international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2016, 6(1), 23-28. international review of management and marketing | vol 6 • issue 1 • 2016 23 dynamics of women entrepreneurs in sultanate of oman: opportunities and obstacles kavita chavali* department of accounting and finance, college of commerce and business administration dhofar university, sultanate of oman. *email: kchavali@du.edu.om abstract the study is a questionnaire based purposive sampling of 100 respondents in oman. the arab world is a patriarchal society with unwritten rules and the objective of the study is to uncover the opportunities available to omani women and the obstacles which they face as an entrepreneur as well as in the process of becoming an entrepreneur. the study also looks into the basic differences in the perception of women who are entrepreneurs and women who would like to become entrepreneurs in the future. analysis of variance is used for hypothesis testing. factor analysis is used to explore the motivational factors, obstacles faced and success factors of women entrepreneurs and future entrepreneurs in oman. keywords: entrepreneurship, motivation, obstacles, success factors, sultanate of oman jel classification: l26 1. introduction sultanate of oman is located in the middle east and stands fourth among the oil producing countries in the world. the contribution of oil in oman is 45% of its gdp $76.460 billion as of 2012 (cia world fact book). the recent downtrend in the oil prices affected all the oil producing gcc countries of which oman is one. there is a need felt by the sultanate to reduce the reliance on oil, privatize and liberalize the economy and achieve self-sustenance. omani government plans to reduce the dependence on non-renewable oil resources to 5% of gross domestic product (gdp) by 2020. it is giving a lot of impetus to the local community especially women by providing conducive scenario to start business of their own. studies have shown that female entrepreneurship is of growing importance in terms of their significant contributions to world economies (brush and cooper, 2012). the sultanate is providing training to women, free education for career progression and giving interest free capital for starting new ventures and many more. the arab world being a patriarchal society has numerous unwritten rules restricting and limiting the economic and social participation of women to become part of the revenue generating entrepreneurial activity and the job force. in this backdrop the researcher felt the need to uncover the opportunities available for omani women and obstacles which they face in the arab world to start a business of their own. the study also looks into the basic differences in the perception of women who are already entrepreneurs and women who would like to become entrepreneurs in the future. the term “entrepreneur” is derived from the french verb “enterprenedre.” it means “to undertake.” an entrepreneur is a person who undertakes and operates a new enterprise or venture and assumes some accountability for the inherent risks. a female entrepreneur is sometimes referred to as “entrepreneuse.” the motivation for starting a business can be a necessity or an opportunity. this depends on whether an economy is developed or developing. those with necessity are being pushed to become entrepreneurs because they have no other options while entrepreneurs with opportunity motive chose to pursue an opportunity and are being pulled into entrepreneurship by the prospects of opportunities. necessity-driven entrepreneurship can help an economy benefit from self-employment initiatives and job creation for others. the gem 2010 report reveals that women are much more likely to be driven by necessity than men when starting a business. chavali: dynamics of women entrepreneurs in sultanate of oman: opportunities and obstacles international review of management and marketing | vol 6 • issue 1 • 201624 2. review of literature there is abundance of literature available on women as entrepreneurs, challenges faced by them and the opportunities they possess. but very limited literature is present related to women entrepreneurs in the arab world. gundry et al., (2002) defines entrepreneurship as being in control of one’s own life and activities. the researcher discusses women being empowered in the society as an important element of entrepreneurship. helms (1997) in his study points out that the reason why majority of women remain untapped is because they are not being empowered. he identifies women not being empowered as the main obstacle for women to start business. pallavi, (2013) in her study identified patriarchal society, absence of entrepreneurial aptitude among woman, support from bankers, balance between work and home resulting in family conflicts and knowledge of technological changes as some of the constraints for women to start business. as per the study there is a strong relationship between age of the entrepreneur and the purpose for which one has taken entrepreneurship. kaur and singh (2013) identified some more obstacles for women to become entrepreneurs. they are startup capital and financing, mobility of woman, family responsibilities, lack of required education and qualification, low self-confidence and support from the family. the researcher suggested “pull and push mechanism” to encourage woman. this is supported by gelin (2005) and in his study argued that “pull and push factors” include survival, desire to achieve personal goals, to feed one’s family, to be respected, quest for pride of ownership, peer pressure, desire for social recognition, desire to deal with the issue of gender discrimination in the labour market and loss of job. dhaliwal and kangis (2006) researched on the motivations and observed that some women start their business as a hobby and continue to look at it as an extension of their role associated with running a family. the majority of the women who are in business have their family member doing business. with their support they use their own or family funds to start their business. mcelwee and riyami (2003) investigated the motivations and barriers of women entrepreneurs in oman. the main factors that motivated women is the process of entrepreneurship itself, financial independence and job satisfaction. the study also explored into the perceptual difference between men and woman in defining success. women are more into micro management of businesses. the main obstacles explored by the author is their accessibility to funds or financing to start business. women entrepreneurs tend to concentrate in service sectors that usually require a small initial capital outlay and less technical knowledge in order to be successful. naser et al., (2009) identified that start-up capital provided by government, self-fulfillment, knowledge, skill, experience and relationship with spouse as the most important factors that motivate women in the united arab emirates to become entrepreneurs. the expectations from the family in terms of family responsibility is very high in the arab world which is one of the major obstacle for women. simonin (2006) postulates that many women start a business because of the autonomy and flexibility they enjoy that are essential to the fulfillment of their family obligations. this is also supported by noble (1986) who argues that women entrepreneurs perceive entrepreneurship as an integrating and balancing tool between family and career needs. schumpeter (2000) in his research explored into the motivational factors influencing woman. the researcher has classified entrepreneurs into two categories. the first who have become entrepreneurs by choice and the other by necessity. the reasons why women become entrepreneurs by choice is to materialize their dream into reality, empowerment and freedom for themselves, to prove themselves among family members, to have their own rules for work, bad job experience, a desire to start and own a company as working for others does not appeal them. women become entrepreneurs by necessity to improve the quality of their life and family, to share economic burden of their family voluntarily or by compulsion and to manage the household. 3. methodology the study is a questionnaire based study, purposive sampling is adopted with a sample of 100 respondents in salalah, sultanate of oman out of which 50 are entrepreneurs and 50 are future entrepreneurs. the responses are collected from 200 respondents but 100 were rejected because of incomplete responses. the respondents are taken from diverse nature of business ventures. factor analysis was conducted to explore the motivational factors, obstacles faced and success factors of entrepreneurs and future entrepreneurs. the responses were collected using a 5 point likert scale. the flowing hypotheses are formulated. analysis of variance (anova) was used for hypothesis testing. the word “entrepreneurs” used in the hypothesis are the respondents who are owners and manage their business in salalah. the word “future entrepreneurs” used in hypothesis are respondents who are in their bachelors and masters and would like to become entrepreneurs in the future and are equipping themselves for the future. hypothesis 1: h0 there is no difference in the perception of entrepreneurs and future entrepreneurs regarding relevance of work experience before starting business in oman. hypothesis 2: h0 there is no difference in the perception of entrepreneurs and future entrepreneurs regarding preferred source of capital for business. hypothesis 3: h0 there is no difference between entrepreneurs and future entrepreneurs related to their empowerment in decision making at home. hypothesis 4: h0 there is no difference between entrepreneurs and future entrepreneurs related to their empowerment of their role in family decision making. chavali: dynamics of women entrepreneurs in sultanate of oman: opportunities and obstacles international review of management and marketing | vol 6 • issue 1 • 2016 25 hypothesis 5: h0 there is no difference between entrepreneurs and future entrepreneurs related to their empowerment in freedom of mobility. hypothesis 6:h0 -there is no difference between entrepreneurs and future entrepreneurs related to their empowerment in the power of making financial decisions. hypothesis 7: h0 there is no difference between entrepreneurs and future entrepreneurs related to their empowerment on their rights to set up business of their own. hypothesis 8: h0 there is no difference in the awareness level of entrepreneurs and future entrepreneurs. 4. data analysis and findings table 1 shows the demographic age distribution of the sample respondents. 50% of the entrepreneurs are in the age group of 21-30 years, 40% in the age group of 31-40 years and 10% are more than 40 years of age. the respondents who are entrepreneurs are owners and manage their business in salalah. 98% of the future entrepreneurs are in the age group of 21-30 years, and 2% are in the age group of 31-40 years. table 2 represents the education of the sample respondents. 62.5% of the entrepreneurs have completed higher education or under graduation, 27% of them are graduates and 10% of them are masters. entrepreneurs are able to study higher education because courses are being offered online giving these women a chance to complete their education online by managing their work and education together because education is an important part of life. 62% of the future entrepreneurs have completed higher education or under graduates, 36% of them are graduates and 2% of them are masters. education gives confidence to try something new and innovative. women in oman have started giving importance to education and as a step forward government and private universities of oman are providing scholarships to students who wish to continue their studies after higher education to promote education and skill in women. graphs 1 and 2 shows that there three most common sectors where women entrepreneurs have business are wholesale and retail, secondly service sector and last but not the least is manufacturing sector. in wholesale or retail sector mostly women are making products like frankincense at home and selling as it is widely available in oman. majority of women who wants to be an entrepreneur in the future are interested to start their business venture in service sector like boutique, salon etc. this means the coming generation of entrepreneurs are willing to step out of their houses and explore the world. women’s business is mostly operated from home and is concentrated in service sector and that which require small initial capital and low technical knowledge (boden and nucci, 2000). many of them are restricted to choose businesses that do not require high skill because they are intrinsically motivated into entrepreneurial venture (finnegan and danielsen, 1997). majority of women who are already entrepreneurs preferred to work from home but the future entrepreneurs are independent and are ready to face challenges. table 3 represents hypotheses testing using anova to test statistical significance. the hypotheses is tested at 0.05 level of significance. as per the results, all the hypotheses are accepted. this signifies that there is no difference between entrepreneurs and future entrepreneurs on various aspects like relevance of work experience before starting business where both strongly agree table 1: age of respondents entrepreneurs and future entrepreneurs age entrepreneurs (%) future entrepreneurs (%) 21-30 50 98 31-40 40 2 more than 40 10 0 total 100 100 table 2: education of respondents entrepreneurs and future entrepreneurs level of education entrepreneurs (%) future entrepreneurs (%) higher education 62.5 62 graduate 27.5 36 masters 10 2 total 100 100 graph 1: business profile of sample respondents entrepreneurs graph 2: business profile of sample respondents future entrepreneurs chavali: dynamics of women entrepreneurs in sultanate of oman: opportunities and obstacles international review of management and marketing | vol 6 • issue 1 • 201626 to it, regarding preferred source of capital in business, various aspects of empowerment like decision making regarding finances, mobility aspect and their awareness levels of the support provided by the sultanate. table 4 represents factor analysis conducted to understand the motivating factors of entrepreneurs to start business. eight factors were selected based on the literature review. rotated component matrix has extracted three most predominant factors. zellner (1994) reported that flexibility to manage dual responsibilities and to live a more balanced life is the motivations for women to leave a paid job to start their own businesses. the motivating factors of women entrepreneurs in oman to start business is being independent, the second most important factor is freedom to make their own decisions and finally better social status in the society. this is in line with the research findings of schumpeter (2000). table 5 shows factor analysis was conducted and out of the eight factors three factors are extracted. the predominant reason why respondents wanted to start a business in the future is better social status in the society followed by being independent and being role model for others in the society where others could emulate. this shows that empowerment is the primary reason to become a successful entrepreneur. this is in line with the research findings of gundry et al., (2002). table 6 shows the 13 factors are identified as obstacles in starting a business venture by woman entrepreneurs. factor analysis was conducted and four values are extracted. the most predominant obstacles entrepreneurs faced is lack of leadership skills. the second most hindering factor is lack of risk taking ability followed by awareness or access to business support as they are the first generation entrepreneurs in their family followed by their self-confidence. this generation of entrepreneurs believed that entrepreneurs are made and lack of leadership skills and risk taking abilities are perceived as major obstacles woman face to start business in oman. table 7 shows factor analysis and five factors are extracted in a total of 13 factors. the obstacles the future entrepreneurs foresee are a little different from the women who are already entrepreneurs. this new generation of future entrepreneurs believes that entrepreneurs can be made with the help of professional education, training, government support and family support. lack of these things is perceived to be obstacles for the new generation entrepreneurs. lack of language skills which are required is also perceived as a hindering factor. lots of emphasis is given in schools and colleges on english language along with arabic which is the local language in oman. table 8 shows the factors which contribute to the success of entrepreneurs. there are eight factors identified from past studies. table 4: factor analysis motivational factors of entrepreneurs rotated component matrix motivational factors for entrepreneurs component 1 2 3 being independent 0.806 0.195 0.120 freedom to make own decisions 0.806 0.189 0.097 social status 0.595 −0.177 −0.233 threat of losing my job 0.416 0.386 0.090 employment generation −0.001 0.818 0.076 role model for others 0.141 0.799 0.019 type of flexibility in time and work −0.049 0.175 0.885 for making money 0.500 −0.395 0.543 table 5: factor analysis motivational factors of future entrepreneurs rotated component matrix motivational factors for future entrepreneurs component 1 2 3 social status 0.819 −0.033 0.091 being independent 0.734 0.229 0.082 role model for others 0.578 0.118 0.287 employment generation −0.124 0.811 0.168 threat of losing my job 0.278 0.721 0.133 for making money 0.577 0.623 −0.190 type of flexibility in time and work 0.097 0.171 0.898 freedom to make own decisions 0.626 0.024 0.638 table 3: hypotheses testing using anova hypothesis testing p value accept/reject there is no difference in the perception of entrepreneurs and future entrepreneurs regarding relevance of work experience before starting business in oman 0.83 accept hypothesis 1 there is no difference in the perception of entrepreneurs and future entrepreneurs regarding preferred source of capital for business 0.67 accept hypothesis 2 there is no difference between entrepreneurs and future entrepreneurs related to their empowerment in decision making at home 0.70 accept hypothesis 3 there is no difference between entrepreneurs and future entrepreneurs related to their empowerment of their role in family decision making 0.71 accept hypothesis 4 there is no difference between entrepreneurs and future entrepreneurs related to their empowerment in freedom of mobility 0.70 accept hypothesis 5 there is no difference between entrepreneurs and future entrepreneurs related to their empowerment in the power of making financial decisions 0.71 accept hypothesis 6 there is no difference between entrepreneurs and future entrepreneurs related to their empowerment on their rights to set up business of their own 0.73 accept hypothesis 7 there is no difference in the awareness level of entrepreneurs and future entrepreneurs 0.07 accept hypothesis 8 *α=0.05, anova: analysis of variance chavali: dynamics of women entrepreneurs in sultanate of oman: opportunities and obstacles international review of management and marketing | vol 6 • issue 1 • 2016 27 three factors are extracted using factor analysis. the most important factor is alertness to opportunities, communication skills and networking and willingness and risk taking ability. stranger (2004) networking is useful in dealing with the isolation that some women feel because of gender discrimination. table 9 represents the factors required for an entrepreneur to be successful. future entrepreneurs perceive sincerity and honesty, pleasant behavior, communication and networking, hard work and entrepreneurial training are the factors extracted as per factor analysis. table 10 represents the most known organizations to promote women entrepreneurs in the sultanate. the fund for development of youth provides financial and management assistance to young people who wants to start a business. the objective of this fund is to provide financial and technical support. sanad scheme promotes new business ventures by giving loans to recent graduates to those projects which are feasible and innovative. the sanad incubators programme helps young entrepreneurs from technical colleges start their own enterprises through monetary and technical support. sanad programme help young entrepreneurs to realize their dream to start something on their own by setting up incubators. “intilaaqah” program helps the young entrepreneurs by providing training, counseling and consultancy services to help youth starting their own business. the awareness regarding the support provided by the government and other agencies is as low as 52.5% in entrepreneurs and 52% in future entrepreneurs. the most popular among the respondents is sanad scheme in creating awareness table 6: factor analysis obstacles faced by entrepreneurs rotated component matrix obstacles faced by entrepreneurs component 1 2 3 4 lack of leadership skills 0.814 0.122 −0.101 0.136 risk taking ability 0.753 −0.125 0.128 0.134 awareness/access to business support 0.673 0.062 0.442 −0.265 self-confidence (believing in one’s abilities) 0.575 −0.003 0.440 −0.013 lack of professional education 0.082 0.811 0.023 0.063 lack of family support 0.333 0.782 −0.200 −0.131 lack of support from government −0.360 0.666 0.082 −0.038 being a woman/gender discrimination −0.176 0.556 0.506 0.241 finding the right contacts for your business venture 0.123 0.038 0.847 0.084 balancing family and work life 0.208 −0.074 0.574 0.477 access to start up finance −0.103 −0.065 0.128 0.770 lack of language skills 0.491 0.048 −0.086 0.687 lack of training 0.046 0.515 0.280 0.615 table 7: factor analysis obstacles perceived to be faced by future entrepreneurs rotated component matrix obstacles faced by entrepreneurs component 1 2 3 4 lack of professional education 0.777 0.165 −0.055 −0.046 lack of training 0.758 0.125 0.234 0.345 lack of support from government 0.732 −0.179 0.033 0.214 lack of language skills 0.589 0.414 0.193 −0.108 lack of family support 0.503 0.322 0.412 0.139 lack of leadership skills 0.068 0.826 0.226 −0.016 risk taking ability 0.119 0.745 −0.155 0.368 awareness/access to business support 0.088 0.585 0.191 0.103 finding the right contacts for your business venture 0.055 0.190 0.855 −0.068 access to start up finance 0.199 0.057 0.828 0.223 self-confidence (believing in one’s abilities) −0.129 0.363 0.023 0.749 being a woman/gender discrimination 0.427 −0.180 0.193 0.656 balancing family and work life 0.422 0.227 0.076 0.544 table 8: factor analysis contributing success factors of entrepreneurs rotated component matrix success factors of entrepreneurs component 1 2 3 alertness to opportunities 0.786 0.364 0.187 communication skills and networking 0.760 0.133 0.083 willingness and risk taking ability 0.721 0.010 0.380 pleasant behavior 0.135 0.904 −0.045 sincerity and honesty 0.254 0.785 −0.077 hard work −0.542 0.586 0.318 entrepreneurial training 0.061 −0.073 0.909 level of education 0.446 0.048 0.741 table 9: factor analysis perceived contributing success factors for future entrepreneurs rotated component matrix perceived success factors of future entrepreneurs component 1 2 sincerity and honesty 0.926 0.047 pleasant behavior 0.852 0.187 communication skills and networking 0.784 0.118 hard work 0.700 0.133 entrepreneurial training 0.634 0.443 level of education −0.021 0.865 willingness and risk taking ability 0.178 0.812 alertness to opportunities 0.476 0.611 chavali: dynamics of women entrepreneurs in sultanate of oman: opportunities and obstacles international review of management and marketing | vol 6 • issue 1 • 201628 and the help rendered by them. there is a need to create awareness among people especially woman who are the future of oman. this can be done by organizing different entrepreneurship educational seminars and workshops. educational institutions should create awareness among women about funding organizations which can help them to do business. banks and other financial institutions also need to create awareness about the various funding schemes available to people to set up business venture. 5. discussion and conclusion women entrepreneurs are still in a nascent stage in oman. the study aims to explore the obstacles and opportunities of women entrepreneurs with the help of a questionnaire. an effort is made to explore whether there is any difference in the perception of entrepreneurs with future entrepreneurs. entrepreneurship in oman seems to be a feasible option. the situation of women entrepreneurs in oman needs to be improved and women should be empowered to make their own decisions for their professional life. women need to be more alert to the opportunities and should gain work experience before starting their venture. women should be encouraged to be creative and independent. majority of woman are restricted to retail or service sector where no major technical skills are required. more women should be encouraged to enter into manufacturing sector with large capital and create employment generation. there should be a continuous support from the government and a conducive environment to inspire and encourage the talent in women. there should be awareness created to enhance their business, technical and leadership skills. customized entrepreneurial educational programs have to be developed and incubation centers have to be set up at educational institutions which give confidence to woman to take up entrepreneurship. references available from: http://www.babson.edu/academics/centers/blank-center/ globalresearch/gem/documents/gem%202010%20womens%20 report.pdf. available from: http://www.unevoc.unesco.org/fileadmin/user_upload/ pubs/entrepreneurship%20education%20-%20oman.pdf. boden, r.j.jr., nucci, a.r. (2000), on the survival prospects of men’s and woman’s new business ventures. journal of business venturing, 15(4), 347-362. brush, c., cooper, s. (2012), female entrepreneurship and economic development: an international perspective. entrepreneurship & regional development, 24(1-2), 1-6. dhaliwal, s., kangis, p. (2006), asians in the uk: gender, generations and enterprise. equal opportunities international, 25(2), 92-108. finnegan, s., danilsen, e. (1997), promoting the development of women entrepreneurs means and ends in women entrepreneurship development, paper presented at the first inter-cultural micro enterprise development (med) summit, colombo, sri lanka, on 28 august 1997, ilo-saat, new delhi. gdp per capita obtained from cia world factbook. available from: https://www.cia.gov/library/publications/the-worldfactbook/index. html, oil & gas figures from bp statistical review of world energy june 2012. gelin, m. (2005), the importance of gender in starting and managing a small business. houston psychiatric society. p42-53. gundry, l.k., ben yoseph, m., posig, m. (2002), contemporary perspectives on women entrepreneurship: a review & strategic recommendation. journal of enterprising culture, 10(1), 67-86. helms, m. (1997), women and entrepreneurship: the appealing alternative business perspectives. gale group information integrity, 10(ii), 16-19. kaur, g., singh, s. (2013), women entrepreneurs in india. third front journal of humanities and social sciences, 1(1), 64-73. mcelwee, g., al-riyami, r. (2003), women entrepreneurs in oman: some barriers to success. career development international, 8(7), 339-346. naser, k., mohammed, w.r., nuseibeh, r. (2009), factors that affect women entrepreneurs: evidence from emerging economy. international journal of organizational analysis, 17(3), 247. noble, b. (1986), a sense of self. venture, 7, 34-36. pallavi, m. (2013), women entrepreneurship: purpose, problems and prospects. pacific business review international, 5(11), 8-16. schumpeter, j.a. (2000), entrepreneurship: the social science view. oxford, england: oxford university press, scott. simonin, m. (2006), women entrepreneurship. business strategy and international business, helsinki university of technology. p91-167. stranger, a.m.j. (2004), gender comparative use of small business training and assistance: a literature review. education and training, 46, 464-475. zellner, w. (1994), women entrepreneurs. business week, 3367, 104-110. table 10: the most known assistance and organizations available to women entrepreneurs organizations entrepreneurs (%) future entrepreneur (%) fund for development of youth projects 11.6 22.4 sanad program 39.5 38.8 raft funds 18.6 8.5 intilaaqah 11.6 2.7 creation of oman development bank 9.3 13.8 women in focus 9.4 13.8 total 100 100 . international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2015, 5(4), 242-245. international review of management and marketing | vol 5 • issue 4 • 2015242 comparison of traditional and modern performance instruments on selected companies from pakistan muhammad imran aslam1, ali akbar khan2*, ijaz hussain3, abdul musawar ali4 1department of management sciences, superior university, lahore, pakistan, 2the economic and business research organization, lahore, pakistan, 3the economic and business research organization, lahore, pakistan, 4the economic and business research organization, lahore, pakistan. *email: aaklhr@gmail.com abstract the objective of this study is to examine the performance of listed companies in karachi stock exchange by using economic value added (eva) and market value added (mva). to estimate performance of seven industrial sectors in pakistan eva is used along with operating cash flow, net operating profit after tax, net income and return on equity. multiple regression models are applied on cross sectional data of 35 firms from seven sectors of pakistan for year 2012 and 2013. results and their analysis are portraying the actual picture for eva in pakistan indicating that ability of eva to explain mva is not significant. keywords: stock exchange, economic value added, cross sectional jel classification: c21 1. introduction measuring performance is very crucial for an organization because this will decide the value that is to be handed over to all stakeholders by management of a business. primary goal of business should be to maximize shareholder’s value sheela and karthikeyan (2012) and this objective can be achieved by maximizing stock prices. many methods are used to measure organization performance. this study aims to use traditional as well as modern performance evaluation tool such as economic value added (eva) to measure performance of an organization. the authors like haddad (2012) and sharma and kumar (2012) have conducted research on performance measurement by using traditional and new techniques. these include eva, return on assets (roa), return on equity (roe), capital adequacy ratio, return on net worth, return on capital employed, operating cash flows (ocf), and net operating profit after tax (nopat), net income (ni), and residual income and earnings per share. sharma and kumar (2012) declared eva as a third reliable measure when paired with earnings per share. traditional performance measures have performed well in measuring the performance of a firm in past and modern era. but sometime these measures failed to predict true results due to income statement alterations by the management of a business. such alterations will satisfy the investors who are looking for new investment as well as waiting for best return on investment. moreover, investment decisions will be uncertain in presence of such circumstances. eva is modern shape of residual income. it is a concept which is reflected by the literature of a famous economist named alfred marshall, young (1997). it can remove the drawback of alteration of traditional performance measures by considering the cost of equity. cost of equity is mainly calculated by capital asset pricing model (capm) and dividend growth model. patel and patel (2012), haddad (2012) and arabsalehi and mahmoodi (2011) calculated cost of equity by using capm. the eva is a technique established by stern et al. (1995). alfred (1998) described eva as a difference between operating profit after tax and cost of capital. young (1997) argued that eva can serve as a language for the management of a business in measuring and communicating performance of a firm. davidson (2003) argues that eva will improve the stock performance. however, eva is also capable to improve the standard of managerial decisions. moreover, managers will learn about the utilization aslam, et al.: comparison of traditional and modern performance instruments on selected companies from pakistan international review of management and marketing | vol 5 • issue 4 • 2015 243 of optimal opportunities for the betterment of business future in short-run and long-run. ronald and arendt (2000) studied that eva usage will clear the concepts of business managers and ultimately solve the problem of selecting performance measure from a large list of metrics like nopat, return on investment, roe and earnings per share. irala et al. (2006) states that eva adoption in west is very much popular and from asian context, this is getting popularity in india. in pakistan concept of eva is not popular. market value added (mva) is another tool to estimate investments and activities of a firm. improvement in eva will result in improvement of mva. young (1997) defined market value as an aggregate of activities and investments of a firm. sakthivel (2010) defined mva as a difference between market capitalization and net worth. where, the term market capitalization is obtained by multiplying number of outstanding shares with their closing share prices and net worth is obtained by adding equity capital, reserves and surplus net of revaluation reserve less accumulated losses and miscellaneous expenditure. moreover, young (1997) described mva as a difference between firm’s total value and total capital. young (1997) describes that if the net present value of a project is positive then investment in such project will cause an increase in mva, such project is termed as “value creating project.” on the other hand if the net present value of a project is negative then investment in such project will cause a decrease in mva, such project is termed as “value destroying project.” 2. literature review this section represents the empirical work carried out on eva as performance indicator. tortella and brusco (2003) investigate the reaction of the market before and after the adoption of eva in the long-run. irala et al. (2006) investigated the importance of stock price maximization for the shareholders and other stakeholders. they are of the view that linkage of managerial compensation with eva can enhance the ability of managers to add value in the firm’s value. sakthivel (2010) investigated the relationship between mva termed as “value creation” and eva. results indicate that low eva groups face more value destruction as compared with moderate eva groups. ismail et al. (2014) demonstrated the effect of performance instruments on the companies listed in karachi stock exchange (kse) by using modern and a set of traditional measures. they concluded that ability of eva to predict performance is not strong as compared with traditional measures. arabsalehi and mahmoodi (2011) investigated the superiority of eva and traditional performance measures like roa, roe and earning per share. final conclusion of the study indicates that accounting measures are defeating the eva superiority. patel and patel (2012) studied the shareholders’ value of indian private sector banking by employing eva from year 2004-05 to 2009-10. results show that only kotak mahindra bank has positive relationship with eva and stock price. haddad (2012) canvassed the impression of eva on the banking sector of jordan including 15 banks listed in amman stock exchange from year 2001 to 2009. sharma and kumar (2012) well-tried to propose the investors the utilization of eva along with other orthodox measures for appraising and making any scheme for future aspects. eva can elaborate mva better than orthodox performance measures. sharma and kumar (2012) found that meeting shareholders anticipation is directly regulate share prices. eva determined positive and substantial while addressing the issue of eva relationship with mva. 3. data sources and methodology 3.1. data sources the data of 35 listed companies from seven industrial sectors of kse is used for results calculations. the annual data for a period of 2012-2013 was used. the source of data was annual reports available from kse library. 3.2. methodology in this study both simple regression and multiple regression models are used for analysis. simple regression model is used to evaluate the ability of each independent variable to explain variation in mva. cross sectional data collected for each year are evaluated separately to estimate significant role by using multiple regression model: yit = β0 + βixit + eit where, “yit” is the mva (stock return), “i” is the name of company, “t” is the time subscript, “β” is the intercept, “eit” is the error term and “xit” are the independent variables like eva, ocfs, nopat, ni and roe. simple regression models are used to evaluate the ability of each independent variable to explain variation in mva. y = β0 + β1x + e 4. analysis and interpretation of data results for year 2012 and 2013 are represented by tables 1-3. relationship between eva and mva is insignificant having p value (=0.856) and (=0.595) for year 2012 and 2013, respectively. however, relationship for traditional instruments of roe and ocf is significant having p value (=0.017) and (=0.064) for year 2012, respectively. results also indicate that the relationship for roe, ocf and nopat is significant having p value (=0.001), (=0.004) and (=0.046) for year 2013, respectively. the goodness of the fit of model is supported for traditional variables data which is represented by f-statistics (=5.255 and =7.984) for p values of (=0.002) and (=0.000) for year 2012 and 2013, respectively. however, goodness of the fit of model for modern instrument is insignificant having f-statistics (=0.033 and =0.289) for p values of (=0.856) and (=0.595) for year 2012 and 2013, respectively. correlation results of table 3 show that correlation between eva and mva is not encouraging which suggests that ability aslam, et al.: comparison of traditional and modern performance instruments on selected companies from pakistan international review of management and marketing | vol 5 • issue 4 • 2015244 of eva alone cannot be trusted due to better correlation results among traditional performance measures such as roe and ocf for year 2012 and 2013. moreover, ability to explain variation in mva is high when a combination of modern and traditional performance measures is used instead of using eva alone. 5. conclusion and recommendations eva is used in this study to estimate performance of industrial sectors in pakistan along with traditional performance measures. results and their analysis are portraying the actual picture for eva in pakistan by comparing eva with mva for year 2012 and 2013. results of pearson correlation between eva and mva is low as compared with traditional measures. moreover, findings indicate that ability of eva individually to explain mva is insignificant. the companies operating in pakistan are still depending on traditional performance measures. but eva can play a vital role when combined with other variables. results are aligned with sharma and kumar (2012), salehi and mahmoodi (2011), irala et al. (2006) and ismail et al. (2014). in firm performance evaluation financial metrics are normally used, but on the other hand there are some factors called non-financial metrics are to be kept in consideration too. these may include expertise of management, technological factor, advancement of human resource management, behavioral finance and quality of products. these factors also play a vital role in effecting the shareholders’ value. these variables are difficult to calculate but in further research should be taken as prime consideration with reference to pakistan. eva role is to help managers not to be a substitute to efficient management. managers’ activities must be aligned with eva by introducing incentive plan so that managers start working for them. references alfred, r. (1998), creating shareholder value: a guide for managers and investors. new york: free press. arabsalehi, m., mahmoodi, i. (2011), eva® or traditional accounting measures; empirical evidence from iran. international research journal of finance and economics, 65, 51-58. davidson, s. (2003), analysis tools help improve bank performance and value. community banker, 12(2), 48. haddad, s. (2012), the relationship between economic value added and stock returns: evidence from jordanian banks. international research journal of finance and economics, 89, 6-14. irala, d., reddy, l., reddy, r. (2006), performance evaluation, economic value added and managerial behaviour. performance evaluation, economic value added and managerial behaviour. pes business review, 1(1), 1-7. ismail, m., aslam, m.i., ch, a.f., zubair, m. (2014), effect of traditional and modern performance instruments on selected companies from pakistan. science international (lahore), 26(5), 2617-2619. patel, r.j., patel, m. (2012), impact of economic value added (eva) on share price: a study of indian private sector banks. international journal of contemporary business studies, 3(1), 24-34. ronald, k., arendt, d.a. (2000), making eva work. corporate finance. afp exchange, 20(4), 98-101. sakthivel, n. (2010), the impact of economic value added (eva) on shareholders’ value: an empirical evaluation. management & change, 14(2), 167-207. sharma, a., kumar, s. (2012), eva versus conventional performance measures–empirical evidence from india. in: asbbs annual conference: las vegas. table 1: coefficients model 2012 2013 b t significant b t significant modern (constant) 10324169.477 1.451 0.156 18806384.208 1.641 0.110 eva 833543.424 0.183 0.856 −6675450.632 −0.537 0.595 traditional (constant) −6958077.692 −0.996 0.327 −15478829.489 −1.413 0.168 ni 3.285 0.410 0.685 −17.636 −1.555 0.130 nopat −15.104 −1.659 0.108 −18.281 −2.082 0.046 ocf 11.638 1.922 0.064 30.417 3.118 0.004 roe 2646835.803 2.520 0.017 5633516.958 3.526 0.001 for t-statistics and p values of each estimated parameter are shown in table 1. eva: economic value added, nopat: net operating profit after tax, ocf: operating cash flows, roe: return on equity, ni: net income table 2: model summary model 2012 2013 f significant f significant modern 0.033 0.856 0.289 0.595 traditional 5.255 0.002 7.984 0.000 for analysis of variance figures are shown in table 2 table 3: correlation coefficient and r2 correlation coefficient r2 particulars 2012 2013 particulars 2012 2013 mva mva overall variables 0.494 0.52 mva 1 1 traditional variables 0.412 0.516 eva 0.032 −0.093 eva 0.001 0.009 ni 0.452 0.391 ni 0.201 0.153 nopat 0.402 0.348 nopat 0.162 0.121 ocf 0.471 0.450 ocf 0.222 0.203 roe 0.507 0.537 roe 0.257 0.288 for correlation coefficient and r2 of each estimated parameter are shown in table 3. mva: market value added, eva: economic value added, nopat: net operating profit after tax, ocf: operating cash flows, roe: return on equity, ni: net income aslam, et al.: comparison of traditional and modern performance instruments on selected companies from pakistan international review of management and marketing | vol 5 • issue 4 • 2015 245 sheela, s.c., karthikeyan, k. (2012), measuring financial performance using eva & mva in indian pharmaceutical industry. asia pacific journal of research in business management, 3(9), 53-69. stern, j.m., stewart, g.b., chew, d.h. (1995), the eva® financial management system. journal of applied corporate finance, 8(2), 32-46. tortella, b.d., brusco, s. (2003), the economic value added (eva): an analysis of market reaction. advances in accounting, 20, 265-290. young, d. (1997), economic value added: a premier for european managers. european managerial journal, 15(4), 335-343. microsoft word 4 ok okey zaman 170-522-1-sm.doc international review of management and marketing vol. 2, no. 2, 2012, pp.99-105 issn: 2146-4405 www.econjournals.com structural investigation of service quality in conventional and islamic banking in pakistan muhammad imran qureshi department of management sciences, comsats institute of information technology, abbottabad, pakistan. e-mail: miqureshi@ciit.net.pk aamir khan department of management sciences, comsats institute of information technology, abbottabad, pakistan. e-mail: maamir@yahoo.com khalid zaman (corresponding author) department of management sciences, comsats institute of information technology, abbottabad, pakistan. e-mail: khalidzaman@ciit.net.pk abstract: the objective of the study is to examine the determinants of expected service quality in conventional and islamic banking in pakistan. a convenient sample of eight hundred customers from eighty branches of five conventional and five islamic banks in khyber pakhtoonkhawa (kpk) province of pakistan participated in the study. a self designed questionnaire was used for data collection. total of five hundred and thirteen filled–out questionnaires were returned, of which 38% were filled out by female customers and 62% by male customers, forming a rate of 64% of total distributed questionnaires. the result indicates that there is a significant relationship between expected service quality and three of their determinants i.e., bank’s tangibles, responsiveness and assurance, while there is a weak relationship has been observed from reliability and empathy over service quality in commercial banks. on the other hand, there is a significant relationship between expected service quality and its determinants i.e., tangibles, reliability, responsiveness, assurance and empathy in case of islamic banks. the results of the study are of value to both academics and policy makers. keywords: islamic banks; non islamic banks; expected service quality; bank’s tangible; reliability; pakistan. jel classifications: l15; g21 1. introduction the banking sector acts as the life blood of modern trade and commerce because of its increasingly integrated role in recent years. technological advancement and improvement in communication system have increased integration process. according to parasuraman et al., (1985), the key to success and survival of any business institution is the delivering quality services to customers; therefore, the expected service quality is the subject of debate over the past two decades. it is important for management to understand, what the pillars of expected service quality and how to measure it, and further more what actions should be taken in order to increase the customer value. a lot of work has been done on expected service quality dimensions and customer satisfaction across different type of business settings. as far as banking sector is concerned, banks are performing multiple functions in order to provide a variety of products and services and the latest facilities to their customers in current global competitive business environment. in pakistan, islamic banks and conventional banks are the two type of banking sectors providing facilities to their customers. because of changing policies and uncertain economic conditions, banking sector in pakistan has experienced very unstable environment since 1950. in 1974 pakistani banking sector was nationalized which results poor performance because of inferior products and services that that’s why banking sector was privatized in 1992. in 2002 meezan islamic bank was the first registered and full fledge islamic bank of pakistan. pakistani banking sector is improving day international review of management and marketing, vol. 2, no.2, 2012, pp.99-105 100 by day with diverse patterns of ownership because of active foreign and local stakeholder participation, which results into a growing competition among banks to attract a large number of customers by providing services quality to get long-term benefits. now there are 6 islamic and 13 conventional banks working in pakistan offering products and services in different parts of the country. banks are operating in a highly competitive environment and are trying to provide quality services matching with customers' expectations. according to ahmad et al. (2010), pakistani customers of islamic bank expect greater expected service quality as compared to the customers of conventional bank. now bank customers are much aware so they are very much concerned about the quality of services. customer satisfaction is the only thing which makes them loyal otherwise customers switch to other banks with out any hesitation. islamic banks work under the rules of sharia'h to grow business and trade activities. islamic banking is expanding their network, size and structure because of a rational and beautiful blending of commercial banks, micro financing and islamic banks in the whole country. because of entrance of the islamic banks in the pakistan, affects the monitory system by adjusting the demand and supply forces for money. according to khan et al. (2008), islamic banks insures more stable financial sector as compare to the conventional banks. according to sbp (2010), it shows that the share of islamic banking during the quarter has increased to 6.4 percent as there was 3.2 percent growth in its assets compared to a decline in asset base of the conventional banks. the islamic banking grew its branch networks 5.4 percent. in recent era, banks are more concerned about their customer and they realized that customer not only acquire service for just only value, but the motivation behind this the service support available after the delivering the service (agnihothri et al., 2002). businesses can make long term sustainable customer relationship by offering high quality services. customer perception of the expected service quality a firm is a major and dominant concept which results in competitive advantage. so there for bankers must concentrate on improving expected service quality to make their customer satisfied because expected service quality has great and positive impact on customer satisfaction in case of nonconventional or islamic banks as compared to conventional banks in pakistan. despite existing research, pakistani banking industry is paying attention to study the expected service quality. more research is also needed to alter the existing gaps. the purpose of this study is to identify the expected service quality dimensions in islamic and conventional banking system. the paper is organized as follows: after introduction which is provided in section 1 above, literature review is carried out in section 2. data and methodological framework is explained in section 3. results are shown in section 4. final section concludes the study. 2. literature review 2.1. customer satisfaction since early 1970s, both theory and research on consumer satisfaction have done by different researchers including olshavsky and miller (1972); anderson (1973). most of the theoretical as well as empirical studies during 70s supported the concept that customer satisfaction refers to the size and direction of disconfirmation experiences, while disconfirmation experiences are the result of a person’s initial expectations’. later, in 1980s, a new dimension was added to customer satisfaction which is an emotional response of customer to the experiences associated with the purchase of particular products or services (westbrook and reilly 1983). however, further development in research during 90s and 2000, the idea of “confirmation/disconfirmation” was built to describe customer satisfaction (davis and heineke, 1998; woodruff et al., 1991). where customer satisfaction or dissatisfaction can be determined by the difference between expectations of the product or service and actual performance. if customer expectations are meeting with the performance of the product or service then the result is satisfaction, otherwise dissatisfaction occurs (vavra, 1997; davis and heineke, 1998). one question remain almost ignored in throughout the development phase of research in customer satisfaction is whether ‘customer satisfaction’ is different for the products and services or it is the same? and one more related question is about the measures directly or indirectly should be used to fully understand and measure the behavioral components of customer satisfaction which results from consumption experience (malhotra et al., 1994). there are some studies including boulding et al. (1993); mittal and baldasare (1996); chandon et al., (1997) and dobni et al., (1997) tried to analyze customer satisfaction by using multiple behavioral measures. furthermore, there are various studies on customer satisfaction with reference to financial services that also reflect the structural investigation of service quality in conventional and islamic banking in pakistan 101 inherited deficiency in literature about customer satisfaction about general services and to define some measures of customer satisfaction analysis for their experiences of using financial services. an organized list of dimensions provided by howell & shamir (2005) includes (a) availability, (b) responsiveness, (c) timeliness, (d) completeness, (e) tangibility, (f) empathy, (g) reliability, and (h) professionalism. however, these refer to some general dimensions to analyze the customer satisfaction experiences suggested and used by several studies. 2.2. customer satisfaction and expected service quality taylor and baker (1994) and howard and sheth (1969) specified an idea that the customer satisfaction may result from any dimension which may or may not be related to quality and its judgments about customer satisfaction may arise from some non-quality issues like needs and equity etc and experience is also required with the service or provider. given this nature of customer satisfaction phenomena, research directions guide us towards the popular concept of ‘expected service quality’ through which the idea of customer satisfaction can better be analyzed. however, it is still debatable that customer satisfaction is an antecedent of expected service quality (bitner, 1990; parasuraman, et al, 1985) or expected service quality is an antecedent of customer satisfaction (anderson and sullivan, 1993; cronin and taylor, 1992; taylor and baker (1994). the concept of expected service quality got significant attention in early 1980s (lehtinen & lehtinen, 1982). parasuraman, et al. (1985) identified ten dimensions of expected service quality, which includes, reliability, responsiveness, competence, access, courtesy, communication, credibility, security, understanding/knowing the customer, and tangibles. after that these dimensions was reduced to five that are: reliability, response, assurance, tangibles, empathy (parasuraman, et al., 1988). a 22-item scale named ‘servqual’ was used to measure the dimensions of expected service quality. the servqual was used in different service sectors like appliance repair and maintenance firm, retail banks, a long distance telephone provider, a security broker, and credit card companies in order to measure the quality of service. so such application and validation of expected service quality dimensions in such diverse setting helped to develop and design a standardized sort of scale which could be applied to the measure the expected service quality of different sort of services organizations. in a various type of business settings offering quality of service in products and services like hospital, banking (cronin and taylor, 1992; spreng and singh, 1993), business school placement center, tyre store, dental school patient clinic and acute care hospital (carman 1990), discount and departmental stores (finn and lamb, 1991; teas, 1993; dabholkar et al., 1996) and others have used servqual for different research studies. though in financial services context, the scale has seen a limited application while in other areas servqual has been applied for the purpose of measuring expected service quality. 3. data source and methodological framework a convenient sample of eight hundred customers from eighty branches of five conventional and five islamic banks in khyber pakhtoonkhawa (kpk) province of pakistan participated in the study namely, allied bank of pakistan, habib bank of pakistan, muslim commercial bank of pakistan, national bank of pakistan, united bank of pakistan, meezan bank limited, askari islamic bank, al-baraka islamic bank, alfalah bank, bank islami. a total of five hundred and thirteen filled– out questionnaires were returned, of which 38% were filled out by female customers and 62% by male customers, forming a rate of 64% of total distributed questionnaires. a five point likert scale structured questionnaire is filled by the sample based on their perceived bank expected service quality according to their personal experiences. the framework of the study is given in figure 1. this study used partial least square (pls) based structural equation modeling (sem) to investigate the role of banks tangibles, reliability, responsiveness, assurance and empathy in determining the banks expected service quality in pakistan. sem is a second generation tool for data analysis based on lizral and pls. it is used by researchers to examine the significance of association among different variables as a major sem technique. it reflects complex relationships of variables regarding the whole model in a meaningful fashion. international review of management and marketing, vol. 2, no.2, 2012, pp.99-105 102 figure 1. research framework 4. results the objective of the study examines the determinants of expected service quality in conventional and islamic banking in pakistan. the separate results have been gathered to find an association among different determinants on expected service quality of both conventional and islamic banking in pakistan. the results of the partial least square structural models are presented in figure 2 for conventional banks and figure 3 for islamic banks for pakistan. the pls structural model indicates coefficients, t-values, while the standardized coefficients reflect the relative strength of the statistical relationships. it helps to estimate t-values for the constructs and variables under study. the coefficients are shown in table 1 and table 2 respectively. 4.1. results of conventional banks table 1 shows the testing of the structural relationships among latent variables. the result shows that bank’s tangibles and responsiveness has a significant positive impact on expected service quality of commercial banks, while there is a negative relationship between assurance and expected service quality in case of commercial banks. table 1. regression weights: conventional banks path estimate s.e. t value p tangible-servqual 1.112 .065 2.353 .000*** reliability-servqual .331 .074 9.534 .253 responsiveness-servqual .175 .082 2.148 .042* assurance-servqual -.219 .076 2.888 .014** empathy-servequal .001 .037 7.026 .980 figure 2 shows the results of commercial banks with structural equation model. structural investigation of service quality in conventional and islamic banking in pakistan 103 figure 2. structural equation model (sem) technique on conventional banks 4.2. results of islamic banks table 2 shows the results of the structural relationships among variables. result shows that, tangibles, reliability and assurance has a significant impact on expected service quality while there is a negative relationship between responsiveness and empathy over expected service quality of islamic banks in pakistan. table 2. regression weights: islamic banks path estimate s.e. t value p tang-servqual 1.17 .055 7.197 .000 rel-servqual 2.03 .084 4.466 .000 resp-servqual -0.06 .042 2.148 .032 assu-servqual 1.29 .066 2.888 .004 emp-servequal -0.12 .075 3.026 .020 figure 3 shows the relationship between expected service quality and their determinants in case of islamic banks. the results are in line with the previous studies, which show that there is a significant relationship between expected service quality and customer satisfaction in case of islamic banking in pakistan (ahmad et al., 2010). international review of management and marketing, vol. 2, no.2, 2012, pp.99-105 104 figure 3. structural equation model (sem) technique on islamic banks 5. conclusion the objective of the study is to investigate the role of banks tangibles, reliability, responsiveness, assurance and empathy on determining the expected service quality of conventional and islamic baking in pakistan. the study used partial least square (pls) based structural equation modeling (sem) to investigate the relationship between them. the result shows that bank’s tangible and responsiveness has a positive impact while assurance has a significant negative impact on expected service quality of conventional banks in pakistan. reliability and empathy doesn’t sufficiently explain their relationship on expected service quality, as it is reported as insignificant impact over the sample study. in case of islamic banks in pakistan, banks tangible, reliability and assurance has a significant positive impact on expected service quality while there is a negative relationship between responsive & empathy over expected service quality of islamic banking in pakistan. references agnihothri, s., sivasubramaniam, n., simmons, d., (2002), leveraging technology to improve field service. international journal of service industry management, 13(1), 47-68. ahmad, a., rehman, k. and saif, m. i. (2010), islamic banking experience of pakistan: comparison of islamic and conventional banks. international journal of business and management, 5(2), 137-144. anderson, e.a., sullivan, m.w. (1993), the antecedents and consequences of customer satisfaction for firms. marketing science, 12, 125-143. anderson, r.e., (1973), consumer dissatisfaction, the effect of disconfirmed expectancy on perceived product performance. journal of marketing research, 10, 38-44. bitner, m.j. (1990). evaluating service encounters: the effects of physical surroundings and employee response. journal of marketing, 54(5), 69-82. boulding, w., kalra, a., staelin, r., zeithaml, v. (1993), a dynamic model of perceived service quality: from expectations to behavioral intentions. journal of marketing research, 30(2), 7-27. carman, j.m. (1990), consumer perceptions of perceived service quality: an assessment of the servqual dimensions. journal of retailing, 66(1), 33-5. structural investigation of service quality in conventional and islamic banking in pakistan 105 chandon, j-l., leo, p.y., philippe, j. (1997), service encounter dimensions – a dyadic perspective: measuring the dimensions of service encounters as perceived by customers and personnel. international journal of service industry management, 8(1), 65-86. cronin jr, j.j. and taylor, s.a. (1992), measuring service quality: a reexamination and extension, journal of marketing, 56(july), 55-68. dabholkar, a. pratibha, dayle i. thorpe, and joseph o. rentz. (1996), a measure of perceived service quality for retail stores: scale development and validation. journal of the academy of marketing science, 24, 3-16. davis, m.m., heineke, j. (1998), how disconfirmation, perception and actual waiting times impact customer satisfaction. international journal of service industry management, 9 (1), 64-73. dobni, d., zerbe, w., ritchie, j.r.b. (1997), enhancing service personnel effectiveness through the use of behavioral repertoires. journal of services marketing, 11(6), 427-45. finn, d.w., charles w.l. (1991), an evaluation of the servqual scales in a retailing setting. advances in consumer research, edited by r. holman and m. r. soloman, 483-490. provo, ut: association for consumer research. howard, j.a., sheth, j.n. (1969), the theory of buyer behavior, wiley, new york (1969). howell, j.m. and shamir b. (2005), the role of followers in the charismatic leadership process: relationships and their consequences. academy of management review, 30(1), 96-112. tan, k.c. (2001), a structural equation model of new product design and development. decision sciences, 32(2), 195–226. khan, m.s.n., hassan, m.k., shahid, a. i. 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(1994), expectations as a comparison standard in measuring service quality: an assessment of a reassessment. journal of marketing, 58(1), 132–139. vavra, t.g. (1997), improving your measurement of customer satisfaction, asqs quality press. westbrook, r.a., reilly, m.d. (1983), value-percept disparity: an alternative to the disconfirmation of expectation theory of consumer satisfaction. advances in consumer research, 10, 256–261. woodruff, r.b., clemons, d.s., schumann, d.w., gardial, s.f., bruns, m.j. (1991), the standards issue in cs/d research: a historical perspective. journal of customer satisfaction, dissatisfaction and complaining behavior, 4, 103-109. . international review of management and marketing | vol 6 • special issue (s4) • 201686 international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2016, 6(s4) 86-90. special issue for “asia international conference (aic 2015), 5-6 december 2015, universiti teknologi malaysia, kuala lumpur, malaysia” the role of corporate social responsibility in flood mitigation among the listed insurance companies in malaysia suresh ramakrishnan1*, sanil s. hishan2, abu saim mohammad shahabuddin3, malini kanjanapathy4 1faculty of management, universiti teknologi malaysia, malaysia, 2faculty of management, universiti teknologi malaysia, malaysia, 3faculty of management, universiti teknologi malaysia, malaysia, 4faculty of management, universiti teknologi malaysia, malaysia. *email: suresh@utm.my abstract rapid industrialization in the developing countries has contributed to an increase in natural disasters. rise in the losses due to disasters is an indicator of non-sustainable development. although in malaysia the natural forces have been mainly liable for the natural disasters in the past, in recent times human intervention in nature is worsening the flood hazards in particular. as we move closer to the year 2020, the country is expected to face serious challenges in flood management. the recent flood situation is an example of the increase in the magnitude of the flood disaster. in this scenario, it is imperative to have a holistic plan to face this challenge. the role of the corporate social responsibility (csr) in flood mitigation is one area which needs to be researched as private sector can play a key role in flood mitigation. this research involved a content analysis of company websites of the listed insurance companies in malaysia to examine the extent to which these companies get themselves involved in the csr programs related to flood relief and mitigation. the results showed that majority of the insurance companies that have the flood related csr initiative is foreign owned. furthermore, these companies have an institutionalized approached towards csr. the result also shows that local insurance companies do not contribute much in terms of the flood mitigation related csr programs. based on the result of the website study we can conclude that the foreign insurance companies involve themselves in flood mitigation related csr programs. however, the local insurance companies need to step up their efforts in terms of csr programs related to the flood relief and mitigation. keywords: corporate social responsibility, communication, insurance, flood mitigation, disaster management, malaysia jel classifications: d83, m14 1. introduction the human and the economic losses due to disasters in the asia pacific region are alarmingly high. the rapid economic growth has spurred risk exposure and vulnerabilities. most vulnerable to the potential impacts of the regions various disasters are the poor and the marginalized. a strategic approach to business engagement on community preparedness efforts requires beyond one off financial and in kind contribution. employee volunteering, leveraging business assets and networks, supporting adaption of new technologies and innovative solutions and helping advanced advocacy efforts (oehler et al., 2013). although there has been a rapid economic growth and technological advancement in malaysia, it has not contributed to the reduction in the losses due to the disasters. the disaster preparedness activities could help to reduce the costs of response and recovery from the disasters. there is an evident need to develop disaster response capacity and coping mechanism of local communities. therefore, the private sector organizations including insurance companies could play a vital role in helping communities to prepare for disasters and in meeting the basic needs of the vulnerable group of the society (oehler et al., 2013). 2. literature review the findings of some of the research on the role of corporate social responsibility (csr) and disaster reduction have highlighted the role of corporate sector in disaster management. in one of the study on csr and disaster reduction, the findings concluded that ramakrishnan, et al.: the role of corporate social responsibility in flood mitigation among the listed insurance companies in malaysia international review of management and marketing | vol 6 • special issue (s4) • 2016 87 there should be partnership between private, public and nonprofit sectors to reduce the impact of the disaster. sustainability is a major challenge to csr work in this field. a mechanism is needed to overcome the isolation of the agencies in these areas and share lessons between them (twigg, 2001). the content analysis on the csr reports of the fortune 500 companies showed that corporations engage in the disaster related csr initiatives for instrumental and ethical reasons. in the case of predictable or more stable threat, proactive long term initiatives included a broader stakeholder group. the activities ranged from financial based forms of assistance to collaborative partnerships with the non-governmental organizations (ngos) and governments (johnson et al., 2011). the results of the research on the csr and natural disasters in srilanka recommended that there is a substantial potential to seek greater and more constructive engagement from the private sector on disaster management. the positive signs were visible in terms of initiatives, resource generation capacity and efficiency. however key negative elements included ad hoc nature of action, absence of any consultation with affected people, lack of continuity and impact assessment and patronizing attitude of some csr initiatives of the company. an activity which has long term benefits has to be sold to organizations so that the private organization gets involved in the disaster management. however, it has to be noted that the private organization cannot do this efficiently without the collaborative partnership between government, private organizations and non-profit organization (ariyabandu and hulangamuwa, 2002). disasters have been classified as manmade disasters and natural disasters. the occurrence of disaster from almost all kinds of hazards is highest in asia pacific as compared to the other parts of the world. malaysia has experienced many natural disasters in the past few decades and most of them were natural disasters. most of the natural disasters are due to heavy rains (shaluf and ahmadun, 2006). as we move closer to the year 2020, the country is expected to face serious challenges regarding the flood and drought management. per capita availability of water is expected to greatly decrease as a result of growing population and greater usage of water for better quality of life, urbanization and industrialization. another potential problem will be the increase in severity and frequency of flash floods. resettlement schemes of the government are not taken positively by the public so government has to find an alternative solution to emphasize on the preparedness and try to involve the business to create awareness among the public (chan, 1995). the frequency and the severity of the natural disasters have increased in terms of losses in last few years. the low and middle income countries have suffered an estimated one third of the $3.5 trillion in losses from the natural disaster that occurred during the years 1980-2011 globally. in particular, floods have increased in frequency and severity of impact. climate change has already manifested in the rising sea levels, changing local rain pattern and more frequent storms all these are the clear signs of the more severe flood hazards in days ahead. the ability of the countries to manage the impact of the disaster will have implication on the growth and development of the country. investing in disaster preparedness will help save lives and reduce the financial burden of the post-disaster response and relief efforts. this can speed up the recovery and help in maintaining the countries long term development. the multi-hazard mitigation council in america found that for every $1 spent on pre-disaster mitigation to prepare for the natural disasters like flood about $4 is saved in post disaster damages (cutter et al., 2013). the fact of this net saving of $3 by every $1 investment could be true for the organizations of the private sector if their csr spending can be deliberately channeled to the initiatives for flood preparedness. the recent floods in malaysia have caused severe damages. it has resulted in 21 deaths, more than rm 1 billion losses of properties and approximately 2000 lost homes. it is evident that due to the rapid urbanization and industrialization the challenge for flood management will be higher as the severity and frequency of floods is expected to increase. to counter this challenge a holistic approach of flood management is needed. this can be done through implementation of preparedness, emergency response and recovery strategies. malaysia’s past experience with floods have shown the need for the better flood management strategies (husaini, 2007). over reliance on the government and international aids might be a constraint to effective disaster management. especially in developing countries, this will lead to more instability because they may not have the funds and expertise to handle such disasters. the national disaster mitigation and preparedness has very low priority among international aid donors, moreover international agencies such as the united nation agencies have limited resources to handle such issues. the private sector organizations have enough funds to partner with the ngos to help the government to implement disaster mitigation and preparedness activities. the donation of inappropriate relief supplies by the private sectors is one of the serious problems. private, public and non-profit sectors need to learn how to collaborate with each other for the disaster mitigation and preparedness activities (twigg, 2001). the insurance sector could be linked to disaster mitigation through public and private partnerships. this sector could be affected more by the disasters as it has a commercial interest to it as well. whenever there is a natural disaster there will be an increase in insurance claim, therefore involving in disaster mitigation through csr initiatives could make good business sense for this sector (twigg, 2001). the present study attempts to develop a systematic understanding about the nature and extent of csr initiatives of malaysian insurance companies for flood relief and mitigation. 3. research methodology this study was a qualitative study to analyze the role of csr in flood mitigation in malaysia. the research method for this study will consist of content analysis on the company websites to give information regarding the csr programs of the insurance companies. content analysis was done on the insurance company websites to identify the characteristic of csr involvement and relationship with other stakeholders in the disaster reduction. based on the findings of the content analysis the nature and ramakrishnan, et al.: the role of corporate social responsibility in flood mitigation among the listed insurance companies in malaysia international review of management and marketing | vol 6 • special issue (s4) • 201688 extent of csr involvement of the organization was analyzed. the sample for the study included all the listed insurance companies in malaysia. there are total 55 insurance companies listed in bursa malaysia. the data was collected from the insurance company websites between november 2015 and january 2016. the insurance companies are categorized according to the product and the nature of their business. basically they are categorized under 11 different groups namely life and general business, life business only, general business only, life and general reinsurance business, life reinsurance business, general reinsurance business, takaful operators for family takaful business, takaful operators for family and general takaful business, retakaful operators for general retakaful business, retakaful operators for family and general retakaful business, international takaful operator. the sample included all the 55 insurance companies. the companies csr programs was divided into two different categories namely the csr programs related to community involvement, and socially responsible employee relation which was used by moon (2002) in his study which involved a 7 country study of csr website reporting. however we did not include the third classification which is the socially responsible production because the sector under study in this research was a service sector and was not being relevant to our study. the programs which come under community involvement are csr programs such as general community issues, agriculture, local economic development, arts and culture, community development, education and training, environment and conservation, health, housing, religion, sport, welfare (including poverty and emergency relief), youth and children-related projects, and other. similarly the programs under the socially responsible employee relations included the employee welfare and employee engagement. socially responsible employer relations refer to the status of the workforce as a stakeholder in the context of company decision making and the development of csr practices and policies. further, the companies were also classified based on the way the csr was managed within the company, the companies which followed the traditional philanthropic approach in their csr initiatives were put under the group of traditional csr and the companies which had more institutionalized approach by having their csr programs embedded in the company’s core strategy. institutionalized csr companies refer to those companies which have csr related to the employee engagement, partnerships with ngos, employing csr codes. the data collected from the company websites were analyzed using a excel sheet performa designed for this study. 4. results the data was summarized using the simple descriptive statistics, there are a total of 55 insurance companies listed in the bursa malaysia. based on the ownership type the insurance companies were classified as local companies and foreign companies. as shown in figure 1, 27 foreign companies and 28 local companies are listed in the bursa malaysia. however, out of these 55 listed insurance companies only 34 companies had given some information about their csr initiatives on their company website as shown in figure 2. the remaining 21 company websites either did not have any information about their csr activities or the websites were not accessible. so based on the initial findings only 34 companies were taken for further analysis. further analysis on the type of csr involvement of the company revealed that most of the companies had both the community involvement and the socially responsible employee relations related csr programs. as shown in the figure 3 none of the companies concentrated only on socially responsible employee relations as they preferred to use the combination of both the community involvement and the socially responsible employee relations related csr programs. however, there were few companies which involved in the csr activities only related to community involvement. on further analysis of the approach to the csr companies with the institutionalized approach outnumbered the companies with the traditional philanthropic approach towards csr. as shown in 27 28 foreign local figure 1: classification of the companies based on the type of ownership 20 7 14 14 0 10 20 30 40 yes no t yp e of o w ne rs hi p csr information on the company website local foreign figure 2: classification of the companies based on the communication of corporate social responsibility related information 3 0 17 3 0 11 0 5 10 15 20 25 30 community involvement srer both t yp e of o w ne rs hi p csr activity local foreign figure 3: companies corporate social responsibility (csr) programs categorized based on type of csr activity ramakrishnan, et al.: the role of corporate social responsibility in flood mitigation among the listed insurance companies in malaysia international review of management and marketing | vol 6 • special issue (s4) • 2016 89 the figure 4 only 3 companies had the traditional philanthropic approach and all these companies were locally owned insurance company. all the remaining 31 companied had an institutionalized approach towards csr. the results also showed that only 8 insurance companies has csr programs related to disaster management and only 4 companies out of these 8 insurance companies had some csr initiatives which focused on the flood mitigation. the details are shown in figures 5 and 6. the overall result of the website study shows that the insurance companies in malaysia do not focus much on the csr programs related to flood mitigation and disaster management. it is evident that only the foreign companies are more focused into the disaster management or flood mitigation related csr initiative as the results shows that only 1 local company has some csr initiatives related to disaster management. however, none of the local insurance companies have focused on flood mitigation related csr initiatives. 5. discussion the result of this study clearly indicates that the disaster management is not the focus in majority of the companies csr initiatives in insurance sectors in malaysia. furthermore, there is only one local company which is into the disaster management related csr initiative and even this local company has its head office outside malaysia. this clearly shows that the insurance companies do not consider that the disaster management csr initiatives will have any impact on their company’s direct or indirect profitability. adaptation to the climate change is critical to the commercial success of the private insurance companies. in the long term it may affect the long term sustainability of the private insurance companies by limiting the availability and affordability of the insurance companies. the investments in activities that help in managing disasters due to climate change not only give them the reputational rewards but are necessary for the sustainability of the industry (herweijer et al., 2009). so it is very important for the insurance industry to focus on the csr activities related to disaster management which is closely related to the climate change. it is also evident from the previous research by (twigg, 2001) that the insurance companies have a commercial interest for investing in the disaster related csr initiatives. this is because this not only helps them in improving the image of the company, but also reduces the claims due to natural disaster in turn helping in the profitability of the organization. the research by the multihazard mitigation council in america has concluded that for every $1 investment on the disaster preparedness activities will result in $4 saving in the post disaster losses (cutter et al., 2013). the losses due to the recent floods in malaysia amounts up to rm 1 billion, so it makes real business sense for the malaysian insurance companies to focus on the csr initiatives related to flood mitigation. this will contribute to the business profitability and it will also reduce the losses to the nation during such disasters. as a policy recommendation we can suggest the malaysian government to step in and give a directive on the focus area for csr spending by the companies which also help in the effective use of the csr spending by the company. the companies can think of strategic partnership with the government agencies and ngos which get involved during such kind of natural disasters. the company has to design a csr program which focuses more on flood mitigation rather than focusing only in the post disaster relief activities. 6. conclusion although the majority of the insurance companies have an institutionalized approach towards csr, there are some insurance companies who are yet to introduce csr. few of the foreign owned companies have identified the need to device the csr initiatives which focus on disaster, majority of the companies have to focus on this area which can be a win-win situation for all their stakeholders. overall, the malaysian insurance sector is doing well in terms of their csr initiatives. in terms of their involvement in csr initiatives related to disaster management and flood mitigation they are way behind their western counter parts. most of the malaysian listed insurance companies involved in the csr related to disaster management or flood mitigation are foreign owned. therefore it can be concluded that the locally owned insurance companies have to understand the importance of the csr initiatives in this area. they need to introduce such programs before the loss due to disaster threatens the sustainability of their business. 20 0 11 3 0 5 10 15 20 25 30 35 institutionalised traditional (philanthropic) t yp e of o w ne rs hi p csr approach local foreign figure 4: companies categorized based on their corporate social responsibility approach 7 20 1 22 0 10 20 30 40 50 yes no t yp e of o w ne rs hi p disaster management csr information disaster management related csr initiatives local foreign figure 5: corporate social responsibility (csr) disaster management related csr initiatives 4 23 0 23 0 10 20 30 40 50 yes no t yp e of o un er sh ip flood mitigation csr information local foreign figure 6: corporate social responsibility initiatives related to flood mitigation ramakrishnan, et al.: the role of corporate social responsibility in flood mitigation among the listed insurance companies in malaysia international review of management and marketing | vol 6 • special issue (s4) • 201690 7. limitation and scope of future research the study was based on the csr related information published on the website of the company, so there might be a case where there are companies which have csr related activities but they have not published it on the website. also, there might be certain information which was published earlier but was deleted as the companies keep updating the information on their websites. the study used the simple method for analyzing the csr data future study can use some software to analyze the pattern of the csr information, this will give some more insight on the csr communication. future study can use a quantitative research method using questionnaire and focus on the drivers and the barriers for the company to get involved in csr initiatives related to the disaster management. references ariyabandu, m.m., hulangamuwa, p. (2002), corporate social responsibility and natural disaster reduction in sri lanka. itdgsouth asia. chan, n.w. (1995), flood disaster management in malaysia: an evaluation of the effectiveness of government resettlement schemes. disaster prevention and management an international journal, 4(4), 22-29. chapple, w., moon, j. (2005), corporate social responsibility (csr) in asia: a seven-country study of csr web site reporting. business and society, 44(4), 415-441. cutter, s.l., ahearn, j.a., amadei, b., crawford, p., eide, e.a., galloway, g.e., schoch-spana, m. (2013), disaster resilience: a national imperative. environment: science and policy for sustainable development, 55(2), 25-29. herweijer, c., ranger, n., ward, r.e.t. (2009), adaptation to climate change: threats and opportunities for the insurance industry. the geneva papers on risk and insurance issues and practice, 34(3), 360-380. husaini, h.a. (2007), flood and drought management in malaysia. ministry of natural resources and environment. ministry of natural resources and environment. malaysia. available from: http://www. met.gov.my/files/climatechange2007/.../k2%20husaini_p.doc. johnson, b.r., connolly, e., carter, t.s. (2011), corporate social responsibility: the role of fortune 100 companies in domestic and international natural disasters. corporate social responsibility and environmental management, 18(6), 352-369. moon, j. (2002), corporate social responsibility: an overview. in: hartley, c., editor. the international directory of corporate philanthropy, 1st ed. london, new york: europa publications. p3-14. oehler, m., roeth, h., welford, r., ying, j. (2013), business and disaster preparedness: helping communities prepare for effective response. csr asia. hong kong. available from: http://www. prudentialcorporation-asia.com/export/sites/default/prudential_en_ pca/resources/foundationpdf/csra2013_business_and_disaster_ preparedness.pdf. shaluf, i.m., ahmadun, f.r. (2006), disaster types in malaysia: an overview. disaster prevention and management an international journal, 15(2), 286-298. twigg, j. (2001), corporate social responsibility and disaster reduction: a global overview. london: benfield greig hazard research centre. . international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2016, 6(3), 448-453. international review of management and marketing | vol 6 • issue 3 • 2016448 economic efficiency rating of russian industrial enterprises julya vadimovna ovcharenko1*, elena anatolyevna bessonova2* 1south-west state university, 94, 50 years of october street, kursk, 305040, russia, 2south-west state university, 94, 50 years of october street, kursk, 305040, russia. *email: ov4arepko.july@yandex.ru/bessonowa_new@mail.ru abstract the objective of this study addresses a specific rating technique to assess the efficiency of enterprise performance. the article touches upon the rating methods commonly applied to obtain a complex rating value on the basis of a comprehensive enterprise activity assessment, such as ranksum method, rank-score method, scale interval method and rating number method. here we present a specific approach to rating with a focus on the efficiency of enterprise performance in particular. we also give reasons for the advantages the approach we suggest obviously provides, such as time saving, gain in information content as well as applicability of the rating results as a reliable tool to a company’s productive capacity management. the article presents the results of the efficiency ratings assigned to a number of russian industrial enterprises which are based on the assessment of their performance efficiency premised on the key efficiency values. as the result of the rating, enterprises engaged in extraction of commercial minerals have been assigned the top positions. the analysis of the indices used for calculating profitability values has led to a conclusion that profit growth and expenditure reduction will favor the raise of their efficiency and, therefore, upgrade their positions in the rating. keywords: rating assessment, efficiency, rank-sum method, rank-score method, profitability indices, rating results jel classification: l16 1. inroduction rating is currently becoming widely applied as a relevant technique to provide analysis and assessment of the whole scope of business aspects. ratings are assigned to every particular entity within a set number of the entities according to the full range of the key values under consideration. since the problem of insufficient productive capacity growth is the very challenge enterprises have to face increasingly nowadays, rating methodology should obviously involve the methods and techniques which would allow to focus on assessing the efficiency of enterprise performance. it is necessary to note that most of the currently applied rating techniques are intended for comprehensive assessment of enterprise performance. the literature most widely presents releases of financial strength ratings for companies of different profiles, commercial banks and other lines of businesses. however, business world representatives have recently been taking an increasing interest in well-organized, structured, most unbiased and credible information obtained on the basis of reliable methods to provide objective business coverage. thus, applying a specific rating technique to assess the efficiency of an enterprise in particular is obviously relevant. the abovementioned reasons clearly show that analytic studies of enterprise operations and production requires comprehensive consideration of rating methodology as well as the possible ways of its practical application. so far, there is no consistent approach to assessing the aspect of enterprise efficiency, since the science of economics has not arrived at consensus on the concept of efficiency. that is the reason why the literature suggests such a big variety of methods to evaluate the efficiency of enterprise operations and production (avrashkov and grafova, 2006). in our opinion, the need for the development of specific rating methods and techniques to assess the efficiency of enterprise performance is determined by the current demands of business, as well as by the following trends in the contemporary economic science: 1. extensive use of the “efficiency” index (which is actually meant as the output, or sales volume) by expert ra (russia’s ovcharenko and bessonova: economic efficiency rating of russian industrial enterprises international review of management and marketing | vol 6 • issue 3 • 2016 449 no. 1 rating agency working on a global scale) as a key value for its expert-400 rating (vinogradova, 2015); 2. focus on two groups of efficiency indices from the set of four key values commonly used for comprehensive entity assessment (distinguished by prof. a. sheremet, doctor of economic sciences (sheremet, 2011)); 3. admission of efficiency values as critically important criteria for enterprise health diagnostics (prof. g. grafova, doctor of economic sciences (grafova, 2006)) which rests on prof. e. altman’s 5-factor z-score formula as well as the golden rule of business. 2. methodology 2.1. currently applied rating methods in order to obtain high precision credibility rating results it is necessary to develop most exact and reliable methods which would cover adequately the scope of company aspects. at present there are different rating methods which are reported in economic literature and are widely used in analytical practice, namely: ranksum method, rank-score method, scale interval method and rating number method (ovcharenko, 2015). 2.1.1. rank-sum method the method involves summing up the ranks of all the particular enterprise key figures. the integrated assessment value is calculated according to the following formula: 1 n i kj aij = = ∑ (1) where kj is the integrated value of each (j th) enterprise assessment on the key values considered; j is the order number of the enterprise; ai is the index value (i = 1….n); n is the number of indices considered. the results obtained allow to judge which of the enterprises shows the highest efficiency according to the range of the key values. enterprises are assigned ratings by ranking the integrated assessment value in an ascending (or descending) order. the higher the integrated assessment value is, the higher the enterprise is rated. in case of equal indicator values, companies are assigned with the same positions. companies with the minimum sum of positions will have the best results under this method (batkovskiy et al., 2015). 2.1.2. rank-score method the method involves summing up the scores assigned to each of the enterprise key values. the higher the key value is, the lower the score assigned. the integrated assessment value is calculated according to the following formula: 1 n i kj bij = = ∑ (2) where kj is the integrated value of each (j th) enterprise assessment on the indices considered; j is the order number of the enterprise; bi is the index score (i = 1 … n); n is the number of key values considered. the lower the figure obtained is, the higher the enterprise is rated. (dibal, 2009). the assessment value acquired according to this method is representative of the enterprise economic and financial capacity level (low, insufficient, average, normal and high) (sheremet et al., 2007). 2.1.3. scale interval method the method for comparative assessment of enterprise performance involves a 3-step algorithm. let us consider each of the steps. step 1: enter the key data matrix (aij), where the key values (i = 1,2,3,… n) are placed into the matrix rows, whereas order numbers of entities (j = 1,2,3,… m) are placed into the matrix columns. step 2: define the benchmark (the reference optimum value) for each particular ith value and enter it into the column for the reference company (m + 1). step 3: calculate standardized key indices as the ratios to the benchmark (reference) values according to the formula: ( ) aij x a reference , j ij = (3) where aij is the best (optimum) value for all the i input values aggregated. step 4: the rating assessment value (кj) for each entity is calculated according to the formula: k j j nj= − + + −( ) ... ( )1 11 2 2χ χ (4) where x1j, x2j,…xnj are the standardized indices of j th entity. step 5: the entities are assigned ratings in the ascending order of the rating value. the one with the minimum кj value is rated highest (plaskova, 2010). 2.1.4. rating number method the method supposes working out the so-called rating number according to the formula. r=2x1+0.1х2+0.08х3+0.45х4+х5, (5) where x1 is the own circulating capital coverage index, х2 is the current liquidity index, x3 is the asset turnover index, x4 is the sales margin return on sales (ros), x5 is the return on equity. this approach is most commonly used to develop standard methods and techniques of assessing enterprises. the higher the value of a rating number is, the higher the enterprise is rated (vachrushina, 2009). 2.1.5. analysis of the currently applied rating methods the currently applied rating methods are based both on overall evaluation of a number of indices and key values and on rigorous mathematical approaches. the analysis of those described above shows that generally they involve consideration of a wide range of indices which are, to a varying extent, descriptive of financial solvency, business credibility and sustainability, credit standing, investment attractiveness of entities. that sheds light on the core of the concept of comprehensive assessment, which reports virtually of the whole scope of quantitative and qualitative parameters and provides a comprehensive holistic picture of a company state. ovcharenko and bessonova: economic efficiency rating of russian industrial enterprises international review of management and marketing | vol 6 • issue 3 • 2016450 2.2. the alternative method for rating evaluation of enterprise performance efficiency suggested by the authors 2.2.1. rationale for the need for the development of a specific rating method to evaluate enterprise efficiency however, business representatives are often interested not in comprehensive information covering the whole range of enterprise aspects, but they seek to receive data focused on a certain set of indices which would report on particular aspects of a company and would be specifically indicative of the efficiency of enterprise performance. as it was mentioned above, no consistent approach to business efficiency evaluation has actually been elaborated. consequently, no explicit well-developed method based on rating techniques which would provide evaluation of enterprise efficiency is currently available. 2.2.2. the advantages of availability of a specific rating method to provide evaluation of enterprise performance efficiency here we deem it necessary to highlight the main advantages of the specific rating method we present in this work in order to prove the actual need for its development and its eventual application: 1. gain in time for the calculations. availability of a specific technique to provide systematic rating of enterprise efficiency allows to shorten the time of analytical procedure considerably compared to comprehensive rating analysis, since it requires much less measuring and calculation; 2. gain in rating informative content and value. since this rating scale is specifically focused on the aspects which are indicative of enterprise efficiency, unlike integrated assessments, it provides more complete, precise and detailed evaluation results for an analyst; 3. the suggested rating presentation is definitely considered to be instrumental in fostering enterprise productive capacity growth as well. thus, it will contribute greatly to identifying hotspots and trouble areas which result in the lack of efficiency. consequently, this rating system will provide clues to working out certain strategic options for enhancing productive and financial capacity of an enterprise (ovcharenko, 2015). thus, availability of a rating system to evaluate enterprise efficiency can be greatly beneficial to the companies which are actually interested in expert assessment of their own as well as their competitors’ standing. since the rating we suggest is only focused on the factors indicative of enterprise efficiency, it seems advantageous from the point of view of time saving and information value compared to ratings considering a full scope of business aspects. it also facilitates making strategic decisions related to productive capacity management. the facts mentioned above give evidence of the need to develop a specific rating methodology for assessing enterprise efficiency. 3. results here we present the economic efficiency rating scaling russian industrial enterprises. it must be noted that industry, as the main sector in the sphere of material production, plays the key role within the structure of the national economy. that is the rationale for our choice of the assessment object. for that purpose we suggest to use the rank-sum method, although modified to some extent. it deems most appropriate in this case since it does not require analyzing a comprehensive set of various criteria. in our opinion it is relevant to focus on profitability indices only, specifically, ros and return on total assets (roa) as the input data, since those indices are representative of both the company’s assets and sales margin disposal efficiency. the results of calculations help to assess the efficiency of companies for each of the groups of selected indicators, and to identify what factors had the greatest impact on the summary for assessment of the effectiveness (tsaruk, 2014). thus, ros shows the share of gross profit on sales in the total revenue, which displays company’s potential profitability; whereas roa is the ratio of company’s earnings before taxes (ebt) against the total assets invested in it, which is indicative of the management efficiency in disposing company assets. consequently, assuming these indices as assessment inputs makes it possible to assess enterprise efficiency most comprehensively. we have assigned efficiency ratings to a number of russian industrial enterprises over the period of 2010 to 2013 applying the official statistics. the assessment addresses the companies engaged in the following industry branches: • extraction of commercial minerals • manufacturing industry • generation and supply of electric power, gas and water • construction industry. the input data for efficiency rating assignment for russian industrial enterprises are presented in table 1. the rating results are reported in table 2. thus, efficiency rating for the russian industrial enterprises addressed displayed the following allocation of the rating positions: table 1: the input data for efficiency rating assignment for russian industrial enterprises branch of industry index/year (%) 2010 2011 2012 2013 extraction of commercial minerals return on sales 31,9 31,4 28 22,1 return on total assets 11,6 14,2 11,9 11,3 manufacturing industry return on sales 14,8 13,2 10,7 8,8 return on total assets 8,2 8,4 8,1 4,5 generation and supply of electric power, gas and water return on sales 7,1 6,4 3,9 4,4 return on total assets 4,6 1,1 0,9 0,7 construction industry return on sales 4,5 4,3 5 8,3 return on total assets 2 2,1 2,9 5,6 ovcharenko and bessonova: economic efficiency rating of russian industrial enterprises international review of management and marketing | vol 6 • issue 3 • 2016 451 • the companies engaged in extraction of commercial minerals are assigned the top position; • the manufacturing enterprises are rated second; • the enterprises engaged in generation and supply of electric power, gas and water are mostly rated third (over the period); • construction companies have gradually shifts from the fourth position in 2010 up to the second position (2011-2012) and then, in 2013, they share the second position with manufacturing industries. thus, we come to a conclusion that the leading position in the efficiency rating among the industrial enterprises (with regard to the industry branches) is occupied by the companies engaged in extraction of commercial minerals, which is due to the country’s immense mineral wealth – russia is the global leader in mineral resources abundance. the next step of the studies is to assign efficiency ratings to major mining companies within the leading branch in order to determine the absolute national “efficiency leader.” we have addressed the following russian enterprises: • public joint stock company (pjsc) gazprom; • pjsc rosneft’; • pjsc surgutneftegaz. the input data for assigning efficiency ratings to the leading mining companies are presented in table 3. the rating results are displayed in table 4. the efficiency rating for the russia’s leading companies engaged in extraction of commercial minerals displayed the following allocation of the rating positions: • pjsc gazprom is assigned the top position; • pjsc rosneft’ is mostly rated second (over the period); • pjsc surgutneftegaz is rated second (and, therefore, the least efficient) in 2010, but then, in 2011 and 2013 the company shares the top position with pjsc gazprom and in 2012 it shares the second position with pjsc rosneft’. thus, according to the efficiency rating pjsc gazprom appears the absolute leader among the russia’s leading enterprises engaged in extraction of commercial minerals, which can be primarily accounted for by the best indicating figures the company displays. 4. discussion we have also found that over the period covered the efficiency of russian industry in general gradually abates. this is, obviously, a negative trend. the pattern displaying the average values of roa and ros indices for industrial enterprises over the years 2010 to 2013 shows a simultaneous lowering of those for all the national industries (figure 1). besides, we have detected that the efficiency of the national leading companies in extraction of commercial minerals also tends to lower at the end of the period covered. since the branch is admitted to be most developed in russia and, consequently, can promote (or, on the contrary, inhibit) the development of other industrial branches, the fact speaks for the overall decrement in the efficiency of national industries. the pattern displaying the average values of roa and ros for the leading national industrial enterprises engaged in extraction of commercial minerals over the years 2010 to 2013 shows a simultaneous efficiency decrement (in most periods) for the companies (figures 2 and 3). we have tried to ascertain the cause for the rating downgrade. for that purpose we considered the figures which make it possible to calculate roa and ros. the collation of the values of company assets and ebt as well as revenue and sales profit for the leading table 2: rating positions of the enterprises assessed (by the industry branches) year rating position extraction of commercial minerals manufacturing industries generation and supply of electric power, gas and water construction industries 2010 1 2 3 4 2011 1 2 3 3 2012 1 2 4 3 2013 1 2 3 2 table 3: the input data for assigning ratings to the leading russian enterprises engaged in extraction of commercial minerals indices/enterprises (%) pjsc gazprom pjsc rosneft’ pjsc surgutneftegaz 2010 return on total assets, 13,79 20,51 13,28 return on sales, 30,96 30,93 22,10 2011 return on total assets 15,41 11,99 18,13 return on sales 35,73 16,03 21,04 2012 return on total assets 12,53 11,33 10,80 return on sales 27,06 12,43 17,64 2013 return on total assets 11,06 8,38 14,44 return on sales 30,23 11,82 16,52 pjsc: public joint stock company table 4: rating positions of the enterprises assessed year rating position pjsc gazprom pjsc rosneft’ pjsc surgutneftegaz 2010 1 1 2 2011 1 2 1 2012 1 2 2 2013 1 2 1 pjsc: public joint stock company ovcharenko and bessonova: economic efficiency rating of russian industrial enterprises international review of management and marketing | vol 6 • issue 3 • 2016452 horizontal analysis of the assets and the sales profit values of the leading companies engaged in extraction of commercial minerals has allowed to conclude that: • almost every company displayed lower ebt growth rate compared to that of the assets (the only exception is pjsc rosneft’ in 2013); • they also mostly displayed lower sales profit growth rate compared to that of the revenue (the only exception is pjsc rosneft’ in 2013). as it was mentioned before, roa shows the share of ebt within total company assets, whereas ros indicates the share of sales profit in sales revenues. we deem that the reduction in the efficiency of performance of the leading russian enterprises engaged in extraction of commercial minerals over the period of 2010-2013 was caused by the following actualities in the efficiency index we have used for assigning the ratings: 1. constant and considerable growth of the denominator (assets and revenue); 2. slight diminution of the numerator (ebt and sales profit). the rating results give evidence to the fact that upgrading the efficiency rate is the top priority task for the leading russian enterprises engaged in extraction of commercial minerals. to achieve the goal it is necessary to take such basic steps as increasing the profit and reducing the company expenditures. that will eventually result in the upgrade of the efficiency rating for russian companies. 5. conclusion the present study addresses rating as a technique of assessing the efficiency of enterprise performance. it was ascertained that the existing modern methods of rating cover the full range of enterprise performance aspects. however, the rating which is specifically focused on the efficiency of enterprise performance has a number of advantages, such as time saving, gain in information content as well as applicability of the rating results to productive capacity management of a company. it is necessary to highlight the importance of further development of a special rating methodology for that purpose. in the conduct of the present study we have assigned ratings to a number of russian industrial enterprises focusing on the efficiency of their performance. we have also presented an efficiency rating for the leading companies engaged in extraction of commercial minerals covering the period of 2010-2013. the assessment has led to a conclusion that the absolute efficiency rating leader is pjsc gazprom, which displays the best efficiency key values among all the industrial enterprises under consideration. however we have diagnosed an overall decline in the efficiency of the leading russian companies engaged in extraction of commercial minerals (and, consequently, the trend touches upon all the national industrial enterprises). increasing the profit and reducing the company expenditures will foster the improvement of their actual efficiency and, therefore, upgrade their efficiency rating. figure 1: dynamics of return on total assets and return on sales for russian industrial enterprises taken in average values over the period of 2010-2013, % figure 2: dynamics of return on total assets values for the leading national enterprises engaged in extraction of commercial minerals, 2010-2013, % figure 3: dynamics of return on sales values for the leading national enterprises engaged in extraction of commercial minerals, 2010-2013, % figure 4: the values of the assets and the ebt for the leading russian companies engaged in extraction of commercial minerals in 2010-2013, mln rubles figure 5: the values of the revenue and the sales profit for the leading russian companies engaged in extraction of commercial minerals in 2010-2013, mln rubles russian enterprises in extraction of commercial minerals covering the period of 2010 to 2013 is represented in figures 4 and 5. ovcharenko and bessonova: economic efficiency rating of russian industrial enterprises international review of management and marketing | vol 6 • issue 3 • 2016 453 references avrashkov, l., grafova, g. (2012), to the question of formation of a normative base for assessing economic and financial condition of the company. auditor, 11, 15-21. batkovskiy, a., semenova, e., trofimets, v., trofimets, e., fomina, a. (2015), automated rating of financial and economic condition of companies. mediterranean journal of social sciences, 5, 297-308. dibal, s. (2009), financial analysis in the concept of controlling. saintpetersburg: business press. grafova, g. (2006), rating assessment of the economic condition of the enterprise. entrepreneur, 4, 89-102. ovcharenko, y. (2015), the rating of efficiency of activity of enterprises as a tool of development strategy of the region. news of southwest state university. the economic series. sociology. management, 15, 188-195. plaskova, n. (2010), economic analysis. moscow: eksmo. sheremet, a. (2011), theory of economic analysis. moscow: infra. sheremet, a., saifulin, p., negashev, e. (2007), methodology of financial analysis. moscow: infra-m. tsaruk, a. (2014), evaluation of economic and environmental efficiency of iron ore enterprises in ukraine. the advanced science journal, 1, 221-224. vachrushina, m. (2009), comprehensive economic analysis of economic activities. moscow: university textbook. vinogradova, n. (2015), institutional effectiveness assessment based on the quality of institutional economic structure in the current context. mediterranean journal of social sciences, 5, 576-587. . international review of management and marketing | vol 6 • special issue (s2) • 2016184 special issue for "management of education: problems and perspectives" international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2016, 6(s2) 184-189. the model of formation of patriotism at schoolchildren by means of folk pedagogics diana n. davletbaeva1*, elena l. iakovleva2, diana f. kajumova3, anna a. karimova4, aida g. sadykova5, elena v. shvetsova6, elmira m. vildanova7, dariya z. yarhamova8 1kazan (volga region) federal university, kazan, russia, 2institute of economics, management and law, kazan, russia, 3kazan (volga region) federal university, kazan, russia, 4kazan (volga region) federal university, kazan, russia, 5kazan (volga region) federal university, kazan, russia, 6institute for social and human knowledge, kazan, russia, 7kazan (volga region) federal university, kazan, russia, 8kazan (volga region) federal university, kazan, russia. *email: dianadi@bk.ru abstract the topicality of the study of the problem is due to the fact that the sharp change in the hierarchy of values, priorities, ideals, lack of spirituality, lack of morality, the unleashing of military conflicts, extremism and clash of religious trends have highlighted the need to strengthen the integrity and diversity of the modern world, the actualization of the problems associated with the formation of philosophical, civil and patriotic beliefs of the younger generation. in this regard, this article devotes on the development of structural and functional model of formation of patriotism at schoolchildren by means of folk pedagogy. the leading approaches to the study of this problem were the student-centered and axiological approaches to comprehensively cover this problem. the article presents a model of patriotic qualities of schoolchildren by means of folk pedagogy, which includes the target, procedural, substantive, organizational and methodical, efficiently-evaluative components that together provide effective formation of patriotic qualities of schoolchildren. this model can be applied in the practice of primary school teachers in the preparation of students of pedagogical high schools to perform the functions of primary school teachers, as well as in-service teacher training system. keywords: structural-functional model, folk pedagogy, schoolchildren, patriotic education management jel classifications: a23, i23, i26 1. introduction 1.1. the topicality of research the development of any country is determined by a number of objective and subjective factors, among which a special place is occupied by the development and adoption of a person acting in this state rules, regulations and laws, the implementation of every citizen of the conventional duties (ziyatdinova et al., 2015; mokeyeva et al., 2015; klimentyeva, 2013). this trend requires a detailed examination of the organization of educational process; development and testing of alternative models of training; ensuring of information and migration security of the educational process (kalimullin and masalimova, 2016; kozhanova et al., 2015; dmitrieva et al., 2015). obviously, the increase in actual problems of formation of civil qualities of the person, to a certain extent, contribute to change of priorities in educational upbringing sphere. it includes the changes in the vision of the ultimate goals of learning and education. the purpose of school is defined as the organization of the formation of a citizen, having state-guaranteed set of rights and duties, committed to the ideals of democracy, the ideas of social partnership, respecting national and personal freedom for itself and others, abide by the laws of the state, capable of a variety of and productive activities for the benefit of society and the personality in the law of the russian federation “on education” (2009). 1.2. literature review the problems of patriotic education are reflected in the research and writings of local teachers and public figures of the past: davletbaeva, et al.: the model of formation of patriotism at schoolchildren by means of folk pedagogics international review of management and marketing | vol 6 • special issue (s2) • 2016 185 lomonosov (1990), belinsky (1982), kapterev (1982), tolstoy (1976), ushinsky (1974), krupskaya (1973), sukhomlinsky (1987) and others. the main thing in the upbringing they considered is the formation of human-patriot who loves his people, their language, their culture, their traditions and customs, differing high morals, love of science, hard work, serving russia. in order to achieve the objectives of patriotic education is of great importance of spiritual and moral experience of previous generations. providing connection and continuity of the past with the present promotes to the preservation of national and universal values through which each nation reproduces its spiritual aspect, ethnic psychology, traditions, customs, and character. the ideas of continuity of national traditions and customs, folk pedagogy and wisdom of our ancestors are reflected in the works of volkov (1997), pavlov (2009), petrovsky (1993) and others. the research works of domestic pedagogues and psychologists are devoted to the problem of continuity of preschool and primary school education: vygotsky (2006), vinogradov (2000), valeev (2006). 2. methodological framework the methodological basis of the study were: epistemology, philosophical ideas about the unity of general, special and individual; a universal connection, interdependence and integrity of the phenomena; the unity of theory and practice; the concept of patriotic education; the leading principles of modern school about the objective necessity of the scientific update content, forms, methods and means of education; the idea of ethnopedagogics of educational process. developing a model of the formation of patriotic qualities of schoolchildren, we proceeded from the fact that the model is a diagram on the basis of which there is a possibility of subsequent reproduction of a given process, and the implementation of possible comparisons, comparisons in future studies and complex psychological pedagogical problems. modeling as a method of scientific knowledge combines theory and experience, induction and deduction, and is illuminated in the writings afanas’ev (1973), novick and uyomov (1968), stoff (1966) and others. the simulation method is used to determine the qualities of pedagogy or improve the characteristics. the model is defined as a system of elements that reproduces certain sides of the link, the functions of the research subject in the philosophy. it is noted that no single model can not claim to be universal. as the research object model structure can be modified: some elements may be removed or conversely added externally. according to slastenin (2002), “in the simulation one can resort to the study and development of the auxiliary artificial or natural system: (a) located in some objective knowledge of the subject; (b) the ability to replace it in certain respects; (c) eventually gives information about the modeled object. the extraordinary complexity of social, including educational processes and their dependence on a huge number of variables that reflect external conditions and the state of consciousness of the people, it is very complicate the construction of the model and its use.” in scientific literature, the term “process” is interpreted as the progress of a phenomenon, a succession of states, stages of development, and as a set of sequential actions to achieve a result, and as a natural, a succession of consecutive moments of development. our study is based on the procedural approach in the development of personality developed by rubinstein (1964): mental functioning continuously, this continuity is provided by the organic unity of conscious unconscious. in this connection, it is most important for the quality of psyche. the continuity of the psyche is objectively determined by its leading role in the self-regulation of all human life. 3. results in the system of activity of a teacher the creation and implementation into the pedagogical process the model of the formation of patriotic qualities of pupils took place. it was used for the study of problems of formation of patriotic qualities of pupils by means of folk pedagogy (figure 1). 3.1. the components of the model as it can be seen from figure 1, the model includes the following components: • target (goal, objectives, principles, approaches, patterns); • subject-subject (teacher, students, parents, teachers, heads of children’s circles and sections); • meaningful (activity, stages (algorithm) of a teacher’s work); • procedural communication (forms, methods, means); • diagnostic scoring (criteria, indicators, levels, result). the tasks were the following: identifying the educational potential of traditional pedagogy; the identification of patriotic education of schoolchildren; developing children’s emotional and sensual aspects of love to fatherland in various activities; formation of experience of the patriotic behavior of pupils through their inclusion in different activities (cognitive, communicative, game, aesthetic, labor, search, etc.). the leading principles were: • the principle of humanization of the educational environment (the attitude of the child to a responsible and independent subject of his own development; a willingness to help, respect for children and adults); • the nature-conformity (taking into account patterns of development, psychophysical organization and inclinations of the pupil, age and gender features; respect for his personality); • cultural conformity (the promotion to children’s cultural identity and self-realization of the creative gifts and abilities, the acquisition of social experience, a free personal selfdetermination); • v ariability (offering opportunities participation in various davletbaeva, et al.: the model of formation of patriotism at schoolchildren by means of folk pedagogics international review of management and marketing | vol 6 • special issue (s2) • 2016186 figure 1: model of the formation patriotic qualities of schoolchildren by means of folk pedagogics activities, in accordance with the capabilities of schools and families, with the interests of each child, the guarantee of free choice of activity and the possibility of obtaining comprehensive information about it); davletbaeva, et al.: the model of formation of patriotism at schoolchildren by means of folk pedagogics international review of management and marketing | vol 6 • special issue (s2) • 2016 187 • the principle of integrity of the educational process and the unity of pedagogical influence; • individualization (taking into account individual trajectories, the orientation of the expansion of social contacts pupil, the establishment of such relationships in the joint activity in which each of the interacting parties will have the opportunity and right to realize their own inclinations and abilities); • dialogism (interpersonal communication, trust, sincerity, mutual respect, building safe situations of dialogue with students); • mutual support (the development of vitality of man, his abilities to prevent and overcome in the process of life obstacles; the creation of an environment which unites children and adults with common goals, interests, difficulties for mutual support and constructive action in coming to a decision regarding behaviors in a potential or actual difficult situations). substantial component in the direction of teachers includes diagnosis, planning, organization of educational work, the author’s implementation of patriotic education programs “my native land is russia.” the procedural component includes forms, methods, means of education. to forms of education, we classified: lessons, class hours, meetings, ethical conversations, parties, reading and discussion of fairy tales, proverbs, epics, organization of roleplaying games, collective-creative work, competitions etc. the methods of patriotic education are considered the following groups: methods of formation of consciousness, judgments, concepts, beliefs, methods of creating a positive experience in the activity; methods of pedagogical stimulation (praise, punishment, competition, situation of success). word, deed, example, tradition, game, folklore, nature, etc. were identified to the means of patriotic education in the model. 4. discussions the problem of investigating the formation of patriotic qualities of the personality is based on the following approaches: 4.1. a systematic approach a systematic approach helps to overcome one-sided pedagogical approach to the study of patriotic education, to summarize data from different scientific fields (history, literature, culture, philosophy, pedagogy) on the notion of “patriotism.” it allows you to set the interaction of state, federal and local governments, educational institutions, public organizations and creative unions in solving problems of patriotic education on the basis of the unified state policy; to reveal the interrelation of subjects of educational process (teachers, students, parents and teachers of additional education); all components of patriotic education (targeted, meaningful, motivational, activity and diagnostic and effectively); training and extracurricular activities; social environment; to ensure the continuity of generations, to relate the present experience with the present and the future. a systematic approach requires consideration of three factors influencing the process of patriotic upbringing of personality: (1) educational space of the school; (2) educational space of the classroom in which teaching is interaction with students; (3) taking into account the individual personality of the child and the provision of timely psychological support. 4.2. personality-oriented approach personality-oriented approach is one of the leading trends in contemporary education. thus, zeer (1997) defines learnercentered approach as “.the emergence of spirituality of a personality, allowing her to realize her natural, biological and social nature. the aim of education is creation of conditions to satisfy to be a person spiritually rich, morally stable, mentally healthy.” the scientist highlights the essential features of personality oriented approach in education on the basis of generalization of modern development. in his view, the main purpose of training is the development of student’s personality. the personality acts as a system-forming factor of organization of educational process; leading motives of education, its value becomes self-development and self-realization of all subjects of study; builds strong knowledge, skills and abilities becomes a condition for ensuring competence of the individual; a full competence of the student is ensured through the inclusion of subjective experience; the purpose of student-centered education becomes the development of independence, responsibility, stability, spiritual peace, reflection. on this basis, student-oriented education is the process of ensuring and maintaining the physical health of the child, the development of natural abilities mind, sensuality, needs work, mastery experiences, understanding of the nature of art. thus, the ideas of integrity, unity of personal and cultural development of man form the basis of this approach, in which development factor is the educational system, and a system-basis domestic national culture, the culture of their people and their homeland. 4.3. the axiological approach the axiological approach, in accordance with the homeland is regarded as a value. according to the axiological approach, the service becomes a service, work in creativity, and interest in inspiration. deep inexhaustible patriotic feeling defines an active creative position of the personality. the concept of “homeland” has a few meanings: this is a great country with a great history and the small homeland, where he was born and grew up, where there are the graves of his ancestors, where he first experienced life’s joy and sorrow. regional studies as a “living school” of life establishes the connection with the phenomena of the surrounding reality. the axiological approach allows to preserve the fundamental values of family, genus, tribe, nationality, nation. the appeal to “reasonable, good, eternal,” i.e. the eternal universal values, is the benchmark in the activities of today’s schools. this approach is closely connected with the culturological approach, which sets socio-humanistic program, determining the direction of activities, values, results. up-bringing focused on culture abut not to the material benefits of civilization, has great potential for moral and spiritual development of a personality (zakirova et al., 2016). the content of culture is determined by the creation of people, incarnate in the created material and spiritual values. spiritual davletbaeva, et al.: the model of formation of patriotism at schoolchildren by means of folk pedagogics international review of management and marketing | vol 6 • special issue (s2) • 2016188 activities as a value-oriented activity directed on comprehension of the environmental phenomena, internal validity and establishing personal meaning of events, ways of life, their feelings, attitudes, ideals, and goals. an important task of the school in the transition to democratization is the mentality of students, preserving the system of fundamental human values, cultural traditions and norms of conduct that reflect the peculiarities of national world perception and lifestyle. 4.4. ethnopedagogical approach ethnopedagogical approach treats patriotic education as a social phenomenon, revealed in the works of national culture and provides a synthesis of national and patriotic consciousness of the person. according to this approach education is built taking into account the linguistic environment of students, cultural traditions of the people, the countries of the region. it prevents the blurring of national differences, the imposition alien to the russian mentality features. the price of russia’s integration with western europe must not become a rejection of native traditions and the subsequent assimilation. ethnopedagogics that emerged as the pedagogy of family, based on love, has humanistic orientation. it is free from narrow political, party and business interests. it is a student-oriented pedagogy as it is addressed to a person who is associated with expensive for him memories of childhood. ethnic children’s environment is an important factor to stimulate creative activity and the activity for the joy of others and the benefit of the community. the foundation of traditional pedagogy is the labor that creates material and spiritual wealth of the country. the works of folklore of all people glorify the selfless love of the motherland. ethnic pedagogy of self-education builds the personality of the patriot as the son of people with a highly developed sense of national pride and human dignity. knowledge of rich heritage of national culture helps people to know and understand each other, better develop inter-ethnic relations. 4.5. activity approach active approach from the standpoint of modern pedagogy focused on the need to transform the pupil to the subject of the educational process. the activity approach does not reject the subject material activities, but takes priority in the sphere of formation of motives, needs, interests, ideals and beliefs of a student’s personality, i.e. it is characterized by personal dedication. the pupil needs to perform an action, to carry out the activities of patriotic nature not due to the influence of the external reasons, people, circumstances, but due to internal motives and belief in its feasibility, significance for oneself, family, society and state. the activity approach involves the self-defining activity of the individual. in the spotlight there is a joint activity of adults and children, which together determine goals and objectives and looking for ways to achieve them. an integral part of the educational process and public life become situation raising activities. the situation allow you to combine various means of education in the unified educational complexes, stimulating diverse activities of pupils. initiate situations raising activities, social factors, and therefore it becomes important organization of social practices. the distinctive features of the situations are as follows: satisfaction varied spiritual needs of pupils; the combination of motives of socially useful and personal meaningful creative activity; ability to carry out its diverse species that require creativity, search of new tasks, tools, voluntary actions of stakeholders, communication, civil position, integrity, uphold the convictions, justified risk, activity, willingness and ability to achieve the target. the activity approach defines the direction of self-realization and social behavior of citizens for the sustainable development of the country. according to this approach, the patriotism is manifested in the activity of the individual, its activities for the benefit of the motherland and the people living in it. the paradigm of humanistic pedagogy of activity based on the development and reproduction of personality, culture, develop creative ways of working. orientation of activity theory on sensitive periods of development of pupils, the leading activity requires a continuous search for relevant content of patriotic education, methods, forms and means. 5. conclusion it is established that the problem of formation of patriotic qualities of school age with use of means of folk pedagogy is important. the developed model of formation of patriotic qualities of schoolchildren by means of folk pedagogy assumes the target component, including goal, objectives, principles, approaches, patterns; the subject-subject component, which includes relations between teachers, pupils, parents, teachers, heads of children’s circles and sections; contextual components, which include activity, stages (algorithm) of a teacher’s work; procedural-the communicative component, which consists of forms, methods and means; diagnostic-effective component that includes criteria, indicators, levels and results. the materials of an article can be used in the practice of school teachers, by preparation of students of pedagogical universities to serve as school teachers, as well as in the system of teacher training. references afanas’ev, v.g. 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(2015), changing attitudes in cross cultural diversity through international senior capstone projects. proceedings of the 2015 annual conference and exposition 122nd asee. seattle, wa, paper. p12045. . international review of management and marketing | vol 5 • issue 3 • 2015 135 international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2015, 5(3), 135-140. factors influencing adoption of knowledge management systems in india from a micro, small and medium enterprise’s perspective1 g. p. girish1*, dennis joseph2, souvik roy3, g. amar raju4 1department of finance, ibs hyderabad, icfai foundation for higher education university, hyderabad, andhra pradesh, india, 2department of operations, ibs hyderabad, icfai foundation for higher education university, hyderabad, andhra pradesh, india, 3department of marketing, ibs hyderabad, icfai foundation for higher education university, hyderabad, andhra pradesh, india, 4department of marketing, ibs hyderabad, icfai foundation for higher education university, hyderabad, andhra pradesh, india. *email: gpgirish.ibs@gmail.com abstract this study focuses on investigating factors which influence successful espousal of knowledge management (km) systems (kms) in india from a micro, small and medium enterprise’s (msme’s) viewpoint. msme sector in india contributes about 7.5% of india’s gross domestic product accounting for about 38% of the manufacturing output and 40% of the exports of the country. the study reviews msme sector in india, literature pertaining to emergent kms and proposes a conceptual model having qualities of technology acceptance model, theory of reasoned action and social cognitive theory. the prelude findings of the study based on literature aids us in laying out factors influencing successful espousal of kms in a developing country like india from a msme’s viewpoint. empirical inquiry of the developed model in future would have practical implication and will facilitate msmes (which are major contributors to improvement of the economy) in successful espousal of kms and garner the latent benefits. keywords: micro, small and medium enterprises, india, knowledge management systems, technology acceptance model, theory of reasoned action, social cognitive theory jel classifications: d80, d82, l21, l22, l25, o30 1 this paper was presented in-absentia in the 2014 international conference on computer engineering (icoce 2014) which was held during november 9-10, 2014 in shenzhen, china. this is a revised and expanded version of the paper. 1. introduction today, we live in a world where fundamental economic resources are not capital, land or labor, but in its place is knowledge, which is entrenched in the knowledge employees who execute job-specific tasks offering high competitive worth to an organization (drucker, 1999). knowledge is widely renowned as a key organizational quality for sustaining organizational competitiveness in the competitive market-place (huber, 2001). with this heightened acknowledgement of knowledge as a critical organizational plus point, the issue of how to handle and control this knowledge appropriately plays a critical role. it has been observed that there is a greater than ever demand for organizations to put into practice knowledge management (km) systems (kms) at a brisk speed (nevo and chan, 2007). the main intent of kms has been to support the edifice, allotment, and operation of knowledge in organizations (alavi and leidner, 1999). in today’s world, embracing kms is the need of the hour. unlike general-purpose information systems (is) meant for efficiently storing huge amounts of data and routinely arranging them into precise format and outcomes for enhancing operational management accomplishment, kmss are intended to successfully maintain organizational km activities. kms is a kind of is that supports and enhances km processes associated with formation, storage, recovery, diffusion and application of knowledge inside international review of management and marketing | vol 5 • issue 3 • 2015136 girish, et al.: factors influencing adoption of knowledge management systems in india from a micro, small and medium enterprise’s perspective and external to the organization (alavi and leidner, 2001). kms is composed of various components such as database management system, intranet, groupware, search engines and additional technologies which are robustly fixed to the organizational practice of km. these technologies are used to show the way for organizations to improved decision making, better productivity and continued competitive advantage (alavi and leidner, 2001). testimony to the growing importance of kms is the fact that many organizations around the world are embracing km initiatives by making sizeable investments in deploying kms (o’brien and marakas, 2006). nonetheless, many km projects have also ended up with less than desirable outcomes due mismatching between system design and realistic knowledge actions (hahn and wang, 2009) emphasizing the fact that triumph of kms relies on organizations conniving appropriate patterns of the systems in-order to fulfill the ways in which they are being used especially during the tasks dispensation (nonaka et al., 1998). a well-designed kms ought to be able to keep the patterns of knowledge behaviors in place and also further institutionalize them successfully. the users will be reluctant to understand a new technology if the technology is not well-matched with their current work practice (rogers, 1995). the victory of kms, just like any other is, depends on the support of management (butler and murphy, 2007). a successful kms ought to take in and deal with broad cultural and organizational issues, and not just essential technology delivery (alavi and leidner, 2001). bearing in mind the troubles of the is implementation, management support is extremely significant for endorsing the kms and shifting employee attitudes (al-busaidi and olfman, 2005). managers of course persuade it adoption by a desirable quality of their formal influence (tarafdar and vaidya, 2006) and therefore their leadership approach plays a significant role in winning it adoption (stone, 1994). micro, small and medium enterprises (msme’s) sector in india contributes about 8% of india’s gross domestic product (gdp) accounting for about 45% of the manufacturing output and 40% of the exports of the country (msme government of india annual report, 2009). the role of this sector is critical especially because of the fact that these msme’s are the nurseries for budding entrepreneurs. even though kmss have been studied extensively over the last few years, there is a lack of literature on the factors influencing adoption of kmss especially from a msme perspective in a developing nation like india. in this study we attempt to addresses this gap. the rest of the paper is structured as follows: in section 2 we introduce msme sector in india. in section 3 we propose a model inspired from and having qualities of technology acceptance model (tam), theory of reasoned action (tra) and social cognitive theory (sct) and conclude our study in section 4. 2. msme sector in india msme’s sector in india contributes approximately 7.5% of india’s gdp accounting for nearly 38% of the manufacturing output and 40% of the exports of india (msme government of india annual report, 2009). the role of msme sector is critical especially because of the fact that these msme’s are the nurseries for budding entrepreneurs. according to msme development act 2006: (a) a micro enterprise is an enterprise having investments in plant and machinery not exceeding rs. 25 lakh, (b) a small enterprise is an enterprise having investments in plant and machinery more than rs. 25 lakh but not exceeding rs. 5 crore, (c) a medium enterprise is an enterprise having investments in plant and machinery more than rs. 5 crore but not exceeding rs. 10 crore. table 1 reports the performance of msme sector in india in terms of number of units, employment, investments and gross output. table 2 highlights the contribution of manufacturing output of msme in gdp of india over the years and table 3 gives details about state or union territory wise distribution of number of enterprises and employment in india. figure 1 gives details about leading industries under msme sector in india. irrespective of whether firms are large or small, there is dire necessity of generating knowledge, sharing knowledge and implementing knowledge gained for maximizing a firm’s competitiveness and its continued existence chances in today’s contemporary information society (nunes et al., 2006). as described by zanjani et al. (2008), msmes at each and every stage have to make operational decisions, tactical decisions and strategic decisions which would be very difficult without accurate information. it’s unfortunate that msmes still seem to be very reluctant in taking km for decision making (nunes et al., 2006). table 1: performance of msme sector in india in terms of number of units, employment, investments and gross output year number of msme’s (in lakhs) total employment (in lakhs) market value of fixed assets (in rs. crore) 2001-02 105.21 249.33 154,349.00 2002-03 109.49 260.21 162,317.00 2003-04 113.95 271.42 170,219.00 2004-05 118.59 282.57 178,699.00 2005-06 123.42 294.91 188,113.00 2006-07 361.76 805.23 868,543.79 2007-08 377.36 842 920,459.84 2008-09 393.7 880.84 977,114.72 2009-10 410.8 921.79 1,038,546.08 2010-11 428.73 965.15 1,105,934.09 2011-12 447.66 1011.80 1,183,332.00 2012-13 467.56 1061.52 1,269,338.02 source: msme report, government of india, msme’s: micro, small and medium enterprise’s table 2: contribution of manufacturing output of msme in gdp year gross value of output in rs. crore percentage share of msme total manufacturing output gdp 2006-07 1,198,818 42.02 7.73 2007-08 1,322,960 41.98 7.81 2008-09 1,375,699 40.79 7.52 2009-10 1,488,390 39.63 7.49 2010-11 1,655,581 38.48 7.42 2011-12 1,790,805 37.52 7.28 source: msme report, government of india, msme’s: micro, small and medium enterprise’s, gdp: gross domestic product international review of management and marketing | vol 5 • issue 3 • 2015 137 girish, et al.: factors influencing adoption of knowledge management systems in india from a micro, small and medium enterprise’s perspective 3. proposed conceptual model for adoption of kms in the midst of the diverse research models developed in the effort to appreciate user approval of technologies, tam has turned out to be one of the most extensively used models for it espousal (venkatesh and bala, 2008). davis (1989) developed tam as a variation of the tra and estimated that tam explains latent user behavioural intention (bi) to use a technological uniqueness. tam posits that individuals’ intentions to make use of an it is table 3: state or union territory wise distribution of number of enterprises and employment in india state/union territory number of enterprises (in lakhs) total employment (in lakhs) total registered sector unregistered sector registered sector unregistered sector sample ec 2005 sample ec 2005 jammu and kashmir 0.15 1.18 1.68 3.01 0.9 2.17 2.68 5.75 himachal pradesh 0.12 1.6 1.16 2.87 0.65 2.27 1.76 4.68 punjab 0.48 9.66 4.32 14.46 4.16 14.16 8.48 26.79 chandigarh 0.01 0.28 0.2 0.49 0.12 0.58 0.53 1.23 uttarakhand 0.24 2 1.51 3.74 0.8 3.62 2.54 6.96 haryana 0.33 4.87 3.46 8.66 3.82 8.41 6.61 18.84 delhi 0.04 1.75 3.74 5.52 0.58 5.94 13.29 19.81 rajasthan 0.55 9.14 6.96 16.64 3.42 15 12.37 30.79 uttar pradesh 1.88 22.34 19.82 44.03 7.55 51.76 33.06 92.36 bihar 0.5 7.48 6.72 14.7 1.48 15.97 10.81 28.26 sikkim 0 0.06 0.1 0.17 0.01 0.56 0.22 0.79 arunachal pradesh 0 0.25 0.15 0.41 0.05 0.82 0.31 1.19 nagaland 0.01 0.16 0.21 0.39 0.16 1 0.54 1.71 manipur 0.04 0.44 0.43 0.91 0.2 1.38 0.78 2.36 mizoram 0.04 0.1 0.16 0.29 0.26 0.3 0.25 0.81 tripura 0.01 0.26 0.7 0.98 0.23 0.53 0.99 1.75 meghalaya 0.03 0.47 0.38 0.88 0.13 1.04 0.75 1.92 assam 0.2 2.14 4.28 6.62 2.11 4.48 7.66 14.25 west bengal 0.43 20.8 13.41 34.64 3.6 54.93 27.24 85.78 jharkhand 0.18 4.25 2.32 6.75 0.75 8.24 3.92 12.91 odisha 0.2 9.77 5.76 15.73 1.73 21.94 9.57 33.24 chhattisgarh 0.23 2.78 2.19 5.2 0.75 4.68 4.09 9.52 madhya pradesh 1.07 11.5 6.76 19.33 2.98 17.32 13.36 33.66 gujarat 2.3 13.03 6.46 21.78 12.45 21.97 13.31 47.73 daman and diu 0.01 0.01 0.04 0.06 0.26 0.03 0.09 0.37 dadra and nagar haveli 0.02 0.04 0.03 0.09 0.26 0.07 0.07 0.41 maharashtra 0.87 14.45 15.31 30.63 10.89 24.72 34.43 70.04 andhra pradesh 0.46 14.9 10.6 25.96 3.83 35.15 31.71 70.69 karnataka 1.36 11.12 7.7 20.19 7.89 22.58 16.24 46.72 goa 0.03 0.56 0.27 0.86 0.33 0.87 0.68 1.88 lakshadweep 0 0.01 0.01 0.02 0 0.05 0.02 0.06 kerala 1.5 12.94 7.69 22.13 6.21 26.98 16.42 49.62 tamil nadu 2.34 18.21 12.58 33.13 14.26 38.89 27.82 80.98 puducherry 0.01 0.13 0.21 0.35 0.21 0.25 0.55 1.01 andaman and nicobar islands 0.01 0.07 0.07 0.14 0.06 0.18 0.15 0.38 all india 15.64 198.74 147.38 361.7 93.09 408.84 303.31 805.24 source: msme report, government of india, msme: micro, small and medium enterprise figure 1: leading industries under micro, small and medium enterprise sector in india international review of management and marketing | vol 5 • issue 3 • 2015138 girish, et al.: factors influencing adoption of knowledge management systems in india from a micro, small and medium enterprise’s perspective determined by two viewpoints, perceived usefulness (pu) and perceived ease of use (peou) (davis, 1989). pu is defined as the amount to which a person believes that, a particular system will increase his or her job performance (davis, 1989). peou is defined as the extent to which a person believes that using the target system will be free of effort (davis, 1989). both pu and peou persuade bi with pu having a stronger outcome on promoting the use of it (davis, 1989). tam showed that peou has a direct influence on pu. the easier a system is to utilize, the less exertion is needed to achieve certain tasks. tam explains about 40% of the difference in individuals’ objective to utilize and authentic usage (venkatesh and bala, 2008) and has confirmed to be a substantial theoretical model that helps to clarify and appreciate individual behaviour in it adoption. it is applicable across different technologies and user contexts and can provide researchers and practitioners with realistic efficacy (bueno and salmeron, 2008). because espousal of kms in organizations involves accepting the behaviour intent of individuals, tam can probably provide a reasonable representation of user intention to utilize kms. the two key constructs in tam, namely, pu and peou are the significant basic determinants which explain the individual’s adoption of kms in this study. in our study we focus on the adoption of kmss. therefore, it is also essential to have a good understanding of why people refuse to accept adopting a kms. ajzen and fishbein’s (1980) tra is “a well-researched intention model that has proven triumphant in predicting and explaining behavior across a wide variety of domains” (davis, 1989). tra is “designed to explain virtually any human behavior” (ajzen and fishbein, 1980). therefore, tra ought to also be an apt model for studying the factors affecting the espousal of kmss. the tra has extensive applicability in varied disciplines and has gone through meticulous testing that has proved to be robust in predicting intentions and conduct (davis, 1989). tra assumes that human beings are usually quite balanced and make methodical use of the information accessible to them (ajzen and fishbein, 1980). the theory views a person’s aim to execute (or not execute) a behavior as the instant determinant of the deed. adding up, a person’s attitude or perceptions about the characteristics are predecessor to behavior aim to accept and use the system (agarwal and prasad, 1997). according to tra, a person’s intent is a function of two basic determinants, one “personal” in nature and the other reflecting “social influence” (ajzen and fishbein, 1980). the personal factor is the individual’s optimistic or pessimistic assessment of performing the deeds, which is called “attitude toward the behavior” and refers to attitudinal factors. the next determinant of intention is the person’s discernment of the social demands put on him/her to carry out or not to carry out the actions in question. this factor is termed “subjective norm” dealing with supposed prescriptions and relates to the normative considerations (ajzen and fishbein, 1980). it is quite possible to expect and add some understanding of a person’s intent by measuring his or her attitude in the direction of performing the behavior, his/her subjective norm, and the relative weights. the ability of technology to support a chore is identified as task technology fit (ttf), which is defined to be the amount to which the capabilities of the technology match the demands of the chore (goodhue and thompson, 1995). the ttf model theorizes that a fit amongst the chore, the technology and the users optimistically influence utilization and performance. a technology will be used well only when the functions of that technology can hold up the users’ requirements (goodhue and thompson, 1995). rational users will approve the technology that enables them to complete their tasks with maximum advantage. it that does not offer adequate benefit will not be used (strong and dishaw, 1999). preceding studies show that the ttf model has been extended by attitude/ behavior models, providing a better elucidation of user reception of technology. according to sct given by bandura (1997), people will be more willing to adopt technologies if they have a greater sense of control over it. this sense of control over ones environment is captured by the self-efficacy construct. self-efficacy viewpoint are cognitions that establish whether behavior transform will be initiated, how much endeavor will be exhausted and how extensive will it be unrelenting in the face of obstacles and failures. self-efficacy influences the endeavor one puts forth to transform risk behavior and the perseverance to carry on striving despite barriers and setbacks that may weaken motivation. self-efficacy is straightforwardly related to espousal behavior, but it also affects espousal behaviors in a roundabout way through its impact on peou. self-efficacy influences the challenges that people take on as well as how soaring they set their goals. several researchers have studied msmes in the context of km (salojärvi et al., 2005). yee-loong chong et al. (2013) found that km processes affected smes resolution to espouse e-business practices in their supply chain. 11 decisive success factors for adopting km in smes were identified and studied by wong and aspinwall (2005). km in smes has become the budding area in the development of business strategies (lee and lan, 2013). km can be used by organizations for smooth business operations but for this organizations must recognize the benefits associated with km implementation (lee and lan, 2013). smes in india are key contributors to growth of the nation (gupta and gupta, 2013). smes should involve in km practices to reap the benefits of that has been mentioned in the literature. in the pursuit of innovation, technology advancement or profitability smes have to tackle a lot of challenges (gupta and gupta, 2013). due to the lack of resources and several budget constraints smes are not able to take the full advantage of km (lee and lan, 2013). in our study we propose a conceptual model that could help smes in espousal of km based on the literature reviewed and using the rationale of tam, tra and sct. figure 2 encapsulates the proposed model for adoption of knowledge management systems from micro, small and medium enterprise’s perspective. tam has turned out to be one of the most extensively used models for it espousal (venkatesh and bala, 2008). davis (1989) developed tam as a variation of the tra and estimated that tam explains latent user bi to use a technological uniqueness. the basic model has not only been used for many diverse types of technology but has also been extended with other factors that supposedly either directly or indirectly influenced intention to use or usage. with the following premise it can be investigated whether “behavioral intention to use kms will positively affect actual use of kms in case of msmes” (h1). in international review of management and marketing | vol 5 • issue 3 • 2015 139 girish, et al.: factors influencing adoption of knowledge management systems in india from a micro, small and medium enterprise’s perspective the framework of kms, if users recognize that the system enables them to resolve problems more successfully and improves their efficiency or job performance, there will probably be a strong intent to further use the system. with this rationale, it can be investigated whether “pu and peou will positively affect bi to use kms in case of msmes” (h2, h3) and “peou will positively affect pu of kms in case of msmes” (h4). according to sct given by bandura (1997) a personal sense of control facilitates a change of adoption behavior. self-efficacy pertains to a sense of control over one’s environment and behavior. with this rationale, it can be investigated whether “perceived self-efficacy positively affects peou” (h5). research has shown that ttf consistently relates to pu and peou. it is expected then that users will perceive the tools to be useful and easy to use when such tools are helpful for completing their tasks. with this rationale, it can be investigated whether “ttf will positively affect the peou of kms in case of msmes” (h6) and “ttf will positively affect the pu of kms in case of msmes” (h7). task complexity is defined as the effort required for completing a specific task. the perceptions concerning the innovation, which are called perceived uniqueness in roger’s theory (1995) about innovation diffusion, are relative benefit (how the novelty is seen compared to the one which is at present in place), compatibility (how reliable is the innovation with individual’s standards and familiarity), complexity (the intricacy of learning and using the innovation), trialability (the aptitude to be weathered before implementation), and observability (the capability of being able to exhibit the outcome of using the innovation). with this rationale, it can be investigated whether “task complexity negatively affects peou in case of msmes” (h8) and “task complexity negatively affects pu in case of msmes” (h9). subjective norm is seen as a combination of perceived expectations from relevant individuals or groups along with intentions to comply with these expectations. when technology use was voluntary, subjective norms influenced pu but did not have a direct influence on behavioral intention. with this rationale, it can be investigated whether “subjective norm positively affects pu of kms in case of msmes” (h10) and whether “subjective norms positively affect bi of kms in case of msmes” (h11). 4. concluding remarks although kmss have been deliberated broadly over the last several years, there is deficiency of literature on the factors influencing espousal of kmss especially from a msme perspective in a developing nation like india. in this study we investigated factors which influence successful espousal of kms in india from a msme’s viewpoint and proposed a theoretical model having qualities of tam, tra and sct. with msme sector in india contributing about 7.5% of india’s gdp accounting for about 38% of the manufacturing output and 40% of the exports of the country, the proposed model if empirically investigated would have realistic implication and will facilitate msmes (which are major contributors to development of the economy) in successful espousal of kms and garner the latent benefits. references agarwal, r., prasad, j. 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(2008), organizational dimensions as determinant factors of km approaches in smes. proceedings of world academy of science, engineering and technology. p35. international review of management and marketing vol. 1, no. 1, 2011, pp.1-7 www.econjournals.com should i take it or should i not? exploration of students’ course choice as a product goknil n. kocak mersin university, school of tourism and hospitality management ciftlikkoy campus, mersin, turkey. email:goknilkocak@hotmail.com n. serdar sever anadolu university, faculty of communication sciences public relations and advertising department, yunus emre campus, 26470, eskisehir, turkey. email: nssever@anadolu.edu.tr abstract: this study aims to explore the components of students’ course selection process and overlooking these components from marketing perspective. three focus groups were administered. data revealed that the focus groups participants’ responses are congregated in two main categories: (1) wom related evaluations. (2) official concerns based evaluations. the wom related evaluations were emerged as; (1.1) instructors’ in-class performance, (1.2) the degree of attractiveness of courserelated virtual environment, (1.3) the toughness of course assignments and their grading policies. official concerns based evaluations were surfaced as; (2.1) level of academic and practical experience of instructors (2.2) the use of computer-enhanced learning technologies. like consumer purchase decision process it is observed that, students too seek reliable information and gather information mainly from senior students in the form of wom activities; and courses and instructors’ performance factors which are counterparts of product and services in academia are evaluated based on information in wom activities. keywords: product choice, wom, students, focus group, exploration, virtual environment. jel classifications: m31, i20 introduction the world around us evolves, so are universities. the new degree programs such as double majors’ increase in distance and online learning programs, and certificate programs have forced universities to understand their students’ expectations and manage service performance. ironically, marketing departments in universities are now have to market to their students. extend of such activities are not limited to universities, faculties or to departments; it has reached to courses and instructors at micro level. the students are becoming centerpiece of universities and it’s not up to lecturers or schools to decide who to enroll courses. having two hats in life, as students and consumers, naturally, just as they do for goods and services, as being students, they too are undergone a decision-making process in deciding among courses and instructors. in fact, they operate with same drive, respond to similar stimulus, use same physical and psychological screens and certainly ask for a benefit. because, it is them who will be happy, satisfied or dissatisfied with a ‘purchase’ decision, and eventually face a similar cost that a misled consumer would pay with a wrong product choice. consequently; students, just as any consumer, seek appropriate information in order to make satisfactory decisions and prevent loss. apparently, listening students and understanding their course selection decision process with its influencers becoming more important. what lies behind course selection behavior? this is where the lights should be cast upon. the purpose of this study is to explore the components of students’ course selection process and overlooking these components from marketing perspective. in order, the leading research question mailto:nssever@anadolu.edu.tr international review of management and marketing, vol. 1, no. 1, 2011, pp.1-7 2 is “how students choose a course”. these types of questions which are open-ended and exploratory, addresses qualitative research methodologies, aiming to generate hypothesis (propositions) rather than to test them (bruck, 2005). qualitative methods are used to understand what lies behind any phenomenon (such as course selection) to gain novel or fresh slants on things about which already known (strauss and corbin, 1990). method in research projects where how people approach events, constructs, previous experiences of others or how people interact are the major aims of this investigation. focus group is deemed as the most profound research method (krueger, 1994). despite some concern on the possible cluttering effect that group dynamics have on the analysis of data (newton and mckenna, 2007; reed and payton, 1997), focus group was chosen as the most appropriate data collection method. while the purpose of this study is exploring course decision behavior, conducting focus group technique is viewed as the most appropriate method. use of focus group technique enhanced participated students to recall, share and discuss the factors that they consider prior to course selection by providing appropriate discussion platform for interaction. despite the various views in the focus group literature on how many focus groups would be sufficient, the common view is total of three or four groups are good enough in order to reveal reliable data (aaker et al., 2004; daymon, 2002: krueger, 1994). another discussion in the literature is when focus groups start to repeat themselves and come up with same findings that indicates a cut-off point and is an ideal number for focus groups. it is suggested that three focus groups should be planned with the option to conduct additional focus groups if new information was still being collected at the end of the third session (krueger, 1994). in this research, focus group sessions were continued until the researchers make sure that the data become repetitive and up to this point three focus groups were administered. each focus group sessions continued approximately one hour. clark and holmes (2007) indicated that focus groups involved a purposive sample as sample methodology which also conducted to this study for sample selection. the researchers attempted to chose the best sample group. all of the participants in the study were chosen among the students at anadolu university, faculty of communication sciences. the reason why this tertiary institution chosen was that faculty of communication science offers wide variety and quantity of courses to choose among. at the semester this project was carried out. school offered more 65 elective courses. eventually, this is a clear indicator of wider possible course choice, as in increasing of choice among available consumer goods. thus, due to its wider elective course availability, anadolu university, faculty of communication sciences was deemed as an appropriate venue to carry this research. focus groups were administered at faculty of communication science’s classrooms. first focus group consisted of 12 students from public relations and advertising department, second focus group consisted of 12 students from communication department, and the third focus group consisted of 10 students from both departments that were equally represented among participants. the number of male students was 20 and number of female students was 14. as for the ages of participants, they were all in traditional student age bracket ranging from 20 to 22. the moderator’s role was fulfilled by one of the researcher in all of the three focus groups. the role of the moderator is to create a highly synergistic environment in which participants openly share their perceptions without hesitations (clapper and massey, 1996). it is assumed that the moderator attempts to develop a deeper understanding of the issue and to see it from the participants’ point of views (krueger and casey, 2000). in each focus group, a trained graduate assistant fulfilled the reporter role and recorded the narratives. a good research question needs to be supported by a clear rationale, as it will by necessity, have to leave out aspects considered important to a systematic thinker (bruck, 2005, p. 240). a good research question of a qualitative study is a statement that identifies the phenomenon to be studied and tells what the researcher specifically focus on and what wanted to known on the subject (strauss and corbin, 1990, p.38). the questions should be purposefully open and broad allowing the researcher to discover relevant variables in the data (corbin and holt, 2004). referring to mentioned directions; leading research questions of each focus group are: (1) what are your considerations while making course decisions and why? (2) which type of information is more valuable on your decisions and why? should i take it 0r should i not? exploration of students’ course choice as a product 3 notice that these questions do not specify any variables but allow significant variables to be discovered in the research process. these questions has designed to ensure that, the data has not been directed to prove a predetermined conclusion by the authors and there is no researcher bias with the recognition that qualitative method in flux and conclusions are supposed to be constructed from data and not imposed on the data (corbin and holt, 2004). following the focus groups, written records were thoroughly investigated word by word, and themes were determined independently by the two researchers. then, researchers were cross-checked the themes. this process was carried out to fulfill the validity requirements of qualitative research. findings and discussion according to aggregated findings; the focus groups participants’ responses are congregated in two main categories. these categories can be labeled as (1) word of mouth (wom) related evaluations, and (2) official concerns based evaluations. the wom related evaluations were emerged as follows; (1.1) instructors’ in-class performance, (1.2) the degree of attractiveness of course-related virtual environment, (1.3) the toughness of course assignments and their grading policies. official concerns based evaluations were surfaced as follows; (2.1) level of academic and practical experience of instructors, (2.2) the use of computer-enhanced learning technologies. focus group findings and some comparisons and verifications in relation to related literature are discussed below. (1) wom related evaluations participants anonymously agreed that wom is most effective on their course choice. in general, wom is defined as exchange of information about a target object or a person face to face or with the help of a communication medium (brown et. al, 2005). focus group sessions exerted that senior students’ previous experiences is the most trusted factor in course choice. all of 34 participants have voiced the same argument. in accordance with the wom literature which indicates a correlation between experience of source and the relief of ambiguity and post-purchase dissonance; participants value senior students’ comments. senior students are seen as valuable sources of information by junior year students. participants agreed that the most important feature of the referring person is his or her identity. 29 of the participants indicated that senior students are more effective above all other sources of information. hard-working students are found to be credible sources of information and they come after senior students. majority of the respondents agreed that they may consider the information from senior students, only if these students have a good reputation among others and known as steadily successful. opinions of assigned academic advisors come third in the cycle. even more interestingly, two of the participants indicated that they do not value what the academic advisors’ advices. another two participants pointed that they do not care about the source; rather they only value the information content. consistent with these findings; katz and lazarsfeld (1955) revealed that wom is seven times more effective than print advertisements, and four times more effective than personal sales pitches in manipulating consumer attitudes and behavior. another interesting finding is unveiled when participants asked about which type of wom is more effective. “which type of information is more valuable on your course decisions? all but one agreed that negative wom (nwom) is more effective with respect to positive wom messages. it is well established that negative information usually has more impact on judgment than positive information (anderson, 1965; chevalier and mayzlin 2003; mittal et. al, 1998). the reason of this attempt may be that losses loom larger than gains (kahneman and tversky, 1976) and students’ first intent is preventing loss. consequently negative wom receives greater response. wom related components are as follows. (1.1) instructors’ in-class performance participants stated that instructors’ in-class performance and their credibility are interrelated. expression of one of the participants is summarizing their mutual approach: “…lecturers may be wellestablished themselves in industrial circles, and they may be knowledgeable in terms of their intellectual capacity. this makes them trustworthy; there is no question about it. but for me it all comes down to how effective he or she is when lecturing. is he or she a good instructor or not? this is my primary concern as a student.” scholars found that teachers’ effectiveness in the classroom and his international review of management and marketing, vol. 1, no. 1, 2011, pp.1-7 4 or her performance is positively correlated. similar findings were demonstrated by frymier and thompson (1992) study. (1.2) the degree of attractiveness of virtual environment, participants further stated that fun factor is the most effective medium in their elective course choices. students further their comments that fun is a result of class related virtual tools and his or her lecturing style. this may sound a bit like “sage on the stage” approach. one of the participants well elaborated on the subject: “…why fun? if a course comes with a web page or rss mechanism, it is absolutely fun. imagine you have class in 8:30 am in the morning .you receive a sms that says lecture is cancelled. it is fun.” the participants added that students attempt to collect information on these issues mainly from senior students. (1.3) the toughness of course assignments and their grading. majority of the participants agreed on the fact that they seek and deliver information regarding to course assignment and their toughness, rather than the information about instructors. nevertheless, the one possible outcome of wom is to reduce perceived risk. participants asserted that students spend every effort to reduce the risk of failing a course, of which will eventually involve loss of financial resources and may cause them of being psychologically unstable. the perceived risk types can be categorized as functional or financial risk that is related to product or service, and being financially disrupted and consumer-focused social or psychological risk results from the consumers or prospects’ interaction with their social environment (von wangenheim and bayon, 2004). parallel to the literature, findings pinpoints that students do use traditional wom in order for reducing the perceived risks, if any, that may be a part of the course chosen. if they perceive that assignments are time consuming and if course requires great many details to tackle, and ladders of grading scale is hard to climb in return, then they don’t bother to enroll to that particular course. this because there are many functional and psychological risks involved, for that matter. (2) official concerns based evaluations participants pointed that the secondary criteria for course choice comes from information of official sources. this dimension was observed as a limited influence on course choice in compare to wom. it seems that wom has greater meaning above all sources of information. students exerted that they are more prone to internet for their daily life but when it comes to course choice, participants pointed that they don’t go any further than checking the lecturers’ reputation and reading course definitions from the official school web browser. the researchers by no means can be sure about what might be the reason behind this phenomenon. nevertheless, it is possible to conclude that only few participants have their own laptop, and majority have a desk top at home or at dormitories. due to the time limitation in computer accessibility, students might want to spend their spare time for private use or surfing on the web when they logged on to the internet. the details that were observed related to official concern based evaluations are listed and discussed below. (2.1) level of academic and practical experience of instructors the findings of this study indicate that instructors’ previous academic and practical experiences are not as important as their in-class performances. this findings overlaps with the findings about why students do not search course related information. the outcome explains that why students do not respect any lecturer related course information, his or her academic standing and/or practical experiences that may be found in official records or sources. they rather tent to rely on information they gather from senior students. solely, the surfaced situation reinstates the fact that students find wom related information more reputable as compare to information from official sources. (2.2) the use of computer-enhanced learning technologies as for the computer backed learning technologies, participants agreed anonymously that it’s an asset and must be applicable in every single course. a common point is web based learning technologies must be used in courses. in fact, they said they prefer a course with web ct page over a course which has no such supplemental support facility. participants stressed that they would appreciate any course that comes with wikis and they were even more appreciative to the idea of courses having rss feeding facility. should i take it 0r should i not? exploration of students’ course choice as a product 5 conclusion and significance of the study as conclusion; perhaps the most peculiar finding of the study is wom massages received from senior students are the common source of information, and their experiences often seen as a point of reference in choosing a course. as pointed out by some scholars, students must make choices with very little formal information as to what a course is about and how it will be conducted. this leads them to rely on word of mouth from trusted students who might be familiar with the course or instructor (davis et al., 1979). prior experience with the instructor or subject matter plays an important role in course-related word of mouth activities (cadotte et al., 1987; curran and rosen, 2006). naturally, it was not only them but many scholars since have consistently demonstrated the links between wom and consumer purchasing behavior (arndt, 1968; brown and reingen, 1987; engel et al., 1969; howard and gengler, 2001; richins, 1983), product success (day, 1971; katz and lazarsfeld,1955), satisfaction with wom experiences (burzynski and bayer, 1977; harrison-walker, 2001), diffusion of innovations (singhal et al., 1999; sultan et al., 1990; sun et al., 2006), perception of risk (shrum and bischak, 2001), and persuasion (bytwerk, 2005; carl, 2006; compton and pfau, 2004; spangenberg and giese, 1997). like consumer purchase decision process it is observed that, students too seek reliable information and gather information from senior students in the form of wom activities; and courses and instructors’ performance factors which are counterparts of product and services in academia are evaluated based on wom activities; again the degree of attractiveness of virtual environment is also benchmarked against to wom based information ; and finally in order for managing the perceived risk, the toughness of course assignments and grading were repeatedly checked with senior students. in fact, wom has a strong influence on product and service perceptions (fitzgerald, 1995). clearly as implied in here, similar findings are valid for course choice as well. the majority of research addressing wom has focused on its generation. the few if any attention was given to the how wom messages are considered by the receivers represented a significant gap in research addressing wom activity (bansal and voyer, 2000). the novice of this research is that despite traditional approach of examining wom generation process, the dynamic nature of how the messages are sought and evaluated by the receivers constitutes the epicenter of this study. not all dimensions of wom were surfaced in the study. weakness of theoretical sampling that had utilized in the study may be one of the reasons of limited appearance of wom dimensions. this may be considered as limitation of the study. nevertheless, it must be indicated that data had repeated itself in three of the focus group sessions. however, limited appearance of wom dimensions may not be the limitation but a significant finding out of this study. in order for data collection if a questionnaire were administered, undoubtedly students were responding to the pre-structured questionnaire items which surely consist of all the wom dimensions. in that case, respondents would somehow pushed to construct a respond within the scope of pre-structured frame of researcher. however, in this case, researchers did not aim to testify a pre-structured frame, but rather to make expedition to find out why students choose a course. limitation and further recommendations the effects of wom in the educational context have gone largely unexplored. this study aims to explain how bachelor of communications students who are enrolled to various courses at tertiary level value word-of-mouth messages in making a course decision. as for every research, this study is not exempt from some limitations. the most peculiar limitation of this particular study emerges due to the nature of focus group studies. due to the nature of focus group studies, findings of this study may not represent the common wisdom of tertiary students. in other words, the focus group discussions have an inherent limitation that is lack of generalization, although the focus group participants represented the most accurate picture of their attitudes about course selection. this qualitative study consists of the students who were enrolled to bachelor of communications. administering similar studies on participants with different attributes may reveal further interesting findings. the findings of this study may help developing quantitative research projects on the same subject in future. international review of management and marketing, vol. 1, no. 1, 2011, pp.1-7 6 references aaker, d., kumar, v., and day, g.s. 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(2004), the effect of word-of mouth on service switching, european journal of marketing, 38(9/10), 1173-1185. . special issue for "management of education: problems and perspectives" international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2016, 6(s2) 198-203. international review of management and marketing | vol 6 • special issue (s2) • 2016198 identities management as a solidarities constructing tool in contemporary society andrey r. tuzikov1, raushaniia i. zinurova2*, sergey a. alekseyev3, elvira b. gayazova4, fania f. ilyasova5, olga v. lisina6 1kazan national research technological university, kazan, russia, 2kazan national research technological university, kazan, russia, 3kazan national research technological university, kazan, russia, 4kazan national research technological university, kazan, russia, 5kazan national research technological university, kazan, russia, 6kazan national research technological university, kazan, russia. *email: rushazi@rambler.ru abstract the relevance of the problem stated in the paper is conditioned by the fact that in the contemporary world and in russia particularly, there is an acute problem associated with the identities’ management of members of society. this problem is of particular importance for young people socialization’s management. the purpose of this paper is to analyze the theoretical approaches to the identities’ configuration management through a combination of conceptual provisions of the theory of management, theory of ideology, sociological and socio-psychological dimensions of identity. the leading approach to the study of this problem is a phenomenological approach allowing presenting as a challenge the construction of a civil ideology that combines social groups’ multiple identities, including ethnic and religious ones. the article reveals the heuristic potential of the ideology theory and the solidarities’ concept for the specification of multiple identifications of young people in modern societies. the ideological dimension of identifications brings to the representation and legitimacy of group interests. theory of solidarities allows evaluating the possibilities of identities’ different configurations emergence among youth groups. the paper submissions can be interesting both for scientists and for practitioners in the fields of management and education. keywords: management of identities, social groups of the youth, ideology, theories of ideology, sociocultural approach jel classifications: i21, i25, i28 1. introduction in modern societies, the issues of social entity’s formation and collective opinions’ and actions’ institutionalization are conceptualized in the framework of the concepts “identity” and “solidarity.” taking into account that the world has entered a phase of turbulent changes that lead to uncertainty increasing it affects the processes of identification too. this uncertainty to some extent is in fashion (the phenomenon of conchita wurst), because it reflects the happening in societies changes, manifested in the attempts to revise the inviolability of social roles and functions in society. at the same time the uncertainty in the previously inviolable sphere of identities creates problems in the sphere of political management, management of consumers’ behavior, constructing of social entities in relation to the tasks and projects of social development, not to mention the necessary management and interactions of everyday life. it is not coincidence that the idea of identities’ configuration (kapitsyn, 2014) and social solidarities is discussed actively, which characterize the sphere of the club, informal kinds of activities (omelchenko, 2013). the term “identity management” was originally used in the sphere of informatics and management of network interactions on the internet. as it is noted by krylov (2008): ‘the management of identity here is aimed at creating of identification system, operating with data and protection of as computer data so personal information of users. however, management of identity, in its “computer” sense, connects social and information systems, giving the users the skills tuzikov, et al.: identities management as a solidarities constructing tool in contemporary society international review of management and marketing | vol 6 • special issue (s2) • 2016 199 to deal with their own identity, anonymity and personal data. such online phenomena like second life, live journal or popular in russia platform “classmates” make from a simple user the manager of his or her own identity, teaching to promote and “sell” their own electronic image’ (krylov, 2008). however, currently the understanding of the need for identity management extends beyond the internet communications, including work in the field of branding and positioning of companies and territories by personnel and external environment of corporations (suppliers, consumers, government). who we are and why we need to do something? or why do we have the right? here are typical identifying issues in this case. modern management of identities affects political, economic, occupational, environment, body, cultural and many other aspects. for example, typical for political management becomes a discussion in terms of identity of problems on the electorate and elections, legitimacy of statehood, citizenship, etc. plurality and diminution of identities is particularly relevant in terms of finding ways to manage the socialization of young people and their collective behavior (tuzikov and zinurova, 2009). in modern academic and political discourses the problem of identity in general and youth identity in particular is one of the leading. this is understandable, taking into account that the identity and its configurations directly affect the worldview, social well-being and, ultimately, social actions and practices, as of certain social groups so the societies of the whole countries and regions. socio-cultural dimension of social phenomena is inextricably linked with the trend of refusal to consider “human,” “individual” in favor of approaches that emphasize the leading role of culture in the development of social institutions, group and personal behavior. important sociocultural characteristics of identity are worldview and ideology (zinurova and krieger, 2013). worldview is one of the core social characteristics of individuals and social groups that make up society. worldview attitudes in addition to general picture of the world belong to ideological components too, which manifest themselves in the processes of social identification, representation, rationalization of social actions and status. 2. methodological framework the relationship of the category “identity” and the concept “ideology” is first put forward by american scientist erickson in the context of personality development’s considering. that is why the paper is titled “identity: youth and crisis.” interpreting the identity as a role and ideological adaptation to the changing stages of human “i” development, erikson clearly points on the fluid nature of identity and emphasizes at the same time that adolescence is a critical period in the development of worldview and is associated with the search for answers to questions like: “who am i? what i want to be? what i don’t want to be?” identity crisis, about which so much is said since the collapse of the ussr, manifests itself in a loss of confidence in previous ideology. to overcome it also a new ideology is required as the “unconscious set of values and assumptions, reflecting the religious, scientific and political thinking” (erickson, 1996). if at the macro-group level the functioning of the ideologies is associated with the legitimation of social interests, at the individual and micro-group level their manifestation the sociological science associates with consciousness (selfidentification) and the functioning of stereotypes. self -identity is seen primarily as a “social i,” which is a symbolic link between personality and social environment. ideology in this case is an important way of self-identification through symbolic structures with which the person or group identify themselves within the social context. the study of ideology in the context of the notion “identity” characterizes a feminist sociology of multiculturalists and postmodernists. the concept of identity gains prominence within social and cultural studies of issues of ethnicity and gender, sexual and racial minorities. on the one hand, it has materializing potential, giving ontological shade to that what exists only in the context of socio-cultural interactions. this is particularly manifested in the case of this term’s using for the analysis of issues of gender, nation and ethnicity. on the other hand, the problem of legitimacy of group identities (especially through new social movements) involves the use of ideological techniques and, therefore, makes the concept “ideology” using quite functional. most ideologies give rise to the interpretations not only of social actions and phenomena, but also the scheme of identities’ constructing. who are we and who are they? and more often, why we are good, and they, to put it mildly, are not very good. the last question is mainly natural for situations of conflict. such basic preconditions are certainly to have an impact on “views” and our attitude to them in standard situations of social interactions. nationalism of all shades is capable to coordinate the feelings and “opinions” of social groups, sharing nationalist values, and nationalist beliefs about minorities or immigrants. all this may be manifested in the contexts of employment, education, places of residence and nationality. almost the main cognitive function of ideologies is to organize specific group (or national) attitudes and relations. scheme of group identity, defined by ideologies can look in the form of a chain of questions like: • who belongs to us and why? (group affiliation) • what, how and why we are supposed to do? (target activity) • what is our place in society and relationships with other groups? (position) • what we have and what don’t? (what resources) of course, the answers to these questions can have different shades and tones due to the nature of socialization of this or that member of the group. for example, individual members of the group can be more orthodox or “advanced” than others, but that doesn’t change the merits of the case. finally, a person may belong to several groups at the same time and even confess several ideologies, each of which has its own impact on social practices depending on the situation. today’s era gives us many examples tuzikov, et al.: identities management as a solidarities constructing tool in contemporary society international review of management and marketing | vol 6 • special issue (s2) • 2016200 of functioning almost chimerical from the traditional point of view structures such as eco-feminism, eco-fascism, or social liberalism. at the same time, the core in a particular situation ideology of the group can be expressed in the discourse. an example is the hidden connotation in the discourse of ethno-nationalism that minorities can’t be patriots and therefore be allowed to manage state (zinurova and tuzikov, 2015). if review briefly the main theories of ideology, they directly or indirectly indicate a prominent role of ideology in the processes of identification. and it is equally typical as for traditional marxism (with its doctrine of class consciousness, class identity, in fact), so for post marxism theories, including postmodern experiments. for example, in the theory of althusser’s ideology (french neomarxism) the identifying mechanism of ideology is embodied in the technique of interpellation, in fact, of the question “who am i? with whom and against whom?” (althusser, 1994). for geetrz (1964), developing anthropological approach, ideology appears as a symbolic reality, which affects identity, giving rise to the interpretations of joint activity of members of the society. that is, the identity of the group and its members in this context can be interpreted as ideologically defined schemes of interpretations of joint actions and their results. it looks like this: we are those who do this and this for that and that and it is correct and necessary. it is naturally, that actions are reinforced by symbols and rituals that possess “real meaning” and a value (demonstrations, clothes etc.). as rightly notes sanina (2014) “the task of the researcher, therefore, is to define a set of attributes that people themselves consider significant and perceive as markers of belonging to their own or another group.” phenomenological and socio-linguistic turn in sociology is introduced by the ideas of discursive construction of social reality. the problems of identity do not stay aside too. one of the classics of the school cultural studies hall (1996) emphasizes that identity is most often conventional and random. he introduces the concept of “discursive identity,” noting that in modern society any identity ‘is reflected in the game of special modalities of power and, thus, is largely the product of the production of difference and exclusion than a sign of identical, naturally-constituted community “identity” in its traditional meaning’ (hall, 1996). language in its social and symbolic significance of discursive constructions (what, how, where and by whom it is spoken, and what is accepted to keep silent) has been considered as the most important tool of formation of social relations. language is simultaneously an environment and a tool for ideologies’ functioning. respectively, and ideological discourse can be considered as a tool of ideological construction of identities. as the example can be mentioned feminist discourse, the discourse of nationalism, the discourse of extremism, etc. with the development of modern society ideas of normal (single) identity, begin to give way to the ideas of multiple identities. the ideas of multiple identities become particularly popular in the framework of a new scientific approach to the study of ethnicity (bart, 2006). in opposition to traditional approach, materializing ethnic identity out of the historical and socio-cultural circumstances, non-traditional approaches (constructivism, instrumentalism) appeal to the situational emergence and development of ethnicity. the multiplicity of identities can be manifested in a simultaneous combination of national (civic) and ethnic (ethno-cultural) identity, such as italian-american origin. accordingly, in this case, the challenge is to construct a civil ideology, combining both identities. about the possibility of such combinations writes parsons (parsons, 1998), insisting that’maintaining of the unity of the nation does not require “dissolution” of ethnic groups in the national community, and to overcome the ethnic conflict strengthening of the overall civil foundations of modern nation is required.’ multiple identities in some way contribute to better adaptation, as the loss of one identity does not entail complete self-destruction, as it would happen in case of “single modality” identity. 3. results the multiplicity (pluralism of identities) reflects the plurality and hierarchy of social roles, to be performed by people in modern societies, and even in terms of constant dynamics of changes. ideology in this case can fulfill the function of some kind of backbone and resisting the chaos opposing force. however, the world of modern ideologies is also not strictly hierarchical. according to the theory of the slovenian scientist zizek (1999), “ideological environment” currently is full of “floating signifiers” of not coupled together concepts with an open meaning like “freedom,” “democracy,” etc., as well as of some “ideological fastener” giving more specific meaning and interpretations (e.g., order or justice). for example, the ideology of feminism can be manifested both in the socialist and liberal versions, and even in environmental variant. it is the result of fastener of “floating signifiers” (or ideologeme). in this case, it is possible to create even chimerical structures. and the creation of constructions, allowing at the same time to involve many igeologemes of them in its orbit is the essence of modern ideological struggle. as a result of “chimeric ideologies” the chimerical identifications arise, building and structuring identifying markers in the context of “ideological fasteners.” as, for example, can be interpreted today’s “democratic facebook-global identification” with the nationalism of the most fascist sense, a new democracy or global nationalism? multiple identities are particularly popular within the postmodern approach in sociology rejecting the totality of metanarratives, but promoting total relativism. moreover, priority is given to the admissibility of previously inadmissible to alter the traditional parameters of identities, including gender. in our opinion, the chaos of identity is a negative trait, leading to destructive for the society consequences and having nothing to do with the notion of “progress.” tuzikov, et al.: identities management as a solidarities constructing tool in contemporary society international review of management and marketing | vol 6 • special issue (s2) • 2016 201 however, the multiplicity of modern humans’ identities and the processes occurring in the socio-economic, socio-political and socio-cultural life of modern man and especially young people and put forward on the forefront the problems of identity configuration. fogelson (1982) puts forward the concept of the “identities’ struggle” in which he, separating the idea of multiplicity of identity, identifies four opposing component: real (the representation of the individual about himself in a particular period of his life), ideal (the model of behavior and existence to which the individual strives), negative (“self-image” which the individual seeks to avoid), shown (a set of images which the individual transmits to others with the purpose to influence their assessment). burke et al. (1981) in 1991 puts forward the thesis about the “set of identities,” through which tries to “grab” disintegrating plurality of identifications. russian researcher sanina (2014), studying contemporary russian identity, considers it as a “package of identities,” namely of civil, public and ethnic, and stresses the need for balance of these identities as the main configuration mechanism. t h e o c c u r r e n c e o f p o l a r a p p r o a c h e s , i n t h e f o r m a t traditional objectivity constructivism and “traditional objectivity” “subjective objectivity” creates a situation of complementarity search and the multi-paradigm. in the domestic theory and practice of sociological study of identity issues the approach of capitsyn (2014) can be noted. the author tries to show the dynamics of the folding “unifying” national-state identity. as its components, he distinguishes “partial” identities and their social and political configurations. social configuration includes “horizontal” identities of the everyday life. such identities include: territorial (natural), natural (body), spiritual (cultural), agent (professional). in common situations, ‘the majority of the population prefers a calm daily life. moreover, people are disconnected with “palisade” of private interests; it is difficult to overcome to start political actions. but if in everyday life there is deteriorating of transportation, environment, utilities, health care, education, employment, etc., the people, going beyond the daily routine, protect their violated rights. social identity, not “restraining” in the context of everyday life, goes out in the sphere of interests’ interaction (political life) where “vertical” identities function with the corresponding values and symbols’ (capitsyn, 2014). vertical (political) configuration includes the following types of identities: international, state, collective and individual. at the intersection of the horizontal and vertical axes of identities “unifying” identities are formed (national and historical). “unifying” national–state identity is multifaceted concept, capturing the content of notions “historical,” “imperial” identities, “citizenship,” “patriotism,” “nationalism.” it is directly related to the integrity of society and the viability of the state. capitsyn says: ‘people in the perception of themselves, society and the whole world build a universal set of “partial” identities, which can be identified analytically, referring to everyday life. however, the content of these identities, their balance or dominance of one of them against the others in different ethnic groups and nations varies considerably. hence the uniqueness of “unifying” national identities of this or that people (state). it also reflects the constructivist impact of ideologists, politicians, political technologists’ (capitsyn, 2014). one can discuss the degree of completeness of species identities’ classification, but the matrix approach to the analysis of identities’ configurations looks promising and allows entering the new schemes of interpretation of empirical data (tuzikov and zinurova, 2015). capitsyn (2014) also allocates the situations where “partial” identities under external impact generate counter-identities, acting as alternatives, destroying “unifying” identities. external (foreigncultural) identities (cosmopolitan, transnational, universalist, etc.) can form with the “inner” identities configurations, destroying “unifying” identity, and with it the social order. this occurs primarily as a result of the adoption of foreign real world as a “significant other.” this foreigncultural pattern is imprinted in the consciousness of people (groups, layers) as achievable and embody “here and now.” this radical transformation is represented as the inevitable alternative to domestic order. formation and accentuation of counter-identities are the basis of technologies that destroy “unifying” identity (capitsyn, 2010). the orange revolutions by sharp rely on this scheme. this confirms the need for effective management of identities and in this case of their configurations. there is a requirement to develop technologies of such management. the semantic field of the concept “identity” overlaps with the concept of “solidarity” that reflects the coupling and commitment to act as part of a group with which identification takes place. developing this approach, the russian scientist omelchenko (2014) addresses to new forms of socialization of the russian youth and notes that “the nature of intra and inter-group communications is in its focus, which are regarded as most relevant for formation of the shared by their group identity and defining of lines of demarcation that separate own from others” (omelchenko, 2014). this approach allows us to look across the borders separating groups with similar identification, not only across territorial boundaries (and the internet erases them), but also socio-cultural ones. in conducted under her leadership studies “significant ideological and value vectors were revealed, the rods of open or indirectly solidary communication of boys and girls belonging to different subcultures, movements, groupings., from different social environments and educational experiences. they can be roughly positioned within a value continuum, as environment of special attraction and repulsion, harmony and tensions. if the vectors to denote by the conditional polar to each other alternatives, they will look like the following: belligerence (aggression) pacifism; an order (loyalty) anarchism; the authoritarianism democracy (liberalism); nationalism/xeno/ homophobia tolerance; patriarchy gender equality; east west; tuzikov, et al.: identities management as a solidarities constructing tool in contemporary society international review of management and marketing | vol 6 • special issue (s2) • 2016202 anti-patriotic sentiment; anti-immigrant sentiment; pro anticapitalist sentiment; consumerism (glamour-hipster) asceticism” (omelchenko, 2014). thus, there is an effect of ideological discursive structures that determine value attitude to identifying practices and “solidary communications.” the very concept of ideology, in our view, retains its heuristic potential in the study of issues related to the configurations of the identity of modern youth. but here the development of management technologies of social solidarities’ configurations is required. 4. discussions an important aspect in the framework of the interested issues is disclosed by abrams (1999) establishing that the relationship between the categories, which are the names of identities, and elements of their alleged contents, is dependent depending on the context; by kimberg and makarevskaya (2005), who apply to the analysis of the identity concept in order to develop approaches to the creation of a theoretical model of the studied social processes. among researchers of this problem, mention should be made of ryazanov (2012), in the spectrum of which the transformation of identities in the russian regions in the post-soviet period is considered. his study of the major trends in the management of identity and ethno-cultural boundaries in multi-ethnic regions of russia, as well as the works of osipova (2011) devoted to the problems of management of territorial identity also are of great interest. however, the considered aspect of management in configuring of identities is not discussed neither by these nor other authors. 5. conclusion currently, the multiplicity of identities reflects the plurality and hierarchy of social roles, to be performed by people in modern societies. at the same time modern societies are characterized by chaos of identities, threatening the progress, to resist which is possible in the framework of certain ideologies. among the main problems in this field, at least two of them can be denoted to. first, the multiplicity of identities of modern humans and the processes occurring in the socio-economic, socio-political and socio-cultural life of the modern person actualize the problem of identity configuration, particularly in situations where “partial” identities under external impact generate counter-identities, acting as alternatives destroying “unifying” identities. secondly, identity intersects with the notion of solidarity, reflecting a sense of ownership and commitment to actions as part of a group with which there is an identification that leads to the manifestation of the influence of ideological discursive structures that determine value attitude to identifying practices and “solidary communications.” the solution to these problems actualizes the need to develop mechanisms for effective management of identities. 6. acknowledgements this publication has been prepared within the framework of supported by the russian foundation for humanities research project no. 15-03-00303 “configuration of the new russian identity of young people: trends and regional specificity.” references abrams, d., editor. (1999), social identity, social cognition and the self: the flexibility and stability of self-categorization. in: social identity and social cognition. malden, ma: blackwell. p358, 197-229. althusser, l. (1994), ideological state apparatuses. in: zizek, s., editor. mapping ideology. london: verso. p342, 100-140. bart, f., editor. (2006). introduction. ethnic groups and social boundaries: the social organization of cultural differences. moscow: new publishing house. p236, 9-48. burke, p.j., reitzes, d.c. (1981), the link between identity and role performance. social psychology quarterly. washington, d.c: american sociological association. p340, 83-92. capitsyn, v.m. (2010), globalization and the management of identities: prolegomena to the strategy of development of russia. values and meanings, 5, 78-80. capitsyn, v.m. (2014), identities: the nature, composition, dynamics (the discourse and experience of visualization). polit book, 1, 8-32. erickson, e. (1996), identity: youth and crisis. moscow: progress. p344. fogelson, r.d. (1982), self, person, and identity: some anthropological retrospect’s, circumspect, and prospect. in: lee, b., editor. psychosocial theories of the self. ny: plenum press. p193, 67-109. geetrz, c. (1964), ideology as cultural system. in: apter, d.e., editor. ideology and discontent. glencoe: the free press. p205, 47-76. hall, s. (1996), who needs “identity”? in: hall, s., gay, p., editors. questions of cultural identity. london: sage. p113, 1-17. kimberg, a.n., makarevskaya, j.e. (2005), concept of identity as a tool for social research. man. community. management, 4, 4-15. krylov, а. (2008), identity management a new direction of management in a changing society. in: krylov, a., tobias, s., bell, h.g., editors. internationals management. fachspezifische tendenzenund bestpractice. (ss. 69-76). berlin: lit verlag. p237. omelchenko, e.l. (2013), solidarity and cultural practices of russian youth at the beginning of xxi century: theoretical context. sociological researches, 10, 52-61. omelchenko, e.l. (2014), solidarity and cultural practices of russian youth at the beginning of xxi century: theoretical context. sociological researches, 12, 52-61. osipova, o.s. (2011), managing the identity of citizens. in: saralieva, z.m., iudin, a.a., editors. socio-economic transformations and challenges. vol. 1. n. novgorod: publishing house of scientific and academic. p347, 153-162. parsons, t. (1998), the system of modern societies. мoscow: aspect press. p270. ryazanov, a. (2012), managing of identity: articulation of ethnic and cultural boundaries in poly-ethnic regions of russia. power, 4, 20-23. sanina, a.g. (2014), the genesis of identity idea in sociology and adjacent sciences. sociological researches, 12, 5-11. tuzikov, a., zinurova r.i. (2015), socio-cultural basis of multiple identity of youth social groupings in modern societies: a conceptualization and problem of dimensions. bulletin of economics, law and sociology, 4, 338-341. tuzikov, a., zinurova, r. (2009), characteristics of the social demand for two-level professional training. russian education and society, 51(12), 38-54. zinurova, r.i., krieger, w. (2013), educational technologies of immigrant’s adaptation in russia and germany: «melting pot» or «dialogue of cultures». in: international conference on interactive collaborative learning (icl). p536-538. tuzikov, et al.: identities management as a solidarities constructing tool in contemporary society international review of management and marketing | vol 6 • special issue (s2) • 2016 203 zinurova, r.i., tuzikov, a.r. (2015), identity of youth social groups and ideology in the socio-cultural dimension: the theoreticalmethodological basis of the conceptualization. bulletin of economics, law and sociology, 4, 293-296. zizek, s. (1999), sublimed object of ideology. moscow: art magazine. p236. . international review of management and marketing | vol 6 • special issue (s2) • 2016258 special issue for "management of education: problems and perspectives" international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2016, 6(s2) 258-263. management of students professional competencies formation on the basis of interdisciplinary integration liudmila a. rapatskaia1*, elena v. alekseeva2, elvira m. vorontsova3, valentina v. konstantinova4, aida g. sadykova5, konstantin b. tumarov6, anna s. streltsova7, fedor f. timirov8 1moscow state pedagogical university, moscow, russia, 2mari state university, yoshkar-ola, russia, 3mari state university, yoshkar-ola, russia, 4mari state university, yoshkar-ola, russia, 5kazan (volga region) federal university, kazan, russia, 6kazan (volga region) federal university, kazan, russi, 7moscow state pedagogical university, moscow, russia, 8the institute for the development of education (nizhny tagil branch), nizhny tagil, russia. *email: g-gs@mail.ru abstract the relevance of the study is conditioned by the modernization of professional training the leading strategy of which is the formation of professional competencies. professional education is characterized by the desire to overcome the professional isolation and to develop a more democratic and effective professional training systems focused on competitive creative professional. the purpose of the article is to provide a control mechanism for the formation of professional competencies of future specialists on the basis of interdisciplinary integration. the leading method has become the method of action research, which allows gaining of new knowledge about the future specialists’ professional training, focused on the formation of entity-entity relations, personal meanings and life values on the basis of interdisciplinary integration. the article reveals leading trends in the development of future specialists’ professional training (reforming, accessibility, solidity and continuity); structure-forming components of professional competencies are allocated (epistemological, normative and functional); the peculiarities of future specialists’ professional competencies formation on the basis of interdisciplinary integration are clarified (focus on holistic education throughout life; upbringing of sustainable civil qualities of the person; the relationship of academic disciplines, ensuring complementarities of content, forms, methods and means of professional training and the creation of common educational modules for various logical reasons); the idea of case-method implementation in the training process is suggested. the paper submissions can be useful for teachers of research universities; centers to enhance personnel training and retraining while selecting and structuring of the content for professional development of the research universities’ teaching staff. keywords: interdisciplinary integration, professional competence, professional training, case method jel classifications: a23, i23, i26 1. introduction 1.1. the relevance of the study formation and development of the world educational environment, priorities’ change in the socio-economic and educational policies, the magnitude and variability of reforms in specialists’ professional training require conceptualization and forecasting of the development of future lawyers’ professional training system. the radical change in higher legal education can be achieved only within the framework of innovative education, characterized by a change of the fundamental bases of traditional pedagogy, from its philosophical paradigm, towards the creation of a new pedagogy, new educational processes, formation of professional competencies of future legal profile specialists based on interdisciplinary integration (abdeeva, 2010; sadovaya et al., 2016a, 2016b; kalimullin and masalimova, 2016; asadullin et al., 2016). in the russian federation, the modernization of vocational education is designated as one of the components to ensure innovation development of economy and social development, national security, the strengthening of russia’s positions in the world community. it demands the update process of vocational education, including legal. in may 2009, the president of the russian federation issued a decree “on measures to improve higher legal education in russia,” which included improving rapatskaia, et al.: management of students professional competencies formation on the basis of interdisciplinary integration international review of management and marketing | vol 6 • special issue (s2) • 2016 259 of the curricula quality of higher professional legal education, strengthening of control over the activities of higher educational institutions that train legal staff. currently an active work on the implementation of this decree is carried out, with the participation of the russia association of lawyers on social assessing of legal education’s quality and the legal commission for science, as well as regional offices directly (lunev et al., 2014; zaitseva, 2013; sabirov et al., 2015; chiknaverova, 2012; asaphova and golovanova, 2015; gazizova, 2009). the purpose of the paper is to provide a managerial mechanism for professional competencies’ formation of future legal profile specialists based on interdisciplinary integration. 1.2. the essence of interdisciplinary integration it is found that interdisciplinary integration is the relationship of the various academic disciplines. to date, the pedagogy has accumulated a rich practical and theoretical experience in vocational training providing on interdisciplinary basis (danyluk, 2000; prichinin, 2012). pedagogical concepts of interdisciplinary connections’ establishment are developed in order: (1) to form the trainees’ complete picture of the world, the valuable attitude to knowledge and social reality, the systematic ideas about the interaction of various sciences; to develop common to a number of disciplines abilities and skills on the basis of didactically systematized differently-subject knowledge (borisenko, 1971); (2) to develop integrated courses, allowing to provide order, the integrity of the educational material, and representing a local educational system, aimed at the study of well-defined and therefore limited process or phenomenon and combining forms, methods, concepts and content of the various academic disciplines (zverev, 1974). it is revealed that the teaching tasks of interdisciplinary connections are as follows. firstly, to establish between the relatively independent to each other academic disciplines the content, conceptual, methodological and other communications and to create integrated training courses and interdisciplinary modules (gabdrakhmanova et al., 2016; khairullina et al., 2016; levina et al., 2015). as it is known, each academic discipline is a classic didactic system, separated from other disciplines and localized in the educational environment and time, having a very clear timing, content, methodological boundaries, containing a large amount of structure-forming components (knowledge, terms and concepts, facts, abilities, skills, competencies). accordingly, the aggregate of all disciplines greatly increases the amount of structure-forming components. this leads to the fact that between the n-quantity of components of the nquantity of teaching structures, belonging to n-quantity of disciplines, an infinite number of inter-subject communications can be established. in his study, danyluk notes that there are three types of inter-subject relations in the domestic pedagogy: content-information, operational activities, organizational methodical, which in turn are divided into 14 classes, including 44 species of interdisciplinary connections. if the number of species of interdisciplinary connections is close to fifty, then what will be their number, wonders the respected author (danyluk, 2000). that is why interdisciplinary communications cannot function as a special didactic system serving one of the components of the educational process, but as the general form of the whole educational process. to establish the limit to applicability of interdisciplinary connections is very difficult, and, by definition, they are designed precisely to overcome boundaries within the educational environment of vocational training. the second didactic task of interdisciplinary connections can serve to justify the selection and structuring of educational material on specific academic disciplines. addressing the basis of organization of the whole training process, interdisciplinary communications can determine not only interdisciplinary, but also the intra-learning modules. in the study of danyluk this problem of interdisciplinary linkages is defined as their didactic erosion, i.e., the lack of defined boundaries that can turn interdisciplinary communications into a special, different from other ones a didactic system (danyluk, 2000). didactic erosion of interdisciplinary connections, says danyluk, not only as a didactic structured, can lead to the fact that the concepts “educational process” and “interdisciplinary communications” are considered to be associated ones (danyluk, 2000). indeed, interdisciplinary communications can meaningfully “to fill up” not only training modules of the taught subjects, but the whole process of vocational training as a whole. however, in practice of vocational training, most often, the algorithm of inter-subject relationships’ implementation is as follows: the teacher organizes the study of the topic, updates the previously learnt material (following links) refers to the topics that are being studied in other subjects (related links) and prepares students for the perception of new material (preliminary communications. however, if the establishment and application of interdisciplinary connections is considered as a basis for management of the formation of professional competencies of students, it is necessary to use interdisciplinary analysis and synthesis not only of the content of knowledge for didactic consolidation of increasing scientific information and systematic updating of educational curricula, but also of the abilities and skills to modernize forms and methods of vocational training. 2. materials and methods 2.1. methods of the study during the research the following methods were used: analysis of regulatory documents, generalization of pedagogical experience, content analysis, foresight, systematization and generalization of facts and concepts, action research method, the method of expert assessments, observation, questioning, pedagogical experiment. 2.2. experimental base of the study experimental work was carried out on the basis of the kazan federal university. in the experimental work 330 teachers and 410 students participated. 2.3. stages of the study the study was conducted in three stages: • in the first phase of the study the analysis of the current state of the problem in the pedagogical theory and practice was carried out; the study program was developed; • in the second phase the leading trends in the development of professional training of future law specialists were rapatskaia, et al.: management of students professional competencies formation on the basis of interdisciplinary integration international review of management and marketing | vol 6 • special issue (s2) • 2016260 revealed; structure-forming components of the professional competencies of future law professionals were allocated; the features of professional competence’s formation of future law specialists based on interdisciplinary integration were clarified; • in the third phase, the systematization, interpretation and synthesis of the research results were carried out; theoretical conclusions were refined; processing and presentation of the obtained research results was carried out. 3. results the main results of this study are: (1) the major trends in the development of professional training of future law specialists (reforming, accessibility, solidity and continuity); (2) structureforming components of the professional competencies of future law professionals (epistemological,the integrity of knowledge, regulatory scope of authority, functional professional duties); (3) features of professional competence’s formation of future law specialists based on interdisciplinary integration (focus on holistic education throughout life; educating of sustainable civil personality traits; the relationship of academic disciplines, ensuring of complementarily of content, forms, methods and means of professional training and the creation of common educational modules for various logical grounds). 3.1. leading trends of development of future law specialists’ professional training the following leading trends in the development of professional training of future law specialists are established: 1. reforming of higher law education in the past recent years in all developed countries, has led to a change in its philosophical paradigm. the legal education is characterized by a desire to overcome the professional isolation and cultural limitations, the search for a more democratic, diversified and efficient systems of professional training, a focus on a more widely educated, highly cultured, creative and harmonious personality. attempts to modernize higher law education led to the educational paradigm, aimed at the revision of targets and priorities. the new educational paradigm considers as a priority the focus on the interests of the individual, adequate trends of social development. in this regard, the democratization and humanization of higher education become its major trends. search of ways by universities to solving these problems is carried out both through the optimization and intensification of academic disciplines teaching and through the development of flexible training systems, taking into account the individual cognitive characteristics of students, their interests and propensities. today we can talk about such sustainable directions of higher law education as the integration of professional and cultural training in unity with the development of students’ personal qualities; introduction in educational process of open learning systems, allowing to organize the students’ training on individual curricula, offering everyone the opportunity to build that educational trajectory which is better corresponded to his or her educational and professional abilities. 2. accessibility of higher law education. education of the xxi century is designed to be education for all. the new educational policy is a policy of equal opportunities for citizens’ access to education as a necessary prerequisite for social and personal development. therefore, the infringement of the right to education is not compatible with the sustainable development of society and leads to the degradation of the individual, to the brink of ousting its living conditions and dignity. as the main directions of education’s accessibility policy in russia may be mentioned: a multi-level nature of higher education; diversification of forms of higher education and its additional educational services; support for poor and other socially vulnerable groups of the population. 3. the solidity of higher law education. the pace of new knowledge’s emerging has increased to such an extent that the initial education may become obsolete in 2-3 years. therefore, the need to move to a new educational concept, which is based on the idea of education’ solidity is urgent task of the theory and practice of professional educational pedagogy. it provides a qualitatively new goals of professional training, the new principles of content’s selection and systematization of educational material; the creation of integrated interdisciplinary courses to achieve a new quality of education of the individual and society. 4. continuity of education: “from education for whole life to education throughout life” this idea has also become a priority for the new educational policy. education acquires a total character: it lasts the whole life and it possesses the accessibility, continuity and sustainability to all skill levels. and it is the higher education system is the basis for the realization of the idea of continuing learning. it is obvious that the above mentioned global trends have defined the current state of professional education and indicate the outlines of higher law education of the xxi century, in which the russian system has to be fitted. 3.2. structure-forming components of professional competencies of future law professionals it is found that the structure of professional competence of the future law experts, it is possible select multiple components: epistemological (integrity of knowledge); standard (scope of authority), functional (professional duties). epistemological component requires a certain knowledge and skills needed to perform their professional duties, the ability for the selection of the information of the legal nature, the formation of information and law data banks, their continuous updating and improvement. the basis of the professional knowledge is information and communication support, since the scope of the rights’ application at the present stage are so varied and versatile, that the acquisition of law education is no longer sufficient for effective law activities’ carrying out. the normative component involves the scope of authority of a lawyer established by law and manifested in curricula activities aimed at crimes’ prevention, detection and establishment of persons, who are preparing it. rapatskaia, et al.: management of students professional competencies formation on the basis of interdisciplinary integration international review of management and marketing | vol 6 • special issue (s2) • 2016 261 the functional component is expressed in a lawyer’s ability to act, to perform professional duties on the basis of law expertise to carry out the selection of objective information, confirming the correctness of extended version and correctness of investigational activities. the isolation of epistemological, normative, functional components in the structure of the professional competencies of future lawyers is conditioned by the orientation of the capacity and resources of higher law education on the end result: the professional training of specialists, (1) possessing a broad philosophical outlook, a high level of personal and professional culture; (2) possessing a modern system of law knowledge; (3) able to navigate freely in the global information society, and to work constructively in problem situations, combining the professional competence with civil liability; (4) characterized by a set of emotional and volitional, moral, ethical, civic qualities. the moral foundations of activities of the modern lawyer when making critical decisions become equivalent or even superior to the technological, economic and environmental justifications. that is why it seems necessary to form future lawyers’ combination of qualities: emotional and volitional (tolerance, prudence, respect, humility, consistency, balance and psychological endurance, teamwork, discipline and punctuality, accuracy in work), moral and ethical (solidity of moral foundations, high ethical views, conscience, responsibility, humanity, common sense), civil (legitimacy, justice, duty). thus, the purpose of higher law education has the nature of the three components: in the professional field professional competencies; in public life a successful socialization, formation of common cultural competencies; in personal sphere awareness of their own selfworth, the manifestations of reflection and activity in the definition of objectives and activities in general, self-identification. this necessitates the formation of professional competencies of future lawyers of international affairs on the basis of interdisciplinary integration. 3.3. features of professional competencies’ formation of future law specialists based on interdisciplinary integration it is found that the process of professional competencies’ formation of future law specialists based on interdisciplinary integration is conditioned by a number of features: focus on holistic education throughout life; raising of sustainable civil qualities of the person; establishment of disciplines’ relationship, ensuring complementarities of content, forms, methods and means of professional training and the creation of common educational modules for various logical reasons. customer and direct consumer of education is a person, whereas society forms the main socially significant requirements to the quality of education in the form of federal and regional components of the curricula, representing enterprise customers and potential consumers who receive competent professional socialized member of society. these peculiarities allow us to formulate the following requirements to the process of professional competencies’ formation of future law specialists based on interdisciplinary integration: (1) conditions quality (curriculum, semester schemes, schedule, material and technical equipment, and so on), which is determined on the basis of the federal state educational standards. at the same time, priority should be given to individual students’ ability to live in the learning process, taking into account their personal needs; (2) the quality of implementation of the federal state educational standard (control and estimation parameters, the organization of active forms of learning, the use of innovative technologies and the other). at the same time considering the formation of professional competencies, one cannot forget about their dialectical relationship with the general cultural competencies. it is a system integrity of common cultural and professional competencies that allows us to consider professional training as a process of personality’s self-projecting, which can be divided into three main stages: selfdetermination, self-expression and self-realization. it is on the last stage the human life philosophy is formed in general, the meaning of life is realized, social position is approved, value standards are implemented, integrated personality characteristics are developed (orientation, competence, emotional and behavioral flexibility), the need for change, transformation of inner world and the search for new opportunities of self-fulfillment in their work is recognized; (3) the quality of the results of professional competencies’ formation (implementation of diagnostics students’ development, stimulation system of learning motivation, reflective-evaluation stage of each session, the inclusion of students in co-management, etc.). the core backbone component of profession-gram is personality. therefore, the process of professional competencies’ formation should be anthropocentric, that is aimed at the formation of the personality of the future specialist the carrier of general and professional outlook, values and beliefs. and this is possible only on the basis of interdisciplinary integration, which mediates the integrity and unity of the personal and professional development of the individual. 3.4. stages of managerial mechanism’s implementation of future law specialists’ professional competencies’ formation based on interdisciplinary integration managerial mechanism’s implementation of future law specialists’ professional competencies’ formation based on interdisciplinary integration involves the following stages of experimental work: ascertaining, forming and control. 3.4.1. ascertaining stage in the frame work of the ascertaining stage it is found that the formation of future law specialists’ professional competences based on interdisciplinary integration has several levels: basic, preparatory and professional. at a basic level, in the process of professional competencies’ formation the epistemological component was dominant (integrity of knowledge), at the preparatory onestandard (scope of authority), at the professional functional (professional duties). in order to implement the mechanism of management of future law specialists’ professional competencies formation based on interdisciplinary integration at this stage the application of casemethod was justified. the case method is based on the acquisition of sets (cases) of text teaching materials and their transferring to students for independent self-study. features of case-method are: (1) analytical procedures (2) method of collective learning, the most important components of which are teamwork, mutual rapatskaia, et al.: management of students professional competencies formation on the basis of interdisciplinary integration international review of management and marketing | vol 6 • special issue (s2) • 2016262 exchange of information; (3) synergistic activities, which implies to prepare groups’ immersion procedures into a situation, the formation of knowledge multiplication effects, insight, sharing of discoveries, etc.; (4) kind of project activities in which there is the formulation of the problem and ways to solve it on the basis of the case, acting as a source of information for understanding of the options for effective actions; (5) it contributes to the enhancement of cognitive activities of students, encouragement of their success; (6) it is the process of formation of an information area, its activating, the organization of information communications, pushing positions, replenishing of informational area and using of the information accumulated in it. 3.4.2. forming stage at this stage the case method was applied on the basis of interdisciplinary integration. as part of the case-method were used: situation analysis method, case studies and exercises, case studies analysis (case studies), the method of analysis of business correspondence, game design, the method of situational role-plays, discussions method. case studies are of particular interest. case study specially designed problematic situations. according to the complexity such situations may have the level character: simple situations (work on the reproductive level), the situations of a higher level of complexity, non-standard situations (creative level). the peculiarity of the situation is in the fact that they are designed on the basis of real-life problems, available for students’ personal meaning. 3.4.3. control stage in the control phase, it is noted that the case method is an effective means to develop and consolidate the knowledge acquired on the basis of which the students make their own decisions. case method allows performing of the following tasks: to make the right decisions in the face of uncertainty; to develop a decisionmaking algorithm; to master the skills of situations’ research: to develop the plan of actions focused on the intended result; to apply the theoretical knowledge obtained, including the study of other disciplines to solve practical problems; to take into account the point of view of other experts on the matter under consideration in the final decision making. the method of cases contributes to the development of ability to analyze situations, evaluate alternatives, to choose the best solution and plan of its implementation. for this purpose, the following kinds of activities are used such as learning of new material, problem tasks’ solving, learning in the problem-solving process and consolidation of new material. the case may contain both as printed so electronic student books. it is necessary to take into consideration the didactic properties and functions of every training tool included in this system, on the one hand, and on the other, the specificity of the didactic task, solved with its help and on the third, common learning concept, which guides the whole system. 4. discussions important theoretical and practical significance have for the study works of abdeeva (2010), anisimov and potapova, (2003), boiyko (2009), bychkov and garmaev (2010), lunev et al. (2014) which reveals the forms and methods of professional training of a lawer. works of borisenko (1971), danyluk (2000), eremkin (1984), zverev (1974), devoted to the nature of interdisciplinary connections are of great interest to achieve the objectives of the study. however, the analysis of scientific works shows that the problem of professional competencies’ formation of future law specialists based on inter-subject integration has discussion nature. in the special literature the question of the managerial mechanism of professional competencies’ formation of future law specialists on the basis of interdisciplinary integration is not solved. 5. conclusion and recommendations it is established that the managerial mechanism of professional competencies’ formation of future law specialists on the basis of interdisciplinary integration involves: (1) the relationship of academic disciplines that ensure the complementarity of the content, forms, methods, means of professional training and creation of common educational modules on various logical grounds; (2) the use of the case method; (3) the formation of students’ sustainable interest in the integration of professionally important knowledge, abilities, skills. the paper submissions can be useful for teachers of research universities, providing training of future law specialists; for the employees of centers for professional skills upgrading and staff retraining in selecting and structuring of the content of professional development of law specialists and scientific-pedagogical specialists of scientific-research universities. taking into account the obtained results of this study a number of research challenges and promising directions that require further consideration can be allocated: the creation of an innovative scientific and methodological support, as a system of interrelated activities that are based on science achievements and the best practices aimed at the formation of professional competencies of future law specialists on the basis of interdisciplinary integration; development of monitoring of professional competencies’ formation of future law specialists. it is found that the effectiveness of managing of professional competencies’ formation of future law specialists on the basis of interdisciplinary integration will be promoted, in case of professional training’s organization according to the “entityentity” type contributing to the formation of personal meanings and life values. references abdeeva, n.a. (2010), culture of the future lawyer’s professional activities, its content and features in the conditions of informatization of education. journal of ksu named after n. a. nekrasov, 16, 57-61. anisimov, t.i., potapova, s.a. (2003), to the question of professionally important personal qualities of a lawyer. legal education and research, 2, 2-6. asadullin, r.m., teregulov, f.s., koletvinova, n.d., egamberdieva, n.m. (2016), fundamental and applied education a new look. mathematics education, 11(1), 23-33. rapatskaia, et al.: management of students professional competencies formation on the basis of interdisciplinary integration international review of management and marketing | vol 6 • special issue (s2) • 2016 263 asaphova, e.v., golovanova, i.i. (2015), competence formation of faculty and teaching staff for the design and implementation of educational program in networking. obrazovanie i samorazvitie, 2(44), 23-29. boiyko, a.i. (2009), reform of law education (a sad reflection on the present critical and critical sad planned future). law education and science, 3, 6-9. borisenko, n.f. (1971), about the basics of inter-subject relations. soviet pedagogy, 11, 24-32. bychkov, a.v., garmaev, y.p. (2010), the practical component of the professional learning strategies of the student-lawyer of criminal law specialization. law education and research, 2, 17-22. chiknaverova, k.g. (2012), describing the competence of autonomous speech in a foreign language for undergraduate students. obrazovanie i samorazvitie, 3(31), 93-98. danyluk, a.y. (2000), the theory of integration of education. rostovon-don: publishing house of rostov pediatrics university. p440. eremkin, a.i. (1984), the system of interdisciplinary links in higher education: (aspect of teacher training). kharkov: publishing house of kharkov university. p152. gabdrakhmanova, r.g., kalimullina, g.i., ignatovich, v.g. (2016), professional pedagogical education quality management. mathematics education, 11(1), 103-112. gazizova, f.g. (2009), a conceptual moral and educational model of a countryside school. obrazovanie i samorazvitie, 6(16), 167-172. kalimullin, a.m., masalimova, a.r. (2016), editorial: actual issues of national education: theory and practice. mathematics education, 11(1), 1-2. khairullina, e.r., makhotkina, l.y., kiryakova, a.v., baranov, v.v., maksimova, o.g., khrisanova, e.g., piralova, o.f., masalimova, a.r. (2016), the real and the ideal engineer-technologist in the view of employers and educators. international review of management and marketing, 6(1), 134-138. levina, e.y., akhmetov, l.g., latipova, l.n., mirzagitova, a.l., mirzanagimova, f.i., latipov, z.a., masalimova, a.r. (2015), diagnostics of educational activity quality on the basis of qualitative methods. asian social science, 11(4), 246-251. lunev, a.n., pugacheva, n.b., stukolova, l.z. (2014), the formation of professional competencies of international lawyer on the basis of interdisciplinary integration. scientific-methodical electronic journal concept, 2, 46-50. prichinin, a.e. (2012), innovative education: the principle of forestalling of reality. obrazovanie i obschestvo, 1, 61-68, sabirov, i.t., ponkratova, l.a., gracheva, n.a., kiselev, s.v., fatikhova, l.e., chudnovskiy, a.d. (2015), the formation and development trends of the consulting market in russia. mediterranean journal of social sciences, 6(2s3), 188-195. sadovaya, v.v., korshunova, o.v., nauruzbay, z.z. (2016a), personalized education strategies. mathematics education, 11(1), 199-209. sadovaya, v.v., luchinina, a.o., reznikov, a.a. (2016b), students professional orientation to the teaching profession in educational environment. mathematics education, 11(1), 327-337. zaitseva, n.a. (2013), the role of education system in adaptation of graduates from russian institutes and colleges at european enterprises (by example of service companies). middle east journal of scientific research, 13(5), 693-697. zverev, i.d. (1974), inter-subject communication as a pedagogical problem. soviet pedagogy, 12, 10-16. . international review of management and marketing | vol 6 • special issue (s2) • 2016166 special issue for "management of education: problems and perspectives" international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2016, 6(s2) 166-171. the mechanism of industrial educational clusters creation as managerial entities of vocational education alexander n. lunev1*, rais s. safin2, evgeny a. korchagin3, damir k. sharafutdinov4, tatyana v. suchkova5, lubov v. kurzaeva6, svetlana r. nikishina7, natalia a. kuznetsova8 1kazan national research technical university named after a. n. tupolev – kai, kazan, russia, 2kazan state university of architecture and engineering, kazan, russia, 3kazan state university of architecture and engineering, kazan, russia, 4kazan state university of architecture and engineering, kazan, russia, 5kazan state university of architecture and engineering, kazan, russia, 6magnitogorsk state technical university, magnitogorsk, russia, 7kazan (volga region) federal university, kazan, russia, 8academy for advanced studies and retraining of educators, moscow, russia. *email: lunev.aleksander2012@yandex.ru abstract the relevance of the paper is conditioned by the increasing role of vocational education in the regional economy. in modern conditions vocational education is regarded as a system of integrative interaction of education, science and industry, aimed at the development of a specialist ready for the life-long learning, capable to a certain type of professional activities, self-organization and competitiveness on the labor market. the aim of the paper is to develop the mechanism of branch educational clusters’ creation as the entities of vocational education’s management. the leading method is the method of action research, allowing to obtain new knowledge about vocational education’s management and to propose mechanisms for its optimization to obtain qualitatively new results of vocational training process. the article defines the essence of an industrial educational cluster as a set of vocational educational institutions, united by industrial features and partnerships with industrial enterprises; presents the mechanisms of interaction between labor market and vocational education; describes the mechanism of educational clusters’ formation on the basis of vertical integration of educational institutions; reveals the mechanism of industrial educational clusters’ formation on the basis of social partnership of the manufacture and vocational educational institutions. the paper submissions can be useful for scientific and pedagogical staff of vocational educational system, specialists of educational managerial bodies and regional authorities. keywords: management of vocational education, educational cluster, social partnership, industry jel classifications: i21, i25, i28 1. introduction 1.1. the relevance of the study today, vocational education is positioned as one of the most important factors for sustainable development of society, competitiveness and national security of the state. this is due to the formation of a new geopolitical environment, the restructuring of industrial sectors and the social sphere, the development of regionalization. in modern conditions the vocational education is considered as a system wholeness of integrative interaction of education, science and manufacture, aimed at the development of a specialist ready for the life-long learning, capable to a certain type of professional activities, self-organization and competitiveness on the labor market (kalimullin and masalimova, 2016; zaitseva, 2013; dmitrieva et al., 2015; sabirov et al., 2015). however, due to the insufficiency and sometimes the lack of links with the industrial sector, vocational education cannot prepare specialists of a new quality type: enthusiastic, competent, adaptable to changes and quickly mastering new techniques and technology of modern high-tech manufacture, capable to analyze complex situations and make responsible decisions, skilled in new information technologies. this leads to a decrease in the quality of vocational education, investment activity in education, the growth of the deficit of demand professionals (lunev et al., 2014). one of the ways to solve the problem is the creation of industrial educational clusters. it is established that lunev, et al.: the mechanism of industrial educational clusters creation as managerial entities of vocational education international review of management and marketing | vol 6 • special issue (s2) • 2016 167 in the conditions of society’s transformation, industrial logic of socio-economic development’s management is ineffective. the industry is becoming a virtual concept and there is neither object nor actor in its development. clusters provide an opportunity to develop not by inertia (dranev, 2001). the paper aims to discover peculiarities of the industrial educational cluster as the entity of vocational education’s management. 1.2. the essence of cluster under the cluster usually is understood a group of objects allocated on the criterion of their proximity to each other. according to the theory of porter, a cluster is a group of geographically neighboring, interconnected companies (suppliers, manufacturers, etc.) and related to them organizations (educational institutions, bodies of state administration, infrastructure companies) operating in a particular area, and complementary to each other. michael porter believes that the country’s competitiveness should be considered through the prism of international competitiveness not of its individual companies but clusters associations of firms in different industries. in this case, a fundamental importance belongs to the ability of clusters effectively to use the internal resources (porter, 1993). in russia the term “cluster” is one of the most popular. however, there is no a unified approach to this concept’s consideration. the most popular points of view are: (1) dranev (2001) assumes that cluster is a network of suppliers, manufacturers, consumers, elements of industrial infrastructure, research institutes, interrelated in surplus value’s creating process; (2) tretyak notes that it is important to distinguish clusters and enterprise networks. tretyak (2006) writes that the term “network” refers to the group of medium firms, which interact to achieve common goals complementing each other and specializing in order to overcome common problems, achieve collective efficiency and conquer new markets; the term “cluster” refers to sector and geographical concentration of enterprises which produce and sell a range of related or complementary goods with joint efforts; (3) migranyan (2004), emphasizes that cluster is a concentration of the most effective and interrelated economic activities, i.e., a set of interrelated groups successfully competing firms that form the “golden section” and provide a competitive position in the industry, national and international markets; (4) tzikhan (2003) assumes that cluster is a community of firms, closely related industrial branches which mutually promote to the growth of competitiveness of each other. it is found that variant approaches to the concept “cluster” are conditioned by the fact that the authors differently determine the entities of the cluster. in our opinion, the entities of cluster can be as companies (suppliers, manufacturers, etc.), so related to them organizations (educational institutions, bodies of state administration, infrastructural companies). accordingly, cluster is proposed to be defined as a group of interconnected companies and associated institutions functioning in a particular field, linked by commonality of needs and the ability to use internal resources effectively. it is established that cluster is an integrative mechanism, which provides for intensive development of its constituent organizations, their social partnership. 1.3. the mechanisms for the industrial clusters’ creation it is found that the creation of industrial clusters is possible through the use of system-forming transformational mechanisms or based on the synergistic effect of horizontal and vertical linkages between organizations. it is found that the system-forming transformational mechanisms are the integration strategies, based on the combination of socioeconomic systems or the formation of sustainable relationships between them. transformation as a form of organizationaleconomic conversion of firms, in which the composition of the legal entities involved in transformation is changed, is an integral part of the dynamics of organizations’ development in the external environment. it is found that the major types of transformation are merger, accession, division, separation and transformation. merger can be defined as the procedure of transition from one organization under the control of another one, by acquiring absolute or partial ownership right on the merger’s organization. merger and takeover are a procedure for ownership’s changing or the company’s ownership structure changing, being the final link in the system of measures for its restructuring. the purpose of mergers and takeovers is to increase the wealth of shareholders and to achieve competitive advantage in the market. mergers and takeovers are one of the main methods for the implementation of the transformational strategies. it is established that if a corporation holds a prominent position in the market and the industry, has good prospects for development, but needs to strengthen its position to achieve competitive advantages in the industry, through mergers and takeovers, it can reach its goal by uniting or acquiring companies of the same segment in the market. often corporations can carry out mergers and takeovers of firms in other segments of the market to reduce the risk of its activities, expanding of its presence sphere. if the corporation revises its positions in the market, finds new priorities, identifies the main areas of activities, getting rid of not the main problematic areas, lacks in finances, it can effectively use the mechanism of mergers and takeovers to sale or separate individual divisions and subsidiaries. it is clarified that the foundation of cluster formation is not based on property relations but market relations of being “profitable” of more “dense” integrated interaction based on the formation of relationships between the different elements of organizations. the nature of these ties is directly linked to aspects of organization’s development. changes of ownership relations can take place and form both positive and negative aspects with the relationship of being “profitable.” for example, when merged small company provider by largest company, the stimulating role of competition is lost and such enterprise often expects from the new owner some initiatives, shifting many issues “in the competence center.” during the formation of a cluster small companies are always in a position of dependence on the efforts for their development. development for them means life, the stopping of one of them stagnation and replacement with a more progressive growing company (lunev et al., 2013). another positive aspect of these relationships is the lunev, et al.: the mechanism of industrial educational clusters creation as managerial entities of vocational education international review of management and marketing | vol 6 • special issue (s2) • 2016168 “central” corporation’s awareness of that objectively existing fact that it is necessary to develop the local environment, which cannot always be able to fund serious research in relevant fields. it is found that the relationship of the invariant properties of objects belonging to different structural levels of being, leads to a synergistic effect. it is established that the basic conditions of system’s self-organization and self-development, from the point of view of synergetic, are: the availability of fluctuating elements; openness, which ensures a constant influx of energy; strengthening of the deviations from the unstable states and exceeding by them of certain critical values; non-linearity of describing the system controls; the cooperative behavior of system’s elements. the possibility of these conditions applying to the study of the mechanisms of clusters’ formation is confirmed by the fact that the latter ones are “open systems” in the form of non-profit partnership. in the course of interaction between organizations horizontal and vertical linkages are formed that can produce synergetic effect and contribute to transaction costs’ decreasing. it is found that organizations competitors are forced to provide a supportive effect on each other, being linked by economic relations. that is, at the same time existing in a competitive environment, the organizations, in contrary to the rules of competition, “help” each other to develop. vertical integration based on the innovative interaction of a specific organization with a strong innovative and technological capacity with a number of its suppliers and competitors, contributes to the development of smaller organizations of suppliers and consumers. the territorial proximity of cluster’s entities allows reduce the costs of “maintenance” of linkages outlined above, which the cluster has in a broad sense and specifically the organizations that make it up. over time, effectively acting clusters become a reason for major investments and careful attention of the government, i.e., the cluster becomes something more than the sum of its individual parts. the cluster center most often is one or a few powerful companies, with competitive relationship between them. this distinguishes cluster from a cartel or financial group. the concentration of rivals, their customers and suppliers contributes to the growth of efficient specialization of production. besides, the cluster provides employment and for many small firms, and small businesses. in addition, the cluster form of organization leads to the creation of a special form of innovation – “of aggregate innovative product.” amalgamation into the cluster on the basis of vertical integration forms not a spontaneous concentration of various scientific and technological inventions, but a particular system of dissemination of new knowledge and technology (tzikhan, 2003). 1.4. the essence of an industrial educational cluster industrial educational cluster is a set of interrelated institutions of vocational education, combined by industrial feature and partnerships relations with industrial enterprises. the important distinguishing features of an industrial educational cluster are, first, the creation of conditions for the formation of professionals with different levels of vocational education, secondly, the raising of highly skilled occupations’ prestige, third, the integration of education with science and manufacture. 2. materials and methods 2.1. methods of the study during research the following methods were used: analysis of normative documents, the action research method, expert evaluation method, observation and questionnaire. 2.2. experimental base of the study experimental work was conducted on the basis of industrial educational clusters in mechanical engineering (supervised by the ministry of economy and industry) and construction industry (supervised by the ministry of construction) of the republic of tatarstan in russia. in the experimental work participated 108 heads of institutions of vocational education, 210 specialists of education authorities, 67 specialists of the regional authorities, 58 employees of the industrial ministries and 376 employers. 2.3. the stages of the study the study was conducted in three stages: • the first stage is devoted to the analysis of modern state of the studied problem in scientific literature and practice of education’s management; to the development of the research program; • the second stage defines the essence of an industrial educational cluster; reveals the mechanisms of interaction between labor market and vocational education; describes the mechanism of educational clusters’ formation and reveals the mechanism of industrial educational clusters’ formation; represents the experimental work to verify the efficiency of the mechanism of industrial educational clusters’ formation; • the third stage involves the systematization, interpretation and synthesis of the research results; refines theoretical conclusions; processes and represents the obtained results. 3. results the main results of this study are: (1) the mechanisms of interaction of labor market and vocational education; (2) the mechanism of educational clusters’ formation on the basis of educational institutions’ vertical integration; (3) the mechanism of industrial educational clusters’ formation on the basis of social partnership of the manufacture and vocational educational institutions. 3.1. mechanisms of interaction between labor market and vocational education it is found out, that formation of industrial educational clusters is the basis for diversification of socio-economic development of the territory, and also provides a quick response of professional educational institutions on the problems of the labor market (table 1). 3.2. the mechanism of educational clusters’ formation on the basis of vertical integration of educational institutions the mechanism of educational clusters’ formation on the basis of vertical integration of educational institutions provides for the integration of educational institutions: from pre-school educational lunev, et al.: the mechanism of industrial educational clusters creation as managerial entities of vocational education international review of management and marketing | vol 6 • special issue (s2) • 2016 169 institutions and ending with the centers of retraining and advanced training. it is found that the mechanism of educational clusters’ formation on the basis of vertical integration of educational institutions is based on the theory of continuing education. continuing education is one of the necessary conditions of human life activities, its integration into national and global community. in continuing education the idea is embodied that the person should be in the center of all educational endeavors for whom, optimal conditions for the full development of abilities and realization of labor potential throughout life must be created. in our opinion, the social role of continuing learning is that it is a factor for the approving of subjectivity of a person in his or her socialization and professionalization, building of a life educational strategy. in the theory of continuous education the idea of learning “through life” is transformed. continuing education should be understood not as a continuous process of assimilation of new knowledge but continuous change in abilities to assimilate quality new and more complex knowledge. therefore, continuing education can be considered as a factor of competitiveness of a specialist in the labor market. it is established that advantages of the mechanism of educational clusters’ formation on the basis of vertical integration of educational institutions are the following: (1) continuing education is seen as a single system; (2) the trainees, as entities of pedagogical process are focused on the education throughout life; (3) integration and the internationalization of knowledge, enhancing of communication, using of information technology are provided; (4) multi-level system of education is developed. 3.3. the mechanism of industrial educational clusters’ formation on the basis of social partnership of the manufacture and vocational education it is found that the mechanism of industrial educational clusters’ formation on the basis of social partnership of the manufacture and vocational education institutions is aimed at solving of the following problems: (1) coherence of labor market and educational services market; (2) the elimination of skilled workers’ deficit, especially in high-tech and innovation fields; (3) shortening the workers’ training; (4) social security of educational institutions’ graduates, raising of the working professions’ prestige; (5) ensuring of the access to higher education for orphans, children from poor and problematic families, rural students; (6) the development of educational and material base of educational institutions in accordance with modern technologies of manufacture; (7) attracting of investments in vocational education and training; (8) the creation of organizational structures on scientific and methodological support of vocational education’s development in the region; (9) the mechanism’s formation of federal-regional management of vocational educational system and the division of powers in the field of education’s management between federal industrial ministries, the ministry of education in the federation and regional educational authorities; (10) creating of the conditions for productive interaction between enterprises and educational institutions on organization and management of educational process, built on a modern technological base; (11) the mechanisms’ formation for the integration of manufacture and education. it is established that the mechanism for industrial educational clusters’ formation on the basis of social partnership of the manufacture and vocational educational institutions includes the following tools: (1) multi-level and multi-stage nature of education; (2) rational occupation of professional niches in the labor market, the transition to contractual forms of employment “graduate employer – institution of vocational education” by organizing “fair of graduates,” contract agreements, educational loans; (3) the continuity of general and professional educational curricula; (4) expansion of students’ and teachers’ mobility in their interests’ realization; (5) taking into account of each participant’s interest in the labor market, his right to free choice with regard to the peculiarities of their businesses and strategic plans; (6) the selection of training occupations with a strong focus on the needs of the labor market, i.e. performance of the state order to ensure effective use of budget for vocational education; (7) the introduction, in addition to per capita norms of the financing order norms, providing economic incentives and effective implementation, particularly graduates’ employment in the acquired professions. 3.4. realization stages of the mechanism of industrial educational clusters’ formation implementation of the mechanism’s efficiency for industrial educational clusters’ formation assumed the following experimental stages: ascertaining, forming and control. 3.4.1. the ascertaining stage the purpose of ascertaining stage was to identify the attitude of scientific and pedagogical staff of the professional educational system, specialists of educational management bodies and regional authorities, staff of line ministries, employers to the formation of industrial educational clusters. at this stage, from the number of heads of professional education institutions, specialists of education authorities, staff of line ministries and employers target groups were created to implement the mechanism of industrial educational clusters’ formation. the target groups developed special curricula that included activities and timelines. table 1: the interaction of vocational educational institutions with the labor market core issues of labor market the reaction of professional educational institutions the imbalance of supply and demand in the labor market retraining low competitiveness on the labor market of certain categories of citizens (persons who need social protection) the development of flexible, employment-oriented training system for unemployed citizens insufficient adaptability of the educational system to labor market requirements, especially in terms of the demand’s prospects advance training of redundant workers for new areas of employment the lack of specialists in the sphere of innovative development innovative vocational training curricula of additional professional education the difficulty of information obtaining about the labor market the establishment of centers for career planning insufficient on-farm horizontal mobility, the growth of functional unemployment improving of the system of intra-company and corporate training lunev, et al.: the mechanism of industrial educational clusters creation as managerial entities of vocational education international review of management and marketing | vol 6 • special issue (s2) • 2016170 3.4.2. the forming stage in the framework of the formative stage industrial educational clusters were created in mechanical engineering (supervised by the ministry of economy and industry) and construction industry (supervised by the ministry of construction). an agreement on public corporate partnership in the field of training of qualified personnel as part of the industrial educational clusters between the supervising (industrial) ministry, the ministry of education and science of the region, major enterprises, institutions of vocational education was developed and adopted. the algorithm to form state-corporate order for staff training was defined: (1) the institution of vocational education concludes contracts on vocational training with the enterprises; (2) on the basis of contracts with companies the vocational educational institution concludes contracts on vocational training with the consumers of educational services; (3) companies apply to the line ministry, supported by agreements with institutions of vocational education; (4) industrial ministry creates an order and submits a request to the ministry of education and science of the region; (5) the ministry of education and science of the region forms regional order and submits a request to the government of the region; (6) the regional government approves the order and sends the relevant documents to the ministry of education and science of the region; (7) the ministry of education and science of the region gives the order (a number of trainees) to institutions of vocational education; (8) the institution of vocational education on the basis of the received key figures concludes contracts on vocational training with the enterprises and the consumers of educational services. 3.4.3. the control stage in the control stage the conditions for creation of industrial educational clusters were revealed: i. formation of cluster policy in vocational education, including: (1) the state support of cluster initiatives at the stage of formation and development of clusters; (2) active use of the state and corporate order as a tool for development of educational industrial cluster; (3) organization of multi-level vocational education on the harmonized training curricula; (4) improvement of regional normative-legal basis in the sphere of vocational education; (5) creation of innovative infrastructure of vocational education; (6) ensuring of the interaction between educational institutions of the region to improve the quality of vocational education; ii. formation of regional system of continuing vocational education, providing: (1) creating of vocational environment which is appropriate to the abilities, needs and possibilities of the person; (2) the multi-stage nature of vocational education, in the form of a set of directions with the educational curricula that have different deadlines of education; continuity of educational curricula of different levels; (3) the distribution of functions between educational institutions, enterprises and organizations included in industrial educational cluster; (4) the creation of services to support the continuing professional education’s process such as adaptive, diagnostic, didactic, psychological centers; (5) optimal professional and qualification structure of high school graduates (bachelors, masters) based on the classification of training areas; (6) the introduction of postgraduate studies, differentiated by duration of training for graduates who mastered educational curricula of higher schools of different durations; (7) improvement of the compatibility of national educational systems through the improvement of recognition procedures of degrees and periods of study, development of common definitions of qualifications, taking into account the volume of academic load, level and results of educational process, competencies and profile of educational curricula; (8) ensuring of rational combination of academic quality and applied nature of educational curricula. 4. discussions important theoretical and practical significance for the study has the work of porter (1993), in which competitive opportunities are analyzed of more than 100 industries in 10 countries. it turned out that the most competitive multinational companies usually are not haphazardly scattered in different countries, and have tendency to concentrate in one country, and sometimes even in the same region of the country. this is due to the fact that one or several firms, reaching competitiveness in the world market, extend their positive impact on the nearest environment: suppliers, consumers and competitors. and success of the environment, in turn have an impact on further growth of competitiveness of the company. in the end, a “cluster” is formed a community of firms, closely related industries which mutually promote to the growth of competitiveness of each other. after the first one often new clusters are formed and international competitiveness of the country as a whole is increased. works of dranev (2001), migranyan (2004), tretyak (2006), tzikhan (2003) are also interesting in which ways of creation and effective functioning of industrial clusters are considered. however, the problem of creation and functioning of educational clusters has a discussion nature. in special literature the questions about the essence of industrial educational clusters and the mechanisms of their creation are not solved. 5. conclusion and recommendations it is found that the mechanism of creation of industrial educational clusters as the entities of management of vocational education provides: (1) the development of all entities of a cluster, stimulating the implementation of new strategies; (2) free exchange of information and rapid diffusion of innovations; (3) the emergence of new forms of competition and the development of absolutely new possibilities; (4) the formation of a substantially continuing system of education. the paper submissions can be useful for scientific and pedagogical staff of the system of vocational education, specialists of education’s management bodies and regional authorities. taking into account the obtained results of this study a number of research challenges and promising directions that require further consideration can be allocated: regulatory support of management of industrial educational cluster; comparative analysis of forms and methods of management of educational cluster and industrial educational cluster. lunev, et al.: the mechanism of industrial educational clusters creation as managerial entities of vocational education international review of management and marketing | vol 6 • special issue (s2) • 2016 171 it is found that the efficiency of the mechanism to form industrial educational clusters will increase with the development of network cooperation with regional labor markets (the mechanism of the relationship between employer needing labor power, and worker, i.e. a potential employee, offering its labor power in a given time) and labor force (as a community of individuals who wish to acquire a profession, to change the profile of activities or to improve their skills) that define the structure of demand for educational services. references dmitrieva, n.v., zaitseva, n.a., kulyamina, o.s., larionova, a.a., surova, s.a. (2015), scientific and theoretical aspects of the staff recruitment organization within the concept of talent management. asian social science, 11(3), 358-365. dranev, y.n. (2001), practice of economic development of trajectories: the experience of the eu and russia. moscow: scanrus. p144. kalimullin, a.m., masalimova, a.r. (2016), editorial: actual issues of national education: theory and practice. mathematics education, 11(1), 1-2. lunev, a.n., pugacheva, n.b., stukolova, l.z. (2013), the essential characteristic of the regional services market. concept, 12, 96-100. lunev, a.n., pugacheva, n.b., stukolova, l.z. (2014), forms of integration of entities of the regional market of vocational education services. concept, 1, 61-65. migranyan, a.a. (2004), theoretical aspects of formation of competitive clusters in countries with economies in transition. moscow: science. p258. porter, m. (1993), the international competition. the competitive advantages of countries. moscow: international relations. p896. sabirov, i.t., ponkratova, l.a., gracheva, n.a., kiselev, s.v., fatikhova, l.e., chudnovskiy, a.d. (2015), the formation and development trends of the consulting market in russia. mediterranean journal of social sciences, 6(2s3), 188-195. tretyak, v.p. (2006), clusters of enterprises: ways of creation and effective functioning. available from: http://www.subcontract.ru/ docum/documshow_documid_133.html. tzikhan, t.v. (2003), cluster theory of economic development. theory and practice of management, 5, 40-51. zaitseva, n.a. (2013), the role of education system in adaptation of graduates from russian institutes and colleges at european enterprises (by example of service companies). middle east journal of scientific research, 13(5), 693-697. 19_zavyalova.indd international review of management and marketing | vol 5 • special issue • 2015126 special issue for "media as the tool: management of social processes" international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2015, 5(special issue) 126-130. media through the prism of stereotypes natalya zavyalova* ural federal university, 620002, 19 mira street, ekaterinburg, russian federation. *email: n.a.zavialova@urfu.ru abstract modern media are responsible for channeling the information to multifarious audience groups. the article presents an attempt to offer a comprehensive vision of media research fi eld, ranging from a big sphere of media communication laws and regulations to cases of political and fi nancial representations in media. the key idea of the article is a new media research paradigm, based on the analysis of modern stereotypes. stereotypes in media are described, according to the principle of information maximum. key methods of the research are ethnographical description and omnibus survey. the results of the research highlight expansion and idealization strategies of modern media stereotypes. expansion strategy is achieved through relatively new stereotypes of asian people in modern world. idealization strategy is described within the framework of russian high income middle-aged respondents of an omnibus survey. based on the omnibus survey results, the paper testifi es to the fact that the poor are reluctant to admit the leading function of the media language in their day-to-day communicative social interaction, while the rich stress the signifi cance of media routine expressions, actualized in verbal social intercourse. this fact alone is a strong signpost to the theory that the rich middle-aged individuals are more agreeable with present social norms, offered by the media, than the poor. high income people follow these verbal signposts and accept them as behavioral models. the paper has a number of theoretical and practical outcomes, relevant to present-day understanding of media genesis. keywords: society, communication, media, stereotype, income, age jel classifi cations: o32, o33, z13, z18 1. introduction researchers often describe media within the framework of richness (daft et al., 1987), synchronicity (dennis et al., 2008), social presence (short et al., 1976), and naturalness (kock, 2009). our additional component for this analysis is the domain of stereotypes, refl ected mainly in the language of media communication and different perceptions of target groups. wilson stresses that stereotypes “… have been shown to be remarkably resilient to change” (wilson, 2006). “the basis for all stereotyping is the differential perception of groups. without such differentiation between groups, stereotyping cannot occur” (hamilton and troiler, 1986). thus, we may rightfully assume that the theoretical value of the paper lies within the domain of a new paradigm of media research. our primary hypothesis is that all types of media research are spellbound to be based on the analysis of language stereotypes, employed to achieve certain goals. “in any discussion of nationalism, identity, or current affairs, language is never ‘innocent.’ the choice of words reveals the underlying outlook of the speaker. so for example the word ‘foreign’ in english is much more hostile …than the german ausländer. latent british xenophobia is revealed in the offensive tabloid expression ‘johnny foreigner’.… to welsh is to cheat or renege; to scotch is to thwart, to squash, to prevent; an irish lanyard is an untidy rope. in other words the names of the three ‘subsidiary’ nations in the british isles have negative connotations in the language of the dominate one. thus national prejudice is encoded in the english language” (mike and peter, 2002). traditional manifestations of media concepts are directed to the domain of media and culture, media and society, media and politics. as a powerful tool of shaping public opinion media are ubiquitous. the central idea of our paper is focused around a paradigm approach to media analysis. thus, we see media research fi elds in the form of the following taxonomy (figure 1). zavyalova: media through the prism of stereotypes international review of management and marketing | vol 5 • special issue • 2015 127 media communication rules and regulations have been discussed in quite a number of works. technological shortcomings have made some media, such as email and text, less suitable for covering emotions (kock, 2004; sussman and sproull, 1999). some scholars highlighted the role of cultural norms and emotional coloring in emails and texts (byron 2008, hancock et al. 2007). emotional responses to media messages is the subject matter of the research by tailor and alan, ‘despite the widespread use of media for work and personal communication, little is known about how the characteristics of various media lead to emotional responses among users or how they distort communication messages for work and personal tasks’ (wells and dennis, 2016). in this paper we enter the fi eld of media grassroots: communicative stereotypes. our primary hypothesis is that media communication is based on stereotypic routine expressions. our secondary hypothesis is that the study of communicative stereotypes is relevant for media description. the primary concern of the paper is the analysis of the core component of media communication common routine stereotypic expressions. as any information system the system of language stereotypes can be described in terms of mathematical laws. we argue the axiom, supported by many scholars, that communicative system must be analyzed exclusively in linguistic terms. our central idea is that communicative stereotypes, should be analyzed within the framework of the principle of information maximum. this idea fi rstly appeared in the works by shannon and weaver (1949) and later it was developed by soviet and russian scholars (golytsin and petrov, 2005): “the system tries to fi nd such response y, which enables the maximum of useful information about the given stimuli x’. l (x,y) = h (y) – h (y/x) – ß r (x,y) → max, where h (y) – the entropy of the system’s conditions, h (y/x) – the entropy of the system’s mistakes and its reactions to outer stimuli, r (x,y) – the average consumption of the system’s resource in y condition within all x environmental conditions, аnd ß the indicator of the system’s defi cit (ß=0, when the system has an unlimited energy resource, и ß=1 when the system has a very big energy defi cit)” (ibid., p.5). according to the described above principle, all informational systems develop within 3 main tendencies (figure 2). expansion is realized through new varieties and numbers of environmental conditions, in which the analyzed system can exist. this tendency is sometimes called ‘searching behavior’ tendency h (y). while idealization is concentrated on the tendency to minimize the system’s mistakes entropy, idealization is sometimes known as the “conservative behavior” tendency h (y/x). it is achieved mainly through the repetition of the best variants. why certain stereotypes are more frequent than others? due to idealization strategy some stereotypes are selected by native speakers and repeated more frequently. resource saving is realized in two possible ways: (1) minimizing the resource spent r (x,y); (2) minimizing the indicator of the system’s defi cit ß by means of resource growth. now we proceed to the analysis of all these 3 principles within the framework of media communicative stereotypes. 2. data and methods the expansion strategy of media communicative stereotypes is described with the help of ethnographic descriptive method. here we analyze new varieties of stereotypical environmental conditions, refl ected in popular media jokes and stereotypical portraits. the idealization strategy analysis is based on the results of the omnibus survey, describing the attitude to communicative stereotypes in russia. the main idea of analysis at this level is presented with the help of the following original scheme (figure 3). the results of the omnibus survey have been employed to highlight the attitudes to communicative stereotypes in everyday figure 1: the taxonomy of media research figure 2: the information maximum principle figure 3: the scheme of communication analysis zavyalova: media through the prism of stereotypes international review of management and marketing | vol 5 • special issue • 2015128 life. this is our original survey, ordered to this distinguished social analysis centre (yuri levada analytical center, 2014) in order to obtain the maximum degree of objectivity and transparency. the survey was conducted across russia with a total number of respondents of 1603 people. our central survey question was as follows: “do you use common routine expressions, quotations from fi lms and public speeches of famous people, bad language set expressions in your day-to-day life?” all these linguistic terms are referred to the domain of idioms in russian. parallel to this question levada-center obtained the information about the fi nancial situation of the respondents. their second question concerned the respondents’ affordability to purchase goods. thus, the answer of respondents to their attitude to idioms was given against the background of their fi nancial situation. yuri levada center carries out nationwide polls in russian federation, which are based on a representative sample of 1600 people over 18 + from 130 sampling points across 45 regions of russian federation. our sample did not include the chechen and ingush republics, as well as remote and sparsely populated region of the far north (nenets, yamal-nenets, taimyr autonomous region, the evenki autonomous district, kamchatka, chukotka, sakhalin oblast). there were 9 russian areas, totally excluded from consideration. the adult population in the excluded areas did not exceed 4%. residents of small settlements with a population of <50 people (about 0.8% of the adult population of russia), the military (about 0.8% of the adult population of russia), the person in custody or detention during the investigation (about 0.8% of the adult population of russia), as well as homeless people (up to 1.5% of the adult population of russia) were not included to the survey. in each federal district independently all the primary sampling units were divided into strata according to their population number: 1. the city of more than 1 million people; 2. the town numbering from 500 thousand to 1 million people; 3. the town numbering from 100 thousand to 500 thousand people; 4. urban settlements of up to 100 thousand people; 5. villages. these 5 categories were further subdivided into smaller groups. given the characteristics of population distribution in the regions we formed 36 strata. the total sample (1,600 respondents) was distributed proportionally among all strata of the adult population in each stratum. the number of primary sampling units was determined from the restrictions on the average number of respondents in the same town/rural area (7-13 respondents). 3. results now we proceed to summarizing the collected data and the analysis performed on these data. the question of our original omnibus survey, ordered to yuri levada analytical center, is as follows: “do you use common routine expressions, quotations from fi lms and public speeches of famous people, bad language set expressions in your day-to-day life?” the table also describes the age, level of education and purchasing power of the respondents which is a direct refl ection of their income level. the survey results demonstrate that the balance of “yes/no” answers is fairly equal. 43.1% of respondents admitted the fact that they were using communicative stereotypes in their day-to-day life, while 56.8% answered negatively. though the number of positive answers is high enough, we assume that every second person in the russian federation refuses to admit the importance of communicative stereotypes in his/her social discourse. the margin between “yes/no” answers in the group of respondents with higher education is <10%, while the margin in the group of respondents with the education below secondary is more than 25%. thus, we consider that the highest degree the respondents have the more they are willing to accept the importance of set communicative units in their everyday life. the second aspect of interest is connected with the focal point of our research describing income and age groups and their attitude towards communication. in the poorest segment of respondents the prevailing negative opinion has a margin of 45%. while in the richest segment of respondents the prevailing positive opinion has a margin of 21%. the attitudes of rich and poor groups are different and the rich tend to pay more attention to communication than the poor. the rich accept the importance of the leading role of certain communicative units in their dayto-day discourse and they follow the patterns, fi xed in languages. figure 4: omnibus survey results, obtained in february, 2014 in russian federation source: the survey was ordered by zavyalova to yuri levada analytical center in february, 2014 zavyalova: media through the prism of stereotypes international review of management and marketing | vol 5 • special issue • 2015 129 the age differences also present the point of interest. in all age groups negative answers prevail, although the degree of negatives is different. while in the youngest group (18-24 years of age) negative answers have the margin of 30.5%, the same margin of negative answers is only 8.4% in the age group of respondents of 40-54 years of age. first and foremost, this result brings us to the conclusion that middle-aged respondents feel more pressure from communicative stereotypes than youngsters. finally, we may rightfully assume that rich middle-aged people in russia see the importance of communicative stereotypes in their life. 4. discussion now we proceed to the discussion of research results. we start from the expansion strategy of communicative stereotypes (figure 2). here we are mainly concerned with international stereotypes of actualized in media. expansion strategy of media stereotypes is realized here in the form of engaging new nations in stereotypical description. switching to business of china, we apply ethnographic data, obtained from the most infl uencial brics media journal “brics business magazine.” how are chinese business tycoons presented here? we start from wang jianlin, dalian wanda group, “in 1970, when wang was 15, his father sent him to the people’s liberation army where he went on to serve in ein lalian, a fi eld training boot camp with long marches and extremely rigorous physical demands … jianlin believes that his decisiveness and ability to work well under stress come from his experience in the army. he emphasizes that he deliberately chose a military management style for his company. if jianlin’s orders are not carried out immediately, the subordinate at fault is fi ned. wang jianlin’s private life also falls into the ‘military discipline’ category he goes to bed at 11 p.m. and neither smokes nor drinks” (10 chinese dragons, 2015). li hejun, head of hanergy holding group limited, describes his visions of the future with a revolutionary touch, which symbolizes certain power battle fi eld, “each revolution witnessed the rise of a great power fi rst the united kingdom, then the united states, and now the third revolution could be led by china” (ibid.). robin li, baidu internet search engine founder, a young chinese intellectual person, talks about intellect power fi eld, “many chinese people had doubts that knowledge truly meant power in a market economy. i think i managed to change their minds” (ibid.). wei jianjun, president of great wall motors company, has directly translated military practices into his business style, “the 51-year-old jianjun is known to maintain strict discipline. he is not on familiar terms with his subordinates, nor does he indulge in any vices. all of great wall’s managers go through a military-style, boot camp training, which has already become legendary. the newly hired managers, workers, and engineers are forced to perform strenuous physical exercises, march for hours on end, and do menial work in hot weather. jianjun believes that this approach helps them develop stronger willpower, stamina, and team spirit” (ibid.). the upshot of these materials testifi es to the fact that chinese business is also in a battle fi eld. their target is global dominance. the idea of war is deeply rooted in chinese mindset, expressed in “sānshíliù jì” (36 war strategemes), where “shāngchang rú zhànchang” (business is war). the theme of battle is also actualized on chinese fi nancial agenda. the 36 war strategemes is a mantra to many chinese businessmen of today. stereotypes of international relations in media jokes. the fi rst joke refl ects the idea of hidden hostility. though on the surface of things the participants of the story seem to be friendly. ‘one day, an asian man, an american man and a french girl were on a train. along the ride, there was a short but dark tunnel. when they entered the tunnel a kissing sound, then a slapping sound was heard. once outside, everyone could see a large red mark on the american’s face. the french girl thought, “that american probably tried to kiss me, but accidentally kissed chinese he slapped him.” the american thought, “the asian tried to kiss the french girl and she tried to slap him, but accidentally slapped me.” now, the asian ‘that was great! me kiss pretty french girl and slap crazy american! can`t wait for next tunnel!’ (jokes-db.com 2012). another example of new expansion strategy of stereotypes, opposing the jews and the chinese. “an airplane takes off from airport. the captain is jewish and the fi rst offi cer is chinese. it’s the fi rst time they’ve fl own together and it’s obvious by the silence that they don’t get along. after thirty minutes, the jewish captain speaks, ‘i don’t like chinese.’ the first offi cer replies, ‘ooooh, no like chinese? why ees that?’ the captain says, ‘you bombed pearl harbor. that’s why i don’t like chinese.’ the f.o. says, ‘nooooo, noooo. chinese not bomb pearl harbah. that japanese, not chinese.’ and the captain answers, ‘chinese, japanese, vietnamese. it doesn’t matter, they’re all alike.’ another thirty minutes of silence. finally the in f.o. says, ‘no like jew.’ the captain replies, ‘why not? why don’t you like jews?’ f.o. says, ‘jews sink titanic.’ the captain tries to correct him, ‘no, no. the jews didn’t sink the titanic. it was an iceberg.’ the f.o. replies,’ iceberg, goldberg, rosenberg, no mattah. all same.’’ (jokes4us.com 2012). the next joke is about japanese cultural stereotypes we see in modern world everywhere. japanese words in the joke do not need translation, because in modern global society people in most parts of the world hear these words at every corner. here expansion strategy is realized in the form of blending of english and japanese. recent reports indicate the japanese banking crisis shows no signs of improving. if anything, it’s getting worse. following last week’s news that origami bank had folded, it was today learned that sumo bank has gone belly up. bonsai bank plans to cut back some of its branches. shares in kamikaze bank have nose-dived and 500 jobs at karate bank will be chopped. analysts report that there is something fi shy going on at sushi bank and staff there fears they may get a raw deal (asianjoke. com 2012). the results of the ethnographic analysis testify to the fact that international stereotyping involves relatively new players asians, who will appear more and more frequently in media scenarios (zavyalova, 2014). asians are given through the stereotypical images of battles and hypocritical behavior, although many of them smart and intelligent. the results of our omnibus survey analysis describe media as something which infl uence middle-aged group of people through the channel of communicative stereotypes. zavyalova: media through the prism of stereotypes international review of management and marketing | vol 5 • special issue • 2015130 5. conclusion the main conclusion we arrive at may be formulated as follows: stereotypes are the core component of all media. stereotypes have to analyzed, according to the strategies of expansions and idealization. expansion of stereotyping process is actualized in creating and exploiting stereotypes of asians, chinese mainly. idealization is mainly achieved at the level of middle-aged rich people. this conclusion may be treated as an important real-life social and psychological phenomenon. our study of idealization is limited to russian federation and the domain of russian communicative stereotypes. we fi nd it promising to analyze the attitude to stereotypes in communication in english within english-speaking communities with different fi nancial background. cross-cultural analysis may lead us to a new vision of global social communication. we have demonstrated that contemporary media need a multifarious set of methods in order to describe the subject area to its highest potential. theoretical and practical outcomes of our research are relevant for media experts. references jokes & humor blog funny pictures and videos. 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/untaggedcmykhandling /leaveuntagged /untaggedrgbhandling /leaveuntagged /usedocumentbleed false >> ] >> setdistillerparams << /hwresolution [2400 2400] /pagesize [612.000 792.000] >> setpagedevice 07_litvinenko.indd international review of management and marketing | vol 5 • special issue • 2015 49 special issue for "media as the tool: management of social processes" international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2015, 5(special issue) 49-54. mapping international journalism in post-soviet russia: global trends versus national context anna alexandrovna litvinenko1*, anna sergeevna smoliarova2, ruslan viktorovich bekurov3, anatoli stepanovich puiy4, eleonora michailovna glinternik1 1saint-petersburg state university, universitetskaya naberezhnaya 7/9, saint petersburg 199034, russia, 2saint-petersburg state university, universitetskaya naberezhnaya 7/9, saint petersburg 199034, russia, 3saint-petersburg state university, universitetskaya naberezhnaya 7/9, saint petersburg 199034, russia, 4saint-petersburg state university, universitetskaya naberezhnaya 7/9, saint petersburg 199034, russia. *email: annaalexandrovnalitvinenko@mail.ru abstract since the beginning of 1990s international journalism in the world is faced with new challenges due to a variety of factors, i.e., technology, globalization and economic crisis in media (sambrook, 2010). in russia transformation of international journalism is complicated by the existence of the strong soviet legacy in the fi eld of foreign reporting and the co-existence of different journalism cultures within one media system. in this paper the authors aim to provide an analysis of the current state of the international journalism in russia, based on the results of a survey among editors of the leading media outlets as well as among foreign reporters of russian media and teachers of international journalism at the russian universities. the results of the study show the existence of cleavage in understanding of functions of foreign reporting between journalists of pro-state and liberal media outlets as well as the overall concern of professionals about the sustainability of international journalism in russia and abroad. keywords: international journalism, russia, global journalism, media crisis, foreign reporting jel classifi cations: d83, i29, z00, z13 1. introduction starting from the beginning of 1990s the fi eld of the international journalism has undergone mayor transformations in established democracies as well as in the so-called hybrid regimes. this development was influenced by the following factors: globalization, de-ideologization, economical challenges and technological progress (puiy, 2010; sambrook, 2010). the end of the cold war marked the paradigmatical shift in the content of foreign reporting in the world (castells, 2008; skey, 2014). at the same time the economic crisis of the industry, fi rst in the 1990s, and then later in 2001 and 2008 meant a big stroke for the “luxury” fi eld of journalism as foreign reporting has always been considered to be in the media business, with closing of foreign bureaus and reducing resources for international journalism (archetti, 2013; berger, 2009). today, in the time of “lean” media outlets the profession of international journalist differs very much from what it used to be 20 years ago (hamilton, 2004; terzis, 2014). thus, today’s foreign correspondent is as a rule less specialized (trend of “fi reman” journalism), has more technical skills (trend to the “universalism” in journalism), often works as a freelance correspondent and has to address new audiences (from “foreign” reporting to “transnational” reporting) (murrell, 2010; sambrook, 2010). it must be mentioned that in russia the crisis of foreign reporting in the 1990s was more intense than in the west as far as during the soviet time international journalism was stimulated by the state and the new-born commercial media in the conditions of the underdeveloped advertisement market didn’t see profits in developing of foreign reporting (vartanova, 2009). only in the recent 6-7 years a new generation of foreign reporters (and also, a new generation of the international journalism teachers) has appeared in russia with the renewed understanding of the functions of international journalism that exists parallel to the litvinenko, et al.: mapping international journalism in post-soviet russia: global trends versus national context international review of management and marketing | vol 5 • special issue • 201550 “old generation,” which is still very much infl uenced by the soviet legacy. in accordance with this development the demand of the media industry in foreign reporting has changed signifi cantly in the whole world and in russia in particularly, giving impulse to the transformation of the professional competences. in this paper we are going to analyze the current trends in profession of international journalist in russia and the expert visions on the further development of this fi eld. in order to start the analysis we have to make some remarks regarding the current state of journalism education in russia as far as traditionally international journalists were educated at journalism faculties within programs of specialization in international journalism. professional international journalism appeared in russia in the 19th century and as educational specialization – in the soviet time, where it was considered to be the “elite specialization” and was even more infl uenced by the political dogmas as the “inland” journalism. the international journalists were considered to have similar functions as diplomats and were closely linked to the state. the main feature of their education was a very strong regional specialization on a certain country: they should know the language, traditions, history of the country and were sent there for a long period of time (more than 5 years as usual), so that the soviet citizens during dozens of years knew, where the particular correspondents were located and there were several “stars” among them, who wrote books on the culture of the country of their specialization and “opening the world” for soviet citizens, who couldn’t travel freely on their own, for example vsevolod ovchinikov and his works on japan and great britain (ovchinikov, 1986). thus, opposite to the western tradition of sending abroad a normal journalist, who proved himself to be a good editor and to have enough skills to work abroad, the russian (soviet) tradition was to send abroad only specially educated professionals with specialization on a region. as one of the russian foreign correspondents, whom we interviewed for this paper, sergey sumlenny, remarks, the russian media have been slowly moving to the fi rst model in the recent time (fi rst of all, of course, it is true for television; there are only very few russian print media, which today can afford having foreign correspondents). as mentioned above in this paper we are going to analyze the current state of international journalism in russia with focus on the global trends and national specifi c features on this fi eld. it must be mentioned that there is a lack of literature on the current trends in international journalism in russia (sambrook, 2010; toepfl , 2011), russian scholars predominantly focus their works on global trends in the fi eld (puiy, 2010; nikonov, 2013; potolokova and kurysheva, 2013), so we had to undertake an empirical research to map the current trends of the international journalism market in russia. 2. methods of research the methods of our research include situational analysis that will be supported by the results of semi-structured interviews with russian international journalists (with 15 full answers). we defi ne an international journalist a professional journalist (a person who earns his living with journalism), who is specialized in covering international topics (this could be an editor working in russia as well as foreign correspondent of a russian media outlet). in our results there is a certain age bias (from 20 to 34 years old), but our speculation was to interview people, who will be defi ning the future of international journalism in russia. we also took eight in-depth interviews with experts – professors teaching international journalism at the russian universities. the majority of them were taken at st. petersburg state university, where the department of international journalism has predominance of younger teachers (with 6 professors over 50 and 7 associate professorsunder 40), so that the expert interviews also depict more the view of the younger generation of educators with one exception (nicolay labush 63). in our in-depth interviews we asked the teachers the following questions (all of them were formulated as open ones and were just triggers for an in depth-interview): 1. whether it is necessary at the university to have specialization in international journalism? maybe in a globalized world, every journalist should have a high degree of cross-cultural competence, to be ready to work in an international context and it should be part of the education of any journalist? orif there is no such a need at all? 2. if this specialization is needed – what focuses should the curriculum have? what skills does an international journalist has to have nowadays? do we need the regional specialization that is still traditionally strong in russia, to teaching international journalism? 3. do you think it is important to take into account the russian traditions of personalized writing and the particularities of the russian media market in education of international journalists? or should the training be rather based on the international anglo-saxonstandards, so that journalist would be able to work for the foreign media outlets as well as for the publications in russia? as for journalists, in our semi-structures interviews we asked them about their professional carrier, key skills they use in their routines, perceptions of the role of the international journalist and the education specializations needed to become a successful international journalist. 3. international journalism in russia: situational analysis in russia the impact of the global factors on the development of international journalism was accompanied and intensifi ed by the slow process of democratization in the country, by the structural reform and the severe crisis of the media system in the 1990s (bodrunova and litvinenko, 2012). in was only in the late 1990s – beginning of 2000s when the advertisement litvinenko, et al.: mapping international journalism in post-soviet russia: global trends versus national context international review of management and marketing | vol 5 • special issue • 2015 51 market has developed and foreign investors started to develop their businesses on the russian media market, also investing in foreign reporting (i.e., travel magazines such as geo and national geographic appeared in russia). however, the recent economic crises of 2008 and of 2014 have led to major cuts in this highly expensive segment of journalism. on the other hand, the state gains more and more shares on the market of international news, because the state still has enough money to fi nanceinternational journalism, especially on tv. the fullfl edged foreign bureaus have remained predominately at the state-funded media outlets: federal tv-channels, sputnik, russia today, rossiiskaya gazeta. the main source of the news, including international news for the russian population remain federal tv channels, which are predominantly state-funded (oates, 2010; toepfl , 2011). there exist an oppositional internet tv-channel “dozhdj” (rain), but it’s audience is quite limited and the amount of international news in the programs is low (they can afford sending reporters abroad only in a “fi reman journalism” modus, thus in 2014 there were a row of reports from the ukraine, but rarely from other countries). it has to be also mentioned that media outlets from the liberal or alternative media cluster (bodrunova and litvinenko, 2013) such as tv dozhdj or online portal meduza that are considered to be independent have quite non-transparent fi nancial structure. thus, tv dozhdj is partly fi nanced by ads which are very few, partly by paywall (app.80$ per household per year) and partly by crowdfunding (russians are known for their reluctance to pay for any content so crowdfunding doesn’t work very well in the country) that is obviously not enough to sustain the tv business. founded in 2014, the news portal meduza that also sends its correspondents abroad (mostly europe, predominantly ukraine) doesn’t reveal the sources of its funding at all (there is neither advertisement nor paywall on the site). this situation with funding of international news in russia (majority of state-funded media outlets vs. “oppositional” ones with rather vague information on their funding) raises questions about the motives and functions of international news coverage in the country. commercial print outlets has been closing their foreign offi ces during the past seven years as it happens in other countries, for instance magazine “expert” that was one of the last commercial print outlets still having foreign correspondents closed their european bureau in berlin in the early 2014. there exist some travel blogs and blogs covering international affairs (opinion citizen journalism), but as far as we can judge, there are not commercialized and cannot be considered as professional journalism. in russia there is no such example of entrepreneurial international journalism as “monocle” and there still do not exist crowdfunding projects in the fi eld of international journalism. in 2014 a quite new form of journalism funding appeared in russia: grants from a russian independent foundation for support of media “sreda” that were given to several outlets, among them also to dozhdj tv. in the us this kind of funding is wide spread (e.g., knight foundation), but for many countries in continental europe it is quite unusual and being perceived as controversial, for instance also in 2014 in germany brost foundation launched a project for investigative data journalism correct!v and this new form of media funding was much discussed in the german media. it is still unclear if this kind of funding will be also used in the russian international journalism. having given a brief overview of the current state of the international journalism in russia we can conclude that although russian foreign reporting is much infl uenced by the global trends, especially in terms of cutting the costs, there exists national specifi cs in the adaptation of innovations on the market: there is lack of entrepreneurial international journalism, there are still no crowdfunding projects in that fi eld and the most wide-spread business model for foreign reporting is state funding. 4. research results we’ve got 14 interviews with russian journalists covering international news. among the respondents there were three foreign correspondents working abroad (in germany and in belgium); five journalists working for anthe international department of local newspapers in st. petersburg; one journalist working for the russian-speaking news portal in estonia; one tv-news reporter, dealing among others with international topics in st. petersburg; one editor of the international department of the local newspaper in st. petersburg; one reporter working for the online-newspaper on north caucasus and dealing with inter-ethnical topics; one reporter ofan english-language daily newspaper published in moscow; one journalist working forthe russian edition of an international travel magazine. the age of respondents is put in parentheses after the name. we will analyze the answers of both the journalists and the experts according to the core issues of our investigation: the education paths and working conditions for international journalists in russia, the core values of journalism culture of international journalists (about the concept of journalism culture see hanitzsch, about the research of journalism culture in russia anikina) (hanitzsch et al., 2011; anikina, 2013). 12 of 14 of respondents in our survey answered with clear “yes” to the question if the specialization “international journalism” within the journalism educational programs – bachelor and master – is needed.although among those who work particularly in the fi eld of international journalism the answers were more differentiated. sergey sumlenny (32), who has been working for 6 years as correspondent for the magazine “expert” in germany, sees although no need in such a specialization as a branch of journalism educational programs. russian media does not need a big number of foreign correspondents, as far as they reduce the number of the correspondents constantly. he suggests that the good idea would be to prepare “autonomous” (universal) journalist, who would be able produce the media product and sell it all by himself. “this litvinenko, et al.: mapping international journalism in post-soviet russia: global trends versus national context international review of management and marketing | vol 5 • special issue • 201552 person, if he/she speaks foreign languages, can easily do the same thing also from abroad.” mikhail tyurkin (34), editor of the international department of the local st. petersburg newspaper “nevskoe vremja,” considers his historical education to be very useful in his everyday work and supposes that this “fundamental education” “is ideal for a political journalist: being great on history helps to understand background of the processes.” olga lizunkova (24), who works in the region of north caucasus, accepts that “with a good knowledge of language, a journalist with no special training will be able to work in another country. butin order to ease their way the specialization is necessary, as far as it is not possible to include in the general program for journalists, for instance, the teaching of cultural features of the arab countries.” olga kapustina (29), working for the german public broadcaster says that “in today’s world, every journalist should have international competences, even if he does not specialize in this subject.” she thinks that seminars in global journalism are needed for all journalists. this opinion was expressed by the most of the respondents (10 out of 15). all the teachers were clearly for keeping the traditional specialization, stressing that the competences of international reporting have to be gained by all the journalism students (“the modern globalizing world requires intercultural competence from every journalist,” anna gladkova, senior lecturer), but “there is a signifi cant difference between a reporter for a local newspaper and that of the tv-program about international affairs; international affairs should be an additional level of knowledge, it is about understanding of the dynamics of interstate relations, historical aspects of the macro-regions” (svetlana bodrunova, associate professor). mikhail tyurkin states that “even detached from politics people have become actively monitor what is happening in the world because their trip to the store tomorrow and their confi dence in the future depends on it.” according to our respondents there exist some core competences that an international journalist should have. ivan nechepurenko (28), working for theenglish-language daily moscow times, argues that “for an international journalist getting education abroad is not just an elegant fi nishing touch but almost a direct necessity.” sergey sumlenny speaks about the shift from the soviet model of educating the specialist on particular countries and regions (“this is this is a long-term planning, which as it seems to me, does not justify itself”) to the western mode of sending correspondents abroad, “who are trained to work in emergency situations.” mikhail tyurkin was in seven trips in 2014 including sotschi and kiev, crimea, dresden and potsdam. according to the majority of the answers, the specialization on particular regions is still needed for a foreign correspondent (“such specialization is very good for the carrier” – kapustina), although it has to be “macro-regional specialization,” with stress on the understanding of global trends and educating the “systemic view.” angelina davydova (37) who works for the national daily newspaper kommersant and focuses on the environmental issues believes that “specialization on particular countries can be done by the students on their own, at the university they should learn to have the systemic approach to world affairs and understanding of the global interrelations.” that approach opposes the global trend to “fi reman” or “parachute” foreign reporting. angelina davydova sums up this tendency: “we become interested in the events in africa, asia, and latin america. in the past the world was bipolar and the amount of regularly covered regions was smaller.” three journalists and three teachers stressed the necessity of the topical specialization (sports, politics, etc.) within the global journalism instead of the regional specialization. ivan nechepurenko: “the best for a student – to fi nd his or her position as early as possible – in direction, in issues. best journalists are often specialists in a narrow area, in politics, economy or culture.” the trend to the universalism in journalism (and especially in international journalism, as far as media often can’t afford keeping the whole bureau abroad and the journalists have to work on their own) forces the trend to universalism, so that, as sumlenny puts it “international journalist must be able to perform many tasks that are not typical of a journalist, who is working in an big editorial offi ce. also, international journalist should be more than the usual journalist skilled in the time management. ideally international journalists need to know at least two foreign languages (for example, the language of the host country plus english), to understand the work of international organizations, to have an idea about the law (to obtain visas and accreditations), to be good at taking pictures and at shooting with a video camera (even if there are working for print media), also video editing could be of great help.” all these requirements are similar to what we can observe on the global level (sambrook, 2010). there are also some technical skills that have been gaining more and more importance in the recent years: “work with big data, visualization and mapping methods become increasingly important also within the international journalism training,” says angelina davydova. all the respondents, journalists as well as educators stress the importance of the expertize on the russian media market and knowledge of the russian national specifi cs in journalism writing which traditionally have differences with the anglosaxon model, in particular regarding the maxima of separating between facts and opinions.“of course, studying anglo-saxon standards is useful, but the most of our graduates will work in russia, and they have to know the journalistic standards of the country they will work in. a number of quality russian media outlets shift from the anglo-saxon principles of news reporting, and it is possible that they will return to the russian traditions of personalized writing” (inna timchenko, senior lecturer). “anglo-saxon tradition is good, but is not universal. as is the case with democracy, it is not perfect, but nothing better has been invented yet. the separation of fact from commentary and balance of sources should still be the part of the principles of educating the journalistic skills. and we should take the best elements from the national tradition and show the best form of it. for example, if russia has a strong journalistic tradition in such genres as essay or pamphlets, we should not just throw it litvinenko, et al.: mapping international journalism in post-soviet russia: global trends versus national context international review of management and marketing | vol 5 • special issue • 2015 53 away,” says svetlana bodrunova. although some of the reporters remark: “it seems that in teaching of the others (western) standards the russian journalism education has not used the full potential yet,” says olga kapustina. mikhail tyurkin assumes that an international journalist should be fl exible also concerning the professional standards: according to him, freelancer working for the st. petersburg newspaper “nevskoe vremya” in germany, france and israel adopt their writing style to the certain media outlet: “our correspondent in germany writes for the ‘bild’ short, succinct news. and for us – extensive articles with background.” the balance between national tradition and anglo-saxon model seems for the educators to be the clue to professional success of the international journalist: “leading journalists in both their countries and abroad will be those who will be able to combine the best features of national tradition on the anglo-american standard,” says svetlana bodrunova. 5. discussion as our research shows, foreign reporting is still regarded in russia as a specifi c fi eld of journalism, where a special education and professional preparation is needed. although the development of this fi eld goes in the mainstream of the global trends, for instance with becoming more convergent, so-called “universal journalists,” who can work on his own abroad on producing of media products for different platforms, there is still a clear trend among journalists to have a certain, at least macro-regional specialization. as consequence of the economic crisis of the media market, there was a further decrease of foreign correspondents bureaus of commercial media as well as of the number of business trips of journalists abroad. on the other hand, we observe growth of the state-funded international journalism with international broadcasters such as rt and agency sputnik as far as only state in russia seems to be able to afford in this low-profi t sector of journalism. there are also waves of interest in foreign reporting from the part of the russian audience, one of them started in the end of 2013 with the ukrainian crisis. this correlated with the sinusoid graph of demand on international news in the us described by sambrook (2010). as mikhail tyurkin puts it, “in a globalized world the need for international journalists increases. despite of the fact that the amount of information about other countries, their political, economic and spiritual life grows, the problem of understanding of the life of other cultures gets bigger, there exists a lack of analysis and of bridges between cultures. and international journalists can play the role of these ‘bridges’.” 6. conclusion the russian international journalism has undergone several transformations in the recent decades: a major economic collapse in the 1990s, commercialization and the growth of foreign investments in the media market in the early 2000s. currently we observe a shift from commercial to more state-funded international reporting, due to the economic crisis as well as due to the growing interest from the part of the government in infl uencing the media representation of the country. alongside with the other trends this tendency can be defi ned as a global one (see the popularity of such international broadcasters as cctv, france 24, deutsche welle, etc.), but in russia this kind of foreign reporting is gaining predominance on the market. this trend raises a question of necessity for scholar of examining the business models (as well as actors and their inter-dependences) of today’s 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5.0 and later.) >> /namespace [ (adobe) (common) (1.0) ] /othernamespaces [ << /asreaderspreads false /cropimagestoframes true /errorcontrol /warnandcontinue /flattenerignorespreadoverrides false /includeguidesgrids false /includenonprinting false /includeslug false /namespace [ (adobe) (indesign) (4.0) ] /omitplacedbitmaps false /omitplacedeps false /omitplacedpdf false /simulateoverprint /legacy >> << /addbleedmarks false /addcolorbars false /addcropmarks false /addpageinfo false /addregmarks false /convertcolors /noconversion /destinationprofilename () /destinationprofileselector /na /downsample16bitimages true /flattenerpreset << /presetselector /mediumresolution >> /formelements false /generatestructure true /includebookmarks false /includehyperlinks false /includeinteractive false /includelayers false /includeprofiles true /multimediahandling /useobjectsettings /namespace [ (adobe) (creativesuite) (2.0) ] /pdfxoutputintentprofileselector /na /preserveediting true /untaggedcmykhandling /leaveuntagged /untaggedrgbhandling /leaveuntagged /usedocumentbleed false >> ] >> setdistillerparams << /hwresolution [2400 2400] /pagesize [612.000 792.000] >> setpagedevice . international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2016, 6(2), 283-288. international review of management and marketing | vol 6 • issue 2 • 2016 283 why do urban young adults share online video advertisement in malaysia? see kwong goh1*, inn-shen tan2, cheow sern vincent yeo3 1taylor’s university, malaysia, 2taylor’s university, malaysia, 3taylor’s university, malaysia. *email: seekwong.goh@taylors.edu.my abstract the purpose of this study is to investigate the factors that will influence young adults in the urban areas to share online video advertisement (ova). in this study, the authors have shortlisted four important variables, namely extrinsic motivation, information sharing, pleasure seeking and social influence in affecting one’s behavior towards sharing ova. a total of 168 participated in this study. a multiple linear regression analysis was adopted to examine the relationship between the variables. results indicated that all hypotheses were significant. this research provides an in depth insight about the factors contributing to sharing of ova. marketers could develop video ads that encourage consumers to share via their social network sites. video ads shared by users are perceived to be less skeptical as compared to those shared by companies and it could achieve wider audience. keywords: sharing online video advertisements, extrinsic motivations, pleasure, information sharing, social influence jel classifications: m310, m730 1. introduction advertising is defined as a form of paid non-personal communication about an organization and products or services transmitted to the target audiences through various types of media according to (hult et al., 2012). advertising enables the products and services to reach out to a large audience at low per person costs thus enhancing awareness. the awareness of the products and services of an organization are heightened while adding value and increasing the visibility of the organization’s products and services. conventional high reach media such as television, magazines or outdoor display advertisements are decreasingly used in advertising practices. credited to the invention of internet and technological advancements, advertisers nowadays are seen utilizing digital technologies to advertise their products and services online (romaniuk et al., 2013). for instance, internet is used as a platform to advertise enabling advertisers to reach and engage with different types of customers at different levels. of all the new forms of advertising, online video advertising (ova) is growing tremendously in recent years. according to rick (2013), the online advertising industry has topped $1.1 billion in revenues, 24% higher sum up the total of $1.4 billion in 2013. such tremendous growth has outshone other online advertising medias, which generally has a growth rate of 18% in the same year. there are two types of ova, which are in-banner or in-stream. in-banner video advertisements are those video advertisements that start right at the moment when consumers click on the banner advertisement, whereas the in-stream advertisements are shown before the video begins. both types of ova are commonly 15 seconds in length (boone et al., 2010). there are several reasons to explain the popularity and growth of ova. one of the reasons is due to the low cost of ova. in the same study, boone et al. (2010) reviewed that using online video ads is comparatively lower in cost when compared to others such as internet music radio. the comparison shown is approximately from $8 to $25 for ova as compared to $20 for music radio (palumbo, 2006). in addition, ova also enables advertisers to effectively target their products and services to interested consumers by appealing more specifically matches to their demographics such as age, lifestyles and preferences. besides that, ova are not only educative, but also bring entertainment values to engage with the target audience thus creating favorable attitudes towards the advertisements (de la salle, 2007). in sum, online videos not only enable advertisers to raise awareness in a creative and interactive goh, et al.: why do urban young adults share online video advertisement in malaysia? international review of management and marketing | vol 6 • issue 2 • 2016284 ways, but also help advertisers to reach the desired target audiences at lower cost compared to other advertising method. one of the main features of ova is the ability for viewers to click “share,” “share with” or “send this to a friend.” with these functions, an ova could be posted on youtube but shared to many other platforms (such as, facebook, linkedin, twitter, wechat, and whatsapp). this enables a particular ova to gain massive number of viewers and at the same time the reach could be expanded to global viewers and audiences. the key question for marketers would be “what can develop viewers’ attitude to share ova through their social network sites?” this paper will measure the psychological elements, such as, reputation, enjoyment of sharing information, pleasure (pl) and social influence (si), in affecting one’s attitude towards sharing ova. 2. literature review 2.1. extrinsic motivation (em) em is defined as “a construct that pertains whenever an activity is done in order to attain some separable outcome” (ryan and deci, 2000). the outcome or reward for certain action performed is not only limited to financial compensations, but also includes the perceptual enhancement to a person’s status or reputation (amabile et al., 1994; ko et al., 2005). rewards that involve enhancements are intangible or invisible but will provide valuable network related benefits regarded as “social capital” (portes, 2000). such reward is especially useful and valuable in the case of competition when one is seeking for support and approval as well as recognition to outperform others (lazega and pattison, 2001). according to the theory of self-determination, there are three types of em. the first one is the engagement in the activity or action to avoid feeling of guilty for not performing such actions. secondly, boost self-esteem and pride, and thirdly to help others in reaching their objectives and goals (ryan and deci, 2000). however, only one of the three motivations suggested will be tested in this study. a person is expected to perform the sharing if the person perceives such sharing activity will help to boost self-esteem and self-pride. in the context of social network system, a person is able to manage his or her reputation and self-presentation in the virtual world by presenting the idealized self through different ways (ellison et al., 2006; schlenker and pontari, 2000). online reputation is often guided and developed as it can be displayed explicitly and used for comparison with others (lin, et al. 2006). therefore, when a person is to cultivate and build his or her reputation, he or she is motivated to seek ways to improve on his or her reputation by using different ways and one of the ways is through sharing information with others providing value to the community. similarly, it is expected that by sharing ova whether or not they are meaningful, educational, informational or entertaining will improve on one’s self-reputation and self-pride. as such we proposed the following hypothesis: h1: em is positively related to sharing intention of ovas. 2.2. information sharing (is) ovas often provide educational information regarding certain products and services to help consumers in understanding the features, purposes, and values of the products and services. altruism which concerns the performing of certain behaviors that are intended to benefit others without expecting returns in any form (lin, 2007; podsakoff et al., 2000; raban and rafaeli, 2007). helping behavior is also defined as “a voluntary action that are intended to benefit another individual of group of individuals” (eisenberg and mussen, 1989, p.3). sharing useful information to the community is one of the motivational forces that is derived from ones belief structures and institutional structures, such as the values of the community. some people feel obligated to share certain information or knowledge to contribute to the community advancement as a fulfillment of their own altruistic or pro-social motives (yu et al., 2010). such beliefs will motivate a person to share the knowledge to others using the information acquired from varies sources. is behavior is also motivated by a person’s individual motivation. one might have the tendency to think engaging in intellectual pursuits and solving problem is challenging and fun, thus helping others to solve their problem by using is is a kind of pl and enjoyment (wasko and faraj, 2005). such helping behavior is likely to contribute to the is intention to community as they perceive helping others to solve problem by sharing useful and relevant information is interesting and pleasurable deriving the feeling of intrinsic enjoyment (davenport and prusak, 1998; kankanhalli et al., 2005; wasko and faraj, 2005). according to wasko and faraj (2005), structural capital plays a role influencing the is intention. for a person who is highly embedded in collectivism culture could have developed the habit of cooperation to achieve collective purposes. therefore, practicing such habits will likely influence one’s willingness to share the acquired information to other members in virtual communities due to the social ties within the network, thus encouraging sharing intentions. based on the literature, we proposed the following hypothesis: h2: is is positively related to sharing intention of ovas. 2.3. pleasure words such as enjoyment, appeal, liking, joy and pl are all used to infer the same phenomenon, therefore, instead of simply focusing on the term “pl” and its effects, this research also reviews on related articles mentioning the term or word that brings similar meaning (tamborini et al., 2010). enjoyment is defined as the degree to which performing an activity is perceived to provide pl and joy in its own aside from the performance consequences (kee and goh, 2013; venkatesh, 2000). however, there are many studies that have different view in defining enjoyment. raney (2003) defined enjoyment as the sense of pl derived from the consuming media products while nabi and krcmar (2004) defined enjoyment derived from entertainment experience and complete with affective, behavioral and cognitive dimensions. vorderer et al., (2004) described enjoyment as “pleasant experiential state that includes psychological, cognitive and affective elements” while bosshart (1998) suggested that enjoyment refers to a pleasurable reception phenomena that consists of the physical system, personality, emotions and cognition, and the social system. tamborini et al. goh, et al.: why do urban young adults share online video advertisement in malaysia? international review of management and marketing | vol 6 • issue 2 • 2016 285 (2010) have highlighted all of the past studies suggested and agreed that enjoyment is a pleasurable response to media use (nabi and krcmar, 2004; vorderer et al., 2004). therefore, supported by the past studies, pl is highly associated with enjoyment. pl arises from many sources and one of them is the pl derived from psychological factor as suggested (le bel and dubé, 1998). psychological pls could be derived from both emotional and cognitive dimensions. le bel and dubé (1998) further explained that psychological pls arise from the positive emotional responses, which involves diffusion of feelings such as a person feeling happy after a nice movie that leads to a pleasant experience. on the other hand, intellectual stimulation and effort with matching consequences could also create cognitive pl. however, this research will test on the emotional pls derived from the feeling of people who intend to share ovas. studies by kim et al., (2007) have investigated the relationship of feelings such as pl and its influences on the information system continuance intention. as a result, the study found that pl has significant impact on behavioral intentions. beaudry and pinsonneault (2010) have also carried out a study on the relationship between emotions (i.e., excitement, happiness, anger and anxiety) and the implementation of information technology (it) application and use. they have identified that happiness has a high positive influence on information system use while excitement was positively related to the it use, while both intentions were affected by pleasant emotions. both studies have highlighted that happiness and pl strongly and positively affects behavioral intentions. furthermore, while interest and enjoyment (pl) motivates one to behave or act, it will likely cause the repetitions of such behavior in future (deci et al., 1999; deci and ryan, 1985). therefore, the third hypothesis is generated based on the idea of positive relationship between pl and the sharing intention of ovas. h3: pl is positively related to sharing intention of ovas. 2.4. social influence si could be defined by cialdini et al., (1990) as something or some actions that are performed by everyone within the social network, which will likely be perceived as sensible action that motivates a person to perform the same action or behavior. as suggested by berkowitz (1997); perkins (2003); perkins and berkowitz (1986), there are two types of norms. descriptive norm refers to the popularity of certain actions and injunctive norms, which refer to the social approval of the actions in both personal and societal level (cialdini et al., 1990). personal level perceives descriptive norms as referring to one’s beliefs of the popularity behaviors accepted or valued by those who are important to them. personal level of injunctive norms is the belief of one regarding the approval from others in performing certain behaviors. under the influence of social pressure, actions performed are not either ethically or morally considered (park and smith, 2007). according to ryan and bonfield (1980), they have discovered that family and friends will influence a person’s purchase decisions. another study by bock et al., (2005) demonstrated that a person is likely to have a favorable or positive feeling towards sharing intention when a person is pressured by si. studies done by marett and joshi (2009) suggested sharing information and rumors in online communities are seen as being prototypical and desired behavior if sharing brings perceived benefits or strongly identify and conform with the community and its goals (lapinski and rimal, 2005). marett and joshi (2009) further maintained that generalization of perceiving certain behaviors is encouraged or influenced by certain si or norms, however, if a person perceives sharing information as an admirable behavior, community members will likely to further solidifying their status and standing within the community by performing same behavior repeatedly. as such we argued that social pressures from family and friends are expected to have influence on the sharing intention of ova. the forth hypothesis is posited below. h4: si is positively related to sharing intention of ovas. 3. methods an online survey was conducted to obtain information from respondents. a total 168 students participated from four major private universities in klang valley. the participants are between age of 18 and 28 years old. there is a good distribution between male (50%) and female (50%). around 95% of the respondents are in the undergraduate studies. most respondents are heavy user of social media with approximately 25-30 h usage per week (87.5%). 3.1. measurement the items for the constructs were adapted from past studies and measured on a 5-point likert scale; ranging from 1 = strongly disagree, 2 = disagree, 3 = neither agree nor disagree, 4 = agree, and 5 = strongly agree. table 1 list all the constructs, sources and number of items used. 3.2. content validity and reliability a cronbach coefficient alpha test was conducted on all four factors to test the reliability of all of the item variables. this was to determine the internal consistency of the scale used. the values of cronbach alpha coefficient are depicted in table 2. all of the factors were found to have alpha coefficient values of >0.7, which is an acceptable level of reliability (hair et al., 2006). we conducted the kaiser-mayer olkin’s (kmo) measure of sampling adequacy test and bartlett’s test of sphericity to assess the suitability of the survey data for factor analysis (hair et al., 2006). factor analysis was also useful to determine construct validity: convergent and discriminant validity. the results of table 1: items and sources variable total items source em 3 marett and joshi (2009) is 4 lee and lee (2011) pl 4 lee, ham, and kim. (2013) si 6 its ova 5 total 21 its: intention to share, em: extrinsic motivation, is: information sharing, pl: pleasure, si: social influence, ova: online video advertisement goh, et al.: why do urban young adults share online video advertisement in malaysia? international review of management and marketing | vol 6 • issue 2 • 2016286 the kmo measure of sampling adequacy and bartlett’s test show that the data meet the fundamental requirements for factor analysis. the kmo measure of sampling adequacy is 0.865 and the bartlett test is significant. factor analysis with principal component analysis and direct-oblimin rotation was then used to group all of the variables into several common factors. the results are reported in table 3. to control the number of factors extracted, a minimum eigenvalue of one was used in the factor analysis. factors with eigenvalues <1 were considered insignificant and were excluded. the factor analysis generated a four-factor solution with a total cumulative percentage of variance of 77.77%. they were found to have meaningful relationships and were therefore, retained. the factors that retained are interpreted as follows: f1: pl (pl); f2: si (si); f3: em; f4: its; f5: is. 3.3. correlation table 4 illustrates the correlations for all five variables. results indicate that all four variables are positively associated with its ova. si has the strongest relationship (r = 0.472, p < 0.01) and it is followed by pl (r = 0.437, p < 0.01). meanwhile em is ranked third (r = 0.418, p < 0.01) and lastly information (r = 0.355, p < 0.01). all variables recorded a moderate strength over its ova. 3.4. regression analysis in order to test the hypotheses, regression analysis was adopted. the result of the regression analysis is shown in table 5. to test for multicollinearity, variance inflation factor values were examined and all were found to be below 2.5, which means there is low multicollinearity among the independent variables and the stability of the regression was not affected (hair et al., 2006). all four independent variables had significant positive influence on its. as such all hypotheses were supported. the adjusted r2 is 0.321 showed that 32% of the variation in its is explained by em, in, pl and si. a close examination of the regression results reveals that si had the highest impact on its (beta = 0.294, p < 0.01) followed by is (beta = 0.202, p < 0.05). 4. discussion and conclusion the main aim of this study was to examine the factors that affect its ova. four factors were identified to be crucial in encouraging sharing of ova and these factors are, em, is, pl and si. the overall proposed model showed good fit to the data and all hypotheses were supported. as hypothesized, extrinsic reward is found to have a significant positive relationship with its ova. this is in line with past research (lee et al., 2013). in other words, people will feel that sharing of ova will help to gain recognition, status and reputation among their peers. next, is is the second factor that has a significant influence on its ova. the result is consistent with the findings in the study done by lee and lee (2011). lee and lee (2011) suggested that the positive belief on informativeness of the ova would likely cause them to watch the ovas and subsequently share the ovas. furthermore, wasko and faraj (2005) suggested that collectivism does have an effect on the habit of cooperation that leads to sharing intention. table 2: reliability construct cronbach’s alpha em 0.909 is 0.812 pl 0.953 si 0.851 its ova 0.902 its: intention to share, em: extrinsic motivation, is: information sharing, pl: pleasure, si: social influence, ova: online video advertisement table 5: regression analysis dependent variable its independent variables beta coefficient t-stat standardized coefficients vif constant 0.415 1.226 f=20.719** r2=0.581 adj r2=0.321 em 0.153* 2.229 0.174 1.498 is 0.202* 2.420 0.167 1.171 pl 0.161* 2.034 0.165 1.609 si 0.294** 3.836 0.282 1.328 **p<0.01, *p<0.05 (n=168), its: intention to share ova, ova: online video advertisement, em: extrinsic motivation, is: information sharing, pl: pleasure, si: social influence, vif: variance inflation factor table 3: factor analysis items component f1 f2 f3 f4 f5 pl3 0.876 pl5 0.848 pl8 0.833 pl4 0.830 pl7 0.812 pl6 0.806 pl2 0.781 pl1 0.773 si3 0.851 si4 0.795 si2 0.778 si1 0.678 em2 0.848 em3 0.845 em1 0.813 its2 0.862 its1 0.847 its3 0.815 is2 0.844 is1 0.838 is3 0.761 its: intention to share, em: extrinsic motivation, is: information sharing, pl: pleasure, si: social influence table 4: correlation variables em is pl si its em 1 is 0.272** 1 pl 0.550** 0.321** 1 si 0.382** 0.313** 0.438** 1 its 0.418** 0.355** 0.437** 0.472** 1 **p<0.05, its: intention to share, em: extrinsic motivation, is: information sharing, pl: pleasure, si: social influence goh, et al.: why do urban young adults share online video advertisement in malaysia? international review of management and marketing | vol 6 • issue 2 • 2016 287 justification by wasko and faraj (2005) is supported by the fact that malaysia is a collectivist country whereby the habit of cooperation will enhance their sharing intention of ova that seems to be useful for others. thirdly, those who perceived that sharing ova would obtain some level of pl will have higher its the ova. the findings are similar with past research that argues positive feelings, such as fun and entertainment will increase positive evaluation towards the ova and subsequently will share the ova (beaudry and pinsonneault, 2010; kee and goh, 2013; kim et al., 2007). lastly, social pressure arises from family, friends and associates that influence a person’s behavior. bock et al. (2005) argued that a person is likely to share if the person is pressured socially. in addition, the findings also backed marett and joshi (2009); lapinski and rimal (2005) claim that sharing intention will be enhanced if sharing is a desired behavior in the community that will help a person to define them or further solidifying their standing by performing the behavior repeatedly. the explanation is that if a person perceives sharing ova is a common practice by people around, it will likely enhance the sharing intention of the person to conform to the norms (ryan and bonfield, 1980). the current study has several practical implications. first, this study helps in exploring the factors that influence gen y’s sharing intention of ova via sns by establishing a better understanding and comprehensive theoretical framework for marketers. better understanding on the factors that cause high sharing intention of ovas enables marketers to have higher chance to create buzz and viral marketing. viral marketing through e-word of mouth via internet enables marketers to reach wider range of customers in a comparatively low cost (cruz and fill, 2008; datta et al., 2005; hennig-thurau et al., 2004). video ads shared by users are favored more as people tend to be skeptical about videos shared by the organization, thus allowing the outcomes of pl towards sharing behavior. consequently, it will likely encourage the sharing intention of ova. second, upon the realization on the influence of si in sharing intention, marketers can apply this knowledge obtained from this study to take advantage on the source of influence within a social group. marketers can identify and approach the person with the highest influence or invite them to be the agent for their viral marketing strategy. lastly, understanding on the expected or perceived outcomes of sharing ova will help marketers to design their online video ads better and more effectively to satisfy the audience’s expectations thus enhancing their sharing intention. the major limitation of this study is the focus on young consumers. therefore, the findings of this research must be interpreted with distinct parameters and considerations as the respondents were from the age group of 18-28. in order to increase the generalizability of the findings, future research could involve more respondents from other age groups. future studies should also examine whether personal and demographic factors such as age, gender, ethnicity, income level and social network sites usage will moderate the effects of these factors on consumer its ova. references amabile, t.m., hill, k.g., hennessey, b.a., tighe, e.m. 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(2010), exploring factors that influence knowledge sharing behavior via weblogs. computers in human behavior, 26(1), 32-41. 14_akopov.indd international review of management and marketing | vol 5 • special issue • 201592 special issue for "media as the tool: management of social processes" international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2015, 5(special issue) 92-96. the role of internet community in political elite’s sociopolitical discourse grigory leonidovich akopov1*, anna leonidovna akopova2, galina konstantinovna pankova3, anatoli stepanovich puiy4, tamara yurevna redkina3 1moscow state technical university of civil aviation rostov branch, prospect sholokhova 262 b, rostov-on-don, 344009, russian federation, 2lomonosov moscow state university, mokhovaya, 9, moscow, 125009, russian federation, 3saint-petersburg state university, universitetskaya naberejnaya 7-9, saint petersburg, 199034, russian federation, 4saint-petersburg state university, universitetskaya naberejnaya 7-9, saint-petersburg, 199034, russian federation. * email: ag078@icloud.com abstract the intensive development of information and communication technologies has caused various transformations in the sociopolitical discourse. the internet community has adopted a new role that of an interactive platform which enables real-time communication for representatives of the government, political elites and electorate. members of internet communities can exchange all types of information. so, the possibility of network interaction made possible public participation in the sociopolitical process. thence, the internet community may be capable of infl uencing political elites and representatives of governmental structures. this mechanism makes it possible to citizens to infl uence the government. many politicians have already realized that in the near future, refusing to maintain political dialogue with the internet community may lead to complete oblivion or even to their demission. internet activity is gradually becoming one of the criteria of the effi ciency of the political activity. the development of the political discourse shows a higher potential of the infl uence that the internet community has on the political elites and, thus, on the political processes active in a country and on the democratization of the political power. political connotations of the internet community permit the political elites valuate the attitude of the internet community to main political events and main representatives of the political elites. keywords: internet community, blogs, network, information process, network policy, political elite, informational power jel classifi cations: h11, o32, o38, z13 1. introduction the network called internet is, by now, an effi cient communication link between heads of state and ordinary citizens. the possibilities offered by the internet allow the political elite to maintain realtime consultations with the citizens. the network facilitates instant monitoring of the public opinion, of the citizens’ needs and problems. we think the main function of the internet global network for contemporary political organizations consists in the promotion of permanent sociopolitical discourse with the possibility of real-time electronic feedback between the political elite and the civic community. it means more freedom for the citizens in what refers to collections, analysis and exchange of information, and also facilitates civic participation in the very directing of the state or infl uencing the state power apparatus. so, thanks to the network policy technologies, anyone can easily contact the political elite to transmit to it his or her recommendations or criticize its work may it be a concrete politician or the political system as a whole. an interaction of this kind makes possible real-time feedback. 2. methods some researchers have been claiming for the last 10 years that “using new technologies will facilitate the creation of a dialogoriented communication space of a ‘government-citizens’ type, which will mean receiving information rapidly on the public reaction to important governmental decisions and effi ciently realize the idea of the civic participation in the solution of socially important problems. the creation of a dialog-oriented space based akopov, et al.: the role of internet community in political elite’s sociopolitical discourse international review of management and marketing | vol 5 • special issue • 2015 93 on the ‘government-to-citizen’ model in the internet will favor the creation of a positive image of the russian government with its users” (dmitriev et al., 2002). the political function of the internet, according to westen’s concept, consists in the promotion of permanent sociopolitical discourse with the possibility of real-time electronic feedback between the government and the citizens. it will make citizens less dependent on governmental functionaries, experts, political organizations, interest groups, associations and media in questions related to collection, organization and exchange of information. the network has the capacity to mobilize civic participation in the politics. the most ideal form would represent auto-government by means of electronic public opinion research, without any participation of professional political communicators (westen, 2004). 3. results nowadays, state functionaries of all the levels must act as political communicators: accumulating the public opinion, put it into practice. such conditions are the conditions of the modern society. many high-level state managers communicate actively with the internet community. for example, dmitry medvedev thinks it is important that heads of state have the skills of the internet communication. responding to a question by a closed-circuit television journalist about the mechanism of president’s dialog with the internet communication in his blog, he told: “it is certain that i have been using internet for quite a long time, i believe it is about 12 years, and i follow the development of the global information network” (medvedev, 2009). the interaction between the political elite and the internet community affects, surely, the process of the modernization of the political institutions, inclusively because of the connotative influence of the internet community on the political elite members. it cannot be denied that politicians have realized it is necessary to communicate with internet users, inclusively by maintaining personal blogs. it is corroborated by the results of different polls that are regularly published by various sources. and even the politicians themselves confi rm it, posting links to their blogs on offi cial internet pages, in informational materials and social networks. researches have noted the citizens have been demonstrating less trust to offi cial media (nikonov, 2013). at the same time, the number of the citizens that search for information in the virtual network has been growing. and if a politician has his or her personal page on the web, he or she provides the possibility of getting fi rst-hand information. also, the media react more and more to blog posts, quoting them or commenting on them in their articles. the political elites are admitting that in the near future, using virtual technologies, blogs and social networks will not only form the citizens’ attitude to members of government, but also exercise real infl uence on the electors’ preferences with high expectations for the elections. many politicians have already realized that in the near future, refusing to maintain political dialogue with the internet community may lead to complete oblivion or even to their demission. internet activity is gradually becoming one of the criteria of the effi ciency of a politician’s activity. it has also been noted that it were the politicians who fi rst initiated their struggle for the virtual electorate’s attention (akopov, 2003). the efforts these politicians applied in the virtual space made offi cial government recognize the necessity of the development of a network policy, as well as the importance of the politicians’ communication with web users. it should be noted also that internet is used by politicians of every level not only in the “government-to-consumer” model, but also in the interaction between politicians (government-to-government model). there are cases when politicians or political elites of different departments or even of different countries maintain online discussions on their public blogs or social network accounts. frequently, mass media also participate in these discussions. blogs gain popularity within the internet community, representing a platform for political debates. we must admit the russian blogosphere has been seriously affected by the federal legislation that postulated that every popular blog should be considered a mass media organ; but we believe this fact is more likely to legitimize the blogosphere than to affect it negatively. “blogosphere means the aggregate of all the blogs as a whole community or public network.” millions of blogs that exist are closely related, bloggers read and comment on other bloggers, post links to other blogs, creating in this way their own subculture. the notion of the blogosphere retrieves one of the most important differences between blogs and simple web pages and forums: related blogs may compose a dynamic international informational jacket” (russian wikipedia, 2011). internet blogging is a perfect pr instrument for the political actors, and which can provide various advantages. in the contemporary, blogs can represent the following for political actors: • a quality source of information of different types • a place for political debate • a means to account for one’s work • a means of operative public information • an element of communication and opinion exchange between allies • a means of political provocations • a means of attracting supporters and allies • an element of communication with the masses and propaganda • a means of online control. at fi rst, blogs were seen as online diaries with pictures and comments, but with further development of network policy, the massive enthusiasm of the citizens and political elites to create and maintain their own “online diaries” engendered a new means of “cyber communication.” the main advantages of the blogs are instant transmission of the information and the integration of information with comments. akopov, et al.: the role of internet community in political elite’s sociopolitical discourse international review of management and marketing | vol 5 • special issue • 201594 these unique qualities have made blogs sources of many important and interesting data and information needed to make important political decisions. blogs dedicated to certain interest or profession represent informal civic communities. being an element of the civic society, they are capable of forming determinate positions, and the participants of these blogs are political actors, assuming an active political position (because a person that is not interested in politics, will not be interested in following a political discussion in the blogosphere). and here we have a lot of information for political research. but if we talk about blogs considering them personal “online diaries,” where people exchange their opinions, it is possible to obtain all type of data, inclusively involving political preferences, reaction to different political events etc. if we analyze correctly information posted in private blogs, we can understand civic attitudes and positions, political preferences and even political actions of citizens that use net technologies. participation in online dialog not only permits to remove political tension by means of operative interaction with the political positions and providing well-based answers to the questions posed by the internet community, but also facilitates the forming of the very political attitudes and educating political culture of the internet users. leading mass media often analyze citizen’s opinions they post to their blogs, and publish sensational materials based on them. practice shows blogs publish content dedicated to events more rapidly than mass media do, and this is quite explainable, because the number of bloggers is higher than the number of journalists, and all they have to do is to post their content, and mass media professionals have to approve obtained data, coordinate it etc. internet users often obtain information from blogosphere without prior searching for it in particular. popular sites quote bloggers, making internet users not only pay attention to this information, but get interested in it. the blogosphere maintains permanent opinion exchange, an incessant dialog between representatives of the most different strata of the society. nonetheless, bloggers do already actively infl uence the political life, they attend to events organized specially for them, meetings with higher government offi cials etc. blogs have become a place for political struggle and political dialog government’s dialog with the civic society as well as government’s dialog with itself. recently, a network called twitter gained great popularity in the virtual space, thanks to its simple design and usability. twitter is a system of microblogs where people publish short messages (up to 140 symbols). these messages appear instantly on the pages of all the subscribers called “followers” here. a certain advantage of the service is that it not only permits publishing via internet, but also via sms, e-mail, instant messaging etc. so it is natural that twitter found its fans in the political life, especially for political discussions. twitter, created in 2006, became rapidly popular in the usa, especially among politicians and celebrities. simple, fast and effi cient, these are the main advantages of this means of communication. the laconic blogs conquered american politicians during the elections of the 44th president of the united states. barack obama began using twitter actively for his communication with his potential electors. updating constantly his blog with new information about the course of the electoral struggle, about his meetings with the electorate, about his new ideas, etc. experts say: “it was barack obama himself who posted to his twitter. at least it was so until he understood he could relax: he was the host of the white house. the night after the election, he published this post: “we just made history. all of this happened because you gave us your time, talent and passion. all of this happened because of you. thanks’. obama’s example got viral. many senators and congressmen created their own microblogs, frequently posting to them personally. the foreign practice was very fast adopted by their russian counterparts” (stepanova, 2010). nowadays, every respectful politician has his/her own microblog. many public personalities pay great attention to this means of communication, preferring to interact with the internet community with the help of a microblog. often, microblogs are used as a teaser or a link to larger messages in traditional blogs or accounts in social pages, which does not contribute to lessen microblogs’ popularity. moreover, nowadays, many members of political elites from many countries have their microblogs. and the number of readers of such micro publications grows incessantly, thanks to the convenience of reading short messages, for example with smartphones. blogs have become the arena of political struggle, the means of exchanging politically important opinions and the place of circulation of political information and disinformation. the blogosphere is quite a popular place of political debate, and thence we can note the substantial infl uence of the bloggers as well as of the internet community as a whole, on political phenomena and processes that take place in the modern society. blogs are fundamental for the internet communication between the civic society and the representatives of governmental power, and they are also a means of informing for the government. blogs allow, with minimal expenses, and in minimal time, informing the internet community of important events, and organize manifestations, meetings and protests. the blogosphere is a very popular place of political debate, a fact that permits to note the growing infl uence of the bloggers’ political connotations on the political events and processes in the informational society. we believe it is important to note that the practice of governmental interaction using the blogosphere is applied more and more actively in the upgrading political systems. for example, twitter helped the usa get out from a situation which could imply a technical default. as white house’s public relations director, dan pfeiffer, said, “twitter and e-mail helped pressure the republican congressmen, boosting the agreement to raise the us’ debt ceiling. barack obama spoke, from his twitter, to more than 9 millions of his followers, urging them to infl uence their states’ congressmen to make them accept the compromise. then, obama began publishing links to every republican congressman’s twitter account. there are almost 300 republican congressmen, and this kind of “spam” cost obama’s microblog about 36 thousand followers in few hours” (voronina, 2011). akopov, et al.: the role of internet community in political elite’s sociopolitical discourse international review of management and marketing | vol 5 • special issue • 2015 95 political elite’s interaction with the internet community is a delicate and complicated instrument, and it will take some time before the machine of the state will be capable of using internet communication with maximal effi ciency in its immediate activity. a government’s activity is refl ected in three spheres: the political, the legal, and the socioeconomic. every one of these spheres has its own traditions, values and work organization specifi city. but with the development of the informational society, every one of these spheres will upgrade, changing its traditional parameters due to the infl uence of the information technologies. and each sphere of the government’s functionality needs quality feedback, that modern information technologies (and blogs are a part of it) can provide. the global communicational internet community is created and develops with the development of the innovative technologies we named. we are observing a transition from direct communication, or face-to-face communication, to indirect, mediated communication. internet communities can easily be formed by people not present in a determinate place, the distance is not that important nowadays. united by a sole idea, the society’s subjects can integrate consolidated communities, being present in the global network, which helps them to bypass barriers of time and space. gotthard bechmann notes: “the communication has practically separated from its corporal, psychological and social substrate” (bechmann, 2010). 4. discussion with the advent of network communication technologies, subjects of the civic society gain unique possibilities of political participation in the life of the society (zhang, 2014). almost 15 years from now, oleg shabrov wrote these prophetic words: “more and more importance is gained by the symbolizing function of the political system and the social function, which allow a person to feel his or her identity with the outer world, overcoming their estrangement. the legitimacy of the power, its public recognition becomes a condition not only of the political stability, but of the social development as a whole” (shabrov, 1997). the scientist’s opinion is corroborated by the political connotations of the internet community, which not only permit one to feel his or her identity, but also provide public recognition to the authorities or public confrontation to the political management. modern researchers give civic society two defi nitions: 1. the integrity of the system of non-governmental relations among all the members of the society which are not immediately controlled by state authorities. 2. community of the most active civilians and their associations (movements, pressure groups, collectives, local self government organs, professional, ecological, cultural, national associations) capable of organizing the defense of their interests and demanding their satisfying by the state, according to the law. so it is not just a group of people, but a community of civilized, conscious and active citizens. the concept of the civic society has experienced a long evolution in the history of political thought, almost always being seen as something quite opposite to the state (akopov and kislitsyn, 2009). in an era when information technologies spread and the informational society develops, the civic society may oppose state power demonstratively. bykov speaks of such episodes (bykov, 2013). some internet users are capable of organizing special pressure groups. the consolidation of the population on the basis of new innovative political technologies allows the citizens to implement their initiatives with more effi ciency and less labour. informational society provides maximum possible access to important political information to the citizens, thence, civic participation in the political life gets more active and organized. using network policy technologies, citizens and public associations can effi ciently infl uence the state government’s apparatus, making it adopt political decisions that are vital to the society. this aspect is studied by the russian researcher georgieva (2013). it was just several years ago that researchers stated that the majority of citizens must not only be politically conscious, but also free to have the opportunity of using the civic freedoms and make the civic society function effi ciently. many representatives of the internet community comment actively on political news published at information portals, making thus their civic position public. this topic has been studied by melnikova (2012). moreover, news sites not only permit their users to comment on a news in special sections, but also recommend sharing the news and comment on it on one’s page in social networks. thus, millions of russians are involved in the political process by means of discussing politically signifi cant news. political scientists may analyze readers’ commentaries to catch the attitude of the masses and prognosticate further development of the situation (potolokova and kurysheva, 2013). there are many examples of hundreds of publications that appear in the internet before mass disorders, calling to such actions. comments on news in the virtual space is, without doubt, a means of self-expression of young internet users, but their political connotations permit to valuate, with an experienced eye, the attitude of the internet community to signifi cant political events and representatives of the political elite. it must be noted that every news that is quite popular with main news sites’ users can accumulate hundreds and thousands of users’ comments. if we take the political connotations of the online commentaries on certain political realities and analyze them, we’ll be able to make some conclusions characteristic of the internet community reaction to virtually any political event. it is notable that we could obtain such information from anywhere, it is only necessary to have access to the internet. thence, virtually any political organization that has the capacity of wasting some time and labour to analyze online publications will have the possibility of making political prognosis. and professional organizations specialized in such analysis, can organize this type of content analysis automatically, with the help of special software. no need to describe the possibilities that political consultants will have after they make such informational analysis, and this akopov, et al.: the role of internet community in political elite’s sociopolitical discourse international review of management and marketing | vol 5 • special issue • 201596 analysis permits them to orient themselves correctly during the elaboration of information strategy noopolitics, defi ned by the russian scientist nikonov (2013). 5. conclusion in modern life, people meet in the internet and, making public their political demands (mainly in the virtual space), they represent a real political force, capable of signifi cant infl uence on political processes. civic groups can use diverse means for achieving what they want: they maintain contact with the establishment, political parties and members of parliament (who ask for their support in exchange of fulfi lling their demands), publish newspapers and various types of propaganda, organize mass campaigns to help attract public attention to their problems, when they do participate, themselves, in legislative elections of state or local scale. network technologies provide, in a perspective, the possibility of making elections online, without having to go out. for initiative groups, which form the nucleus of the civic society, different forms of political protest is a substantial means of infl uencing the authorities. in the informational society, protests are organized and regulated via the internet, and, as we have already noted, social networks and blogs are frequently used for this, facilitating signifi cantly the activists’ job. the massive expansion of social networks in the modern society catalyzed the protest potential that had been accumulated; manifestations organized via social networks appear regularly in different places. the world’s most popular social network is called facebook, it has more than a billion users, according to public data. so, about one person in fi ve has a facebook account. russian networks have much fewer users, but still, their popularity is quite high we may take odnoklassniki and vkontakte for instance. offi cial information made public by the vkontakte administration quotes more than 100 million users. it is diffi cult to name another mass media with such an auditory. no xxth century politician could even dream of such a means of communication. the development of network technologies allows speaking of an enormous potential of the network communication and of the necessity to modernize the political process according to the contemporary reality. it is clear that the political elites are literally doomed to interact with the online society, having to comply with their political connotations. the active expansion of the internet and the use of the information and communication technologies in the contemporary society make the elite use the net actively (and sometimes even aggressively) to gain political power and to maintain the manipulation of the public consciousness. in its turn, the internet community got the possibility of making public their political connotation and their opinions related to any events published in the internet. the development of the political discourse reveals a high potential of internet community’s infl uence on the political elites and, consequently, the political processes and the democratization of the political power in the country. political connotations of the internet community permit the political elites examine the attitude of the internet community to signifi cant political events and establishment. all of this enables the political activists to exercise signifi cant pressure on the authorities, permitting to talk of the modernization of the political system. the implementation of innovative forms of opinion analysis enables new possibilities of the creation and development of a direct, immediate democracy, in which citizens will be able to infl uence the political elites and even make collective decisions of highest importance to the country. references akopov, g.l. (2003), net policy of the russian political elites (theory and practice). rostov-on-don: rostov-on-don state university. akopov, g.l., kislitsyn, s.a. (2009), politology. a manual for students. rostov-on-don: rostov-on-don state university. bechmann, g. (2010), contemporary risk society, informational society, society of knowledge. moscow: lomonosov moscow state university. bykov, a. (2013), the principles of freedom of speech in the national context: russian experience. the 1st international symposium on media studies. antalya: akdeniz university. p8-14. dmitriev, a.v., latynov, v.v., yakovlev, i.g. (2002), politics and politology, internet. moscow: new humanitarian university. georgieva, e.s. (2013), mass media and political elites: a model of interaction. in: korkonosenko, s.g., editor. mass media in modern world, saint petersburg conference. saint petersburg: saint petersburg state university. p185-188. medvedev, d.a. (2009), interview to china state television. offi cial site of the president of the russian federation. available from: http://www.kremlin.ru/events/president/news/4443. [last accessed on 2015 aug]. melnikova, m.s. (2012), social aspects of the internet communication. vek informatsii, 1, 29-32. nikonov, s.b. (2013), information society in its function as an object of directed infl uence of noopolitics. world applied sciences journal, 13a(27), 241-246. nikonov, s.b. (2013), noopolitical aspect of international journalism. middle-east journal of scientifi c research, 1(17), 21-25. potolokova, m.o., kurysheva, y.v. (2013), internet-technology marketing: theoretical approach. world applied sciences journal, 13a(27), 266-269. russian wikipedia. available from: http://www.ru.wikipedia.org. [last accessed on 2011 mar]. shabrov, o.f. (1997), political management: a problem of sustainability and development. moscow: intellekt. stepanova, n. (2010), president medvedev will have a twitter account. moskovskiy komsomolets, no. 25322. voronina, k. (2011), barack obama lost 36 thousand twitter followers in few hours. internovosti. available from: http://www.internovosti. ru/text/?id=44126. [last accessed on 2015 jun]. westen, t. (2004), a digital election scenario. elections in cyberspace: towards a new era in american politics. washington: aspen institute, communications and society program. zhan, s. 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/untaggedcmykhandling /leaveuntagged /untaggedrgbhandling /leaveuntagged /usedocumentbleed false >> ] >> setdistillerparams << /hwresolution [2400 2400] /pagesize [612.000 792.000] >> setpagedevice 02_bolshakov.indd international review of management and marketing | vol 5 • special issue • 2015 11 special issue for "media as the tool: management of social processes" international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2015, 5(special issue) 11-17. multifunctionality of mediasphere in problematization of social contradictions sergey nikolaevich bolshakov1,2*, natalya alekseevna mikhalchenkova3, marina dmitrievna istikhovsaya4, yulia mikhalovna bolshakova5 saint petersburg state university, vo, 1 line, 26; st. petersburg, 199004, russia, 2syktyvkar state university named after pitirim sorokin, 167001, russia, komi republic, syktyvkar, oktyabrsky prospect, 55, russia, 3syktyvkar state university named after pitirim sorokin, 167001, komi republic, syktyvkar, oktyabrsky prospect, 55, russia, 4syktyvkar state university named after pitirim sorokin, 167001, komi republic, syktyvkar, oktyabrsky prospect, 55, russia, 5saint petersburg state university of economics, 197022, st. petersburg, ordinarnay ulitcza, 21-109, russia. *email: sergey.n.bolshakov@rambler.ru abstract the article analyzes the functions and dysfunctions of mass media in modern society, states the communicative essence of problematization of the contradictions existing in society. the main purpose of the article is to analyze the functions of media communications concerning socially signifi cant problems that refl ect the contradictions existing in the society. as a part of the structural and functional analysis, we have come to the conclusion that the problematization of social contradictions is considered as the result of interactions between individual and collective social subjects, taking place in the social environment that has a systemic character. the authors identifi ed nine basic functions of modern media sphere in the construction of socially signifi cant problems. keywords: social problems, mass media, social structures, social interests, social contradictions, communications jel classifi cation: z13 1. introduction in the social transformations of recent decades new contradictions, settlement of which requires information and communication confi guration of social subjects’ efforts adequate to modern challenges, become more and more obvious. modern media are not only the main source of information of the contradictions of the society functioning, but also communicative means concerning the development and settlement of these contradictions. therefore mediasphere determines the dominant trends in the public perception of socially important problems and the formation of attitudes of different social groups in respect of these problems. mediasphere in modern society is the main space, where socially signifi cant range of problems is constructed, as currently it is the media that is not only the main source of public information of the contradictions of society functioning, but also communication means concerning the development and settlement of these contradictions. it is mediasphere that determines the dominant trends in the public perception of socially important problems, defi nition and formation of attitudes of different social groups in respect of these problems. the approach to the analysis of functions (dysfunctions) of media sphere in solving socially important problems suggested in this article is based on the identifi cation of the communicative nature of problematization of contradictions existing in society. by means of communications some or other social contradictions are involved in the media sphere and become the subject of public attention. 2. research method the methodological basis of this study is the concepts of modern researchers in the sociology and political science, communication bolshakov, et al.: multifunctionality of mediasphere in problematization of social contradictions international review of management and marketing | vol 5 • special issue • 201512 theory and journalism, which are developed on the basis of the spectrum of neo-institutional approach, structural functionalism, political science concepts of the public sphere, the theory of “participation journalism.” neo-institutional theory of north and researches of institutional prerequisites for collective actions (olson, et al.), the concept of network self-organization of modern societies, stated in the works of castells et al., as well as studies of special aspects of selforganization of virtual communities are important for theoretical researches of the scientifi c problematics. research methods: systemic, structural and functional, and comparative-historical methods of theoretical analysis. 3. discussion obvious and imaginary problems generated by various mass media become a subject of public attention. however, in the subject fi eld of this study there are media communications concerning socially important problems, refl ecting the contradictions that exist in the society. so before you turn to the analysis of the functions (dysfunctions) of mediasphere in the generation of (setting and settlement) of socially important problems, it is necessary to consider the process of problematization of social contradictions. the concept of “social contradictions” was actively developed in the soviet social science (rutkievich, 1992; 1995; 2001), however, despite the often fairly critical attitude towards dogma and excessive economic determinism of the soviet social and political theories, this concept can get a new heuristic potential within new scientifi c paradigms. in this article the conceptualization of social contradictions is important because the phenomenon of public life problematization is diffi cult to understand, ignoring the methodological connection between the concepts of “problem” and “contradiction.” social contradictions are considered in modern science from different angles, determined as a rule, by the basic meaning of the term “social.” let’s consider three main angles of social contradiction defi nition. first, we are talking about the contradictions between society and nature. in this context, the most common understanding of this group of contradictions are the contradictions between activities of a man and the society according to the change of the environment and the results of these activities. a wide range of environmental problems, the importance of which in modern society and in particular in the media sphere is critically growing, is derived from the fi rst group of contradictions (smolyarova, 2011). second, the social contradictions are considered as contradictions between social classes, strata or layers. in this sense, the social contradictions are conceptualized in the context of the various theories of social stratifi cation, and refl ect the basic polarities in social status, which are essential features of the distribution of people in social classes and strata. a special feature of this group of contradictions consists in rootedness in the foundations of the different systems of social stratifi cation that confi rm social and strata (or social and class) differences (radaev and shkaratan, 1995). the process of awareness of its interests by a social stratum is of great importance in the analysis of the impact of this group of contradictions on socially important problems generation. the problematics of awareness by social stratum (class) of its interests goes back to the writings of karl marx, who described a class confl ict as a form of development of class contradictions in the context of the process of awareness by the class of its common interests. it is the awareness of the interests that transformed the class from “a class in itself” into “a class for itself.” in other words, according to marx, the basis for collective action is formed through awareness of common social interests. third, the social contradictions are understood in the broader context as the contradictions between different social groups according to a variety of criteria. as the relationships between people and social groups are diverse, then the classifi cation of such contradictions can be different. among other things, we can talk about all kinds of subcultural contradictions, interreligious and inter-ethnic contradictions and socio-demographic contradictions, etc. however, their detailed consideration goes beyond the thesis work object fi eld, which includes the analysis of social contradictions only as an essential element of the socially important problems generation mechanism. in this generation the attention is paid to the contrast between the presence of certain contradictions in the society, on the one hand, and the degree and nature of the involvement of these contradictions in the public discourse on the other hand. as a part of the defi nition of theoretical and methodological approaches to the subject of study it is especially important to identify the character of awareness of social contradictions and their involvement in the public discussion. this process can be defi ned as “problematization of social contradictions,” i.e., conversion of existing, but not always recognized contradictions into socially important problem attracting the public interest. in his lectures on political philosophy a. pyatigorsky said that problematization is “a consideration of the object of political refl ection, that leads either to new alternatives or new variants of previous alternatives, or, fi nally, to a radical change of the object” (pyatigorsky, 2007 p.70-71). in this defi nition, the connection between problematization and political refl ection is not accidental. just in the process of refl ection of the existing social contradictions, these contradictions are called, defi ned or redefi ned, and turned into a problem. the role of the media sphere in the process of problematization of social contradictions turns out to be fundamental. not by accident, a. piatigorsky notes that the need of problematization was previously not understood by researchers and journalists: “.... since the beginning of the twentieth century, the most interesting political diagnoses were made not by politicians and scientists, but journalists” (pyatigorsky, 2007). the relationship between the social contradictions and their refl ection in the generation of socially important problems is bolshakov, et al.: multifunctionality of mediasphere in problematization of social contradictions international review of management and marketing | vol 5 • special issue • 2015 13 clearly observed on the example of analysis of such actual for modern russian society phenomenon as a social polarization. its origins are social contradictions expressed in a high level of social differentiation between different groups. however, the polarity itself is evident not so much in these contradictions, as in real confrontation of the social groups to each other, i.e., in their interaction, which is defi ned by opposite interests and attitudes of behavior, gain of value differences, growth of social tension. thus, the analysis of problematization of social contradictions should consider not only the existing contradictions, but also their political refl ection, which also has two sides fi rst, a purely mental or individual and psychological one, and second, an external and symbolic side caused by the fi rst one. in terms of methodology, the ratio of the two sides can be described by referencing to the works of p.a. sorokin, devoted to the analysis of patterns of social life in terms of the objectifi cation of mental component in external symbolic structures. “each of the countless mental processes which arise between two or more members of communication, in its transfer from one subject to another must necessarily go through the stage of ‘reifi cation’ or symbolization” sorokin wrote (sorokin, 1992). this stage of symbolization provides the necessary identity of psychological refl ection, which provides a base for collective action. the functions (dysfunctions) of mediasphere in problematization of the social life consist in such symbolic reifi cation of social contradictions refl ection. let’s consider functional aspects of media construction of socially important problems in more detail. merton developed the main categorical apparatus of the functional theory which was actively developed in terms of the mediasphere analysis (merton, 1967). as a part of structural and functional analysis the problematization of social contradictions is considered as a result of interaction of individual and collective social subjects, which take place in certain social environment which has system properties. the stable elements of this environment create internal structural bonds. operations of these structural elements, aimed at support of integrity and stability of the whole system, are the functions. at the same time, some elements perform both explicit and latent operations, aimed at reduction of the effi ciency of the system, and even at self-destruction of the system integrity. in this case, we are talking about dysfunctionality of certain elements. 4. results the mentioned presuppositions of modern structural functionalism make it possible to analyze the function (dysfunction) of media sphere in the problematization of social contradictions. institutional characteristics of the problematization of social contradictions have a certain structural organization. as construction of socially important problems based on such problematization is the subject-subjective or intersubjective communication, its structure will include subjects of communication as key elements. one of these subjects in the beginning of the problematization of social contradiction plays the active role of the initiator of this process and sets the discourse appropriate to its vision. other subjects in this phase of problematization act as recipients that receive the transmitted information. when we speak about an interactive model of construction of socially signifi cant problems, such model would necessarily include a stage in which the subject change their positions, and the active role of the initiator of problematization goes to other subjects, playing the role of recipients at the fi rst stage. modern interactive media give an opportunity to engage unlimited number of participants in a process of problematization of social contradictions. therefore, in the interactive media environment active role of the initiator of problematisation discourse will go not only from the fi rst to the second participant, but from the second to the next one. in this process of exchange of opinions, information and arguments its subjects will play the roles of active communicators and recipients of the information and opinions of others. this is the essential difference between interactive media from the classic media, in which the participants’ roles of communication are strictly fi xed. this difference creates a fundamentally new opportunities not only in the problematization of social contradictions, but also in the creation of prerequisites for collective action aimed at settlement of socially important problems identifi ed at this process. at the same time, interaction does not always ends in development of the position that is mutually acceptable for all participants and collective action will not necessarily be monolithic. the procedure of exchange of socially and politically signifi cant information itself has an essential value in settlement of confl icts and deepening of mutual understanding. in the role of the subjects of described interactions not only individual actors individual citizens, including journalists, bloggers, etc. can act, but also the collective subjects regulatory and administrative authorities, political parties, social organizations, churches, businesses and others. the audience for which the active participants of the process deploy a discourse of this problematization should be among other important structural elements of media construction of socially important problems. the composition of the audience, the presence of certain interest groups within it, the specifi c involvement of these groups in the overall process of exchange of information about contradictions identifi ed, nature and methods of deprivation of certain participants are the signifi cant structural characteristics. a specifi c aspect of problematization of social contradictions in the interactive media environment is removing of the hard differentiations between active participants and the audience. passive observers can become active communicators at any time (gorin, 2011). sami means of communication, which are material and technical mediators of interaction of the problematization subjects of social contradictions, are also an essential element of the described structure. these elements can include a variety of media, including electronic, as well as various discussion platforms (not only bolshakov, et al.: multifunctionality of mediasphere in problematization of social contradictions international review of management and marketing | vol 5 • special issue • 201514 virtual, but real ones political clubs, press conferences, and various forms of direct democracy, such as meetings of citizens necessary for the implementation of a number of authority of local government, etc.). on the basis of identifi ed structural features problematization of social contradictions basic functional (and dysfunctional) characteristics of the media sphere as a key structural element of media construction of socially important problems can be revealed. for these purposes, let’s dwell briefl y on some methodological bases of functional analysis important for further analysis. interactive media environment is a complex open system with nonlinear behavior, in which mobility and intersubstitutability of both functions and individual and collective social subjects that perform them are observed. furthermore, the functionality of various structural elements can turn into dysfunctionality in other subsystems. therefore, for the analysis of non-rigid and mobile aspects of the media sphere functioning, those adjustments play principal methodological role which are made to the methodology of structural-functional analysis by merton. by analyzing the content of the term “function” merton pointed to its borrowing from biology (at fi rst in the sociology of herbert spencer), where the term “function” meant (organic) processes considered in relation to those processes which support the livelihoods of the whole organism as a living system (merton, 1967). the term “function” was learned in a similar understanding in sociology of durkheim and anthropology of radcliffe-brown. however, this approach has been substantially revised by merton in three main aspects. first, merton denies the postulate of functional unity of the social system, which distracts researchers from the possible negative consequences of the elements functionality. merton indicates that the same elements can be functional in one subsystem and dysfunctional in other ones. second, merton denies the postulate that is based on the fact that each element of culture or society has positive functions. in particular, he criticizes the justifi cation of this postulate given by malinovsky. and the third postulate of classical functionalism, denied by merton, consists in the idea of necessity of a number of functions for the system survival and, consequently, the necessity of some specialized structures that fulfi ll these functions (merton 1967). as contrasted to this rather rigid postulates merton formulates the idea of functional alternatives or, as he puts it, the functional substituent. redefi nition of principles of functional analysis by robert merton allows the researcher to apply it not only to study relatively simple systems, taken in a static and peaceful state, but, fi rst of all, to analyze dynamic, internally contradictory, and open social and political systems (markov, 1988). in addition, for the analysis of the functional aspects of the subject of our study the statements of functional theory of merton on the explicit and latent functions and dysfunctions that allow you to analyze the irrational aspects of social (or political) systems are essential. these aspects may appear in the “prejudices,” “stereotypes” and steady “misapprehension” imposed by media. taking into consideration these theoretical principles, let’s consider fi rst the main and most obvious function of the media sphere. lasswell pointed out three functions of media communications: information about the world and warning of the possible dangers of its destruction; correlation with the social structures and the impact on them through feedback; conservation and transfer of cultural experience. these three functions are repeated in various forms by other authors (zemlyanova, 1999). subsequently, wright added entertainment function (wright, 1986). similar logic can be observed in the description of the functions of mass communication in the domestic psycholinguistics. for example, leontiev, identifi es four functions: the function of the optimization the society activities due to orientation on communication, infl uencing the collective activity, the function of contact and the formation of group consciousness, control function by maintaining of social norms and the function of socialization (leontiev, 1974). modern french researchers of mass communication identify fi ve functions of mass communication, which are called highly metaphorical: the function of the antenna provision of society with information; the function of amplifi er an exaggeration of the facts and dramatization of the events; the function of focus the creation of focus of social and cultural movements changes; the function of the prism the formation of new behavior models; the function of echo preservation of symbols of social nature and the maintenance of social structure (deya, 1993). overview of approaches to identify the functions of the media sphere can be continued, as this is a key issue. however, for all their diversity the functionality defi nition logic of the media sphere is stable enough. basing on the existing approaches to the identifi cation of the social functions of the media sphere, and relying on a theoretical analysis of the role of the media sphere in the problematization of social contradictions, let’s identify the functions of the media sphere in the construction of socially important problems. the following nine functions can be named among the main of them. 1. communicative function, which consists in provision of communication between individual and collective subjects of problematization of social contradictions based on the creation of platforms, providing maintenance of the general discourse of socially important problems. 2. axiological function which provides joint development of discourse of value-semantic attitude to the identifi ed socially important problem by the subjects. 3. the function of socio-political socialization, which allows involving wide groups of citizens who previously avoided active involvement in social and political life in process of setting, discussing and solving socially important problems. 4. the educational function, which consists in development of the ability of the subjects of problematization of social contradictions to think independently and responsibly. 5. integrative and disintegrative function, which is expressed bolshakov, et al.: multifunctionality of mediasphere in problematization of social contradictions international review of management and marketing | vol 5 • special issue • 2015 15 in the help, on the one hand, to combine efforts by various subjects in the settlement of socially important problems, and on the other hand to disengage the positions of participants of problematization of social contradictions and the identifi cation of different groups of interests, which should be agreed in the decision-making process. 6. confl ictological function which is related to the previous one and which consists in the timely identifi cation of confl ict factors of problematization of social contradictions and in the prevention of acute confl ict interaction. 7. the administrative function which consists in the ability of media environment to promote during the process of problematization of socially important contradictions the development of the managerial decisions, quality and effectiveness of which will depend on the concurrence of the positions of diverse interest groups involved in the process of construction of socially important problems. 8. the predictive feature which allows you to foresee the most undesirable forms of social contradictions, to identify potentially emerging problems and to set priorities and prospects of development of various spheres of public life. 9. humanistic function which consists in attraction of the various social subjects to non-violent actions in settlement of the existing social contradictions and the implementation of civil control over the activities of the authorities, which makes it possible to minimize the negative impact of bureaucracy, corruption, protectionism and other reasons non-reactivity of the authorities to socially important problems. however, along with these functions mediasphere may be dysfunctional in the process of problematization of social contradictions. in this case, there will be not only failures in exercise of the above functions, but also the development of negative consequences diametrically opposed to those which should be achieved as a result of the normal media sphere functioning in the described processes of problematization of socially signifi cant contradictions. for example, the communicative function can result in dysfunction associated with the emergence of communication barriers and the destruction of communications, axiological function dysfunction, expressed in the devaluation of value and the destruction of semantic sphere. the other functions can experience similar transformations. one of the demonstration forms of dysfunctionality of media sphere in the construction of socially important problems is the so-called phenomenon of “compassion fatigue” “compassion fatigue” is expressed in a loss of sensitivity to social problems and apathy. one of the fi rst empirical studies of this phenomenon is the work of kinnik, kregman and kamerona (kinnick et al. 1996). the phenomenon of “compassion fatigue,” is described by the authors as an unexpected side product of the functioning of the media sphere, one of the dysfunctions of which is “narcotizing” effect (the “narcotize dysfunction” of the media sphere was described by lazarsfeld and merton (lazarsfeld and merton, 1948). compassion according to the authors of the study means the social subject’s emotional reaction which is caused by empathy. the essence of this reaction is that the individual is mentally putting himself in the place of someone who is suffering which promotes consolidation of morality and the feeling of compassion. thus empathy is a dispositional characteristic that can be detected at various levels of social interactions. originally, the term “compassion fatigue” appeared in the studies of so-called “burnout,” which is experienced by people who help others professionally (doctors, social workers). in these professional groups weakening of compassion towards patients or clients was observed. as several studies show, including the study of hoffman (hoffman, 1993), there is a range of optimal level of empathy, in which individuals will most likely try to facilitate their empathic compassion, choosing a strategy of involvement rather than avoidance of assistance. outside this optimum range there is either low empathy condition in which compassion can be not intense enough to break through the selfi sh concentration of the subject on himself, or over-empathy condition, which causes so strong emotions that results in avoidance of compassion and, accordingly, in participation in assistance. however, the problem of the transfer of this hypothesis to the plan of study of social and political functioning of the media sphere requires additional grounding. this grounding is taken in the above study of kinnik, kregman and kamerona. according chernykh (2007), the term “burnout” was used extended for description of a wider social phenomenon, manifested in the reduction of interest in socially important problems. this phenomenon is explained by signifi cantly increasing fatigue of society of a ruthless fi lling of media sphere with pictures of numerous tragedies and disasters that are accompanied by requests to make a donation. it is evident that, the phenomenon “compassion fatigue” is also manifested in the political sphere, the modern transformation of which is largely explained by socio-political and civic apathy and “demobilization” of the society. the consequences of the phenomenon of “compassion fatigue” are rampant not only in terms of socio-political and civic apathy, but also in relation to the fundamental ability of communities to respond to social problems in general. in russia, such effects are the most dangerous, if to take into account the degree of “atomization” of society, fragmentation of social relations, a narrow radius of trust and extremely low indicators of social capital. in these conditions, “narcotizing dysfunction” of media sphere results in even more apparent indifference to socially important problems, bluntness of the feelings of care and compassion. the concept, which explains the phenomenon of “compassion fatigue,” explains the ineffi ciency of technology of drawing attention to charitable activities and donations which is widely used in the media sphere. these technologies are aimed at increase of coverage of social problems in order to cause a sense of compassion. it is obvious that such technology of promotion of charitable funds will not only have the opposite effect, but also lead to more massive dysfunction, expressed in the expansion of the ability of society to feel compassion. bolshakov, et al.: multifunctionality of mediasphere in problematization of social contradictions international review of management and marketing | vol 5 • special issue • 201516 5. conclusion construction of socially important problems in the media sphere has a certain dynamic that is expressed by its life cycle, refl ecting the growth and decline of public interest in a one or another problem. it is evident that, the repetition of the information about the problem creates the effect of saturation and fatigue of the negative images that are able to win compassion only to a certain limit. under the condition of such saturation addition reports about problem do not bring the desired result, and even have a negative rather than a neutral effect, which has quite measurable parameters (emotional, attitudinal and behavioral reactions of the audience to the problem). such cyclical effect is well studied on the material repetitive advertising messages, which initially cause a positive response, but after many repetitions often generate negative reactions (ray et al., 1971). however, the life cycle of media construction socially important problems depends not only on the frequency of repetition of information and the phenomenon of “compassion fatigue.” under the conditions of the information fi eld expansion and the saturation of media sphere with socially important information the competition between the problems for the public attention is inevitable. socially important problems also compete for the interest that people have concerning the events going beyond everyday life and immediate cares. such a “way out” beyond the immediate circle of the life world is possible as a result of such feature of media sphere as its omnipresence in everyday life. omnipresence is considered not only as an essential feature of modern mass media, but also as one of the grounds of mediacracy. the life cycle, in which you can maintain the interest of the communication participants to any problem will be shorter, and the degree of audience participation lower if the audience can not be in line with the fl ow of information about socially important problems. the iniquitousness of presence of the media sphere is provided by the expansion of communication channels, the convergence of the mass media, the frequency of messages in various media, which creates the effect of “normalization” of socially important problems (deviations resulted from such “normalization” is perceived as quite normal due to the apparent prevalence of the phenomenon). such “normalization,” blocking the ability to focus efforts, aimed at settlement of socially important problems and are provided by so practices of journalism that are based on the pursuit of sensational information, the predominance of negative news, the unwillingness to introduce broader context of socially important problems and to present the problem itself without discussion of the ways of its settlement. socially important problems in this case takes in the media sphere the form of large-scale crises and disasters with which the audience is diffi cult to be in line. the construction of socially important problems in the media sphere loses mobilizing aspects. in addition, in the revelatory journalistic analytics the existing institutions often appear to be ineffective, it also tears up possible foundations to search settlements of socially important problems. positive information, on the contrary, is often caused by the image motives and the need to “raise the rating” of a certain person or structure which also often leads to blocking constructive potential of positive information that distorts reality. as a result of the described features of the construction of socially important problems in the media sphere the anthropocentric world view and the subjective position of the recipients of information are destroyed. the problems appear as a result of actions of superhuman power, a fatal combination of circumstances, soulless state “machine,” etc. people in this context lose confi dence in their ability to infl uence the situation. the characteristic feeling of powerlessness in this case will block the joint efforts to settle the problems causing the apathy and indifference. on the ground of the analysis of dysfunctionality of media sphere in the setting and settlement of socially important problems, which manifest itself in the growing social apathy against problematization of social contradictions, we can make the following hypothesis. such negative trends in media construction of socially important problems can be mitigated if, fi rst, the information about the problem is less diffuse and more specifi c, being in line with the particular characteristics of more structured audience, second, the information itself is structured as a result of interactive interpersonal communication and, third, local knowledge of contexts of development and settlement of socially important problems is built in media constriction of socially signifi cant problems. all three conditions can be created in an interactive media environment. we can assume that interactive media are able to transform the life cycle of perception of socially important problems due to its ability to establish social interactions around the problems discussed. the stability of these interactions will depend on the 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5.0 and later.) >> /namespace [ (adobe) (common) (1.0) ] /othernamespaces [ << /asreaderspreads false /cropimagestoframes true /errorcontrol /warnandcontinue /flattenerignorespreadoverrides false /includeguidesgrids false /includenonprinting false /includeslug false /namespace [ (adobe) (indesign) (4.0) ] /omitplacedbitmaps false /omitplacedeps false /omitplacedpdf false /simulateoverprint /legacy >> << /addbleedmarks false /addcolorbars false /addcropmarks false /addpageinfo false /addregmarks false /convertcolors /noconversion /destinationprofilename () /destinationprofileselector /na /downsample16bitimages true /flattenerpreset << /presetselector /mediumresolution >> /formelements false /generatestructure true /includebookmarks false /includehyperlinks false /includeinteractive false /includelayers false /includeprofiles true /multimediahandling /useobjectsettings /namespace [ (adobe) (creativesuite) (2.0) ] /pdfxoutputintentprofileselector /na /preserveediting true /untaggedcmykhandling /leaveuntagged /untaggedrgbhandling /leaveuntagged /usedocumentbleed false >> ] >> setdistillerparams << /hwresolution [2400 2400] /pagesize [612.000 792.000] >> setpagedevice tx_1~at/tx_2~at international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2022, 12(1), 11-18. international review of management and marketing | vol 12 • issue 1 • 2022 11 the mediating role of age productivity on human resources development, health infrastructure, and proverty level antoni pestaria*, kamaludin, husaini, fadli universitas bengkulu, bengkulu, indonesia. *email: antonp.1921@gmail.com received: 20 september 2021 accepted: 17 december 2021 doi: https://doi.org/10.32479/irmm.12539 abstract poverty is a classic problem in many regions in indonesia, including the bengkulu province. there are several causes of poverty case in bengkulu, three of which are low human resources, inadequate rural health infrastructure, and less productive population with productive working age. the purpose of the study is to examine (1) the influence of human resources management, health infrastructure, and productive age partially on poverty in bengkulu province, and (2) the influence of human resources, health infrastructure respectively through mediation of productive age on poverty in bengkulu province. this study uses a quantitative descriptive approach using secondary data. the research population is all districts/cities in bengkulu province totalling 9 districts and 1 city in 2010-2019. this study uses saturated sampling. the data was then processed and analyzed using sem-pls. the results of the study show that human resources proxied by the human development index (hdi) had a positive effect on the poverty level, health infrastructure had no effect on the poverty level, productive age had no effect on the poverty level, productive age was not a mediating variable between resources and the poverty level, so that cannot be used as a mediating variable, and productive age does not mediate the effect of health infrastructure on poverty levels in bengkulu province. keywords: human resources, health infrastructure, poverty levels, productive age jel classifications: m48 1. introduction the situation of poverty in general is a trigger for national economic growth and the difficulty of improving people’s living standards. however, until the early twentieth century, public policies to address the problem of chronic poverty and destitution did not exist, the implication being that poverty was considered a way of life with little that could be done (moges, 2013). the theory of growth and poverty states that when trying to reduce poverty it will slow down the rate of economic growth (todaro and smith, 2012). this is in line with the argument that countries with lower inequality will experience slower economic growth. this argument tends to refute the classical economic growth theory. this is the reason why it is important to analyze the impact of economic growth on poverty (hariadi, 2009). in theory, according to becker (1962), mincer (1958), schultz (1961), the variable that is thought to have an effect on poverty is human capital (human resources/hr) which refers to the level of education of people living in certain areas. human resource development is said to be very important in developing the quality of human resources which plays a very important role in reducing poverty. early theories regarding this relationship originated from writings that believed that human resource development could invest in economic growth through education, health, and training which in turn would increase yields and contribute to economic growth. in the knowledge economy era, the key to international competition is the development of high-quality human resources (wang and liu, 2016). based on data from the statistical bureau of bengkulu province (bps), property of human resources can be used as a benchmark this journal is licensed under a creative commons attribution 4.0 international license pestaria, et al.: the mediating role of age productivity on human resources development, health infrastructure, and proverty level international review of management and marketing | vol 12 • issue 1 • 202212 in measuring the poverty level of the population, namely through the poverty depth indicator (p1) and the poverty severity index (p2). the poverty depth index in urban areas of bengkulu province increased by 0.036 in september 2019 compared to the same period in the previous year. in rural areas which also experienced an increase of 0.113. for the poverty severity index in the same period, urban areas experienced an increase of 0.01 and in rural areas 0.04. overall when compared between these two regions, it can be concluded that the poverty depth index and poverty severity index in rural areas are higher than in urban areas. there are several causes of poverty in bengkulu, three of which are low human resources, inadequate rural health infrastructure, and less productive population with productive working age. the theory used is the development of theories regarding the level of poverty, human resources, productive age of the population, and health infrastructure. theoretically in the field of psychology, according to sarlo (2019) that complex poverty is caused by two causes, namely: structural causes and cultural causes. furthermore, according to mani et al. (2013) the occurrence of poverty is caused by bad human behavior in making decisions. these bad behaviors include impulsive and intuitive behavior. this bad behavior is caused by a decrease in self-control, stress, and external negative pressure so that it adds to the burden of processing individual thoughts. through this study, it will also be known what the dimensions and indicators of each variable are as the main predictors of poverty in this province. the implication is that the findings of this study will be able to make a positive contribution to the creation of good governance that leads to good governance and poverty alleviation for the future which of course must start from each district/city which will then be accumulated gradually. comprehensive (one province). 2. literature review 2.1. poverty and the index according to lewis (1966), poverty is caused because someone is not able to enter the market competition. patterson (2000) also supports lewis’s opinion. they argue that poverty is a cultural product. the product of culture begins with individual deficiencies in some form of physiological and mental development which causes individuals to lack in education and health. the children it carries will become increasingly uneducated and less healthy. as these conditions continue, they adjust their behavior to create an interdependent generation that sustains a culture of poverty (jordan, 2004; bradshaw, 2009). income poverty is closely related to the level of average income and the distribution of income relative to the average per capita or per household income. for countries with somewhat similar average income levels, income distribution has a direct effect on the incidence and depth of poverty. this relationship affects how income growth rates can be used for poverty alleviation purposes. in other words, countries with an initial egalitarian pattern of income distribution can translate their growth performance into strong reductions in the incidence and depth of poverty (kanbur, 2005). poverty alleviation can also be accelerated if the income distribution pattern in developing countries is more egalitarian (fosu, 2011). in order for this research to be more focused and focused, the theories and concepts used to measure the poverty variable in this study use a combination of theories and concepts proposed by (1) gordon and spicker (2007) with the dimensions of absolute poverty and relative poverty and, (2) world bank (2001) with the dimensions of community income. so, the number of dimensions for this variable is three dimensions. meanwhile, the central bureau of statistics defines poverty as an approach to the inability of the community to meet basic needs in terms of the economy, both food and non-food, with an average monthly per capita expenditure below the poverty line. the measure of poverty based on the method used by the central bureau of statistics (2019) is the poverty line while the poverty rate is measured by the concept of the head count index (hci-p0) or calculating the number of poor people below the poverty line. the human development report (hdr) and the central statistics agency for riau province (2019) state that human development is a process to increase the choices people have. among the many choices, the most important choice is to live a long and healthy life, have knowledge, and have access to the resources needed to live properly. the measure of poverty based on the method used by the central bureau of statistics (2019) is the poverty line while the poverty rate is measured by the concept of the head count index (hci-p0) or calculating the number of poor people below the poverty line, which is then called the poverty depth index (ikm). 2.2. human resources development index economists agree that human resources (hr) is an important determinant of economic growth (arrow, 1962; aghion and howitt, 1992). human resource growth generally concludes the positive impact of both with the help of developed theories and available empirical evidence. the general conceptualization of the role of humans as a source of economic activity and economic growth refers to many attributes (muhammad et al., 2016). a large number of studies have found evidence that an educated workforce is a major determinant of economic growth (barro, 1991; mankiw et al., 1992; barro and sala-i-marin, 1995). other studies examine the importance of human resources as a substantial determinant of economic growth (krueger and lindahl, 2001). the human development index (hdi) has four human development indicators used in hdr which consist of (alkire, 2010): 1. the main aim of all development exercises is to improve the human condition and enlarge people’s choices. human development is a means to higher productivity. a wellmaintained, healthy, educated and skilled standby workforce is the most productive asset. therefore, investment in these sectors is justified on the basis of productivity. this helps to reduce the rate of population growth. pestaria, et al.: the mediating role of age productivity on human resources development, health infrastructure, and proverty level international review of management and marketing | vol 12 • issue 1 • 2022 13 2. human development is also friendly to the physical environment. deforestation, desertification, and soil erosion decrease as poverty declines. 3. better living conditions and poverty reduction contribute to a healthy civil society and greater social stability. 4. human development also helps reduce civil disturbances in society and in enhancing political stability. in measuring the human development index (hdi) using the theories and concepts put forward by the united nations development program/undp (1990) adopted by bps which refers to the hdi with three indicators including longevity and a healthy life, knowledge, and a decent standard of living. 2.3. health infrastructure infrastructure as the sum of the material, institutional, and personal facilities and data available to economic agents and which contribute to realizing an equitable distribution of remuneration for inputs that are commensurate with the allocation of resources according to the complete integration and maximum level of economic activity (jochimsen, 1966). based on some of the opinions above, it can be concluded that infrastructure is all forms of facilities and infrastructure found around the community’s living environment aimed at improving the welfare of the community. to be able to optimize its objectives, the government issued a number of policies whose main goal is the existence of various existing infrastructures in accordance with their designation. according to buhr (2003), the broadest economic version of the term ‘infrastructure’ refers to list jochimsen’s (1966) work on infrastructure theory, where jochimsen aims to present a preparatory study for a modern theory of market economic development based on the study of infrastructure. according to clark et al. (1981) health infrastructure is the most important thing in order to reduce or alleviate poverty in an area because health is the main thing for humans to continue their daily activities. the role of health infrastructure in reducing poverty is more access to infrastructure services which also affects the realization of the sustainable development goals (sdgs). the contribution of infrastructure to the sdgs is reflected in increasing productivity and welfare among the poor, thereby optimizing the coverage and quality of services offered through improving education, health, transportation services, energy, information technology and basic sanitation (douthit and alemu, 2016; foster et al., 1984). the measurement of health infrastructure refers to a study conducted by mardiana et al (2017) using ik (health infrastructure) as a proxy, namely by using a comparison between the number of health facilities in the district and city areas to the total population of districts and cities. 2.4. productive age the productive age population is considered as part of the population that takes part in ongoing employment activities. they are considered capable in the employment process and have the burden to bear the lives of residents who are included in the category of unproductive and non-productive population. the current productive age population is not only dominated by people with an age range of over 20 years who have completed their education. currently, many young people who are still in school have their own businesses. in some cities such incidents are common. the involvement of young people in work begins as assistants in family businesses, before finally starting their own business. the productive age ranges from 15-64 years which is the ideal age for workers. in the productive period, in general, as you age, your income will increase, which also depends on the type of work you do. a person’s physical strength to carry out activities is closely related to age because when a person’s age has passed the productive period, his physical strength decreases so that productivity decreases and income also decreases. thus, this study uses indicators for measuring productive age adopted from research by anwar and fatmawati (2018), namely by comparing the number of residents of productive age (15-64 years) in districts and cities to the total population of districts and cities. 2.5. research model and hypotheses the current study combines 3 variables (hr, health infrastructure, and productive age) to analyze poverty variables, especially those in bengkulu province today. this will also be a novelty in the current research. the urgency of this research will be known through which of the two exogenous variables and the two mediator variables that affect poverty in bengkulu province. based on these factors, the main (dominant) causes of poverty in districts/ cities in this province will also be known. through this research, it will also be known what the dimensions and indicators of each variable are as the main predictors of poverty in this province. the implication is that the findings of this study will be able to make a positive contribution to the creation of good governance that leads to good governance and poverty alleviation for the future which of course must start from each district/city which will then be accumulated gradually. comprehensive (one province). exogenous variables (x) which consist of human development index/hdi (x1), health infrastructure (x2). the mediator variable used is the productive age of the population (m1) (figure 1). the endogenous variable is poverty in bengkulu province (y). because there is no research that examines poverty in terms of the influence of the human development index/hdi and health infrastructure with the mediation of the productive age population variable. hypotheses on this research are: h1: human development index/hdi has an effect on poverty in bengkulu province h2: health infrastructure affects poverty in bengkulu province h3: the productive age of the population affects poverty in bengkulu province h4: human development index/hdi has an effect on poverty in bengkulu province through the productive age of the population h5: health infrastructure affects poverty in bengkulu province through the productive age of the population 3. research method this study uses a quantitative descriptive approach, in accordance with the problems and objectives to be studied, namely to explain pestaria, et al.: the mediating role of age productivity on human resources development, health infrastructure, and proverty level international review of management and marketing | vol 12 • issue 1 • 202214 the influence of human development resources (hdi) and health infrastructure on poverty levels mediated by productive age. the research approach used is explanatory research which will explain the position of the variables studied and the relationship between one variable and another through a hypothesis. the research population used is all districts/cities in bengkulu province. with a total of 9 districts and 1 city in bengkulu province in 2010-2019. in this study, the measurement of human resources refers to research conducted by faqihuddin (2010) using the human development index (hdi) as a proxy. the formula for calculating hdi is as follows: ipm = 1/3 xi = 1/3 [x(1)x(2)+x(3)] information: x(1) = life expectancy index. x(2) = 2/3 (literacy index) + 1/3 (average length of schooling index). x(3) = adjusted per capita consumption index. health infrastructure (hsi) is expenditure for the construction of health facilities and infrastructure carried out by the bengkulu provincial government. in this study, the measurement of health infrastructure refers to the research conducted by mardiana et al (2017) using ik (health infrastructure) as a proxy. therefore, ik is calculated using the following formula: number of regency and city health facilities hsi= jnumber of regency and city population the mediating variable used in this study is productive age (pa). the productive age is the age that produces goods and services. bps takes age 15 years or older than the previous year’s working age limit. the measurement of productive age was adopted from anwar and fatmawati (2018) research conducted by the following formula: amount of age 15-64 in regency and city pa= total population of regency and city we operate path analysis techniques to examine the effect of the independent variable and the dependent variable and to analyze the direct and indirect intermediaries between the independent variables and the dependent variable through the mediating variable. the data analysis technique in this study used sem-pls. 4. results and discussion 4.1. the results of measurement model test the evaluation of the measurement model aims to see the influence between variables that will validate the model and test the reliability of its construct as the theory used and previous empirical research. this evaluation stage starts from testing the reliability of the construct using composite reliability (cr), average variable extracted (ave), and cronbach’s alpha. the outer model meets the convergent validity requirements for reflective indicators, if the loading factor is above 0.70 and the p-value is significant (<0.05), the loading factor between 0.40 and 0.70 should be considered to be maintained. the deletion of the 0.40-0.70 indicator is carried out if the impact of the deletion of the indicator can increase the average variance expected (ave) and composite reliability (table 1 and figure 2). to test the reliability of reflective constructs in this study, cronbach’s alpha, composite reliability and average variable extracted (ave) bases were used with results showing that the values of all constructs were greater than cronbach’s alpha minimum >0.7, composite reliability 0, 70, and ave 0.5. cronbach’s alpha value and composite reliability value of all research constructs is greater than 0.70. thus, it can be concluded that all latent variable constructs meet the reliability test criteria. the high value of cronbach’s alpha and composite reliability in this study, because the calculated parameters are parameters that have been previously valid. the validity test in this study was carried out using convergent validity and discriminant validity as described in the previous chapter. convergent validity assessment is carried out by looking at the average variable extracted (ave) value with the criteria that if the ave value is >0.5, then the indicators used have met the requirements of convergent validity (hair et al., 2012). the results of the ave value in this study are presented in table 2. table 1: result of measurement model test year hdi health infrastructure (hi) poverty index (pi) productive age (pa) 2010 0.998 0.918 0.981 1.000 2011 0.999 0.908 0.999 1.000 2012 1.000 0.960 0.999 1.000 2013 0.997 0.581 0.999 1.000 2014 0.996 0.665 0.999 1.000 2015 0.999 0.480 0.999 1.000 2016 0.999 0.935 0.999 1.000 2017 0.998 0.924 1.000 1.000 2018 0.996 0.916 0.996 1.000 2019 0.994 0.902 0.995 1.000 source: data processed 2020 hrd index (x1) health infrastructure (x2) (x2) productivity age (m) poverty index (y) figure 1: research model source: adapted from gordon dan spicker (1999); world bank (2001; 2002). pestaria, et al.: the mediating role of age productivity on human resources development, health infrastructure, and proverty level international review of management and marketing | vol 12 • issue 1 • 2022 15 testing the measurement model (outer model) through three assessment criteria, namely convergent validity, discriminant validity, and composite reliability. the measurement results after going through two stages show that all indicators have a loading factor value of > 0.50 so it can be concluded that the outer model has met the criteria for convergent validity. 4.2. result of structural model test the results of testing the structural model (inner model) can be seen in the r-square (r2) for the dependent variable, the path coefficient value of the t-value of each path between variables. the path coefficient value and t-value of each path will be explained in the sub-discussion of the results of hypothesis testing. the value of r2 is used to measure the level of variation of changes in the independent variable to the dependent variable (hair et al., 2012). the higher the r2 value, the better the prediction model and the proposed model. based on table 3, the r2 value for the poverty level variable is 0.480, meaning that the poverty level can be explained by 48% by the variation of the variables (hdi, health infrastructure, and productive age), and the remaining 49% is influenced by other factors not included in this research model. the r2 value for the productive age variable is 0.749, meaning that the productive age can be explained by 75% by variables (ipm, and health infrastructure) and the remaining 25% is influenced by other factors not included in this research model. structural model testing (inner model) and hypothesis testing are measured or evaluated with a value of determination (r2). figure 3 is the result of structural model measurement based on sem. 4.3. hypotheses test we refer to the critical ratio value which is ±1.96 at a significance level of 0.05. if the critical ratio value is greater than ±1.96 then the causal relationship between the two constructs is significant. the existence of a positive or negative sign on the critical ratio value indicates a directly or inversely proportional relationship between the constructs tested in the study. the path coefficient table on the smart pls output can be seen in table 4. based on the p-value and path coefficient value to see the influence of hr on the poverty level, it can be concluded that the hr variable has a positive and proven significant effect on the poverty level. the results of testing hypothesis 1 (h1) which states that human resources can increase the level of poverty (supported). the higher the human resources, the human resources owned by the regency and city in bengkulu province will have an impact on increasing the level of poverty. health infrastructure has a positive and insignificant effect on the level of poverty. this can be seen from the p > 0.05 and the positive path coefficient value. a positive value on the path coefficient indicates the influence between health infrastructure and poverty table 2: result of ave estimation variable average variable extracted (ave) human development index (hdi) 0,995 health infrastructure 0,698 productive age 1,000 poverty index 0,993 source: data processed 2020 table 3: result of ave estimation variable r-square adjusted r-square productive age 0,783 0,749 poverty level 0,480 0,350 source: data processed 2020 figure 2: measurement model test pestaria, et al.: the mediating role of age productivity on human resources development, health infrastructure, and proverty level international review of management and marketing | vol 12 • issue 1 • 202216 levels is unidirectional. these results indicate that human resources have an insignificant role in increasing the level of poverty. based on the p-value and path coefficient values to see the effect of health infrastructure on the poverty level, it can be concluded that the health infrastructure variable has a positive effect and is proven not to be significant on the poverty level. the results of testing hypothesis 2 (h2) which states that health infrastructure has not been able to increase the level of poverty (rejected). the more health infrastructure owned by the regency and city has no effect on the poverty level in bengkulu province. productive age has a negative and insignificant effect on the level of poverty. this can be seen from the p > 0.05 and the positive path coefficient value. a positive value on the path coefficient shows the opposite effect between productive age and poverty levels. these results indicate that the productive age has an insignificant role in reducing poverty levels. based on the p-value and path coefficient value to see the effect of productive age on the poverty level, it can be concluded that the variable of productive age has a negative effect and is proven to be insignificant to the poverty level. the results showed that the productive age had no effect on the level of poverty. the results of testing hypothesis 3 (h3) which states that the productive age has not been able to reduce the poverty level (rejected). path analysis result indicate that the coefficient value of the hr path to the poverty level before being included in the mediation variable and hr to the poverty level after being included in the mediation variable decreased from 1.030 to −0.166 and the p-value which was initially significant (<0.05) became insignificant. (0.17). according to hair et al. (2012), when the value of the path coefficient of the independent variable to the dependent value decreases and is not significant, then the form of mediation that occurs is full mediation. in addition, the results of the direct influence of human resources on the productive age and the results of the effect of the productive age on the poverty level have insignificant results. thus, it can be concluded that there is no indication that productive age mediates the influence of human resources on poverty levels. thus, hypothesis 4 (h4) which states the influence of human resources on the level of poverty with productive age as a mediating variable is rejected. the coefficient value of the health infrastructure path to the poverty level before being included in the mediation variable and health infrastructure to the poverty level after the mediation variable was included decreased from 0.323 to 0.183 and the p-value which was initially insignificant (>0.05) became insignificant (0.77). according to hair et al. (2012), when the value of the path coefficient of the independent variable to the dependent value decreases and is not significant, then the form of mediation that occurs is full mediation. in addition, the results of the direct effect of health infrastructure on the productive age and the results of the effect of the productive age on the poverty level which were initially insignificant became significant. thus, it can be concluded that there is no indication that productive age mediates the effect of health infrastructure on poverty levels. thus, hypothesis 5 (h5) which states the effect of health infrastructure on poverty levels with productive age as a mediating variable is rejected. 4.4. discussion the results of this study indicate that districts and cities in bengkulu province have good human resources with a high average length figure 3: result of structural model table 4: structural model hypothesis testing results direct effect without mediation path relationship path coeficient standar deviation t-statistic ipm tk 1,030 0,500 2,059* ik  tk 0,323 0,648 0,499 up  tk −0,214 0,309 0,694 direct effect with mediation path relationship path coeficient standar deviation t-statistic ipm  tk −0,166 0,201 0,827 ipm  up 0,355 0,247 1,357 ik  tk 0,183 0,256 0,714 ik  up −0,162 0,181 3,382** pestaria, et al.: the mediating role of age productivity on human resources development, health infrastructure, and proverty level international review of management and marketing | vol 12 • issue 1 • 2022 17 of education. however, based on the results of observations and observations that have been made by researchers, there is a phenomenon that many people who are categorized as having good and qualified education choose to find work outside bengkulu province in the hope of getting a better job for their future. while the workforce in bengkulu province itself is far more people who work as employees in the informal private sector. that’s why poverty in bengkulu province remains in a position that is not reduced. poverty is seen not only in the sense of lack of income or adequate consumption, but as a state of deprivation that includes socio-economic aspects of life. the use of one indicator for “poor” is not sufficient to capture poverty conditions. there is also limited value in suggesting areas of policy formulation and program interventions. a more useful approach to understanding the conditions of poverty and the processes that generate it is to expand the analysis of poverty in a multi-dimensional manner and in addition to examining aspects of the welfare of the poor including their access to certain goods, services and functions. the results of this study are in line with yusuf and dai (2020) which revealed that hdi has a positive effect on poverty levels. human resource development and poverty alleviation are important. this issue has important policy implications because appropriate investments to improve the quality and quantity of human resources can be an important element in poverty alleviation strategies. in this regard, interventions in areas such as education, skills building, health and nutrition can have a positive impact on the characteristics of the labor market with large potential returns and can reduce poverty. with economic reforms progressing, a skilled, healthy, trained and literate workforce is much more likely to attract foreign investment and contribute to the success of a region’s growth strategy. the current study explores the relationship between human resource development and poverty to provide a broad range of policy options, particularly in the context of labor demand constraints. for this reason, the government needs to focus on developing existing human resources in order to meet the demands of the labor market so as to reduce population poverty. the low productive age results in limited self-development capabilities and causes narrow employment opportunities so that poverty in bengkulu province remains high. people living below the poverty line have limited access to productive age, thus causing low quality of human resources which has an impact on productivity levels, so that the income of the poor is low. the low productive age causes bengkulu province to have minimal mastery of science and technology. most of the population of bengkulu province still lacks good skills and expertise. as a result, most residents of bengkulu province choose to work in sectors that do not require special skills. productive age has no significant effect on data poverty due to the gap between productive age and employment level in bengkulu province. the gap is a mismatch between the work obtained and the productive age, resulting in low income. according to ragnar nurkse, low income has implications for low savings and investment. this low saving and investment causes underdevelopment and so on, resulting in poverty. this study is not in accordance with the results of research conducted by clark et al. (1981) found that productive age can reduce the level of poverty in an area balanced by health facilities and infrastructure. this indicates that the increasing productive age is not accompanied by better health infrastructure which has an impact on the increasing poverty rate, marked by a decrease in the number of residents in the district/city of bengkulu province to take advantage of the health infrastructure prepared by the government. one way to describe individual capabilities is through the educational dimension. the higher the education, the higher the individual’s capability so that it increases the individual’s opportunity to break the cycle of poverty. seeing the importance of the education dimension, development is needed to increase individual capabilities. development can be classified into two types, namely physical development and non-physical development, according to todaro (2000, p. 20). this theory should be adopted by the authorities to be able to process in reducing poverty. 5. conclussion in this study we raised the health infrastructure variable to measure poverty in bengkulu province. there is a fundamental difference found that many previous studies discussed the relationship between infrastructure to public spending and economic growth (cohen and paul, 2004; czernich et al., 2011; daido and tabata, 2013; dalenberg and partridge, 1997; démurger, 2001; duffydeno and eberts, 1991; elburz et al., 2017; esfahani and ramırez, 2003). this research is based on the opinion of cohan (2017) that health, including through health infrastructure, can be a factor that will affect the poverty level of the population. the poverty variable uses a combination of theories and concepts proposed by gordon and spicker (2007) with the dimensions of absolute poverty and relative poverty, while pouliken (2010) uses the dimensions of people’s income. the use of a combination of both theories and concepts with the consideration that the theories and concepts of gordon and spicker (2007) are very common and very widely used by other researchers. basically, relative poverty is also a relative dimension, so this dimension is considered less able to provide a real picture of poverty in bengkulu province. therefore, the community income dimension is added by (pouliken, 2010). so, the number of dimensions for this variable is three dimensions. the combination of the two opinions is the first novelty in this study. the current study combines 3 variables (hr, health infrastructure, and productive age) to analyze poverty variables, especially those in bengkulu province today. in poverty alleviation, it cannot be seen as one-dimensional or homogeneous, so interventions that fail to take into account the specific status and conditions of the poor will inevitably fail. programs need to be tailored to meet the requirements of specific target groups, as there is considerable differentiation among the poor in terms of their ability to benefit from the program. in particular, the core poor are people who are difficult to reach, and given their particular circumstances and attributes. pestaria, et al.: the mediating role of age productivity on human resources development, health infrastructure, and proverty level international review of management and marketing | vol 12 • issue 1 • 202218 the problem of poverty covers a wider range than just a mere monetary problem (world bank, 2005). there are many aspects or dimensions that can cause the phenomenon of poverty, such as health, demographic structure, accessibility, economy, education, social capital, and resources. references adeoti, o., falegan, t., idowu, d.o.o. 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(2020), the impact of unemployment and human development index on poverty in gorontalo province 2008-2017. jambura equilibrium journal, 2, 7-16. 10_kurysheva.indd international review of management and marketing | vol 5 • special issue • 2015 67 special issue for "media as the tool: management of social processes" international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2015, 5(special issue) 67-72. global journalism: main aspects of conceptualization yulia vladimirovna kurysheva1*, anatoli stepanovich puiy2, anna alexandrovna litvinenko3, aleksei yuryevich bykov4, iuliia sokratovna danilova5 1saint-petersburg state university, universitetskay naberejnay 7/9, saint-petersburg 199034, russia, 2saint-petersburg state university, universitetskay naberejnay 7/9, saint-petersburg 199034, russia, 3saint-petersburg state university, universitetskay naberejnay 7/9, saint-petersburg 199034, russia, 4saint-petersburg state university, universitetskay naberejnay 7/9, saint-petersburg 199034, russia, 5saint-petersburg state university, universitetskay naberejnay 7/9, saint-petersburg 199034, russia. *email: yuliakurysheva@gmail.com abstract globalization processes and development of information and communication technologies have led to fundamental changes in understanding of journalism as a social process. the concept of global journalism needs conceptualization, as at the present stage the practice of professional activities is isolated from the theoretical framework. this article analyzes the main scientifi c approaches to the study of globalization processes in journalism and structures the main aspects of conceptualization of understanding the global journalism. their basic theoretical and empirical evidence and refutation are formulated. keywords: global journalism, global discourse, transnational information space jel classifi cations: o3, o32, o33, z13, d83 1. introduction development of civilization is directly related to innovations in the life activity of society, while the innovations in everyday life have an impact on all aspects of public life. journalism is a constant witness to the changes that occur in our daily lives, and at the same time, under the infl uence of these changes, journalism itself transforms, while maintaining its status of public interest. some authors believe that news journalism is becoming more and more global (reese, 2008). however, development of concepts of transnational journalism, the journalism that crosses national borders, is uneven and not systematic due to natural causes – the difference in national journalistic cultures. professional practice in the fi eld of regional, supra-national, international, global journalism is ahead of the theoretical basis, which expires prior to receiving suffi cient argumentation base. however, the problem of conceptualizing of the term remains relevant, despite the validity of the differences in approach. development of globalization processes and information technology allowed to assess the social, political and economic signifi cance of information of mass proportions. development of cross-border communication changes practice, models and elements signifi cant to journalism. restructuring of media system, emergence of new elements, new connections and relations between the elements affect the subjects of mass communication. the content side of journalism is also transformed: the ratio of national, international, global content is reviewed in terms of relevance to audiences. as a result, professional and strategic part of journalism changes, which is infl uenced by globalization processes. in this respect, an attempt to systematize the approaches to understanding the term “global journalism” seems theoretically signifi cant and almost timely. 2. methodology in this article, we analyzed the scattered researches and concepts of the global journalism, formulated principles of classifi cation kurysheva, et al.: global journalism: main aspects of conceptualization international review of management and marketing | vol 5 • special issue • 201568 of approaches to understanding the term, based on which we formulated several aspects of its conceptualization. each aspect is accompanied by an argumentation base in the form of historical facts and contemporary examples that demonstrate various types of globalization of journalism in spatial, substantive, organizational relationships. the technique used in this article is justifi ed at the attempt of trying to systematize multidimensional concepts that do not have a single defi nition; the fi ndings of such scientifi c works stimulate further study of the phenomenon, taking into account the totality of the views on it that are already formed. the research is based on the most complete variety of scientifi c and theoretical works, empirical studies of global processes in journalism, historical literature on foreign and international journalism, documents and annual reports of global and regional media companies. 3. findings 3.1. global journalism: geographical aspect in macro perspective, the study of global journalism focuses on the breadth of outreach by individual mass media. globality of the media is associated with globality of the audience. dependence of journalism from national sociopolitical context has been well studied in the theories of the press. journalism has national expression. the mass media system is functioning in a national society that abides by certain cultural, political, economic and social laws. that’s why hallin and mancini in their comparative study come to a conclusion of the existence of different models of media systems and the lack of homogeneity in them (hallin and mancini, 2004). reprint information from other newspapers and newspapers from abroad are characteristic for the fi rst stage of european journalism, us journalism and journalism of colonies. advances in technology of information dissemination beyond the control of the state borders have led to rapid development of infrastructure of transnational mass media. multiple forms of geographical expression of globalization of journalism can be singled out. long before the information technology enabled information to freely overcome the border, news agencies began to acquire global information signifi cance. a small number of news agencies affected the agenda of the national mass media. in the 19th century, new types of media organizations – international news agencies – appeared. since 1856, following the colonialist interests of the countries in which they originated, these news agencies, while trying not to interfere with each other, divided the global information space into spheres of infl uence (desbordes, 2008). the global role of the international news agencies, especially “reuters,” “associated press,” “united press international” and “france press,” has come under close attention immediately after the second world war, when “after the announcement of unesco there was a common belief that this ‘big four’ dominates international information fl ows” (putnis, 2014). the next step on the way to establishment of a global journalism was formation of transnational media corporations. global media economics has a short history, media system actually were nationally oriented before 1980s. despite the development of international information fl ows, including the exchange of video and television programs, broadcasters and newspapers were mostly national and existed under national laws. development of satellite technology has led to a revision of regulation, and “as soon as by 1990, the two largest media groups in the world – ‘time warner’ and ‘disney’ received more than 15% of the total income outside the united states. by 1997, this fi gure increased to 30-35%” (mcchesney, 2014). today, there are a few media giants at the global media market. for example, “bertelsmann” is represented in 50 countries. “gannett company” with the help of a wide network of mass media covers more than 110 million people a month. subsidiary company of “news corporation,” “dow jones,” covers business news in all regions of the world. since 1967, dow jones has had journalists in all major fi nancial centers in europe, asia, latin america, australia and africa. “time warner” is the largest media company, mass media of which cover more than 200 countries in 45 languages. spanish media group “grupo prisa” focuses on the hispanic population of the world, covering 22 countries through its mass media (argentina, bolivia, brazil, chile, colombia, costa rica, dominican republic, ecuador, el salvador, guatemala, honduras, mexico, panama, paraguay, peru, portugal, puerto rico, spain, united kingdom, uruguay, usa, venezuela) for more than 7 years (grupo prisa informe annual, 2008). foreign versions and applications to national publications gradually became a phenomenon of everyday reality for earlier national media systems. for example, the newspaper “financial times” is released in 24 cities around the world under a single brand; editions of the uk, european, asian and the us publications don’t differ much. as of 2014, market circulation of the uk edition was 65,620 copies, the circulation of european edition was 72,317 copies, asian edition – 31,546 and the us – 42,693 copies (financial times. national newspaper cross platform circulation certifi cate no. 46882989, issued october 10, 2014/www.abcstandards.org.uk.). overcoming national borders through projects for foreign audiences, an example of which is the project of “russian newspaper,” “russia beyond the headlinesm,” – a multilingual information resource for an audience outside of russia. it is created by an independent editorial staff, offers news and commentary on major topics and events in russia in 23 countries in 16 languages. total coverage of the audience is 34.5 million readers through print and electronic versions. geography of the project outreach is broad – the us, britain, france, belgium, italy, spain, germany, luxembourg, serbia, bulgaria, greece, macedonia, argentina, brazil, uruguay, japan, china, hong kong, korea, india, thailand, australia. in some countries, the project covers more than one newspaper. global television news networks, as well as news agencies, cover the audience around the world. they go far beyond national borders; in february 2009, a weekly global audience of “bbc global news” was 238 million people, a previous record fi gure was 188 million, but due to the new bbc arabic television channel, this fi gure had grown ( bbc’s international news services attracts kurysheva, et al.: global journalism: main aspects of conceptualization international review of management and marketing | vol 5 • special issue • 2015 69 record global audience of 238 million. m2presswire. february 06, 2009). since 2005, tv channel “russia today” is broadcasted over more than 100 countries; in 2012, broadcasters’ audience research board in the uk included “russia today” in the offi cial weekly ranking on a par with “euronews” and “fox news.” they “do not just provide people with the information necessary for an adequate understanding of global politics, but also bring new journalistic standards into national practice” (chalaby, 2003), “transnational media corporations are potentially involved in the construction of a global, or at least transnational public sphere” (chalaby, 2003). development of internet media technologies. some authors believe that the only truly transnational communication tool is the internet. in fact, it provides a network of sources of information and points of access to them regardless of frontiers and traditional mass media tied to physical media and retranslators. global network of the internet ensured a situation where information about the events originating outside the national media system is not limited to the immediate access to a primary source media in the fi rst place. electronic versions of virtually every national and large regional mass media are currently available to audiences in different countries. new indicators appeared in ratings and statistics: total audience of the edition (traditional and electronic), the number of unique visitors to the site for the period. thus, the total audience of mass media that belongs to traditional national media system is by a huge ratio greater than the audience of its traditional parent mass media, dependent on circulation (in the case of print media) or the availability of air time (in the case of electronic media). for example, as of december 2012, the monthly total readership of the newspaper “the guardian” was 68.6 million unique users, of which 12.7 were in the uk, 17.1 in the us. at the same time, the circulation of the printed version does not even reach half a million – 204,839 copies daily (the guardian audience story, 2013). in addition to traditional media, other sources of information become available to the public on the internet: from the formal to the so-called civil. 3.2. global journalism: discursive aspect micro perspective of global journalism is focused not so much on the system, but on its content part. geographic characteristics of outreach of mass media can’t fully characterize the phenomenon of global journalism. global journalism is out of the category of territoriality, it does not depend on national or regional boundaries. according to hafez, “there is no suffi cient empirical evidence of the existence of the media system that can reliably be called global in terms of the possibility of creating a global public sphere” (hafez, 2007). the global nature of the internet has also been questioned because, fi rstly, the internet is used locally – for communication with others for the most part, rather than for inclusion in cultural interaction at the supranational level (olausson, 2013). secondly, digital gap remains at national and international level. thirdly, the internet discourse fi eld is heterogeneous due to linguistic factor if nothing else. two basic forms of global journalism can be distinguished in terms of discursive approach. adaptation of the global agenda to the interests of the national audience – the study of foreign news through the prism of national discourse (clausen, 2004). so, cottle (2009) argues that it is necessary to go beyond the “global domination” and “global public sphere,” as this approach cannot explain how these or other topics acquire global signifi cance. as an example, he cites the september 9, 2011 attack in the united states – a national disaster, which acquired the global status thanks to mass media, including national. consequently, the “global media cannot be determined by the only characteristic of transnational outreach...,” global discourse may appear in mass media at all levels: local, national and transnational, as well as in the content of all levels: local, national, foreign (berglez, 2008; olausson, 2010). most empirical studies confi rm the stability of the national state paradigm. the main arguments are: preservation and development of the national mass media system, phenomenon of globalization of the press as a response to global trends in information processes, regionalism of mass media in europe, allocation of foreign news into a separate section, division into “us” and “them,” prevalence of information from the west, cultural imperialism and cultural homogenization. forms of globalization of journalism at the discursive approach: presence of the foreign information columns in the press, presence of foreign information in the news, geographic expansion of the tabs on electronic versions of national publications. all electronic versions of publications are focused on foreign and global content, not all publications do so in the same degree. for example, the page of the electronic version of the british national newspaper “the times” has several tabs under the news heading: uk news, world news, news of europe, the us and latin america, asia, middle east, africa. the fi rst tab on the page of the electronic version of “el pais” redirects readers to international news, which are classifi ed by region in detail: news of europe, the us, mexico, latin america, middle east, asia and africa. the next tab is opinions, and only the next one is national news. electronic versions of “kommersant” and “usa today” are less focused on the global information; they have a tab with the news of the country in the fi rst place, followed by world news without division by geographical area. globalization of the agenda frame. most of the news that spread globally are formed by large organizations that are controlled from the same country, which suggests that their activities are confi ned to narrow commercial objectives and national perception of the world (reese, 2008). many media brands go global by releasing their applications to other countries, but they do not thereby cease to work in line with the editorial policy of the parent company. “the attempt to standardize the understanding of the news at the global level, viewing it through the prism of media messages at the world level, demonstrates the diffi culty in forming the defi nition, the defi nition of news at the global level is as problematic as nationally. journalists are guided by professional colleagues in practical understanding of global news (reese, 2008). here we face a problem of determining the boundaries of the national news, where the national news ceases to be such and becomes global. after all, ‘national media still retain their leadership position for the national audience, so they remain the dominant source of global news that are still created in the context of national-focused kurysheva, et al.: global journalism: main aspects of conceptualization international review of management and marketing | vol 5 • special issue • 201570 thinking’ (altmeppen, 2010; hafez, 2007; 2009). here the problem of obsolescence ‘of the traditional theory of foreign journalism’ becomes obvious, with its attachment to the events in particular countries in terms of global challenges: war on terrorism, aids epidemic, etc. (berglez, 2008). the concept of ‘global journalism’ is related to the collapse of the stereotype of ‘national thinking’ in social studies (beck, 2005), an example of which is the traditional division of columns and information in national mass media into local and foreign. berglez believes that global journalism follows an evolutionary element of foreign journalism. according to him, global journalism is a special style, a global view of social reality (berglez, 2008). the trend of global refl exivity noted by researchers (hjarvard, 2001) means that less and less topics will be refl ected in the media agenda without the inclusion of information from outside the national system. global view of what is happening in the framework of this understanding of the global journalism opposes to national view (beck, 2005). traditionally, the national view centers on the country and national events and interests. in the meantime, global view shows how the events taking place in different parts of the world are interconnected and infl uence each other. in this context, ‘any media can be called global if it provides global audience with messages in global frame’ (olausson, 2013). at the same time, it cannot be claimed with certainty without additional studies that ‘cnn international’ is more global mass media than national newspaper.” thus, berglez believes that the global discourse in the news mass media is characterized by identifying interconnections between people, processes and events at the national, local, multinational and global levels. consequently, the style of global news journalism should be radically different from the traditional style of foreign journalism, which mainly refl ects events occurring in one country to another country, without making any connections between them. berglez suggests the following criteria of globality of the news: global space (how a journalist shows the relationship of the processes occurring in different parts of the world), global power (how a covered event is shown through the prism of national and foreign politics), global identity (how a journalist managed to transcend national borders in the refl ection of political identifi cations) (berglez, 2008). 3.3. global journalism: political and economic aspect first attempts of the conscious dissemination of information beyond the borders of the state are associated with the advent of radio and political struggle for world domination in the late 20’s – early 40’s. these phenomena provoke the development of international broadcasting, characteristic task of which was to misinform the enemy and activate the supporters. the “cold war” and the development of television give special status to the work of the international journalist. the total volume of foreign broadcasting increases, while the activities of foreign broadcasting services fall under the attention of special services. formation of an international information and communication order was held in parallel and substantially refl ected the main stages of globalization, as refl ected in the theory of imperialism, dependency theory, the theory of world-system analysis. the first scientific and political attempts to understand the inequality in international exchange of information are related to the 70’s of the 20th century. they are usually referred to the document prepared by the commission of sean macbride (vinogradova and melnik, 2010). in fact, it has become the largest international evidence of recognition of inequality in the global information exchange. heterogeneity, inconsistency, one-sided fl ow of information at the international level is associated with different levels of political and economic development of the countries and their information technology. west nature of global mass media is due to the fact that “the media have reached their global characteristics as a result of the acquisition by a small number of western companies of other mass media, due to which they have become the media giants who spread neoliberal values and western models of life around the world” (olausson, 2013). historical factors to ensure the dominance of western media in the global space are: political support of the governments, economic involvement of big business and multinationals in media expansion, transition of competition to the global level, common value-ideological base of the media, government and business in the west (zegonov, 2009). dissemination of information activities of international news agencies in the early stages is associated with the development of the economic interests of the country of origin. foreign activity of the news agencies was focused not so much on the dissemination of information but on ensuring the exchange of information for solving political and economic problems of the state (desbordes, 2008). for example, the british economic interests were focused on brazil, argentina, uruguay, chile and peru… british trading houses in chile and peru played a signifi cant role in the economic development of the country. over this period, the cooperation of news agencies reuters and havas was aimed at the development of offi ces in nine key points in latin america (1876). after 1876, the agreement on the division of spheres of infl uence was reached. information agency “havas” focused on south africa, while “reuters” – on asia. however, the infl uence of “reuters” on south america was preserved, including due to technical superiority. the advantage of western corporations in the global information space is obvious at the moment. representatives of the american and western european origin are among the largest multinational media companies. development of the competitors to western media giants, such as al-jazeera, does not cancel but rather confi rms the western nature of media globalization, because it acts as the opponent and counterbalance. the ratio of the specifi cs of global information fl ows, their nature and focus are associated by researchers with the geopolitical factor (nikonov, 2013). 3.4. global journalism: professional aspect many scientists and practitioners have noted that globalization leads the development of global journalism, which is qualitatively different from foreign journalism of previous years that existed under the previous sociopolitical characteristics, goals and objectives defi ned by the national framework of thinking. berglez kurysheva, et al.: global journalism: main aspects of conceptualization international review of management and marketing | vol 5 • special issue • 2015 71 defi nes global journalism based on the defi nition of globalization – it is journalistic practice, which refl ects the daily reality of people, their actions, problems and living conditions relevant to the global context (berglez, 2007). development of communication technology has an impact on the identity and professional status of the foreign correspondent. an empirical study by archetti (2013) demonstrated that the profession of a foreign correspondent is on the verge of extinction… today, the association of foreign press in london has 500 members. modern literature on foreign journalism notes: “foreign journalism became a thing of the past, because local people are not interested in foreign news” (altmeppen, 2010; cozma, 2010). approach to understanding global journalism as a new kind of news discourse raises the concept of global thinking. it is important for conceptualization of global journalism, since the leveling of national borders in the work of the journalist, due to technological capabilities, does not mean the development of a new professional paradigm. the concept of foreign or international news cannot cover contemporary social, economic and political relationships in the world that no longer take into account the political boundaries. global thinking has more to do with the knowledge and understanding of the world rather than with technological capabilities. technology helps disseminate information across borders, but the technology does not help see the relationships. global view depends on the background and levels of outlook of a specifi c journalist: their ability to see the facts, put them together, see their relationship, choose the angle of view, and select the sources of information. from the perspective of professional practice, global journalism redefines traditional issues: objectivity and freedom in the reflection of everyday reality, the principles of selection of news. objectivity of refl ecting events at the national level is comprehensible to us and has been defended by professional standards for centuries. however, the scope of the national mentality, patriotism, protection of national interests and other factors may stand in the way of a balanced, objective coverage of events outside our country in the context of global signifi cance and consequences. on the one hand, globalization and technology have expanded the subject fi eld of journalistic creativity (lazaroiu, 2009). the development of communication technology has an impact on the peculiarities of foreign journalists’ access to information sources. on the other hand, the development of civil journalism eliminates the unique status of a foreign journalist as an expert in dissemination of information, because any person can spread the news around the world. 4. discussion in the context of globalization and development of information and communication technologies, fast and relatively cheap in the everyday use, the attempts emerged in the scientifi c fi eld to theorize the concept of global journalism. most of the works involve a certain aspect of the concept of global journalism, while omitting the rest. these approaches are scattered and scarce. thus, studies of global journalism through the prism of the concept of global public space can be met in the scientifi c literature; some authors operationalize the study of global journalism through structural analysis of transnational media corporations, the others identify global journalism through substantial characteristics; there are researchers who focus on the specifi cs of international information processes, as well as those who examine the role of new information and communication technology in shaping the global journalism. broader generalization allows distinguishing the scientific supporters and opponents of the existence of global journalism. proponents of a global approach (cardoso, 2012; volkmer, 2003) consistently demonstrate the presence and viability of transnational media system, while the rest of the researchers (hafez, 2009; herman and mcchesney, 1997) are skeptical about such a possibility and reason the position of preserving the national colors of mass media in a global context. in this article, we reviewed the controversial issue of understanding the global journalism and identified four main aspects of conceptualization of the term. despite the fact that they are all determinative and equivalent for understanding the phenomenon of global journalism, we cannot say with certainty that this list is exhaustive. the assumption remains out of question that in the framework of regional and national context of journalistic culture, manifestations of a particular aspect of globalization trends in the media sphere would not be the same. equation of the concepts of “global trends in journalism” (at national level) and global journalism in general also seems questionable. all this remains a subject for further scientifi c studies. 5. conclusion after considering the attempts in modern scientific field to theoretically understand the concept of global journalism, empirical studies of journalistic practice at the transnational level and examples of professional practice, we came to a conclusion that the concept of global journalism depends on several factors at once. first, journalism is historically a national phenomenon, closely associated with national boundaries, national mentality, national view of what is happening in the world. second, the development of information technology is transforming the paradigm of national journalism. understanding the phenomenon of global journalism is currently being built on four basic approaches: the geographical expansion of the boundaries of journalism, globalization of the discursive practice of mass media, geopolitical features of global journalism, transformation of professional standards. several forms of implementation in practice are distinguished within each approach. for example, the geographical expansion of the boundaries of journalism translates into greater geographical coverage of the audience by mass media. globalization of discursive practice is manifested in the peculiarities of working with the information of foreign and international issues at the level of national mass media. geopolitical features characterize the political importance of the formation of the international kurysheva, et al.: global journalism: main aspects of conceptualization international review of management and marketing | vol 5 • special issue • 201572 information fl ows. transformation of professional standards implies on the one hand an increase in opportunities for journalists to work with the international information, while on the other hand there is a leveling of the importance of the status of an international journalist in comparison with the prior-to-globalization era. references archetti, c. 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5.0 and later.) >> /namespace [ (adobe) (common) (1.0) ] /othernamespaces [ << /asreaderspreads false /cropimagestoframes true /errorcontrol /warnandcontinue /flattenerignorespreadoverrides false /includeguidesgrids false /includenonprinting false /includeslug false /namespace [ (adobe) (indesign) (4.0) ] /omitplacedbitmaps false /omitplacedeps false /omitplacedpdf false /simulateoverprint /legacy >> << /addbleedmarks false /addcolorbars false /addcropmarks false /addpageinfo false /addregmarks false /convertcolors /noconversion /destinationprofilename () /destinationprofileselector /na /downsample16bitimages true /flattenerpreset << /presetselector /mediumresolution >> /formelements false /generatestructure true /includebookmarks false /includehyperlinks false /includeinteractive false /includelayers false /includeprofiles true /multimediahandling /useobjectsettings /namespace [ (adobe) (creativesuite) (2.0) ] /pdfxoutputintentprofileselector /na /preserveediting true /untaggedcmykhandling /leaveuntagged /untaggedrgbhandling /leaveuntagged /usedocumentbleed false >> ] >> setdistillerparams << /hwresolution [2400 2400] /pagesize [612.000 792.000] >> setpagedevice tx_1~at/tx_2~at international review of management and marketing | vol 13 • issue 2 • 202328 international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2023, 13(2), 28-35. satisfaction and loyalty of korean restaurant consumers based on consumer value and knowledge caesarilla maggie zavira, dyah ismoyowati, henry yuliando* department of agroindustrial technology, gadjah mada university, yogyakarta, indonesia. *email: henry_yuliando@ugm.ac.id received: 28 december 2022 accepted: 07 march 2023 doi: https://doi.org/10.32479/irmm.14207 abstract korean food is increasingly popular worldwide, which has made many korean restaurants pop up, including in yogyakarta. however, with the various challenges, some restaurants are currently not operating. one of the factors that may be the cause is the need for more consumer satisfaction in the competitive korean food market. this research examines the effect of consumer values (hedonic and utilitarian value) and consumer knowledge on consumer satisfaction and loyalty in korean restaurants. partial least square was used in this study by taking a sample of 331 respondents using purposive and snowball sampling techniques through online surveys. validity and reliability tests were also carried out at the beginning of data processing. descriptive analysis is used to find out socio-demographic information and consumer behaviour. the analysis results show that consumer value and knowledge positively and significantly affect customer satisfaction and loyalty. utilitarian has a greater influence than hedonic values. satisfaction can be explained by hedonic and utilitarian value and consumer knowledge by 60.2%, while consumer loyalty can be explained by 61.8%. keywords: korean food, satisfaction, loyalty, knowledge, consumer value jel classifications: m30, m31 1. introduction nowadays, korean food is getting more and more popular worldwide. this popularity began with introducing of a chicken dish cooked in a korean recipe, bibimbap. popularity also applies to other traditional korean foods, which have spread to various countries, especially china and southeast asia (hwang et al., 2018). introducing korean food worldwide is also supported by establishing the “korean food foundation” which aims to analyze the market (kim and yoo, 2020). this makes consumers in various countries interested in korean food (seo et al., 2012). consumer knowledge of food from other countries leads to increased consumption of a country’s ethnic food, including korean food. as a result, many ethnic restaurants are starting to stand up. ethnic restaurants are restaurants that combine physical arrangements similar to those of the nation where the food was produced, including how it is served (marinkovic et al., 2015). in recent years, korean restaurants have begun to appear in yogyakarta, each of which has a different concept. for this ethnic restaurant business, consumers usually look for delicious food and authentic cultural experiences from the interior, music, and layout (song and qu, 2017). by searching on google using the keyword “ethnic korean restaurant in yogyakarta” for all available regions, 24 korean restaurants were found listed on the google star rating. these restaurants include bornga, silla korean and japanese restaurant, king korea, seorae, chingu café, and many more. based on further investigation, several of the listed restaurants are no longer operating. it is suspected that the cause of their not being able to survive is because they cannot provide satisfaction for their customers amid intense competition with other similar restaurants. it is understood that the restaurant business faces various challenges, and one of them is consumers who have more expectations from dining experiences, such as searching for ambiance (bilgihan et al., 2018). it is essential for restaurants to know consumer satisfaction with their products, this journal is licensed under a creative commons attribution 4.0 international license zavira, et al.: satisfaction and loyalty of korean restaurant consumers based on consumer value and knowledge international review of management and marketing | vol 13 • issue 2 • 2023 29 services, and experiences and provide differential value to consumers (hanaysha, 2017). for korean restaurant management to understand the impact of consumer perceived value on customer happiness and loyalty when dining at korean restaurants, they need to use the competitive business environment as a guide. values felt by consumers that are widely used in the literature are hedonistic and practical principles (hasan, 2022). hedonic value is a consumer judgment based on pleasure, while utilitarian value is based on the benefits or harms received from a product or service (lee and wu, 2017). according to (lee and kim, 2018), utilitarian values include product/service efficiency, specific tasks, and aspects of the economic dimension. according to holbrook and hirschman (1982) in sukhu and bilgihan (2021), hedonic value focuses on the desire for pleasure and aspects of experience connected with the search for pleasure, fantasy, and feelings. when consumers realize that there is sufficient value and income in a potential purchase, one of the important factors in the final purchase decision is consumer knowledge. this consumer knowledge will help determine consumer needs and increase consumer satisfaction (bidgoli et al., 2021). low levels of consumer knowledge lead to a lack of trust in buying behavior (li et al., 2021). snowball sampling is sampling obtained from a rolling process from one respondent to another (nurdiani, 2014). restaurant management must anticipate the customer’s decisionmaking process when considering various elements before dining. this is important because the first impression consumers will be the impression that sticks with them (shahzadi et al., 2018). the restaurant business must be able to attract and retain consumers to survive in the competition. furthermore, to get loyal customers, business people must fulfill their satisfaction. satisfaction can be achieved if the products, services, and experiences created at the restaurant can meet consumer expectations (ahmed et al., 2022). dissatisfied consumers will likely switch to competitors (xia and ha, 2021). mbango (2019) argues that consumer satisfaction results from consumer value, while loyalty is the impact of consumer satisfaction. having loyal consumers or customers is an advantage for the company because it will provide additional value through repeat purchases. in addition, having loyal consumers will also reduce the costs a business must incur to retain its customers (chikazhe et al., 2021). therefore, this study aims to analyze the effect of hedonic table 1: list of questionnaire statements code statement source hedonic value v1 the presentation of food in korean restaurants is attractive and meets my expectations. jin et al. (2012) v2 restaurant has attractive and informative advertisements and promotions on social media, which inspires my trust and confidence in korean restaurants. kwon et al. (2020) v3 korean restaurant has employees who look clean and tidy. jin et al. (2012) v4 korean restaurant has an attractive layout in the korean style. song and qu (2017) v5 korean restaurant provides free internet service, and this is pleasing to me. chen et al. (2011) v6 korean restaurant played korean songs, and i enjoyed them. ha and jang (2010) v7 korean restaurant has a clean dining area, so i can enjoy the dishes i ordered properly. chen et al. (2011) utilitarian value u1 korean restaurant has a delicious and distinctive taste according to the taste i am looking for. song and qu (2017) u2 korean restaurant has a wide variety of menus. song and qu (2017) u3 korean restaurant serves the ordered menu in the right portion and satisfies my hunger. song and qu (2017) u4 korean restaurant is located in an easily accessible and strategic location. harrington et al. (2017) u5 korean restaurants often provide regular discounts. kukanja et al. (2017) u6 korean restaurant employees provide good service according to consumer demand. chen et al. (2011) u7 korean restaurant employees are informative in providing explanations to consumers. chen et al. (2011) u8 korean restaurant provides timely service according to the estimation given by. chen et al. (2011) u9 restaurant provides fast service to customers. ryu et al. (2010) u10 korean restaurants have affordable and reasonable food prices. ha and jang (2010) u11 korean restaurants have lower food prices than other ethnic restaurants. harrington et al. (2017) consumer knowledge p1 i know a lot about korean restaurants that suit my tastes. li et al. (2021) p2 i know where to buy korean food. li et al. (2021) p3 i know different types of korean food. huy tuu and ottar olsen (2009) p4 i am more familiar with korean restaurants than other restaurants. peng and chen (2015) p5 i have more knowledge about korean food than my friends. donoghue et al. (2021) customer satisfaction k1 korean restaurant offers products and services that meet my expectations. lee and wu (2017) k2 the korean restaurant that i visited was able to fulfill my needs regarding korean food. dirsehan and cankat (2021) k3 the korean restaurant i visited was of high-quality. dirsehan and cankat (2021) k4 i am satisfied with my dining experience at the korean restaurant. ahrholdt et al. (2019) customer loyalty l1 i will give positive comments about korean restaurants if asked by. gallarza et al. (2016) l2 i will recommend a korean restaurant to my friends and family. yoo and park (2016) l3 i will invite my friends and family to come to the korean restaurant. gallarza et al. (2016) l4 i will be back to visit korean restaurants next time. gallarza et al. (2016) l5 i am still tolerant/accepting a price increase at a korean restaurant. gallarza et al. (2016) zavira, et al.: satisfaction and loyalty of korean restaurant consumers based on consumer value and knowledge international review of management and marketing | vol 13 • issue 2 • 202330 figure 1: construct validity results values, utilitarian values, and consumer knowledge on consumer satisfaction and loyalty. 2. literature overview 2.1. consumer value consumer value is a preference that customers feel and evaluations of product use. the value perceived by consumers is subjective according to each individual and is influenced by many factors (prebensen and rosengren, 2016). values felt by consumers can be described through utilitarian values and hedonic values. utilitarian value is a trade-off focusing on needs and practices between benefits and costs (ryu et al., 2010). not only utility benefits, products and services are also often used for other reasons, such as emotional reasons, which are often referred to as hedonic values. hedonic value is defined by overby and lee (2006) as an assessment of the benefits of experience, such as entertainment. 2.2. consumer knowledge consumer knowledge often influences consumer behavior toward a product and satisfaction (aghamirian et al., 2015 in suchánek and králová, 2019). ordinary consumer knowledge is also associated with product knowledge. according to cacciolatti et al. (2015), product knowledge usually comes from consumer memory. product knowledge is often influenced by purchase frequency and usage experience. 2.3. customer satisfaction satisfaction is important in consumer behavior and in the food service industry because it guides what needs to be done managerially (dipietro and levitt, 2019). satisfaction can also be evaluated through consumer attitudes toward products or services. consumers who feel satisfied will be willing to repurchase or seek experience of products or services in the future and are willing to recommend them to others (suhartanto et al., 2019). 2.4. customer loyalty a restaurant business must depend on more than customer satisfaction to survive in a competitive business. more than that, the restaurant business needs to have loyal customers. loyalty is a strong commitment to buy regularly or experience a product in the future, even though various factors can influence it. loyal consumers will be willing to recommend to others and pay a premium price (ahmed et al., 2022). 3. methodology 3.1. research object this research was conducted at a korean restaurant in the special region of yogyakarta. questionnaires were distributed online through social media to obtain data from korean restaurant consumers. online questionnaires were chosen because of their various advantages: flexibility, speed and timeline, convenience, ease of data input and analysis, diversity of statements, low cost, and ease of obtaining large amounts of data (evans and mathur, 2018). research using purposive technique and snowball sampling. purposive sampling is a sampling technique to obtain information from certain target groups who have information based on knowledge or experience (etikan et al., 2016). snowball sampling is sampling obtained from a rolling process from one respondent to another (nurdiani, 2014). 3.2. data collection in addition to statements testing the impact of values and knowledge on consumer satisfaction and loyalty, respondents will be given questions about socio-demographic data and consumer behavior. table 1 lists the proposed survey questions to examine the zavira, et al.: satisfaction and loyalty of korean restaurant consumers based on consumer value and knowledge international review of management and marketing | vol 13 • issue 2 • 2023 31 impact of hedonic values, utilitarian values, consumer knowledge, consumer satisfaction, and consumer loyalty. respondents are asked to select options from the following scale in the statement testing the influence: 1. strongly disagree 2. disagree 3. neutral 4. agree 5. strongly agree based on the results of distributing questionnaires and screening data, a total of 331 data were obtained, which could be further processed. the criteria for research respondents are consumers of korean restaurants aged ≥18 years and have made purchases at korean restaurants in the last 3 months. 3.3. methods of analysis pls-sem is a technique suitable for quantitative data analysis based on the research objectives. this is because pls does not require fulfilling the data normality assumption (tseng et al., 2022). in addition, to find out the socio-demographic information of the respondents, data analysis was also carried out using descriptive statistics. descriptive statistics, as defined by vetter (2017), is a technique for calculating, outlining, and summarizing gathered study data. descriptive statistics were carried out to determine the respondents’ socio-demographic information, including gender, age, and occupation. besides that, descriptive statistics are also used to find out information on consumer behavior, such as purchase frequency, restaurant preferences, nominal issued, and reasons for respondents’ interest in korean food. the construct validity, convergent validity, internal consistency reliability, and discriminant validity of the reflective measurement model were assessed (hair et al., 2014). the structural model is next evaluated after the measurement model has been authorized. a bootstrap approach was utilized to assess the path coefficients and statistically significant hypotheses. the valid sample size exceeds the 150 minimum sample size that is frequently used in sem research (331). 4. results 4.1. descriptive analysis of socio-demographic characteristics and consumer behavior a total of 331 valid data used in this study can be analyzed statistically related to socio-demographic data and consumer behavior. the majority of respondents are female (79%). respondents’ ages were grouped into 18-26 years, 27-35 years, and 36-44 years. most respondents are students (88%). in the last three months, most respondents (164 people) made a one-time purchase at a korean restaurant. figure 1 shows the percentage of respondents’ gender. the majority of respondents (90%) also spend <idr 176,000.00 for one purchase. chingu café is the restaurant most frequently visited by respondents, namely 32%. meanwhile, 40% of respondents expressed interest in korean food because they were curious about the taste. in more detail, socio-demographic information and consumer behavior can be seen in table 2. 4.2. measurement model evaluation previously tested the validity of the trial questionnaire. as a result, the calculated-r value of the clean and tidy employee appearance indicator (v3) is smaller than the tabled-r (0.3061), so the indicator is removed from the research questionnaire. analysis of the measurement model was made possible by looking at the results of testing discriminant validity, internal consistency reliability, convergent validity, and construct validity. when placed through a construct validity test, the study construct is declared valid if the outer loading value is more than or equal to 0.7. via outer loading, the latent variable’s value is connected to the indicator. the ave (average variance extracted) value must be more than or equal to 0.5, according to fornell and larcker (1981), in mansouri et al. (2022), in order to assess convergent validity. the ave number demonstrates how well the latent idea explains the indicator’s variance. to be table 2: socio-demographic information and consumer behavior description frequency percentage gender female 261 79 male 70 21 age (years old) 18-26 318 96 27-35 11 3 36-44 2 1 occupation student 293 88 private employee 27 8 entrepreneur 5 1 civil servants 2 1 fresh graduate 2 1 others 2 1 frequency of purchase in the last three months once 164 50 twice 84 25 three times 46 14 four times 12 4 five times 13 4 more than five times 12 4 average nominal for one purchase idr20.000,00-idr175.000,00 297 90 idr176.000,00-idr331.000,00 30 9 idr332.000,00-idr487.000,00 3 1 idr488.000,00-idr643.000,00 1 0 korean restaurant preferences chingu café 105 32 sarangeui oppa 49 15 king korea at galeria mall 44 13 seorae at plaza ambarrukmo 29 9 others 104 31 reason for interest in korean food curious about the taste of korean food 141 41 good taste of korean food 107 31 liking korean dramas 46 13 liking k-pop music 27 8 liking korean celebrity 15 4 others 9 3 zavira, et al.: satisfaction and loyalty of korean restaurant consumers based on consumer value and knowledge international review of management and marketing | vol 13 • issue 2 • 202332 met the required limits. the results of the discriminant validity test shown through the cross-loading value can be seen in table 4, where each construct fulfills the requirements, namely having a cross-loading value greater than the other constructs. 4.3. structural model evaluation the structural model analysis includes hypothesis testing and coefficient of determination (r2). a bootstrapping procedure is employed to test the hypotheses. in the table 5, the hedonic value has a direct and significant positive impact on consumer satisfaction (=0.260, t = 5.968, p = 0.000). also, it has been shown that hedonic value directly, significantly, and favorably affects consumer loyalty (= 0.105, t = 2.336, p = 0.010). the table also shows that the utilitarian value variable significantly and directly affects consumer satisfaction (p = 0.000, = 0.410, t = 9.918). moreover, utilitarian value has a direct, positive, and significant impact on loyalty (= 0.138, t = 2.535, p = 0.006). this result is in line with ryu et al. (2010)’s study, which discovered that utility and hedonic value had a direct positive impact on customer satisfaction. these results are also consistent with kim et al. (2019) research, which discovered that hedonic and utilitarian values have a direct impact on consumer loyalty. consumer satisfaction is positively and significantly impacted by consumer knowledge (= 0.289, t = 6.742, p = 0.000). these findings are consistent with huy tuu and ottar olsen’s (2009) study on the impact of risk and food knowledge on customer satisfaction and loyalty, which found that consumer knowledge directly increases customer contentment. customer loyalty is table 3: the results of testing construct validity, convergent validity, and internal consistency reliability variable indicator construct validity (outer loading) convergent validity (ave) composite reliability (cr) hedonic value v1 0.954 0.650 0.909 v2 0.923 v4 0.961 v6 0.439 v7 0.948 utilitarian value u1 0.912 0.537 0.912 u2 0.937 u3 0.924 u4 0.493 u5 0.465 u6 0.931 u7 0.916 u8 0.767 u9 0.761 consumer knowledge p1 0.825 0.603 0.883 p2 0.709 p3 0.794 p4 0.748 p5 0.800 consumer satisfaction k1 0.826 0.709 0.907 k2 0.835 k3 0.841 k4 0.864 consumer loyalty l1 0.785 0.701 0.921 l2 0.812 l3 0.807 l4 0.895 l5 0.879 verified as internally consistent and dependable, the composite must satisfy the requirements for cr values of ≥0.7. composite reliability (cr) scores assess the reliability of internal consistency. table 3 displays the findings of the validity and reliability tests together with the outer loading, ave, and composite reliability values. the discriminant validity was assessed using the cross-loading value. cross-loading is a measurement of how closely related the construct indicators are to one another in the research model. table 4 presents the findings of the discriminant validity analysis. the results of the construct validity tests are shown in figure 1. based on the results of construct validity testing, the outer loading indicator for affordable prices (u10), prices are lower than restaurants of other ethnicities (u11), and the presence of free internet (v5) are < 0.4 so that these three indicators were removed from the research questionnaire. korean song indicators (v6), easily accessible and strategic locations (u4), and periodic discounts (u5) have outer loading values > 0.4 and < 0.7. based on hair et al. (2014), if the outer loading value is > 0.40 but < 0.70, it can be evaluated through the impact of removing indicators on ave and cr. if, after deletion, the indicator can increase the ave and cr values to above the threshold, then the indicator can be removed. if deleting the indicators does not increase the ave and cr values, the indicators are still maintained. after the evaluation was carried out, the ave and cr values were above the threshold so that the indicators were not removed again. the results of the construct validity test after removing the indicators represented by the outer loading values can be seen in table 3. in the table, it can also be seen that the ave, outer loading, and cr values have zavira, et al.: satisfaction and loyalty of korean restaurant consumers based on consumer value and knowledge international review of management and marketing | vol 13 • issue 2 • 2023 33 t= 4.574, p-value= 0.000). another method that utilitarian value significantly and favorably affects customer loyalty is through customer satisfaction (= 0.182, t = 5.920, p = 0.000). moreover, customer satisfaction—which impacts customer loyalty—is positively and significantly impacted by consumer education (= 0.128, t= 4.432, p = 0.000). the results of testing the coefficient of determination can be seen in table 6. the simultaneous impact of exogenous latent variables on endogenous latent variables is described by the coefficient of determination. the r2 values of 0.67, 0.33, and 0.19, respectively, are threshold values for significant, moderate, and weak predictive strength, according to chin (1998) in tseng et al. (2022). according to the table, hedonic values, utilitarian values, and consumer knowledge account for 60.2% of consumer satisfaction, while other factors not related to the study account for the remaining percentage. the findings also indicate that hedonic values, utilitarian values, consumer knowledge, and consumer happiness account for 61.8% of consumer loyalty, while additional factors outside the scope of the study account for the remaining percentage. these findings indicate that the values of 0.602 and 0.618 have high predictive potential or a value close to 0.67. 5. conclusion and implications consumer value and knowledge positively affect consumer satisfaction and loyalty, with the influence exerted by the utilitarian value being more significant than the hedonic value. hedonic values, utilitarian values, consumer knowledge, and consumer satisfaction may explain 60.2% of consumer contentment, while hedonic values, utilitarian values, consumer knowledge, and consumer satisfaction can explain 61.8% of customer loyalty. in this study, the results showed that most korean restaurant consumers were in their 20s (generation z) and had reasons for their interest in korean food, namely their curiosity and liking for korean dramas. with this result, korean restaurant business people need to be up-to-date on korean drama trends and be able to recognize the various types of food that appear in them. this is intended as promotional material on social media. this promotional material can be used simultaneously to increase consumer knowledge and positively affect consumer satisfaction. in addition, this study also found that hedonic value is the initial factor that makes consumers interested in purchasing at korean table 4: discriminant validity results variable indicator hv kk lk pk uv consumer satisfaction (kk) k1 0.534 0.826 0.613 0.508 0.579 k2 0.525 0.835 0.620 0.468 0.580 k3 0.480 0.841 0.584 0.474 0.549 k4 0.530 0.864 0.677 0.501 0.547 consumer loyalty (lk) l1 0.502 0.679 0.785 0.488 0.622 l2 0.437 0.592 0.812 0.525 0.459 l3 0.433 0.602 0.807 0.520 0.411 l4 0.494 0.626 0.896 0.515 0.496 l5 0.489 0.591 0.879 0.487 0.470 consumer knowledge (pk) p1 0.350 0.440 0.454 0.825 0.295 p2 0.375 0.487 0.489 0.709 0.400 p3 0.370 0.518 0.518 0.794 0.330 p4 0.366 0.408 0.463 0.748 0.317 p5 0.325 0.361 0.406 0.800 0.237 utilitarian value (uv) u1 0.448 0. 0.551 0.480 0.336 0.912 u2 0.474 0.572 0.517 0.357 0.938 u3 0.484 0.572 0.532 0.351 0.924 u4 0.244 0.371 0.248 0.182 0.494 u5 0.240 0.263 0.244 0.166 0.466 u6 0.488 0.595 0.548 0.368 0.931 u7 0.453 0.571 0.526 0.333 0.917 u8 0.501 0.617 0.529 0.400 0.767 u9 0.471 0.627 0.537 0.410 0.761 hedonic value (hv) v1 0.958 0.589 0.532 0.422 0.503 v2 0.929 0.581 0.531 0.414 0.497 v4 0.965 0.566 0.520 0.411 0.509 v6 0.429 0.361 0.343 0.383 0.304 v7 0.952 0.540 0.501 0.396 0.492 table 5: hypothesis testing research hypothesis original sample (o) t-statistics p-values conclusion h1: hedonic value→consumer satisfaction 0.260 5.968 0.000 supported h2: utilitarian value→consumer satisfaction 0.410 9.918 0.000 supported h3: consumer knowledge→consumer satisfaction 0.289 6.742 0.000 supported h4: hedonic value→consumer loyalty 0.105 2.336 0.010 supported h5: utilitarian value→consumer loyalty 0.138 2.535 0.006 supported h6: consumer knowledge→consumer loyalty 0.244 5.028 0.000 supported h7: consumer satisfaction→consumer loyalty 0.443 6.959 0.000 supported h8: hedonic value→consumer satisfaction→consumer loyalty 0.115 4.574 0.000 supported h9: utilitarian value→consumer satisfaction→consumer loyalty 0.182 5.920 0.000 supported h10: pengetahuan konsumen→consumer satisfaction→consumer loyalty 0.128 4.432 0.000 supported also directly and significantly positively impacted by customer knowledge (= 0.244, t = 5.028, p = 0.000). in conclusion, consumer loyalty is positively and significantly influenced by consumer satisfaction (= 0.443, t = 6.959, p = 0.000 to evaluate the direct effect). these results are consistent with gallarza et al. 2016’s research, which shows that customer satisfaction and customer loyalty are positively connected. furthermore, shown in table 5 are the bootstrapping results. consumer loyalty is positively and significantly indirectly impacted by the hedonic value via customer satisfaction (= 0.115, zavira, et al.: satisfaction and loyalty of korean restaurant consumers based on consumer value and knowledge international review of management and marketing | vol 13 • issue 2 • 202334 restaurants. compared to hedonic values, utilitarian values have a greater influence on consumer satisfaction and loyalty. so, even though consumers are looking for an authentic cultural experience that is reflected in attractive interiors, music, layout, advertisements and promotions, and cleanliness based on their visits to korean restaurants (hedonic values), aspects of food quality, location, employees, and service (utilitarian values) become a more important 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(2016), the effects of e-mass customization on consumer perceived value, satisfaction, and loyalty toward luxury brands. journal of business research, 69(12), 5775-5784. tx_1~at/tx_2~at international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2023, 13(4), 1-8. international review of management and marketing | vol 13 • issue 4 • 2023 1 analysis of the availability of information for aspiring multinational companies in south africa mpho modisane, gisele mah, paul saah* school of management sciences, faculty of economic and management sciences, north-west university, mafikeng, northwest province, south africa. *email: saahpaul10@gmail.com received: 04 april 2023 accepted: 25 june 2023 doi: https://doi.org/10.32479/irmm.14548 abstract aspiring multinational companies have very few guidelines on how to expand their businesses beyond south africa, unlike established multinational companies. the plight of aspiring multinational companies finding business opportunities beyond national borders highlights the importance of properly understanding the international business environment. the purpose of this study is to evaluate the availability of information for aspiring multinational companies. the study employs a quantitative method, and the population is 196 managers of aspiring multinational companies in south africa. the primary data for this study was obtained by administering questionnaires to managers of aspiring multinational companies in south africa. the findings of the study revealed that companies that have been in operation for <3 years have a challenge accessing the information to successfully penetrate multinational business markets. these challenges experienced by the newer aspiring multinational companies emanate from the fact that they do not have any guideline on what needs to be in place and from where they can get the information. it is recommended that aspiring multinational corporations in south africa access information on running multinational businesses, especially the information on the regulatory and economic environment such as international laws, local spending, and the public environment. keywords: multinational companies, foreign countries, businesses, market, global jel classifications: m12, m13, m21 1. introduction many companies go multinational because they want their products or services to be sold to new markets elsewhere in the world. on the other hand, a multinational could be a new company setting out to enter globalisation of their products and services, so these multinationals can either be old companies that are long-established in their country of origin, or newly registered. being a multinational also means the company is developing globally, whereby additional revenue streams can be explored, more strategic business partnerships can be forged, more job opportunities will be provided in foreign countries, and the services or goods can gain prominence (kim and milner, 2019). according to kim and milner (2019), attempting to establish a business in a new country in the world is continuing to prove to be difficult. many corporations are searching for growth opportunities in new markets in other countries, and although this brings the excitement of new opportunities, it also presents the likelihood of risks materialising. unlike established multinational companies, aspiring multinational companies have very few guidelines for how to expand their businesses beyond south africa. the pattern of increasing numbers of companies looking for opportunities outside the borders of south africa highlights the importance of properly understanding the multinational business environment, and manage the requirements associated with going multinational as a business. fewer new aspiring multinational companies in developing countries are able to comfortably stand-alone without the help of a partnership or government support; an example is that of this journal is licensed under a creative commons attribution 4.0 international license modisane, et al.: analysis of the availability of information for aspiring multinational companies in south africa international review of management and marketing | vol 13 • issue 4 • 20232 chinese manufacturing companies whereby out of a sample of 500 aspiring multinational companies, only 49 were found to be self-reliant. most of the remaining 451 companies depend on the country-specific advantages created by their government (jormanainen and koveshnikov, 2012). the consequence of the problem of lack of information to guide multinationals is that companies are going to make wrong business decisions and lose their profits while doing business outside their home country. one of africa’s biggest problems in entering multinational markets is the lack of guidance on entry modes. for many years, business decisions were made in africa based on information that was not precise enough to be relied on, missing important details, being older than 1 year, or simply unavailable (mkhabela, 2013). aspiring multinational companies in south africa find it difficult to access business opportunities in foreign business markets (gilbert and heinecke, 2014). this problem is witnessed by the existence of challenges faced by the highlighted south african companies; these multinational corporations also had difficulties penetrating and establishing themselves in the global economy. although foreign markets are in themselves complex, because of the traditional challenges emanating from government policy, religion, different customer behaviour and so on, the major problem that can be identified is the lack of information specifically tailored for aspiring companies looking to go into foreign business markets (jordaan, 2012). the inability to acquire adequate information about foreign markets is a major constraint for aspiring south african multinationals (gilbert and heinecke, 2014). most existing frameworks on multinationals in south africa offer guidance on how a company can be slowly established locally and later enter multinational markets. there are a few guidelines that are not necessarily frameworks that guide aspiring multinational companies, especially on trading for a few years locally before attempting to go outside south africa, or even whether to go multinational immediately at inception (jordaan, 2012). mkhabela (2013) explains that the south african parliament mandated the committee of international relations and cooperation to gather information through public participation, to investigate the challenges faced by aspiring multinational companies looking for business opportunities. following a report from the investigation indicating that there are indeed challenges faced by aspiring multinational companies, parliament suggested a code of good practice for doing business elsewhere in the world and the need for a scholarly inquiry on the challenges faced by and resources available to south african aspiring multinational companies. therefore, the purpose of this study is to create a framework to enable aspiring multinational corporations in south africa. this research would expand on the existing framework for corporations to specifically address challenges faced by south african aspiring multinational corporations (mkhabela, 2013). therefore, the study seeks to research what risks south african aspiring multinational companies could face, what information is available to assist them to look for business opportunities in other countries, and ultimately to formulate a guideline for multinational companies to access business opportunities in foreign business markets. 2. literature review the purpose of this section is to examine the theoretical perspectives that underpin the operation of multinational corporations and review of literature for aspiring multinational companies. 2.1. theoretical perspective of multinational companies this chapter provides literature review of existing multinational theories. although many scholars came up with multinational theories of multinationalism, the following were found to be relevant to this study: firm based-advantages theories, host country advantages theories, lastly firm and host country advantages theories. 2.1.1. firm-based advantage theories the firm-based advantage theories are based on the understanding that the underlying motive for an aspiring multinational company to move beyond its home country is to gain a competitive advantage enjoyed by other firms already operating in those foreign markets. competitive advantage is two-pronged; that is, ownership competitive advantages and non-ownership competitive advantages. ownership advantages are aspects such as patents and trademarks, while non-ownership competitive advantages are knowledge of products and services, company management structure, and business strategic partners (andreff and andreff, 2017). it is always beneficial for a multinational company to have a holistic view and understand the nature of ownership advantages in their entirety. lundan (2011) indicates that, as a result, firmbased advantages theories have to be understood to reflect civil society and quasi-governmental institutions. some of the firm based-advantages theories are the resources-based theory, the entrepreneurial approach and the uppsala model (stages model). the resources-based theory, as argued by sourkouhi et al. (2013), states that aspiring multinational companies need to act on the assumption that a company’s resources are homogeneous with a strong strategic management business position. according to this framework, a multinational company has perfect mobility of resources, otherwise trying to go multinational will be a long process. the key resources that any company that intends to go multinational should possess in homogeneity are human, physical and organisational resources. human resources are the necessary experience needed; physical resources are machinery, information technology and materials needed; and organisational resources are an operating model and strategic leaders to achieve the company’s direction. teece (2018) explains that focusing on creating strategic resources to improve the business will not only create a sustained advantage for the aspiring multinational company, but will also cultivate a competitive advantage. the concept of resources-based approaches to the business may be a known practice; however, a one-size-fits-all approach may not be ideal for a diverse country such as south africa. the entrepreneurial approach, as explained by teece (2014), indicates that an aspiring multinational company needs an entrepreneurial transitional leader who can take advantage of modisane, et al.: analysis of the availability of information for aspiring multinational companies in south africa international review of management and marketing | vol 13 • issue 4 • 2023 3 foreign opportunities. the model advocates for managers of these companies to be able to juggle three critical functions, namely: remote strategic management to manage the company’s investments from a distance, the ability to adjust towards managing economic activities of socially and geographically different markets, and having the ability to research and explore opportunities in foreign markets. jordaan (2012) emphasises that managers of an aspiring multinational company are critical to the company’s foreign or multinational risk-bearing capacity. this approach is appealing because it emphasises the capabilities of the managers; the transitional concept creates a perception that the approach expects the aspiring multinational company to move at a snail’s pace. ngugi (2012) explain that an entrepreneur is ultimately going to act on his desire to take his business transnational based on three very critical factors: drive, viability, and a predisposition, with a higher drive and predisposition being regarded as the most significant basic elements ultimately propelling an entrepreneur to assess the viability of a multinational business opportunity. the uppsala model (stages model), as outlined by andreff and balcet (2013), reveals the stages model from the basis that aspiring multinational companies can easily navigate foreign markets by incrementally gaining knowledge and experience. the understanding, according to the uppsala model, is that a multinational company is bound to have problems penetrating global markets unless it gains enough knowledge of how to control and own businesses multinationally. the company management needs inside information on opportunities and prevailing market problems in the foreign markets, investment laws, and projected current and near-future demand and supply. gao et al. (2022) advocate the uppsala model because it encourages aspiring multinational companies to move slowly through the stages of learning foreign markets as the only fool-proof mechanism to succeed multinationally; however, aspiring multinational companies may not have the appetite to be established locally first; at worst, the home country market may be oversaturated with their expertise. 2.1.2. host country advantage theory unlike the firm advantage-based category, this class of theories underlines the role of a company’s competitive advantages when choosing the route of going multinational, simply because new companies generally lack competitive advantages. the host country advantage theories emphasise that the multinationalisation process is triggered by the attractiveness of the host country. these theories presume that the company can be prepared and have a host of competitive advantages from their home country; however, the success in the new country lies heavily with the host country (fan et al., 2019). the host country advantage theories are the imbalance and springboard approach, the linkage, leverage and learning theory, and the network model. the imbalance and springboard approaches argue that the springboard of any aspiring multinational company is outward foreign direct investment, which, according to the imbalance and springboard framework, helps companies to gain an enormous competitive advantage (balcet and bruchieri, 2010). the framework purposed that an aspiring multinational company should look for imbalances or disadvantages in foreign markets such as lack of a certain critical resource; therefore, the company should capitalise on the imbalance as a business opportunity. deng (2012) states that once the company has that portion of the market share, it can easily leapfrog into foreign markets with more speed than their more experienced competitors. the researcher is sceptical of basing a penetration strategy mostly on the imbalances of the foreign markets, because the imbalances may be pointing to an even bigger problem that may not be solved remotely, such as lack of supportive technological infrastructure. the linkage, leverage and learning theory explains that the ability of aspiring multinational companies to penetrate foreign markets can be achieved through a combination of three aspects: linkage, leverage and learning. companies create linkages with large experienced multinational companies through strategic partnerships and joint ventures, and as a result of creating linkages, the companies are able to use these linkages to give them access to their desired markets and automatically take learning from their partner giant company (jordaan, 2012). fan et al. (2019) exhibit how the case study companies have advanced themselves to end up credible global players, by way of leveraging on their learning via centred acquisitions. in developed markets, companies can collect intangible assets and/or follow international customers in search of new markets and competitive advantages. furthermore, based on interviews in four emerging multinationals in one-of-a-kind industrial sectors, the company leaders showed preliminary proof of the fundamental reasons behind the internationalisation method of emerging multinationals from the viewpoint of linkage, leverage and learning (lll). the challenge is that aspiring multinationals may not be able to leverage big companies unless their interest is similar or related. the network model, as explained by bruschieri (2010), indicates that firms usually look for network opportunities with foreign firms to gain an authentic experience of what it is like to operate in the targeted foreign markets. a multinational network has the advantage of affording the out-of-town company a genuine feel of the new markets and helps the partner company to obtain access to the resources or assets necessary to improve their competitive advantage. however, the network model has the disadvantage of inter-organisational relations, causing a strong imitation to the extent of brand over-dependency on its counterpart. fan et al. (2019) indicate that it can be observed that the network model and the linkage, leverage and learning theory have similarities on the point of the usefulness of establishing business networks. they both have a perspective that networks help corporations to attain a right-of-entry mode into foreign markets, while at the same time being in conformance with the resources or assets required for improving a firm’s competitive advantages. 2.1.3. firm and host country advantage-based theories jordaan (2012) explains that firm and host country advantagebased theories are more logical, consistent, and comprehensive than the firm advantage-based theories and the host country advantage-based theories. as a result, they interpret the basis of a company managing to successfully be going multinational being the need of either exploiting company and host country resources modisane, et al.: analysis of the availability of information for aspiring multinational companies in south africa international review of management and marketing | vol 13 • issue 4 • 20234 (asset-exploiting investment), or the need to obtain access to otherwise unavailable resources in the company and the host country (asset-seeking investments), or the company might be looking to do both at the same time. the following are firm and host country-based theories: the double networking model, born global theory, the eclectic paradigm model, and the investmentdevelopment path. given this theoretical examination, there are several factors that should be taken into consideration when a company intends to go multinational. firstly, companies need to consider where they are in terms of their home country before choosing which model of going outside their country they will adopt. secondly is the availability of information to guide specifically south african aspiring multinational companies on how to look for business outside the country, which is relevant to the south african context, and lastly, guiding the companies on how to mitigate the risks associated with going multinational. kim and milner (2019) argue that the debates about the significance of the rule-based business approach for emerging multinational companies for economic growth and the likely positive effects on aspiring companies are critical for consideration by political and academic policymakers, which the theories discussed so far do not encourage. 2.2. types of multinationalism for aspiring multinational companies this section presents the insights that are used to assess the various methods of multinationalism and also explores the existing types of multinationalism for aspiring multinational companies. markusen (2013) asserts that many theoretical models have been developed to explain the concept of companies looking for growth beyond their home countries; unfortunately, most of the theories seemed rather to lean more towards unravelling the phenomenon of foreign direct investment rather than an aspiring multinational business. however, historically, multinational corporations have been among the important contributors in a continuous globalisation activity, which has increased phenomenally over the last three decades, even surpassing the gross domestic product of various countries. multinational companies are defined as business establishments that have value-added holdings outside their home countries (shah et al., 2012). a company chooses to go multinational during its strategy formulation or strategy review session. heidenreich (2012) explains that the strategy of operating outside the home country can be both daunting and exciting at the same time, because doing business elsewhere in the world means that the company resources may no longer be used in an integrated manner, taking away the opportunity for economies of scale. on the other hand, corporations can be creative in their choice of business activities undertaken multinationally, allowing the interdependencies on home country expertise to be fully utilised remotely. a truly multinational company must, according to shah et al. (2012), over and above having value-added services, also send to those countries a complete business package consisting of capital injection, technological advancements, managerial capabilities, and marketing competencies, to be able to satisfy the multinational company criteria. economic organisations that are attempting to grow from their national origins to operations across borders are aspiring multinational companies, which are corporations that should have a corporate office in their home country, but are looking to have other management head offices elsewhere. heidenreich (2012) indicates that to have multinational company status, businesses need to ensure that in one way or another, they have, or command, value-added services in more than one country. the difference between multinational and aspiring multinational companies is that multinational companies have managed to own, or control, value-added services in more than one country, whereas aspiring multinational companies are still looking for ways to go multinational. kraemer and van tulder (2009) explain that there are both traditional intrinsic and traditional extrinsic motives for an organisation to aspire to go multinational from an international business perspective. whether a company goes the route of traditional intrinsic, by internationalising markets over the borders in a multinational economy, or traditional extrinsic, by government involvement using their bargaining power capabilities, the company has to choose the mode of entry into multinational markets. mkhabela (2013) explains that aspiring multinationals can opt for any of the following modes of entry into markets: horizontally integrated multinational, vertically integrated multinational, conglomerate multinational, franchising, and joint ventures. a horizontally integrated multinational is involved in the production of essentially the same product but in different countries. the main objective here is for the corporation to continue to grow by the means of expansion into many different types of new markets. cieślik (2019) avers that the theoretical modelling of horizontally integrated multinational companies involves a trade-off between the saving on the trade cost and the cost of establishing a new plant in the host country. with vertically integrated multinational, the company’s integration starts from the top of the stages, with raw materials in one country, manufacturing in the second country, retailers in a third country, and lastly, customers in either the same country or in the fourth country. the main aim of integrating vertically is for the companies to have the advantage of controlling the costs and mitigating the risks posed by various business settings. to gain comparative advantage, vertically integrated multinational companies carefully scan the environment for countries with the least costs and risk for each of the stages of integration. from each country with the lowest costs and risks, a strategic partner (company) is identified. the companies are then allocated the stages fitting their level of advantage in the integration (bergstrand and egger, 2013). conglomerate multinationals produce different ranges of products in different countries. by this diversification process, conglomerate multinationals look to spread risks and maximise returns by carefully buying assets overseas. a conglomerate merger involves a merger between two companies that are completely unrelated to one another in terms of the products they sell or produce (hill, 2013). this implies that companies establish a conglomerate because it helps them to diversify according to opportunities in each country and therefore, unlike a single-product company, conglomerates are less vulnerable to losses due to business challenges in one sector or industry. franchising is an increasingly modisane, et al.: analysis of the availability of information for aspiring multinational companies in south africa international review of management and marketing | vol 13 • issue 4 • 2023 5 popular foreign-market entry and expansion strategy for retailers domiciled in slow-growth western markets. within the traditional model of franchising, the role of the franchisee is to implement the franchisor’s brand values and operational standards. however, there is reason to expect that the rigid approach to franchisee management, based on a comprehensive franchise agreement document and monitoring routines, is not ideally suited for penetrating culturally distinct markets (gorbunova et al., 2012). establishing a wholly-owned subsidiary in a foreign market can be done in two ways: the firm can either set up a new operation in that country, often referred to as a greenfield venture, or it can acquire an established firm in the host nation and use that firm to promote its product. while companies can benefit from each other’s brand to gain market presence, which would otherwise take longer for one company to build from scratch, some companies avoid entering into joint ventures because they fear losing their brand in the quest to jointly create value, where if the joint venture is dissolved, one company could lose brand value (hill, 2013). 3. methodology this study uses a quantitative data collection and analysis approach. quantitative studies generally involve the systematic collection of data about a phenomenon, using standardised measures and statistical analyses. the population of the study was 196 managers of aspiring multinational companies in south africa. a sample size of 152 aspiring multinational companies’ managers from 196 managers were enough to generate a confidence level of 99%, which gave a 1.0% margin of error. the sample size of the study was determined using a sampling technique. a sample, according to gray (2014), is the full selected group of items or objects on which hypotheses are tested or research questions are answered, drawn from the total population. the respondents were chosen using non-probability sampling, namely criterionbased purposive sampling. creswell and clark (2011) avers that purposive sampling involves the selection of respondents based on a study’s specific objectives and research questions, rather than at random. for this study, questionnaires were used to collect data; they were distributed to participants using the linkedin platform for professionals. the factor and gap analyses were used in this study. a confirmatory factor analysis is defined as a statistical procedure that is used to test how precisely the measured variables represent the number of constructs. confirmatory factor analysis was chosen for this study because, after the number of factors required in the data have been specified, confirmatory factor analysis can be used to either confirm or disregard the measurement theory (azma et al., 2019). the gap analysis is used because the researcher is convinced that there is access to an information gap that the analysis helped to expose. the gap theory model is a method that was in the past applied in marketing research studies; the model places focus on the measurement of what one is hoping for versus what they get in reality and at times the gap analysis is even used to measure the participant’s perception of how things should be like versus what they are experiencing. the gap theory model is based on the understanding that participants’ views documented during responses to questionnaires are based on a circumstantial void being experienced and that is the best view a researcher can get (fodness and murray, 2007). 4. findings this section analyses primary data collected from responses in order to answer the research questions. the main aim of the analysis is to evaluate the availability of information for aspiring multinational companies. 196 questionnaires were sent out, 189 were completed and of the completed questionnaires, 166 were usable for the purpose of this research. the demographics were as follows: the age of the participants was between the ages of 31 and 60, and 66.3% were males, while 33.7% were females. 54.8% of the participants aspire to operate in more than five countries, 44.6% of the participants have been operating locally for 5 years and above, 60.8% of the participants had more than 1,000 employees, and 34.9% of the participants used the partnering mode. in this regard, the cronbach’s alpha coefficient for the 18 items, the factor analysis and gap analysis for this study are presented in the subsequent segments. cronbach’s alpha was run on the 18 quantitative questions, and the results are presented in table 1 with the results of a measure to assess parallels between items on the same test. this is an evaluation of whether several items that intend to measure the same common construct generate comparable scores. the cronbach’s alpha coefficient for the 18 items is 0.838, which means that the research items have a high internal consistency. it means that the dataset is reliable, and therefore the quantitative analysis can be done using factor and gap analysis. 4.1. results of factor analysis factor analysis is used to find which value has the highest level of significance by articulating the observed data as functions of several likely causes. a correlation of 1 and above is considered a positive correlation and a correlation of below 1 is a negative correlation (hajjar and alkhanaizi, 2018). the survey questions contained dimensions regarding the following attributes of multinational business enablement: regulatory environment, economic environment, public environment, international laws, local spend, and sources of multinational business information, which were then divided into 18 elements. five attributes that ranked highest in order of availability by the participants were: • economic environment: available information on the stability of macroeconomic environments; • public environment: availability of information on foreign countries’ public sector; • international laws: information available on whether foreign countries treat foreign companies according to international laws; table 1: cronbach alpha reliability statistics cronbach’s alpha cronbach’s alpha based in standardised items number of items 0.82 0.038 18 modisane, et al.: analysis of the availability of information for aspiring multinational companies in south africa international review of management and marketing | vol 13 • issue 4 • 20236 • local spend: information on foreign countries’ public spend; and • sources of multinational business information: awareness of any sources of information in south africa on supporting technology infrastructure for multinational businesses. the results illustrated that the participants were more concerned with regulatory environment, local spend, international laws, and sources of multinational business information. the bottom three attributes, on the other hand, were: • regulatory environment: multinational regulations reference materials are free; • local spend: information on foreign company enablement is freely available; and • international laws: availability of information on foreign countries’ enforcement of foreign laws is freely available and sources of multinational business information. on the other hand, the high rankings attributed from top to bottom are: sources of multinational business information: awareness of any sources of information in south africa on supporting technology infrastructure for multinational businesses, international laws, economic environment, public environment, local spend, and regulatory environment. the results revealed that the participants were lacking information about the foreign countries’ local information about public environment, local spend, and regulatory environment. the respondents were pleased with the information they received on sources of multinational information. the results illustrated that the participants were happy with the information they received on sources of multinational business information in south africa, international laws, and the economic environment. the variables in the factor analysis were proven to be standardised, as all the variables had a variance of 1 or less, and the total variance is equal to 18, which is the total number of variables. a confirmatory factor analysis was conducted, after which, three items remained for measuring the extent of availability of information and success factors for enabling aspiring multinational companies. the three factors are economic environment, public environment, and international laws, which indicates that the analysis has confirmed that these three are a true measure of aspiring multinational companies’ success factors. the confirmatory factor analysis ranking orders of the availability of information and success factors are economic environment being the first, public environment is the second and international laws is third. 4.2. results of gap analysis the gap analysis conducted indicates the comparison of what is available with the idealised potential. potential far surpassed the apparent levels of accessibility of information by the scores. chang (2014) states that it is common for potential or expectation to exceed satisfaction, and this highlights that there is always a need for improvement. the more the potential is close to satisfaction, the higher the perceived level of available information. the gap analysis indicates that some attributes were regarded as lacking in providing information for aspiring multinational companies, and therefore they must be the critical areas for consideration. although other areas showed very small challenges with the availability of information, these can still be included in the framework as part of a complete guideline. however, a huge amount of focus is still required by the companies, particularly on the aspects with the lowest information availability. aspiring multinational companies need to know that information on local spend is not readily available as demonstrated in this study, and company managers need to also take extra time to check another critical element, which is the alignment of foreign markets with international laws to successfully mitigate the risk of arbitrary expropriation. equally, aspiring multinational companies need to be aware that the regulatory information of foreign countries is not easy to find, and therefore companies have to be aware of the possible challenges associated with penetrating these markets and prepare before entering these markets. the factor and gap analysis also indicated that information on foreign company enablement, information on foreign countries’ private sector, and information on courts and law enforcement systems are mostly available across all aspiring multinational companies. this implies that there is a need for a framework to assist aspiring multinational companies. although the results revealed that newer aspiring multinational companies in the export industry are the most dissatisfied with the minimal information available on aspiring multinational companies, the study has successfully managed to show the elements that are critical for the success of aspiring multinational companies, which can therefore be captured in a framework. based on the overall findings of this study, it can be said that all the identified indicators have a positive correlation coefficient and significant relationship and therefore influence the activities of aspiring multinational companies in south africa. consequently, this study proposes a recommended framework that can enable aspiring multinational companies in south africa to successfully penetrate multinational markets. table 2 depicts the proposed framework for aspiring multinational companies in south africa. 4.3. proposed framework for aspiring multinational companies this study proposed the following in table 2. after following the above process, the company management has to sit and craft a strategy informed by the information documented from the process. a strategy must be built around what the multinational company can offer to avoid strategy flaws such as under-estimations whereby the company makes big financial decisions based on a mere estimation of foreign investment. to successfully implement the aspiring multinational strategy outlined in the process above, there has to be perfect alignment with the strategy to be subsequently adopted. modisane, et al.: analysis of the availability of information for aspiring multinational companies in south africa international review of management and marketing | vol 13 • issue 4 • 2023 7 5. conclusion the pressures of globalisation and the desire for increased profitability have continued to motivate south african aspiring multinational corporations to invest across international borders. the extent of availability of information specifically designed to guide south african companies aspiring to become multinational companies has revealed elements of lack, but at the same time pockets of excellence. the participants indicated that the following sources of multinational business information were available to them as multinational companies: sources of information in south africa on supporting technology infrastructure for multinational businesses, international laws, economic environment, public environment, local spend and regulatory environment. the participants indicated that they were lacking information about the foreign countries’ local information about the public environment, local spend and regulatory environment. when exploring components contributing towards the establishment of a multinational company, the study has revealed the following as key towards establishing a multinational company over and above basic knowledge of business requirements: • companies need to consider and understand the company’s legislative environment on which legal and political forces act to change regulations that affect the company’s business efforts • the aspiring multinational companies have to comprehend the multinational economic environment, by exploring the external economic factors that are influencing the purchasing habits of other businesses and consumers. this also includes other factors outside the company’s control, such as the prevailing economic conditions of a country that are likely to have an impact on the effectiveness of a company towards achieving its goal • companies need to gain insights into multinational local spend to understand the basics of foreign countries’ local markets. this will help to establish which categories of customers are in the specific foreign country, and which products and services they spend their money on • companies need to be aware of the various aspects of multinational public environment spending, which one has to know before doing business with foreign public departments. these include the trends in government 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(2018), exploring the factors that affect employee training effectiveness: a case study in bahrain. sage open, 8(2), 215-231. heidenreich, m. (2012), the social embeddedness of multinational companies: a literature review. socio-economic review, 10(3), 549-579. hill, w.l. (2013), international business: competing in the global marketplace, maidenhead, berkshire. london: mcgraw-hill education. jordaan, a. (2012), multinational corporations: theoretical and conceptual framework. pretoria: university of pretoria press. jormanainen, i., koveshnikov, a. (2012), international activities of emerging market firms. management international review, 52(5), 691-725. kim, i.s., milner, h.v. (2019), multinational corporations and their influence through lobbying on foreign policy. multinational corporations in a changing global economy,  9(4), 497-536. kraemer, r., van tulder, r. 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(2013), strategic management; concepts, benefits, and process. iosr journal of business and management, 13(3), 61-64. teece, d. (2014), a dynamic capabilities based entrepreneurial theory of the multinational enterprise. london: palgrave macmillan. teece, d. (2018), business models and dynamic capabilities. institute for business innovation. los angeles: university of california. tx_1~at/tx_2~at international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2023, 13(1), 11-18. international review of management and marketing | vol 13 • issue 1 • 2023 11 millennial street food consumption: an integrated theory of reasoned action approach rejoice jealous tobias-mamina1, eugine tafadzwa maziriri2* 1department of marketing management, faculty of economic and management sciences, university of pretoria, south africa, 2department of business management, college of business and economics, university of johannesburg, south africa. *email: euginem@uj.ac.za received: 28 july 2022 accepted: 14 november 2022 doi: https://doi.org/10.32479/irmm.13419 abstract street food vending is still prevalent in developing countries despite the enormous stride recorded in the areas of food processing. this study investigates the practicality of the extended theory of reasoned action for street-food patronage decisions. the framework is premised on six critical constructsattitudes, subjective norm, past behaviour, food safety concerns, patronage intention and actual patronage. data were collected from 550 consumers in gauteng to validate the integrated conceptual framework. structural equation modelling (sem) technique is used to analyse data relating to the hypothesised relationships in the model. the results indicated that subjective norms and food safety concerns positively and significantly influence patronage intention. attitude towards street food and past behaviour negatively and insignificantly influenced patronage intention. lastly, patronage intention had a positive and a significant influence on actual patronage. drawing from the study’s findings, managerial implications are discussed, and limitations and future research directions are suggested. by and large, this study immensely contributes new knowledge to the existing body of consumer behaviour literature in africa a context that is often most neglected by some researchers in developing countries. keywords: attitude towards street food, subjective norms, past behaviour, food safety concerns, patronage intention, actual patronage jel classifications: m10, m16, m31 1. introduction family structure, changing lifestyles, and limited time to prepare food have significantly changed consumer food choices and consumption. conversely, consumers’ changing needs and individual preferences in eating-out drive millennial consumers to different food outlets, concomitantly seeking value and convenience. street food retailing is a common phenomenon of urban life in many countries (greenspan, 2018). kebab in turkey, “quarter” and “tshisanyama” in south africa, are most much-loved national street foods and found at almost any street corner in those countries. ethnic entrepreneurs in south african society often shape out an economic niche by means of business enterprises that are open to the public. typically, the analysis of food consumption has been in the context of family wellbeing, yet street food retail stalls, as an interface between food production and consumption, provide a significant and uncharted organizational arena for showcasing food retail changes with the south african market. street food vendors and their diverse food are fast becoming social icons. as such, the demand for the food served on the street is growing. nevertheless, there is a scarcity of research on the antecedences and consequences of street food consumption. consumption decision involve weighing in the perceived risks and benefits. street food refers to ready-to-eat foods eaten by mass consumers that are sold in the streets and public places and normally consumed with mild or no further processing. however, street vending is an informal food supply sector characterised by highly unregulated practices. while largely unregulated and seemingly isolated from the major restaurant sector, street food vending is categorized as food and beverages services under this journal is licensed under a creative commons attribution 4.0 international license tobias-mamina and maziriri: millennial street food consumption: an integrated theory of reasoned action approach international review of management and marketing | vol 13 • issue 1 • 202312 accommodation and food service industrial classification systems (south african classification systems). the theoretical question is: to what degree does the tra and its conceptual development relate to consumption behaviours in different social milieu? although the tra has been applied widely within developed countries and partly within various backdrops, limited studies on differential conditions and generalizability of the tra in consumption contexts can be availed (hussain et al., 2016). studies differ in the methodologies and findings since different products and services are studied at different points in time. although food vending is prevalent in africa, little empirical literature has addressed the dimensionality of street food patronage. furthermore, there is scarcity of research on consumption pattern of millennials vis-a-vis street food consumption. millennial young adults born between 1981 and 2000 (strauss and howe, 2000). currently, millennials are at different life stages and their lifestyles and values impact what they want or need and are reflected in their consumption of food and beverages (saulo, 2013). fundamentally, this paper aims to augment the theory of reasoned action and develop a robust integrative framework on street food patronage in an emerging economy context. many studies have adopted tra to explain consumption behaviour from diverse perspectives. thus, this study also explores concerns of theory generalizability, particularly for consumption behaviours as well as role of subjective norms and food safety concerns on consumption behaviours. unlike attitudes, which conform to predictions under the tra, subjective norms have frequently failed to predict intentions in most consumer research (kim et al., 2003). this study examines how a situational aspect (street food consumption) relate to subjective normative influence. lastly, this study tested the extended tra while controlling for past behaviour, considering patronage intention and actual consumption as criteria. this paper reports the findings of an empirical study, which examines the factors influencing consumer’s intention to patronise street food. the rest of the paper is structured as follows. firstly, we provide a review of previous studies including a description of the research model and the proposed hypotheses. the paper then explains the various methods employed within the study. the subsequent section presents and discusses the research results. the final section reflects the implications of the study with some concluding interpretations. 2. theoretical background and research hypotheses street food can be defined as ready to eat food (prepared on or off the street including beverages) that vendors and hawkers prepare or sell in public places using pushcarts, baskets or from stalls (fao, 2005). using appropriate theoretical framework provides edifice to identifying factors influencing food consumption in diverse settings. thus, the major concern for the street food retailers will be how potential and current customers perceive this type of retail setting and the behavioural consequences in terms of consumer attitudes and perceptions. in view of this, the theory of reasoned action (ajzen, 2011) offers a critical theoretical framework when seeking to comprehend the antecedents of street food patronage or consumption. the theory of reasoned action is the preferred theory because it is more parsimonious and is easily adaptable to different consumption contexts (ajzen and fishbein, 2004). 2.1. theory of reasoned action theory of reasoned action (tra) is regarded as the most influential and generally applied theory for explaining individual’s probability of performing a specific behaviour. the model has been validated in varied behavioural contexts with which most researchers find it useful for predicting and explaining an individual’s intention to engage in a behaviour at a specific time (paul et al., 2016). hence, in this study, tra is applied to examine millennials’ likelihood to patronise street food. tra assumes that an individual’s behavioural beliefs determine her/his attitude and behavioural intention towards a particular behaviour. in the context of this study, this means that prospective patrons’ attitudes, subjective norm, past behaviour and food safety concerns influence their decision to patronise street food. nonetheless, other studies have criticised tra as an incomplete model and many researchers have attempted to increase the proportion of variance explained with the inclusion of additional variables (armitage et al., 2002). 2.2. hypothesis formulation the development of the hypotheses is discussed in the following sections. 2.3. attitude and patronage intention attitude toward behaviour refers to the degree to which a behaviour’s performance is positively or negatively valued. behavioural attitude is determined by the aggregate set of accessible behavioural beliefs associating the behaviour to various consequences and other attitudes. (ajzen, 2011). attitude towards a behaviour consists of beliefs and experiences that either reinforce or weaken beliefs. intention to patronise street food should be a function of individual attitude and does not involve group coordination. furthermore, the relationship between attitude towards a behaviour and behavioural intention is apparent in consumer behaviour models (ajzen, 2011) and is well documented in the conventional marketing literature. thus, a millennial’s decision to patronise street food is influenced his/her attitude towards street food. it is therefore, expected that attitude impact the millennial’s behavioural intentions and actual consumption of street food hence it is hypothesised that: h1: attitudes towards street food positively influence behavioural intention to patronise street food. 2.4. subjective norms and patronage intention subjective norms reflect a person’s belief about whether people to whom one is close or whom one respects think that he or she should perform a particular act (ajzen and fishbein, 2000). the influence of subjective norms encapsulates the social pressure a decision maker feels when making purchase decisions. in this study, we hypothesized that subjective normative influence would be a function of the level of peer pressure one experiences. previous studies also identified a significantly positive relationship between tobias-mamina and maziriri: millennial street food consumption: an integrated theory of reasoned action approach international review of management and marketing | vol 13 • issue 1 • 2023 13 consumer subjective norms and organic food purchase intentions (e.g. chen, 2007; arvola et al., 2008). however, studies found that if a product is relatively new to the market or the perceived value of the product is not yet strongly shaped, consumers feel little or no pressure to conform with significant others (roberts and henderson, 2000). conversely, consumers confronted with a choice decision of a product whose perceived value accepted are likely base their decision on pressure from others. since this study is examining the decision-making process at street food consuming, targeting millennial consumers’ behaviour who may feel social pressure from others, the subjective norm is included as a construct in this study. if consumers believe that significant others have positive attitudes and opinions regarding street foods, they are more likely to have positive intentions to consume street foods. as a setting for testing hypotheses, the context of the study is street food patronage. for each of the variables in the tra, respondents expressed their reactions to street food consumption or patronage. therefore, it can be posited that: h2: subjective norms positively influence behavioural intention to patronise street food by young adults in south africa 2.5. past behaviour and patronage intention tra is criticized as an incomplete model and many researchers have endeavoured to increase the proportion of variance explained with the inclusion of additional variables (armitage et al., 2002). several studies have investigated the roles of additional variables or moderators of the intention behaviour link, including past behaviour. several researches have argued that consideration of consumers’ past behaviours can afford better predictions of behavioural intentions (patiro and sihombing, 2014) based on the notion that consumers’ behaviours are a result of learning (kim and krishnan, 2015). past behaviour of street food consumption is likely to be a strong determinant of future behaviour due to the habitual nature of eating. to provide a more rigorous test of the tra, this study included past behaviour as an antecedent of patronage intention. the inclusion of past behaviour in the prediction equation is methodological: “past behaviour can be used to test the sufficiency of any model” (ajzen, 1991). similar to findings indicating that past behaviour diminishes the effects of intentions on behaviour (e.g., bagozzi, 1981; rodrigues and girandola, 2017), it is expecting that the impact of attitudes, subjective norm and food safety concerns on intentions will be reduced after past behaviour is introduced as a predictor. this study predicts that past behaviour would have a significant effect on millennials’ street food patronage intentions. on the contrary, ajzen (2011) argues for an indirect relationship between past behaviour and actual behaviour, advocating for the mediation of tpb control components. ajzen (2011) argues that the direct effect of past and actual behaviour can be attributed to common method variance effects. therefore, is hypothesised that: h4: past behaviour positively influence behavioural intention to patronise street food. 2.6. food safety concerns and patronage intention street food patronage raises a plethora of concerns about food safety. according to the world health organization (who, 2006), food safety comprises actions aimed at ensuring that food is safe for consumption. although street vendors similarly conduct business as fast food restaurants, street vendors operate with limited facilities for food storage, preparation and cooking. this often heighten concerns about cleaning and sanitation of food contact surfaces and handling. based on the prospect theory (kahneman and tversky, 1979), individual tend to value losses and gains differently, thus individuals make decision based on perceived gains rather than perceived losses. this perspective establishes the reference points for millennials’ consumption decision in the street food retailing. the intensity of millennials’ health concern about street food and services would limit their choices to consume. food safety concerns have been operationalised as the degree of pessimism or optimism on street food safety. in the current study, we hypothesized that the degree of food safety concerns will invariably determine the level of patronage. previous studies identified a significantly positive relationship between food safety concerns (material and environment) and patronage (lee et al. (2012). it is clear from research that individual-level psychosocial factors, notably social norms and efficacy beliefs, influence behaviour (ajzen and fishbein, 1980; bandura, 1989). although attitudes play an important role in driving behaviours, the nature of attitudes related to food safety concerns have not been specified. therefore, consumption decisions that provide varying expectations of safety assume that street food patronage affects consumers’ optimism or pessimism about the safety of street vending sites. therefore, it is hypothesised that: h5: food safety concerns positively influence behavioural intention to patronise street food by young adults in south africa 2.7. patronage intention and actual patronage a positive correlation between patronage intention and actual behaviour was proposed in theory of reasoned action (ajzen and fishbein, 2004) and has been consistently verified in literature (paul et al., 2016). several marketing studies repeatedly measured intention based on the assumption that high consumer intention is a precursor to the actual behaviour (e.g. hassan et al., 2016), hence it is hypothesised that: h6: patronage intention positively influence actual patronisation of street food by young adults in south africa 2.8. hypothesised model in summary, consumers’ attitudes towards street food consumption, their subject norms, past behaviour, food safety concerns are postulated to affect their behavioural intention to patronise street food which consequently influence their actual patronage (figure 1). behavioural intention is assumed to be an individual’s subjective likelihood that he or she will present a specific behaviour (fishbein and ajzen, 1980). this construct thus represents the consumer’s subjective probability of patronising street food. actual consumption behaviour is compared with patronage intention to determine if consumers follow through with their intentions. 3. methodological aspects from a post-positivist perspective, this study adopts a quantitative data collection and analysis approach. this study follows an approach akin tobias-mamina and maziriri: millennial street food consumption: an integrated theory of reasoned action approach international review of management and marketing | vol 13 • issue 1 • 202314 to those engaged in other contexts (e.g. tan and lau, 2016; zamasiya et al., 2017) in predicting behavioural intention. in order to collect data and test the hypothesised relationships, a self-administered survey instrument was developed based on existing measures of constructs from marketing literature. the measures were adapted to the research context. the items for the constructs were measured using a five-point likert scale, with anchors ranging from strongly disagree (1) to strongly agree (7). the population of this study consists of millennial consumer in south africa. respondents were selected using convenience sampling method at public places namely university campus and their local malls. of the 600 questionnaires distributed only 550 were retained for further data analysis. respondents provided responses to the survey indicating their opinions about street food patronage. however, the “10 times rule” for pls was used (hair et al., 2012). this rule of thumb indicates that the sample size should at least equal 10 times the maximum number of structural paths pointing at a latent variable in the pls model. therefore, the sample size of 550 valid responses is considered more than adequate for the analysis based on the suggested “ten times rule.” confidentiality of responses was observed, participants were instructed not provide identifying marks on the questionnaire. 3.1. questionnaire design and measures the questionnaire consists of two major sections. the first section contains scale items (indicators) selected to measure each construct based on existing measures (table 1). measurement items were adapted from the theory of reasoned action, food safety concern and patronage intention literature. the items for measuring attitude (atsfp) construct were adopted from fakih et al. (2016). measures for subjective norm (sn) construct were adapted from fishbein and ajzen (1980). the items for measuring food safety concern (fsc) construct were adapted from roddy et al. (1996) and past behaviour measure was adapted from ajzen (2011) the past behaviour measure(pb), a time frame (2 weeks) was given in order ensure that respondents focus on the same period while answering the question. measures for patronage intention construct (pi) were operationalised from yu et al. (2018) and finally, measure for actual patronage construct were adapted from ajzen (2011). the measure for actual patronage was used to reflect voluntary consumption of the service. 3.2. data analysis the investigator used the statistical package for social science (spss) version 25 to evaluate the data pertaining to the geographical profile of the respondents, while, on the contrary, the latest software version of smart-pls 3.2.7 was used to analyse the data captured, as pls-sem was preferred to covariance-based sem because of its improved statistical power in parameter estimates and the maximisation of understood variance (tajvidi et al., 2018); less compatible than competitive relatives are plssem and cb-sem (rigdon et al., 2010; sarstedt et al., 2014). 4. results 4.1. sample characteristics the respondents reported their demographic details, which include age, gender, year of study and allowance. of the 550 respondents, attitude towards street food patronage subjective norms past behaviour food safety concerns patronage intention actual patronage h1 h4 h3 h2 h5 figure 1: proposed model of consumers’ street food patronage table 1: psychometric properties of measurement scales construct item item-total correlation value α value cr value ave value factor loadings attitude towards street food patronage atsfp1 0.697 0.790 0.851 0.658 0.757 atsfp2 0.699 0.773 atsfp3 0.706 0.895 subjective norms sn1 0.638 0.724 0.792 0.592 0.792 sn2 0.670 0.603 sn3 0.711 0.778 sn4 0.760 0.805 past behaviour pb1 0.711 0.869 0.938 0.884 0.942 pb2 0.716 0.939 food safety concerns fsc1 0.619 0.722 0.815 0.658 0.711 fsc2 0.724 0.741 fsc3 0.745 0.784 fsc4 0.743 0.705 fsc5 0.759 0.764 patronage intention pi1 0.501 0.713 0.794 0.562 0.737 p12 0.604 0.755 pi3 0.619 0.757 actual patronage ap1 0.834 0.891 0.948 0.901 0.939 ap4 0.857 0.959 tobias-mamina and maziriri: millennial street food consumption: an integrated theory of reasoned action approach international review of management and marketing | vol 13 • issue 1 • 2023 15 48.3% were males, 44.1% were females and only 7.7% preferred not to disclose their gender. of the respondents, 86.9% were below the age of 33 while 13% were above 35 year but below 40 years of age. the participants were largely undergraduates and about 14% were postgraduate students. regarding average allowance/income, the group with the most significant number of responses was within the 100-2000 bracket, constituting about 78% of the respondents. generally, the respondents were quite familiar with street food, with the majority having consumed street food in the past. 4.2. research results 4.2.1. psychometric properties of measurement scales the assessment of the measurement scales’ psychometric properties was performed through a cfa to determine the constructs’ reliability, validity, and model fit. table 1 presents the outcomes of the cfa assessment. the measurement model for constructs with reflective measure is assessed through assessing individual item reliability. the model’s internal consistency was assessed using the cronbach’s α index and the composite reliability index. a construct is considered homogenous if the cronbach’s α coefficient is greater than 0.7 (hair et al., 2012). however, the cronbach’s α index tends to underestimate the internal consistency of latent variable (henseler et al., 2009) hence composite reliability (cr value) is used to confirm composite reliability. the cronbach’s α value of the research model constructs range from 0.713 to 0.891 whereas the composite reliability vales ranges from 0.794 to 0.948 thus meeting the recommended threshold of 0.7. therefore, the plssem model estimation submits that all model constructs show acceptable internal consistency. construct convergent validity assessment build on the ave value as an evaluation criterion. in the measurement model, as shown on table 1, the ave values range from 0.562 to 0.901 are above the recommended threshold of 0.5 (hair et al., 2012). this implies that the latent construct explains more than half of its indicators’ variance (bagozzi and yi, 1988). discriminant validity of the six constructs was tested using the fornell and lacrker criterion and the cross-loading criterion. according to fornell and larcker criterion, the square root of ave of each construct should be higher than the construct’s highest correlation with any other construct in the model. table 2 shows the correlation matrix of the constructs with the square root of the reflective constructs’ ave higher than the correlations of the constructs with other latent variables in the path model. also, the cross loadings of each indicator’s loadings were found to be greater than all of its cross loadings (chin, 1998). to further assess the discriminant validity, if a latent construct shares more variance with its own indicators than with the other indicators in the model (hair et al., 2012), the htmt ratio is utilised, in which the standard is set at htmt.85. based on the smart pls output, all variables met the criteria with an htmt value below 0.85 indicating sufficient discriminant validity. therefore, the analysis results indicate that the measure of all constructs in the model have high levels of convergent and discriminant validity. the goodness-of-fit was calculated using the equation suggested by amato et al. (2004). this method considers both the quality of the measurement model and the structural model. this study model has a gof of 0.67, which exceeds the threshold gofb > 0.36 suggested by wetzels et al. (2009). therefore, this study concludes that the research model provides a largely good fit. the objective of reflective measurement model assessment is to confirm reliability and validity of the measurement model. the analysis results give support for the overall standard of the constructs measures and these results suggest that the data and measurement model are adequate for hypothesis testing. 4.2.2. structural model and hypothesis testing subsequent to the validation test, pls-sem was used to calculate the explanatory power and predictive relevance of the proposed model, magnitude of the path coefficient and the significance of the hypothesised relationships. the central criterion for evaluation of the structural model in pls algorithm is the r2 (variance explained). 4.2.3. outcome of hypotheses testing in this study, testing of the hypotheses was determined by path coefficient values as well as the t-values for the structural model obtained from the bootstrapping algorithm. according to beneke and blampied (2012), t-values indicate whether or not a significant relationship exists between variables within the model and path coefficients demonstrate the strength of the relationships in the model. two-tailed t-tests were conducted at the 5% significance level. 4.2.4. outcome of testing hypothesis figure 2 and table 3 indicate that h1 is not supported as reflected by the hypothesis findings, (β = −0.273) and is insignificant at t-statistics 1.525. this implies that attitude towards street food patronage is negatively related to patronage intention in an insignificant way. however, this is contrary empirical findings of alam and sayuti (2011) who found a positive relationship between attitude and behavioural intention within the food informal sectors. figure 2 and table 3 depict that h2 is supported significantly with a t-statistics of 4.220. the strength of the relationship is indicated by the path coefficient of 0.718. this finding suggests that subjective norms has a direct strong positive effect on patronage intention. these findings corroborate with ramayah et al. (2012) findings suggesting subjective norm as a strong predictor of behavioural intention. however, this finding is contrary to a study by kumar et al. (2017) which found an insignificant relationship between subjective norm and behavioural intention. table 2: correlation between latent constructs matrix and the square root of ave atsfp sn pb fsc pi ap atsfp (0.811) sn 0.143 (0.769) pb 0.398 0.475 (0.940) fsc 0.319 0.576 0.364 (0.926) pi 0.483 0.508 0.404 0.554 (0.750) ap 0.322 0.414 0.473 0.563 0.582 (0.949) nb: no. in parenthesis is √ave. tobias-mamina and maziriri: millennial street food consumption: an integrated theory of reasoned action approach international review of management and marketing | vol 13 • issue 1 • 202316 figure 2: final structural model table 3: results of structural equation model analyswis path hypothesis path coefficients (β) t-statistics decision attitude towards street food patronage → patronage intention h1(-) −0.273 1.525 negative and insignificant subjective norms → patronage intention h2(+) 0.718 4.220 positive and significant past behaviour → patronage intention h3(+) −0.077 0.946 negative and insignificant food safety concerns → patronage intention h4(+) 0.508 5.799 positive and significant patronage intention → actual patronage h5(+) 0.483 5.960 positive and significant interestingly, this research did not find support for past behaviour as a predictor of patronage intention with the street food consumption domain. past behaviour has a negative and insignificant effect on consumers’ intention to patronise street food markets (β = −0.077; t = 0.946. these findings are however contrary to earlier studies by ku-shan and yi-man (2011) and conner and armitage (1998). ku-shan and yi-man (2011) found that the frequency of past behaviour influence the subsequent intention to patronise. conner and armitage (1998) reported that one’s past behaviour mostly determines behaviours. thus, the negative association between past behaviour and intention can be due to the fact that, as behavioural frequency increases, individuals are more likely to form habits and the role of intent is reduced. figure 2 and table 3 depict that h4 is supported significantly with t-statistics (5.799 and path coefficient of 0.508, indicating the strength of the relationship. the relationship between food safety concerns and patronage intention is robust. these findings corroborate with previous studies (hansla et al., 2008; yu et al., 2018). hansla et al. (2008) found that individuals with a higher level of safety concern are more likely to consider the consequences and this generates the sense of responsibility that ultimately activates their moral values to perform pro-safety behaviour. figure 2 and table 3 depict that h5 is supported significantly (t = 5.960) and path coefficient of 0.483. this finding suggests robust relationship between patronage intention and actual patronage. the findings corroborate with teng (2011) who found a positive relationship between intention to visit and actual visit. 5. conclusion and implications for the study this research uncovers theoretical, managerial and policy ramifications that deepen awareness of the business practices within the informal sector. specifically, it provides insight into the understanding of the informal sector’s food marketing literature. the reasoned action approach seems likely to offer a more detailed perspective on understanding evolving customer behaviour and the informal business segment. this study findings are expected to confirm attitudes as the immediate predictor of behavioural intention thereby closing the attitude-behaviour gap. existing research has shown that street food attitudes, subjective norms and health safety concerns are important for predicting street food patronage activity. the findings of this study contribute to the understanding of consumer behaviour in the street food market, which has gained little attention form the marketing literature. specifically, the paper offers insight into the various factors that influence street food patronage. the finding that past behaviour does not determine patronage intention in explaining street food patronage is reflective of two main marketing implications. firstly, tobias-mamina and maziriri: millennial street food consumption: an integrated theory of reasoned action approach international review of management and marketing | vol 13 • issue 1 • 2023 17 this study confirms the existence of a new street food category thus indicating an expansion of the informal street food market. the need for sustainable consumption practices largely drives the growth in the consumer demand for street food. this segment of the economy is expected to continue to grow as awareness of sustainable practices intensifies in most developing economies. similarly, the informal street food market will continue to expand as evidenced by activities within the small and medium enterprises in the african context. this expansion is expected to gain momentum as the population in the region continues to rise and the rural to urban migration continues unabated. overall, the current study findings support the proposition that attitudes, subjective norms, food safety concerns and patronage intention should be recognized as significant antecedents for influencing street food consumption decision amongst south african consumers. 5.1. limitations and future research suggestions despite this study’s interesting results, its constraints are worthy of notice. first, the findings are not generalizable to non-student samples because students were the sample for gathering data. future study therefore requires considering non-students in order to generalize the outcomes. in addition, the present research was restricted to the province of gauteng in south africa without other provinces being included. this research should be replicated in other south african provinces and other developing countries for comparative outcomes. in conclusion, the examination’s quantitative nature may have resulted in disregard for more enlightening and extravagant information that could have been generated by a qualitative methodology if incorporated into the inquiry. future examinations may, as necessary, explore indistinguishable points from the current examination using a blended process technique to improve the expansiveness of the outcomes of the examination. references ajzen, i. 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(2017), factors influencing smallholder farmers’ behavioural intention towards adaptation to climate change in transitional climatic zones: a case study of hwedza district in zimbabwe. journal of environmental management, 198(pt 1), 233-239. 1266 syedah.indd international review of management and marketing | vol 5 • issue 3 • 2015114 international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2015, 5(3), 114-121. comprehending the marketing strategies of microfi nance institutions: case of selected institutions within multan district of pakistan syedah shan e. ahmad* department of economics and management sciences, the women university, multan, pakistan. *email: syedahshan@hotmail.com abstract the study focuses on fi nding whether microfi nance institutions (mfis) within multan district of pakistan use marketing approaches and strategies in credit delivery and savings mobilization. the objectives of the study are measuring the degree of marketing orientation among mfis and probing the application of marketing in credit delivery and savings mobilization. the research aims to test the hypothesis that “whether or not mfis in multan district are market oriented in delivery of credit and mobilizing the savings.” primary data has been used as the main source of data for the study. the data was drawn from credit offi cers and management team (in some cases) of the mfis. descriptive statistics have been used for analyzing the data by using excel sheets and spss software. the survey revealed that the certain mfis are not market-oriented in services’ delivery. one of the main fi nding is that marketing activities are poorly organized in mfis. moreover, little focus has been placed on marketing in corporate plans, and a very low budget has been allocated to promotional activities. in some cases no separate marketing promotional activities have been found. unavailability of data is there and while conducting the survey lack of data transparency issue has been faced. the evidence in the paper suggests that mfis should make marketing departments, develop the customer service packages in an easy approachable manner, and reinforce their marketing planning capabilities particularly in environmental awareness area. the paper is informative when planning for the establishment of proper marketing departments in mfis. keywords: credit delivery, marketing strategies, microfi nance, saving mobilization jel classifi cations: l1110, m30, m390 1. introduction households’ savings culture is a widely known worldwide phenomenon. people save as they want to guard themselves against any unexpected crisis, accumulate fund for investment, meet their social obligations, and also to meet future consumptions. regardless of the presented reasons for savings, the poor populace in society is controlled in accessing savings and credit facilities presented by formal fi nancial institutions (cravens, 1991). the elucidation for this pragmatic situation is the fact that commercial banks observe doing business with the poor and with microenterprises to be costly and highly risky. the medium and large enterprises are arbitrated to be relatively credit worthy. microfi nance institutions (mfis) have consequently become the key source of funding for both the poor and micro-enterprises. mfis bridge the savings and credit gap and also help the poor and micro-businesses to ensure access to savings and credit facilities. it is broadly accepted that micro-fi nancing plays a signifi cant role in improving the living conditions of the poor populace by making it possible for them to have access to prolifi c resources, with fi nancial services as a key resource. such resources can be directed to income generating activities and subsequently generate employment for the poor populace. microfi nance is also renowned as making a substantial impact on issues as women empowerment, and environmental degradation as well as refi ning access to such social services as education, health, and housing by poor and vulnerable. it is a tool which provides the poor with access to productive capital, which if accompanied with human and social capital, tackled through education and training, facilitates the people to move out of poverty (no. 10, m., 2009). 1.1. microfi nance in pakistan currently the microfi nance sector in pakistan has microfi nance providers (mfps) which are categorized into fi ve peer groups international review of management and marketing | vol 5 • issue 3 • 2015 115 ahmad: comprehending the marketing strategies of microfi nance institutions: case of selected institutions within multan district of pakistan by industry network pmn as microfinance formal banks, specialized mfis, rural support programme, multi-dimensional non-governmental organizations (ngos) working as microfi nance service providers and others. regarding the source of income, majority of mfis organized their own funds but the non-government organizations normally depend on government and donor partners. it is frequently stated in related studies that regardless of the important part played by mfis, this sector has faced enormous challenges and limitations which partially account for the slow growth of this sector (syedah et al., 2013). one of the main challenges is for mfis to attain a bigger number of the poor clients. the survey of consultative group to assist the poor showed that microfi nance experts guesstimate that over 500 million poor people globally demand fi nancial services, nonetheless only a small fraction of those people in reality have access (steel and andah, 2003). the task of building a worthwhile and sustainable microfi nance sector to meet this enormous demand simulate an exciting yet overwhelming challenge. by inference, mfis serve just a tiny fraction of poor households and micro enterprises in pakistan although the sector seems to be growing. the query one will have is: “what are mfis doing to draw the lasting potential customers into microfi nance industry?” one part of information missing in many empirical studies on micro fi nancing in pakistan is the marketing placement of mfis. furthermore, it is an admitted fact that, for any given institution that catches itself operating in a situation of growing number of microfi nance operators, it turns out to be more problematic to get the fi rm’s product noted and for potential customers to conduct business with her lacking a good marketing mindset. the use of good marketing methodologies and policies by mfis in endorsing their products will not only draw additional new customers, but also guarantee a sustainable microfi nance sector in the country. this study will thus try to fi nd out whether mfis use marketing methodologies and policies in reaching the productive poor. 1.2. objectives of the study the study focuses on fi nding that whether mfis within multan district of pakistan use marketing approaches and strategies in credit delivery and savings mobilization. the objectives of the study are: 1. assessing the degree of marketing orientation among mfis 2. probing the application of marketing in credit delivery and savings mobilization. 2. literature review on the concern of market strategies, various studies have tried to classify the key features of marketing oriented enterprises. for case in point, kholi and jawarski (1990) acknowledged that, marketing orientation requires: 1. one or more departments engaging in activities geared in the direction of developing an understanding of client’s current and future needs and aspects affecting them 2. sharing of this understanding crossways departments and 3. the different departments engaging in doings designed to meet certain customer needs. rendering to carlson et al., (1990), the objectives of an institution need to be considered before preparing and designing marketing strategies approaches. drucker (1974) studies an effective mission to be dedicated to markets rather than products. in simple words, the mission statement should emphasis on wide ranging set of needs that an institution is trying to satisfy its clients (that is external focus). drucker claims that, the purpose and mission of all business organization is to please the customer. therefore, the goal to which all marketing actions in the mfis are to be focused over the formation period then turns out to be the marketing objective of the institution. it must disclose the expected achievements in sales, profi tability, cash fl ow and liquidity, market share, portfolio balance, amongst others, in a stated time frame (drucker, 1990). when realizing marketing objectives, kotler (1994) specifi es that marketing policies are in a straight line linked to marketing programs implemented by the mfis. until the marketing policies are converted into marketing approaches, the marketing objectives of the mfi cannot be realized. kotler (1994) proposes that in developing market policy the major issues that need to be focused are the mission analysis; competitive differentiation and positioning, market segmentation; and matching assets with customer requirements. kotler says mission analysis has two borders; that are customer missions and key value missions. customer mission emphases on customer needs with which mfis are dealing in. whereas key value mission refers to what is vital within the business, or in simple words what mfis want people to see as important. according to cravens (1991), marketing methods concern the planning and implementation of precise actions in the market place. the certain precise actions move around the marketing mix comprised of the following elements; pricing policies, product policies, distribution policies, marketing communications and service policies. fifi eld (1994) studies product policies of mfis as the base of their marketing methodologies. it is so if the product does not provide the expected features to the customers, even a reasonable interest rate together with creative promotion and well-ordered distribution will not pay for its weaknesses. robinson (1994) recommends that deposit demand services is measured by a combination of motives and determinants and thus can be delivered by a combination of saving products providing different levels of liquidity and return. gronroos (1990) agrees marketing communication is the most evident aspect of the marketing approaches of mfis. the communication methods open to the mfis in providing marketing to the consumer could be categorized as follows; advertising, personal selling, sales promotion and public relations. gronroos proposes that distribution policy of mfis is related to distribution and delivery of products to the client. the key marketing issues to be reported in distribution are related to networks or branches and logistics. there is certain literature review which confers idea of relationship marketing in the fi nancial sector. berry and thompson (1982) have utilized relationship marketing for banking sector, arguing the concept will take over retail bank marketing practice. gronroos (1990 a) also framed a relationship-focused defi nition of international review of management and marketing | vol 5 • issue 3 • 2015116 ahmad: comprehending the marketing strategies of microfi nance institutions: case of selected institutions within multan district of pakistan marketing. the aim of marketing is to create, maintain, boost and commercialize customer relationships for fulfi lling the objectives of involved parties. christopher et al. (1991) describes the concept of relationship marketing based on a comprehensive viewpoint than previous contributions. levitt (1981) argues that when an institute is loyal to its clients, is dedicated to provide valuable and enhanced services in reaction to changing needs of its clients, there is an inclination for its clients to recompense the favor in a mutually benefi cial, long-term relationship form. ryans and wittink (1977) have characterized service offerings founded on the degree of variation of competing services and clients ability to change suppliers and have recommended that service fi rms give suffi cient attention for encouraging customers’ loyalty. a loyal client is probable to be a low-risk borrower, supposing that a mfi shapes its services to meet the precise demands by each client (churchill, 2000). hypothesis: the research aims to test the hypothesis that “whether or not mfis in multan district are market oriented in delivery of credit and mobilizing the savings.” 3. methodology both secondary and primary data made the basis of the study. secondary information was used to establish the marketing orientation criteria and provide additional information about those works that already have been conducted in the microfi nance marketing area. this infers that the present research involved a review of literature on the approaches of credit delivery and savings mobilization along with external factors which impact the activities of mfis in pakistan. in pakistan, mfi can be categorized into formal and semi-formal mfis. primary data which formed the basis for the study was collected by using self-administered questionnaire. questionnaires were directed to credit offi cers and in certain cases management team from nominated mfis multan. asked questions cover the strategic marketing issues which apply to savings programs of mfis, their marketing placement as per their mission statements, credit delivery recovery strategies and to their own internal marketing strategies. the study counts on descriptive statistical analysis done from the use of windows excel and the statistical package for social sciences (spss). mfis were studied and explored in terms of their marketing goals, mission, policies and approaches based on defi ned indicators. all mfis operating in the multan and registered with the pmn is used as the sampling frame. mfis interviewed were carefully chosen through purposive sampling. the institutions were nominated based on captured market size by utilizing the number of clients acquired as indicator. these institutions have no < 5000 clients and are considered as representatives of successful mfis within multan. 4. analysis of findings this section presents the findings from the administered questionnaire to the eight selected mfis. in these institutions, either the credit offi cers or the management team was interviewed. to identify the marketing methods, approaches and strategies that have been implemented by mfis, questions associated to marketing dogmas and general judgment of the premium attached to marketing were inquired. the responses indicate that all of the mfis have a corporate mission statement. regarding the issue of whether these statements were dedicated to customer needs or else, it was found that the mission statements of all of the mfis had both fi nancial focus and customer orientation. though, customer orientation was obvious between the ngos than among the savings and loans companies. this is not bizarre, because of the charitable services provided by the ngos. the inference of this is that ngos were more marketing-oriented whereas the savings and loans were less marketing-oriented. 4.1. marketing department among mfis during survey when inquired whether a marketing department existed in their institutions or not, about 50% indicated that they had a marketing department. in any institution, marketing department is the nerve center through which an extensive range of marketing activities such as corporate strategy, product policy, marketing service, selling, and physical distribution of products take place. whereas the absence of such a department shows that marketing activities will not be provided with the serious attention they deserve. for those remaining institutions having no marketing departments, questions were also modeled to fi nd out whether some staff members were held responsible for performing different marketing roles. these institutions had staff not initially assigned as proper marketing staff executing the marketing function. this is shown in table 1. in the case of those liable for formulating the marketing objectives and policies in the fi nancial institution and the designation those individuals occupy in the chain of command of the organization, 75% of the mfis showed that they were set by senior management while 25% indicated they were done by middle management. the results indicate that mfis had marketing functions as their uppermost priority in terms of its demonstration at the management level. though, concerns were outstretched as to whether these officers had the required skills, knowledge, familiarity, and experience to perform such activities regarding data collection, evaluating past marketing performance and classifying marketing table 1: staff members executing the marketing function in institutions without marketing department staff number of mfis percentage of mfis management team 1 25 credit offi cers 3 75 total 4 100 source: survey data 2013. mfi: microfi nance institutions international review of management and marketing | vol 5 • issue 3 • 2015 117 ahmad: comprehending the marketing strategies of microfi nance institutions: case of selected institutions within multan district of pakistan opportunities to certify the provision of quality service. this presumes that marketing activities may not be appropriately systematized in such institutions and is responsible for an indication that they are possibly not market oriented. 4.2. marketing strategies 4.2.1. marketing planning when inquired whether marketing plans were set by the mfis, all three savings and loans companies and two ngo, constituting 63% of the interrogated mfis gave the response, “yes” whereas the remaining three, creating 37% said they never set marketing plans. a quick look at such strategies and policies however demonstrate that 80% of the mfis had corporate plans with minute focus on marketing. the emphasis was relatively on financial considerations. in responding the question on frequency with which they go through their marketing plans, 38% responded “very often,” 50% answered “often” and 12% said “sometimes”. the inference of this fi nding is that not much signifi cance is attached to marketing. regarding whether the mfis set a marketing plan for each of their services and products, 62% said they did whereas 38% said they did not. this answer might give a hint of the presence of a high level of marketing orientation between the mfis. nevertheless, drawing conclusions from this response rate should be done with care allowing for the fact that 80% of the mfis paid very little attention in preparing marketing plans. 4.2.2. products when probed whether there had been modifi cations to the products and services offered and delivered over the last 5 years on average, 62% of the respondents showed that there had been changes and modifi cations in the products and services they offered. all the savings and loans companies cross-examined had varied their product range. some of the novel products introduced by the savings and loans companies included the import financing, sale of insurance products, and dissimilarities in the loan and group fi nance schemes that has been practiced by the rural banks. table 2 shows the response of the mfis on the frequency with which changes are made to their products. it can be observed that the mainstream of them modifi ed their savings products as and when they considered necessary. 50% responded they modifi ed their savings products as and when necessary, 12% answered they did so every 1-2 years and 38% didn’t modify their product at all. the inference of this may be that the concern of clients was not the pre-occupation of mfis in their effort of savings mobilization. a parallel trend is observed regarding credit products and is presented in table 3. 50% claimed that they altered their credit products as and when necessary, 12% said annually and 38% did not modify their products in the least. product modifi cation is required for savings mobilizing and delivery of credit to the poor populace and microenterprises. customers’ needs could be best met with a blend of savings and credit products proposing diverse levels of liquidity and return. conversely, the responses given infer that product modifi cation was done casually or else accidentally rather than being a deliberate and considered effort with the drive of satisfying customer needs. this shows that the interest of clients was not of supreme importance to mfis in credit delivery. some of the factors, taken into consideration by the selected companies while modifying their savings products were the emerging client needs, level of competition, deposit level, competitive products and existing interest rates. however, factors considered by the selected companies when modifying their credit products comprised of prevailing interest rates, emerging client requirements, risk exposures sectional analysis of the economy and competitive products. thus it could be concluded that the mfis measured both customer and fi nancial considerations while modifying their products. 4.3. marketing objectives when inquired whether the mfis had specified marketing objectives for designated marketing activities, 50%, showed they did not have specifi ed marketing objectives whereas the other half responded they had. two-third (63%) of the ngos and one-third (37%) of savings and loans companies indicated they did not have specifi ed marketing objectives. this is a clear sign that a considerable number of mfis are not marketing oriented in their activities. in general, most of the stated marketing objectives by mfi for delivery of credit circled around the processing and credit delivery, offering attractive competitive lending rates, volume increase of loan portfolio, satisfying profi table relationship to reference a few. some of the detailed marketing objectives for savings mobilization comprised meeting clients’ demands on time, inspiring members to save frequently, interest amount to be paid to depositors, enlightening on the savings culture of their clients, taking banking table 2: frequency with which savings products are modifi ed period number of mfis percentage of mfis annually nil nil every 1-2 years 1 12 every 3 years or more nil nil as and when necessary 4 50 not at all 3 38 total 8 100 source: survey data 2013. mfi: microfi nance institutions table 3: frequency with which credit products are altered period number of mfis percentage of mfis annually 1 12 every 1-2 years nil nil as and when necessary 4 50 not at all 3 38 total 8 100 source: survey data 2013. mfi: microfi nance institutions international review of management and marketing | vol 5 • issue 3 • 2015118 ahmad: comprehending the marketing strategies of microfi nance institutions: case of selected institutions within multan district of pakistan to the door step of clients to reference a few. the mfis were also questioned on whether a portion of their budget was allotted to marketing activities. their response is presented in table 4. 12% indicated they did not allocated any budget for marketing activities whereas 38% indicated they allocated 1-4% of their budget for marketing activities. this shows that 12% who have no marketing budget will not offer reserves for the marketing strategies an activities required for profi tability and market growth. another 38% allotted between 5% and 8% portion of their budget to marketing activities. only 12% of the mfis disbursed between 9% and 12% allocation of budget on marketing activities. such a verdict offers a clear indication about real attitude to marketing and fi nally towards customers amid mfis. instead of providing funds for marketing activities in their corporate plans, mfis decided on paying for expenses rising from activities seeming to be related to marketing which were inadvertent. 4.4. marketing approaches of mfis 4.4.1. marketing research respondents were inquired about conducting marketing research. 62.5% said they conducted marketing research whereas 37.5% said they did not. out of those who said they conducted marketing research, 25% said they did it very often, while 50% said they did it often whereas remaining 25% said they did that sometimes. the mfis’ response to the question on how information acquired from research was used is presented in table 5. 38.5% said they used it for long term strategic planning, 12% used it as a basis and source of normal routine activities and 50% said they used it as a decision making basis. it was however, seen that most mfis depended on mainly on secondary data and intuition and perception in conducting their marketing research. though, for an effective and operative strategic planning, primary data gathering would be very helpful. the fact that primary data gathering was nearly absent meant that good strategic marketing planning was on the low side. 4.4.2. observing customer preferences and environment the comebacks of the question “whether mfis monitor customer preferences at their location or not,” 60% indicated “yes” whereas 40% said “no.” table 6 offers information in what way frequent the nominated mfis monitor customer preferences. 38% of the mfis showed they did that very often, 50% believed they did that often, whereas 12% said they did that sometimes. as customers of the mfis are not the same in terms of demands, perceiving their preferences very often will help mfis to improve their services and develop appropriate products. though, since it is not done very often, it indicates that mfis are not placing much effort to improve their delivered products to ensure maximum customer satisfaction. moreover, questions were probed to discover whether mfis observed changes to the environment by listening to certain environmental factors considered as problems and opportunities being faced by mfis. environmental factors being considered include business environment, macroeconomic indicators like national gross domestic product (gdp), interest rates, technological developments, social/cultural factors, foreign exchange rates and national infl ation, fi scal factors, intra company issues, market and the competitors. this assists with the determination of the degree of consideration of marketing environment in which mfis worked. answers by mfis to the question that whether they developed a systematic approach to follow changes to the environment are shown in table 7. almost 50% of mfis answered “yes.” some of the approaches used encompassed periodic analysis of economic situations, tracking changes in macroeconomic indicators, observation of changes in remuneration levels, customer feedback surveys, competitor intelligence and sensitivity analysis. the inference from this is that most of the mfis used formalized and organized approaches in monitoring the environment. this illustrates a high level of strategic management. it can be concluded from the responses that mfis paid very little attention in observing and noting the changes in environment. less than 40% of them tracked the economic and fi scal factors, business environment, technological developments, social/cultural intra-company issues and the market very often. only 38% of the mfis followed trends in fi scal, business, economic, intra-company table 4: provision in budgeting for marketing activities provision in budgeting for marketing activities (%) number of mfis percentage of mfis nil 1 12 1-4 3 38 5-8 3 38 9-12 1 12 13-16 nil 0 above 17 nil 0 total 8 100 source: survey data 2013. mfi: microfi nance institutions table 5: use of information obtained from research activity number of mfis percentage of mfis for long-term strategic planning 3 38 basis of normal routine activities 1 12 decision making basis 4 50 total 8 100 source: survey data 2013. mfi: microfi nance institutions table 6: frequency at which customer preferences were observed frequency of scrutinization number of mfis percentage of mfis very often 3 38 often 4 50 sometimes 1 12 total 8 100 source: survey data 2013. mfi: microfi nance institutions international review of management and marketing | vol 5 • issue 3 • 2015 119 ahmad: comprehending the marketing strategies of microfi nance institutions: case of selected institutions within multan district of pakistan issues and competitors very often. economic conditions that were expected to be followed include trends in national infl ation, national gdp, interest rates and foreign exchange rates. low level of observing these environmental factors advocates a low level of marketing orientation. 4.4.3. promotion a question regarding promotional strategy was also asked. 81% of the mfis that were interviewed said they had a promotional strategy. table 8 represents the frequency for steering promotions by the selected mfis. results reveal that 12% conducted promotions to mobilized savings very often whereas 38% did that often. 38% conducted promotions sometimes whereas 12% never conducted promotions. 50% of mfis claimed that they had a promotional budget whereas remaining 50% didn’t have. it can be inferred from this scrutiny that mfis are not doing much effort to attract customers. table 9 demonstrates responses by mfis to the question about the extent to which budgetary distributions to promotions are made. results show that 50% of selected mfis said to have their budget allocated between 1% and 4% while 12.5% said they distributed between 5% and 16%. 37.5% said they distributed above 17% of their marketing budget to promotions. the results show that little attention is being given to promotional activities by the mfis as it is confi rmed by their relatively low expenditure on promotions. 4.4.4. determining interest rates respondents were given a list of methods which they might have used in interest rates determination. the list of market oriented approaches were ensuing competitors, variable pricing and customer acceptance pricing. the other three approaches were fi nancial oriented mark-up pricing and cost plus build up and break-even analysis. these pricing methods were well explained in the questionnaire. the table 10 shows that many mfis used a combination of approaches in their interest rates’ determination. results reveal that 50% of the mfis uses market-oriented approaches for their interest rates’ determination. this infers that the level on which mfis depend upon prevailing market scenario in fi xing interest rate was quite low. the overall result is that when it’s about pricing, mfis tended to be partly market oriented. 4.5. mobilization strategies for deposit among mfis two savings approaches have been found to be used by mfis i.e. forced savings and mobilization of voluntary savings. in case of forced savings, clients qualify for loan with the institution after saving for about an average of between 3 and 6 months. in the case of mobilization of voluntary savings, savers’ actions were mostly based on personal motivation. an indication of gender bias was also there in the mobilization of savings and credit delivery among mfis. most likely the cause for this could be the reality that women made a big part of the poorest groups of population and mostly they followed independent economic activities. one more explanation was that mfis’ managers observed women to be reliable clients, and also found them to be more discipline than men in making regular loan repayments. 4.6. loan recovery strategies among mfis it has also been found that many of the mfis studied had strict methods for providing credits and decreasing default in table 7: percentage of institutions that monitored environmental factors environmental factor number of mfis percentage of mfis very often often sometimes not at all very often often sometimes not at all business environment 3 2 2 1 38 25 25 12 economic 3 4 1 nil 38 50 12 0 fiscal 3 2 2 1 38 25 25 12 technological development 1 3 1 3 12 38 12 38 social/cultural 1 3 3 1 12 38 38 12 intra-company issues 3 1 3 1 38 12 38 12 market 1 3 3 1 12 38 38 12 competitors 3 2 2 1 38 25 25 12 source: survey data 2013. mfi: microfi nance institutions table 8: number of times the mfis conduct promotions number of times number of mfis percentage of mfis very often 1 12 often 3 38 sometimes 3 38 never 1 12 source: survey data 2013. mfi: microfi nance institutions table 9: percentage of promotional budget constituting marketing budget percentage of marketing budget distribution to promotions (%) number of mfis percentage of mfis 1-4 4 50 5-16 1 12.5 above 17 3 37.5 source: survey data 2013. mfi: microfi nance institutions table 10: methods employed for interest rate determination method number of mfis percentage of mfis cost-plus build-up and mark-up pricing 4 50 break-even analysis 3 37.5 customer acceptance 1 12.5 following competitors 2 25 variable pricing 3 37.5 source: survey data 2013. mfi: microfi nance institutions international review of management and marketing | vol 5 • issue 3 • 2015120 ahmad: comprehending the marketing strategies of microfi nance institutions: case of selected institutions within multan district of pakistan loans payment. savings and loans companies trusted on the background of borrowers, specifi c purpose of request for loans, an assessment of how did borrowers manage resources and disposition together with strengths and weaknesses, collateral and guarantee offered and whether they have kept with the company for a period of time. on the other hand, ngos considered factors alike regular cash fl ow from business on behalf of which the loan was required, a guarantor from the locality where the loan is being taken, presence to organized orientation, existing degree of exposure and business training sessions. from the above-mentioned, it could be assumed that both marketing and fi nancial considerations with more importance on the latter were taken into account before granting loans. this had caused in high recovery rates. 5. conclusion from the beginning, this study search for fi nding out that whether mfis use marketing approaches and strategies in getting the productive poor within multan district. the research aimed to test the hypothesis that “whether or not mfis in multan district are market oriented in delivery of credit and mobilizing the savings.” both primary and secondary data were used for conducting the study. secondary information was utilized to create the standard benchmark for determining the market orientation of chosen institutions and deliver additional information about interrelated empirical studies previously carried out in the area of microfi nance marketing. primary data for the research was gathered, using self-administered questionnaire to eight selected mfis in multan. one of the key fi ndings from this study is that marketing activities are not properly organized in mfis within multan district. secondly, there is a very little focus on marketing in the corporate policies and strategies of institutions. thirdly, there is small budgetary allocation to marketing activities by mfis within the multan district. also, mfis have not revealed much commitment for strategic marketing of its products at management level. in a wide spectrum, fi ndings of the study prove the hypothesis that mfis in pakistan are not market oriented in delivery of credit and mobilizing the savings. 6. recommendations grounded on conclusions drawn from the result of the study, following recommendations are made: 1. mfis predominantly should create marketing departments. these departments must be strengthened by hiring people with needed skills, knowledge and experience in functions related to marketing. this will guarantee revenue growth, fi nancial sustainability and customer satisfaction. this is so as marketing is the basic of the forces that drive business profi t and success 2. it is obligatory for mfis to custom out customer service packages which should include product availability and innovations. nature of each constituent requires research as various service offerings with dissimilar interest rates are probable to be needed by all of them and diverse marketing strategies and approaches are likely to be needed 3. mfis must strengthen their marketing planning competences and capabilities particularly in the environmental awareness section. this is specially so, because of the costs of changes in environment on the operations of mfis and their inferences for mfis’ choice of strategy 4. there is a need to announce new products on an incremental basis. this should be done by announcing one or very few at a time, so as to mfis staff and clients can manage, monitor and comprehend them properly 5. product innovations have not to be a one-stop gap measure; rather it should be an on-going program to increase the quality of fi nancial services which are being provided to clients. references berry, l.l., thompson, t.w. 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(2013), budding issues in microfinance sector of pakistan. science international, 25(4), 921-925. << /ascii85encodepages false /allowtransparency false /autopositionepsfiles true /autorotatepages /all /binding /left /calgrayprofile (dot gain 20%) /calrgbprofile (srgb iec61966-2.1) /calcmykprofile (u.s. web coated \050swop\051 v2) /srgbprofile (srgb iec61966-2.1) /cannotembedfontpolicy /warning /compatibilitylevel 1.4 /compressobjects /tags /compresspages true /convertimagestoindexed true /passthroughjpegimages true /createjdffile false /createjobticket false /defaultrenderingintent /default /detectblends true /detectcurves 0.0000 /colorconversionstrategy /leavecolorunchanged /dothumbnails false /embedallfonts true /embedopentype false /parseiccprofilesincomments true /embedjoboptions true /dscreportinglevel 0 /emitdscwarnings false /endpage -1 /imagememory 1048576 /lockdistillerparams false /maxsubsetpct 100 /optimize true /opm 1 /parsedsccomments true /parsedsccommentsfordocinfo true 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5.0 and later.) >> /namespace [ (adobe) (common) (1.0) ] /othernamespaces [ << /asreaderspreads false /cropimagestoframes true /errorcontrol /warnandcontinue /flattenerignorespreadoverrides false /includeguidesgrids false /includenonprinting false /includeslug false /namespace [ (adobe) (indesign) (4.0) ] /omitplacedbitmaps false /omitplacedeps false /omitplacedpdf false /simulateoverprint /legacy >> << /addbleedmarks false /addcolorbars false /addcropmarks false /addpageinfo false /addregmarks false /convertcolors /noconversion /destinationprofilename () /destinationprofileselector /na /downsample16bitimages true /flattenerpreset << /presetselector /mediumresolution >> /formelements false /generatestructure true /includebookmarks false /includehyperlinks false /includeinteractive false /includelayers false /includeprofiles true /multimediahandling /useobjectsettings /namespace [ (adobe) (creativesuite) (2.0) ] /pdfxoutputintentprofileselector /na /preserveediting true /untaggedcmykhandling /leaveuntagged /untaggedrgbhandling /leaveuntagged /usedocumentbleed false >> ] >> setdistillerparams << /hwresolution [2400 2400] /pagesize [612.000 792.000] >> setpagedevice tx_1~at/tx_2~at international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2023, 13(3), 25-32. international review of management and marketing | vol 13 • issue 3 • 2023 25 exploration of salt farmers’ e-marketing strategy: a lesson from madura island, indonesia fathor as*, fatimatul fatmariyah department of management, university of trunojoyo madura, indonesia. *email: fathor.as@trunojoyo.ac.id received: 12 february 2023 accepted: 05 may 2023 doi: https://doi.org/10.32479/irmm.14351 abstract this study aims to explore various e-marketing strategies that salt farmers might use. the qualitative-descriptive method was chosen as the method used in this research. researchers collected data by observing, conducting interviews, and documenting our studies. the method of analysis is known as descriptive-qualitative analysis. the findings indicated that salt farmers’ knowledge of the various forms of e-marketing media was satisfactory. however, their expertise consisted just of knowledge, and they needed to learn how to make the most of the existing media to exploit it as a promotional tool. although salt farmers are already familiar with many different media that can use as marketing media, the most excellent e-marketing technique for business uses only facebook networking or social media marketing strategy. keywords: marketing, e-marketing, salt marketing, social media marketing jel classifications: m30, m300, m31, m310, m37, m370 1. introduction salt is one of the commodities that have an important position in life. the need for salt is very high, both to meet the needs of consumption and industry. nationally, the need for salt increases with population growth and industrial development. the need for salt demand reflects that salt has a function that has yet to be replaced or substituted by other materials (trikobery et al., 2017). in 2020, the need for salt nationally was 4.5 million tons (lokadata, 2020), but national salt production is predicted only to be around 1.26 million tons (statistics-kkp, 2020). the data confirm that salt production in indonesia has never been sufficient for salt needs, so imports are one solution. data from the central statistics agency noted that throughout 2020, indonesia imported 2.61 million tons of salt (dataindonesia.id, 2020), or 50.29% of the national salt availability (lokadata, 2020). the need for salt is large and has yet to be met by salt farmers in the country due to various factors. on the other hand, the need for large salt and small salt production is not directly proportional (inline) to the level of absorption and salt prices of farmers in the country. the level of absorption and price of salt at the farmer level is very difficult and cheap because one of them is not a little game from intermediaries. so that the average income earned by farmers in one production is rp 17,294,563/m2. collecting traders buy farmers’ salt starting from rp 35,000/krg to rp 40,000/krg. the calculation of the total marketing margin on his marketing channel is rp 25,000, and the level of marketing efficiency shows that marketing at the farmer-to-merchant level is 100% and at the merchant, level collecting to consumers is 58.33% and 61.53% (ismail, 2015). therefore, a comprehensive national policy is needed that favors salt farmers in terms of absorption rate, price, and marketing strategy. farmers’ price and sales side experience inequality due to sales factors on one particular party because they have no other alternative. so that in the long run, farmers need to understand the right marketing strategy, one of which is using e-marketing as a marketing promotion medium to publish farmers’ salt products to this journal is licensed under a creative commons attribution 4.0 international license fathor and fatmariyah: exploration of salt farmers’ e-marketing strategy: a lesson from madura island, indonesia international review of management and marketing | vol 13 • issue 3 • 202326 each buyer to provide a choice of price decisions that are suitable for farmers. in indonesia, one of the salt producers is madura. madura is an island known as the “salt island.” madura holds the largest salt land potential in indonesia, reaching 15,000 hectares of salt land, and is the largest salt supplier in indonesia (zubaidah, 2018). the total salt production on madura island in 2018 was 768 tons (indonesiabaik.id, 2019), while the data for 2019 and 2020 have yet to be officially realized. the regency on madura island, the third largest salt producer, is pamekasan regency. salt production in this district during 2020 reached 30,726 tons from a total land area of ±913 h spread across 15 villages and three districts (galis, pademawu, and tlanakan) (liputan6.com, 2021). this number decreased compared to previous years; the decrease in production was due to high rainfall and frequent weather changes in 2020 (maduranews, 2021). in addition, the large number of salt farmers who have not used geo-membrane technology is also an obstacle to increasing the quantity and quality of salt. technology is indeed one of the obstacles. besides, salt farmers experience various other obstacles in producing salt, including weather factors, government policies that are considered not pro-salt farmers, sales, prices, access to information, access to marketing, and so on. small-scale salt business actors could be stronger in terms of mastery of technology, capital, market access, market information, and business governance. the lack of access and information to the market has caused salt farmers to become entangled in oligopsony marketing practices or entangled in unfair salt marketing cartels (komaryatin, 2012). because so far, in their marketing strategy, salt farmers need help understanding the marketing strategy for the products they produce. this is due to various factors, including farmers’ level of understanding and knowledge. regarding the promotional model, it can be seen that (1) farmers do not have promotional tools, and (2) farmers feel that there has never been a party or anyone who helps promote their products to the public (fathor and gitayuda, 2018). marketing is a business activity that needs to be mastered by anyone to maintain business survival because marketing activities are interactive business instruments with stakeholders. marketing becomes a social and managerial process between individuals and groups that need each other to meet the needs of each other (kotler and amstrong, 2012), and marketing is an activity to prepare and deliver products appropriately to the right consumers at the appropriate time, place, and price through the appropriate promotion or communication process (assauri, 2015). based on the views of marketing experts, marketing is a series of business principles in determining the target market, evaluating needs, providing products, value for consumers, and profit for the company. implementing this concept requires a strategic creation to achieve all the company’s goals, so it requires well-organized marketing management towards the stability of marketing implementation. marketing management is a tool for implementing marketing. furthermore, in marketing, marketers should be able to understand the importance of a strategy and what can be implemented; strategies in marketing have a strategic role in the product’s success in reaching consumers. in essence, marketing strategy is the logic of company marketing in creating value and obtaining profits (kotler and amstrong, 2012). marketing strategy becomes very important as a series of goals, targets, policies, and rules that guide marketing efforts from time to time at each level in facing business dynamics (assauri, 2015). related to the marketing strategy of salt farmers, some research results show the importance of a new strategy in marketing policy since the market structure of the salt industry tends to oligopsony based on indicator (1) the number of participants in the market needs to be more balanced; (2) few competitors, (3) market entry barriers. in terms of behavior, there are unfair practices in form (1) the collecting merchant is the agent of the company, (2) inaccurate weighing, (3) buyers monopolize pricing. and in terms of market performance, it shows that marketing could be more efficient, profits are uneven, farmers’ share is low, and the market needs to be integrated, so that price increases are not transmitted to farmers (alham, 2013). in addition, other facts show that there is only one salt marketing channel, namely farmers – middlemen – factories – agents – retailers consumers. the marketing margin for salt marketing channels is rp. 1,780,000/ton with the largest margin distribution is in salt factory marketing institutions and based on marketing efficiency analysis with a structure conduct performance approach, namely inefficient salt marketing (suherman et al., 2011). widiyastutik et al., (2017), in his research, confirmed that there had been two channels for marketing people’s salt so far, namely, (1) intermediaries, and (2) factories, but the prevailing market mechanism is imperfect market competition, so there is no market integration within the scope of salt factories from outside madura with madura salt farmers, especially since the distribution of market margins and the largest profit share remains controlled by factory marketing institutions. research results show that a new strategy for carrying out salt marketing must exist. during this time, the company’s strategy tends to be backward, so it must be considered a breakthrough in the most feasible and realistic marketing strategies (rohmad, 2015). in addition, according to jamil, the government should carry out comprehensive empowerment through the strategic role of farmer groups because groups can take advantage of opportunities in the salt marketing system to find alternative sales to more profitable marketing institutions (jamil and netti, 2015). in addition, consistent assistance from the government is needed for farmer groups because the participation of the government is important, especially local governments, in helping to communicate with stakeholders through the optimization of integrated communication systems (fathor, 2014). for the rest, seeing the reality of information technology that is developing very massively and has been able to change the direction fathor and fatmariyah: exploration of salt farmers’ e-marketing strategy: a lesson from madura island, indonesia international review of management and marketing | vol 13 • issue 3 • 2023 27 of the business world today, it is also necessary for salt farmers to be responsive to these developments. the development of information technology is making it easier and more challenging for companies. one of these information technologies is the internet. the internet has developed very quickly and can reach every corner of the world, so companies are competing to introduce their products to the public through these media because the internet can become an instrument of product marketing, improve the brand image with a very wide reach online system, and in internet marketing, there are five main targets and benefits determined, namely sell, serve, speak, save and sizzle (chaffey and smith, 2008). furthermore, the role of internet marketing or online marketing is transformed into a company’s effort in marketing products and building long-term relationships with stakeholders through internet media (kotler, 2016), because the main purpose of internet marketing is to create, build and maintain relationships with stakeholders through online interaction in the exchange of ideas, products, and multi-services (tandusan, 2015). along the way, internet marketing is further known as e-marketing, because e-marketing is the use of the internet and related digital technologies to achieve marketing goals and support modern marketing concepts (khandagale and gonte, 2023). in the era of globalization, e-marketing has become a part of daily life for almost all businesses, although many companies still need to optimize electronic media optimally for various reasons (cant and van rooyen, 2017). the true, e-marketing provides various conveniences and speeds in information, expanding the market, brand image, ease of providing information, and so on. e-marketing is a strategic effort in product marketing using electronic media or the internet. it is the most effective e-marketing channel that successfully conveys the brand message to consumers and generates the greatest return on investment in the form of consumer purchase intent (de la roche et al., 2022) and, to increase marketing areas and sales volume. in its development, only some companies have utilized e-marketing services as their business strategy. in its implementation, e-marketing is carried out by utilizing various models: (1) advertising through a website or blog. this ad can increase business productivity, and (2) search engine marketing. this model aims to promote the presence of a website through increased visibility on search engine results pages (serps), (3) search engine optimization. this marketing model improves web visibility access, (4) social media marketing. this model is applied through social media; (5) email marketing by sending messages directly via personal email, (6) blog marketing. company-owned blog sites used for promotional purposes; (7) referral marketing. method of product promotion by word of mouth, (8) inbound marketing. this method is carried out by withdrawing if there are customers, (9) viral marketing (baker, 2002; mohammed et al., 2003; frost et al., 2019). this method is similar to word of mouth but in digital messages from person to person. the empirical and real use of e-marketing media has been able to have a positive effect on the development of the company because e-marketing, such as social media marketing, has a positive effect on brand sustainability and consumer (adhawiyah et al., 2019), e-marketing has a significant effect on purchasing decisions (sugianto and fathor, 2021), e-marketing has a significant influence on presales activities (al-zubi, 2022); the positive effect of e-marketing on facebook generates buying interest (yasin et al., 2019), the use of electronic marketing makes companies more successful among various companies (cant and van rooyen, 2017). marketing through e-marketing can obtain benefits which include consumer services and company image services to be good, finding new business partners, the process becomes simple and can condensed time, can increase productivity, efficiency, access to information becomes fast, learn to attract and communicate with customers (manggu and beni, 2019), e-marketing can form a positive attitude and a higher intention to buy (de la roche et al., 2022), and social media marketing capital, the company has been able to achieve turnover (fathor et al., 2021). so that in the context of salt farmers, internet marketing is gradually expected to support farmers’ salt marketing strategies. as said khandagale and gonte (2023), e-marketing plays a significant & critical role in doubling agricultural income, so that they can gradually get out of the confines of irresponsible and unfair market rulers. nowadays, the internet has become an important commodity for the daily necessities of everyone in various directions of different ages. through this internet media, everyone can find out various information. it is a separate strategy to be used in marketing products. it is to expand the reach of marketing without having to go directly to the market physically. therefore, this research is very important to help find marketing solutions for salt farmers. thus, one of the alternative solutions for salt farmers at a crossroads is to get out of dependence on intermediaries and overcome the confusion of salt farmers to sell their products. it is necessary to study e-marketing strategies or internet marketing for salt farmers. the difference between this research and previous studies lies in the marketing strategy used; the previous research used marketing strategies in general, while this research focused on marketing strategies through e-marketing. so the purpose of this study is to explore marketing strategies for salt farmers through e-marketing. 2. literature review 2.1. marketing business strategy in a very tight competition needs cautious attention from the company’s managers. capability in marketing is one of the keys to success to exist and survival from similar business competitors or their substitutions because marketing is an activity carried out from the beginning to the end of the product in the hands of the consumer. marketing is a mandatory activity that needs to be done by every business. marketing activities widely contained various strategies for maintaining business continuity. marketing is creating, pricing, distributing, and promoting favorable to stakeholders (pride and ferrell, 2015). according to ama, the activity, set of fathor and fatmariyah: exploration of salt farmers’ e-marketing strategy: a lesson from madura island, indonesia international review of management and marketing | vol 13 • issue 3 • 202328 institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers and the chartered institute of marketing is the management process responsible for identifying, anticipating, and satisfying customer requirements profitability (basines et al., 2017). the marketing concept requires precise creativity to achieve all the company’s goals, so it requires well-organized marketing management to stabilize marketing implementation. marketing management becomes a tool or tool that imparts the concept of marketing. these various marketing activities need to be integrated and follow the business unit being run. in the people’s salt business, this activity needs to be observed. one of them is in carrying out the promotion of business results through the use of marketing concepts that follow the development of information technology, namely e-marketing. 2.2. e-marketing the revolution in the field of marketing is moving so fast, from traditional marketing patterns to internet-based marketing. internet marketing is a form of business that markets products and services through internet media (kotler and amstrong, 2012). internet marketing not only refers to digital media use but also to maintaining good relationships with consumers. internet marketing becomes a process of building and maintaining customer relationships through online activities (mohammed et al., 2003). internet marketing is part of electronic marketing; e-marketing is the use of information technology for marketing activities and communicating and conveying various information to customers (frost et al., 2019). today, e-marketing moves so fast that it cannot be ignored. even many organizations are examining how they can best use this new medium (baker, 2002). so, marketers need to carefully assess the importance of e-marketing and assimilate it into all aspects of marketing (baker, 2002). in implementing the application of using e-marketing, there are five components in internet marketing: (1) process, (2) build and strengthen relationships with customers, (3) online, (4) exchange, (5) meeting the satisfaction of the needs of both parties. in addition, internet marketing can be done using several application models, including (1) advertising, (2) search engine marketing, (3) search engine optimization, (4) social media marketing, (5) email marketing, (6) blog marketing, (7) referral marketing, (8) inbound marketing, and (9) viral marketing (baker, 2002; mohammed et al., 2003; frost et al., 2019). 3. research methods the approach used in this study is qualitative. this qualitative approach is carried out through the uniformization between reality and theory and empirical through descriptive methods. qualitative is a tradition in the social sciences that fundamentally relies on human observation of its area and relates to these people in their language and distillation (moleong, 2013). at the same time, descriptive is the activity of studying certain problems, ordinances, and situations, including relationships, activities, attitudes, and views, as well as ongoing processes and the influences of a phenomenon (nasir, 2014). this study focuses on galis district, pamekasan, east java. the location selection is because it is the only salt-producing district in pamekasan regency with 795 miners. selection and determination of informants using purposive sampling techniques with 40 informants. the primary data in this study is the result of interviews with informants, while secondary data is data obtained from reading sources. the data strengthen the findings and complements the information collected through direct interviews. data analysis techniques are carried out through a descriptivequalitative approach. this analysis technique is carried out by describing and interpreting the meaning of the collected data to get a thorough picture of the real situation. 4. results and discussion galis subdistrict is one of the sub-districts with salt farmers in pamekasan regency. the district is between 113o 19’ – 113o 58’ bt and 6o 51’ – 7o 31’ ls. geographically, galis district has an area of 2,386,254 h2, divided into ten villages. the total population of galis district is 14,349 men and 14,569 women, making the total population of galis district 28,913. galis subdistrict is a district that has a very large area of salt pond commodities, so the locals mostly work as farmers or professional salt farmers. 4.1. informant characteristic the informants in this study were salt farmers in galis district, pamekasan regency. the number of informants was as many as 40 salt farmers. informant characteristic data in the form of data on gender, age, education, and average income per season in table 1. table 1 shows the number of informants, as many as 40 people or 100% of the male gender. the age of informants between 30 and 40 years is seven informants or 17.5%, the age of informants between 41 and 50 years is ten informants or 25%, the age of 5160 years is 20 people or 50%, and the age of 61 years and above is table 1: informant characteristic information amount % gender man 40 100 age 30–40 7 17,5 41–50 10 25 51–60 20 50 61 above 3 7,5 education elementary school 17 42,5 junior high school 13 32,5 senior high school 10 25 average earnings per season ≤rp. 5.000.000 11 27,5 rp. 5.000.000–10.000.000 20 50 rp. 10.001.000–20.000.000 4 10 ≥rp. 20.000.000 5 12,5 source: primary data processed 2021 fathor and fatmariyah: exploration of salt farmers’ e-marketing strategy: a lesson from madura island, indonesia international review of management and marketing | vol 13 • issue 3 • 2023 29 three people or 7.5%. the highest education in elementary schools was 17 people, or 42.5%; 13 informants, or 32.5%, had a junior high school education, and the highest high school education was 10, or 25%. the average income per season ranges from ≤rp. five million amounts to 11 people, or 27.5%, of the average income per season, which ranges from rp. 5,000,000-10,000,000 as many as 20 people or 50%, the average income per season is between rp. 10,001,000 and 20,000,000 is four people or 10% and informants with an average income per season ranging from ≥rp. twenty million amounts to 5 people or 12.5%. 4.2. informant’s knowledge of e-marketing media the results of this analysis are the answers of informants who are asked to answer and explain their knowledge of e-marketing media, as shown in table 2. the summary results of the informant’s answers are mapped and summarized to clarify the meaning contained in the information provided by the informant, as stated in table 2 above. based on the table, it is known that in terms of informants’ knowledge about e-marketing media, it is adequate. still, their knowledge is only knowing, and they need to learn how to use the existence of these media to be used as marketing media. this limited knowledge has caused the implementation of e-marketing to be constrained, and it is also following the findings balogun and raji (2021) that the average company faces problems and difficulties in the implementation of e-marketing that have a significant impact on services. 4.3. the right e-marketing strategy for salt farmers the results of the analysis related to the right e-marketing strategy for salt farmers in marketing their products as shown in table 3. table 3 shows that a suitable e-marketing strategy is social media marketing with facebook media facilitation. however, their knowledge already exists about other media that can use as marketing media. seeing the real condition of salt farmers in rural areas, who experience limitations in their marketing strategies, both in terms of products, prices, promotions, distribution, and markets, it is necessary to implement marketing strategies to help salt farmers get out of these problems. the current condition has been shown in the study results above, in addition to some research findings showing that many things are experienced and harm farmers. the complexity of the problem of traditional folk salt farmers is shown in several research results that show that in terms of market structure, the salt industry tends to oligopsony based on indicator (1) the number of participants in the market needs to be more balanced; (2) few competitors, (3) market entry barriers. in terms of behavior, there are unfair practices: (1) the collecting merchant is the agent of the company, (2) inaccurate weighing, (3) buyers monopolize pricing. and in terms of market performance, it shows table 2: knowledge of e-marketing media question answer have you ever heard of or know about information technology? yes, i’ve heard of it, but i need to find out what it looks like technology information. have you ever heard of or know about the internet? yes, i’ve heard and known from people, but i need help understanding to use it. have you ever heard of or known about websites? yes, i’ve heard and know, but i need help understanding to operate and use it. have you ever heard of or know online marketing? yes, i’ve heard and said i could buy things there, but i need to learn how to use that tool. have you ever heard of or know e-marketing? i had never heard of or known about the tool. have you ever heard of or known path? no, i never heard or knew about the tool. have you ever heard of or know email? yes, i’ve heard, but i don’t know how to operate it. have you ever heard of or know youtube? yes, i know because sometimes i watch lectures on youtube. have you ever heard of or know kaskus? no, i never heard or knew about the tool. have you ever heard of or know google+? i have yet to hear or know about google+. have you ever heard of or know facebook? yes, i have a facebook account. have you ever heard of or know twitter? no, i never heard of or knew about twitter. have you ever heard of or know bbm? no, i never heard of or knew about bbm. have you ever heard of or know whatsapp/wa? yes, i know about whatsapp because i use it. have you ever heard of or know sms? yes, i know, and i often use that to communicate. have you ever heard of or know messenger? no, i never heard or knew. have you ever heard of or know marketplaces like olx, lazada etc? yes, i’ve heard, but i need to find out what the media is as a marketplace. source: primary data processed 2021 table 3: e-marketing strategy question answer if you want to market salt through e-marketing, what media is more suitable for online marketing? website/blog/situs i need to learn how to operate and use it. path i need to learn how to operate and use it. email i need to learn how to operate and use it. youtube yes, as long as there is someone who wants to teach us first about how to use and operate it kaskus i need to learn how to operate and use it. google+ i need to learn how to operate and use it. facebook because my son and i have cell phones and facebook accounts, and so far, we have used them to communicate whatsaap because my son and i have cell phones and facebook accounts, and so far, we have used them to communicate twitter i need to learn how to operate and use it. bbm i need to learn how to operate and use it. sms i need to learn how to operate and use it. messenger i need to learn how to operate and use it. marketplaces like olx, lazada etc i need to learn how to operate and use it. reasons for using the most suitable media facebook because facebook it’s already used enough to make a video or story source: primary data processed 2021 fathor and fatmariyah: exploration of salt farmers’ e-marketing strategy: a lesson from madura island, indonesia international review of management and marketing | vol 13 • issue 3 • 202330 that marketing is inefficient, profits are uneven, farmer’s share is low across all channels (20%), and the market is not integrated into the short and long term, so price increases at the retail level are not transmitted at the farmer level (alham, 2013). while based on channels or distribution, salt marketing channels consist of 1 channel: farmers to traders collecting to consumers (ismail, 2015). it is reinforced by the fact that there is only one channel of salt marketing, namely farmers – middlemen – factories – agents – consumer retailers; based on marketing efficiency analysis, salt marketing is inefficient (suherman et al., 2011), and the lack of people’s salt marketing channels consisting of two forms, namely marketing channels through intermediaries, in the form of sack coarse salt and marketing channels through factories in the form of sack coarse salt and iodized fine salt. the structure of the salt market leads to an imperfect competition market. the distribution of marketing margins and the largest share of profits in marketing people’s salt lies in the marketing institutions of factories (widiyastutik et al., 2017). these findings show farmers’ wiggle room is very narrow in marketing their products. these limited and narrow channels have caused farmers only to wait and leave the fate of their products to them without being able to attempt opposition. so that marketing innovation needs to be carried out to open new market segments, so the government should empower comprehensively through the strategic role of farmer groups because groups can take advantage of opportunities in the salt marketing system to find alternative sales at more profitable marketing institutions (jamil and netti, 2015). in addition, consistent assistance from the government is needed for farmer groups because the participation of the government, especially local governments, is very important in helping to communicate with stakeholders to increase competitiveness (fathor, 2014). based on several findings show that small-scale salt business actors living in rural areas need access and information about the market. the lack of access and information to the market has caused salt farmers to become entangled in oligopsony marketing practices or entangled in unfair salt marketing cartels (komaryatin, 2012). this is because, so far, salt farmers need help understanding the marketing strategy of the products they produce due to various factors, including the level of understanding of farmers. so that the strategy applied by the company (farmer) in competition needs to be updated; the company (farmer) must implement the most feasible and realistic marketing strategy to overcome these conditions (rohmad, 2015). one alternative solution for salt farmers at the intersection is to use an e-marketing approach or internet marketing for salt farmers. internet marketing or electronic marketing is one of the efforts that can be made to market a product or service through or using electronic media or the internet. in the real world, in this era of 4.0, regulating marketing efforts requires implementing e-marketing to be possible for a company, while modern trends are considered when making decisions (al-ababneh, 2022). it is because business owners who wish to keep competing in the future the market need to implement e-marketing (markoski and janeska, 2018), and the fact of wanniarachchi and rajakaruna (2022) is that many companies tend to launch, manage, and organize business ventures with e-marketing. in the long run, implementing e-marketing in business can provide positive compensation for companies (wanniarachchi and rajakaruna, 2022). the basis is that internet marketing has become an important commodity for the daily needs of everyone in various directions of various ages. through this internet media, everyone can find out various information. it is a separate strategy to be used in marketing products. it is to expand the reach of marketing without having to go directly to the market physically because internet technology can reach a large market area with an unconstrained space and speed of time. in addition, using e-marketing can be an alternative method to maximize marketing strategies (lin, 2021), and have less time (mohan, 2017). there are seven stages in analyzing and designing an e-marketing strategy: situation analysis, e-marketing strategic planning, objectives, e-marketing strategy, implementation plan, budget, and evaluation plan (strauss and frost, 2009). however, this study does not discuss these stages because this research is focused on using the right application model. in e-marketing, several e-marketing application models can be used, (1) advertising, (2) search engine marketing, (3) search engine optimization, (4) social media marketing, (5) email marketing, (6) blog marketing, (7) referral marketing, (8) inbound marketing, and (9) viral marketing (mohammed et al., 2003). the use and selection of e-marketing applications are crucial because the application model must be adjusted to the marketer’s capabilities. the unrestricted use of social media is one of the many e-marketing models (lin, 2021) that can be utilized in the process of carrying out communication system integration programs continually and intact continuously (fathor, 2014). other models include the following: marketers can develop technologies with others. still, they need to know enough to grasp the technology and choose the appropriate supplier (strauss and el-ansary, 2006), so that the media they chose is suitable to be utilized as a tool to implement an e-marketing plan (chasanah et al., 2022). it necessitates having sufficient knowledge to comprehend the technology. it has been demonstrated that implementing this e-marketing strategy can improve firm survival (lin, 2021), raise business returns at little cost, improve productivity, and create a competitive edge (mbuh et al., 2020). salt farmers are adequate, based on the analysis results regarding knowledge of e-marketing media. still, their knowledge is just knowing and needing to learn how to use the existence of these media to be used as marketing media. regarding the use of e-marketing media that is right for farmers, the use of media in e-marketing that will be used as an e-marketing strategy is essentially only using facebook or social media marketing strategies. however, their knowledge already exists about other media that can use as marketing media. 5. conclusion salt farmers’ knowledge of e-marketing media is adequate. still, their knowledge is just knowing and needing to learn how to use fathor and fatmariyah: exploration of salt farmers’ e-marketing strategy: a lesson from madura island, indonesia international review of management and marketing | vol 13 • issue 3 • 2023 31 the existence of media to be used as a marketing medium. the right e-marketing strategy for salt farmers is only using facebook media or social marketing strategies. however, their knowledge already exists about other media that can use as marketing media. salt farmers should increase their knowledge of the procedures for using e-marketing media. salt farmers should be able to take advantage of other social marketing strategies that can use as marketing media. 6. acknowledgements our thanks go out to (1) rector of trunojoyo madura university, (2) head of lppm trunojoyo madura university, (3) coordinator of the management study program, and (4) all informants of salt farmers in galis district, pamekasan regency. references adhawiyah, y.r., anshori, m.i., fathor, a.s. 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(2018), indonesia’s largest salt land is in madura. available from: https://sindonews.com tx_1~at/tx_2~at international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2022, 12(3), 1-9. international review of management and marketing | vol 12 • issue 3 • 2022 1 implementation of quality management towards the internal service quality and trust in management and its impact on job satisfaction: the role of moderation of the national health insurance system ridwan tonny hasiholan pane1*, djoko setyadi2, titik rosnani3 1economic and business faculties, tanjungpura university, indonesia, 2economic and business faculties, mulawarman university of samarinda, indonesia, 3economic and business faculties, tanjungpura university, indonesia. *email: rdwntonny@gmail.com received: 08 january 2022 accepted: 16 april 2022 doi: https://doi.org/10.32479/irmm.13015 abstract this research aims to explain the effects of the implementation of quality management towards the internal services quality and trust in management and its impact on health workers’ job satisfaction and to examine the role of moderation variable of the national health insurance system. the method used in this study was quantitative and research participants were health workers who work in 20 health centers with 365 health workers. the data were analyzed using the statistical method of structural equation modeling with the warppls approach. the results of the study found that the implementation of quality management had a significant effect on (1) internal service quality, (2) trust in management, (3) health workers’ job satisfaction, (4) internal service quality had a significant effect on trust in management, (5) internal service quality had a significant effect on the mediation of the implementation of quality management towards health workers’ job satisfaction (6) trust in management had a significant effect on the mediation of the implementation of quality management towards health workers’ job satisfaction (7) the national health insurance system had a significant effect on the moderation of the quality of internal service towards health workers’ job satisfaction (8) the national health insurance system had a significant effect on the moderation of trust in management towards health workers’ job satisfaction. keywords: quality management, job satisfaction, trust, insurance jel classifications: i13, i18 1. introduction according to a health care research report in 2017, the job satisfaction level of staff working at the public health center in west kalimantan province was categorized medium (51.4%). it was then followed by low (27.9%) and high (20.7%). the data indicate that the job satisfaction level of health workers in the province is not yet optimal because medium and low categories dominate it. in fact, staff’s job satisfaction has a close relationship with the implementation of quality management, as illustrated by the research of (amin et al., 2017). the research reveals that better quality management will likely increase the worker’s job satisfaction. as argued earlier, unfortunately, the implementation of quality management at the public health center was not yet optimal. it is evidenced by a lack of the human resource’s competence in health science, making the management does not work well as stipulated in the strategic plan of the health ministry (20202024). the document asserts that the quality management of a public health center is carried out through an accreditation process. according to the regulation of the minister of health no 46 of 2015, the accreditation of the public health center aims to illustrate the quality and performance of public health centers through a continuous improvement towards the quality management system and the program and service delivery this journal is licensed under a creative commons attribution 4.0 international license pane, et al.: implementation of quality management towards the internal service quality and trust in management and its impact on job satisfaction: the role of moderation of the national health insurance system international review of management and marketing | vol 12 • issue 3 • 20222 system and programs, as well as the implementation of risk management. as mentioned above, efforts to improve the quality management of the public health center and increase the capacity of human resources for the management of the health center are not in line with the performance report of the sintang health office in 2020. the report reveals that many performance indicators still have not reached the target, this issue might show a gap in health services and is a phenomenon that occurs in health centers in sintang regency. issues that occurred in the public health center affected by the aforementioned phenomena encourage the author to solve them. because this research is perceived as a scientific matter, the solution should also be conducted in a scientific way; by looking for variables that can be built to explain interpersonal, inter-departmental relationships within the organization to find appropriate solutions. next the author reviews previous studies related to the variables that will be built in this research and finds inconsistencies in the research results, for example: quality management variable with job satisfaction variable, research results (arunachalam and palanichamy, 2017), (addis et al., 2019), (wang et al., 2019) found that quality management was significant on job satisfaction. meanwhile, (de menezes, 2012) and (pedersen et al., 2020) claimed that quality management was not significant to job satisfaction the variables of internal service quality with job satisfaction also found inconsistencies in research results (sharma et al., 2016), (pantouvakis and mpogiatzidis, 2013), (abdullah et al., 2021). they discovered that the variable of internal service quality was significant to job satisfaction, meanwhile, (dauda et al., 2013) found that the internal service quality variable was not significant to the job satisfaction variable. the inconsistency of the research results of the trust variable with the job satisfaction variable was also found. for instance, (zeffane and bani melhem, 2017) found that trust was significant on job satisfaction, while other research (inmaculada et al., 2020) found that trust was not significant on job satisfaction. due to inconsistencies in previous studies, the author added mediating and moderating variables in this study. to re-examine and clarify the relationship between variables, mediating and moderating variables were added as follows: 1. the internal service quality variable mediates the quality management implementation and job satisfaction variables for health workers. 2. the variable of trust in management mediates the variable of implementing quality management and the variable of health workers’ job satisfaction. 3. the national health insurance system moderates the variable of internal service quality and the variable of job satisfaction of health workers, as well as moderating the variable of trust in management and the variable of job satisfaction of health workers. the mediating and moderating variables in this study distinguish it from previous ones. the problems at the public health center, as illustrated by the phenomena at the public health center in sintang and the inconsistency of previous research, became the basis for doing this research. 2. literatur review 2.1. quality management (harteloh, 2003) states that quality describes the direct characteristics of a product: easy to use and so on. health center quality management is an effort to improve the health status of the community through the accreditation of the public health center as stipulated in the minister of health regulation no. 46 of 2015. the main objectives of the certification of the public health center are to improve the quality of health services and patient safety and to increase protection for health workers, the community, and the environment. according to that regulation, the accreditation assessment includes the following: 1. management administration group 2. community health efforts group 3. individual health efforts group 2.2. internal service quality (stauss, 1995) states that internal service quality is the service provided by organizational units to people who work in departments or employees within the organization. (prakash and srivastava, 2019) argue that internal service quality can play a central role in designing internal customer care and satisfaction because internal customers are employees within the organizational unit. (skarpeta et al., 2020) stated that internal service quality in public organizations was carried out in order to determine the key elements that determine the concept of internal service quality and to identify factors that support the achievement of internal quality levels. further, (moores and reynoso, 1995) said that internal service quality occurs because of the internal interactions that occur between departments in the company. organizational dynamics are of particular relevance to service production and delivery in service organizations.thus,interactions between units/departments can serve each other so that employees can receive services from other units or departments. on the other hand, the employee continues to provide services to the company’s customers. the quality of internal services greatly influences the services provided by employees to the company. 2.3. internal services quailty in the health sector internal customers are health units, both work units, and employees such as doctors, nurses, and other medical professionals. these internal customers must be served well to improve performance and job satisfaction. (parasuraman et al., 1985) have identified five dimensions of quality service, namely: (1) tangible is the ability to show existence to external parties, (2) reliability is the ability to provide real, real services as promised. (3) responsiveness refers to the desire of staff to help customers and provide responsive service. (4) assurance is the knowledge and courtesy of employees, and the ability to gain trust and confidence (5) empathy is personal attention to customers. 2.4. job satisfaction job satisfaction is an attitude or response to his work that indicates a deviation between the worker’s number of awards and the amount pane, et al.: implementation of quality management towards the internal service quality and trust in management and its impact on job satisfaction: the role of moderation of the national health insurance system international review of management and marketing | vol 12 • issue 3 • 2022 3 that the worker believes they should receive (robbin, 2003). (luthan et al., 2008) stated that job satisfaction is an employee’s emotional state in which a meeting point occurs or does not occur between the service limit of employees and the level of remuneration, both financial and non-financial. in other words, the level of employee satisfaction with their work is not only measured through salary but also other factors such as work comfort, communication, facilities, and others., (robbins and judge, 2011) states that job satisfaction can be influenced by several factors, such as mentally challenging work, equitable rewards, supportive working conditions, and supportive colleagues. here are the explanations of each factor: 1. mentally challenging work the mentally challenging work factor of employees in job satisfaction illustrates that employees prefer jobs that allow them to maximize all of their abilities freely when completing the given work. usually, employees really expect a response from superiors about how well the job is done. jobs that are not challenging often make employees bored. conversely, too challenging jobs tend to be difficult to do and frustrate employees. in short, the challenges of work between these two extreme limits make employees happy and satisfied. 2. equitable rewards employees want fair and expected organizational policies, especially in terms of pay and promotion opportunities. although not all employees aim to make money alone, job satisfaction will be achieved if salary payments are made fairly, in accordance with the scope of work, employee abilities, and applicable standards. 3. supportive working conditions employees will always pay attention to the work environment to get a sense of comfort. employees do not like work facilities that are unpleasant and dangerous. employees want a work environment that resembles the atmosphere when they are at home. 4. supportive colleagues employees do not just work for money or physical rewards. for most employees, work is basically to meet the needs of social interaction. having positive co-workers support will provide employee job satisfaction. in addition, leadership behavior also affects employee job satisfaction. 2.5. trust in management (mayer et al., 1995) points out that trust is a willingness to believe in the actions of another party with the hope that the other party will act in accordance with the expectations of the person who believes in them, regardless of the ability to monitor or control that party. (tseng and chung, 2017) said that trust must be maintained continuously because trust has logical consequences. trust in management is an indication of employee reactions to the support and encouragement given to management. (chams-anturi et al., 2020) explains that managers can use tools to increase organizational trust, which will eventually help to improve company performance. since trust can make employees adopt performance-related behaviors, managers can use trust as a mechanism to encourage more stable relationships, increase the transfer of existing knowledge, facilitate experimentation, and express ideas. in this case, it seems that managers or organizational leaders can make employees trust the organization to create trust in management. 2.6. national health security system law number 40 of 2004 on the national social security system (sjsn) mandates that the social security program is mandatory for all residents, including the health insurance program, which is managed through social security administering agency the social security administration body has been regulated in law number 24 of 2011 concerning the social security administering body (bpjs) in the regulation of the minister of health no. 28 of 2014 concerning guidelines for the implementation of the national health insurance, the implementation of the national health insurance program aims to provide health protection in the form of health care benefits in order to meet the basic health needs that are given to everyone who has paid dues or whose contributions are paid by the government. the targets for implementing the national health insurance program are all components, starting from government participants, health facilities, and stakeholders, bpjs. bpjs has a strategic role in the implementation of the national health insurance system. bpjs has a strategic role in the implementation of the national health insurance system. the results of the study (nugrahaningsih et al., 2021) concluded that increasing bpjs service motivation was able to improve employee performance. moreover, improving performance will improve the service of the national health insurance system. motivation also influences job satisfaction (setyadi et al., 2020). this means that the increasing motivation of services in the national health insurance will further increase employee job satisfaction. 2.7. principles of implementation when implementing the national health insurance system (jkn), the health social security administering body refers to the provisions mandated in law number 40 of 2004 on the national social security system (sjsn), namely: 1. mutual cooperation the principle of mutual cooperation means that participants are able to help those who are less fortunate. in addition, healthy participants help the sick. this is realized because participation is mandatory for all indonesians. 2. non profit funds managed by the health social security administering body are trusted funds collected from participants on a nonprofit basis with the aim of not seeking profit 3. openness the principles of transparency and prudence management underlie all fund management activities originating from participant contributions. 4. portability the principle of social security portability is intended to provide ongoing guarantees to participants. pane, et al.: implementation of quality management towards the internal service quality and trust in management and its impact on job satisfaction: the role of moderation of the national health insurance system international review of management and marketing | vol 12 • issue 3 • 20224 5. participation is mandatory mandatory participation is intended so that all people become participants so that they can be protected. although participation is mandatory for all people, its implementation is still adjusted to the economic capacity of the people and the government, as well as the feasibility of implementing the program. 6. trust funds funds collected from participant fees are deposited with the organizing body to be managed and possible to optimize these funds for the welfare of participants. 2.8. organizational theory the organization is a unit that enables society to achieve a goal that cannot be achieved by individual efforts. meanwhile, organizational behavior is the study of individuals and groups in the organizational environment. organizational theory (laegaard and binslev, 2006) divides the goals of the organization into three levels. the first is the socio-psychological level, in which organizational theory focuses on interpersonal/individual relationships in organizations that are interrelated to achieve their respective goals. the second is the structural level, where the organizational theory focuses on the organization in general and the parts within it such as divisions, sub-divisions, and units. at this level, the organizational theory explains the existence of relationships between units, divisions, and parts of the organization that are interrelated to achieve goals between these units. the third is the macro level, the namely organizational theory that focuses on organizational relationships with other organizations to achieve their goals. based on the description above, the authors propose the following hypothesis: (h1): the implementation of quality management has a significant impact on the internal services quality at the public health centers in sintang region. (h2): the implementation of quality management has a significant impact on trust in management at the public health centers in sintang region. (h3): the implementation of quality management has a significant impact on the job satisfaction of the health workers at the public health centers in sintang region. (h4): the internal services quality significantly impacts trust in management at the public health centers in sintang region. (h5): the internal services quality significantly mediates the implementation of quality management on the job satisfaction of health workers (h6): trust in management significantly mediates the implementation of quality management on the job satisfaction of health workers (h7): the national health insurance system significantly moderates the internal services quality on the job satisfaction of health workers at the public health centers in sintang region. (h8): the national health insurance system significantly moderates trust in management on the job satisfaction of health workers at the public health centers in sintang region. 3. research methodology this research used a quantitative approach with a survey method. the research was conducted in 20 public health centers in sintang regency, west kalimantan province. 365 health workers participated, and their responses were stored for data analysis. the data were then analyzed using a specific statistical method, called the structural equation modelling with the warppls 5.0 approach. research model of the paper is presented in figure 1. 4. result 4.1. outer model evaluation (measurement model) 4.1.1. convergent validity convergent validity aims to examine the relationship between indicators in measuring constructs. convergent validity is measured through the factor load value greater than or equal to 0.5-0.6. meanwhile, the criteria for the ave (average variances extracted) value must be > 0.50 (solimun et al., 2017). based on the convergent validity test with the loading factor in table 1, the loading factor value was greater than 0.5 to 0.6 and has met the requirements for each variable. convergent validity test was carried out based on the ave (average variances extracted) value with the criteria must be > 0.50 (solimun et al., 2017). based on table 2, all variables in this study have met the convergent validity test based on the ave (average variances extracted) value because they have met the criteria for the ave value > 0.50. 4.1.2. discriminant validity discriminant validity aims to test indicators of two constructs that should not be highly correlated and can be evaluated through the value of the ave square root and the correlation between constructs (ghozali, 2014). an indicator is claimed to meet discriminant validity if the square root value of ave is greater (>) than the correlation between latent constructs (ghozali, 2014). job satisfaction of health workers (y) implementation of quality management (x1) trust in management (x3) internal service quality (x2) national health insurance system (z) figure 1: research model pane, et al.: implementation of quality management towards the internal service quality and trust in management and its impact on job satisfaction: the role of moderation of the national health insurance system international review of management and marketing | vol 12 • issue 3 • 2022 5 based on table 3, the square root value of ave (the value in brackets) was greater (>) than the correlation between the latent constructs of the other variables so that the five latent variables met the discriminant validity value. 4.1.3. reliability measurement reliability measurement intends to see the internal consistency of the measuring instrument; to test whether the indicators from the instrument can be used to make measurements more than twice with accurate results (ghozali, 2014). there are two ways to measure reliability, namely by looking at the composite reliability value. an instrument is claimed to be reliable if the composite reliability value is > 0.70 and has a cronbach alpha value > 0.6 (solimun et al., 2017). based on table 4, the composite reliability value for the constructed variable meets the rule of thumb (>0.70). these results indicate that the latent variable has met composite reliability so that it can be concluded that the variable meets the requirements and is reliable. the reliability test with composite reliability above can be strengthened by using the cronbach alpha value. based on the table above, the instrument can be declared reliable or fulfills cronbach alpha because it has a cronbach alpha value > 0.6. based on table 5, the value of the significant weight indicator for the constructed variable has met the standard. meanwhile, the result for vif (variance inflitation factor) was smaller than 3.3. the table above shows that the formative latent variables have met the formative measurements, so it can be concluded that the variables meet the requirements, (sholihin and ratmono, 2021). 4.2. effect significance test table 6 shows that the implementation of quality management (x1) had a significant impact on the quality of internal services (x2). in addition, the implementation of quality management (x1) also had a significant impact on the job satisfaction of health workers (y) and on trust in management (x3). then, the internal services quality (x2) was significant to trust in management (x3). the z*x2 interaction was 0.011, whereas the z*x2 interaction was more than 0.05. in other words, the national health insurance system (z) was significant as a moderator of the relationship between internal service quality (x2) and job satisfaction of health workers (y). the z*x3 interaction was <0.001, whereas table 1: convergent validity testing based on loading factor variable indicator loading factor x1 (implementation of quality management) x11 0.741 x12 0.769 x13 0.783 x14 0.748 x2 (internal service quality) x21 0.703 x22 0.780 x23 0.784 x24 0.708 x3 (trust in management ) x31 0.787 x32 0.803 x33 0.840 x34 0.757 y11 0.716 y12 0.737 y13 0.706 y14 0.804 y15 0.814 y16 0.747 z (national health insurance system) z11 0.728 z12 0.778 z13 0.736 z14 0.719 source: primary data processed with warppls 5.0 software table 2: convergent validity testing based on ave variable ave x1 (implementation of quality management ) 0.579 x2 (internal service quality) 0.555 x3 (trust in management) 0.636 y (job satisfaction of health workers) 0.570 z (national health insurance system) 0.548 source: primary data processed with warppls 5.0 software table 3: discriminant validity testing variable x1 x2 x3 y z x1 (0.761) 0.528 0.466 0.366 0.289 x2 0.528 (0.745) 0.644 0.523 0.505 x3 0.466 0.644 (0.797) 0.583 0.476 y 0.366 0.523 0.585 (0.755) 0.456 z 0.289 0.505 0.476 0.456 (0.741) source: primary data processed with warppls 5.0 software table 4: reliability testing based on cr and ca variable cr ca x1( implementation of quality management ) 0.846 0.757 x2 (internal service quality ) 0.832 0.731 x3 (trust in management) 0.875 0.809 y (job satisfaction of health workers ) 0.888 0.848 z (national health insurance system ) 0.829 0.725 source: primary data processed with warppls 5.0 software table 5: formative measurement model variabel indikator p vif x2 x21 <0.001 1.308 x22 <0.001 1.491 x23 <0.001 1.506 x24 <0.001 1.319 y y1 <0.001 2.263 y2 <0.001 2.332 y3 <0.001 1.529 y4 <0.001 2.080 y5 <0.001 2.660 y6 <0.001 2.084 z z1 <0.001 1.376 z2 <0.001 1.478 z3 <0.001 1.364 z4 <0.001 1.342 source: primary data processed with warppls 5.0 software pane, et al.: implementation of quality management towards the internal service quality and trust in management and its impact on job satisfaction: the role of moderation of the national health insurance system international review of management and marketing | vol 12 • issue 3 • 20226 the z*x3 interaction was more than < 0.05. this means that the national health insurance system (z) is significant as a moderator of the relationship between trust in management (x3), and job satisfaction for health workers (y). table 7 shows that the relationship between variables has a positive effect. the increasing implementation of quality management (x1) will further improve the internal services quality (x2). in addition, increasing the application of quality management (x1) will increase the job satisfaction of health workers (y) and further increase trust in management (x3). furthermore, improving the internal services quality (x2) will increase trust in management (x3). the interaction effect of z*x2 is 0.118. this means that the national health insurance system (z) has a positive effect as a moderator of the relationship between internal service quality (x2) on the job satisfaction of health workers (y). the interaction effect of z*x3 is 0.162, which means that the national health insurance system (z) has a positive influence as a moderating of the relationship between trust in management (x3) and job satisfaction for health workers (y). table 8 and figure 2 explain that the internal services quality (x2) significantly mediated the implementation of quality management (x1) on the job satisfaction of health workers (y), where the p-value < 0.001 was more than < 0.05. then, trust in management (x3) significantly mediated the implementation of quality management (x1) on the job satisfaction of health workers (y), where the p-value was < 0.001 more than < 0.05 from the tables above, it can be concluded: 1. the implementation of quality management (x1) had a significant impact on internal services quality (x2) 2. the implementation of quality management (x1) was significant to trust in management (x3) 3. the implementation of quality management (x1) was significant to the job satisfaction of health workers (y) 4. the internal service quality (x2) had a significant impact on trust in management (x3) 5. the internal service quality (x2) significantly mediated the implementation of quality management (x1) on the job satisfaction of health workers (y). 6. the trust in management (x3) significantly mediated the implementation of quality management (x1) on the job satisfaction of health workers (y). 7. the national health insurance system (z) was significant as a moderator of the relationship between internal service quality (x2) on job satisfaction of health workers (y) 8. the national health insurance system (z) was significant as a moderator of the relationship between trust in management (x3) and job satisfaction of health workers (y) 5. discussion results of the study revealed that the implementation of quality management (x1) was significant with the quality of internal services (x2). this finding is in line with research (fleischman et al., 2017) which claims that good management will provide good quality services. another study (pattanayak et al., 2017) also finds that higher-quality management improves service quality. this finding supports the main objective of quality management, which aims to improve overall quality, including process quality and service quality. the implementation of quality management at the public health centers in sintang is performed through accreditation. based on the research results, it is clear that the implementation of quality management through accreditation improves the quality of service to employees or improves internal services. this is in line with research (ghareeb et al., 2018) which shows that accreditation table 6: p values x1 x2 x3 y z z*x2 z*x3 x1 x2 <0.001 x3 <0.001 <0.001 y 0.002 <0.001 <0.001 0.011 <0.001 z source: primary data processed with warppls 5.0 software table 7: path coefficients x1 x2 x3 y z z*x2 z*x3 x1 x2 0.531 x3 0.215 0.576 y 0.151 0.210 0.383 0.118 0.162 z source: primary data processed with warppls 5.0 software table 8: p value of indirect for paths with 2 segment x1 x2 x3 y z x1 x2 x3 <0.001 y <0.001 <0.001 z source: primary data processed with warppls 5.0 software figure 2: research results pane, et al.: implementation of quality management towards the internal service quality and trust in management and its impact on job satisfaction: the role of moderation of the national health insurance system international review of management and marketing | vol 12 • issue 3 • 2022 7 triggers major changes in organizations both in improving the quality and level of organizational learning. therefore, accreditation is imperative as the main effort to improve quality in primary care. this study also found that the implementation of quality management was significant on trust in management at the public health centers in sintang. this finding corroborates with research (bugdol, 2013) which says that quality management is significant with trust. improving quality management will increase trust in management. other research (azarian and taghipour, 2020) found that the influence of the quality management system had a significant impact on organizational trust. in addition, another important finding from this study is that the application of quality management has a significant impact on the job satisfaction of health workers. this finding is in line with research (prajogo and cooper, 2017) which argues that quality management increases job satisfaction one of the implementations of quality management in health centers is the application of accreditation. in another study (kousgaard et al., 2019) it was found that the impact of accreditation makes changes in behavior and physical infrastructure. furthermore, accreditation has increased competence and increased job satisfaction. this study also found that internal service quality was significant to trust in management. this study is in line with research (boonlertvanich, 2019) and research (rasheed and abadi, 2014), which found service quality significantly with trust. research (thaichon and quach, 2015) found that service quality positively affects customer affective and cognitive evaluations, including satisfaction, trust, commitment, and value. it was also found that the higher the quality of service for health workers, the greater the trust in the management of the public health center. research (cuong and khoi, 2019) also found that service quality was significant for trust. this study also proves that the quality of internal services significantly mediates the relationship between the variables of the implementation of quality management and job satisfaction of health workers. in fact, previous research noted that there were differences in research results between the variables of quality management and job satisfaction. therefore, in this study, the author added the internal service quality as a mediating variable to clarify the relationship between quality management variables and job satisfaction. in addition, it was also found that the variable of trust in management significantly mediated the relationship between the variables of implementing quality management and job satisfaction of health workers. previous research indicated result differences in the relationship between quality management variables and job satisfaction. therefore, in this study, the author added trust in management as a mediating variable to clarify the relationship between quality management variables and job satisfaction. based on the results of the moderation test, the p-value of the interaction of the national health insurance system*internal service quality (z*x2) was 0.011, which means <0.05. the national health insurance system had a significant impact as moderating the relationship between the quality of internal services and job satisfaction for health workers because the national health insurance system can strengthen the relationship between the quality of internal services for health workers and the job satisfaction of health workers. this supports the theory of job satisfaction (robert et al., 2007), namely the equity of motivation theory. in principle, this theory suggests that people will be satisfied as long as they feel there is justice. feelings of equity and inequity are obtained by comparing themselves with other people in the same class, office, or elsewhere. this theory identifies equity in input, which is something valuable felt by employees as input to support their work, such as education, training, and work tools. the national health insurance system influences the quality of internal services. it affects the public health center in serving health workers, ensuring the availability of medicines, or managing medical devices following the mandate of the minister of health regulation no. 21 of 2016 concerning the management of capitation funds for national health insurance. that regulation stipulates that capitation funds can be used to procure medicines and medical devices at the public health center. the availability of medicines and medical devices will undoubtedly support the work of health workers so that it will increase the job satisfaction of health workers at the health center. next, based on the results of the moderation test, the p-values of the interaction of the national health insurance system*trust to management (z*x3) was <0.001, which means <0.05. this means that the national health insurance system is significant as a moderator of the relationship between trust in management and job satisfaction for health workers. the national health insurance system that moderates trust in management on health workers’ job satisfaction at the health centers in sintang regency was accepted and could be proven. the national health insurance system as a moderating variable in the study also has a significant relationship as a moderating relationship between trust in management and job satisfaction of health workers. in other words, the national health insurance system strengthens the connection of trust in management with health workers’ job satisfaction. the health insurance system influences trust in regulating and distributing national health insurance capitation funds in a transparent, open, and proportional manner, according to the minister of health regulation no. 21 of 2016. this will ensure accountability and transparency of the distribution of capitation funds. hence, increasing trust in the management of the health center will certainly increase the job satisfaction of health workers at the public health center. so management that is trusted in the national health insurance system is transparent, accountable, and shares the right of health workers so that it increases the job satisfaction of health workers. 6. conclusion in conclusion, this study found that the quality management variable influenced the job satisfaction of health workers at the pane, et al.: implementation of quality management towards the internal service quality and trust in management and its impact on job satisfaction: the role of moderation of the national health insurance system international review of management and marketing | vol 12 • issue 3 • 20228 public health centers in sintang regency. the implementation of quality management at the health center was carried out through an accreditation process. the more optimal the implementation of the health center accreditation, the higher the job satisfaction of health workers in the health center. job satisfaction of health workers at the public health center in sintang regency was also influenced by the variables of internal service quality and trust in management. by increasing the quality of internal services and trust in management, health workers’ job satisfaction at the public health center in sintang regency will increase. the national health insurance system is also proven to be a moderating variable of the relationship between internal service quality and job satisfaction of health workers. the national health insurance system strengthens the relationship between the internal services quality for health workers and the job satisfaction of health workers. the national health insurance system has an influence on the quality of internal services or for the public health centers in serving health workers, ensuring the availability of medicines, or managing medical devices. availability of adequate medicines and medical devices will increase the job satisfaction of those working at the public health centers in sintang regency. the national health insurance system is also proven to be a moderating variable of the relationship between trust in management and job satisfaction of health workers at the public health centers in sintang regency. the national health insurance system has an impact on trust in management in regulating and distributing capitation funds for national health insurance in a transparent, open, and proportional manner. this will increase the job satisfaction of health workers at the public health centers in 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(2017), trust, job satisfaction, perceived organizational performance and turnover intention: a public-private sector comparison in the united arab emirates. employee relations, 39(7), 1148-1167. 16_1286 husain ok.indd international review of management and marketing | vol 5 • issue 3 • 2015 173 international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2015, 5(3), 173-179. the role of brand loyalty: the case study of telekom malaysia munawwer husain* school of business management, college of business, university utara malaysia, sintok, kedah, malaysia. *email: mhusain333@yahoo.com abstract brand devotion is the principal thing in an association that leads from consumer loyalty toward items and administrations offer. this study is led to investigate the principle calculates that add to brand dedication in the telecom organization, telekom malaysia (tm). there are fi ve primary variables utilized as a part of the contextual investigation that is duty, consumer loyalty, corporate picture, trust and advancement on brand devotion in the telecom organization. this study utilized overview systems, where a sum of 290 review structures was circulated to tm clients through comfort examining yet just 165 were gotten and usable. the outcome demonstrates a critical positive relationship between the variables (duty, consumer loyalty, corporate picture, trust and advancement) toward brand dedication. keywords: brand, commitment, customer satisfaction, trust, promotion jel classifi cations: l80, m31, m37 1. introduction the colossal rivalry between telecom administrators is not due to globalization, but rather is brought about by educating the client. they have information about costs, exceptionally instructed and less excusing in light of the fact that they are open to numerous items. the development, innovation in correspondence additionally bolsters in the expanded rivalry, power as it gives an open door for a client to get to more data on items advertised. as it were, the client has more energy to pick. the expanding quantities of telecom supplier are one of the reasons that infl uence brand dedication towards telekom malaysia (tm) item and administrations. a noteworthy quantities of lime are ended versus establishment because of switch to different administrations supplier, for example, maxis, celcom and others (tm annual report, 2011). there are 1440 rented lines introduced and from fi gures 510 rented line ended (35%) in light of changed to others supplier. the client has a tendency to subscribe others supplier on account of unsatisfi ed administrations given by the tm organization and bundles contrasting others telecom supplier (tm marketing department). brand is a critical resource for each organization on the grounds that it demonstrates the responsibility of an organization to the business sector. it is likewise a guarantee of each organization to convey particular items, and advantage to the client. each band brings a novel feeling connection to the client. the brand could fortify values and observation in the psyche of a client about the administration, experience, items that are acknowledged from an organization that would interface an organization and the client. it is the inconspicuous experience, however the presence is felt in every psyche and heart of each client. brand loyalty is criticized on the grounds that development fi nancing is in line with new competition among mechanical player in the business place. the organization must adjust new diverse and methodologies in the business sector reality. components like demography, moderate economy, exceptionally propel contender, and over-burden limit in the business implies little quantities of client in the business. the company is contending one another to get offers for the agreement and moderate business. in advertising. the expense for new clients is 5 times higher rather keeping up existing clients. tm was beforehand known as jabatan tm. in 1987, it was corporatized and known as syarikat tm berhad (stmb), recorded in bursa saham malaysia on september 9th, 1990. keeping in mind the end goal to maintain and more strengthened, stmb dispatched its new brands tm, on 14th april 2005. as one of the organizers recorded in bursa malaysia, tm international review of management and marketing | vol 5 • issue 3 • 2015174 husain: the role of brand loyalty: the case study of telekom malaysia has been one of the greatest organizations in malaysia and tm has contributed an enormous measure of cash to lead the telecom business and guaranteeing the best administration quality to all the clients in the more progress and challenging environment. in this way, mark steadfastness is an imperative center for an organization (reidheld and sasser, 1990) and a brand could likewise impact the purchasers to re-buy the same brand of an item or services. until now, there is very little study that gives much consideration on elements that infl uencing brand loyalty in malaysia, particularly in the government link company. in spite of numerous studies that has been done universally, there are less studies on distinguishing variables that infl uencing brand devotion for an organization that offers limitless telecom administrations. 1.1. problem statement and research objective in previous research several factors are found to infl uence the brand loyalty to an organization or business. among the factors are service commitment, satisfaction, corporate image, trust and promotion. there are certain criteria or intention of customers as a reason to be loyal to their selected brand. therefore, this study is intended to investigate the infl uence of the factors among the customers of tm berhad in the malaysian competitive telecommunication business environment of today. this research is an attempt to investigate the infl uence factors towards brand loyalty at tm. it is hoped that this study could assist in understanding the current and potential customers better. a decade ago, tm was the single provider and enjoys a “comfort zone” as there are no other service provider can beat their reputation. however, nowadays it is no longer monopolized markets as customers are being offered in a very wide selection of telecommunication service providers. it is a time for tm to take into consideration the customer point of view in order to maintain a favorable image to the customers. as suggested by the literature, brand is considered as one of the most important in order to link the customer expectation toward their satisfaction, degree of commitment, trust, corporate image and promotion. in the tm annual report 2011, decreasing profi t before tax at −26.4% (rm1, 001.2 million) was reported in the fi xed line sector compared to the previous year of 2010 (rm1, 360.2 million). among the causes identifi ed is that customers prefer to choose another telecommunication operator which give more convenient package that suit with customer needs. other unsatisfi ed causes, as observed during the maintenance visits to the customer’s premise, are the human and technical issues. customers are putting more emphasis on the types of services they received. in the global telecommunication industries, many governments are giving licenses to other companies to operate telecommunication services. this developer is giving the customer a wide choice and to be able to switch to another provider that are suitable to their needs. thus, brand loyalty is important to sustain the growth of tm revenue and performance. the understanding of the factors that affect brand loyalty in tm is hoping to be able to contribute information and ideas for the organization and marketer for a better strategy in the telecommunication sector. 1.2. research objective the broad objective of this research is to examine the factors that affect brand loyalty at tm; specifi cally: i. to study the level of brand loyalty at tm ii. to identify whether commitment, customer satisfaction, corporate image, trust and promotion effects brand loyalty at tm. 1.3. research question the research question for this study contains: i. what is the degree of brand loyalty at tm? ii. is there a signifi cant relationship between commitment and brand loyalty? iii. is there a signifi cant relationship between satisfaction and brand loyalty? iv. is there a signifi cant relationship between corporate image and brand loyalty? v. is there a signifi cant relationship between trust and brand loyalty? vi. is there a signifi cant relationship between promotion and brand loyalty? 2. literature review this chapter reviews and explore the literature on brand loyalty, commitment, customers satisfaction, corporate image, trust and promotion. the fi rst section explains generally about the variable from previous researcher and follow by sub-section where the relationship being discuss and shown between independent variables (commitment, customers, satisfaction, corporate image, trust and promotion) and dependent variable (brand loyalty) (figure 1). 2.1. brand loyalty in past exploration brand dedication has been said “a profoundly held responsibility to re-purchase or re-belittle a favored item or administrations reliably later on, accordingly creating a redundancy same brand or same brand set buying, in spite of situational impacts and promoting endeavors having the capacity to bring about exchanging conduct” (oliver, 1999, refer to in zaribbayevich, figure 1: theoretcal framework international review of management and marketing | vol 5 • issue 3 • 2015 175 husain: the role of brand loyalty: the case study of telekom malaysia 2010). accordingly steadfast shopper just repurchase the same brand over the time even there is an option mark in the business, and in the end brand faithfulness can be measured by the dedication to repurchase in term of items and administrations (ryan et al., 1999). this kind of clients is genuinely steadfast with the brand that gives a chance to association in term of benefi t and picture. a client brand relationship is a center segment of reliability (fournier, 1998; fullerton, 2003; morgan and hunt, 1994; sirdeshmukh et al., 2002). clients are faithful to the brand in the event that they appreciate the advantages connected with the relationship, for example, connection, with coordinating and affi liation. other than that brand devotion is the measure of a connection a client has four brands (aaker, 1991). as indicated by oliver (1997), brand unwaveringness allude to the dedication to repurchase or bolster a favored item consistently, notwithstanding other brands” showcasing endeavors bringing about the switch of the brand. past scientist has reasoned that client unwaveringness can build benefi t from 25 for every penny to 85 for each penny (reidheld and sasser, 1990). as far as budgetary it was an incredible quantity of benefi ts to an association. brand unwaveringness is created by an association itself as well as contribute all the more as said by alexandria et al. (2004), informal turns out to be the best procedure in term of correspondence methodology in administration industry. from verbal correspondence it will advantage to an association by ability to take an interest so as to make the change of an association benefi t through advertising examination and new recommendation (zeithml and bitner, 2006). a verbal exchange is correspondence that being utilized by the client as a part of request to give a data toward item/benefi ts they utilize either great or terrible. on the off chance that great data has been transmitted it gives a great effect to association to have new clients with no expense included. american marketing association, characterized brand reliability as “the circumstance in which a purchaser for the most part purchases the same producer started item or administration over and over after some time as opposed to purchasing from various supplier inside same classifi cation” or “the extent to which a customer reliably buys the same brand inside o item class.” 2.2. commitment and brand loyalty responsibility is characterized as an esteemed relationship between the two gatherings (moorman et al., 1992) that infers abnormal state of comprehension to wind up fruitful furthermore some of the relationships will convey to shared fulfi lling and advantageous (gundlach et al., 1995; morgan and hunt, 1994). bowen and shoemaker (2003) expressed duty as the readiness of both sides to keep up their progressing relationship and eagerness to relinquishes in the transient essential to get long haul advantage later on. this is bolstered by another specialist where a customer’s persevering longing to proceed with an association with an association with their ability to try our penance to keep up the relationship (lacey et al., 2007). from the defi nitions above, responsibility is a conviction as well as it sort of penances by both parties” clients and association to keep up and proceed with the relationship for long haul advanta. past specialist mei-lein (2011) expressed in her exploration trust, duty and consumer loyalty has a critical and a solid effect on client unwaveringness. consequently, responsibility assumed a part so as to make brand devotion toward the item and administrations given by an association. at the point when both relationships in the middle of client and association as specifi ed above, it will prompt brand reliability, as both sides are willing to cooperate to have long haul advantages. 2.3. customer satisfaction fulfi llment originates from an inclination of alright with the item or administrations. concurring hoyer and maclnnis (2001), consumer loyalty may be connected with a feeling of acknowledgement, joy, enthusiasm and energy of an administration or item. johnson and fornell (1991) characterized consumer loyalty as the conduct of the client to assess an offering to date through a general perception toward the procedure. another scientist likewise accepts that fulfillment have an immediate connection with feeling, for instance kotler (2000) said fulfi llment as “feeling a man getting delight or dissatisfaction coming about because of looking at an item or administrations acknowledged by execution (or result) that would be normal.” while hoyer and maclnnis (2001) additionally said that fulfi llment may be connected with sentiments of acknowledgement, bliss, alleviation, energy and delight. judgment is an important word that can characterize all the more about fulfi llment. the judgment of an item or administrations, where it is charming level of usage of pertinent clients, including whether it surpass or not from what they actualized (oliver, 1997). fulfi lled client lead to client dependability which is demonstrated by sivadas and prewitt (2000) said “there is expanding acknowledgment to the estimation of consumer loyalty in client dedication.” agreeing fornell (1992), “high consumer loyalty will prompt expanded steadfastness to the fi rm and the clients will be less intrigued by the offer from different contenders.” the center for the study of social policy (2007) conceptualizes that fulfi llment is in light of the customer’s experience of both contacts with the association (the snippet of truth) and individual results. in like manner, numerous specialists (oliver, 1981; brady and robertson, 2001) conceptualize consumer loyalty as an individual’s feeling of delight or disillusionment coming about because of contrasting a product’s saw the execution (or result) in connection to his or her desire. while, boulding et al. (1993) and close fulfi llment into two general conceptualizations: exchange particular fulfi llment and total fulfi llment. exchange particular fulfi llment is a customer’s assessment of his or her experience and response to a specifi c administrative experience (cronin and taylor, 1992; boshoff and gray, 2004). total fulfi llments allude to the customer’s general assessment of the utilization experience to date (jones and suh, 2000). fulfi lled clients are more faithful, which diminishes a fi rm’s chance by diminishing the legitimacy of interest (anderson et al., 2004) and fulfi lled clients are more steadfast, less delicate to value developments, and more prone to participate in positive verbal conduct (anderson et al., 2004; brady and robertson, 2001. 2.4. corporate image corporate picture is an immaterial resource that is hard to be replicated and can help to keep up money related execution (roberts and dowling, 2002). corporate picture and item brand assumed an alternate part (aaker, 1991). it shows the international review of management and marketing | vol 5 • issue 3 • 2015176 husain: the role of brand loyalty: the case study of telekom malaysia purchaser how they perceived an item or administrations offers by corporate picture shows whether it is exact or not (keller, 2003) and observation toward an association itself. the advantage of a corporate picture is to give a quality suggestion or client connection in light of the association, to give believability to the picture (mastery, reliability and preferring), and as an image to clarify and depict the associated social and estimations of the association (aaker, 1991). another scientist said corporate picture or brand picture speak to a general exercises inside of an association, for example, methodologies, promoting exercises; marking and item offering, conceptualization and it will, characterized by picture (dobni and zinkhan, 1990; martinez and pina, 2003). company’s picture is in view of people’s discernment toward all organization data got (recognitions, conclusions and conviction). another scientist specifi ed that an in number picture is vital structure brands proprietor on the grounds that it will separate item or administrations brand from others. picture incorporate shading, words, mottos which will pass on and clarifi ed or convey a message not simply in the name itself. from picture client will have a few stories in their brain that could bring or recalling what might they be able to get from the picture indicated. today, organizations are depending on their corporate picture to pick up unwaveringness towards clients. it will help an association maintain and being acknowledged in the commercial center. without a corporate picture an association is neglected to understand their item/benefi ts into a commercial center. 2.5. trust as indicated by moorman et al. (1993) trust is a conduct of ability to depend on where its subject to whom one has a share. disappointment and abandonment is an impact when they disloyalty this trust. anderson and narus (1990) underline that trust happens when a gathering has the capacity give something positive as craved. along these lines, to framing the faith in the brand, clients are normal a quality and positive. profoundly relationship can prompt conduct of conviction where the words and guarantees from different gatherings are solid and it must be satisfying his/her commitment to keep up the relationship (schurr and ozzane, 1985). convictions ought to be steady with an essential part in relationship responsibility (morgan and hunt, 1994) and additionally client steadfastness (gundlach and murphy, 1993). it can be checked whether a gathering accepts the others, it’s like to build up a positive behavioral goal to acknowledge the others. at the point when clients have confi dence in the brand, which implies they are occupied with making a buyer through the brand (lau and lee, 1999). 2.6. promotion advancement is somewhat correspondence in the middle of clients and associates. it is one of part expressed in showcasing blend hypothesis. there are a few shots of advancement, for example, deal advancements, promoting, exposure and individual offering (direct advertising). deals advancement is a situated of boosting that offered infrequently, and it will fortify reputation to support the buying of a specifi c item. deal advancement system is to have an immediate effect on purchasers conduct. the targets of offers advancement will go to a more noteworthy degree when it is done on occasion, and unforeseen by the clients. “limited time products association international” characterizes the special items as “valuable or enhancing articles or stock – which may be printed with organization name, logo or message– use in advertising or other correspondence projects”. promoting one of the advancement shapes where the item is imprinted with the logo of supporter and in some cases a piece of messages. it is used an update, indication of goodwill or other media messages in conjunction with accomplishing the destinations of advertising and advancement by the promoter. as indicated by agrawal (1996) promoting is a “guarded” system for connection with brand dedication. it will help to hold steadfast clients. thus, an association ought to be spending more cash for a publicizing their image to the general population. it will help an association to drawing in new and steadfast client by battling with the weaker brand in the commercial center. as indicated by evan et al. (1996) publicizing will infl uences consumer’s in a few conditions which is pictured, state of mind and conviction toward an association brand and item that connected to customer’s acquiring conduct. another analyst said advancement is the main motivation for shoppers to attempt the new item (grover and srinivasan, 1992). by advancement buyer will have an alternative to pick the item by contrasting and others that suit with their needs. 3. methodology this part clarifi es the procedure embraced in this study. the primary talk is on the improvement of the examination system of the study and took after by theories advancement whereby fi ve speculations are produced. the examination outline utilize is an overview research. the device utilization to gather the essential information is the survey which has been produced by past investigations of the related variables as talked about in the writing audit part. the respondents of this exploration are the tm clients in klang valley particularly kelana jaya. the respondents are drawn nearer amid their visit to tm point amid the study period. expressed as exploring for the overview address on the writing, building the best fi tting review of the options, coming to the member, which are telecom clients in kelana jaya taking an interest in study, assembling the information, testing and breaking down the information. this part really clarifi es in profound towards what have been done to begin and settled the study for this study the overview exploration is chosen as the examination outline. this is so as the overview system has a high level of unwavering quality, lower expense and shorter times oblige executing it. in this study, the type of quantitative examination utilizing overview exploration has been utilized. this is on the grounds that quantitative examination location research objective through experimental evaluations that include numerical estimation and investigation. the study examination has been utilized by appropriate a survey to test of individuals. concurring (zikmunk, 2010) there are intersubjective certifi ability where diverse people talking after the same technique will create the same results or arrive at the same conclusion. the accommodation inspecting strategy will be 30. population alludes to the whole gathering of individuals, occasion or thing that the scientist expects to explore. in tm annual report (2011), klang valley contributes 70% of international review of management and marketing | vol 5 • issue 3 • 2015 177 husain: the role of brand loyalty: the case study of telekom malaysia clients among other district in malaysia. the center of this study is at the kelana jaya region where this area is a piece of klang valley. in tm, klang valley partitioned in four divisions, i.e. focal, west selangor, east selangor and petaling jaya. kelana jaya is a piece of petaling jaya area and caters a substantial number of tm clients. accordingly kelana jaya is chosen as the example for this study. utilized for this study for all respondents to get an answer towards particular inquiry with respect to elements infl uencing brand reliability at tm. the poll papers have been conveyed to all respondents through hand by the hand conveyance technique at tm point counter. at that point, the answers will be gathered back before respondent leaving the counter. the information from the polls were examining utilizing statistical package for social science rendition 15.0 to get the rate, mean, standard deviation and relationship. another strategy is the pearson correlation coeffi cient test to focus the relationship in the middle of free and ward variables. concurring it additionally displays the recipe that used to quantify the connection of a relationship low, medium or high. finally, linear multiple regression analysis used to recognize free variable that impacting the investigation of the most overwhelming variability. this system is utilized to get the best relapse model to choose autonomous variable that could expand the total relapse model. unwavering quality of the survey was tried utilizing cronbach’s alpha methodology in view of the model of interior consistency. at the point when alpha esteems closer to “1,” it demonstrates a high level of unwavering quality. in the event that the alpha qualities are under 0.6, it may accept that the instruments utilized as a part of this study had a low unwavering quality worth. the worthy, worth for alpha is more than 0.7. from the unwavering quality test led after getting poll reactions demonstrated that brand loyalty 0.891 bases on cronbach’s alpha worth. while, commitment (0.903), customer fulfi llment (0.885), corporate picture (0.886), trust (0.886) and promotion (0.891) demonstrated the thing recorded is steady. the principle reason for this study was to focus components impacting brand faithfulness toward telecom administrations supplier (tm). two levels of factual examination were led to two tests. initially, included elucidating measurement. second included two principle factual device, examination of diverse (t-test and restricted anova). for connection between ward variable and free variable’s relationship and numerous relapse) have been directed. there are diverse finding between test led where there is a noteworthy relationship between all variables utilizing connection yet various relapse indicates just three variables has a critical relationship towards brand steadfastness (consumer loyalty, trust and advancement) while different variables (responsibility and corporate picture) demonstrate of non-huge relationship toward brand faithfulness in the telecom business. 4. discussion and recommendations the reason for this exploration is to research the relationship of the distinguished elements towards brand devotion, the case concentrating particularly on tm. the targets were to know whether the free variable (duty, consumer loyalty, corporate picture, trust and advancement) infl uence subordinate variable (brand dependability). quantitative exploration confi guration was utilized on the grounds that the study is commonly more formal and structure. it is in view of vast, agent tests and the information acquired subject to quantitative investigation. the essential information was accumulated straightforwardly from the tm clients who are looking for administrations at the heel counter of tm point kelana jaya. the study was led to locate the particular answer towards inquiry and the goal of this contextual investigation. numerous relapses were utilized to comprehend and examine every relationship between free variable and ward variable. based on the information investigation from past section, underneath is the outcome outline for the speculation tried. the outcome of the essential information accumulated, there is no critical relationship in the middle of duty and brand faithfulness. this outcome repudiates with the discoveries in many past examinations where the writing has shown a positive relationship in the middle of responsibilities and brand reliability. be that as it may, in this study shows the switched whereby customer’s observations toward duty are not critical to brand steadfastness. duty is no more utilized as a deliberate for client brand dependability in light of the fact that in telecom industry responsibility is not the purpose of faithfulness where there are decisions with comparable item and administrations advertised. concurring oliver (2006; referred to in martenson, 2007) consumer loyalty can be seen as a satisfaction of consumers utilization objectives as experienced and portray by shoppers. it is criticized on the grounds that client just faithful with the supplier if the supplier satisfi es their need and fulfi lled by the item or administrations given. another word, it is a judgment that an item or administration highlight, or the item or the administration itself, gave a pleasurable level of utilization related satisfaction, including levels of under-or over satisfaction oliver (1997, p. 13, referred to in martenson, 2007). at the point when client fulfi lled by the administration or item it then gets to be faithful toward the decision brand. as per ganesan (1994, referred to in caceres and paparoidamis, 2007) found that long haul introduction is infl uenced by the degree to which client and sellers believe their “channel accomplice.” each partner’s capacity to give positive results to alternate decides responsibility for the relationship. trusts are likewise critical to brand devotion, where the client is extremely watchful to pick the item or administrations, those when clients trust with the thing faithful will meet up. as notice by past scientist it about the long haul introduction. the exploration found that a large portion of the respondents are female contributes most elevated rate 56.7% with quantities of 93 respondents, while male contributes 43.33% with quantities of 71 individuals from an aggregate of surveys conveyed. period of respondent likewise recorded with four classes which age between 26 and 35 years was most noteworthy rate contributes 45.1% (74 respondents), second most elevated of respondent were aged between 36 and 45 years 23.8% (39 respondents). other two gatherings were underneath 25 or more 45 which are shows just 13.4% (22 respondents) and 17.7% (29 respondents). international review of management and marketing | vol 5 • issue 3 • 2015178 husain: the role of brand loyalty: the case study of telekom malaysia the after effect of respondent’s race demonstrates that larger part of the respondents are malay, with 73.8% (121 respondents), trailed by chinese just 11% (18 respondents). the different respondent’s race was indian and others which are show just 9.1% (15 respondents) and 6.1% (10 respondents). the aftereffect of respondent’s occupation was ordered in three principle part open, private and own business. open area contributes most noteworthy rate from different areas with 58.5% (96 respondents), trailed by private division, 35.4% (58 respondents) and own organizations 6.1% (10 respondent). conjugal status was recorded last things in the poll were incorporated two classes lone ranger and wedded where, dominant part of my respondents are hitched with 66.5% (109 respondents), while just 33.5% (55 respondents) are status bachelor. 5. conclusion from fi nding there are shows customer’s of telecom parts are concur about clients’ fulfi llment, trust and advancement can lead them to be brand steadfastness toward an association that offer telecom items and administrations. thus, it demonstrates that tm clients are worried about these three variables. tm as supplier ought to proceed with and profound examination to acquire projects and ways to deal with fulfi ll client needs, keeping in mind the end goal to support in the commercial center to increase upper hand. from trust and great advancement there are direct associations with customers fulfillment on administrations and item subscribe by clients. in the new period of telecom innovation, as a supplier tm ought to be centered to youth for new items as this gathering of individuals utilized innovation every day life and they have a tendency to impart the great experience to their group. from the numerous relapse investigation, there are shows advancement measurement held the most elevated score and has a noteworthy relationship towards brand steadfastness hold a light to others variables. besides, the connection discovering additionally expressed that advancement was the most variable that will impact brand reliability. from client observation advancement is an absolute necessity to bode well towards an item and administrations. by this methodology, clients dependably know and will settle on a choice how to satisfy their needs by the advancement given by the supplier. then again, fulfi llment measurement turns out to be third most astounding 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5.0 and later.) >> /namespace [ (adobe) (common) (1.0) ] /othernamespaces [ << /asreaderspreads false /cropimagestoframes true /errorcontrol /warnandcontinue /flattenerignorespreadoverrides false /includeguidesgrids false /includenonprinting false /includeslug false /namespace [ (adobe) (indesign) (4.0) ] /omitplacedbitmaps false /omitplacedeps false /omitplacedpdf false /simulateoverprint /legacy >> << /addbleedmarks false /addcolorbars false /addcropmarks false /addpageinfo false /addregmarks false /convertcolors /noconversion /destinationprofilename () /destinationprofileselector /na /downsample16bitimages true /flattenerpreset << /presetselector /mediumresolution >> /formelements false /generatestructure true /includebookmarks false /includehyperlinks false /includeinteractive false /includelayers false /includeprofiles true /multimediahandling /useobjectsettings /namespace [ (adobe) (creativesuite) (2.0) ] /pdfxoutputintentprofileselector /na /preserveediting true /untaggedcmykhandling /leaveuntagged /untaggedrgbhandling /leaveuntagged /usedocumentbleed false >> ] >> setdistillerparams << /hwresolution [2400 2400] /pagesize [612.000 792.000] >> setpagedevice tx_1~at/tx_2~at international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2023, 13(3), 1-8. international review of management and marketing | vol 13 • issue 3 • 2023 1 cross-cultural negotiation conflicts: the myanmar case annamária sasne grosz1*, laszlo jozsa1, sandi maung2 1department of marketing, university of pannonia, veszprém, hungary, 2university of pannonia, veszprém, hungary. *email: sasne-grosz.annamaria@gtk.uni-pannon.hu received: 10 january 2023 accepted: 08 april 2023 doi: https://doi.org/10.32479/irmm.14132 abstract the economic role of southeast asia has deeply changed in the past decades therefore central european companies turned to collaborate with many of them. however, the cultural differences can lead to fiasco. we focused on understanding the role of cultural background in business negotiation and potential conflicts of international businesses. in the qualitative phase, we looked for entrepreneurs and corporate professionals in southeast asia who (1) were native to the country and had contact with the european business world; (2) were european businesspeople operating in southeast asia. we prepared in-depth interviews with 10 people where questions concerned the differences between cultures, their business role, and personal experiences. we found that the business culture of the studied countries is primarily determined by the values of the buddhist religion, characterized by a highly hierarchical structure and a large distance of power. the stable foundation of businesses is family relationships, they operate in a centralized way, characterized by one-person decision-making. outsiders are not allowed access to the business, resulting in very low transparency. due to some similarities between central european business habits and burmese culture cooperation is possible. beside the description of a seldom studied country’s business style, potential conflict situation was determined. keywords: business negotiation, myanmar, cultural impact, buddhism, central europe jel classifications: f23, m14, m16 1. introduction in the globally interconnected economy of the 21st century, it is a natural aspiration for companies and institutions to internationalize their activities. however, it is still not obvious to many that this requires serious preparation, not only on how to credibly “sell” your own offer to a potential partner, but also on how to start making contacts and how to conduct your first meetings. as long as we stay within our own culture, this is not a major challenge, as we have the experience to do it, based on our track record. but what to do if negotiating partner is obviously from a different culture (caputo et al., 2019)? what should we be prepared for? who is the right person in the company to conduct the negotiation? there are so many questions that managers want to answer quickly and effectively. furthermore, to keep a company globally competitive, multinational businesses decided to manufacture products in target countries instead export them. working with foreign workforce, negotiating with foreign suppliers, selling to a market abroad – each of these aspects of business activities are influenced by culture, and decision makers should be prepared for cultural differences. canen and canen (2004) claim that there is a need to be sensitive to cultural characteristics of organizations and managers should first build trust among business participants. trust can reduce barriers, helps to manage workforce diversity and through this, increases satisfaction and productivity. tutar et al. (2014) mention some advantages of culturally diverse environment. first, it is simply more fun to work people with different cultural background. second, diversity is one of the sources of creativity. third, a multicultural environment is relevant to a global environment and market conditions can be better concerned in it. by all means, these advantages will help to flourish businesses only they are properly managed. however, different cultures may result misunderstandings, even conflicts – and we have to find the way this journal is licensed under a creative commons attribution 4.0 international license grosz, et al.: cross-cultural negotiation conflicts: the myanmar case international review of management and marketing | vol 13 • issue 3 • 20232 to manage them during building trustworthy therefore effective environment. trustworthy organization can be built on three levels: organizational cultural identity, workforce cultural diversity and customers’ and companies’ cultural diversity. for a european company planning business in southeast asia all of these levels will occur. the problem of cross-cultural management is crucial; efficiency of the company, organizational climate including employees’ feelings and well-being – are important in long-term partnership so we have to find a way to harmonize culture and cultural diversity at any level. in recent decades, asian countries, including the southeast, have become more and more attractive as possible markets, and for the countries located in this region central europe has also been added to the list of potential investment locations and cooperation opportunities. according to one of mckinsey’s latest reports (kumra et al., 2022), asian companies face new challenges in an extremely competitive environment, to which, according to the ceo’s interviewed in the research, they are preparing to respond by focusing on highlighted areas. however, most of the studies, including this mckinsey report focus on economically developed countries, there is a lack of studies about economically disadvantaged countries. maybe the importance of them is not big enough for large investor countries, but they can be interesting for smaller central european countries and companies. 2. literature review lawrence et al. (2021) studied the impact of differences in cultural and institutional factors in field of mergers and acquisitions (m&a) and discovered the followings: all of the three steps of m&a can be influenced by cultural distance between participants, however, this influencing effect appears mostly in the initiation phase. furthermore, their study shows that top-tier advisors were successful in completing culturally distant deals due to their superior skills and expertise. these findings suggest successful negotiators should be well prepared at the beginning of any business process, not only with theoretical knowledge but also with some experience of the given culture. at the same time, in fam et al.’s study (2010), it has been specified that the distance between the cultures intending to do business, and the tendency of the respective cultures to approach the other, cannot be neglected. fam et al. theory, called chopsticks marketing, is based on confucian teaching which is a set of pragmatic rules directing people’s behavior and relationships. the values and rules, like proper living, respect of authority, desire for harmony, conservatism, contentedness, tolerance of others, order, and stability, are taught and practiced by far-east families (not only chinese ones). in the marketing practice it means a continuous cooperation between the business partners understanding local customs and habits, accepting the local customer behavior. 2.1. business relationships in myanmar – present and future possibilities the purpose of the research mainly is to discover myanmar’s business culture and negotiation’s habits from the viewpoint of a possible future investment by central european companies. due to the lack of direct business relationship between this region and specially myanmar, we decided to use western (mainly american) cultural characteristics as a moderating element, and compose conclusions with comparison among western, central european and burmese culture. to be able to complete it, the main characteristics of each of them have to be discussed in a nutshell. grosse (2011) summarized literature on the global managers’ perceptions about cultural issues in field of business. she found americans definitely result oriented, who are interested in knowing the final expected results, costs of them and deadlines when results should be achieved. they work hard, because their self-image is based on actions, and actions can speak better than what they say. their working style is truly competitive and aggressive, not avoiding conflicts and confrontations during negotiation but taking risk as an opportunity. business and personal time and issues are separated from each other; they don’t tend to discuss personal life with coworkers. due to their monochronic viewpoint, they are obsessive about punctuality and deadlines. they say exactly what they mean: 2pm means definitely 2pm, and no means no. users easily say no, they suppose it is easier than not to keep the given word. although countries in central europe find themselves different from each other, historical and geographic background makes them culturally similar, and central europe often is considered as a mediator between west and east. luboviecki-vikuk (2021) completed a complex literature analysis about central and eastern european countries and summarized important details. greetings happen mostly with handshake, differences could be found whether the female or male partner shows hand first. titles are important, so as part of introduction titles are mentioned together with participants’ surname. rank, professional and/or academic degree is respected during the whole process. according to business meetings, punctuality is important – in some countries (e.g. belarus) it is meant in relation to the guest. meetings often are held in restaurants, pubs, which means negotiation happen during lunch, or cocktail party. negotiations are moderately ceremonial and monochronic, but sometimes polychronic attitude appears. several meetings ends with a final decision, however, due to bureaucracy and requirement of administrative approval many times negotiation process is prolonged. style of discussion can be described with modesty, mildness and humility is admired. several countries consider participants’ rank as an important factor. southeast asian countries are economically different, still traditional values are common and southeast asian businesses reflect many of them in leadership, management and how to develop businesses. cross-cultural studies found differences between west and southeast asian countries in problem solving approaches as well, and it seems these are persistent (barkema and vermeluen, 1997; barkema et al., 2015). the most meaningful contrasts lies in individualism-collectivism and consideration of power distance. collectivism can be seen in importance of networks. belonging to a group is more important than being individual; as a result family bounds are tight and family issues weaves through workplaces and tasks as well. sense of belonging is so strong that they make distinction between in-group and out-groups persons grosz, et al.: cross-cultural negotiation conflicts: the myanmar case international review of management and marketing | vol 13 • issue 3 • 2023 3 resulting in low level of trust in foreigners, therefore preliminary relationship building is a must (wang and chung, 2020). as purwanto et al. (2020) noted, corporate image has a significant effect on trust: the better the corporate image, the higher the trust will be,; such as, during building relationship companies should improve their image taking culturally important habits and rules into their consideration. power distance is embodied in the autocratic management mode, one-person decision making and total control. employees respect authorities and follow the decisions without criticism and questions; additionally interest in changes the existing ones is very low. further attribute is the high-context communication style where people avoid conflicts due to use of contextual suggestions (zhou et al., 2021). 2.2. potential sources of problems in cross-cultural business relation it is easy to see from the description of business habits and mentality of the three mentioned regions that meetings among them could be problematic. it starts right at the beginning with punctuality which is crucial for westerners, important for central europeans but absolutely indifferent in southeast asia. close family relationships in business and family life appearance in working hours (through talking about family events; frequent phone calls, etc.) are common in southeast asia, may frustrate western partners, and be acceptable in central europe. strategies are task-related in western countries and mostly in central european countries, but in southeast asian countries those are relationship-oriented and it is better if they reflect core values and integration with community (nisbett et al., 2001). competitive and aggressive working style of west definitely is in contrast with the polite and mild communication style of central europe just like with peaceful style of southeast asia. not asking questions and not-to-say-no habit are bound to politeness and respecting higher rank negotiators in southeast asian countries, to respect of academic or professional rank of negotiator in central europe, contrary to the west where no questions mean acceptance and agreement. additionally, lack of criticism and proactivity in southeast asian countries often results in serious problem situation in case of unexpected events which can be easier managed in western and central european countries. the probability of occurrence of the above mentioned problems is supported by smite et al.’s (2021) findings, who’s research topic was agile way of work in swedish-indian joint groups. as it was mentioned in the first part of the introduction, cultural diversity can leads to a more attractive and creative business environment, but now it is clear, that the above described differences in mentality and culture may cause many difficulties and must be managed. the question is evident: what is the best way to prepare for and supervise these hardships? 2.3. model of cross-cultural competence many scientific and also business studies identify as a key factor what gertsen (1990, in johnson et al., 2006) calls “cultural competence’ (cc) the ability of individuals to work effectively in a culturally different environment. after a detailed analysis of the literature in which they examined the fields of international business, workplace diversity and intercultural communication, johnson et al. (2006) defined cross-cultural competence as follows: “in international business life, the individual’s ability to adapt in behavior in order to rely on his knowledge, skills and personal qualities be able to work effectively and successfully with people of different national cultural backgrounds at home or abroad” (johnson et al., 2006. p. 530). the novelty of the definition is that, in addition to knowledge and skills, it emphasizes their application (chiu et al., 2013). based on the definition, the cc complex model has been developed. khakhar and rammal (2013) confirm the importance of the ability to act over knowledge and learning. in their study, they investigated the success factors of business negotiations among arab managers. for their research, they used ghauri’s (2003) comprehensive model for international business negotiations as a framework. accordingly, the negotiation process consists of a pre-trial stage, a personal negotiation stage and a post-trial stage. these phases are influenced by (1) background factors: which include the objectives of the negotiations, the environment/venue of the negotiations, the involvement of third parties such as government bodies and the individual negotiating parties; (2) the atmosphere: which focuses on whether the negotiations take place in a conflictual/cooperative environment, the power/dependence relationship between the parties and the expectations regarding the lifetime of the deal; (3) strategic factors: these include knowledge of formal/informal presentation, the strategy used by the negotiating parties, the decision-making process followed by the negotiating parties, and whether the parties need to use an agent; and (4) cultural factors: these consist of factors such as the parties’ use of time, the negotiator’s preference for individualism or collectivism, the high or low contextual pattern of communication, and the emphasis placed on personal relationships between the negotiators. it is not the subject of this research, but it should be mentioned that in reality, bicultural-based behavior is not uncommon and can have significant impact on cq (lakshman et al., 2021). for those in academia, these models perfectly cover all the factors influencing the outcome of intercultural communication and international business negotiations, but how can one decide how successful a given organization, and even more so, its employees participating in the initial negotiations, will be in solving their task? as we have seen above, the acquisition of knowledge about a specific culture is a necessary but not sufficient condition for successfully coping in a cross-cultural situation, for this one must be able to apply the knowledge appropriately in the given situation. we can use personality-based methods or competency-based methods, or a combination of these, when selecting actors participating in the collaboration. no matter which one we choose, it is worth taking into account the elements in the participant’s personality and competence set that show suitability for intercultural negotiation, which can be summarized as cultural intelligence. cultural intelligence (cq) places every situation in a cultural context and thus helps its interpretation (pasztor, 2020), and the known measure of cq shows how well a given person is able to effectively deal with intercultural differences. li (2020) examined the relationship of these two main theories (ccc and cq). as a key finding, it was diagnosed that people with low level of cross-cultural competence (ccc) do not maintain to develop motivational cq, because they believe their own culture is the only reality. behavioral cq – the grosz, et al.: cross-cultural negotiation conflicts: the myanmar case international review of management and marketing | vol 13 • issue 3 • 20234 one is important for successful business meetings and negotiations – can be developed only at higher level of ccc. it is to note, that cross-cultural competence is not constant, but a result of a learning process (wilczewski et al., 2019), consequently it can be developed by trainings as well (hutchings, 2003). cross-cultural competence models emphasize the individuals’ knowledge about and preparedness for cultural differences. not only the other cultures must be known – managers and other employees must know and understand their own culture as well. chiu et al. (2010) described intersubjective perception and intersubjective culture as a reason why people sometimes not act on their personal values and beliefs instead they consider what they perceive as well-known in their culture. in order to avoid this effect in the research, the focus was on determining possible conflict situations than measuring respondents’ values and beliefs. 2.4. problem statement southeast asian countries are open to accept investments from western and central european countries and many of them enjoy benefits of them already. others, like less developed countries stand at the starting point and look for opportunities. those who belong to the second group have to face serious difficulties in the multior international business world. despite of huge amount of theoretical writings about what are the hypothetical differences among cultures and business relationships, they still suffer in uncertainty of how to deal with difficulties. during the research the focus was on the practical side of exploring the problems: through experiences of experts who already are successful in an international environment it was planned to identify real conflict situations. furthermore, in a later phase some methodology to control and manage most of them will be developed. 3. methodology it was planned to carry out a research advancing the study of this topic compared to previous researches. szkudlarek et al. (2020) have identified the stages in the evolution of research on international business life in the light of changes in the central issues of analysis. according to their findings, an intercultural, context-rich exploration with individual perspective has been designed taking into consideration emotional values and personal well-being. using personal interviews there was a possibility to discover generative approaches and dynamic intercultural conflicts; different cultural, economic background, roles and experiences resulted in the context in which answers could be interpreted. the interviews could be completed at individual level, but the questions focused on interand intra-personal interactions at workplaces, meaning emotions and how respondents felt themselves in certain situations. such entrepreneurs and business professionals in myanmar were looked for who are (1) natives of the country and have some form of contact with the european/western business world (6 persons); (2) european/western business people operating in myanmar (4 persons). drawing on the network of contacts of the research team members, a series of in-depth interviews with 10 participants was launched, where the main groups of questions were about the differences between the two cultures, their role in business and the personal experiences of the interviewees about conflicts. questions were compiled based on ghauri’s model discussed in section of theoretical background, additionally questions was applied about willingness to learn according to the preliminary assumption, namely burmese businesses are at the low level of cross-cultural competence. the interviews were made in malay, burmese and english by one person who fluently spoke each language and had international business experiences as well. using native languages of respondents could help to achieve a relaxed and informal atmosphere. audio recordings were made with the permission of participants and transcripts were translated into english by the interviewer. we assessed the trustworthiness of the research by applying sets of criteria from former studies (hirschman, 1986; lincoln and guba, 1985; wallendorf and belk, 1989). table 1 demonstrate that data and analyses meet these criteria. table 1: trustworthiness of the study and findings trustworthiness criteria method of addressing in our study credibility confidence that can be placed in the truth of the research findings • engagement in field: researchers and interviewer with international business experience • member checks: respondents were informed about the first interpretations and could give comments • use of peer debriefing: research idea and presumptions were discussed with other academics • result: better understanding of core issues transferability the degree to which the results of qualitative research can be transferred to other contexts with other respondents • robust description of method and sample • purposive sampling • result: description allows comparison of our context to other possible context; greater in-depth findings dependability stability of findings over time • stepwise replication: two researchers analysed the same data and compared the results • peer examination: during the research researchers continuously discussed the process and findings with colleagues • result: inconsistences could be eliminated; peers contributed to deeper analysis confirmability interpretations and findings clearly derived from the research data • triangulation: investigator triangulation: multiple researchers worked on investigating the interpretations • result: reduce the effect of investigator bias integrity ensure that data were not fabricated by the informants • interviews were professional, of a nonthreatening nature and anonymous • result: participants were not trying to misinformation and evade the discussed issues source: author’s own edition based on hirschman, 1986; lincoln and guba, 1985; wallendorf and belk, 1989 grosz, et al.: cross-cultural negotiation conflicts: the myanmar case international review of management and marketing | vol 13 • issue 3 • 2023 5 4. results analyzing the interviews it was found, that burmese employees and many times managers as well do not consider cross-cultural knowledge as an important part of their interest, therefore, many experiences were mentioned as problems between international business participants. three areas can be distinguished within business negotiation conflict situations. these are (1) formal elements of negotiations; (2) running the business on a day-to-day basis; (3) beyond the bounds of legality. 4.1. formal elements of negotiations when it comes to meet a potential business partner, myanmar people still consider that punctuality is not an important issue. they live their life as they used to meaning being late even with 30 minutes is normal. “if they say they are going to meet you at 1pm, in fact, you will meet them only at 1:30pm.” “the government officials are not punctual at all, but they expect you to be on time. there are times they postponed a meeting for a month.” (local business man with western experience). when finally they arrive, a western partner should recognize, myanmar people loves to wear traditional attires – both male and female managers. however, they can accept formal dress at the other side. greeting each other happens on a common way: while handshake starts to disappear from western culture (especially due to covid) it never was considered as the norm of greetings in myanmar. furthermore, female managers do not want physical contacts with strangers and it is a burmese custom consider women as untouchables. during the negotiation it is important for myanmar people to use honorifics while addressing their partners, using ‘a ma’ or ‘a ko’ in front of their names to show respect. this respectful behavior becomes crucial as they think their western partner is older and/or is higher ranking than them. “even if are working as a head of department, you still must give respect to people from lower-level management due to age respect. there are times, these older people would not agree with your decisions, and you have no choice but to accept their arguments.” (local business man with western experience). no matter what their opinion is, it is not polite to criticize the partner’s suggestion, it is not even appropriate to ask questions during the business meeting. it derives from their polite and soft-spoken culture, as does the fact that they never say anything directly, but speak implicitly. the discussion is further complicated by the fact that the burmese do not bother if a friend or family member calls them during the meeting, they simple answer the call – and it may occur often, because their overprotective family culture is shown in the fact that relatives call each other several times a day. 4.2. running the business on a day-to-day basis naturally, some of the above mentioned elements of the culture of myanmar appears in the everyday business situations as well. punctuality, implicit communication, lack of criticism, respect to the age and rank, answering family phone calls during meetings influence business work continuously. additionally some other possible source of conflicts has been discovered in the respondents’ answers. although managers significantly speak english well enough, most of the employees struggle with language barriers resulting normally shy people will share their opinion less and their selfconfidence decreasing. respect and lack of confidence culminate in a perception of feeling inappropriate to ask back their superiors, so they keep quiet instead – even if the task was given or the situation is not clear for them. “…if they found someone who dare to ask back questions to superiors, they will get shocked and tell them, that they should not say this kind of things to them.” (western business woman working in myanmar at a western company). it is interesting that if, as a result, they do something incorrectly and receive constructive feedback, they tend not to accept it especially when the reason behind the feedback is not evident. “we have some stuffs who called sick days after receiving feedback from us about their mistakes because they are so emotionally upset. also, even though they are told to solve a problem, they will solve it one time only. subsequently, they will try to avoid the problem instead.” (western businessman working in myanmar at a local company). family and strong family connection are important for myanmar’s local businesses, thus it is a cultural norm to treat co-workers as brother and sister during work. they tend to mix professional and personal relationships and issues, so it is common to share family related information with other employees. they not only share family content but they like gossiping about company’s information within the organization. as an outcome of lack of active restrictions and actions taken by an organization or government, people do not give much attention to the importance of confidentiality. confidentiality is known in business organization as a code of conduct practices, but it is not commonly practiced ethically. “there was a hr strategy team workshop and team members were taking pictures. and they even posted a photo about the entire hr team strategy that they had planned on the social media.” (western businessman working at a myanmar company). family orientation can be caught in management style and decision making process also. in local businesses, only top-level management does the decisions and they do not really have a consideration towards the feedbacks receiving from lower level management and employees. management system is centralized, final decisions must go through different person in charges and decision-making takes a long time. the reason behind is fear of taking risks and responsibilities; instead, decisions goes through multiple layers of management which is time consuming and even by burmese is considered as unproductive but traditional way of doing business. a special attitude appears according to how burmese employees deal with e-mails and phone calls. there are some local organizations who do not even read e-mails regularly and phone calls can be the most effective way to communicate. they prefer to do jobs which is within their job scope and most of them are unwilling to do extra miles to work beyond it; and e-mails often could be judged as out-of-scope content. this phenomenon is closely related to keep their working environment relaxing and of slow pace. 4.3. beyond the bounds of legality we also have to mention some aspects of burmese business life which are beyond the legally accepted norms of business from the viewpoint of westerners. grosz, et al.: cross-cultural negotiation conflicts: the myanmar case international review of management and marketing | vol 13 • issue 3 • 20236 transparency helps to build trust and keep communication open; also it makes relationships among employees stronger and work may be more effective in a trustworthy environment. business transparency level is very low in myanmar, only the top-level management knows the objective of the company clearly from both financial and management aspects. “for example, they do not release the budget for the organization publicly. we do not really know how the money is being distributed. typically, in our culture, it is a public information.” (western woman, working at a myanmar institution). gift giving is another sensible issue during myanmar and western partners’ negotiation. gifts should never be given during negotiations in western cultures and it is also common not to give any gifts to potential customers or partners first time we meet them. in myanmar, it is acceptable and commonly used habit to give some presents even at the first time business partners meet, just to show gratitude and appreciation for giving their time to meet up. “it can be even regarded as a cultural norm and gifts are important for the first meeting. zhe gift can be anything as long as it is not money, it can be a dinner ticket for two, a corporate pen, calendar or a notebook.” (local business man with wester experiences). 5. discussion during the interviews western and myanmar characteristics were compared; this resulted from the ethnic, educational and business ties of the selected interviewees. first of all, the findings have been summarized in table 2 to emphasize possible conflict areas between western and myanmar companies in field of business work. the aim is not only to show the contrast with western countries, but also to show how myanmar is different from the central european region so the table has been completed based on literature and experiences – with central european specificities. most of the findings in table 2 describing burmese business culture derives from buddhism. not surprising since 87.9% of myanmar’s population practice buddhism (2014 census) and it was found for example that for christians and muslims hardly can get public sector jobs in the country (matthews, 2001). the influence and role of religion was analyzed in buying behavior by aprianto et al. (2021). religion makes influence on many aspect of people’s life, attitudes and behavior; moreover, persons consider not complying their religious habits by companies as violation. therefore, role of religion, buddhism, may have crucial impact on business behavior in myanmar. buddhist communication style is non-confrontational, they avoid public criticism, and ask questions that possibly leads to confrontation. they speak friendly and gently, and consider silence as way of communication also. aggressiveness is not acceptable, because it violates the principle of compassion and harmony. filial piety explains respect of age and rank, since it is about a virtue of respecting one’s parents, elders and ancestors. extra effort to achieve better results in work is not important because of lack of competitive mind. buddhist like to choose cooperation table 2: possible sources of conflict situations among myanmar, western and central european countries area of conflict cause of the conflict western countries myanmar central european region formal elements of negotiation punctuality important. being late is waste of each other’s time. tend to be late, approx. 30 min important. 5-10 min are acceptable greetings handshake is a norm, but is disappearing handshake is not a norm, but acceptable handshake is a norm, but is disappearing asking questions during meetings normal just listen, not polite to ask normal use of critics during meetings normal not polite not polite style of speaking explicit, direct implicit, indirect both direct and indirect answering calls during meetings not accepted normal depending on who calls running the business on a day-to-day basis language barriers use of english is not problematic use and understand english with difficulties use of english is common, sometimes with difficulties use of constructive feedback expected tend not to use normal co-workers as family members personal and business life separated personal and business life mixed personal and business life – a little bit mixed gossiping not acceptable common and acceptable common decision making process simplified, effective complicated, takes long time complicated, takes long time dealing with e-mails form of communication, important tend not to answer; use phone calls instead form of communication, important extra miles in work common never depending on reward beyond the bounds of legality transparency a must no transparency only a few gift giving never during negotiation; else there are limitations common there are limitations source: authors’ own research grosz, et al.: cross-cultural negotiation conflicts: the myanmar case international review of management and marketing | vol 13 • issue 3 • 2023 7 instead of competition according to buddha’s discipline saying not to compete with anyone, simply try to be better than you were yesterday (chuang and cheng, 2003; mikulas, 2007). the pursuit for low pace environment explains why proactivity is not common in myanmar. proactivity goes together with risk taking, fast pace of work, continuous search for information, probably asking tons of questions which may be taken as an aggressive behavior – and these all are in contrast with polite and soft communication and attitude. although the main religion in central europe is christian, business behavior is closer to burmese habits, than the western patterns meaning central european organizations have a fairly good chance to find opportunities in myanmar. as it was mentioned, it was clear from the interviews, that burmese business persons do not feel the necessity of intercultural and cross-cultural wisdom. bhawuk (1998) describe this level of crosscultural competence as the unconscious incompetence, where people often misinterpret others behavior without even knowing it. this is accompanied by low level of ccc, and lack of motivation to develop cq. in opposition, those interviewees who can be considered as expatriates (studies and/or work experience in the west) proved, burmese people can develop and be successful in intercultural business situations. building motivation of burmese employees and managers may be the way that makes influence on their behavior. most of their present behavior stems from a lack of information: they have not learned that such cultural problems can occur, nor do they know what the cultures they are supposed to work with are like. according to li (2020) motivation cq can arises during developing affective component of ccc – meaning first we have to make burmese business persons to understand what opportunities they can achieve with improved cross-cultural competencies. increasing their comprehension toward the role of culture in business may be part of an entrepreneurship education, which is necessary to develop general entrepreneurial knowledge (doan, 2022). 6. conclusion everyone knows that eastern countries belong to the high-context culture, while western countries belong to the low-context one, and this has many consequences for communication between the two cultures. contribution of present research to business negotiation studies is providing a picture of business life of seldom studied country, myanmar, a potential destination of future investments. furthermore, based on literature review and a primary qualitative research not only characteristics of burmese business culture has been described but also possible conflict situations between european and burmese business negotiators has been identified. despite obvious differences, findings suggest, central european business is closer to burmese business than it was thought. based on similarities relationships may be built and there is a possibility to achieve improvement in attitude of managers and workforce of myanmar. not only their differences from western culture stem from buddhism, but also their desire to learn. based on one of the teachings of buddhism, one of burmese’s goals in life is to become better person each day than the day before. this makes it possible to help them accept that, in order to boost the business life of their country, they should learn about the potential investment countries and their cultural characteristics. with the help of tolerance and respect for others, also based on buddhist teachings, they are able to adapt to the expectations of the international business world without losing their own cultural values. in this study, only a part of the questions asked has been answered, namely what to expect if a westerner or central european want to start a business in myanmar. in the next part of the research, the goal is to use survey research to answer the additional question of who might be suitable for an intercultural negotiation in the case of the investigated cultures, and what solutions are recommended to be used. in the future, research aim is to develop case study and role play-based methodology to make it possible for central european managers to get familiar with burmese business culture and have some experience in cross-cultural negotiations. references aprianto, r., salim, m., sardiyo, s. 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(2021), contextual influences on marketing and consumerism: an east asian perspective. international marketing review, 38(4), 641-656. tx_1~at/tx_2~at international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2021, 11(3), 19-28. international review of management and marketing | vol 13 • issue 1 • 2023 19 prevalent user-centered monetization techniques in social media mark rowland bruce*, adebayo felix adekoya, samuel boateng, peter appiahene department of computer science and informatics, faculty of science, university of energy and natural resources, ghana. *email: bruce493000@yahoo.com received: 04 october 2022 accepted: 30 december 2022 doi: https://doi.org/10.32479/irmm.14005 abstract this study provides a solid illustration of the degree to which social media sites are now incorporated into market research. several studies have explored the impact of the continual connection between customers and companies on the social web platforms, with direct connotation for the enhancement of new products and trading. the effect of user and content market-production for participation on social web platform line communities on purchase expenditures is positive. there is a specific connection between increasing social media interaction and improved customer participation and loyalty. it has been discovered that blogs aid managers in the screening phase of product development and give power for negotiating better contract conditions. the aim of the paper was to review relevant literature on user-centered monetization techniques in social media. the study employed prisma analysis for this review. during the study, the main social media monetization techniques that were found were sponsorship, advertisement, public relations, affiliate, ambassadors and crowd funding. keywords: social media, monetization, online, enterprise, entrepreneur jel classification: o35 1. introduction a stockholm high school dropout expressed his desire to send video games of himself playing online. he had accumulated $30 million in net worth via the same endeavor. because of this, a new generation of company owners has been inspired to look out for ways of commercializing social media and integrate it into their operations. alongside the expansion of online content providers, new revenue models have emerged. based on a survey of the relevant literature, researchers can identify how larger companies and smes utilize social media as networking, marketing, and communication tools. additionally, as anticipated, social media networks provide around $7 trillion in yearly gross value to the world economy (chui et al., 2012). this supports our claim that social media has evolved into an essential and valuable facility for current corporate operations. several publications focus on entrepreneurs and business owners, such as “digital networks acceptance: speculators’ social capital online” (smith et al., 2017).this article focuses on how people use digital networks. the great majority of studies, including “the impact of social media on resource gathering in entrepreneurial organizations,” look at how corporations and enterprises relate to digital media (drummond et al., 2018). the number of workers and interest in the platforms both increased by 25% as of 2012, according to various research that have shown how much employees worth and how they frequently utilize their company’s social media internally (baskaran et al., 2020). studying sme practices on digital platforms facilitates research on the monetization of sme techniques (burgess, 2016). so it make sense to look at how social media is making money. the authors want to analyze monetization approaches on social networking sites using this research subject. literature does not examine the advantages of social networking for solitary persons. instead, social media impacts were extended to this journal is licensed under a creative commons attribution 4.0 international license bruce, et al.: prevalent user-centered monetization techniques in social media international review of management and marketing | vol 13 • issue 1 • 202320 enterprises or small and medium businesses (arfi and hikkerova, 2019; cenamor et al., 2019; olanrewaju et al., 2020). since social media marketers are a somewhat new trend, the techniques for monetizing their content have not been well examined in a study. the articles don’t go into enough depth to illustrate how social media is utilized effectively as an instrument for profitable marketing, communication, and cost-cutting. in particular, they refuse to highlight that social media is a form of an instrument for firms to monetize, which might be a source of revenue for company owners. this is very important since monetization is one of the most significant parts of social media companies. people in general are now aware that those who utilize digital platforms may make money from them. however, the subject hasn’t received enough research. 1.1. social media at present the contemporary social media environment is comprised of two essential elements. the industry and ecosystem’s underlying technology and business models are provided by a wide range of platforms, both existing and new, established and developing. the second concept to consider is that of use cases. this refers to the many ways in which different types of individuals and organizations are using these technologies and the goals that they are trying to accomplish. the platforms themselves have contributed immensely to the development of social media, as well as how it has affected both consumer behavior and marketing strategies. this holds true for both the development of social media and its impact on both fields. for some individuals, the “early days” of social media might evoke recollections of the time when sites like myspace and friendster were popular. facebook and other websites that have appeared over the past 10 years were made possible by these websites. social media comes in many different forms, including messaging, and asynchronous online conversations structured around certain particular subjects. contemporary years have seen an increase in the popularity of instagram and snapchat, two more recent social media platforms that primarily use visual information rather than text. since digital content providers and marketers have attempted to reach their target viewers with digital content and marketing messages, advertising-supported business models have been the standard. prior study has reviewed the marketing potency of social media (in its different forms). for example, kopf (2020) has proven that specific social interactions on social media platforms (such as “refer a friend” features and online community discussions) can have a favorable effect on critical marketing outcomes such as amassing new customers and sales. still under investigation is the efficiency of social media advertising, as well as how it affects other media, such as television, and its impact on the acceptance of new products through information propagation tactics (fossen and schweidel, 2019). we suggest that to comprehend the present position of social media, at least from a marketing stand point, depends on the actions of users on these platforms than in the technology or services rendered by these platforms, even though the emergence (and collapse) of many social media landscape has been vital for grasping the social media platform. it is because what users do on these platforms is more likely to be a reflection of the users’ interests other than the technology or work provided by these landscapes. people from all works of life make use of social media for a number of objectives. examples include twitter and facebook’s news feeds, whatsapp and wechat’s private messaging, and reddit’s discussion boards. these are often classified as: i. talking and socializing online with known individuals, such as relatives and friends ii. engaging in the same activity with unidentified others who have similar interests iii. having access to and participating in online content including news, rumors, and user-generated product reviews. people use social media to generate, access, and spread knowledge by word-of-mouth to a variety of people, including known “strangers” in their networks and unknown “strangers,” as well as known “strong ties” or “weak links.” some of the previous research has focused on word-of-mouth (wom) in relation to social media. this study has investigated topics such as the effects that the spread of wom (such as publishing a facebook post or a tweet) has on others, the impact that the kind of wom material conveyed has on others’ behavior (ordenes et al., 2019), and the factors that inspires consumers to post on social media, such as status concerns and the desire to exhibit their best selves (grewal et al., 2019; wallace et al., 2015). 1.2. social media for marketing this study offers a convincing example of how social media websites are now integrated into market research. according to goh et al. (2013), marketing and new product creation are both impacted by the social web environment and the constant engagement between consumers and businesses on a daily basis. according to garcía-crespo et al. (2010), involvement in social media brand communities is positively impacted by user and marketer-generated content. increased participation and customer spending on social media were directly correlated, as shown by rishika et al. (2013). aggarwal and singh (2013) found that blogs provide managers the ability to negotiate better contract terms and assist in the screening stage of product development. krishnamurthy and dou (2008) looked at how to change the integrated social media properties of a network while using the proper market seeding and pricing strategies. rather than using social media as a substitute for soft internet marketing, lee et al. (2015) found that companies become more prosperous when they integrate social media into the buying and utilization process. according to oestreicher-singer and zalmanson’s (2011) research on the commercial significance of social commerce, facebook likes boost sales, attract consumers, and socialize the purchasing experience. xie and lee’s (2015) analysis of facebook purchase data found that exposure to sponsor and earned social media activity had a favorable effect on consumers’ propensity to acquire brands. it was observed that the broadcasting, time, and content of personal messages had a substantial impact on the sale of music on myspace, according to bruce, et al.: prevalent user-centered monetization techniques in social media international review of management and marketing | vol 13 • issue 1 • 2023 21 chen et al. according to the findings of study carried out by qiu et al. and colleagues, learning and the dynamics of the network both numerically and financially impact the amount of videos watched (2015). sung et al. (2018) utilized data from facebook from u.s. universities to demonstrate that students in the same groups form denser groups and networks. in a somewhat divergent research, susarla et al. (2016) studied the costing methods of newspapers from the internet and ended that pricing for prior free online material has an unequal effect on word-of-mouth for popular and specialized issues. susarla et al. (2016) argue that social media projects are successful when there is constant consultation with intended users. research conducted under this topic focuses on the strategies or techniques used in monetizing social media for marketing goals. integrating social computing with content distribution is crucial for effective social media deployment in the digital market with its increasing user base. the bulk of studies found that an essential component of social media marketing is having fruitful consumer conversations. e-commerce may target specific clients based on geographical trends and comparable interests by recognizing distinct customer groups beyond social media platforms, such as forum/group or organization members. 2. methodology 2.1. introduction this review evaluated only studies published in english. this study included studies published from 2000 to the present based on the time period during which application security research started. ieee journal, international conference on computer and communication technology, journal of financial theory and practice, international journal of empirical finance, international journal of economic sciences and applied research, international journal of scientific and research publications, and journal of public economic theory were among the databases examined. throughout the research, significant terms such as “social media monetization,” “digital economy,” and “monetization of social media,” were employed. 2.2. inclusion and exclusion the report was one we decided to include: (1) the entities that were or required to be extracted are described in the methods or results section; and (2) a minimum of one entity was retrieved involuntarily, with assessment of the results provided for that object. any report which did not meet one of the following criteria was discarded: (1) the techniques were not employed during the data removal phase of a systematic analysis; (2) the publication included editorial, or other non-original write-ups; or (3) no assessment component was provided. only articles published between 2010 and 2022 were studied for this particular research. the research also included ones on various digital user-generated monetization strategies, such as social media monetization. the research did not include any papers that were published before 2010. 2.3. information sources the following databases were searched for information. these include includes academic search premier vital law, lexis, proquest, abi/inform collection, abi/inform digital dissertations global, business source complete: enhanced business interface (ebsco), sciencedirect (elsevier), scopus, and google scholar. 2.4. process of selection the retrieved citations were first de-duplicated. 45 citations were arbitrarily chosen, and each was separately examined by two reviewers, in order to calibrate and improve the inclusion and exclusion criteria. with the help of a third reviewer, disagreements were settled by consensus. a significant degree of agreement was reached when two reviewers separately evaluated another batch of 37 abstracts that were chosen at random in a subsequent round. due to the great degree of agreement, just one reviewer examined the remaining papers. we classified reports as “not relevant” or “possibly useful” throughout this phase. all citations that were deemed to be “possibly significant” had their whole texts evaluated separately by two writers. based on the specific data aspect that the included papers sought to extract from the original, scientific publications, we divided them into several groups. we reached an accord with a third author to settle disputes between the two reviewers. 2.5. data collection process the data collecting procedure comprised two independent reviewers. the reviewers were knowledgeable in research design, data analysis, and statistics and at least had a basic familiarity of the subject matter. the reviewers underwent training to acquaint themselves with the current study subject. following data gathering, extracted papers were examined to determine which ones were most desirable. a third impartial reviewer arbitrated any disputes that arose between the two reviewers. 2.6. the analysis and data synthesis a meta-analysis of methodological characteristics and contingent variables linked with the rate of occurrence of data removal procedures was not feasible due to the wide range of research methodologies and measures. so, we provided a narrative summary of what we learned. 3. results 3.1. study selection out of 78 distinct citations we chose 50 reports we found for full-text scrutinization, and included 35 papers that satisfied our addition requirements. acceptance for full-text and abstract scrutinization was 0.99 and 0.97, respectively (figure 1). 3.2. study characteristics using the databases abi/inform global vital law, lexis, academic search premier, proquest digital dissertations, abi/ inform collection, business source complete: enhanced business interface (ebsco), google scholar sciencedirect (elsevier) and scopus, table 2 lists the factors that should be taken into account when extracting data. for each field, we list the primary group and the standard that was focused on it. finally, we bruce, et al.: prevalent user-centered monetization techniques in social media international review of management and marketing | vol 13 • issue 1 • 202322 report if a technique to extract that field was published. in addition, table 2 lists the data components that are pertinent to the process of systematic review, grouped by the standard from which the element was incorporated, their domain and where applicable, the connection with already-in-use automation techniques. 3.3. individual studies results table 2 outlines some of the studies that were selected for review. for each study, the table outlines the extract to the study (study: column 1), title (extracted elements: column 2), purpose of study (column 3), domineering theme (method: column 4), methodology (column 5), results (column 6), and research gap (column 7). 4. discussion 4.1. an ever-evolving status quo in regards to the media and revenues recent figures indicate that media monetization models may be at a turning point at the present time, which is good opportunity to look forward. reasons why: i. acceptance of paid content among consumers is rising gradually. a quarter of media consumers in germany report that their receptivity to sponsored content has grown during the covid-19 epidemic. similar insights may be made for several markets ii. as far as streaming subscriptions are concerned, the united states and germany have similar numbers. increasing percentages of families are subscribing to various premium content services, and this trend will continue iii. recently, in contrast to financed content, advertising income has grown volatile and prone to crises. take a look at ipg’s media investment and intelligence business magna, which, as a consequence of covid-19, saw its 2020 worldwide ad revenue decrease by 2.5% compared to the preceding year iv. alternatively, with new technology and the related individual consumer targeting, targeting may boost the efficacy of advertising and restore its relevance. new advertising-based income models will also have a beneficial impact: advertisingbased video on demand (avod) is already established in a number of asian and north american regions, but its enormous potential has not yet been fully realized. in the majority of european nations, avod does not yet play a significant role, but recent studies indicate a significant consumer interest; fifty percent of german media consumers are receptive to avod (deloitte media consumer survey, 2021) v. previously, age groups differed in their embrace of digital media; however, this trend is already diminishing. there has been a distinct divide between older and younger media consumers when it comes to their consumption of linear content. however, the disparity is narrowing vi. e-commerce is becoming an increasingly significant income source for media organizations. media businesses are expanding their business operations, and huge companies with digital platform (dpcs) are showcasing great odds for cross-subsidizing e-commerce and media composition vii. moreover, merchandising is growing importance as broadcasters and vod providers commercialize their popular models, following disney’s lead viii. user contributions to news and online media are becoming an established and significant source of income. donors want to support creative brains, recognize the quality of their contents, table 1: existing automation work, category, sources, and data elements data elements category included in standards published method of extract total number of participants non-participants abi/inform collection, abi/inform global yes settings miscellaneous google scholar, science direct no total number of intervention group non-intervention google scholar, science scholar no outcomes and time points (i) collected; (ii) reported outcomes abi/inform collection, abi/inform global no overall evidence discussion abi/inform collection, abi/inform global google scholar yes study design method ebsco yes total study duration method ebsco no finding source miscellaneous ebsco no key conclusions of the study authors miscellaneous ebsco yes references of other relevant studies miscellaneous ebsco yes correspondence required miscellaneous ebsco no miscellaneous comments by the review authors miscellaneous google scholar, science direct no jonnalagadda et al., 2015 figure 1: evaluation of the papers to be included in this review source: jonnalagadda et al., 2015 bruce, et al.: prevalent user-centered monetization techniques in social media international review of management and marketing | vol 13 • issue 1 • 2023 23 table 2: full description of some of the papers extracted author (s) title purpose domineering theme methodology results research gap (katsimente and eldås, 2020) how do social media entrepreneurs monetize youtube? the purpose of this essay is to explain that social media goes beyond just a business instrument, and that its monetization qualities are not as clear as its networking and marketing possibilities. this gave rise to the composition of the research question, “how might traders in social media benefit from youtube?” social media entrepreneurship a qualitative multi-case study was arranged to be undertaken with direct attention to social media channels; however, it was only able to observe eight channels on youtube, which are separated into two categories, cosmetic and movie content analysis. this study’s discoveries are discussed in light of what is known from the existing scientific literature a social media entrepreneur may use advertising, affiliate links, partnerships, merchandising, crowdsourcing, public relations, and sponsorships as revenue methods via youtube. the interaction with the subscribers makes the various monetization methods clear. the career-oriented and audience-focused frameworks are the two sorts of strategies that are shown by the data the study only focuses on only youtube monetization techniques without focusing on other social media channels (cortimiglia et al., 2011) social applications: models of revenue, channels of delivery, and factors of critical success-an investigative research and verification from the spanish-speaking market to explore the contribution of the technology channels of delivery (either internet and/or mobile) and appropriation of revenue strategies application monetization a mixed-methods research technique was adopted, which includes seven case studies with typical social network and content sharing services and a cross-sectional survey of 124 social application services available in spanish the study provided an in-depth look at the innovation of content sharing services and social network, illustrating how closely tied revenue plans are to the technical distribution method. the business designs for social network services and content sharing were found with six important success characteristics did not investigate the monetization of social media channels (olanrewaju et al., 2020) entrepreneurship and social media study: a literature review this paper provides a comprehensive evaluation of previous study that has been under taken in the area of social media and entrepreneurship entrepreneurship of social media. with the aim of discovering major ideas and study techniques in the field, 160 publications that were written between 2002 and 2018 were combined. an integrative framework was created to find relationships between the clarified components based on the extent review the study is focused on qualitative case analysis, and neither in-depth company interviews nor quantitative analysis are included. as a consequence of people’s subjective perspectives, the data gathered via observation and focus groups and the analysis based on them may provide skewed and insufficient findings the main point of the research was established on the use of social media by entrepreneurs. (contd...) bruce, et al.: prevalent user-centered monetization techniques in social media international review of management and marketing | vol 13 • issue 1 • 202324 table 2: (continued) author (s) title purpose domineering theme methodology results research gap (hu, 2011) social media business model survey-case tencent, facebook, and myspace the study focuses on an investigation of social media businesses’ business models social media monetization three company cases-myspace, facebook and tencent-are used in the research as examples. the goals are to create a framework for analyzing business models for social media services, use that framework to analyze case firms’ business models to determine which one performs best, and then enhance the business models of the two other, less successful companies considering a survey of the business model and social media literature, this paper presents a technique for empirical research and creates a new business model framework the study is focused on qualitative case analysis, and neither in-depth company interviews nor quantitative analysis are included. as a consequence of people’s subjective perspectives, the data gathered via observation and focus groups and the analysis based on them may provide skewed and insufficient findings (smith et al., 2017) digital networks acceptance: speculators social capital online in this article, a review plan for understanding how entrepreneurs obtain social funds in the digital era is outlined social media monetization twelve study propositions that describe how the distinctive technological features of sites of social connectivity affect online entrepreneurs’ linking and bonding social capital have been built by the researchers into a conceptual framework. these claims are supported by firsthand accounts from the founders showing that the online social capital accumulation of business owners varies. they include methodological and theoretical innovations for curbing scheme dynamism, entangled systems, and ambiguous behavioral standards in research issues this paper examines a growing disconnect between current social capital theory and entrepreneurship research and modern entrepreneurial practises (contd...) bruce, et al.: prevalent user-centered monetization techniques in social media international review of management and marketing | vol 13 • issue 1 • 2023 25 and encourage its production. users of youtube are exemplary of this monetization scheme. 4.2. monetizing social media numerous academic studies have examined the interaction between business and social media. according to melakoski et al., the term “participatory economy” is used to describe items that are produced, spread, shared, and utilized through social media (2007). likewise, “social market” describes the merger of e-commerce with social media for commercial gain. the “sharing economy,” the “networked economy,” “wikinomics, and the “peer-to-peer economy are a few of the other titles that have been used to describe this phenomenon. they are also associated with “crowdsourcing” and “the synthetic economy” (appel et al., 2020). the vast majority of social networking platforms are almost free to use. users are drawn to the network by the availability of the free service. however, as the number of users rises and the quantity of material expands, the urge to do business also increases. companies with a large user base, such as facebook and twitter, are looking for methods to monetize their free services in order to generate revenue. and marketers have previously considered the social media monetization plan. whether it be conventional business or online commerce, the business framework is important to the success of any sector. social media technologies provide companies the potential to innovate their business models, therefore generating new income streams by extracting value from social media material, as opposed to conventional enterprises. the table 3 outlines some of the fundamental business model types for online social media services. 4.3. monetization techniques entrepreneurs on social media produce money from their social media profiles by monetizing internet spaces which are hooked to businesses that grasp monitory benefits from partnering. an asset or object may be “monetized” if it is turned into cash, thus liquidating it into legal tender (gustafsson and khan, 2017). online-created and published material has been monetized on digital platforms by its owners or users. it’s worth noting that companies are more likely to work with creators who already have a large following, a large number of subscribers, and a high level of activity on their platforms. 4.3.1. sponsorship the practice of paying a fixed sum of money, frequently by an organization, to remunerate a person, organization or venture, and this funded commercial closely copy review material has table 2: (continued) author (s) title purpose domineering theme methodology results research gap (sindermann et al., 2020) social media/ or messenger applications be paid for?? initial data on the adoption of a substitute to the current exixting data business model the research points to respond to the two questions listed below. what percentage of users would acquire this substitute business/ financial subscription model for social media services and chat apps, and do certain sociodemographic and personality traits imply acceptance for this model? (numerous studies demonstrate linkage between personality, demographics and social media use factors) social media monetization quantitative study social media users were polled to find out whether they’d be prepared to pay for the services they get in exchange for maintaining the privacy of their data, among other things. 26% of participants agreed with this instance. one of the five big individual characteristics, acceptability, was positively connected with support for this specific paradigm (gustafsson and khan, 2017) blogs monetization: enterprising behavior, co-creation of chances and social media entrepreneurship the goal of the research is to look at the new trend of making money off of lifestyle blogs as a demonstration of social media entrepreneurship social media monetization literature review research shows that blogs may be monetized by focusing on how social (intersubjective) and individual (subjective) components interact, as well as the importance of networking in today’s corporate environment bruce, et al.: prevalent user-centered monetization techniques in social media international review of management and marketing | vol 13 • issue 1 • 202326 become more popular among businesses (wojdynski and evans, 2016). today, online celebrities like cosmetic experts, nutrition and wellbeing vloggers, and fashion bloggers promote businesses (khamis et al., 2017). this is when content creators begin using native advertising, in which the material they publish on their social media pages is sponsored by those businesses (campbell and grimm, 2019). for a single post or video promoting a company’s goods, social media entrepreneurs might be paid significantly (evans et al., 2017). since they are being compensated for sharing their opinion on a product or service, they must be upfront with their audience about the nature of their connection with the business (kay et al., 2020). two objectives are in mind when social media business owners publish sponsored content: to convince their followers to purchase the promoted things and to provide their followers more details about the products (kay et al., 2020). entrepreneurs online who publish funded content must be transparent about the sponsorship and explain to the audience what the label provides (kay et al., 2020). given that non-funded information like distinctive updates from their day to day activities appears on the same sites and accounts as native advertising (kay et al., 2020), the consumers can be deceived about what is authentically funded (campbell and grimm, 2019). online usage by businesses as a means of marketing is less apparent than using conventional media, regardless of the efforts made by online entrepreneurs to make it evident that their post is funded with disclaimers like “this material is funded” (stubb et al., 2019). in order to prevent consumers from being duped by posts the federal trade commission (ftc) in the united states and other governments have passed legislations demanding marketers to expressly reveal any social media advertising (ftc, 2013). it may be achieved by labelling sponsored material with the word “sponsored” (boerman et al., 2017). if a social media entrepreneur receives sponsorship from the same firm more than once, the sponsor has the option of renewing their sponsorship. when it comes to youtube especially, businesses are aware of its influence on customer behavior. funding user-generated content (ugc) inventors online is a productive way for advertisers to popularize their goods since it enhances the consumers buying intent (gozegir and gocer, 2018). 4.3.2. advertisements (ads) numerous companies remunerate social media sites, notably youtube, to highlight its goods in videos. for smaller creators who haven’t yet secured big businesses to sponsor their films, ads via the youtube partnership program are crucial. this payment is available if you reach 1,000 subscribers and 4,000 annual viewing hours. however, if the video includes “delicate content,” “harsh or wild content,” “controlled goods,” or “legislative policies,” the video is not eligible for monetization (youtube’s community guidelines, n.d.). on youtube, a program called cost per click table 3: business models of online services business model types feature sources brokerage in addition to connecting buyers and sellers and facilitating transactions, brokers collect fees for each transaction (hu, 2011; sindermann et al., 2020) advertising a website contains both content and advertisements. its revenue may be the primary source of income. this paradigm works optimally when the amount of user traffic is substantial or highly specialized (kopf, 2020) informediary there are useful data on client information and consumption behavior that might be utilized to analyze the targeting of marketing initiatives. they provide indirect advantages (cortimiglia et al., 2011) merchant goods and services wholesalers and retailers, amazon.com, for example, may conduct sales based on list pricing or via auctions (cortimiglia et al., 2011; hu, 2011; sindermann et al., 2020) manufacturer it is dependent on the capability of the internet to enable a manufacturer (a corporation that develops a product or service) to access customers directly, hence condensing the distribution route. as with dell computers, the manufacturing model may be built on efficiency, greater customer service, and a better grasp of client preferences (stubb et al., 2019) affiliate by delivering monetary incentives (in the form of a % of sales) to linked partner sites, this approach enables consumers to make purchases wherever they are browsing. affiliates assist merchants with purchase-point click-throughs. these sites may, for instance, compensate affiliates for a user’s click-through or give a commission depending on the number of clicks that result in a purchase (gustafsson and khan, 2017) community users make a significant commitment, not just in terms of their time but also their own feelings and experiences. the sale of additional items and services, as well as voluntary donations, may generate money. contextual advertising and service subscriptions also have the potential to generate cash. for instance, some open-source communities depend on money from associated services such as system integration, training, and product support rather than their collectively generated program codes, while social networking platforms allow users to interact with others while also providing options for advertisements and premium services subscriptions (kay et al., 2020; wallace et al., 2015) subscription fees for subscriptions are collected over time. it is incurred regardless of actual use rates (gustafsson and khan, 2017) utility according to use, fees are imposed “pay as you go,” or “pay as you use” (gustafsson and khan, 2017) noah parsons, 2017, https://articles.bplans.com/what-is-a-business-model-business-models-explained bruce, et al.: prevalent user-centered monetization techniques in social media international review of management and marketing | vol 13 • issue 1 • 2023 27 (cpc) pays content creators based on how many people watch the videos. the commercials on youtube may emerge as a video advertisement before, during, or as a text advertisement inside the video. once the video reaches 10 min, and only if the youtuber has decided to add them, the video ads appear. when content owners have their commercials seen for not <30 s or 50% of the time, cost per view (cpv) is a revenue sharing model that rewards them. remuneration to youtube video producers ranges from $0.10 to $0.30 per view, with an average rate of $0.18 per view for the most popular material. ads on youtube generate an average of $18/1,000 views. youtube retains 45% and pays out 55% of all revenues (stubb et al., 2019). 4.3.3. public relations (pr) labels supply social media promoters with their products in exchange for reviews on their platform. businesses don’t remunerate social media promoters to promote their wares or utility; instead, they get free publicity. “public relations are a planned presentation strategy that construct shared useful connections between firms and their populace” (prsa, 2012). public relations (pr) is earned, and it is a more legitimate technique to market a business or product since the recipients will share their honest thoughts about the company and its goods (wallace et al., 2015). companies in the cosmetics business often use pr boxes in return for product giveaways from social media influencers because of severe competition and the similarity of goods. pr packages sent to the social media entrepreneurs that participated in this research often included (free) things connected to their channels, such as beauty samples that viewers could find enticing and purchase. 4.3.4. affiliate in the past 5 years, this technique of marketing and revenue generation has grown in popularity as more social media users associate with a company. a single digital platform is used by the social media entrepreneur to publicize the wares and utility of various websites. to advance the label’s services and goods, they may post an affiliate link or code on third-party websites. through the use of social media, affiliate links promoters hope that viewers will click on the links to the product or service websites in order to get a discount on their purchase. if it’s an affiliate code, customers may use it to save money on all the goods and services the website has to offer. an affiliate marketer gets rewarded whenever a link is clicked or a code is entered. 4.3.5. ambassadors any person who uses a company’s products and encourages others to use them in exchange for a commission or free goods from the company is called label ambassador. it is a licenced brand ambassador that interacts with the public mainly for promotional goals like increasing positive brand awareness (grewal et al., 2019). in order to get payment, brand ambassadors must tell viewers that their material is sponsored by a certain firm and urge them to try that brand’s products (stubb et al., 2019). most brand ambassadorship activity in recent years has occurred on social media sites like instagram, facebook, and youtube (iqani, 2019). it is possible for non-celebrities to become brand ambassadors as well, which is a successful tactic since they may influence the opinions and decisions of people they are personally connected to (iqani, 2019). social media influencers with a sizable following might help the communication departments succeed by influencing and contributing to their strategies (booth and matic, 2011). when label ambassadors are active on social media and promoting a company, verbal marketing can be very effective for businesses development instrument (hu, 2011). 4.3.6. crowdfunding crowdfunding is the process of appealing to a group of individuals to donate meager amounts of money in order to enhance a business endeavor, generally over the internet. social media entrepreneurs use the crowdfunding site patreon, which advertises itself as a page that gives authors creative power, meaningful interactions, and a steady income. the patrons are known as patreons (katz, 2015). this website may be used by social media entrepreneurs to provide patreon patrons gifts, more content, and creator access. additionally, the platform facilitates a distinct community, involvement, and acknowledgment between patreons and the social media entrepreneur. 5. conclusion this section provides the ways of monetization which are accessible to the social media entrepreneurs, mainly on youtube and the approach they can take for their monetization strategies. a multitude of new occupations have rose in today’s digital era and among those careers are the online entrepreneur. it is vital to comprehend how entrepreneurs monetize online because it will contribute with adding knowledge on the concept of entrepreneurship and social media. the main strategies to monetize social media are sponsorship, advertisement, public relations, affiliate, ambassadors, and crowdfunding. references aggarwal, r., singh, h. 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(2015), automating data extraction in systematic reviews: a systematic review. doi: 10.1186/s13643-015-0066-7. international review of management and marketing vol. 2, no. 1, 2012, pp.59-74 issn: 2146-4405 www.econjournals.com assessing the predictive power of customer satisfaction for financial and market performances: price-to-earnings ratio is a better predictor overall pierre rostan centre of commerce and management, rmit international university vietnam, 702 nguyen van linh blvd., district 7, hcmc, vietnam. tel: +84-8 3776 1410. email: pierre.rostan@rmit.edu.vn alexandra rostan centre of commerce and management, rmit international university vietnam 702 nguyen van linh blvd., district 7, hcmc, vietnam. tel: +84-8 3776 1410. email: alexandra.rostan@rmit.edu.vn abstract: our paper shows that based on the rmse criteria, price-to-earnings ratio is a better predictor of financial and market performances of the firm than the customer satisfaction index (cs). this conclusion is based on the choice of five financial and seven market indicators that we consider as proxies for financial and market performances with a sample comprising eighty-six companies: book value, dividend yield, gross profit margin, price to cash-flows, price-to-earnings, price to sales, annual return, roa, roe, roi, volatility and tobin’s q. however, cs clearly outperforms our five benchmarks (tobin’s q, price-to-cash flows, price-to-earnings, volatility or the indicator itself) when forecasting tobin’s q, volatility, roe and roi. in periods of volatile market such as year 2008, cs is a more stable predictor of volatility or roe than the indicators themselves (i.e. volatility for volatility, roe for roe). key-words: customer satisfaction; financial performance; market performance; price-to-earnings; financial ratio; market ratio jel classifications: c15; c53; m31; m41; g17 1. introduction for the last fifty years, academics and practitioners have written on customer satisfaction (cs). evrard (1993) provided an extensive review. cs has been the corner stone of the discipline on consumer behavior. cs is generally considered as an indicator of future cash flows generated by the company and can be viewed as relevant information for investors, shareholders, consumers, etc. (fornell, 1992; vandermerwe, 2000). some studies confirmed that investors and shareholders show growing interest in nonfinancial measures such as cs (ernest & young, 1997). thus, the main preoccupations of our study are the following: can a non-financial measure such as cs forecast the financial and market performances? can financial indicators such as tobin’s q, price-to-cash flows, price-to-earnings and volatility be better predictors than cs? in this paper, asumptions are that: 1) financial and market indicators such as book value, dividend yield, gross profit margin, price to cash-flows, price-to-earnings, price to sales, annual return, roa, roe, roi, volatility and tobin’s q are good proxies of financial and market performances of companies. 2) cs has a predictive power for financial and market indicators at t+1 year, t+2 year, etc. 3) financial and market indicators such as tobin’s q, price-to-cash flows, priceto-earnings, volatility or the indicator itself have a predictive power for financial and market indicators at t+1 year, t+2 year, etc. we will assess the second and third asumptions with ols for the period 2004-2009. assessing the predictive power of customer satisfaction for financial and market performances: price-to-earnings ratio is a better predictor overall 60 our paper is organised as follows: the literature review highlights the importance for managers of monitoring cs and discusses how authors have use cs in forecasting financial and market performance. the methodology section presents our model, its inputs and outputs and describes the database. we wrap up our results and we make relevant comments in the two last sections. 2. literature review reviewing the existing literature on cs, we discuss the importance of cs for the firm when monitoring the demand and implementing a strategy and we focus on the relationship between cs and financial and market performance of the firm. we analyze the choice of the optimal model to capture this relationship. 2.1 cs as an indicator cs is a gauge to monitor the demand and to implement a strategy. cronin and taylor (1992) define cs in the framework of financial and market performance: they express cs as a behavior of repurchasing the product and an attachment to the product. measuring cs is fundamental to companies in order to guide a strategy focused on quality and to make optimal investment and organizational choices. measuring cs will help 1) marketing products that meet customers demand; 2) building customer loyalty and attract new clients; 3) increasing sales. a traditional measure (shin and elliot, 2001) is based on identifying the main attributes of the product or service, then evaluating cs relative to each attribute, giving a weight to each one. authors such as veloutsou et al. (2005) challenge this technique by prefering an international measure to estimate cs because one can observe similar features of satisfaction among different cultures. sweden has been the first country to introduce a cs index in 1989 (the scsb), then germany in 1992, the usa in 1994 with the acsi (fornell, 1996) and europe in 1998 with the ecsi. these global indices present a challenge to build a questionnaire (closed due to the large number of people under survey), to create measurement scales and a valid process of aggregation of various questions such as the weight given to each question. the existing indices are the results of thousands of questionnaires. they target products or services of a panel of private or public companies. in this study, we use the acsi index as proxy of cs. the acsi (american customer satisfaction index), built by fornell (1994), is the u.s. cs index for clients of listed companies and government institutions. published quarterly in the wall street journal, the acsi index is managed in partnership with the university of michigan. more than 200 companies are targeted by the index, which represents 40 industrial sectors belonging to seven major sectors. the "client" is always a representative set corresponding to a market segment considered homogeneous. the asci index compares, year after year, the global satisfaction of clients for a given company and its sector. the index not only incorporates the answers relative to cs but also contrasts them to numerous data of the company. the survey is realised via internet or telephone. 2.2 investigating the relationship the relationship between cs and financial and market performance has been investigated by the european foundation for quality (efqm)1 or authors such as bughin (2005). they agree on the fact that cs is upstream of the global performance of the company. kaplan and norton (1998) identify four indicators related to cs (return, total sales, roa2, roe). neely and adams (2001) casted a multidimensional model which they called a “performance prism” integrating all the stakeholders (shareholders, human resources, suppliers, customers) and their needs. in sweden, anderson et al. (1994) looked at the positive relationship between cs (measured by the csb index) and the roi. in their paper, cs data are compiled at the beginning of the semester, roi data at the end. a profit coming from the improvement of cs is not immediate. this is why they measure the cs efficiency with a time lag. yeung et al. (2002) show the significant and complex relationship between cs and customer loyalty, buzz marketing and financial and market indicators. moreover, anderson et al. (1994) find that cs contributes to improve financial performance of a company by tightening customers’ loyalty that reduces price elasticity, decreasing the costs infered by a positive marketing buzz and the 1 efqm models the resources and results of a company. 2 return on asset, return on equity, return on investment and other ratios are presented in the methodology. international review of management and marketing, vol. 2, no.1, 2012, pp.59-74 61 transactional costs. even if the cs impact on performance is not always reflected in the accounting ratios, cs comoves positively with the company stock price. fornell and lehman underscore the time consistency of cs on the performance of the company. ittner and larker (1999) analyzed the impact of cs on stock return but underscored the impact on accounting ratios. the public announcement of cs scores impacts directly stock returns that adjust over a 10-day period. regarding the impact of cs on annual return, jacobson and mizik (2009) show that ‘excess stock portfolio returns for firms with strong customer satisfaction are small and statistically insignificant, and if there is any above-market performance at all, it is due to a small set of firms in the computer and internet industries’. tuli and bharadwaj (2009) analyzed the impact of cs on volatility. they find ‘empirical support for the hypotheses that increases (i.e. improvement) in cs result in decreases (i.e. reduction) in overall and downside systematic and idiosyncratic risk’. finally, some authors have underscored the close link between price-to-earnings (pe) ratio, growth and performance (e.g. easton, 2004, and thomas and zhang, 2006). our paper will emphasize the forecasting power of the pe ratio for the financial and market performance of the firm. 2.3 choosing the optimal model yeung et al. (2002) are supporters of the ordinary least square model to forecast performance indicators from cs. they started with the asumption of the non-linearity of the relationship (e.g. exponential). their conclusion is surprising: not only it contradicts their initial asumption but also it shows that the hypothesis of linearity is acceptable. the opponents will say that we cannot capture in a simple model the beneficial effects of cs on the performance of the firm since this relationship is too complex and the channels too evolved. zahorik (2001) explored the relationship through a complex model that allows the manager to optimally allocate ressources to increase cs. the model integrates the relationship between cs and individual loyalty, aggregated retention, market share, profits and demonstrates how a dollar value in the change of cs can be measured. however, this model is very difficult to implement for an average manager, necessitates a fastidious collect of data, a hazardeous calibration of the effort function, which measures how much money should be expensed to improve optimally some identified attributes of cs. their paper is a good academic exercise but disconnected from the market practice. at the opposite, the ols model is simple and belongs to the «kiss3» family. the model is standard, simple, robust, universally recognized, and easily reproducible by any manager. by contrast, a non-linear model requires hypotheses; it is not standard, and not easily reproducible. it reacts like a black box: we will find an exponential relationship between cs and one given variable, a quadratic relationship with another one. if quadratic, the relationship may have a 2-degree order with one variable, a 3-degree order with another, i.e. we deal with a field of infinite possibilities, not easily reproducible. 3. methodology we divide the methodology in three sections. we describe 3.1) the indicators tested by our model, 3.2) the database, and 3.3) the model. our paper assesses the ability of cs in forecasting firms’ financial and market performance. we benchmark cs with five indicators: tobin’s q, price-to-cash flows, price-to-earnings, volatility and the forecasted indicator itself. we choose financial and market indicators as proxies for the performance of the firm. in the following section, we present these indicators. 3.1 description of indicators in this section, we describe the five financial indicators and the seven market indicators that will be forecasted. 3.1.1 financial indicators 1. roe= equityrs'stockholdetotalaverage incomenet (1) 3 keep it sophisticately simple assessing the predictive power of customer satisfaction for financial and market performances: price-to-earnings ratio is a better predictor overall 62 2. roa= assetstotalaverage incomenet (2) 3. roi= capitalinvested taxadjustedprofitoperatingnet  (3) 4. gross profit margin= salesnet profitgross (4) 5. price to sales = share price/sales per share (5) 3.1.2 market indicators 1. book value = goutstandinsharescommonofnumber equitystockpreferredequityrs'stockholdetotal  (6) 2. dividend yield = sharecommonperpricemarket sharecommonperdividend (7) 3. price to cash flows = ebitdaorshareperflowscash priceshare (8) 4. price-to-earnings ratio = shareperearnings sharepervaluemarket (9) earnings per share = net income / number of common shares outstanding (10) 5. tobin’s q = total market value of firm/total asset value = (share price*number of shares outstanding+total value of preferred stock+long-term debt+short-term debt)/total assets (11) 6. annual return = (share price on jan. 1 for the year t+1 / share price on jan. 1 for the year t) 1 (12) 7. volatility = 250.)( 90 1 90 1           rr i i (13) with ri, the last 90 daily returns of the company stock for the year. 3.2 the database in this section, we describe how we have built the database. the variables are cs and the twelve indicators presented above. 3.2.1 acsi index cs computation follows the methodology of the american customer satisfaction index based on interviews with customers as inputs of a multi-equational econometric model developed by the ross business school of the university of michigan. the acsi model is a model of causes and effects. the inputs of acsi cs are customer’s expectation, perceived quality and perceived value (see figure 1). outputs of acsi cs are customer’s complaints for the product, customer loyalty including customer’s retention and price tolerance. the cs goes from 0 to 100. our database includes the acsi index of eighty-six public companies from 2004 to 2009. international review of management and marketing, vol. 2, no.1, 2012, pp.59-74 63 figure 1. methodological framework for building the acsi cs index perceived quality customer’s expectation perceived value acsi client satisfaction client loyalty customer’s complaints source: acsi4 3.2.2 financial and market indicators beside the acsi index, our database comprises financial and market indicators of eighty-six public companies from 2004 to 2009: book value, dividend yield, gross profit margin, price to cashflows, price-to-earnings, price to sales, annual return, roa, roe, roi, volatility and tobin’s q. we obtained these indicators from the financial statements and historical prices available on reuters and yahoo finance. we based the selection of the twelve indicators on the literature review, given that these indicators are the most tested or the most representative among the group of market and financial indicators. eighty-five companies are american; one is european (daimler-chrysler) the later remains in our sample since daimler-chrysler had an extensive activity in the u.s. during the study period. we present the list of companies in the appendix (table 7). seventy-five companies under review are included in the s&p 500 index, i.e. 87%. our sample has a survivorship bias. our initial sample was of about one hundred companies when we started to collect data. the original selection criterion was to be part of the acsi database. failures and m&a made the initial number to shrink to eighty-six companies. we retained in the sample only firms that survived until 2009. in terms of activity sectors, figure 4 in the appendix illustrates the sample of eighty-six companies used in this study compared to the s&p 500 index: the sample is overweighted in the sector of utilities (16% versus 6%), consumer staples (24% versus 8%) and consumer discretionary (23% versus 18%). we consider the overweight of these three sectors as relevant since they are present more than any other sectors in consumers’ mind in terms of emotions and loyalty. for example, procter & gamble (consumer staples), federal express (utilities) and ford (consumer discretionary) are present in consumer habits since these products and services are popular and regularly pushed by marketing campaigns. the consumer gains consistently possession of the use and the representation of the product or service. the marketing reinforces the sens of possession. therefore, we expect that a relationship exists between cs and performance indicators, cs being stronger for products or services better known by consumers. if a customer is satisfied, he/she consumes. an increase in demand means an increase in revenues, in stock return, etc. yeung and ennew (2001) confirmed that ‘happy customers are more likely to be loyal, loyal customers are more profitable’. 4 acsi cs indices are available on http://www.theasci.org/. assessing the predictive power of customer satisfaction for financial and market performances: price-to-earnings ratio is a better predictor overall 64 3.3 the ols model the objective of the paper is to assess the ability of cs in forecasting twelve indicators, taken individually, with the following ordinary least square model (ols): j= 1, 2, 3, 4 year, from 2005 to 2008 for calibrating, from 2006 to 2009 for forecasting. x = customer satisfaction, tobin’s q, price-to-cash flows, price-to-earnings, volatility or each of the twelve indicators choosen as y. y = tobin’s q, price-to-cash flows, price-to-earnings, volatility, roa, price-to-sales, roe, roi, book value, dividend yield, price return or gross profit margin. for example, 1) we run the ols equation using x as the series of customer satisfaction index levels of eighty-six companies in year 2004 and y as the series of roa of eighty-six companies in year 2005. 2) we then forecast y, the series of roa of eighty-six companies in year 2006 from the ols equation obtained in 1) and with the new inputs x as the series of customer satisfaction index levels of eightysix companies in year 2005. we repeat steps 1) and 2) in order to compute the forecasted roa in year 2007 from cs index levels observed in year 2006 and the ols equation obtained from roa observed in 2006 versus cs index levels observed in 2005, etc. we forecast the twelve financial and market indicators introduced in section 3.1 using cs, tobin’s q, price-to-cash flows, price-to-earnings, volatility or the indicator itself choosen as y. our objective is to benchmark cs against financial and market indicators such as tobin’s q, price-to-cash flows, price-to-earnings and volatility in order to assess the forecasting ability of cs. the choice of the indicators tobin’s q, price-to-cash flows, price-to-earnings and volatility as benchmarks of cs relies on an initial correlation analysis where we noticed that, taken individually, these indicators have the highest number of significant correlations with the other indicators (bilateral pearson test). since the coefficient of determination r2 is simply the square of the correlation coefficient in the case of a simple linear regression model such as the one that we use in our paper, the correlation analysis is a way to identify the indicators with the highest forecasting power. besides tobin’s q, price-to-cash flows, price-to-earnings and volatility, the choice of a given indicator to forecast itself in the future (e.g. roa at t-1 forecasts roa at t) is based on the intuition that the indicator today will be the best estimate of its value in the future. finally, the choice of the index or indicator level rather than the annual change in value is the result of the analysis of the correlation matrix between 1) the annual change in value (annual returns) and 2) the absolute levels of index and indicators for the whole sample. we observed less significant correlations with the annual returns than the absolute levels. using equation 14, we forecast the twelve financial and market indicator at t+1 year, t+2 years, t+3 years and t+4 years since our sample is limited in time (from year 2006 to 2009). in order to assess the forecasting power of cs, tobin’s q, price-to-cash flows, price-to-earnings, volatility or the indicator itself, we use two measures: 1) the «root mean square error or rmse» measure. rmse is used extensively in the literature: 2) the correlation coefficient that measures the strength and the direction of the relationship between the forecasted and observed series. the correlation coefficient tells us that the closer the value to one, the better the forecast. in addition, it tells how much the forecasted and observed series move in phase. 4. results 4.1 general results tables 1 and 2 below report the measures of rmse and correlation coefficient of the forecasts of the twelve financial and market indicators based on cs, tobin-q, price-to-cash flows, price-toearnings, volatility and the indicator itself. for each indicator, we shade the best measure of rmse (14)cxy tjt     (15)1 286 1    i forecastedobserved n rmse international review of management and marketing, vol. 2, no.1, 2012, pp.59-74 65 and correlation coefficient. table 1 provides the results at t+1 year and table 2 the results at t+2 years. table 1. 1-year forecast of twelve financial and market indicators based on ols and cs, tobinq, price-to-cash flows, price-to-earnings, volatility or the indicator itself table 2. 2-year forecast of twelve financial and market indicators based on ols and cs, tobinq, price-to-cash flows, price-to-earnings, volatility or the indicator itself overall, table 1 shows that price-to-earnings is the best variable to forecast the twelve financial and market indicators (lowest average rmse at 12.82). based on the correlation criteria, the indicator is the best predictor of itself (average correlation at 56% in table 1). according to tables 1 and 2, the forecasting power of tobin’s q, price to cash flows and the indicator itself improves at t+2 years (rmse at respectively 15.13 versus 16.18, 15.22 versus 18.81 and 15.73 versus 18.08). the analyses at t+3 years and t+4 years (refer to table 8 in appendix) do not confirm the trend, i.e. the optimal forecasting lag of these three predictors is t+2 years. concerning the other predictors (customer satisfaction, price-to-earnings and volatility), the optimal forecasting lag is t+1 year. we note that regarding the t+3 years forecasts, based on the rmse and correlation criterias, the indicator itself is the best predictor overall with a rmse of 19.09 and a correlation of 0.35 on average over the twelve forecasted indicators. concerning the t+4 years forecasts, based on the rmse 1-year forecast forecasted indicators: average root mean square error between forecasted values and observed values average correlation between forecasted values and observed values average root mean square error between forecasted values and observed values average correlation between forecasted values and observed values average root mean square error between forecasted values and observed values average correlation between forecasted values and observed values average root mean square error between forecasted values and observed values average correlation between forecasted values and observed values average root mean square error between forecasted values and observed values average correlation between forecasted values and observed values average root mean square error between forecasted values and observed values average correlation between forecasted values and observed values tobin-q 6.56 0.04 8.59 0.34 9.44 0.28 6.97 0.15 6.64 0.08 8.59 0.34 price-to-cash flows 42.38 -0.01 53.87 0.73 71.49 0.77 33.77 0.40 43.81 0.08 71.49 0.77 price earning 72.80 0.00 63.80 0.73 73.50 0.73 50.38 0.37 73.44 0.06 50.38 0.37 volatility 34.05 0.21 34.35 0.11 35.03 0.12 34.52 -0.02 56.50 0.67 56.50 0.67 roa 0.07 0.24 0.08 0.23 0.08 0.05 0.08 -0.03 0.10 0.25 0.06 0.60 price-to-sales 11.94 0.04 13.60 0.75 16.46 0.78 8.58 0.64 12.13 -0.05 14.78 0.94 roe 1.88 0.10 2.74 -0.12 2.45 -0.36 2.87 -0.22 2.45 0.07 6.24 0.32 roi 0.44 0.13 0.46 -0.02 0.45 -0.01 0.45 0.07 0.45 -0.07 0.63 0.37 book value 15.14 -0.01 15.93 0.23 16.07 0.14 15.44 -0.02 16.04 0.13 7.61 0.89 dividend yield 0.03 0.03 0.03 0.11 0.03 -0.01 0.03 0.03 0.03 0.07 0.02 0.61 price return 0.52 0.02 0.52 0.07 0.53 0.01 0.53 0.04 0.63 -0.14 0.52 0.00 gross profit margin 0.17 0.02 0.17 0.07 0.17 0.03 0.17 0.17 0.19 0.22 0.10 0.84 average: 15.50 0.07 16.18 0.27 18.81 0.21 12.82 0.13 17.70 0.11 18.08 0.56 using customer satisfaction using tobin-q using the indicator itselfusing price-to-cash flows using price earnings using volatility 2-year forecast forecasted indicators: average root mean square error between forecasted values and observed values average correlation between forecasted values and observed values average root mean square error between forecasted values and observed values average correlation between forecasted values and observed values average root mean square error between forecasted values and observed values average correlation between forecasted values and observed values average root mean square error between forecasted values and observed values average correlation between forecasted values and observed values average root mean square error between forecasted values and observed values average correlation between forecasted values and observed values average root mean square error between forecasted values and observed values average correlation between forecasted values and observed values tobin-q 8.06 -0.03 11.59 0.03 11.99 0.12 9.26 -0.12 8.09 0.03 11.59 0.03 price-to-cash flows 51.49 0.01 35.68 0.66 33.22 0.75 44.77 0.49 51.23 0.04 33.22 0.75 price earning 89.52 0.01 59.80 0.68 62.05 0.71 75.47 0.27 88.80 0.09 75.47 0.27 volatility 43.05 0.23 43.75 -0.03 43.14 0.07 42.97 0.00 43.05 0.23 43.05 0.23 roa 0.08 0.20 0.09 0.20 0.09 -0.02 0.09 -0.09 0.08 0.10 0.07 0.48 price-to-sales 14.28 0.05 8.97 0.67 9.86 0.76 12.11 0.52 14.24 0.05 12.07 0.83 roe 2.38 0.02 5.38 -0.14 5.75 -0.09 3.04 -0.10 2.58 0.04 2.44 0.01 roi 0.36 0.13 0.36 0.17 0.40 -0.02 0.39 0.09 0.35 0.04 0.44 0.44 book value 14.53 -0.02 15.17 0.24 15.28 0.14 14.55 0.09 15.08 0.16 9.61 0.78 dividend yield 0.03 0.01 0.03 0.17 0.03 0.14 0.03 0.11 0.03 0.18 0.03 0.29 price return 0.60 0.03 0.61 -0.07 0.61 0.09 0.60 -0.08 0.63 -0.21 0.60 0.01 gross profit margin 0.17 0.01 0.17 0.09 0.18 0.06 0.17 0.20 0.17 0.17 0.11 0.76 average: 18.71 0.05 15.13 0.22 15.22 0.23 16.95 0.11 18.69 0.08 15.73 0.41 using customer satisfaction using tobin-q using price-to-cash flows using price earnings using the indicator itselfusing volatility assessing the predictive power of customer satisfaction for financial and market performances: price-to-earnings ratio is a better predictor overall 66 criteria, the price to cash flows ratio is the best predictor overall with a rmse of 32.86 on average over the twelve forecasted indicators. table 1 shows that tobin’s q, volatility, roe and roi have the lowest rmse when forecasted with cs. cs satisfaction looks a superior predictor. all the other indicators (price-to-cash flows, price-to-earnings, roa, price-to-sales, book value, dividend yield, price return and gross profit margin) are better forecasted by price-toearnings or the indicator itself (e.g. price-to-cash flows at t using price-to-cash flows at t-1, etc.). 4.2. forecasting tobin’s q, volatility, roe and roi table i presents the t+1 year forecasts. based on the rmse measure, cs is the best predictor of tobin’s q, volatility, roe and roi. cs beats its benchmarks: tobin’s q, price-to-cash flows, price-to-earnings, volatility and the indicator itself as predictors at t+1. these results give support to the works of anderson, fornell and lehmann (1994) which found a close relationship of cs and roi, the works of kaplan and norton (1998) regarding roe, the works of tuli & bharadwaj (2009) highlightening volatility and the works of williams and naumann (2011) concerning tobin’s q. however, if we have a closer look at the results, we observe that the rmse of price-to-earnings when used as a predictor is very close to the rmse of cs, 6.97 versus 6.56 for tobin-q forecasted by cs, 34.52 versus 34.05 for volatility, 2.87 versus 1.88 for roe, 0.45 versus 0.44 for roi. based on the correlation coefficient criteria between the forecasted and observed series, we observe that cs is not the best predictor. comparing cs as a predictor with the indicator itself (e.g. volatility at t used as a predictor of volatility at t+1), we observe that the indicator itself is the best predictor of tobin-q, volatility, roe and roi. these contradicting results deserve an explanation. the rmse measures the square root of the square of the average distance between the observed and the forecasted series. the correlation measures the tightness of the relationship between the observed and the forecasted series. should they not converge to the same result? the following microanalyses show that the correlation coefficient, used in conjunction with rmse when assessing the forecasting power of a model, can help market analysts identifying outliers such as in year 2008 when high market volatility has affected the forecasting power of two benchmarks, i.e. volatility and roe. focusing on the volatility forecasts, based on rmse, cs is the best predictor of volatility. on the contrary, based on the correlation coefficient criteria, volatility at t-1 is the best predictor of volatility at t. we illustrate the forecasted volatility for year 2006 obtained from the volatility (figure 2 below) and from cs (figure 3 below). since we have four forecasted samples (year 2006 to 2009), we observed rmse and correlation for each year in table 3: table 3. rmse and correlation for 1-year forecasted volatility t+1 year forecast forecasted volatility 2006 2007 2008 2009 average rmse 7.02 13.64 51.82 153.52 56.5 predictor is volatility correlation 0.64 0.69 0.56 0.78 0.67 rmse 8.16 14.08 61.43 52.55 34.05 predictor is cs correlation 0.1 0.24 0.25 0.24 0.23 table 3 clearly shows that year 2009 is an outlier (rmse equals to 153.52) when the predictor is volatility. this is why the average tops 56.5 whereas the average of the first 3 years of rmse equals to 24.16 versus 27.89 when cs is a predictor of volatility. the explanation is very simple: 2008 was the year of a credit crisis, there was much volatility in the market; for example, on october 24, 2008, the vix index reached an historical high of 89.53 for a long-term average of 19; the result is that volatility in 2008 lost its forecasting power for 2009. we may conclude, in regards with this volatility micro approach, that in a normal market, volatility is a better predictor of volatility than cs; in a volatile market, cs is the best predictor of volatility. international review of management and marketing, vol. 2, no.1, 2012, pp.59-74 67 figure 2. observed volatility (vol_2006) versus forecasted volatility (fvol_2006) for 86 companies in 2006 using volatility at t-1. rmse = 7.02; correlation = 0.64 figure 3. observed volatility (vol_2006) versus forecasted volatility (fvol_2006) for 86 companies in 2006 using cs at t-1. rmse = 8.16; correlation = 0.10 we repeat the same micro approach with tobin’s q, roe and roi. we obtain respectively tables 4, 5 and 6. table 4 shows that cs beats tobin’s q when forecasting tobin’s q. there is no special outlier on year 4. table 4. rmse and correlation for 1-year forecasted tobin’s q t+1 year forecast forecasted tobin’s q 2006 2007 2008 2009 average rmse 1.39 6.73 11.57 14.66 8.59 predictor is tobin’s q correlation 0.75 0.6 0.99 -0.98 0.34 rmse 2.08 7.74 5.54 10.85 6.56 predictor is cs correlation 0.17 -0.03 -0.01 0.032 0.04 0 1 0 2 0 3 0 4 0 5 0 6 0 1 0 2 0 3 0 4 0 5 0 6 0 7 0 8 0 f v o l _ 2 0 0 6 v o l _ 2 0 0 6 8 1 2 1 6 2 0 2 4 2 8 3 2 3 6 4 0 4 4 1 0 2 0 3 0 4 0 5 0 6 0 7 0 8 0 f v o l _ 2 0 0 6 v o l _ 2 0 0 6 assessing the predictive power of customer satisfaction for financial and market performances: price-to-earnings ratio is a better predictor overall 68 table 5 shows that cs beats roe when forecasting roe because there is an outlier in 2009 (rmse of 18.54 versus 1.24). here, we conclude that in a normal market roe is as good as cs to forecast roe. in a volatile market, cs is best. table 5. rmse and correlation for 1-year forecasted roe t+1 year forecast forecasted roe 2006 2007 2008 2009 average rmse 0.43 1.05 4.93 18.54 6.24 predictor is roe correlation 0.69 -0.09 0.61 0.06 0.32 rmse 0.46 0.83 5.01 1.24 1.88 predictor is cs correlation 0.29 -0.08 -0.09 0.29 0.10 table 6 shows that cs beats tobin’s q when forecasting roi. there is no special outlier. in conclusion, we have shown that using two criterias in conjunction to evaluate the forecasting power, rmse and correlation, will help identifying samples with outliers that rmse cannot capture alone. table 6. rmse and correlation for 1-year forecasted roi t+1 year forecast forecasted roi 2006 2007 2008 2009 average rmse 0.51 1.28 0.12 0.63 0.63 predictor is roi correlation 0.83 0.16 0.38 0.13 0.37 rmse 0.71 0.32 0.12 0.63 0.44 predictor is cs correlation 0.11 0.21 0.16 0.06 0.13 5. conclusion our paper shows that based on the rmse criteria, price-to-earnings ratio is a better predictor of the financial and market performances of companies than customer satisfaction (cs). this conclusion relies on the choice of five financial and seven market indicators that we have considered as proxies for financial and market performances with a sample of eighty-six companies: book value, dividend yield, gross profit margin, price to cash-flows, price price-to-earnings, price to sales, annual return, roa, roe, roi, volatility and tobin’s q. however, cs clearly outperforms our benchmarks (tobin’s q, price-to-cash flows, price-toearnings, volatility or the indicator itself) when forecasting tobin’s q, volatility, roe and roi. previous authors have clearly identified the tight relationship, which exists between cs, volatility and tobin’s q (market indicators), roe and roi (financial indicators). in period of volatile market such as the year 2008, cs is a more stable predictor of volatility or roe than the indicator itself (i.e. volatility at t-1 for volatility at t, roe at t-1 for roe at t). we found that the optimal forecasting lag of the financial and market performance of the firm is 1 year for customer satisfaction, price-to-earnings and volatility used individually as predictors and 2 years for tobin’s q, price to cash flows and the indicator itself. concerning the optimal forecasting time lag of cs at t+1 year, previous authors have explained that the lag is justifiable since a profit associated with the improvement of cs is not immediate. our results are in line with the works of anderson, fornell and lehmann (1994) regarding the impact at t+1 year of cs on roi but in addition, our study identifies the impact at t+1 year on roe, volatility and tobin’s q. moreover, our paper shows that, when forecasting a given financial or market indicator, the indicator itself at t-1 is a good predictor most of the time and can easily compete with the two leaders, price-toearnings ratio and cs. finally, we have shown that using two criterias in conjunction to evaluate the forecasting power, rmse and correlation, will help identify samples with outliers that rmse cannot capture alone. our paper presents several limits. the length of time of its sample is restricted; the number of companies is also limited. we replicated the s&p 500 index in order to get a homogeneous sample, international review of management and marketing, vol. 2, no.1, 2012, pp.59-74 69 but we overweighted the sample with utilities, consumer staples and consumer discretionary since we believed that these three sectors have a bigger impact on consumers’ mind in terms of emotions and loyalty than the other sectors of the s&p 500. we biased our sample in favor of cs. this approach may be questionable. one additional point in building our sample was a survivor bias that made our initial sample of about hundred companies to shrink to eighty-six companies. besides, we may extend the research to other indicators or other approaches of forecasting such as principal components 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(2006), customer satisfaction measurement, quest for quality. intercom, 53-54. international review of management and marketing, vol. 2, no.1, 2012, pp.59-74 71 appendix figure 4. sample of 86 companies by sector (top pie) compared to the s&p 500 index (bottom pie) consumer discretionary 18% consumer staples 8% financials 17% health care 11% materials 6% information technology 15% industrials 11% energy 6% utilities 6% telecommunications services 2% consumer staples 24% consumer discretionary 23% industrials 8% information technology 7% materials 0% financials 6% health care 2% energy 9% telecommunications services 4% utilities 16% assessing the predictive power of customer satisfaction for financial and market performances: price-to-earnings ratio is a better predictor overall 72 table 7. sample of 86 public companies company name ticker sector included in the sp 500 index apple aapl information technology 1 ameren corporation aee utilities 1 american electric power company, inc. aep utilities 1 aetna inc. aet health care 1 the allstate corporation all financials 1 amr corporation amr industrials 0 amazon.com, inc. amzn consumer discretionary 1 allegheny energy, inc. aye utilities 1 anheuser-busch inbev nv bud consumer staples 1 conagra foods, inc. cag consumer staples 1 colgate-palmolive company cl consumer staples 1 the clorox company clx consumer staples 1 comcast corporation cmcsa consumer discretionary 1 cms energy corporation cms utilities 1 costco wholesale corporation cost consumer staples 1 campbell soup company cpb consumer staples 1 delta air lines, inc. dal industrials 0 daimler dcx consumer discretionary 0 dillards, inc. dds consumer discretionary 1 dell dell information technology 1 dish network corp dish consumer goods 0 dte energy company dte utilities 1 duke energy corporation duk utilities 1 ebay ebay information technology 1 consolidated edison, inc. ed utilities 1 entergy corporation etr utilities 1 exelon corporation exc utilities 1 ford motor company f consumer discretionary 1 fedex corporation fdx industrials 1 firstenergy corp. fe utilities 1 florida power & light company fpl utilities 1 honda motor co., ltd. hmc utilities 0 h.j. heinz company hnz consumer staples 1 starwood hotels & resorts worldwide, inc hot consumer discretionary 1 hewlett-packard company hpq information technology 1 the hershey company hsy consumer staples 1 ibm ibm information technology 1 intercontinental hotels group plc ihg industrials 0 j.c. penney company, inc. jcp consumer discretionary 1 international review of management and marketing, vol. 2, no.1, 2012, pp.59-74 73 jones apparel group, inc. jny consumer discretionary 1 kraft foods inc. kft consumer staples 1 the kroger co. kr consumer staples 1 liz claiborne, inc. liz consumer discretionary 1 lowes companies, inc. low consumer discretionary 1 southwest airlines co. luv industrials 1 marriott international, inc. mar consumer discretionary 1 mcdonalds corporation mcd consumer discretionary 1 metlife, inc. met financials 1 altria group, inc. mo consumer staples 1 nisource inc. ni utilities 1 nike, inc. nke consumer discretionary 1 northeast utilities system nu utilities 0 pg&e corporation pcg utilities 1 priceline.com incorporated pcln technology 0 public service enterprise group inc. peg utilities 1 pepsico, inc. pep consumer staples 1 the procter & gamble company pg consumer staples 1 progress energy, inc. pgn utilities 1 ppl corporation ppl utilities 1 prudential financial, inc. pru financials 1 papa johns intl, inc. pzza industrials 0 qwest communications international inc. q telecommunications services 1 reynolds american, inc. rai consumer staples 1 rri energy rri utilities 0 sprint nextel corporation s telecommunications services 1 the charles schwab corporation schw financial 0 sears holdings corporation shld consumer discretionary 1 sara lee corp. sle consumer staples 1 the southern company so utilities 1 sempra energy sre utilities 1 supervalu inc. svu consumer staples 1 safeway inc. swy consumer staples 1 at&t inc. t telecommunications services 1 molson coors brewing company tap consumer staples 1 target corporation tgt consumer discretionary 1 tyson foods, inc. tsn consumer staples 1 time warner inc. twx consumer discretionary 1 unitedhealth group inc. unh health care 1 united parcel service, inc. ups industrials 1 verizon communications inc. vz telecommunications services 1 wendys arbys group inc. wen consumer discretionary 1 assessing the predictive power of customer satisfaction for financial and market performances: price-to-earnings ratio is a better predictor overall 74 wells fargo & company wfc financials 1 whirlpool corporation whr consumer discretionary 1 wal-mart stores, inc. wmt consumer staples 1 xcel energy inc. xel utilities 1 yum! brands, inc. yum consumer discretionary 1 13% not included in the sp 500 index 11 87% included in the sp 500 index 75 100% 86 table 8. 3-year and 4-year forecast of twelve financial and market indicators based on ols and cs, tobin-q, price-to-cash flows, price-to-earnings, volatility or the indicator itself 3-year forecast forecasted indicators: average root mean square error between forecasted values and observed values average correlation between forecasted values and observed values average root mean square error between forecasted values and observed values average correlation between forecasted values and observed values average root mean square error between forecasted values and observed values average correlation between forecasted values and observed values average root mean square error between forecasted values and observed values average correlation between forecasted values and observed values average root mean square error between forecasted values and observed values average correlation between forecasted values and observed values average root mean square error between forecasted values and observed values average correlation between forecasted values and observed values tobin-q 8.21 -0.08 9.09 -0.02 8.52 0.02 8.41 0.01 8.25 -0.04 9.09 -0.02 price-to-cash flows 46.50 -0.02 42.33 0.50 44.66 0.63 45.21 0.28 47.25 -0.05 44.66 0.63 price earning 103.57 -0.05 93.33 0.47 87.32 0.66 99.39 0.30 103.30 0.09 99.39 0.30 volatility 57.15 0.23 57.20 0.08 57.22 0.07 57.29 0.09 53.14 0.53 53.14 0.53 roa 0.08 0.15 0.08 0.31 0.08 0.08 0.09 0.08 0.08 -0.09 0.07 0.49 price-to-sales 13.52 0.07 12.20 0.50 11.92 0.66 13.03 0.30 13.66 0.06 8.69 0.75 roe 3.17 0.05 4.10 -0.25 3.82 -0.38 3.46 -0.16 3.12 0.04 3.27 -0.30 roi 0.37 0.11 0.37 0.22 0.38 0.01 0.38 0.16 0.37 -0.10 0.37 0.20 book value 14.47 0.02 14.17 0.25 15.88 0.14 14.81 -0.05 14.21 0.19 9.49 0.77 dividend yield 0.03 0.05 0.03 0.20 0.03 0.17 0.03 -0.08 0.03 0.23 0.03 0.22 price return 0.70 0.07 0.70 -0.06 0.72 -0.06 0.71 -0.11 0.72 -0.51 0.70 -0.10 gross profit margin 0.17 -0.04 0.17 0.14 0.17 -0.01 0.17 0.20 0.17 0.17 0.12 0.71 average: 20.66 0.05 19.48 0.20 19.23 0.17 20.25 0.09 20.36 0.04 19.09 0.35 4-year forecast forecasted indicators: average root mean square error between forecasted values and observed values average correlation between forecasted values and observed values average root mean square error between forecasted values and observed values average correlation between forecasted values and observed values average root mean square error between forecasted values and observed values average correlation between forecasted values and observed values average root mean square error between forecasted values and observed values average correlation between forecasted values and observed values average root mean square error between forecasted values and observed values average correlation between forecasted values and observed values average root mean square error between forecasted values and observed values average correlation between forecasted values and observed values tobin-q 10.85 -0.12 11.03 -0.40 13.65 -0.67 11.13 -0.30 10.93 -0.04 11.03 -0.40 price-to-cash flows 63.79 -0.06 62.65 0.45 53.35 0.66 62.25 0.29 63.59 0.04 53.35 0.66 price earning 139.46 0.05 138.54 0.39 119.15 0.60 137.15 0.27 139.18 0.05 137.15 0.27 volatility 52.91 0.22 53.06 -0.03 53.30 0.28 53.39 -0.09 55.50 0.54 55.50 0.54 roa 139.46 0.05 138.54 0.39 119.15 0.60 137.15 0.27 139.18 0.05 137.15 0.27 price-to-sales 17.79 0.09 17.61 0.45 14.46 0.67 17.42 0.31 17.78 0.04 16.75 0.64 roe 1.25 0.28 1.31 -0.12 2.65 -0.18 1.31 -0.09 1.46 0.13 1.32 -0.45 roi 0.63 0.05 0.63 0.11 0.63 0.05 0.62 0.21 0.63 0.06 0.63 0.13 book value 14.83 0.02 14.37 0.27 16.82 0.20 15.07 -0.03 14.82 0.10 10.08 0.74 dividend yield 0.03 0.09 0.03 0.20 0.03 0.18 0.03 0.19 0.03 0.26 0.03 0.28 price return 0.95 0.11 0.95 0.09 0.95 -0.01 0.95 0.00 0.98 -0.37 0.93 0.09 gross profit margin 0.17 0.12 0.17 0.13 0.17 0.13 0.17 0.12 0.17 0.18 0.12 0.70 average: 36.84 0.08 36.57 0.16 32.86 0.21 36.39 0.09 37.02 0.09 35.34 0.29 using tobin-q using price-to-cash flows using customer satisfaction using tobin-q using the indicator itself using the indicator itselfusing price earnings using price-to-cash flows using price earnings using volatility using volatility using customer satisfaction . international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2015, 5(4), 230-241. international review of management and marketing | vol 5 • issue 4 • 2015230 a research for the determination of the relationship between organizational conflict management and organizational alienation oya korkmaz1*, sibel aydemir2 1international trade and logistic, tarsus school of applied technology and management, mersin university, turkey, 2department of international trade and logistic, zonguldak vocational school, management and organization, bülent ecevit university, zonguldak, turkey. *email: oyakorkmaz@yahoo.com abstract our study researched at which level organizational conflict affected organizational alienation and what kind of a relationship there is between organizational conflict dimensions and organizational alienation in the institutions reviewed by us. our study also examined how organizational conflict and organizational alienation are influenced by the demographical variables including sex, marital status, income status, education and job experience. necessary data was collected by survey method in our study. the surveys were made to white collar employees who are working for the leading logistics companies of the industry operating in mersin and zonguldak provinces of turkey. the data which was obtained from the surveys was interpreted after being analyzed in spss statistic package program and it was aimed to make it guiding for the decision makers while creating new human resource policies in their institutions. keywords: organizational conflict management, organizational conflict, organizational alienation jel classifications: d23, m10, m12 1. introduction contemporary organizations that are aware of the fact that conflict exists at all phases of life turn the conflicts which are experienced within the organization into advantages and therefore create positive results for the organization. the organizations which realize that the conflict which is experienced within the organization can bring about positive results use conflict as a means to reach organizational goals instead of eliminating it. directors who are capable of understanding conflict as a reality of the organization, and exploit conflict to obtain better organizational results. however, while directors exploit conflict, they should consider the fact that the conflicts which are experienced at medium levels can bring about positive results while the conflicts which are experienced at higher levels can bring about negative results for the organization. the organizational conflict which influences the work quality and work output of an organization gain flexibility for the organization to adapt changing market conditions and meet the demands of the changing customer profile. the organizational conflict which reduces the differences within the organization also contributes to the increase in employee talents and improvement in product quality. organizational conflict plays an important role in the interior affairs of the organization because it occurs thanks to the interior plots which are experienced within that organization. therefore, organizational conflict has to be managed better or eliminated. a conflict which is effectively managed or eliminated guarantees the physical and mental health of the employees, makes the organization long lived and ensures reaching the desired level in the employee affairs. being a big loss of time and effort, organizational conflict creates great awareness in understanding others. breaking resistance to korkmaz and aydemir: a research for the determination of the relationship between organizational conflict management and organizational alienation international review of management and marketing | vol 5 • issue 4 • 2015 231 change, organizational conflict constitutes a valuable source for organizational learning. gaining deeper understanding skill in complicated organizational matters, organizational conflict ensures fair distribution of sources within the organization. managers spend most of their time to settle conflicts. the managers who spend most of their time to settle conflicts seem to have reduced efficiencies and performances. the organizational conflict originating from the planning and control mistakes of the management results in grouping in the organization, disrupts work unity, threatens work peace and prevents the initiative to work together in the future. it also leads to waste of time and energy by the employees, low personnel motivation, low efficiency, damaging the workplace, tension at the workplace, absence, high rate of turnover, dissatisfaction, increase in the intention to leave the organization and employees’ alienation to the organization. therefore, in this study, we examined the relationship between organizational alienation, which is one of the negative results caused by organizational conflict and organizational conflict management and the level of this relationship. likewise, this study also researched whether organizational conflict management and organizational alienation concepts varied based on demographic variables. therefore, it is aimed to make the results which are obtained through this study useful for the businesses which operate in similar industries. 2. organizational conflict conflict has several definitions in literature. according to one definition, conflict is defined as a process which involves individuals or groups in dispute and controversy (rahim, 2001. p. 18). based on another definition, conflict is defined as a universal concept which comes into being at every situation where differences are experienced in purposes, perceptions, opinions and beliefs at inter-individual, inter-group levels (robbins, 2005. p. 422). according to robbins, conflict occurs in four phases. these phases include potential conflict, perceived conflict, felt conflict and open conflict processes (seval, 2006. p. 247-248). 2.1. potential conflict this first phase which is called potential conflict involves the presence of the reasons which result in conflict. 2.2. perceived conflict being the second phase of conflict, perceived conflict occurs only due to the differences in perception. 2.3. felt conflict the third phase of conflict is called felt conflict. perceptions turn into feelings. felt conflict refers to the feelings of the conflicting parties about the event(s). 2.4. open conflict this phase is related to the results of the conflict. for example, it can occur in the form of open discussion, mutual discussion, using harsh words and language, sending certain information and data to the opposite party, and even using physical force. as a result, it can be qualified as either increasing (functional) or decreasing the success of the group. in brief, open conflict refers to the actually shown behaviors of the conflicting parties (tokat, 1999. p. 31-32). contributing to revealing quality opinions, organizational conflict strengthens the link within the group affairs and makes adjustments in power relationships. today, organizational conflict is not perceived as good/bad or positive/negative but as the presence of both. organizational conflict naturally involves good/bad or positive/negative properties within it as synonymously. therefore, organizations classify organizational conflict as constructive and destructive. constructive conflicts adjust working affairs and make employees feel better. destructive conflicts, on the other hand, feeds hostile attitudes, prevents decision making processes and enables to keep useful information in an organization (gregorio et al., 2012. p. 21). the constructive and destructive results which are caused by conflict are summarized in the table 1 (ada, 2013. p. 62-63). managers with traditional thinking consider conflict inconvenient and even destructive for the organization, they try to protect the organization from conflicts and make efforts to demolish the reasons for conflict. however, the conflicts in the organization have useful sides if they can be controlled and kept at a certain level. we can list the positive sides of conflict as follows in general (seval, 2006. p. 251-252). • enables the discussion of the problems • increases the interest in the problem, improves the skill to solve problems • leads to a competitive environment in the organization • increases creativity in the organization and leads to new opinions • the employees’ interest in organization problems and the organization itself increase • gains dynamism to the organization • contributes to the improvement of the democratic environment in the organization • positively affects innovation, change and creativity in the organization. table 1: comparing constructive and destructing conflicts constructive conflicts destructive conflicts they have a positive effect on the individuals, groups and the organizations they have a negative effect on the individuals, groups and the organizations the problems which remain hidden during the conflict are updated misuse of human energy is in question it allows reviewing an already taken decision the group transmits its negative anger to others it allows reviewing respective documents reduction in efficiency and job satisfaction are in question it leads to encouraging creativity elimination of the conflicting parties by the manager is in question it allows the acceptance of the problem by the manager korkmaz and aydemir: a research for the determination of the relationship between organizational conflict management and organizational alienation international review of management and marketing | vol 5 • issue 4 • 2015232 the inconveniences of conflict are as follows (seval, 2006. p. 251-252). • can lead to delays in taking decisions • making excessive compromises due to conflict can result in the organization’s divergence from its goals • personnel’s replacement speed increases • motivation is reduced in the organization • leads to consumption of energy other than goals • disrupts trust environment in the organization and reduces efficiency. there are some classifications made about organizational conflict in the studies. functional and non-functional conflicts are referred to as the most frequently used conflicts among these classifications. based on their emergence types, conflicts are listed as potential conflict, perceived conflict, felt and open conflict. another classification is personal conflict, interpersonal conflict, conflict between persons and groups, inter-group conflict and inter-organization conflict. organizational conflict is also subjected to differentiations such as conflicts within the organization (vertical, horizontal and order command-staff conflict) and goal conflict, role conflict, institutionalized conflict, appearing conflict (kavacık et al., 2013. p. 74). it is quite important in terms of the ways of solution to be developed to know the reasons for the conflicts that occur at several levels and between several parties (koçel, 2007. p. 510). in general, reasons for conflicts can be listed as interwork functional mutual commitment, sharing certain sources, differences in goals, differences in perceptions, ambiguity about the management area, lack of communication, differences in statuses, differences between managing styles, differences in interests, new qualifications stipulated by changing conditions, polarizations in employee-employer relationships and power struggle within the organization (karcıoğlu and alioğulları, 2012. p. 218-220). organizational conflict triggers individual and organizational change and allows that organization to reach the desired way of living. within the framework of this change, organizational conflict causes change in bottom-up or up-bottom management processes, and therefore allows peace between that organization and employees in that organization. organizational conflict changes the human resources roof of an organization within the framework of this change, seeks revision in working hours, promotes work and family balance, allows the employees’ participation in the decisions, and reduces the conflict experienced within the organization thereby increasing socializing (horton et al., 2014. p. 16). 3. conflict management conflict management aims to reach positive results for individual and organizational development and prevent negative results (mirzeoğlu, 2005. p. 52). we can talk about three basic approaches on the conflicts which occur in the organization. they can be listed as traditional, behavioral and interactive approaches. based on classical management thought, conflict is an undesired event. it should be avoided if possible and it should be immediately solved and eliminated as soon as it occurs. this attitude is also implied in the scientific management movement led by taylor, management theory developed in the leadership of henri fayol and weber’s bureaucracy theory. these approaches envisage developing a rational organizational structure. in this approach, conflict is destructive in general and the duty of the management is protect the organization from conflicts in this regard. based on neoclassical approach, on the other hand, conflict is an undesired phenomenon; it disconcerts the organization, creates confusion; and actions should be taken to eliminate them as soon as they occur. based on this approach, all conflicts are not destructive and some group conflicts might have positive social functions. based on modern approach, on the other hand, regardless of what kind of a structuring and functionality organizations have, conflicts that occur within them are unavoidable and even necessary formations. although more or less of the conflicts within organizations are harmful for organizational goals, a conflict at an optimal level is always promoted. the presence of conflict at a certain level promotes innovation, improvement, creativity, effectiveness etc. within organizations. we can set forth the way the subject conflict is addressed in the organizational hypotheses as shown in table 2 (akçakaya, 2003. p. 4-5). in the face of the unavoidability of conflict within the organizations, every approach can use one or several of the following methods so as to solve conflicts (sarpkaya, 2002. p. 422). 3.1. problem solving method it is the main goal of this management to solve the problem. in this method, the parties in conflict are confronted. the main goal table 2: ways of addressing the subject of conflict based on organizational hypotheses traditional approach (classical and neoclassical) modern approach (interaction model) conflict is avoidable conflict is unavoidable conflict is revealed in forming the organizational structure of the management and the mistakes in its managing and by problem creators conflict originates from the unavoidable differences in organizational structure, unavoidable differences in goals, differences in the perceptions of the lines and staffs to values and problems and several similar reasons conflict interrupts the regular operation of the organization and prevents optimal work success (performance) conflict can contribute to organizational success at different levels as well as lead to reduction in it it is the main duty of the management to eliminate conflict it is the duty of the management to manage the solution of the conflict to serve organizational success optimal organizational work success requires the elimination of the conflict optimal organizational work success requires the presence of an organizational conflict at a reasonable level korkmaz and aydemir: a research for the determination of the relationship between organizational conflict management and organizational alienation international review of management and marketing | vol 5 • issue 4 • 2015 233 in confronting the parties within the conflict is the belief that even the parties in conflict can have common points. 3.2. superior goals management the higher goals technique which is used in solving the conflicts between the groups stipulates the formation of a set of common goals or targets. these goals cannot be implemented unless the groups in conflict enter into a coordinate work. 3.3. appeasement method in this method, common sides of the parties are emphasized instead of the reasons leading the conflict. behind this technique lies the belief that the “emphasis of the common opinions about some matters facilitates the movement in line with common goal.” if the difference between the groups is severe, behaviors such as appeasement and escape could only be a short term solution at the most. 3.4. voting method conflicting parties are one by one given the opportunity to explain their opinions in front of a community and as a result, voting is sought from this community which has a certain opinion about dispute. thus, the problem is solved in favor of the party which is decided by the majority. 3.5. avoiding method the workers’ failure to realize their own goals or others’ goals. in other words, it is the non-confrontation of the individuals or groups with conflict potential. 3.6. increasing sources one main reason for inter-group conflicts is the limited sources. the success of a group in seizing sources leads to the failure of another group. scarce sources of an organization can be any positions, moneys, tools and equipment within the organization. 3.7. reconciliation reconciliation is reaching a mutual acceptable solution in which individuals can only take only some part of the desired thing. there is no absolute winner or loser in this technique, and decisions taken are probably not ideal for either of the groups. reconciliation technique can be most effectively used if the desired goal (for example, money) is shared equally. if this is not possible, one of the groups should compromise and give up some values. reconciliation can also require the intervention by a third person or a group. an arbitrator can be sought in this case. 3.8. case study this method is a method which aims to study on an actual event which is similar to the matter on which workers have conflicted and change their behaviors. an effective conflict method creates an innovative working environment, improves team spirit, establishes trust, eliminate polarization of them against us, and add significant values to an organization. and, an effective leadership is required for the effective functioning of the conflict management which adds significant values to an organization (odetunde, 2013. p. 5323). 4. organizational alienation alienation concept was used for the first time in “phenomenology of spirit” (1807) by hegel (yapıcı, 2004. p. 1). found in the philosophical dimension from the antic era to hegel, alienation gained a different dimension and moved to economic area with marx (küçükali, 2002. p. 328). alienation concept is defined as a social-psychological disease condition which results from an introvert attitude brought by the absence of values in literature in general and contemporary peoples’ inability to be involved in social processes (pappenheim, 2000. p. 44). expressing the person’s feeling of alienation or abandonment from his environment, work, product of labor, personality, this concept is generally defined as the “reduction in adaptation of the individual with his social, cultural and natural environment, ineffectiveness in his supervision on his environment and reduction in such supervision and adaptation gradually leading to the loneliness and desperateness of the individual (tükel, 2012. p. 39). types of alienation were determined for the first time by seeman (1959) and they were expressed as weakness, meaninglessness, irregularity, alienation from the society (isolation) and self-alienation (salihoğlu, 2014. p. 3). • weakness dimension: is the individuals’ inability to manage his behaviours, events’ lack of the consciousness to manage the events • meaninglessness dimension: is the individual’s inability to decide which rights and what to believe • irregularity dimension: is the individual’s exhibiting behaviours which are not conforming to social values, rights • alienation from the society: is the socially valuable facts not making any sense for the individual • self-alienation: is the individual’s alienation from the social structure, from the self and non-adaptation with the social structure. when there is a way, factor or practice which brings about alienation in the members of organization, organizational structure or environmental factors, this is expressed as organizational alienation concept. organizational alienation which can be defined as the result of the events such as having the characteristics or division and class bureaucracy in a society as a whole in the organization is generally defined as the individuals’ alienation from their expectations, values, rules and relationships. there are a number of factors which directly or indirectly affect alienation in organizations. they can be classified as organizational and environmental factors within themselves. the organizational elements which lead to alienation are (şimşek et al., 2006. p. 576-577). • way of management • past events and experiences • size of the organization (audit field, transfer of authority, specialized personnel, centralization or non-centralization) • information flow • group characteristics (social structures of groups, role structures in groups, group norm, intragroup cooperation, leadership in groups) korkmaz and aydemir: a research for the determination of the relationship between organizational conflict management and organizational alienation international review of management and marketing | vol 5 • issue 4 • 2015234 • modular relationships (mannered, temporary and superficial relations which are established due to reasons such as organization commitment etc.) • manufacturing type (unit manufacturing, serial manufacturing, non-stop manufacturing, order based manufacturing) • division of labor • working conditions (noise, high work pace and fatigue, boredom and monotonousness, isolation, working hours, working at a fixed place, participation and human relations) • beliefs and attitudes. the environmental factors which lead to alienation, on the other hand are; • economic structure • technological structure • social and cultural structure • industrialization, urbanization and social disintegration • political and legal structure • unionisations and • mass media. organizational alienation is expressed as the dissatisfaction condition experienced by the organizational individual in matters such as his power, his perspective for vocational improvement and change, expectation to be recognized and accepted by his superiors (eryılmaz and burgaz, 2011. p. 273). alienation leads to many negative results on the employees. alienation from work leads to loss of work and life satisfaction, low productivity, low motivation, high work stress, low loyalty towards work and organization, high level of labor transfer, quitting work, taking dislike of work, alienation from work, low organizational health perception and negative effect on intrabusiness social costs (taştan et al., 2014. p. 124). as is seen, organizational alienation brings about significant results on both employees and the organization. therefore, there are many studies about organizational alienation in literature. however, there are almost no studies that analyze the relationship between organizational alienation, which is one of the negative results of organizational conflict, and organizational conflict management. therefore, the relationship between organizational conflict management and organizational alienation is analyzed in our study. 5. research method 5.1. purpose and importance of the research this study has researched how organizational conflict management affects organizational alienation, which is one of the negative results of the conflicts that are experienced within the organization, and particularly which dimension of conflict management leads to organizational alienation. this research has also set forth the level of the relationship between organizational conflict management and organizational alienation. this study was also done to determine the organizations which successfully manage and do not manage the conflict within the organization and make the human resource policies which are applied by the organizations that successfully manage their organizations a model for other organizations. this study was also done to determine whether demographic characteristics affect organizational conflict and organizational alienation which is a result of organizational conflict. 5.2. sampling of the research and data collection tool having been perceived as only transportation at the beginning, the areas of activity of logistics have expanded in time and the need for labor to work in this area has gradually increased. human resources have gradually gained importance in the logistic field particularly upon the acceleration gained in the industry recently and consciousness experienced in perceiving the industry. from this point of view, we applied surveys to 76 persons working at logistics companies operating in zonguldak and mersin by complete count method in order to produce human resources policies for the employees who are considered a valuable asset for the logistics industry. in the research, “conflict management scale” was used to determine the perception levels of the employees with regard to conflict management (the rahim organizational conflict inventory ii). developed by rahim (1983) and consisting of 28 expressions, the scale measures the sub-dimensions of “integration,” “compromise,” “domination,” “avoidance,” and “reconciliation.” in this scale, 5-phase likert type grading scale was exploited to determine the reactions of the participant individuals for the given expressions. in this scale, expressions vary in the range of (1) “strongly disagree,” (2) “disagree,” (3) “i have no idea,” (4) “agree” and (5) “strongly agree.” in the research, the alienation scale which was developed by ofluoğlu and büyükyılmaz (2008) was used to determine the alienation levels of the employees. consisting of 14 expressions, the alienation scale consists of 5 sub-dimensions which are namely “weakness,” “meaninglessness,” “irregularity,” “alienation from the society” and “self-alienation.” in this scale, 5-phase likert type grading scale was exploited to determine the reactions of the participant individuals for the given expressions. in this scale, expressions vary in the range of (1) “strongly disagree,” (2) “disagree,” (3) “i have no idea,” (4) “agree” and (5) “strongly agree.” moreover, a personal information form consisting of 5 questions was used in order to collect information about the sex, marital status, income, education and working experience of the participants. 5.3. hypotheses of the research the hypotheses which are prepared by exploiting literature information will be tested in this study: h1: there is a relationship between conflict management and alienation h2: there is a reverse relationship between conflict management and alienation perception h3: there is a significant relationship between the dimensions of conflict management and alienation perception h4: there is a significant difference between conflict management and alienation perception based on sex h5: there is a significant difference between conflict management and alienation perception based on marital status korkmaz and aydemir: a research for the determination of the relationship between organizational conflict management and organizational alienation international review of management and marketing | vol 5 • issue 4 • 2015 235 h6: there is a significant difference between conflict management and alienation perception based on income h7: there is a significant difference between conflict management and alienation perception based on education h8: there is a significant difference between conflict management and alienation perception based on working experience. 5.4. findings obtained from the research based on the findings obtained from the research, 73.3% of the participants who are working for the logistics company operating in zonguldak province are male while 26.7% of them are female. 45.5% of the participants who are working in mersin province are male while 54.5% of them are female (table 3). upon the examination of the ages of the participants of the research, it was seen that 43.3% of the participants who are working for the logistics company in zonguldak province were at the age range of 29-39 while 52.3% of the participants who are working in mersin province were likewise at the age range of 29-39 (table 4). based on the findings obtained from the research, it was seen that 53.3% of the participants who are working for the logistics company which is operating in zonguldak province were high school graduates while 59.1% of the participants who are working in mersin province had undergraduate degree (table 5). upon the examination of the income levels of the participants of the research, it was determined that 96.7%, i.e., almost all, of the participants who are working for the logistics company operating in zonguldak received a salary in the amount of 5001 tl and higher, and 86.4% of the participants who are working in mersin province received a salary between 1000-3000 tl (table 6). upon the examination of the job experience of the participants of the research, it was seen that 63.3% of the participants who are working for the logistics company which is operating in zonguldak province and 65.9% of the participants who are working in mersin province were changing employees between 1 and 10 years (table 7). upon the examination of the marital status of the participants of the research, it was determined that 53.3% of those working in zonguldak province were married and 43.7% were single while 59.1% of those working in mersin province were married and 38.6% of them were single (table 8). 5.5. analysis of research data while evaluating the findings which are obtained in the study, spss 20.0 (statistical package for social sciences) program was used for the statistical analyses. reliability analysis was made in determining the reliability of the research data. correlation analysis, multiple regression analysis and one-way anova test were used in order to determine the relationship between the variables, direction and effects of the relationship. 5.5.1. reliability analysis alpha coefficient (cronbach’s alpha) was exploited in testing the reliability of the scales which were used in the research. as a result of the reliability analysis which was performed in the package program, alpha coefficient was calculated as 0.863 for the conflict management scale and 0.797 for the alienation scale. these figures indicate that the scales have high internal consistency. table 3: findings obtained from the research in sex sex frequency percent cumulative (%) zonguldak male 22 73.3 73.3 female 8 26.7 100.0 total 30 100.0 mersin male 20 45.5 45.5 female 24 54.5 100.0 total 44 100.0 table 4: findings obtained from the research in age range age frequency percent cumulative (%) zonguldak 18-28 6 20 20 29-39 13 43.3 63.3 40-50 9 30 93.3 51-61 2 6.7 100.0 62 and older 0 0 100.0 total 30 100.0 mersin 18-28 19 43.2 43.2 29-39 23 52.3 95.5 40-50 2 4.5 100.0 51-61 0 0 100.0 62 and older 0 0 100.0 total 44 100.0 table 5: findings obtained from the research in education education frequency percent cumulative (%) zonguldak high school 16 53.3 53.3 college 6 20 73.3 under-graduate 7 23.4 96.7 post-graduate 1 3.3 100.0 total 30 100.0 mersin high school 3 6.8 6.8 college 12 27.3 34.1 under-graduate 26 59.1 93.2 post-graduate 3 6.8 100.0 total 44 100.0 table 6: findings obtained from the research in income level income level frequency percent cumulative (%) zonguldak 2001-3000 tl 1 3.3 3.3 5001 tl and higher 29 96.7 100.0 total 30 100.0 mersin 1000-2000 tl 19 43.2 43.2 2001-3000 tl 19 43.2 86.4 3001-4000 tl 3 6.8 93.2 4001-5000 tl 1 2.3 95.5 5001 tl and higher 2 4.5 100.0 total 44 100.0 korkmaz and aydemir: a research for the determination of the relationship between organizational conflict management and organizational alienation international review of management and marketing | vol 5 • issue 4 • 2015236 5.5.2. correlation analysis table 9 shows cronbach alpha values of conflict management and organizational alienation. the results regarding the correlation analysis (pearson correlation) between the main independent variable (organizational conflict management) and dependent variable (organizational alienation) for those working in zonguldak and mersin provinces are given in tables 10 and 11. based on the results of the correlation analysis, while there was a reverse medium level relationship between conflict management and organizational alienation for those working in zonguldak province, no relationship was determined between conflict management and organizational alienation for those working in mersin province. the results of the correlation analysis in which the relationship between the dimensions of conflict management and organizational alienation are examined for zonguldak and mersin provinces are given in tables 12 and 13. based on the result of the correlation analysis for zonguldak province, there was a significant difference found between the dimensions of conflict management (integration, domination and reconciliation) and organizational alienation. based on the result of the correlation analysis for mersin province, no significant relationship could be found between the dimensions of conflict management and organizational alienation. the results of the anova analysis which was made to research whether there was a significant difference between conflict management and organizational alienation for zonguldak and mersin provinces are given in tables 14 and 15. based on the anova analysis made for zonguldak province, there was a significant difference determined between organizational conflict management and organizational alienation for both models. based on the anova analysis made for mersin province, there was no significant difference determined between organizational conflict management and organizational alienation for each of the four models. 5.5.3. regression analysis the results which are obtained from the regression analysis which is a statistical analysis in evaluating the effect of one or several independent variables (integration, domination and reconciliation) on a dependent variable (organizational alienation) for zonguldak and mersin provinces are given in tables 16 and 17. based on the result which was obtained from the multiple regression model made for zonguldak province, model 1 was table 7: findings obtained from the research in job experience job experience frequency percent cumulative (%) zonguldak (year) <1 2 6.7 6.7 1-10 19 63.3 70 11-21 5 16.7 86.7 22-32 3 10 96.7 33-44 1 3.3 100.0 total 30 100.0 mersin (year) <1 9 20.5 20.5 1-10 29 65.9 86.4 11-21 6 13.6 100.0 total 44 100.0 table 8: findings obtained from the research in marital status marital status frequency percent cumulative (%) zonguldak married 16 53.3 53.3 single 14 43.7 100.0 total 30 100.0 mersin married 26 59.1 59.1 single 17 38.6 97.7 widow/divorced 1 2.3 100.0 total 44 100.0 table 10: correlation analysis for conflict management and organizational alienation (zonguldak) conflict management organizational alienation pearson correlation −0.504 significant (two-tailed) 0.004 table 11: correlation analysis for conflict management and organizational alienation (mersin) conflict management organizational alienation pearson correlation −0.009 significant (two-tailed) 0.952 table 12: correlation analysis for the dimensions of conflict management and organizational alienation (zonguldak) conflict management organizational alienation integration pearson correlation −0.500 significant (two-tailed) 0.005 compromise pearson correlation −0.230 significant (two-tailed) 0.221 domination pearson correlation −0.388 significant (two-tailed) 0.034 avoidance pearson correlation −0.146 significant (two-tailed) 0.440 reconciliation pearson correlation −0.487 significant (two-tailed) 0.006 table 9: reliability results of the conflict management and alienation scale scales number of expressions cronbach’s alpha conflict management 28 0.863 organizational alienation 14 0.797 korkmaz and aydemir: a research for the determination of the relationship between organizational conflict management and organizational alienation international review of management and marketing | vol 5 • issue 4 • 2015 237 rejected and model 2 was accepted. it was determined that the integration and domination dimensions of the organizational conflict management, which was an independent variable according to the model, explained 32% of the change in the dependent variable (organizational alienation). accordingly, the regression equation which was obtained for zonguldak province was formed as follows. “organizational alienation = 62.479 − (1.064 × integration)-(0.634 × domination)” (1) based on the result which was obtained from the multiple regression model made for mersin province; model 1, model 2, model 3 and model 4 were rejected. 5.5.4. hypotheses based on demographic characteristics and scrutinizing conflict management and alienation perception levels tables 18 and 19 give the t-test results where conflict management perception levels of those working in zonguldak and mersin respectively are evaluated in terms of sex variable in zonguldak and mersin respectively. based on these results, there was no significant difference (p > 0.05) found between the conflict management perception levels and sex variable of the participants who are working in zonguldak and mersin. tables 20 and 21 give the t-test results where organizational alienation perception levels of those working in zonguldak and mersin respectively are evaluated in terms of sex variable zonguldak and mersin respectively. based on these results, there was no significant difference (p > 0.05) found between the organizational alienation perception levels and sex variable of the participants who are working in zonguldak and mersin. tables 22 and 23 give the one-way anova analysis results where conflict management perception levels of those working in zonguldak and mersin respectively are evaluated in terms of marital status variable. based on these results, there was no significant difference (p > 0.05) found between the conflict management perception levels of the participants who are working in zonguldak and mersin and marital status variable. tables 24 and 25 give one-way anova analysis results where organizational alienation perception levels of those working in zonguldak and mersin respectively are evaluated in terms of marital status variable. based on these results, there was no significant difference (p > 0.05) found between the organizational alienation perception levels of those working in zonguldak and mersin in terms of marital status variable. tables 26 and 27 give one-way anova analysis results where organizational conflict perception levels of those working in zonguldak and mersin respectively are evaluated in terms of income variable. based on these results, there was no significant table 13: correlation analysis for the dimensions of conflict management and organizational alienation (mersin) conflict management organizational alienation integration pearson correlation −0.126 significant (two-tailed) 0.414 compromise pearson correlation 0.006 significant (two-tailed) 0.967 domination pearson correlation −0.001 significant (two-tailed) 0.996 avoidance pearson correlation −0.028 significant (two-tailed) 0.859 reconciliation pearson correlation 0.121 significant (two-tailed) 0.434 table 14: relationship between conflict management and organizational alienation anova (zonguldak) models sum of squares mean square f significant model 1 regression 439.231 146.410 5.330 0.005 residual 714.136 27.467 total 1153.367 model 2 regression 424.664 212.332 7.867 0.002 residual 728.703 26.989 total 1153.367 table 15: relationship between conflict management and organizational alienation anova (mersin) models sum of squares mean square f significant model 1 regression 219.110 43.822 0.888 0.499 residual 1874.799 49.337 total 2093.909 model 2 regression 216.008 54.002 1.122 0.360 residual 1877.901 48.151 total 2093.909 model 3 regression 212.825 70.942 1.509 0.227 residual 1881.084 47.027 total 2093.909 model 4 regression 206.877 103.438 2.247 0.119 residual 1887.032 46.025 total 2093.909 table 16: conflict management and organizational alienation – regression analysis (zonguldak) models β t significant r r2 adjusted r2 model 1 constant 63.802 6.536 0.000 0.617 0.381 0.309 integration −0.879 −2.022 0.054 domination −0.540 −1.728 0.096 reconciliation −0.322 −0.728 0.473 model 2 constant 62.479 6.571 0.000 0.607 0.368 0.321 integration −1.064 −3.048 0.005 domination −0.634 −2.245 0.033 korkmaz and aydemir: a research for the determination of the relationship between organizational conflict management and organizational alienation international review of management and marketing | vol 5 • issue 4 • 2015238 difference (p > 0.05) found between the organizational conflict perception levels of those working in zonguldak and mersin in terms of income variable. tables 28 and 29 give one-way anova analysis results where organizational alienation perception levels of those working in zonguldak and mersin respectively are evaluated in terms of income variable. based on these results, there was no significant difference (p > 0.05) found between the organizational alienation perception levels of those working in zonguldak and mersin in terms of income variable. tables 30 and 31 give one-way anova analysis results where organizational conflict perception levels of those working in zonguldak and mersin respectively are evaluated in terms of education variable. based on these results, there was no significant difference (p > 0.05) found between the organizational conflict perception levels of those working in zonguldak and mersin in terms of education variable. tables 32 and 33 give one-way anova analysis results where organizational alienation perception levels of those working in zonguldak and mersin respectively are evaluated in terms of education variable. based on these results, there was no significant difference (p > 0.05) found between the organizational alienation perception levels of those working in zonguldak and mersin in terms of education variable. table 17: conflict management and organizational alienation – regression analysis (mersin) models β t significant r r2 adjusted r2 model 1 constant 35.744 2.657 0.011 0.323 0.105 −0.013 domination −0.100 −0.251 0.803 integration −1.218 −1.848 0.072 compromise −0.079 −0.301 0.765 reconciliation 1.226 1.868 0.070 model 2 constant 35.555 2.679 0.011 0.321 0.103 0.011 domination −0.101 −0.257 0.798 integration −1.235 −1.906 0.064 compromise −0.096 −0.379 0.707 reconciliation 1.164 1.940 0.060 model 3 constant 34.644 2.741 0.009 0.319 0.102 0.034 integration −1.237 −1.932 0.061 compromise −0.088 −0.356 0.724 reconciliation 1.131 1.953 0.058 model 4 constant 33.718 2.756 0.009 0.314 0.099 0.055 integration −1.239 −1.957 0.057 reconciliation 1.098 1.941 0.059 table 18: independent‑samples t‑test for conflict management and sex (zonguldak) conflict management levene’s test for equality of variances t-test for equality of means f significant t df significant (two‑tailed) mean difference se difference equal variances assumed 2.767 0.107 0.158 28 0.876 0.75155 4.76814 equal variances not assumed 0.221 20.860 0.827 0.75155 3.40201 se: standard error table 19: independent‑samples t‑test for conflict management and sex (mersin) conflict management levene’s test for equality of variances t-test for equality of means f significant t df significant (two‑tailed) mean difference se difference equal variances assumed 0.000 0.989 −0.882 42 0.383 2.46667 2.79742 equal variances not assumed −0.881 40.513 0.383 2.46667 2.79862 se: standard error table 20: independent-samples t-test for organizational alienation and sex (zonguldak) organizational alienation levene’s test for equality of variances t-test for equality of means f significant t df significant (two‑tailed) mean difference se difference equal variances assumed 4.692 0.039 0.607 28 0.549 1.67081 2.75241 equal variances not assumed 0.482 7.603 0.643 1.67081 3.46678 se: standard error table 21: independent-samples t-test for organizational alienation and sex (mersin) organizational alienation levene’s test for equality of variances t-test for equality of means f significant t df significant (two‑tailed) mean difference se difference equal variances assumed 0.177 0.676 −0.004 42 0.997 −0.00833 2.13776 equal variances not assumed −0.004 33.931 0.997 −0.00833 2.20046 se: standard error korkmaz and aydemir: a research for the determination of the relationship between organizational conflict management and organizational alienation international review of management and marketing | vol 5 • issue 4 • 2015 239 tables 34 and 35 give one-way anova analysis results where organizational conflict perception levels of those working in zonguldak and mersin respectively are evaluated in terms of job experience. based on these results, there was no significant difference (p > 0.05) found between the organizational conflict perception levels of those working in zonguldak and mersin in terms of job experience variable. table 22: one-way anova analysis for marital status and conflict management (zonguldak) marital status n mean sd se f significant married 16 98.0625 9.02196 2.25549 0.650 0.427 single 14 101.2857 12.77274 3.41366 total 30 99.5667 10.85860 1.98250 sd: standard deviation, se: standard error table 23: one-way anova analysis for marital status and conflict management (mersin) marital status n mean sd se f significant married 26 100.3462 10.36124 2.03201 2.479 0.096 single 17 103.4118 5.99019 1.45283 widow/divorced 1 119.0000 total 44 101.9545 9.21565 1.38931 sd: standard deviation, se: standard error table 24: one-way anova analysis for marital status and organizational alienation (zonguldak) marital status n mean sd se f significant married 16 27.0000 4.99333 1.24833 2.204 0.149 single 14 23.6429 7.31287 1.95445 total 30 25.4333 6.30645 1.15139 sd: standard deviation, se: standard error table 25: one-way anova analysis for marital status and organizational alienation (mersin) marital status n mean sd se f significant married 26 25.4231 4.90039 0.96105 1.782 0.181 single 17 29.4118 9.10397 2.20804 widow/divorced 1 29.0000 total 44 27.0455 6.97822 1.05201 sd: standard deviation, se: standard error table 26: one-way anova analysis for income and conflict management (zonguldak) income n mean sd se f significant 2001-3000 1 102.000 0.050 0.824 5001 tl and higher 29 99.4828 11.04090 2.05024 total 30 99.5667 10.85860 1.98250 sd: standard deviation, se: standard error table 27: one-way anova analysis for income and conflict management (mersin) income n mean sd se f significant 1000-2000 19 104.3158 9.58617 2.19922 0.750 0.564 2001-3000 19 99.9474 9.29441 2.13228 3001-4000 3 103.0000 9.53939 5.50757 4001-5000 1 104.0000 5001 tl and higher 2 96.0000 0.00000 0.00000 total 44 101.9545 9.21565 1.38931 sd: standard deviation, se: standard error table 28: one-way anova analysis for income and organizational alienation (zonguldak) income n mean sd se f significant 2001-3000 1 20.0000 0.762 0.390 5001 tl and higher 29 25.6207 6.33253 1.17592 total 30 25.4333 6.30645 1.15139 sd: standard deviation, se: standard error table 29: one-way anova analysis for income and organizational alienation (mersin) income n mean sd se f significant 1000-2000 19 27.1579 6.35315 1.45751 0.087 0.986 2001-3000 19 26.8947 8.38580 1.92383 3001-4000 3 26.3333 4.61880 2.66667 4001-5000 1 31.0000 5001 tl and higher 2 26.5000 6.36396 4.50000 total 44 27.0455 6.97822 1.05201 sd: standard deviation, se: standard error table 30: one-way anova analysis for education and conflict management (zonguldak) income n mean sd se f significant high school 16 27.6875 5.42487 1.35622 0.050 0.824 college 6 23.0000 6.44981 2.63312 under-graduate 7 23.1429 7.31274 2.76396 post-graduate 1 20.0000 total 30 25.4333 6.30645 1.15139 sd: standard deviation, se: standard error table 31: one-way anova analysis for education and conflict management (mersin) income n mean sd se f significant high school 3 106.3333 6.65833 3.84419 0.944 0.428 college 12 104.8333 11.65281 3.36388 under-graduate 26 100.1538 8.54022 1.67488 post-graduate 3 101.6667 1.52753 0.88192 total 44 101.9545 9.21565 1.38931 sd: standard deviation, se: standard error table 32: one-way anova analysis for education and organizational alienation (zonguldak) income n mean sd se f significant high school 16 27.6875 5.42487 1.35622 1.635 0.205 college 6 23.0000 6.44981 2.63312 under-graduate 7 23.1429 7.31274 2.76396 post-graduate 1 20.0000 total 30 25.4333 6.30645 1.15139 sd: standard deviation, se: standard error table 33: one-way anova analysis for education and organizational alienation (mersin) education n mean sd se f significant high school 3 27.0000 6.24500 3.60555 1.731 0.176 college 12 26.2500 5.04750 1.45709 under-graduate 26 26.4231 7.72618 1.51523 post-graduate 3 35.6667 1.15470 0.66667 total 44 27.0455 6.97822 1.05201 sd: standard deviation, se: standard error korkmaz and aydemir: a research for the determination of the relationship between organizational conflict management and organizational alienation international review of management and marketing | vol 5 • issue 4 • 2015240 tables 36 and 37 give one-way anova analysis results where organizational alienation perception levels of those working in zonguldak and mersin provinces respectively are evaluated in terms of job experience variable. based on these results, there was no significant difference (p > 0.05) found between the organizational alienation perception levels of those working in zonguldak and mersin in terms of job experience variable. 6. conclusion our study researches the reasons for conflict and at which dimension(s) conflict management is more effective rather than the presence of a conflict between those working in the organizations within our review scope. the conflict which is more than necessary or not goal oriented causes employees to experience psychological problems. organizational alienation, which is considered a psychological problem, also subsequently affects organizations adversely. recent studies on human resources have shown that psychological factors are at least as much effective as physical factors on the worker’s efficiency. based on this viewpoint, we focused on two important topics, namely organizational alienation and organizational conflict management, which are included among the factors that affect the psychological conditions of the working environment, examined the relationship between them and reached the following results. these results are deemed to be contributing to the businesses which operate in the similar industry to design a proper working environment for and create next generation human resources policies. based on the correlation analysis result made in this research which examines the relationship between conflict management and organizational alienation; it was determined that those working for the logistics company which operates in zonguldak province experienced a medium level of conflict with each other and this conflict led to organizational alienation. it was determined that the participants who are working for the logistics company which operates in mersin province did not experience organizational conflict with each other and as a result they did not feel alienation from the organization. these results show that zonguldak port cannot attract branded corporate logistics companies in the industry due to the facts that big tonnage vessels cannot approach due to low draft of zonguldak port, container transportation cannot be made in the ports, loading and unloading processes take too long time, combined transportation lacks in improved infrastructure, there are no modern logistics facilities and an active free zone, logistics service providers are insufficient in terms of equipment, technology, cost, service diversity and quality, logistics industry employees are not graduates of logistics related departments of the universities, major industries have little expectation about integrated logistics activities, some of them prefer to use their own fleets, some of the logistics related departments of the regional universities are too new, some of them have not produced any graduates yet, and some of them have not even taken any students, university-industry cooperation is not strong, there are no consultancy companies for the logistics industry, there are no corporate/branded service provider companies in the logistics industry, major industries work with low profit margin and they are exposed to be affected by global crises. yet, mersin port seems to attract the leading and branded companies because it is better than zonguldak port as it does not have the disadvantages of zonguldak port and due to both its trade volume and infrastructure and market opportunities. these companies consider their employees as the most valuable assets of the company and they perform many activities in order to enable the improvement of its employees. these companies increase the satisfaction of their employees thanks to the human resource policies that they apply, increase their efficiency and commitment to the institution, enable the employees’ participation in decision formation thereby creating a working environment which allows the employees to improve themselves. the employees in these fast growing companies which are open for change and learning are given the duties which are best for them to obtain the highest efficiency. thus, the potential conflict which might occur among the employees by these methods table 34: one-way anova analysis for job experience and conflict management (zonguldak) job experience (years) n mean sd se f significant <1 2 103.0000 9.89949 7.00000 1.008 0.422 1-10 18 99.8889 9.37386 2.20944 11-21 6 103.0000 16.39512 6.69328 22-32 3 88.3333 2.08167 1.20185 33-44 1 100.0000 total 30 99.5667 10.85860 1.98250 sd: standard deviation, se: standard error table 35: one-way anova analysis for job experience and conflict management (mersin) job experience (years) n mean sd se f significant <1 9 102.0000 7.54983 2.51661 0.025 0.976 1-10 29 102.1034 10.18874 1.89200 11-21 6 101.1667 7.54763 3.08131 total 44 101.9545 9.21565 1.38931 sd: standard deviation, se: standard error table 36: one-way anova analysis for job experience and organizational alienation (zonguldak) job experience (years) n mean sd se f significant <1 2 23.5000 12.02082 8.50000 1.021 0.416 1-10 18 26.0556 6.40287 1.50917 11-21 6 21.6667 4.67618 1.90904 22-32 3 28.6667 4.50925 2.60342 33-44 1 31.0000 total 30 25.4333 6.30645 1.15139 sd: standard deviation, se: standard error table 37: one-way anova analysis for job experience and organizational alienation (mersin) job experience (years) n mean sd se f significant <1 9 23.1111 6.95422 2.31807 1.875 0.166 1-10 29 28.1034 6.96083 1.29259 11-21 6 27.8333 5.91326 2.41408 total 44 27.0455 6.97822 1.05201 sd: standard deviation, se: standard error korkmaz and aydemir: a research for the determination of the relationship between organizational conflict management and organizational alienation international review of management and marketing | vol 5 • issue 4 • 2015 241 of these companies is eliminated. in our study, which was made by this viewpoint, it was seen that the companies operating in mersin province eliminated the conflict between their employees thanks to the human resources policies they apply as they are well-known countries in the industry worldwide. promoted both theoretically and practically, these results suggest that zonguldak port and the logistics companies which operate in zonguldak port should take mersin model as an example while restructuring. and the practicability of these results which are recommended for the industry is what makes this study valuable. as a result of the correlation analysis which was made for the dimensions of conflict management and organizational alienation, it was determined that there was a significant relationship between organizational conflict and organizational alienation with its integration, domination and reconciliation dimensions. the conflict occurring in only three dimensions of conflict management can depend on the personality traits and social value judgments of the employees in zonguldak province. in the one-way anova analysis which was made to research whether there is a difference between conflict management and organizational alienation, while difference was obtained between conflict management and organizational alienation for zonguldak province, no difference was found between conflict management and organizational alienation for mersin province. the results which were obtained from the anova analysis seem to promote the correlation analysis. based on the regression analysis made, there was a relationship determined between organizational alienation and integration, and domination dimensions of conflict management. based on the model, it was determined that integration and domination dimensions of conflict management, which is an independent variable, explained 32% of the change in the dependent variable (organizational alienation). it was determined that there was a significant difference between demographic variables and conflict management and organizational alienation as a result of the analyses made to research how the demographic variables; sex, marital status, income, education and job experience affect conflict management and organizational alienation. this is because the conflicts between the employees do not originate from the demographic characteristics of the employees but from their personality traits and way of management. references ada, n. 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(2004), eğitim ve yabancilaşma. uluslararası i̇nsan bilimleri dergisi, 1(1), 1-9. tx_1~at/tx_2~at international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2023, 13(2), 19-27. international review of management and marketing | vol 13 • issue 2 • 2023 19 the realities of learning through failure in entrepreneurship: results of qualitative research nizar mtibaa*, sami boudabbous governance, finance and accounting, faculty of economic sciences and management of sfax, university of sfax, tunisia. *email: nizar.mtibaa@isgis.usf.tn received: 02 january 2023 accepted: 05 march 2023 doi: https://doi.org/10.32479/irmm.14239 abstract in this research work, we sought to conceptualize the existing relationship between entrepreneurial learning and failure. by exploring the theoretical models of entrepreneurial learning, particularly those of cope (2005) and politis (2005), we identified three major research proposals that we confronted with reality by conducting an exploratory qualitative study with 10 tunisian entrepreneurs who had experienced failure during their entrepreneurial activity. through this study, we retained that failure constitutes an opportunity for entrepreneurial learning that manifests itself as a continuous process where the emotions of the entrepreneur play an important role. this learning depends on the nature of the failure, the emotions and the emotional regulators. keywords: entrepreneurial learning, entrepreneurial failure, entrepreneurial learning through failure, emotions jel classifications: l26 1. introduction hmida (2021); seckler et al. (2017); lattacher and wdowiak (2020); schwab et al. (2022) consider entrepreneurship as a remedy to the economic problems that countries are experiencing. several authors, including pinto (2013); oberoi et al. (2022); kim et al. (2020); amankwah-amoah et al. (2019), in addition to the european commission (2007), have highlighted the role that entrepreneurship plays in the economic growth of a country. in the same sense, bachiri (2016); toumi and smida (2018); besra and rahman (2020); par sanejad et al. (2019) argue that entrepreneurship is a real economic and social phenomenon. pinto (2013, p. 102) on the other hand, highlights the importance of entrepreneurship for countries that were able to escape the 2008 financial crisis. however, it should be noted that the reality is quite different since companies often face difficulties (rezaee et al., 2021). note in this sense, as fang he et al. (2017); van trang et al. (2019) and safari and das (2022), that entrepreneurial activity is unstable and risky in nature and often lead firms to failure. indeed, it is well known that several major entrepreneurial clusters experience thousands of business disappearances every day (amankwahamoah et al., 2022; yousafzai et al., 2020; lin et al., 2019). also, we will have to quote leger-jarniou, (2013) and, pan et al. (2022), for whom learning from failure is one of the greatest lessons of the philosophy of these large entrepreneurial clusters. hmida (2021) adds that in tunisia, entrepreneurship is not immune to failure, being often associated with risk-taking, and therefore with a high probability of failure. this prompted us to explore this topic and to ask ourselves how failure can be a vehicle for entrepreneurial learning. this will be our research question. this approach will be articulated around two sections. the first will be a review of the literature on entrepreneurial learning through failure. the second section will be devoted to the presentation and interpretation of our results. we conclude with a general conclusion this journal is licensed under a creative commons attribution 4.0 international license mtibaa and boudabbous: the realities of learning through failure in entrepreneurship: results of qualitative research international review of management and marketing | vol 13 • issue 2 • 202320 in which we present the main lessons learned from this work, as well as future research perspectives. 2. review of the literature throughout this section, we will discuss the theoretical approaches used to study entrepreneurial learning through failure, and then present the definitions of the key concepts: entrepreneurial learning and entrepreneurial failure. we end by highlighting the process of entrepreneurial learning through failure. in this research, and to answer our research problem, we will rely on two theories mobilized by kolb (1984), and by corbett (2005) and cope (2011), considered as the authors of entrepreneurial learning. these are the experiential learning theory and the transformational learning theory. indeed, kolb (1984) suggests that three mechanisms come into play for learning to take place: a mechanism of experimentation, another of transformation and a last one of socialization. corbett (2005) and cope (2011) add that research on entrepreneurial learning is based primarily on experiential and transformative learning theories. in the first theory, the experiential theory, the emphasis is placed on experience in the learning process (kong et al., 2020). in this sense, cope (2005) maintains that the knowledge produced refers to a continuous modification of the reference schemas previously constructed by the individual. it is therefore a matter of learning at an individual level that requires the involvement and interaction of the individual with his environment (montiel-campos, 2022). according to ngijol (2013, p.60), “it is therefore a theory of learning that couples reflection and action as inseparable elements of the process of increasing knowledge. in this regard, let us note that the work of kolb (1984) has greatly inspired the contents of experiential learning theory. indeed, kolb (1984, 1999), quoted by corbett (2005), based on a clinical observation, identified four individual learning styles: divergent, assimilative, convergent and accommodating. transformational learning is a theory that suggests a type of learning for adults. it was developed by mezirow (1990). when the answer to a problem seems impossible, transformational learning is an appropriate solution (rahman and amalia, 2020; crews, 2022; zunino et al., 2022). leading to radical change, this learning is considered superior since it is a transformation preceded by a discontinuous sequence of events characterized as crisis (hao et al., 2021; westerlund et al., 2020; hu et al., 2017; amankwah-amoah et al., 2018). thus, and as duchesne (2010) argues, we can view transformational learning theory as a cognitive process during which problems will be faced by an adult learner in a transformational way. as he or she tries to turn the situation to his or her advantage, new, rich, and better ideas emerge (walsh and cunningham, 2017; othman et al., 2020; lin and chou, 2022). 2.1. entrepreneurial learning the concept of entrepreneurial learning is so complex that, in the literature, there is a complete lack of consensus on a precise definition of this phenomenon (pan et al., 2022; kong et al., 2020). for minniti and bygrave, (2001); erdélyi (2010), studies on this concept are at the intersection of research on learning and entrepreneurship. it should be noted, however, that cope (2003; 2005) has emphasized the importance of learning as an integral part of the entrepreneurial process. parker (2006) defined entrepreneurial learning in terms of its objectives, types and means of implementation. rae (2000), on the other hand, limited himself to the definition of entrepreneurship. for bagheri and pihie (2010), entrepreneurial learning constitutes the whole of the knowledge acquired during the two phases of development of the company, pre and post creation. thus, according to the authors, entrepreneurial learning represents what is learned during the entrepreneurial activity (rahman et al., 2020; fisch and block, 2021; siebrand and kruse, 2022; shepherd and patzelt, 2017), but this point of view has been strongly criticized by many authors such as gartner (1985), and bygrave and hofer (1991), for whom, entrepreneurial learning is the set of knowledge acquired by the entrepreneur only at the time of the creation of a company (pittaway and cope, 2007). admittedly, we have noted a number of discrepancies in the definitions of these different authors (d’acunto et al., 2018; chapman and phillips, 2022). however, they are all based on the idea that entrepreneurial learning is at the heart of entrepreneurial activity (kindermann et al., 2022). for their part, wang and chugh, (2014) consider that entrepreneurial learning results in a change in old ideas or attitudes or an adoption of new knowledge or behavior. therefore, entrepreneurial learning is not only presented as a process of creating new knowledge, but also encompasses the acquisition of skills that can help the entrepreneur in his or her activity (ferreto et al., 2018; dias and martens, 2019). certainly, minniti and bygrave (2001) and wang and chugh (2014), agreed on the emergence of the notion of entrepreneurial learning that constitutes a cross between organizational learning and entrepreneurship. nevertheless, it remains difficult to provide a universal definition for this concept. nevertheless, we note several common points in the definitions of entrepreneurial learning that we have already cited. indeed, it is presented as a continuous process that allows for the creation of new knowledge whose objective is to ensure the success of the entrepreneurial project (zhang et al., 2018; jenkins, 2022; omorede, 2021). 2.2. entrepreneurial failure in the literature, we note that this concept of entrepreneurial failure is based on three main theories. these are the theory based on resources, the theory of population ecology and the theory of divergence that integrate respectively, according to khelil (2016), the three dimensions of failure: the voluntaristic dimension, the deterministic and the emotional. entrepreneurial failure is, therefore, a difficult concept to define. it is of relative appreciation since it is strongly related to the perception that we can give him (walsh and cunningham, 2017; holienka et al., 2022; morrison, 2018; thumiki, 2017). singh et al. (2007) came close to a number of concepts such as that mortality, discontinuity, insolvency, bankruptcy, closure, failure, inefficiency. to define the entrepreneurial failure, arasti, (2011) adds that it is a mtibaa and boudabbous: the realities of learning through failure in entrepreneurship: results of qualitative research international review of management and marketing | vol 13 • issue 2 • 2023 21 deficit result, consequence of an anomaly during the entrepreneurial process. for liao et al. (2009); rezaee et al. (2021), failure occurs when the entrepreneur decides not to make any more effort for the continuation of the entrepreneurial adventure. thus, quitting is synonymous with failure, just as selling one’s business to avoid bankruptcy constitutes entrepreneurial failure (arasti, 2011; yasir and majid, 2018; shepherd and patzelt, 2017; jung et al., 2022). nevertheless, a good number of authors have focused only on the economic and financial aspect, to define the entrepreneurial failure, using the term “bankruptcy” to define it (arasti, 2011;ucbasaran et al., 2013; amenta and stagnaro, 2022; patzelt et al., 2021; kollmann et al., 2017; ferreto et al., 2018).other authors, such as cannon and edmonson (2005), mcgrath (1999), singh et al. (2007), smida and khelil (2010), ucbasaran et al. (2013), hepherd and patzelt (2017), li et al. (2021), and chapman and phillips (2022) have simply dismissed this view of failure as too simplistic to define this entrepreneurial failure. “insofar as it amounts to considering the entrepreneur as a fallen hero because guilty and to simplify a complex reality” (philippart, 2017, p. 14). in the same sense, ucbasaran et al. (2013); li and chen (2021); engel et al. (2021), and montiel-campos (2022) argue that the term entrepreneurial failure goes beyond the economic aspect (failure), but takes into account the gap between the set objectives and the results(inefficiency). wennberg et al. (2010) add that the bankruptcy is not the only reason that forces the entrepreneur to leave his company, and put forward the personal expectations of entrepreneurs. as far as we are concerned, and taking into account this plurality of definitions proposed above, we have opted for our empirical investigation to adhere to the approach that assumes that entrepreneurial failure is not limited only to the simple notion of bankruptcy, and takes into account other aspects such as entrepreneurial dissatisfaction, abandonment or even failure to meet deadlines in the realization of a project (de hoe and janssen, 2016; lin and chou, 2022; zhang et al., 2019). 2.3. entrepreneurial learning through failure we can consider, as shepherd (2003), that entrepreneurial learning through failure corresponds to the entrepreneur’s ability to detect the causes of failure and to exploit his or her knowledge. it is then a dynamic process of knowledge construction, preceded by the two mechanisms of collecting and interpreting information (de hoe and janssen, 2015; amankwah-amoah et al., 2019; schwab et al., 2022). to understand the phenomenon of entrepreneurial learning, several theoretical models have been developed (lin and chou, 2022; eklund et al., 2020; walsh and cunningham, 2017). for our purposes, we have chosen to focus on the two most commonly used models in the academic literature. these are cope’s (2005) and politis’ (2005) models. for cope (2005), there are three dynamic temporal phases for an entrepreneur’s learning. the first is the one that precedes the creation of the enterprise. it is a long journey during which the entrepreneur builds his or her knowledge capital (amankwahamoah et al., 2018; lattacher and wdowiak, 2020). the second phase takes place when the business is actually created. learning is then presented as a dynamic process that takes place in parallel with the entrepreneurial activity. the third phase is accomplished following failure. these three phases are conducive to doubleloop or generative transformational learning; emphasizing that each type of learning has its own set of characteristics (schwab et al., 2022; kroeger and wright, 2021; greenhill, 2019). for politis (2005), there is a link between the success (or failure) of an entrepreneur and the results of previous events that have a definite impact on the entrepreneur’s future choices. the latter tends to reproduce the same actions responsible for his success while trying to adjust them according to the context. in the case of failure, the entrepreneur will seek to identify the reasons for his or her failure in order to avoid repeating them in the future (simmons et al., 2019; rezaee et al., 2021; wilson and perepelkin, 2022). in any case, success as well as failure are considered as learning stimulators since they trigger the transformational process that generates new knowledge (villanueva and martins, 2022; williams et al., 2020; ng and jenkins, 2018). for byrne and shepherd (2015); amankwah-amoah et al., (2019), the consequences of failure are negative on the entrepreneur. they manifest themselves in the form of psychological, economic, and social costs. cope (2011) adds that learning can be paralyzed by the negative emotions that emerge as a result of the consequences of failure costs. for their part, walsh and cunningham (2017); dias and martens (2019); d’acunto et al. (2018); fisch and block (2021), and whitbeck and gerasymenko (2022) argue that entrepreneurs who do not take responsibility for their failures and seek to attribute them to external causes, will not be able to learn from their failure. in any case, the literature reveals three research propositions: • failure is a vehicle for entrepreneurial learning • negative emotions paralyze entrepreneurial learning through failure. • an internal attribution of failure is necessary for learning in what follows, an empirical exploration will allow us to deepen these ideas. 3. research methodology our objective is to understand the phenomenon of entrepreneurial learning through failure in tunisia, through exploration. to do this, we have chosen to use a qualitative methodology. we will present, in what follows, the characteristics of the sample. we will talk about the data collection and finally proceed to the analysis of the collected data. it should be noted that in order to provide elements of an answer to our research problem, we conducted a qualitative exploratory study, especially since research on entrepreneurial learning through failure remains at an embryonic stage (de hoe and janssen 2016; siebrand and kruse, 2022; yousafzai et al., 2020). furthermore, and according to cusin and maymo (2016), the stigma of failure makes the topic difficult to address, necessitating a qualitative exploration. mtibaa and boudabbous: the realities of learning through failure in entrepreneurship: results of qualitative research international review of management and marketing | vol 13 • issue 2 • 202322 3.1. characteristics of the sample our study focuses on small entrepreneurs who have experienced failure during their entrepreneurial journey. small entrepreneurs are, indeed, more vulnerable to failure. also, according to hmida (2021), tunisia is experiencing a rise in growth of small entrepreneurs, which explains the choice to conduct a study on small tunisian entrepreneurs. our sample is composed of 10 tunisian entrepreneurs (table 1). 3.2. data collection for our investigation, we chose the semi-structured interview technique to conduct interviews with our sample. blanchet and gotman, (2007, p. 59) consider that “it is a matter of letting the interviewee express himself as freely as possible while taking up the significant points.” to reach the individuals in our sample, we used our informal networks to contact and set up appointments with the entrepreneurs. the interviews took place in a variety of spaces: offices, cafeterias and the entrepreneur’s home. each interview lasted an average of one hour, during which time we used the tunisian dialect to avoid any ambiguity and to ensure that the questions we asked were understood. 3.3. content analysis content analysis was chosen to analyze the responses collected. in this sense, bardin, 2013, p.93) argues that “the use of qualitative content analysis to take advantage of a so-called qualitative material is essential survey interview, psychotherapy....giving rise to a rich and complex verbal material.” 4. interpretation of the results in what follows, we will proceed to the analysis and interpretation of the information we have collected based on the matrices of miles and huberman (2003). 4.1. entrepreneurial learning through failure it is important to note that there are different types of entrepreneurial learning, such as learning from oneself, learning from the environment and learning from the company and its management. 4.1.1. learning from oneself this type of learning has three categories of learning: learning about one’s strengths and weaknesses, learning about one’s goals and interests, and a third that is part of personal development. 4.1.1.1. strengths and weaknesses generally, practice allows the entrepreneur to test his or her skills and to deal with a crisis situation. nonetheless, failure offers the entrepreneur an opportunity to experience a situation that cannot be taught otherwise (fisch and block, 2021; zhu, 2022). in this sense, one entrepreneur states: “no theory can tell us what failure is.” let us note, moreover, that almost all of the entrepreneurs we interviewed stated that they discovered qualities in themselves that they could never otherwise explore. they maintained that failure allowed them to strengthen their self-image. one interviewee even said, “you become bolder and have more energy.” another added; “during the hard times, i was made to work hard and be punctual, something i didn’t do before and thought i could never do.” in any case, failure is an opportunity to test one’s abilities, and gives the entrepreneur the chance to identify and adjust his or her goals and interests according to the situation (yousafzai et al., 2020; d’acunto et al., 2018). one of our interviewees argued in this sense: “besides this has sown in me the desire to learn more and evolve.” on the other hand, failure teaches one to behave better, to be patient, to be responsible and more optimistic. indeed, in entrepreneurship success is not a given. consequently, it is up to the entrepreneur to be patient in order to reach his or her goal (toumi and smida, 2018; kim et al., 2021). very often, the entrepreneur considers that the abandonment of the project more beneficial as it allows them to avoid stress and risk taking (morrison, 2018). table 1: classification of the sample number age type degree/level of study company data e1 36 f no diploma sector: textile; company: a small sewing workshop; employees: 1 e2 34 f baccalaureate level sector: food industry; company: a small workshop of traditional confectionery with two points of sale in tunis; employees: 10 e3 36 f research master in management sector: sports; company: a sports hall; employees: 5 e4 45 f no diploma sector: textile; company: one small sewing workshop; employees: 2 e5 36 f professor dephilosophie sector: education; company: kindergarten and school day care employees: 13 e6 25 h licensed in management sector: commercial; company: hardware store; employees: 5 e7 54 h agricultural engineer sector: food industry; company: oil production and packaging plant olive oil; employees: 40 e8 36 h thésard sector: artistic; company: conservatory of music e9 27 f professional training sector: services company: hairdressing; employees: two e10 40 h engineer in computer science sector: technology of communication mtibaa and boudabbous: the realities of learning through failure in entrepreneurship: results of qualitative research international review of management and marketing | vol 13 • issue 2 • 2023 23 in all cases, and for our interviewees, patience is a form of resistance. one of our interviewees maintains that “patience is best learned at a difficult time.” another adds: “i have learned to be patient;” a third retorts: “you have to be patient and never give up, go to the end of your dreams because the beginning of each project is always difficult, it is normal.” with respect to accountability, it is important to note that failures are not given importance after a success, whereas failure provides palpable evidence of the presence of some anomaly (holienka et al., 2022; rezaee et al., 2021). nevertheless, the entrepreneur must accept the consequences of his or her choices and assume responsibility for failure; this is likely to help him or her behave in a more mature and objective manner (chua, 2022; boso et al., 2019). hence its importance. “failure makes us more responsible, we learn to take responsibility for our choices,” says one of our interviewees. in terms of optimism, it must be said that learning to be optimistic is learning to see the bright side of things (walsh and cunningham, 2017; parsanejad et al., 2019; lin and chou, 2022). indeed, optimism prevents the entrepreneur from the idea of focusing solely on failure to find solutions and keep moving forward: “failure makes you strong, solid, allows you to learn to stay optimistic despite problems so you can move forward.” 4.1.1.2. learning from the environment let us remember that the tunisian market has specificities that only failure allows to understand the way this market works and to acquire the necessary social know-how. in all cases, failure allows entrepreneurs to acquire knowledge and skills to manage their relational network (oberoi et al., 2022; cacciotti et al., 2020; wyrwich et al., 2019). for them, the failure represented an opportunity to be able to integrate into a professional relational network. “during the difficult time i decided to be upfront with my clients and i was surprised to find a lot of support and sympathy from them,” said one interviewee. another added: “i understood how the market works in tunisia, how to establish contacts with customers and suppliers, i learned how to negotiate with them” or: “socially, i learned how to manage my relationships with customers.” 4.1.1.3. learning from the company it is about gathering the necessary knowledge about the strengths and weaknesses of the company and its needs (kong et al., 2020; amenta and stagnaro, 2022). one of our interviewees states, “after the difficult times, i understood that to succeed, you have to know yourself well and know your limits, i was more realistic i was able to assess my value in the market, i made sacrifices with very low prices compared to the market, that’s what allowed me to get by, it’s good to dream but you always have to keep your feet on the ground;” another adds: “you have to know that a project is not a sum of money that you are going to earn, on the contrary it is an expense. you also have to know that returns are not always stable. you also have to realize that you are always faced with difficulties.” 4.1.2. learn to manage management is a problem for some entrepreneurs in our sample. it generally represents the cause of their failure, which pushes them to revise their managerial choices to avoid these failures and to manage their budgets and time better. from this point of view, failure constitutes an opportunity to acquire managerial knowledge (li et al., 2021; thumiki, 2017; kong et al., 2020; oberoi et al., 2022). in this sense, one interviewee argues, “especially i will not have a partner anymore, i absolutely need to find someone to take care of the managerial aspect, because i am finally convinced that hiring a manager is not a choice it is a necessity especially since i just discovered that i am not a good manager specifically money management).” 4.2. emotional regulators the intensity of the negative emotion that emerges following an entrepreneurial failure varies from one entrepreneur to another. to overcome this situation, the entrepreneur relies on emotional regulators that act as triggers for positive emotions (toumi and smida, 2018; hu et al., 2017b). these are often classified into three types: faith, addiction to extreme situations, and mithridatization. 4.2.1. faith several researchers have highlighted the importance of the spiritual aspect in the professional world as it provides mental comfort and satisfaction to employees (lattacher and wdowiak, 2020; pan et al., 2022). nevertheless, the literature has made a distinction between the notion of spirituality and that of religion. for antal and frémeaux (2013), one has an affective aspect that is intimate to the individual, and the other takes on the role of a guide and directs his or her behavior, it is more explicit. on this question of faith, one respondent said: “you have to believe in god and in yourself....you have to love because if you love what you do you will always find a way out sooner or later. “another added: “but i believe in god. sometimes god takes one thing and gives you another,” you have to be patient. note that in difficult times, every person has a support on which he or she can rely to be able to get through (schwab et al., 2022; ha and park, 2021; morrison, 2018). some entrepreneurs interviewed used the term faith in god several times for faith in god allows them to stay strong, resilient and face difficulties. since, for them, everything happens by the will of god and that success is, certainly, the fruit of their work, but also of the will of god. it should also be noted that risk-taking is considered an addiction to extreme situations. indeed, a good number of authors have cited the notion of risk-taking to define entrepreneurship. for them, entrepreneurship means facing a hostile environment (kong et al., 2020; schwab et al., 2022; zheng et al., 2022). thus, an entrepreneur who works under these conditions is a person who has the ability to accept uncertainty (filon, 1997 p. 5). “the entrepreneur is above all a risk taker since he invests his own money.” among our interviewees, only one entrepreneur declared that he was not willing to take risks. he says he finds pleasure in taking on challenges. for him, these situations represent an opportunity to test his abilities and to try to exceed his limits. for the sake of adventure, he very often opts for the riskiest choices. this taste for mtibaa and boudabbous: the realities of learning through failure in entrepreneurship: results of qualitative research international review of management and marketing | vol 13 • issue 2 • 202324 adventure provides him with the strength and solidity necessary to continue working. his refusal of routine leads him to accept difficulties and to enjoy facing them. “but it’s always better to be able to bounce backfrom failure.” he adds: “what helped me was my personality, i like to take risks, i hate routine, and above all i like what i do....i sometimes refused promoter contracts because it became routine.” 4.2.2. the mithridatization it is a technique that consists of facing fear instead of running away from it. the objective is to acquire a certain immunity that allows the individual to face unpredictable situations. this technique is generally used by police officers to face their fear. in any case, for many entrepreneurs, failure leads to success (wilson and perepelkin, 2022; kroeger and wright, 2021; ha and park, 2021; dias and martens, 2019). thus, it becomes imperative for them to confront and learn to better manage it. thus, an entrepreneur who is aware of the mithridatization goods of a failure manages better than others to overcome his fear and thus regulate his emotions. “one must fail.” “you can’t be successful without failure, you have to face it or you won’t evolve”. “you have to adapt because it’s everyday life, every day you find difficulties.” 4.2.3. the passion according to the literature, it is an individual’s sense of commitment to his or her work. this commitment involves three variables. first, the affective aspect, which represents the love for this activity, then the time and finally the energy. for many researchers, the passionate man is a man who has managed to build some balance between his passion and his private life (van trang et al., 2019; zhang et al., 2018; schwab et al., 2022). finding time and energy for one’s work is not necessarily synonymous with passion; passionate people are beings who seek to engage in an activity that gives them pleasure despite the results. generally, passionate people are not obsessed with success. this is likely to motivate them to work even in difficult times (lemoine, 2023; cacciotti et al., 2020; dias and martens, 2019). in our research, we found that, according to the entrepreneurs we interviewed, passion is a reason for success. in this sense, one entrepreneur said: “it is a passion for me, the love of my work has pushed me to continue and to be patient.” a second added: “you have to love it if you don’t love it, so why do i spend sleepless nights working?” 4.3. proposed models of entrepreneurial learning through failure • proposition 1: through our empirical approach, we have highlighted a concordance between the nature of entrepreneurial learning and the cause of failure. the entrepreneurs interviewed mentioned that failure was an entrepreneurial learning opportunity for them. this proposition corroborates that of cardon and mcgrath (1999). it has been confirmed. • proposition 2: according to the literature, learning through failure requires a certain ability to control one’s emotions on the part of the entrepreneur. in our approach, we identified certain elements that can play the role of emotional regulators by generating positive emotions that can mitigate the negative effect of failure. this proposal has been confirmed. it is consistent with the idea of de hoe and janssen (2014). • proposition 3: according to the literature, if the causes of failure emanate from the entrepreneur’s environment, then the probability of learning from failure is low. the entrepreneur will project his failure onto external factors, and will not modify his behavior, whereas, in the opposite case, he will try to identify and analyze closely the causes of his failure. the study we conducted pointed to the presence of learning through failure among entrepreneurs who attributed their failures to external causes. this proposition has been refuted. the exploratory study we conducted with a sample of entrepreneurs allowed us to identify the nature of the learning acquired following a failure. the resilience of entrepreneurs to failure gives an unconscious character to this learning. our approach revealed that failure generates emotional reactions in the entrepreneur who relies on emotional regulators to learn from failure (figure 1). 5. conclusion in an interaction between organizational learning and entrepreneurship is entrepreneurial learning, which, according to the literature, corresponds to a continuous process of knowledge creation. we have emphasized the role of emotion in the entrepreneurial learning process through failure, since in order to learn from failure, the entrepreneur must master negative emotions. in any case, in this research work, we have taken as our objective to help demonstrate the nature of the links between failure and entrepreneurial learning. the choice of a particular research field constitutes the main empirical contribution of this research. indeed, being in a post-revolutionary phase, tunisia lives in a critical context making companies more vulnerable to failure. we have been able to demonstrate, through this approach, that failure is an emotionally rich experience, especially for female entrepreneurs. we have also put forward that in order for there to be an entrepreneurial learning process, it is necessary to attenuate the intensity of negative emotions, thanks to emotional regulators such as faith, addiction to extreme situations and mithridatization. figure 1: entrepreneurial learning through failure mtibaa and boudabbous: the realities of learning through failure in entrepreneurship: results of qualitative research international review of management and marketing | vol 13 • issue 2 • 2023 25 nevertheless, this research work would benefit from being more dense if variables such as emotional intelligence, risk-taking or life skills were added to our research problem in order to elucidate the role they may play in entrepreneurial learning through failure. it would be equally judicious to conduct a comparative study with entrepreneurs from different cultures and genders to look for possible divergences in the nature of the emotional regulators used during the process of entrepreneurial learning through failure. references amankwah-amoah, j., adomako, s., berko, d.o. 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(2022), how do investors evaluate past entrepreneurial failure? unpacking failure due to lack of skill versus bad luck. academy of management journal, 65(4), 1083-1109. tx_1~at/tx_2~at international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2023, 13(1), 29-40. international review of management and marketing | vol 13 • issue 1 • 2023 29 impact of lean accounting on value of the company at the jordanian industrial companies mohammad ahmad shehadeh*, suleiman hussein al-beshtawi department of accounting, the world islamic sciences and education university, amman, jordan. *email: 6190501018@std.wise.edu.jo received: 04 september 2022 accepted: 15 december 2022 doi: https://doi.org/10.32479/irmm.13681 abstract the purpose of this study was to determine how lean accounting affected the value of the company in jordanian industrial companies. the researchers used a descriptive-analytical approach to examine study data collected through a questionnaire and from the annual financial reports of the (52) jordanian industrial companies listed on the amman stock exchange during the period from 2017 to 2021. the study brought up a number of findings, the most important of which are: the availability of an impact of lean accounting tools in enhancing the company’s value in jordanian industrial public shareholding companies, with a high level of relative importance. the study provided a number of recommendations, the most important of which was that jordanian industrial companies’ management creates well-structured plans and implements effective strategies to support increasing the value of the company and achieving excellence and prosperity. keywords: lean accounting, the value of the company, jordanian industrial companies jel classifications: m41, m49, m51, g10 1. introduction the industrial sector in particular and the rest of the globe have seen quick changes and advancements, such as the widespread adoption of japanese management concepts including eliminating waste and loss, gradual and continuous improvement, and worker collective engagement. the japanese automaker toyota has used these concepts in all stages of manufacturing and was the first to adopt lean production in the process of creating cars in all production lines, which participates in eliminating extra costs and maximizing profits. since the reason behind these sophisticated and sophisticated technologies is the increasing intensity of rivalry among industrial enterprises that are attempting to obtain client happiness and satisfy their desires, as a result, conventional management accounting methods have become ineffective in making the best use of a company’s resources and achieving its objectives. hence, new management accounting systems, such as lean accounting, become required to help businesses minimize expenses, maximize profits, and raise the value of the company (al-dulemi and shehadeh, 2018). 1.1. importance of the study 1.1.1. first: scientific significance the researcher concentrated on the idea of lean accounting as one of the contemporary administrative accounting systems which are crucial for industrial companies in all of their domains since it works to reduce waste and losses or reduce damaged and missing items and it includes the optimal use of the resources and capabilities available to the company and takes into consideration the gradual and continuous improvement in operations and activities, which helps to reduce manufacturing costs and raise the company’s value. through this research, theoretical literature explaining how lean accounting affects a company’s value as well as the characteristics of lean accounting techniques will be improved (performance measurement linkage chart, continuous improvement “kaizen,” value stream maps, target cost). 1.1.2. second: the practical significance the importance of the study lies in measuring the impact of lean accounting tools and its relationship to increasing the value of the this journal is licensed under a creative commons attribution 4.0 international license shehadeh and al-beshtawi: impact of lean accounting on value of the company at the jordanian industrial companies international review of management and marketing | vol 13 • issue 1 • 202330 company. the researcher focused on jordanian public shareholding industrial companies listed on the amman stock exchange, and as such, the scientific significance is centered on the importance of jordanian industrial companies, which is the study community. the study also aims to attract the attention of administrators and decision-makers and provide them with the most crucial flexible practices that move companies toward the application of advanced techniques that will address the shortcomings in cost-cutting, performance improvement, and company value growth. 1.2. aims of the study 1. what is the relative importance of the company’s value in jordanian industrial companies? 2. what is the relative importance of lean accounting in jordanian industrial companies? 3. a description of how lean accounting tools (performance measurement linkage chart, continuous improvement “kaizen,” value stream maps, target cost) have improved the value of the company of jordanian industrial companies. this goal gives rise to the following sub-goals: • determining how the performance measurement linkage chart has affected the company’s value among jordanian industrial companies • determining how continuous improvement, “kaizen,” affects a company’s value in jordanian industrial companies • determining how value stream maps affect the value of the company in jordanian industrial companies • determining how the target cost will affect the company’s value among jordanian industrial companies. 1.3. problem of the study the problem of the study is to raise the company’s value in jordanian industrial companies through the impact of lean accounting. and since those companies, in general, face significant problems and changes in many areas due to the intense competition and openness to global markets, traditional management accounting systems became now unable to satisfy the criteria of modern production systems due to the inability of many businesses to integrate the concepts of rationalization-whether it be decreasing loss or damage and attaining the highest and best quality of products. this led to the development of traditional systems in management accounting through the employment of knowledge and thought to find new tools in management accounting that increase the capabilities of companies to generate value, so attention turned to lean accounting as a new method in the field of management accounting. 1.4. questions of the study the main question: does the use of lean accounting tools affect increasing the value of the company in industrial jordanian companies? the following sub-questions can be derived from this main question: • the first sub-question is: does the performance measurement linkage chart has an effect on improving the value of jordanian industrial companies? • second sub-question: does continual improvement, “kaizen,” affect how much a company is valued in jordanian industrial companies? • the third sub-question: do value stream maps have an impact on improving the value of jordanian industrial companies? • the fourth sub-question: does the target cost have an impact on enhancing the company’s value in jordanian industrial companies? 1.5. hypothesis of the study the first main hypothesis: there are no statistically significant differences at the level of significance (α ≤ 0.05) for the lean accounting tools with its dimensions (performance measurement linkage chart, continuous improvement “kaizen,” value stream maps, target cost) in enhancing the company’s value in jordanian industrial companies. the following sub-hypotheses were derived from this hypothesis: • the first sub-hypothesis: there are no statistically significant differences at the significance level (α ≤ 0.05) of the performance measurement linkage chart in enhancing the company’s value in the jordanian industrial companies • the second sub-hypothesis: there are no statistically significant differences at the level of significance (α ≤ 0.05) for continuous improvement, “kaizen”, in enhancing the company’s value in the jordanian industrial companies • the third sub-hypothesis: there are no statistically significant differences at the level of significance (α ≤ 0.05) for the value stream maps in increasing the company’s value in the jordanian industrial companies • fourth sub-hypothesis: there are no statistically significant differences at the level of significance ((α ≤ 0.05) for the target cost in increasing the company’s value in the jordanian industrial companies. 1.6. model of the study based on the analysis of previous studies relevant to the study topic and its variables, hypothetical relationships can be represented in the study through the study model, as shown in figure 1: 1.7. conceptual definitions 1.7.1. lean accounting is a contemporary accounting method that reflects flexible practices and adaptability by enhancing the usefulness of work, enhancing the decision-making process by providing understandable and accurate information, and eliminating waste and loss brought on by conventional accounting systems. it also works to continuously improve the economic unit, which helps to reduce production costs and increase profits (kazim, 2014). 1.7.2. the value of the company is the amount of cash flows that shareholders are expected to obtain by investing their money in the shares of a particular company, which means that the value of a company is determined by the value of its shares in the financial markets and that the value of a company is determined by the market value of one share multiplied by the number of the subscribed shares (halim and hamid, 2019, 195). 1.8. limitations of the study • objective limits: the study focused on measuring the effects of some dimensions of lean accounting tools represented shehadeh and al-beshtawi: impact of lean accounting on value of the company at the jordanian industrial companies international review of management and marketing | vol 13 • issue 1 • 2023 31 in (the performance measurement linkage chart, material flow, and material withdrawal, value stream maps, target cost), and these dimensions were selected because they are the most well-known ones applied in jordanian industrial companies and their effects on enhancing the value of the company. • spatial limits: the current study will focus on the numerous jordanian industrial companies listed on the amman stock exchange, a total of (52) company that comprised the study community. • human limits: consisted of the members of the financial department and members of the board of directors. 2. previous studies 2.1. introduction the researcher has reviewed a number of previous works in arabic and english that are directly or indirectly related to the topic of his study and that deal with one or more of its dimensions. the researcher has summarized these works in two parts, the first of which is studies in arabic and the second of which is studies in a foreign language and has arranged them chronologically (from the most recent to the oldest). 2.2. arabic studies mane and buqsari’s (2021) study entitled “the impact of lean production on reducing production costs for industrial companies.” in this study, the researchers were concerned with determining the influence of lean production on reducing production costs for algerian industrial institutions, notably the sanitary ceramic production unit in algeria’s chlef state. the researchers used a questionnaire to collect data, and some of the findings they came to include: the features of lean production have a good impact on reducing production costs in the institution under study. the researchers suggested a number of recommendations, the most significant of which is a rise in industrial institutions’ interest in lean production because it is considered an advanced production philosophy and suitable for both large and small businesses. marghani et al. and others’ study (2021) entitled “the difficulties of implementing lean accounting in economic institutions (analysis of a sample of al-wadi state).” the researchers concentrated on the obstacles and problems associated with the implementation of lean accounting in economic institutions in algeria’s al-wadi state. the researchers wanted to identify lean accounting as a current introduction to cost reduction, as well as measure the extent of the obstacles and challenges associated with applying lean accounting methods in economic institutions in algeria’s al-wadi state. the researchers created a questionnaire appropriate for the study’s topic, and one of their most significant findings is that while the economic institutions in algeria’s el-wadi state have a lot of requirements for applying lean accounting, there are some challenges and barriers that prevent its application. the researchers made several recommendations, source: the researcher prepared this model using the following sources figure 1: study variables independent variable the study lean accounting (alotaibi et al., 2021), (atkinson et al., 2018), (al-dulemi and shehadeh, 2018), (al-rawi, 2019) (al-rahimi, 2016), (okour, 2018) (elbasha 2017), (lliemena et al., 2020) dependent variable company value (al-khafaji and al-awad, 2021), (bosna, 2019), (badr el-din and mouloud, 2019) shehadeh and al-beshtawi: impact of lean accounting on value of the company at the jordanian industrial companies international review of management and marketing | vol 13 • issue 1 • 202332 including the essential need to use lean accounting, which helps eliminate waste and loss and increases profits. ba’lash and al-sheikhi’s study (2020) entitled “a theoretical investigation of the concept of lean accounting and what distinguishes it from traditional accounting.” the researchers focused on identifying the methodologies and tools of lean accounting and how they differ from traditional accounting. the researchers wanted to identify the advantages of using lean accounting as well as the most significant contrasts between traditional accounting and modern lean accounting. the descriptive approach was adopted by the researchers. one of the most significant findings of this study is that productive activity is the most essential factor in the implementation of lean principles and lean accounting. the researchers suggested that courses be held to highlight the benefits of using lean accounting in minimizing waste and making sound judgments. al-rawi study (2019) entitled “lean accounting in planning production costs in jordanian public shareholding industrial companies.” the researcher dealt with the methods and principles of lean accounting in planning production costs in jordanian public shareholding industrial companies. the study’s independent variable is represented by the lean accounting tools (continuous improvement “kaizen,” points box, value stream maps, hushen policy). the study population consisted of accountants, account department managers, internal auditors, and financial managers in jordanian industrial companies. the researcher’s most important findings are: that the use of continuous improvement methods “kaizen,” points boxes, value stream maps, and hushen’s policy have a significant positive impact on planning costs of production operations in jordanian industrial companies, as well as the need to hold courses and conferences that help define methods and tools lean accounting and its benefits for jordanian industrial companies. al-zubaidi and al-bakri (2015) bakri’s study titled “the role of lean accounting in supporting corporate governance to achieve competitive advantage (a case study conducted at diyala electrical industries company).” it is a comprehensive study about the role of lean accounting in assisting company governance in achieving and maintaining competitive advantage. the researchers aimed to pay special attention to the use of lean accounting because it plays an important role in increasing the role of corporate governance and identifying the term governance from various perspectives, as well as the positive impact of modern management accounting methods on supporting corporate governance and focusing on the idea of customer satisfaction. one of the most important results is that lean accounting is an information system that focuses on financial and non-financial information efficiently and effectively and is thus based on giving information to all administrative levels in the diyala general company for electrical industries. among the most significant and effective suggestions made by the researchers: focus on customer satisfaction in the diyala general company for electrical industries in a vital approach to developing and achieving competitive advantage. 2.3. foreign studies the study by alves et al. (2021) entitled “lean accounting: a structured literature review” in this study, the researchers concentrated on conducting a review and analysis of the literature on lean accounting, in order to develop the creation of new, logical perspectives on how to establish, develop, and improve flexible accounting. since this study provides a critique of previous studies in the field of lean accounting, the researchers carried out a comprehensive evaluation of the literature to categorize and evaluate 39 papers from esteemed journals that dealt with lean accounting between 1996 and 2020. the most significant findings of the study are as follows: although the lean accounting method is thought to be the best approach for small businesses, there has not been much research on the role of accountants in these organizations or how to integrate its ideas with generally accepted accounting principles (gaap). the researchers made a number of recommendations, the most crucial of which is that more and more research should be done on the topic of lean accounting because it enhances companies’ profitability effectively and efficiently. the study by grasso et al. (2021) entitled “materials for teaching lean accounting” the researcher focused on a study on lean accounting and lean production because these methods have become more common in developed countries in recent years. according to the study, only a small number of accounting courses focused specifically within the narrow specialization of management accounting and expenses. the researcher also mentioned that one of the reasons for the lack of coverage of lean accounting and lean production is the lack of study material for teaching lean accounting. the researcher also mentioned that the american accounting association will add semester courses on lean accounting and lean production to address the shortage, as this contributes to reducing production costs efficiently and effectively. the study resulted in a variety of findings, the most significant of which are: the addition of teaching resources related to lean accounting and lean production helps students understand the principles and tools of lean accounting and lean production and their advantages in reducing waste in the production process and in the company as a whole. the researcher made a number of recommendations, the most significant of which are: it is necessary to add semester courses concerning lean accounting because it successfully and efficiently eliminates waste. the study by alotaibi et al. (2021) entitled “improving product quality under the application lean accounting tools within the behavioral approach” this study is considered as a thorough analysis of the significance of using lean accounting tools and techniques (such as continuous improvement “kaizen,” points boxes, and value streams) and taking into consideration the role of ethical and responsible behaviors on the part of the decision-maker in order to make the shehadeh and al-beshtawi: impact of lean accounting on value of the company at the jordanian industrial companies international review of management and marketing | vol 13 • issue 1 • 2023 33 right decision in reducing production costs without compromising quality and disposal waste and loss and to work on gaining customers’ delight and fulfilling their needs, which helps to increase revenues. given that the researchers made a concerted effort to use the lean accounting tools and methodologies in the cement factory in kufa based on the available laboratory data that they obtained. the study indicated that the research sample represented by the cement factory in kufa does not use lean accounting procedures and tools and that their adoption helps cut costs while not compromising product quality. the researcher recommended that the kufa factory’s lean accounting procedures and tools be implemented because they contribute to enhancing the company’s value and providing customer satisfaction. the study by rachael et al. (2020) entitled “an assessment of the practicability of lean accounting in health care sector.” in this study, the researchers looked at the potential for applying lean accounting in the nigerian healthcare sector as well as the difficulties or obstacles that stand in the way of such an application as a means of administrative control in this sector. according to the researchers, the majority of studies on the topic of lean accounting tools and methodologies are in the sector of production, particularly the production of automobiles, and the potential for removing waste and loss in the production process and the company as a whole. so, lean accounting tools must be applied across a variety of industry sectors because they effectively help to decrease costs, and profits are maximized. among the researchers’ findings: lean accounting can be used in the nigerian health care sector because it helps to eliminate waste and loss and so profits are maximized. one of the most important findings advised by the researcher is the need for staff and top managers to be properly trained in lean accounting practices and techniques. the study of teixeira et al. (2019) entitled “lean accounting: economic-financial performance of companies with lean manufacturing.” this is an in-depth case study of four top companies listed on the boveca stock exchange (brazil stock exchange) before and after applying lean manufacturing and assessing economic and financial performance using primary and secondary data. the researchers observed that lean manufacturing did not go hand in hand with suitable accounting procedures for the new production environment, which suggests that the management system has to be rethought within the frame of the value flow stream-based lean accounting method. the study came to the following findings: there is a deficiency in the spread of adoption of applying lean accounting in the corporate environment, but brazilian companies still have a long way to go before they can develop and implement lean accounting because it helps to save costs. the study made the following recommendation: brazilian companies should fundamentally adopt lean accounting since it helps them increase profitability. 2.4. what distinguishes this study from previous ones through an examination of the literature, books, and past studies, it was discovered that researchers and scholars are interested in the study’s topics, dimensions, and factors; this interest has been represented in the multiplicity and diversity of studies that have been addressed. thus, this study is an extended version and expansion of previous studies, but it differs from previous studies in that it investigates the relationship between these variables directly, whereas previous studies and literature investigated the relationship between these variables indirectly, by linking them to other variables. 3. theoretical background 3.1. definition of lean accounting according to abu hijleh and mashhour (2020), “lean accounting” is a flexible accounting system that includes a set of flexible principles and practices that simulate lean production by offering appropriate control and measurement reports that reveal information about activities that add value for the client by cutting costs and getting rid of pointless steps at each level of production to efficiently and effectively reflect the best financial performance of the company. on the other hand; shehadeh (2017), lean accounting is a modern management accounting system based on continuous development and improvement, the pursuit of perfection, the elimination of waste, delivering products to customers on time, achieving the company’s desired goals, and assisting in making the appropriate and accurate decision at the right time, all of which contribute to reducing costs and maximizing profits. lean accounting, according to maskell et al. (2017), is a specialized approach to business management based on the foundations of flexible management and flexible production that offer suitable foundations for the use of accounting information that support flexibility in production and management to support cost management, value-adding activities, and elimination of waste from the accounting systems used in the economical units. as for kazem (2014), lean accounting is a modern accounting approach that reflects flexible thinking and practices by enhancing the usefulness of work, enhancing decision-making through the provision of understandable and accurate information, eradicating waste and loss resulting from traditional accounting systems, and working toward the gradual and continuous improvement of the economic unit, it helps to cut production costs and increase profits. karen (2012) defined lean accounting as “the accounting methodology that leads to increasing the value of work through the use of flexibility techniques and measuring its financial impact in order to implement flexible improvement actions for the organization.” lean accounting, according to the two abovementioned researchers, is a contemporary japanese approach that identifies the best outputs efficiently and effectively, as well as the best products with the lowest costs, highest quality, and more competitiveness, all of which help to raise the value of the company. shehadeh and al-beshtawi: impact of lean accounting on value of the company at the jordanian industrial companies international review of management and marketing | vol 13 • issue 1 • 202334 3.2. independent variables definition for the study (lean accounting tools) alaa (2011) noted that in order to achieve good and effective management of institutions’ performance and their lean activities, lean accounting depends on a variety of tools that are integrated with one another. from an accounting perspective, the following are the most essential lean accounting tools and techniques: 3.2.1. performance measurement linkage chart according to muhammad and al-maini (2013, 303–307), a performance measurement linkage chart is a logical diagram that connects performance measures for value flow with performance measures for the cell. these performance measures for the cell are described in the following five measures: 1. the measure of a machine’s operational efficiency: it assesses a machine or piece of operational equipment’s capacity to deliver high quality in a timely manner that satisfies clients’ demands. 2. the measure of the daily report in hours, which measures how well the cell achieves completion time efficiently and effectively, focuses on the production fit customer’s demands and meets their request in a way that minimizes waste and provides the necessary and highly relevant information to the team members working within the cell. 3. the measure of the quality report at the beginning that works on following, checking, monitoring, and controlling the cell at the 1st time to assure whether it functions properly, efficiently, and effectively as well as the efficacy of the machines and equipment, where the machines and equipment are monitored and their upkeep or discontinuation is assessed. 4. the measure of production’s control in real operation (workin-progress) which is concerned with determining inventory reduction in the cell and the costs associated with it. 5. value stream performance measure: it comprises the cell’s hourly and daily reports. these measurements are helpful to prepare weekly or monthly reports that show how the value flow may achieve effective and efficient performance. according to the two above-mentioned researchers, the performance measurement linkage chart is a chart based on measuring cell performance by an hour efficiently and effectively by connecting performance measures of value flow with measures of cell performance for the purpose of customer service, meeting their needs, ensuring their satisfaction, and continuous company improvement, all of which help lower costs and increase company value. 3.2.2. continuous improvements “kaizen” according to shehadeh (2017), continuous improvement “kaizen” is based on the introduction of gradual and continuous improvements to infinity and the pursuit of perfection, which leads to the development of products efficiently and effectively, improving the quality of products and services, and satisfying customer satisfaction, all of which contribute to lowering production costs, maximizing profits, and achieving the target company’s goals. drury (2016) thinks that continuous improvement “kaizen” depends on a particular methodology in the application, and it works on introducing gradual and sequential changes to production through. these enhancements are reflected in continuously reducing costs to the lowest possible level and raising quality to the highest possible level, i.e., it is a continuous search process to get rid of waste, improve quality, get rid of damage or reduce it, and improve the performance of operations that increase the value of customers and satisfy their demands. according to hilton et al. (2012), continuous improvement “kaizen” is one of the contemporary, significant, and essential techniques focused on the introduction of consecutive, gradual production improvements that eventually result in cost savings and an enhancement in the output’s quality. the two above-mentioned researchers suggest that continuous improvement (“kaizen”) is the introduction of successive and continuous changes in the company’s operational processes and its offered services in a fundamental way that helps increase productivity and maximize profitability. 3.2.3. value stream mapping value stream maps, according to arnold et al. (2012), are one of the tools and techniques of lean accounting used in the planning and to comprehend the flow of materials from the factory to the consumer and do not only concentrate on comprehending the current condition of operations and flow, but also on accurately defining the non-added and added value of every phase of the process efficiently, which encompasses all activities, even in the processes of storing production and primary materials in the manufacturing process, and is based on eliminating all operations that do not achieve any specific value and represent a loss and a waste for the company’s production operations, such as the extending the length of the waiting period for inventory and other types of wastage. the value stream maps, according to the two above-mentioned researchers, are based on determining materials that enter the company, processing them until they are finished products, then supplying them to customers as needed, and identifying and eliminating the activities that result in the waste, the loss, and the extravagance, all of which help to maximize profits and raise a company’s value. 3.2.4. target cost it is the approach related to linking cost and value to the characteristics and advantages of the product or the service, which aims to focus on continuous incremental improvement and management and design of the product in areas that have a major impact on decreasing costs and maximizing customer value. in other words, the target cost tool is one of the tools designed for profit planning and cost management in a manner that ensures reducing costs at all levels of production activities and regulating them according to planned and specified control standards. this tool essentially addressed to the user to define his or her needs, objectives, and capabilities. regarding these needs, they are founded on producing productions that are both shehadeh and al-beshtawi: impact of lean accounting on value of the company at the jordanian industrial companies international review of management and marketing | vol 13 • issue 1 • 2023 35 valuable and suitable for this consumer while working in a highly competitive economic environment. it tries to hone its abilities in how to efficiently and effectively oversee all relevant departments involved in the manufacturing process in a way that ensures a profit equal to the efforts and energy expended and takes into account time, development, quality, and cost as success factors. (jiambalvo, 2019). the target cost begins with clients in the market deciding an acceptable and reasonable price for a service or product, through which they can promote the product in the market, and then moves on to determining the costs that assure access to that price (nassar et al., 2018; muhammed, 2020). according to the two above-mentioned researchers, the target cost is the method related to setting the desired market price by customers based on social strata, and then setting the profit margin, and then determining the target cost, which is the difference between the market price and the profit margin, which contributes to gaining customer satisfaction. 3.3. the advantages of lean accounting according to maskell and kennedy (2007), using lean accounting systems has a variety of advantages, such as: 1. contributing to the elimination of waste and loss that occurs during the company’s production process in general, this reduces costs and increases profits. 2. the use of lean accounting tools at the company contributes to increasing its capacity to achieve its sustainable advantage and enhance the level of production efficiency and effectiveness. 3. getting a competitive advantage and manufacturing products that suit the needs of the consumer and are delivered on time. 4. lean accounting is centered on enhancing the value of sales efficiently and effectively because it provides suitable and appropriate information to decision-makers (management). according to the two researchers, the lean accounting approach efficiently offers the needed information and is represented by changing traditional financial data and financial reports to produce financial statements that are simple to understand for all beneficiaries. 4. methodology of the study 4.1. methodology the descriptive analytical method was used by the researcher to describe and analyze the study’s topic: impact of lean accounting on value of the company at the jordanian industrial companies. the study data, collected through a questionnaire and through the annual financial reports of jordanian industrial companies listed on the amman stock exchange between 2017 and 2021, were evaluated, and the relationship and impact between the variables were discovered. 4.2. populations of the study the study population consisted of the jordanian industrial companies listed on the amman stock exchange, which totaled (52) industrial companies and were distributed over (9) sub-sectors, according to the official websites of the amman stock exchange (www.ase.com.jo) and the securities depository center (www. sdc.com.jo) for the period (2017-2021). the study’s sample was made up of jordanian industrial companies that meet the following requirements and are listed on the amman stock exchange: 1. the company maintain the financial market trading continuously during the study period 2. the company has all the information needed to account for the research model’s variables 3. the fiscal year of the company closes on december 31st of each year. as a result, the study sample consisted of (34) industrial companies, accounting for 65.4 % of the study population. the study sample consisted of (170) employees at the upper administrative levels (general and executive managers) and middle administrative levels (departments and unit managers and heads of departments) that are familiar with the instruments of lean accounting and their implementation in the organization. 4.3. data collection the study relies on two sources for data collection: 4.3.1. first, secondary sources this included articles, refereed scientific periodicals, research, reports, publications, and previous arab and international studies that dealt with the study variables’ themes and dimensions in order to have a comprehensive understanding of the area of study as well as familiarity with the most recent advancements that have occurred. it also contained annual financial statements from jordanian industrial companies from 2017 to 2021 in order to collect data on the company’s value. 4.3.2. second, primary sources this included a questionnaire intended to measure the variable of lean accounting tools, which comprised a number of items that reflected the dimensions of the lean accounting tools. the questionnaire used a five-point likert scale to measure the sample members’ level of agreement with each item as one of five different levels as follows: table 1 shows the study sample members' estimated levels of approval for the survey questionnaire and their digital representation (shehadeh, 2017). based on the five-point likert scale, the following formula was used to assess the relative importance of the items and dimensions: relative important maximum alternative minimum alternative = − tthe number of levels = − = 5 1 3 1 33. where the levels were divided into three groups, and the alternatives were chosen based on the average value of the shehadeh and al-beshtawi: impact of lean accounting on value of the company at the jordanian industrial companies international review of management and marketing | vol 13 • issue 1 • 202336 responses, which are: • low if the average is from 1.00 to <2.33 • average if the average is from 2.33 to <3.66 • high if the average is from 3.66 up to 5.00. 4.4. reliability of the study cronbach alpha coefficient was used to test the reliability of the tool used to measure the independent variable. according to sekaran (2010), cronbach’s alpha value must be more than (0.70) for the scale’s result to be considered statistically acceptable, and the closer it is to 100%, the more stable the study tool is. the results were as shown in table 2: as shown in table 2, the values of the internal consistency coefficient cronbach’s alpha for the items of the lean accounting tools all seemed to be more than (0.70), ranging between (0.845 and 0.859), and the value of the cronbach’s alpha coefficient for the study tool as a whole was (0.949), indicating the consistency and reliability of the study tool’s items. 4.5. multicollinearity test the multiple linear correlation test is used to ensure that there is no high correlation (perfect or near perfect) between the independent variables because the high level of correlation causes the coefficient of r2 to rise more than its real value. to confirm this, pearson correlations were calculated using a matrix of independent variables. correlation coefficient values <0.80 indicate that there is no multi-linear correlation problem (gujarati, 2004). the results were as follows: table 3 reveals that the correlation coefficient reached its highest value (0.825), which is between (value stream maps) and (target cost), while the rest of the values were <(0.80), indicating that there is a multiple linear correlation (gujarati, 2004). to validate or reject this result, the variance inflation factor (vif) was calculated for the independent variables, where a vif of more than (10) indicates the existence of the multiple linear correlation problem (gujarati, 2004). as shown in the following table: table 4 shows that all variance inflation factor values were <10, which rejects the preceding result and indicates that the data is free of the multiple correlation problems. 4.6. statistical analyses used several statistical methods were used to evaluate and analyze the primary data, eviews software was used to answer the study’s questions, achieve its objectives, and test its hypotheses, which are as follows: • average, standard deviation, maximum value, and minimum value: to describe the study variables • internal consistency test, cronbach’s alpha, to assess the reliability of the study tool • pearson correlations and variance inflation factor (vif) test: to ensure that the data does not have multiple linear correlations • simple and multiple linear regression test: to test the study’s hypotheses. 5. identify the study variables the study variables included each of the lean accounting tools (performance measurement link chart, continuous improvement “kaizen,” value stream maps, target cost), which indicated the independent variable, and the company’s value, which indicated the dependent variable, and it was measured by tobin q ratio during the period (2017-2021). descriptive statistical approaches, including averages, standard deviations, relative importance, and maximum and minimum values were used to describe these variables. as shown in table 5: 5.1. identify lean accounting tools table 5 shows that the sample participants’ tendencies were table 2: the values of the internal consistency coefficient for the study tool no. variable/dimension cronbach alpha 1 performance measurement linkage chart 0.845 2 continuous improvement “kaizen” 0.851 3 value stream maps 0.859 4 target cost 0.849 5 lean accounting tools 0.949 table 3: correlation matrix between independent variables variable performance measurement linkage chart continuous improvement “kaizen” value stream maps target cost performance measurement linkage chart 1.000 continuous improvement “kaizen” 0.701* 1.000 value stream maps 0.698* 0.778* 1.000 target cost 0.709* 0.694* 0.825* 1.000 (*) at a significance level of≤0.05 table 4: variance inflation factor variable variance inflation factor vif performance measurement linkage chart 2.444 continuous improvement “kaizen” 2.891 value stream maps 4.238 target cost 3.523 table 1: the study sample members’ estimated levels of approval for the survey questionnaire and their digital representation (shehadeh, 2017) answer strongly agree agree neutral disagree strongly disagree numerical code 5 4 3 2 1 shehadeh and al-beshtawi: impact of lean accounting on value of the company at the jordanian industrial companies international review of management and marketing | vol 13 • issue 1 • 2023 37 toward the high relative importance of lean accounting tools in jordanian industrial companies, with a general average of (3.922) and a standard deviation of (0.634). all of the lean accounting tools demonstrated high relative importance, as (performance measurement link chart) was in the first place, with an average (of 4.126), and a standard deviation (of 0.652), while (value stream maps) was in the last place, with an average of (3.764), and a standard deviation of (0.755). 5.2. identify the company value according to table 6, the average of the tobin q in jordanian industrial companies during the period (2017-2021) was (1.090%), the standard deviation was (0.814%), and the value of the highest observation during the period was (4.387%), which was at the jordan wood industries company (jwico) in 2019, while the value of the lowest view was (0.117%) with the industrial resources company. the values show a difference in the value of the jordanian industrial companies. 5.3. hypothesis testing the main hypothesis states that: there are no statistically significant differences at the level of significance (α ≤ 0.05) for the lean accounting tools with its dimensions (performance measurement linkage chart, continuous improvement “kaizen,” value stream maps, target cost) in enhancing the company’s value in jordanian industrial companies. the main hypothesis has been divided up into four sub-hypotheses, each of which examines how lean accounting tools independently affect a company’s value in jordanian industrial companies. as shown in table 7, multiple linear regressions were used to test the main hypothesis while simple linear regression was used to test the sub-hypotheses, and the results were as follow: 5.3.1. result of the main hypothesis test the findings of a multiple linear regression analysis of the effect of lean accounting tools on the company’s value are shown in table 7, which indicates the significance of the model as it reached a value of (f = 29.198) and a significance level of (sigf = 0.000), which is <0.05. the value of the coefficient of (r2 = 0.414) showed that the lean accounting tools were able to account for a percentage of (41.4%) of the change in the company’s value, with all other factors held constant. the table also demonstrates that there is a substantial positive influence on all of the lean accounting tools, where the value of b at the dimension of performance measurement linkage chart was (0.346) and the value of t was (4.758) with a level of significance (sigt = 0.000) <0.05. the value of b at the continuous improvement dimension “kaizen” was (0.090), while the value of t was (2.527), both at a level of significance (sigt = 0.012) < (0.05) at the value stream maps dimension, the value of b was (0.621), it had a t-value of (9.577) and a significance level of (sigt = 0.000), both of which were <0.05. furthermore, the value of b at the target cost dimension was (0.318), and the value of t was (3.101), both with a significance level (sigt = 0.002) <0.05. based on the preceding, the main hypothesis is rejected, and the alternative hypothesis is accepted which states that “there is a statistically significant effect differences at the level of significance (α ≤ 0.05) for the dimensions of lean accounting tools,” (performance measurement linkage chart, continuous improvement “kaizen,” value stream maps, target cost) in enhancing the value of jordanian industrial companies. 5.3.2. the results of the sub-hypothesis test of the main hypothesis first: results of the first sub-hypothesis test the first sub-hypothesis states that “there are no statistically significant differences at the significance level (α ≤ 0.05) of the performance measurement linkage chart in enhancing the company’s value in the jordanian industrial companies.” table 8 shows the findings of a simple linear regression analysis of the effect of the performance measurement linkage chart on the company’s value. the table shows the model’s significance, table 5: identify lean accounting tools variable average standard deviation rank relative importance performance measurement linkage chart 4.126 0.652 1 high continuous improvement “kaizen” 3.978 0.722 2 high value stream maps 3.764 0.755 4 high target cost 3.821 0.380 3 high lean accounting tools 3.922 0.634 high table 6: identifying the company’s value variable in jordanian industrial companies during the period (2017-2021) scale company value (%) average 1.090 standard deviation 0.814 maximum value 4.387 minimum value 0.117 table 7: *the results of a multiple linear regression analysis to demonstrate the influence of lean accounting tools on the value of the company variable coefficient standard chart (t) value (sigt) performance measurement linkage chart 0.346 0.073 4.758 0.000 continuous improvement “kaizen” 0.090 0.036 2.527 0.012 value stream maps 0.621 0.065 9.577 0.000 target cost 0.318 0.103 3.101 0.002 regression analysis 3.129 0.344 9.088 0.000 (r2) 0.414, (adjr2) 0.400, (f) 29.198, (sigf) 0.000, (d-w) 1.654, dependent variable: company value. * the effect is statistically significant at the level (α≤0.05) shehadeh and al-beshtawi: impact of lean accounting on value of the company at the jordanian industrial companies international review of management and marketing | vol 13 • issue 1 • 202338 as it reached a value of (f = 59.648) and a significance level of (sigf = 0.000), which is <0.05, the coefficient value (r2 = 0.262) indicated that the performance measurement linkage chart could explain a percentage of (26.2%) of the change in the company’s value, with all other factors held constant. table 8 also shows that there is a positive significant effect on the performance measurement linkage chart, where the b value was (0.647) and the t value was (7.723) and the level of significance (sigt = 0.000) is <0.05. therefore, the first sub-hypothesis is rejected and the alternative hypothesis is accepted, which states: “there is a statistically significant differences t at the level of significance (α ≤ 0.05) of the performance measurement linkage chart in enhancing the company’s value in the jordanian industrial companies.” second: the results of the second sub-hypothesis test the second sub-hypothesis states that: “there are no statistically significant differences at the level of significance (α ≤ 0.05) for continuous improvement “kaizen” in enhancing the company’s value in the jordanian industrial companies.” table 9 shows the results of the simple linear regression analysis of the effect of continuous improvement “kaizen” on the company’s value. the table also shows the model’s significance, as the value of (f = 57.382) and the level of significance (sigf = 0.000) are <0.05. the value of the coefficient (r2 = 0.255) indicated that the continuous improvement “kaizen” was able to explain a percentage of (25.5%) from the change in the company’s value, with all other factors kept constant. the table also shows that there is a positive significant effect on continuous improvement “kaizen,” where the b value was (0.728) and the t value was (7.575) and the level of significance (sigt = 0.000) is <0.05. accordingly, the second sub-hypothesis is rejected and the alternative hypothesis is accepted, which states: “there are no statistically significant differences at the level of significance (α ≤ 0.05) for continuous improvement “kaizen” in enhancing the company’s value in the jordanian industrial companies.” third: the results of the third sub-hypothesis test the third sub-hypothesis states that: “there are no statistically significant differences at the level of significance (α ≤ 0.05) for the value stream maps in increasing the company’s value in the jordanian industrial companies.” table 10 shows the results of a simple linear regression analysis of the effect of value stream maps on the company’s value. the table shows the model’s significance, as it reached a value of (f = 102.492) and a significance level of (sigf = 0.000), which is <(0.05). the value of the coefficient of determination (r2 = 0.379) indicated that the value stream maps could demonstrate 37.9% of the change in the company’s value, with all other factors kept constant. the table also demonstrates that there is a significant positive influence on the value stream maps when b = 0.111 and t = 10.124 and the level of significance (sigt = 0.000) is <0.05. accordingly, the third sub-hypothesis is rejected and the alternative hypothesis is accepted, which states: “there is a statistically significant difference at the level of significance (α ≤ 0.05) for the value stream maps in enhancing the company’s value in the jordanian industrial companies.” fourth: the results of the fourth sub-hypothesis test this hypothesis states that: “there are no statistically significant differences at the level of significance ((α ≤ 0.05) for the target cost in increasing the company’s value in the jordanian industrial companies.” table 11 shows the findings of a simple linear regression analysis of the impact of the target cost on the company’s value are shown in table 11. the table shows the model’s significance, as it reached a value of (f = 74.649) and a significance level of (sigf = 0.000), which is <0.05. the value of the coefficient of determination (r2 = 0.308) indicated that the target cost illustrated (30.8%) of the change in the company’s value, with all other factors kept constant. table 11 also shows that there is a positive significant effect at the target cost, where the value of b was (0.900) and the value of t table 8: *results of an analysis using simple linear regression to show how the performance measurement linkage chart’s impacts on the value of the company variable coefficient standard chart (t) value (sigt) performance measurement linkage chart 0.647 0.084 7.723 0.000 regression analysis 1.239 0.339 3.652 0.000 (r2) 0.262, (adjr2) 0.258, (f) 59.648, (sigf) 0.000, (d-w) 1.710, dependent variable: company value, *the effect is statistically significant at the level (α ≤ 0.05) table 9: *results of simple linear regression analysis to show the impact of continuous improvement “kaizen” on the company’s value variable coefficient standard chart (t) value computed (sigt) continuous improvement “kaizen” 0.728 0.096 7.575 0.000 regression analysis 1.343 0.369 3.636 0.000 (r2) 0.255, (adjr2) 0.250, (f) 57.382, (sigf) 0.000, (d-w) 1.714, dependent variable: company value, *the effect is statistically significant at the level (α ≤ 0.05) table 10: * results of simple linear regression analysis to show the impact of value stream maps on the value of the company variable coefficient standard chart (t) value (sigt) value stream maps 0.111 0.011 10.124 0.000 regression analysis 2.607 0.413 6.320 0.000 (r2) 0.379, (adjr2) 0.375, (f) 102.492, (sigf) 0.000, (d-w) 1.919, dependent variable: company value, *the effect is statistically significant at the level (α≤0.05) shehadeh and al-beshtawi: impact of lean accounting on value of the company at the jordanian industrial companies international review of management and marketing | vol 13 • issue 1 • 2023 39 was (8.640) and the level of significance (sigt = 0.000) is <0.05. thus, the fourth sub-hypothesis is rejected and the alternative hypothesis is accepted, which states: “there is a statistically significant difference at the level of significance (α ≤ 0.05) for the target cost in increasing the company’s value in the jordanian industrial companies.” 6. findings and recommendations 6.1. findings of the study 1. according to the results of the descriptive analysis, trends of sample members were towards agreeing that the use of lean accounting tools had a positive effect with a high percentage significance on enhancing the value of jordanian industrial public shareholding companies. additionally, it was observed that the sample participants agreed that the tool (the performance measurement linkage chart) was the tool with the highest relative relevance among all the lean accounting tools, while the tool (value stream maps) was the tool with the lowest relative importance. 2. according to the results of the first main hypothesis test, adopting lean accounting has a positive impact with a high percentage significance on increasing the company’s value in jordanian industrial public shareholding companies. this result is in line with the sample members’ responses, which indicated that implementing lean accounting tools would have a significant impact on the company’s value. 3. the results of the test of the sub-hypotheses deriving from the first main hypothesis indicated that there is a role of using lean accounting tools (the performance measurement linkage chart, continuous improvement “kaizen,” value stream maps, and target cost) in increasing the company’s value in jordanian industrial public shareholding companies. when examining the sample members’ responses to each of the individual lean accounting tools individually, the results are consistent with the sample members’ responses, which were about having an effect, with a high -percentage significance, of the adoption of lean accounting tools in raising the value of the company. 4. there is a difference in the value and size of jordanian industrial companies according to tobin q during the period (2017-2020). 6.2. recommendations the study suggests the following: 1. in order to increase the flow of value in operational activities, and to identify and enhance activities that add value to products, and to eliminate activities that do not add value to products, senior management and executive management in industrial companies must commit to increasing activating of the use of lean accounting tools, this helps to maximize the value of the company. 2. enabling the use of the value stream mapping tool in lean accounting to fully determine the flow of all production activities and their workflow in an integrative way, as well as to control production processes and their timing, and to create daily hourly reports to measure the increase in the ability to discover and solve obstacles in order to participate in increasing the company’s value. 3. to familiarize industrial companies with lean accounting and its tools, significance, and advantages by conducting training sessions and workshops by the relevant authorities in the jordanian industrial sector 4. enhancing the management of jordanian industrial companies’ attention in capturing possibilities and offering new products and services that will enable them to produce and enhance future earnings. 5. jordanian industrial companies’ management should develop detailed plans and implement effective strategies to help increase the company’s value and improve quality and success. 6. increasing the level of employee involvement in developing plans to enhance quality and performance, taking into account their comments and recommendations regarding the production process, and maximizing the company’s value. 7. conclusions in this paper, the impact of lean accounting on the value of company has been studied in jordanian industrial companies. twenty five jordanian industrial companies listed on the amman stock exchange during the period from 2017 to 2021 are selected in this study to examine the lean approach. the outcome of this study are the availability of an impact of lean accounting tools in enhancing the company's values in jordanian industrial public shareholding companies, with a high level of relative importance. in the future, the lean accounting and its affect on the value of profit should be studied in jordanian banks. references alaa, k.a. 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(2017), the role of integration between lean accounting and the theory of constraints in reducing production costs in manufacturing university. unpublished master’s thesis. jordan: irbid national university. teixeira, h.f., santos, n.m.b., akkari, a.c.s., munhoz, i.p. (2019), lean accounting: economic-financial performance of companies with lean manufacturing. international. journal of advanced engineering research and science, 6(5), 444-451. tx_1~at/tx_2~at international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2022, 12(6), 64-76. international review of management and marketing | vol 12 • issue 6 • 202264 exploring the relationship between organizational culture, organizational commitment and performance in commercial banks in two african countries s. naidoo1, krishna k. govender2* 1regenesys business school, south africa, 2university of kwazulu-natal, south africa. *email: govenderk@ukzn.ac.za received: 18 august 2022 accepted: 28 october 2022 doi: https://doi.org/10.32479/irmm.13795 abstract although the relationship between organizational culture, organizational commitment and organizational performance has been thoroughly researched in most developed countries, not much research has been conducted in developing countries, especially in africa. thus, being sparked by the erratic performance, an on-line survey was conducted among to reflect the above relationships. with respect to organizational employees from a commercial bank in two african countries, to test 12 (twelve) hypotheses which were postulated commitment, the study focused on the three antecedents, namely, normative, affective and continuance commitment, rather than the composite concept. upon analysis of the data from a non-probability sample of 265 respondents using structural equation modelling, it was ascertained that there is no relationship between the three antecedents of organizational commitment and the performance of employees in both the combined, as well as in the individual bank samples. however, although no relationship existed between organizational culture and employee performance, a strong positive relationship was ascertained between organizational culture and organizational performance. considering that the findings do not necessarily concur with much of what has been reported in the literature, the implications of the findings on the performance of the sampled banks as well as for future research, are discussed. keywords: culture, performance, commitment, commercial banks, developing country jel classification: m14 1. introduction one of the main challenges facing organizations particularly in the service industry, is having committed and competent employees, who give of their best towards the achievement of organizational objectives. andrew (2017), asserts that when a bond is developed between employees and the organization, employees will perform better as they are more committed, and this commitment is important for organizations to remain competitive. tompos and ablonczy-mihályka (2018) claimed that studying culture in the workplace has become relevant, due to the fact that cultural diversity within organizations has become common. other researchers opine that cultural diversity has positive implications for the workplace, including sustainability and competitive advantage (urbancová et al., 2020). tompos and ablonczy-mihályka (2018), assert that leaders and managers must meet the conditions that make cultural diversity conducive for the productivity of employees and overall performance of the organization. according to the annual financial reports of the commercial banks in lesotho and eswatini, it was evident that in 2017, both banks experienced a decline in financial performance compared to the previous reporting period. although in 2018, both these banks showed an improvement in financial performance, in 2019, both the performance of both banks declined, thus prompting the need to understand whether this inconsistent performance is attributed to the culture or employee commitment (financial reports this journal is licensed under a creative commons attribution 4.0 international license naidoo and govender: exploring the relationship between organizational culture, organizational commitment and performance in commercial banks in two african countries international review of management and marketing | vol 12 • issue 6 • 2022 65 2017-2019). this study will therefore assess the relationship between organizational culture, organizational commitment and performance at one commercial bank in each of the above african countries. more specifically, the study will critically examine the effects of the three antecedents of organizational commitment on employee and organizational performance. 2. literature review schein (2010) as cited by tomya and saenchaiyathon (2015), referred to culture as ‘’a pattern of basic assumptions, which are important for management as they create success or failure for an organization.” jardioui et al. (2019) view culture as “shared values” and “ways of working” for individuals in an organization. several frameworks have developed to understand and study culture and according to rukh and qadeer (2018), the cultural values framework (cvf) provides an accurate assessment of culture mainly in the private sector in both developed and developing economies. in a study on key cultural constructs using the cvf model, pinho et al. (2013), confirm that organizational culture affects organizational performance. according to dauber et al. (2012), organizational culture can be classified into three approaches, which include the “dimensions” approach, where organizational culture is linked to other constructs and adopts a multidisciplinary approach. this approach is adopted in this study, since it includes the relationship between organizational culture, organizational commitment and performance (homburg and pflesser, 2000). pinho et al. (2013) highlighted that organizational commitment is made up of three dimensions which include the employee’s involvement, emotional attachment and identification with the organization. according to syakur et al. (2020), commitment is the ability to build long term relationships where certain employees would stay longer than others who did not commit to relationships. martini et al. (2018), assert that employee commitment is also referred to as organizational commitment, as it relates to an employee’s attitude or loyalty towards the organization. prihantoro (2012), argued that employee performance can be influenced by organizational commitment. according to andrew (2017), a positive relationship between organizational commitment and job performance, is required for companies to enhance their performance, and to strengthen the employees’ commitment towards the organization. nikpour (2017) asserts that some of the factors that support organizational commitment include emotional commitment, continuance commitment and normative commitment. according to nguyen et al. (2020), when employees trust an organization, they are likely to be more committed to the organization; thus, trust is also viewed as a antecedent of commitment. kaplan and kaplan (2018) identified three factors influencing organizational commitment, namely, strong belief and acceptance of the organization’s values; the willingness to exert effort on behalf of the organization; and a desire to remain a member of the organization. kaplan and kaplan (2018), identified these factors as, fulfilling set goals; service quality; acceptance of change; and fulfilling extra tasks, and these factors supported both the theories they identified and the conceptual framework they developed. willingness to exert effort on behalf of the organization is associated with performance. pinho et al. (2013), posit that organizational performance is a recurring theme that is investigated by management, with little consensus on how performance is defined. organizational performance is the collective performance of individual employees, whereas employee performance is the evaluation of the results of an employee’s behaviour against the accomplishment of a given task (berberoglu, 2018). organizations are always trying to improve their performance in order to achieve their goals and objectives, and is often lead by intelligent, energic and agile leaders, who inform and develop the culture to remain competitive (mujanah et al., 2019). these researchers further postulate that development of a strong culture prepares organizations in times of uncertainty and also improves organizational performance. sukanebari and konya (2020), assert that the accomplishment of work in an organization is achieved through its employees, so if organizations are to improve performance, employee commitment becomes necessary as it promotes individual employee performance. singh et al. (2018) identified several factors affecting organizational performance and these included organizational leadership. according to raharjo et al. (2018), some of the important antecedents of employee performance include, organizational commitment, job design and job satisfaction. thus, presenting the view that when employees are more committed to their jobs, they will be more involved in the activities of the organizations, that may result in organizational performance. lay et al. (2020), highlight that organizational culture influences the employee’s behaviour and organizational performance. according to martini et al. (2018), the employee’s performance is also influenced by internal factors that include competency, work commitment, job satisfaction; internal organization that relate to the organizational culture. several researchers (limpanitgul et al., 2017; lau et al., 2017; saha and kumar, 2018; lee and cho, 2018), explored the relationship between organizational culture and affective commitment, and reported that organizational culture did not have a direct influence on affective commitment. however, adam et al. (2018), concluded that organizational culture has a significant and positive effect on organizational commitment. in order to further explore the relationship between organizational culture and affective commitment with respect staff in an african bank setting, it is postulated as follows: h1a: organizational culture has a significant positive impact on the affective commitment of bank staff in eswatini. h1b: organizational culture has a significant positive impact on the affective commitment of bank staff in lesotho. pakpahan (2018) studied the impact of organizational culture on normative commitment, and reported that organizational culture is positively associated with the normative commitment of employees. limpanitgul et al. (2017), found that organizational culture significantly strengthens the effect of empowerment on normative commitment. normative commitment was also found naidoo and govender: exploring the relationship between organizational culture, organizational commitment and performance in commercial banks in two african countries international review of management and marketing | vol 12 • issue 6 • 202266 to be depend on organizational culture (arokiasamy and tat, 2019; batugal, 2019). in order to further understand the relationship between organizational culture and normative commitment, it is hypothesised that: h2a: organizational culture has a significant positive impact on the normative commitment of bank staff in eswatini. h2b: organizational culture has a significant positive impact on the normative commitment of bank staff in lesotho some researchers (yaseen et al., 2018) reported that organizational culture had a significant positive relationship with continuance commitment. however, other researchers (limpanitgul et al., 2017; raharjo et al., 2018; lundkvist and amedi, 2019) reported that no relationship existed between organizational culture and continuance commitment among employees. thus, in order to explore the relationship between organizational culture and continuance commitment with respect to the african bank employees, it is hypothesized as follows: h3a: organizational culture has a significant positive impact on the continuance commitment of bank staff in eswatini. h3b: organizational culture has a significant positive impact on the continuance commitment of bank staff in lesotho. raharjo et al. (2018), affirmed that affective commitment has a significant positive effect on employee performance, a view which is also supported by several researchers (hafiz, 2017; ribeiro et al., 2019). in order to explore these relationships further in the context of bank employees in eswatini and lesotho, it is hypothesised that: h4a: affective commitment has a significant positive impact on the performance of bank employees in eswatini. h4b: affective commitment has a significant positive impact on the performance of bank employees in lesotho. researchers (martini et al., 2018; karem et al., 2019), highlight that normative commitment can also affect employee performance. however, kaplan and kaplan (2018), revealed that there is no relationship between normative commitment and employee work performance. since there are different views on the relationship between commitment and performance, in order to explore the relationship further in the context of the staff from two african banks, it is hypothesised that: h5a: normative commitment has a significant positive impact on the employee performance of a bank in eswatini. h5b: normative commitment has a significant positive impact on the employee performance of a bank in lesotho. raharjo et al. (2018), found that morale is the dominant indicator of commitment, whilst low error rate was the dominant indicator of employee performance. these researchers demonstrated that there is a positive relationship between commitment and employee performance. martini et al. (2018) confirmed that continuance commitment has a significant positive effect on employee performance. these findings were also supported in studies conducted by memari et al. (2013). however, some other researchers (cesario and chambel, 2017; kaplan and kaplan, 2018) concluded that there is no relationship between continuance commitment and employee work performance. thus, in order to explore the relationship further, it is hypothesised that: h6a: continuance commitment has a significant positive impact on the employee performance of a bank in eswatini h6b: continuance commitment has a significant positive impact on the employee performance of a bank in lesotho andrew (2017), reported that there is a strong and positive relationship between employee commitment and organizational performance and that all three commitment contributes equally to organizational performance. other researchers such as nikpour (2017), also concluded that organizational commitment mediates the relationship between organizational culture and organizational performance. however, nguyen and tu, (2019) revealed that there is no correlation between affective commitment and organizational performance. to explore the relationships further and in an african bank context, it is hypothesised that: h7a: affective commitment has a significant positive impact on the organizational performance of a bank in eswatini h7b: affective commitment has a significant positive impact on the organizational performance of a bank in lesotho many studies, including that of raharjo et al. (2018) and mujanah et al. (2019), confirm that organizational commitment has a positive relationship with employee performance. however, although kaplan and kaplan (2018), hypothesised that normative commitment has a positive effect on work performance; they concluded that normative commitment had no significant impact on work performance. in order to further explore the relationship between normative commitment and organizational performance, it is hypothesised that: h8a: normative commitment has a significant positive impact on the organizational performance of a bank in eswatini h8b: normative commitment has a significant positive impact on the organizational performance of a bank in lesotho sukanebari and konya (2020), highlighted that employees with high continuance commitment will work hard to achieve the organization’s goals and objectives. these researchers concluded that a significant and positive relationship exists between continuance commitment and the antecedents of organizational performance, which include effectiveness, efficiency and profitability. ekienabor (2018) also confirmed the relationship between continuance commitment and organizational performance. in order to explore this relationship further and in an african bank context, it is therefore hypothesised that: h9a: continuance commitment has a significant positive impact on the organizational performance of a bank in eswatini h9b: continuance commitment has a significant positive impact on the organizational performance of a bank in lesotho some researchers (raharjo et al., 2018; mujanah et al., 2019), assert that organizational culture can result in the achievement of organizational objectives. raharjo et al. (2018) argued that if an organization has a good culture, employees will be more satisfied, which will ultimately result in improving their performance. yamali (2018), argued that since employees are the backbone of naidoo and govender: exploring the relationship between organizational culture, organizational commitment and performance in commercial banks in two african countries international review of management and marketing | vol 12 • issue 6 • 2022 67 an organization, they contribute to an organization’s development, and that the organizational culture assists employees to identify with the organization. adam et al. (2018), also established that organizational culture has a significant positive effect on employee performance and argued that organizational culture plays a key contributing role that directly influences employee performance. however, pawirosumarto et al. (2017) posited that that organizational culture does not significantly influence employee performance. in order to explore the relationship further, and in an african context, it is hypothesised that: h10a: organizational culture has a significant positive impact on employee performance at a bank in eswatini h10b: organizational culture has a significant positive impact on employee performance at a bank in lesotho from an early study undertaken by denison (1990) on the relationship between corporate culture and performance, it was concluded that participative corporate cultures outperformed cultures that were non-participative. several other researchers (nikpour, 2017; mujanah et al., 2019), assert that organizational culture has a positive impact on organizational performance, and that this impact is as a result of organizational culture impacting employee performance. however, yesil and kaya (2013), revealed that organizational culture did not impact the financial performance of the organization. thus, the literature is somewhat conflicting and therefore in order to explore this relationship further, it is hypothesised that: h11a: organizational culture has a significant positive impact on the organizational performance of a bank in eswatini. h11b: organizational culture has a significant positive impact on the organizational performance of a bank in lesotho. mujanah et al. (2019), reported a positive relationship between perceived organizational support and employee performance. hameed and anwar, (2018), concluded that human capital has a direct relationship with organizational performance. in order to further explore these relationships, it is therefore hypothesised, that: h12a: employee performance has a significant positive impact on the organizational performance in a bank in eswatini h12b: employee performance has a significant positive impact on the organizational performance in a bank in lesotho 3. methodology this research is conducted by using the survey method as postulated by funminiyi (2018). a positivist research paradigm was adopted since the study focused on testing relationships between research constructs to deduce conclusions. a quantitative approach was also deemed most suitable to meet the study objectives and test the proposed hypotheses (nayak and singh, 2021). furthermore, a cross sectional design was deemed appropriate since it is analytical in nature and establishes relationships (zangirolami-raimundo et al., 2018). a non-probability convenience sampling method was used to select the research sample. the target population included all staff that were employed in the two international banks in lesotho and eswatini. the researcher received the email addresses of the respondents from the it division of these respective banks. the md of these banks sent out a notification informing staff about the research and encouraged participation. it was evident from the hr reports that there were 272 staff in the lesotho bank and 290 in eswatini. the determination of a valid and acceptable sample size was based on cochran’s (1977) correction sample size formula for categorical data (bartlett et al., 2001). the overall sample size of 228,13, was rounded up to 229 respondents (bartlett et al., 2001). the reason for using the correctional formula was as a result of the sample size exceeding 5% of the population size, (cochran, 1977). therefore, based on the combined population of 562, a sample size of 228.13, rounded off to 229 was deemed acceptable for this study, (bartlett et al., 2001; cochran, 1977). the questionnaire employed in this survey consisted of seven sections. section a required that respondents supply their biographical and background information. sections b, c, d, e and f focused on the research constructs of the study, which were operationalized in accordance with previous research after minor modifications (owino, 2014). a six-item scale was adapted and adopted from terzioglu et al. (2016) to measure ‘organizational culture. a six-item scale was also adapted and adopted from malhotra and mukherjee (2004), to measure “continuance commitment;” “normative commitment” and “affective commitment.” a five-item scale was adapted and adopted from shahzadi et al. (2004) to measure employee performance. finally, “organizational performance, was measured using a six-item scale adapted from rahman (2001). all items were measured on a 5-point likert scale which was anchored by 1 = strongly disagree to 5 = strongly agree, to express the degree of agreement with each statement. lower scores reflected respondents’ disagreement with the statements, while higher scores reflected their agreement. thus, the scores implied the mean scores, which reflected the respondents’ level of agreement or disagreement with the constructs (nunan et al., 2017). a pilot study was conducted among 10 participants from each country and six questionnaires were returned from eswatini and five from lesotho. the pilot study revealed critical information relating to the confusion of understanding of particular words. there was also sensitivity around racial clustering and this was subsequently removed from the questionnaire. although these questionnaires were validated in many previous studies (terzioglu et al., 2016; malhotra and mukherjee, 2014; shahzadi et al., 2004; rahman, 2001), the pilot study revealed that when applied in a different cultural context, the questions may not be that easily understood by the respondents. thus, necessary amendments were made to the wording of the statements. the online survey was conducted by creating and emailing separate links for eswatini and lesotho. the survey was conducted over 30 days, and on the 30th day, after discussions with a statistician, it was decided that the response was sufficient. the data was coded in an excel spreadsheet before analysis. descriptive and inferential statistics analysis were carried out using the spss software (ong and puteh, 2017). structural equation modelling (sem), was naidoo and govender: exploring the relationship between organizational culture, organizational commitment and performance in commercial banks in two african countries international review of management and marketing | vol 12 • issue 6 • 202268 used since it is an important process to evaluate the goodness of fit of the proposed model, (shi et al., 2019). confirmatory factor analysis was conducted to assess reliability and validity of the measurement instruments, and thereafter, the path analysis was performed in order to test the proposed hypotheses. the chi-square (x²) distribution allowed the researcher to evaluate the fitness of the measurement model. however, since according to shi, lee, maydeu-olivares (2019), the chi-square is not always sufficient in assessing a model fit, other goodness fit model indices were developed to provide usefulness of the hypothesised model and to further determine the feasibility of the solution and explain the data observed (shi et al., 2019). these included bentler’s (1990) comparative fit index (cfi), root mean square error of approximation (rmsea) (cangur and ercan (2015), and bollen’s (1989) incremental fit index ((ifi) (moss, 2016). reliability was assured using composite reliability (cr) (hajjar, 2018; mendi and mendi, 2015; peterson and kim, 2013). since the alpha coefficient (α) is not a ‘desirable’ estimate of reliability of a scale, due to for example, under-estimating reliability (peterson and kim 2013), cr has therefore become the alternative reliability estimate. the factor loadings of the default model were used to calculate the cr values which are aligned to the views of hajjar (2018) and mendi and mendi, (2015). o’hair et al., (1998) posited that the threshold for cr values should be above the 0.70, which is consistent with othman and rahim (2019) and zaid et al. (2019). the cr threshold to be met was 0.6 ≤ x > 0.7 for all the factor loadings. convergent validity was assessed based on the composite reliability (cr) value and if the cr value is greater than 0.80, then the standards for convergent reliability have been met (zaid et al., 2019). convergent validity was examined by observing the inter-correlation between measurement items and the research constructs. therefore, in the current study, if the cr value was greater than the average variance extracted value (ave), then the convergent validity standards have been met. in order to compute the ave values, the formula suggested by rochefort et al. (2018) was used. in order to justify the existence of convergent validity, the ave needs to be greater than 0.5 and the cr greater than 0.7. discriminant validity was examined by measuring the maximum shared square variance (msv) and discriminant validity is attained when the ave is greater than.50 and greater than the msv (balakrishnan and griffiths, 2017). the amos software was used for sem, since it tests traditional models using confirmatory factor analysis (kline et al., 2013). in the second stage of the model testing, the structural model was examined and centered on the suggested goodness-of-fit (gof) metrics, and the model that fits both theoretical standards and gof was chosen for sem analysis (oke et al., 2012). the general model fit in both measurements, and the structural model is examined using goodness-of-fit indices including chi-square ratio which controls the model complexity, comparative fit index (cfi), normed fit index (nfi), tucker lewis index (tli), relative fit index (rfi), incremental fit index (ifi) and root mean square error of approximation (rmsea) (dishman et al., 2015). the model specification was carried out as the first procedure in cfa (shek and yu, 2014) and the model fit estimates were evaluated (jackson et al., 2009:10). with reference to the model fit, indicators recommended include chi-square/degrees of freedom and goodness of fit index (gfi), adjusted goodness of fit index (agfi) (jackson et al., 2009), normed fit index (nfi), incremental fit index (ifi), tucker-lewis index (tli), composite fit index (cfi) and the random measure of standard error approximation (rmsea) as recommended (schreiber, nora, stage, barlow, king, 2006). based on the aforementioned, there were no adjustments to the proposed conceptual model, therefore the proposed model became the tested and accepted model. path modelling as part of the sem procedure was carried out in order to demonstrate and test the theoretical underpinnings of the study and the significance of the relationships between the model constructs (jenatabadi and ismail, 2014). the measurement model was evaluated by examining the p-values, as well as standardised regression coefficients (nunkoo and ramkissoon, 2012). 4. research findings from the combined (303) responses received, 18 questionnaires were excluded because the respondents did not fully complete the survey, which resulted in 265 responses being analysed. in summary, the response rate from lesotho was 51.3%, whilst eswatini represented a response of 48.7%, which translates into 136 and 129 respondents respectively. figure 1 reveals that that the majority (57%) of the respondents were female however, in lesotho, 48% were male respondents and 52% female, whilst in eswatini at 37.2% were male and 62.8% were female. figure 1 also reflects that the majority (56.6%) of the respondents were married. it is also evident from figure 1, that the majority (35.1%) of the respondents were in admin/clerical positions, followed by 24.2% who were in junior management positions. notably, in eswatini, the majority (48%) of the respondents were single. participants in the age 29−39 category were in the majority (48.7%), and this is more or less consistent in both eswatini (45%) and lesotho (52%). those respondents aged between 18 and 28 were in the minority, with a response rate of 7.2% for lesotho (2.9%) and eswatini at (11.6%). figure 2 reveals a consolidated view of the education level and employment tenure of the respondents. it is evident that the majority (39.6%) of the respondents had an undergraduate degree, followed by 26.8% who had a post graduate degree. it is also evident from figure 2, that the majority (30.9%) of the respondents were with their current employer for between 1 and 5 years and 20.4% had indicated that they were with their current employer for between 11 and 20 years. the 6 research constructs and the factor loadings from the final measurement model and the items/statements that were retained in order to ensure reliability and validity are reflected in table 1. it is evident that from the initial measurement model (mm), several naidoo and govender: exploring the relationship between organizational culture, organizational commitment and performance in commercial banks in two african countries international review of management and marketing | vol 12 • issue 6 • 2022 69 items/statements were dropped in order to reach construct validity and also to improve the model fit to reach an acceptable model fit. once the appropriate overall fit was established, the next step was to assess reliability and validity, based on previous literature (willoughby et al., 2017; devine and hughes, 2016). once an appropriate overall model fit was established (kuo et al., 2021; streiner, 2006), the next step was to assess reliability and validity (othman, hussein, salleh and wahid, 2014; sun, 2005; brown, 2019). according to table 1, the cr is greater than 0.7 for all the constructs measured, with the highest cr (.903) being for ac being, and the lowest ave (.755) being for cc. therefore, from a reliability perspective the results indicate an acceptable internal consistency, since according to kok and mojapelo (2020); diedenhofen and musch (2016), composite reliability (cr) is attained when the composite reliability index is >.7. from table 1, it is also evident that the factor loadings for all items are >.5, which further evidences that reliability is attained for this study (hair et al., 2014). discriminant validity was used to assess the average variance extracted (ave) values for each construct compared to the shared variance. the standardised regression weights were used to calculate ave using the formula provided. the ave is expected to be greater than 0.5, as this is deemed an acceptable threshold, however an ave that is above 0. is also regarded as marginally acceptable (kok and mojapelo, 2020; chinomona and cheng, 2013). it is evident from table 1, that whilst the ave is greater than 0.5, the cr is greater than the ave, which implies that convergent validity is attained in this study. in addition, the ave value for each construct was higher than the maximum shared squared variance (msv) and average variance extracted (ave) values, thus providing further evidence of discriminant validity (abualoush et al., 2018; hair et al., 2017). having derived the model estimates, the model fit was then retested (jackson et al., 2009:10). the general model fit in both measurements, relates to reliability and validity and the path analysis was examined using various goodness-of-fit indices (duzcu et al., 2019; miharja et al., 2020). table 2 reflects the indices used to determine the fit of the structural model. the next phase of data analysis using sem involved path analysis (moncaleano and ludlow, 2018; beran and violato, 2010). the measurement model was evaluated by examining the p-values, the mean scores as well as standardised regression coefficients, since in conducting path modelling, a particular responsibility is to explain standardised regression coefficients as well as the predictive ability (rudsari and gharibi, 2021). figure 3 reflects all the paths based on sem that was undertaken to examine the theoretical foundations of the study and the significance of the relationships between and among the research constructs. table 3 reflects the decision on the various hypotheses that were postulated in this study. 5. discussion the positive relationship between organizational culture and commitment reported in this study was also supported by previous researchers (lau et al., 2017; lee and cho, 2018; lee et al., 2018). however, in the study of lee et al. (2018), psychological contract was used as mediating variable. dwinfour et al. (2017), also concluded that organizational culture has a significant and 0 50 100 150 m al e f em al e s in gl e m ar rie d o th er 18 -2 8 29 -3 9 40 -5 0 51 + s ch oo lin g c er tif ic at e d ip lo m a u nd er g ra d d eg re e p os t g ra d d eg re e o th er overall lesotho eswatini source: primary data figure 1: gender, marital status, age and education 0 10 20 30 40 50 a dm in /c le ric al ju ni or m an ag er m an ag er s en io r m an ag er o th er <1 y ea r 15 y ea rs 610 y ea rs 11 -2 0 y ea rs > 20 y ea rs job level and tenure overall lesotho eswatini source: primary data figure 2: distribution of respondents by tenure and position naidoo and govender: exploring the relationship between organizational culture, organizational commitment and performance in commercial banks in two african countries international review of management and marketing | vol 12 • issue 6 • 202270 positive relationship with commitment, but the study neglected to define the type of commitment, which could have left the respondents interpreting commitment from their own frame of reference. saha and kumar (2018), also focused on the moderating role which organizational culture had on affective commitment, and the results revealed that organizational culture had a positive effect on affective commitment. the findings of this study with respect to the positive relationship between organizational culture and normative commitment, were consistent with that reported by several other researchers (pakpahan, 2018; arokiasamy and tat, 2019; batugal, 2019, limpanitgul et al., 2017, martini et al., 2018). limpanitgul et al. (2017), concluded that even though organizational culture was used as a moderating variable between empowerment and normative commitment, it was found to significantly strengthen the relationship. with reference to the objective to evaluate the influence of organizational culture on continuance commitment, this study confirmed that overall there is a significant positive relationship between organizational culture and continuance commitment, (p < 0.028*). the findings also revealed that overall, there is a significant relationship between affective commitment and employee performance. the overall findings are consistent with that reported by several researchers, (raharjo et al., 2018; nurbiyanti and wibisonope, 2014; parinding, 2015; hafiz, 2017; kaplan and kaplan, 2018). martini et al. (2018) also confirmed that affective commitment has a positive relationship with employee performance. table 1: factor loadings of constructs construct measured variables factor loadings organizational culture (oc) oc3 the organization supports the participation of co-workers 0.665 oc4 overall communication (across departments and levels) in the organization is effective and efficient 0.847 oc5 the organization's collaboration system is efficient and effective 0.851 oc6 my organization supports/promotes creativity and innovation 0.730 composite reliability (cr) 0.858 average variance extracted (ave) 0.604 maximum shared square variance (msv) 0.339 continuance commitment (cc) cc2 it would be very hard for me to leave my organization right now, even if i wanted to 0.897 cc3 too much in my life would be disrupted if i decided i wanted to leave my organization now 0.649 composite reliability (cr) 0.755 average variance extracted (ave) 0.613 maximum shared square variance (msv) 0.340 normative commitment (nc) nc1 i feel an obligation to remain with my current employer 0.671 nc2 even if it were to my advantage, i do not feel it would be right to leave my organization now 0.804 nc3 i would feel guilty if i left my organization now 0.818 nc5 this organization deserves my loyalty 0.723 composite reliability (cr) 0.842 average variance extracted (ave) 0.572 maximum shared square variance (msv) 0.545 affective commitment (ac) af1 i would be happy to spend the rest of my career with this organization 0.731 af2 i really feel as if this organization's problems are my own 0.622 af3 i feel a strong sense of belonging to my organization 0.886 af4 i feel emotionally attached to this organization 0.815 af5 i feel like i am part of the family at my organization 0.823 af6 this organization has a great deal of personal meaning for me 0.788 composite reliability (cr) 0.903 average variance extracted (ave) 0.611 maximum shared square variance (msv) 0.545 employee performance (ep) ep1 i am dedicated and take my responsibilities seriously 0.833 ep2 i have the professional skills and technical knowledge to do my job efficiently 0.882 ep3 i do my work according to specific policies and procedures 0.732 composite reliability (cr) 0.858 average variance extracted (ave) 0.669 maximum shared square variance (msv) 0.049 organizational performance (op) op1 profitability has increased in the past three years in our organization 0.883 op2 income from business activities has increased in the past three years in our organization 0.892 op3 at our organization the number of customers has increased in the past three years 0.647 op4 in the past 3 years our market share has improved 0.721 composite reliability (cr) 0.869 average variance extracted (ave) 0.628 maximum shared square variance (msv) 0.172 source: research data table 2: model fit indices fit indices model fit values criteria χ2/df (p-value) 1.735 (<0.001) <5 ifi 0.954 >0.9 cfi 0.953 >0.95 rmsea 0.053 <0.08 source: research data naidoo and govender: exploring the relationship between organizational culture, organizational commitment and performance in commercial banks in two african countries international review of management and marketing | vol 12 • issue 6 • 2022 71 in this study it was ascertained that normative commitment had no influence on employee performance, whereas some researchers (martini et al., 2018; batugal, 2019; karem et al., 2019) confirmed that normative commitment has a positive relationship with employee performance. nevertheless, these findings are consistent with that reported by kaplan and kaplan (2018). in assessing the relationship between employee performance and continuance commitment, it was found that there is no relationship between continuance commitment and employee performance. however, several researchers (raharjo et al., 2018; martini et al., 2018; memari et al., 2013; nydia, 2012), confirmed a positive relationship between employee performance and continuance commitment. nevertheless, the findings of this study are consistent table 3: decision on the hypotheses independent variable ↘ dependent variable standardised regression coefficient p-value hypothesized relationship (decision on the hypotheses) oc cc 0.159 <.028* significant accepted oc nc 0.444 <.001* significant accepted oc ac 0.582 <.001* significant accepted oc ep -0.006 0.946 insignificant rejected cc ep 0.075 0.436 insignificant rejected nc ep -0.220 0.110 insignificant rejected ac ep 0.355 0.006* significant accepted oc op 0.354 <.001* significant accepted cc op 0.112 0.205 insignificant rejected nc op 0.134 0.284 insignificant rejected ac op -0.058 0.621 insignificant rejected ep op 0.154 0.019* significant accepted source: primary data source: primary data figure 3: structural model naidoo and govender: exploring the relationship between organizational culture, organizational commitment and performance in commercial banks in two african countries international review of management and marketing | vol 12 • issue 6 • 202272 with that of kaplan and kaplan (2018), who also reported that there is no relationship between continuance commitment and employee performance. this study also revealed that there is no relationship between affective commitment and organizational performance. although andrew (2017), reported that there is a strong and positive relationship between the three antecedents or organizational commitment and organizational performance, the findings of this study are also consistent with that of nguyen and tu, (2019) where there was no correlation or relationship between affective commitment and organizational performance. with respect to the influence of normative commitment on organizational performance, similar to kaplan and kaplan’s (2018) study, in this study no relationship was evident between normative commitment and organizational performance. mousa and puhakka (2019) found a positive association between normative commitment and organization inclusion, however they highlighted that higher organizational inclusion results in higher performance, engagement and collaboration of employees, and lower levels of turnover, absenteeism and withdrawal behaviour from employees. this study revealed that overall, there is no significant relationship between continuance commitment and organizational performance. however, sunkanebari and konya (2020) reported that employees with high levels of continuance commitment indicated that they would work harder to achieve the organization’s goals and objectives. furthermore, sunkanebari and konya (2020), reported that a positive and significant relationship exists between organizational performance and continuance commitment. berberoglu (2018), confirmed that employees with high levels of continuance commitment stay because they “need to” and this psychological association could be detrimental to organizational performance. employees who may also have high levels of stress but remain in the organization and this further contribute to compromised organizational performance (berberoglu, 2018). the findings with respect to the relationship between organizational culture and employee performance revealed that there is no relationship between these two variables. although this finding was supported by pawirosumarto et al. (2017), these researchers alluded to a positive relationship being evident between leadership style and employee performance. this finding is also in line with that of raharjo et al. (2018); who postulated that organizations with a good culture are likely to experience higher employee performance. harlina et al. (2013) also concluded that organizational culture has a significant impact on employee performance. the findings of this study also showed that there is a significant relationship between organizational culture and organizational performance, which is also supported by rashid et al. (2003). pinho et al., 2013), only confirmed partial support for a positive relationship between organizational culture and organizations performance. the overall findings revealed that there is a significant relationship between employee performance and organizational performance. this positive finding was supported by mujanah et al. (2019). however, their study focused on the employees’ perception of organizational support that related to how an organization cares for the well-being of its people. furthermore, hameed and anwar (2018) also confirmed a positive relationship between human capital, representing people’s inspiration, aptitudes, accomplishments, qualifications, adaptability and abilities to organizational performance, and organizational performance. 6. conclusion the aim of the study was to assess the relationship between organizational culture, the antecedents of organizational commitment, employee performance and organizational performance. a conceptual model was proposed by engaging with the theoretical and conceptual literature relevant to the study and postulating a set of 12 hypotheses. data was collected from a sample of employees from a bank in lesotho and another in eswatini and the data were analysed individually as well as jointly. in summary, it emerged that there is a significant relationship between organizational culture, affective and normative commitment. however, a positive relationship between organizational culture and continuance commitment was only apparent from the lesotho sample data. it was also evident that although there was a significant relationship between affective commitment and employee performance in the combined sample data, there was no relationship between these variables in sampled data of the individual banks. furthermore, the relationship between normative and continuance commitment was also insignificant for both bank samples. it also became apparent that there is no relationship between the three antecedents of organizational commitment and the performance of employees in both the combined sample as well as in the individual bank samples. no relationship was also established between organizational culture and employee performance in both the combined sample as well as the individual bank samples. however, there was a significant and positive relationship between organizational culture and organizational performance in the combined bank sample, as well as the lesotho bank sample, but not for the eswatini bank sample. the results for the relationship between employee performance and organizational performance were also significant and positive for the combined sample as well as the sample from the bank in eswatini. it may be concluded that respondents with strong affective and normative commitment resonate with the organizational culture therefore share in the organization’s vison, feel secure and are encouraged to collaborate and contribute their ideas across the departments and division in the respective organizations. respondents from lesotho are more likely to continue their employment relationship with the bank. however, the respondents from the bank in eswatini alluded to there being alternative and more viable opportunities elsewhere in the market. naidoo and govender: exploring the relationship between organizational culture, organizational commitment and performance in commercial banks in two african countries international review of management and marketing | vol 12 • issue 6 • 2022 73 the negative relationship between the antecedents of commitment and employee performance implies that whilst the respondents remain with the organization because they resonate with the organizational culture, they are not fully committed to optimal performance. participants do not regard organization culture as a key contributor to success, and more specifically to how their contributions translate into organizational success. employees are not committed to performing their given tasks, and this may raise other personal challenges that relate to the stress and well-being of these respondents, which may compromise the sustainability of the organization. it is further concluded that respondents in both the sampled banks, have no emotional connection to their respective organizations and therefore may exit the organization at the first available opportunity. lau et al. (2017), also highlighted that employees with low levels of affective commitment have no emotive attachment to stay with the organization and are therefore more likely to exit the organization. therefore, it can be concluded that there is no relationship between organizational performance and affective commitment in this study. with respect to the bank in eswatini, visible and transformative leadership is required to focus on cultural awareness sessions to create employee buy-in to sustain the long-term success of the banks. the focus should be on a high-performance culture, and the management teams need to ensure alignment of individual goals to organization goals. with respect to the bank in lesotho, whilst it encouraging to note that employees are committed to the organization’s culture, management needs to ensure that employees remain with the organization, because they are capable of achieving organizational success, and not because they have no other alternatives for employment. engagement sessions need to be developed that translate strategy into individual objectives and outcomes and the achievement of these outcomes should be consistently monitored. the social exchange relationship needs to be closely examined to determine whether employees stay with the organization because they feel obliged to or because they have no alternatives of employment elsewhere, which further hinders profitability. an understanding of the impact of organizational culture on performance and the antecedents of organizational commitment will be very important for hr practitioners in the banking industry to develop appropriate business strategies to improve the performance of these and other similar institutions. it is encouraging to note that although the findings relating to organizational culture and normative commitment are aligned and supported by the previous studies cited in literature, it would be interesting to undertake further studies with organizational culture as a mediating or moderating variable, to determine whether similar or different findings would become evident. references abualoush, s., masa’deh, r., bataineh, k. & alrowwad, a. 2018. the role of knowledge management process and intellectual capital as intermediary variables between knowledge management infrastructure and organization performance. interdisciplinary journal of information, knowledge, and management, 13, 279-309. adam, a., yuniarsih, t., ahman, e., kusnendi, k. 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(2018), research methodology topics: cross-sectional studies. journal of human growth and development, 28(3), 356-360. https://doi.org/10.1177/1073191117698755 https://doi.org/10.1177/1073191117698755 international review of management and marketing vol. 1, no. 2, 2011, pp. 25-35 issn: 2146-4405 www.econjournals.com next-generation retailing in india: an empirical study using factor analysis manju smita dash dept of business administration, utkal university, vanivihar, bhubaneswar-4, orissa, india. email: manjudash@ymail.com c.v. krishna dept of business administration, utkal university, vanivihar, bhubaneswar-4, orissa, india. email: venkatakrishnachodimella@gmail.com abstract: the retail landscape in india is changing rapidly and is being scrutinized by large scale investments by foreign and domestic players. market liberalization and changing consumer behavior have sown the seeds of a retail transformation. indian retailing is growing fast and imparting the consumer preferences across the country. today retailing is largest contributing sector to country's gdp i.e. 10% as compared to 8% in china, 6% in brazil. modern retailing is capable of generating employment opportunities for 2.5 million people by 2010 in various retail operations and over 10 million additional workforces in retail support activities. organized retail which presently account for only 4-6 percent of the total market is likely to increase its share to over 30% by 2013.it offers huge potential for growth in coming years. india is becoming most favore retail destination in the world. keywords: organized retail, hyper market, next generation retail, specialty stores, supply chain. 1. introduction india is witnessing changing life styles, increased incomes, the demographic variabilities and vibrant democracy. indian retailing is expanding and is expected to reach at us$637 billions by 2015.modern retail is soon capturing 22% share in total retail by 2010 with the expansion of 12 millions outlets and provision of creating 1.5 millions jobs in 2 to 3 years. the industry is playing vital role in the economic growth of the country. the concept of shopping is moving in and around hypermarkets, supermarkets, and specialty stores and in other formats. the retailing industry has been present in our country through history and is considered as one of the largest sectors in the indian economy, contributing to around 14% to the gdp, and employing around 7% of the total population. for decades, retailing in india has been highly fragmented, i.e., unorganized, due to the presence of huge number of small mom-n-pop stores. as per images f&r research 'india retail report 2007', organized retailing in india accounts for 4.6% (rs. 55,000 crores or $ 12.4 billion) of rs. 120,000 crores or $ 270 billion retail market with an expected 40% plus annual growth rate, and is expected to grow to rs. 2,00,000 crores, i.e., $ 45 billion by 2010. during the period 20052006, the leading retailers' sales growth was 50-100%.while retailing industry is present for centuries, it is only in the recent times that it has witnessed so much dynamism and corporate attention. it is the latest bandwagon that has witnessed hordes of big players like tata, birla, reliance, pantaloon group, etc., leaping into it. the entry of big players in retailing has caused a major revolution in its marketing strategies and innovations. now retail sector, being considered as the most dynamic and attractive sector in india, is going through a transition phase. for a long time, the corner grocery store was the only choice available to the consumer. this is slowly giving way to international formats of retailing. the traditional food and grocery segment has seen the emergence of hypermarkets / supermarkets / grocery chains (food world, subhiksha, apna bazaar, big bazaar, etc.) and fast food chains (mcdonalds, dominos, etc.).the indian retail sector is estimated to have a market size of about $180 billion, but the organized sector represents only 2% share of this market. liberalization of indian economy has brought opening for consumer goods this has helped many mnc,s to serve with wide variety of choices to indian consumers. consumers has shifted there demands towards foreign brands international review of management and marketing, vol. 1, no. 2, 2011, pp.25-35 262 like pizza hut, mc donald’s etc. internet has also been an tool for this revolution as indian consumers are more accessible to the growing influences of domestic and foreign retail chains the indian retail industry is undergoing a paradigm shift and `next generation retailing' has evolved with new standards and benchmarks set for the sector, with higher and sophisticated technology at one end and increasing customer focus on the other. this article defines `nextgeneration retailing' and describes its characteristic features by using factor analysis and focuses on the advantages of next generation retailers in the indian context. next-generation retailing is defined as the newer and younger generation of organized retail industry evolution which is multidimensional and far more advanced when compared to its previous generations. `next-generation retailing' has evolved finally, and its important characteristic features are: high-end technology, experimenting with innovative formats and enhanced customer centricity for building a loyal clientele. according to a report by ernst and young, currently, the indian organized retail sector is in its third phase of evolution wherein the retailers are focusing on end-to-end supply chain management, backend operation, and technology and process improvements. and finally, the next-generation is challenging the older and much stronger unorganized retail. 2. literature review india is being seen as a potential goldmine for retail investors from over the world and latest research has rated india as the top destination for retailers for an attractive emerging retail market. india’s vast middle class and its almost untapped retail industry are key attractions for global retail giants wanting to enter newer markets. even though india has well over 5 million retail outlets, the country sorely lacks anything that can resemble a retailing industry in the modern sense of the term. this presents international retailing specialists with a great opportunity. the organized retail sector is expected to grow stronger than gdp growth in the next five years driven by changing lifestyles, burgeoning income and favorable demographic outline mohanty & panda (2008) opines about retailing as a sector of india occupies important place in the socio-economic growth strategy of the country. india is witnessing retailing boom being propelled by increasing urbanization, rising purchasing power parity (ppp) of ever growing india’s middle class, changing demographic profiles heavily titled young population, technological revolution, intense globalization drive etc. sahu (2010) describes that a rise in consumer confidence, improvement in profitability and aggressive expansion plans signal better tidings for listed players in the organized retail space. moreover, analysts believe listed retailers could attract foreign investments by spinning off their subsidiaries into separate companies which can provide a great opportunity for the improvement of this sector. gellner (2007) explains in this context that in most retail meetings and/or publications, hardly ever is there any talk on problems that modern retail formats are encountering doing business in india. there is a significant profitability challenge, to deliver the brand promise in terms of quality and geographic spread in line with the growth in consumer demand. nagesh (2007) describes that indian retailing will see a sea of change in the next five years, driving consumption boom never seen in the history of any country. from a drout situation we will see a flood of modern retail, so indian retail will be on a steady ground of sustained growth year after year and thereafter. akash (2009) says that retail business in india, as anywhere else in the world, plays a crucial role in an economy. retail in india has the potential to add value over rs 2,00,000 crore ($45billion)business by the year 2010 generating employment for some 2.5 million people in various retail operations and over10 million additional workforce in retail support activities including contract production and processing, supply chain and logistics, retail real estate development and management. gibson, ceo retail association 0f india opines (2007) that modern retailing today is growing faster than expected while the current growth rate is around 30 percent, the sector is expected to grow at 4050percent on a year basis. shivkumar, executive director and leader of retail and consumer practices price warehouse co-operatives,(2009)also holds the opinion that retailing is the next sunrise segment of the economic development of the country. next-generation retailing in india: an empirical study using factor analysis 27 mishra (2008) says, there is a hectic activity in the sector in terms of expansion, entry of international brands and retailers as well as focus on technology, operations, infrastructure and processes. all these present a tremendous opportunity in this high growth industry. yuvarani (2010) opines that according to a study the size of the indian retail market is currently estimated at rs 704 corers which accounts for a meager 3% of the total retail market. as the market becomes more and more organized the indian retail industry will gain greater worth. however, the future is promising, the market is growing, government policies are becoming more favorable and emerging technologies are facilitating operations. biyani (2007) describes that we are on the cusp of change wherein a huge, multicultural india is transforming from a socialist economy to a consumption-led, creative economy. the scope and depth of change that is taking place due to the revolutionary retail market with a gigantic opportunity for marketers and retailers, not only in large cities but also in small towns. so retailing can play a significant role in creating the india of tomorrow. kearney (2007) explains that the retail sector provides a unique platform to india .government, both central and state, need to engage with the sector and utilize its potential for social development. so the indian market and its consumers poised for a retail consumption explosion that will continue for future. india’s sunrise retail sector is witnessing a major transformation as traditional markets make way for modern and indigenously development retail formats. standing on the threshold of a retail revolution and witnessing a fast changing retail landscape. indian retail is still growing, and growing at an enviable rate. in the new era of liberalization, there exists immense opportunities for retail business .progressive policies, economic and political stability ,liberal policies on technology, changing consumers profile and demographic character, increasing urbanization, improved infrastructure, increasing number of nuclear families ,increasing working women population are new opportunities. bulging of middle and upper middle classes, whose purchasing power is now substantial and turning indian economy as the fourth largest economy in the world in terms of purchasing power, are opportunities galore for giving further boost to retail business in india. 3. objectives and methodology the main objectives of this article are: • to define next-generation retailing • to identify the characteristic features of next-generation retailing • to find out the factors of next-generation retailing • to identify the advantages of next-generation retailing 1. sample size: 200 2. sampling method: simple random sampling 3. sample population: consumers 4. sampling data: primary field survey data 5. sampling area: visakhapatnam india the global potential market for retailing retailing is the world's largest private industry with total sales of $6.6 tn. in india too, the industry is large, accounting for around 10% of gdp, which is the second largest after agriculture. annual retail sales in india are estimated at $340 bn and have been growing at 5% annually. india has one of the highest densities of retail outlets in the entire world. there are more than 12 million retail outlets (including unorganized ones) in the country. over the past decade, there has been rapid expansion of organized retail formats. the organized retail space had increased to 16 million sq ft in 2008 from barely 1 million sq ft in 2002. the customer profile too is quite young and spending patterns have shifted upwards, thus creating a growing opportunity for the retailers to serve and delight the customers. while 50% of india's population is less than 25 years old, 70% is less than 35 years of age. the implication is that there is a large complement of young working population, thus, resulting in increased retail spending. the indian market is quite lucrative for global players in the retail sector, and india has been placed at second position in at kearney's annual global retail development index (grdi) 2008. as the contemporary retail sector in india is reflected in sprawling shopping centers, multiplexmalls and international review of management and marketing, vol. 1, no. 2, 2011, pp.25-35 282 huge complexes offer shopping, entertainment and food all under one roof, the concept of shopping has altered in terms of format and consumer buying behavior, ushering in a revolution in shopping in india. this has also contributed to large-scale investments in the real estate sector with major national and global players investing in developing the infrastructure and construction of the retailing business. the trends that are driving the growth of the retail sector in india are  low share of organized retailing  falling real estate prices  increase in disposable income and customer aspiration  increase in expenditure for luxury items (chart) another credible factor in the prospects of the retail sector in india is the increase in the young working population. in india, hefty pay packets, nuclear families in urban areas, along with increasing working-women population and emerging opportunities in the services sector. these key factors have been the growth drivers of the organized retail sector in india which now boast of retailing almost all the preferences of life apparel & accessories, appliances, electronics, cosmetics and toiletries, home & office products, travel and leisure and many more. with this the retail sector in india is witnessing rejuvenation as traditional markets make way for new formats such as departmental stores, hypermarkets, supermarkets and specialty stores. the retailing configuration in india is fast developing as shopping malls are increasingly becoming familiar in large cities. when it comes to development of retail space specially the malls, the tier ii cities are no longer behind in the race. if development plans till 2007 is studied it shows the projection of 220 shopping malls, with 139 malls in metros and the remaining 81 in the tier ii cities. the government of states like delhi and national capital region (ncr) are very upbeat about permitting the use of land for commercial development thus increasing the availability of land for retail space; thus making ncr render to 50% of the malls in india. the story of organized retail even though the indian market holds a lot of promise, the penetration of organized retail has been comparatively quite low in india. india is a nation of traditional mom and pop stores, which have an extensive reach, and have been ruling the retail sector for many years. the traditional unorganized retail outlets provide customized services to their small local clientele, including credit sales and home delivery. however, the entry of many organized retail chains, some of which are promoted by major indian corporate houses, is posing a threat to the traditional retailers. these new retailers are experimenting with a multitude of formats, and are trying to build a strong base with superior technology and high sense of customer centricity. the organized retailers aim to capture a progressively increasing share of the total retail pie. the large number of players entering organized retail at such a pace is a cause of concern for the unorganized retailers. from a fresh entrant like reliance fresh, to a pioneer, like pantaloon retail india limited (pril), all the organized retailers are upgrading and equipping themselves to capture the attention of prospective customers. `nextgeneration retailing' has finally emerged on the scene and the retail industry is moving ahead at a new pace. shoppers are seen being delighted by the `shoppertainment' that they are currently experiencing, and they are finding their own way of getting served better in the way they want. next-generation retailing in india: an empirical study using factor analysis 29 evolution of indian organized retailing the development of organized retail started comparatively late in india. single brand retail chains (such as those of raymond's, liberty footwear and such others) began to find a foothold in the major metros during the 1980s. multi-brand retail chains came into the picture mainly during the 1990s. shopping centers began to come up around 1995. shopping malls and hyper markets have begun to evolve primarily during the new millennium. now, several large indian business houses have made a foray into retailing, with multiple formats and in varied product categories. multinational retailers are also trying to edge their way into the indian market in whatsoever manner the present foreign investment norms permit. international retail chains, such as wal-mart, tesco, etc., are waiting in the wings for foreign direct investment (fdi) being allowed in multi-brand retailing. exhibit 1 shows different phases in the growth of organized retailing in india during the new millennium. as shown in exhibit 1, since the dawn of the new millennium, organized retail in india has shown three phases of development, while we are anticipating a fourth one: 1. first phase: this was the starting point for the take-off of organized retailing, where the main focus areas were entry, growth and expansion strategies, with importance being accorded to top line revenue growth. 2. second phase: in this phase, the focus shifted to expanding the product range and geographic reach by building a wider network of outlets. 3. third phase: this is the current phase, projected to continue up to the year 2011. in this phase, the emphasis is on technological enhancements, supply chain management, backend operations, and technology and process improvement. this phase may be considered as the first stage of `nextgeneration retailing.' 4. fourth phase: in the fourth phase, many decisive changes are anticipated. these include mergers and acquisitions, consolidations and shakeouts, involving huge investments. 4. empirical analysis given this background, a sample of 200 consumers was surveyed to explore the characteristic features of `next-generation retailing' with the help of factor analysis. all the 200 respondents were surveyed on 14 variables listed in exhibit 2, to know how they rate each variable as being a characteristic feature of `next-generation retailing.' the rating was done on a five-point semantic differential scale, ranging from `strongly agree' to `strongly disagree.' the survey data was analyzed by factor analysis through principal component analysis extraction method using spss version 15.0. some of the results obtained are summarized in exhibits 3 to 6. finally, three factors are extracted by this method. factor analysis clearly demarcates the important dimensions for `next-generation retailers', as the results clearly show that the 14 variables can be grouped into three factors or dimensions that best explain `next-generation retailing'. the three important dimensions of `next-generation retailers' are: 1. technology a. sophisticated information management system (factor loading = 0.539) b. computerized inventory management system (factor loading = -0.565) c. strong supply chain (factor loading = 0.655) international review of management and marketing, vol. 1, no. 2, 2011, pp.25-35 303 d. speedier processing (factor loading = 0.770) e. electronic billing (factor loading = -0.828) 2. innovative format decisions a. new and improved merchandize lines (factor loading = 0.553) b. newer locations (factor loading = 0.712) c. variety of assortments (factor loading = -0.588) d. experiment different sizes (factor loading = -0.371) e. attractive visual merchandizing (factor loading = -0.708) 3. customer centricity a. customer friendly (factor loading = 0.180) b. exceeding customer expectations (factor loading = -0.603) c. providing rich customer experience (factor loading = 0.739) d. more value for money (factor loading = 0.750) next-generation retailing in india: an empirical study using factor analysis 31 international review of management and marketing, vol. 1, no. 2, 2011, pp.25-35 323 next-generation retailing in india: an empirical study using factor analysis 33 based on the above, `next-generation retailing' is defined as "the newer and younger generation of organized retail industry evolution which is multidimensional and far more advanced than its previous generations." the important dimensions of `next-generation retailing', referred to as `the three dimensions' that are making it unique and enabling it to stay ahead of the previous generations, are: 1. technology 2. innovative format decisions 3. customer centricity the next-generation retailers stay ahead of the previous generations by advancing along these three dimensions and thereby pose a stiff competition to others. the three dimensions of `next-generation retailing' are shown diagrammatically in exhibit 7. the concept, definition, dimensions and diagram pertaining to `next-generation retailing' are developed, based on the results of the field survey and factor analysis. 5. challenges & opportunities retailing has seen such a transformation over the past decade that its very definition has undergone a sea change. no longer can a manufacturer rely on sales to take place by ensuring mere availability of his product. today, retailing is about so much more than mere merchandising. it is about casting customers in a story, reflecting their desires and aspirations, and forging long-lasting relationships. as the indian consumer evolves they expect more and more at each and every time when they steps into a store. retail today has changed from selling a product or a service to selling a hope, an aspiration and above all an experience that a consumer would like to repeat. for manufacturers and service providers the emerging opportunities in urban markets seem to lie in capturing and delivering better value to the customers through retail. for instance, in chennai cavinkare,s limelite, marico’s, kaya skin clinic and apollo hospital’s apollo pharmacies are examples, to name a few, where manufacturers/service providers combine their own manufactured products and services with those of others to generate value hitherto unknown. the last mile connect seems to be increasingly lively and experiential. also, manufacturers and service providers face an exploding rural market yet only marginally tapped due to difficulties in rural retailing. only innovative concepts and models may survive the test of time and investments. however, manufacturers and service providers will also increasingly face a host of specialist retailers, who are characterized by use of modern management techniques, backed with seemingly unlimited financial resources. organized retail appears inevitable. retailing in india is currently estimated to be a us$ 200 billion industry, of which organized retailing makes up a paltry 3 percent or us$ 6.4 billion. by 2010, organized retail is projected to reach us$ 23 billion. for retail industry in india, things have never looked better and brighter. challenges to the manufacturers and service providers would abound when market power shifts to organized retail. international review of management and marketing, vol. 1, no. 2, 2011, pp.25-35 343 organized retailing in india: trend of 21st century from mandis to malls, indian retailing has come a long way. the transformation of indian retailing is to be noticed, especially with the indian economy playing a crucial role globally. with food and oil prices rising internationally, the retail sector worldwide has been impacted. to develop a better understanding of the key challenges in the retailing sector and to discuss and debate on the strategies for combating challenges faced by the indian retail sector, confederation of indian industry (cii) with deloitte as the knowledge partner organized a retail conference “transforming retailing in india” in mumbai. speaking on global trends, strategies and outlook in the retail segment in the 21st century was dr ira kalish, director, deloitte research. differentiation, branding, compelling customer experience, exploring commoditization, share of purchasing power, and continuous innovation would be the key retail strategies to be focused on in the 21st century, highlighted dr kalish. he further spoke on the growing impact of the internet on global retailing, including the gradual decline in store visits, slower growth of same store sales, increase in internet shopping from 0% 5% in the last 10 years in the us and bigger increase in internet research. incremental spending on innovative products, focus on health, wellness and focus on social responsibility are the main challenges in global retail, stressed the speaker. present at the cii conference was mr shyamak tata, partner, deloitte haskins & sells who in his address dealt with the challenges and opportunities faced by the indian retail industry. mr tata said that out of the indian gdp of about $1036 bn in 2007, retail was about $295 bn. organized retail penetration has increased from 3% in 2004 to 8% in 2007, mr tata said. he further elaborated on some key trends in the indian retail industry as real estate, innovation, retail formats and consolidation and collaboration. mr tata spoke on the major challenges faced by the indian retail sector as decisions on diversification, environment, location, operations, innovations, talent, technology and competition from new entrants. whether organized retail penetration in 2011 would be 25% was the key question raised by mr tata. the future ahead `next-generation retailing' has a long and promising future ahead, as it has started late in india and is as yet in a nascent stage. technology is going to be the crucial factor in the development of retail in india, which will get even stronger and the backend supply chain will also become more robust in the near future. there will be even more new formats, and focus on customer centricity will increase further. customers would thereby enjoy the full benefits of `next-generation retailing' in india. `next-generation retailing' has evolved from different stages and is expanding further with three important dimensions-technology, innovative format decisions, and customer centricity. the `next-generation retailers' are on the high edge of technology adoption and because of this, they are poised to expand rapidly as more of time and resources are saved by technology, and one can even get the exact pulse of the customers by using different information systems. also, the `next-generation retailers' are at an advantage because of a wide variety of format options, thereby offering greater choice for customers and a wide range of products under one roof. the attractive and comfortable ambience would help to exceed customer expectations through better service delivery. 6. conclusion the retail sector has played a phenomenal role throughout the world in increasing productivity of consumer goods and services. it is also the second largest industry in us in terms of numbers of employees and establishments. there is no denying the fact that most of the developed economies are very much relying on their retail sector as a locomotive of growth. the india retail industry is the largest among all the industries, accounting for over 10 per cent of the country’s gdp and around 8 per cent of the employment. the retail industry in india has come forth as one of the most dynamic and fast paced industries with several players entering the market. but all of them have not yet tasted success because of the heavy initial investments that are required to break even with other companies and compete with them. the india retail industry is gradually inching its way towards becoming the next boom industry. the retail industry in india has come forth as one of the most dynamic and fast paced industries with several players entering the market. but all of them have not yet tasted success because of the heavy initial investments that are required to break even with other companies and next-generation retailing in india: an empirical study using factor analysis 35 compete with them. the india retail industry is gradually inching its way towards becoming the next boom industry. references akash, s.b. (2009), opportunities and challenges of retailing business in india-an explanatory study, kail journal of management and research, 2(1). biyani, k. (2007), ceo, future group “retailing in the creative economy”, india retail report, an images f&r research, pp.330-333. available at: www.indiaretailing.com gellner, a. (2007), the sportswear retail segment: problems & prospects, india retail report, an images f& r research, pp.202-204. available at: www.indiaretailing.com gibson,g. (2007) ’who will buy the most? business line, (brand line) p.1. kearney, a.t. (2007) india: the next retail growth story’, india retail report, an images f&r research,pp.228-233. available at: www.indiaretailing.com mohanty, a.k.& panda, j. (2008), retailing in india: challenges and opportunities, the orissa journal of commerce, vol. xxix, no.2, bhubaneswar, july, pp. 69-79. nagesh, b.s (2007), indian retail the way forward, india retail report, an images f & r research,pp.246-248,www.indiaretailing.com. panda,a.k.&mohanty,s.(2008),emerging retail trends in india, the orissa journal of commerce, vol.xxix, no.2, bhubaneswar, july, pp.81-89. sahu, r.p. (2010), higher sales boost retail, business standard, section ii, 21. shivkumar, s(2009),executive director, retail and consumer practices price warehouse cooperative, india retail report, an images f&r research, pp.6. available at: www.indiaretailing.com yuvarani, r. (2010), future trends of retail in india, edit online article: www.articlesbase.com 10_2014 allil okey.indd international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2016, 6(2), 246-249. international review of management and marketing | vol 6 • issue 2 • 2016246 the impact of organizational justice on employee retention: evidence from oman rabia imran1, kamaal allil2* 1department of management and marketing, college of commerce & business administration, dhofar university, salalah, sultanate of oman, 2department of management and marketing, college of commerce & business administration, dhofar university, salalah, sultanate of oman. *email: kallil@du.edu.om abstract increasingly, retaining competent employees is becoming a major concern for organizations. sustainability and success of organizations are dependent on reducing turnover. therefore, this research is designed to identify the role played by organizational justice dimensions in retaining employees within organizations. for that, a sample of 148 respondents working in omani airports was selected for the study. the results reveal that all three dimensions of organizational justice i.e., distributive, procedural and interactional justices have positive and signifi cant impact on employee retention. implications and directions for future research were also discussed. keywords: employee retention, distributive justice, procedural justice, interactional justice jel classifi cations: g2, j28 1. introduction employees are the main source of achieving organizational objectives. it is almost impossible for the organizations to succeed without the effort and commitment of their employees (rad and yarmohammadian, 2006). retention of good employees in an organization is becoming one of the biggest challenges, which the companies’ nowadays are facing. hr personnel along with top level management are focusing all their efforts to reduce turnover and retain effective employees; this effort is important as it reduces costs and increase chances of success for the organizations (mitchell et al., 2001). several factors can affect the retention of employees within an organization. one of the important factors is the feeling that one is treated fairly i.e., justice. employees like to be associated with an organization where they feel that their contributions are rewarded fairly (al-zu’bi, 2010). employees who feel that they are treated fairly would refl ect positive behaviors (abu elanain, 2009). organizational justice is found to have a strong impact on employee’s turnover intentions (karatepe and shahriari, 2012; sarnecki, 2015). if employees perceive that justice prevail in the organization then their chances of staying with their organization will increase (rastgar, 2013). previous research on organizational justice has focused on identifying its relationship with and its impact on turnover intentions (karatepe and shahriari, 2012; kumar, 2014; sarnecki, 2015). however, there is a scarce empirical evidence on the role of organizational justice on employee retention (er) which creates a need of the current research which is trying to fi ll this gap by conducting a research in the middle east area specifi cally in sultanate of oman. sultanate of oman is passing through a diffi cult phase as the oil prices are going down and government is left with less budget. as a consequence, organizations are also facing trouble and it is becoming diffi cult for them to retain the employees. the current research is an attempt to help organizations working in oman to identify the main factors that affect employees’ retention. therefore, the main aim of this research is to fi nd out the role played by the organizational justice dimensions in retaining competent employees within the organization. imran and allil: organizational justice impact on employee retention: evidence from oman international review of management and marketing | vol 6 • issue 2 • 2016 247 2. litertaure review 2.1. er one of the most serious issues facing organizations nowadays is retaining good employees. employees are moving from one organization to another in search for better package and benefi ts. in this scenario, organizations spend a huge amount of money and efforts to identify and implement the factors that can retain their workforce (mitchell et al., 2001). the aim of the management within the organization is to retain the employees for the maximum period of time to avoid costs, attain stability in workfl ow and increase profi t (suresh and krishnaraj, 2015). retention is defi ned as a deliberate attempt of an organization to design an environment where by all the efforts are focused towards engaging employees in a longer term (chaminade, 2007). its main purpose is to avoid the loss of experienced employees because such employees upon leaving take organizational secrets with them (abbasi and hollman, 2000). it is considered to be most diffi cult aspect for any organization as they keep on identifying the strategies for retention of employees (litheko, 2008). retention of effective employees is an essential component of an organizational strategy. identifi cation and implementation of such strategies makes an organization able to manage its talent (lockwood, 2006). the talent available at different levels within the organization judges various aspects of organizational processes and systems and then decide whether to stay with or leave the organization (hausknecht et al., 2009). one important factor that employees take into consideration while deciding to stay with the organization is their perception of organizational justice. the perception of fair treatment from the organization make them satisfi ed and thus improve their performance (fernandes and awamleh, 2006). er is also considered as one of the important factor contributing to organizational performance. if an organization fails to retain its effective employees then it would not be able to exploit their skills in order to maximize the performance (zachariah and roopa, 2012). available literature identifi es a number of factors that affect er including hr practices (walia and bajaj, 2012), job satisfaction and working conditions (akila, 2012), career development (eyster et al., 2008), compensation (feldman, 2000), employee motivation, talent management (chitsaz-isfahani and boustani, 2014) and organizational justice (karatepe and shahriari, 2012; kumar, 2014). the organizations which are successful in creating a perception among their employees that they are rewarded equitably and fairly are able to develop a workforce that is satisfi ed, have higher performance and remain retained with the organization (al-zu’bi, 2010). the likelihood that employees will retain with their organizations will increase if they perceived that they are fairly treated (yao et al., 2004). organizational justice has a strong effect on retaining valuable employees (bakhshi et al., 2009). 2.2. organizational justice organizational justice is described as how leaders make use of procedures that are fair to all to determine the outcome (colquitt et al., 2001). it is only concerned with the fair ways to treating employees (randeree, 2014). in fact, organizational justice has become a main interest to many researchers. the reason is that organizational justices have proved to have strong relationship with many variables. previous literature shows that organizational justice plays an important role in explaining many behavioral outcomes within an organization (greenberg, 1990; imran, 2015; moorman, 1991). organizational justice proved to be one of the important factors that clarify employee’s reaction to unfair work outcomes, procedures and relations (alsalem and alhaiani, 2007). there is a discrepancy among researchers regarding the number of dimensions of organizational justice. some researchers have conceptualized organizational justice as having three dimensions (bakhshi et al., 2009; bies and moag 1986); others have conceptualized justice as having four dimensions (cole et al., 2010; duffy et al., 2013; gupta and kumar, 2012). however, this research would be conceptualizing organizational justice as having three dimensions namely: distributive justice (dj), procedural justice (pj), and interactional justice (ij) as these are widely used dimensions. pj deals with the perception concerning the fairness rules and procedures regulating a process. presence of this form of justice leads to satisfaction with the process (fatima et al., 2015; nabatchi et al., 2007). dj deals with the perception of employees regarding the fairness of the reward system. when comparing with others, an employee must feel that the rewards are distributed fairly without any discrimination i.e. according to their contribution and level of effort (alsalem and alhaiani, 2007). ij refers to the perception of fairness while interpersonal treatment. it relates to the perception of the kindness and respect people receive while explaining the decision and searching for the information (bies and moag, 1986). available literature in the fi eld of industrial psychology has proved a positive impact of organizational justice on number of outcomes. these include satisfaction (bakhshi et al., 2009); commitment (ali and saifullah, 2014); organization citizenship behavior (jafari and bidarian, 2012). however, the outcome of interest nowadays is er. from the above discussion, it is amply clear that there exists suffi cient ground to treat procedural, distributive and ij as direct factors infl uencing er in the research model and thus the following hypotheses is considered (figure 1): h1: employees’ perception of pj has direct and signifi cant impact on er. h2: employees’ perception of dj has direct and signifi cant impact on er. h3: employees’ perception of ij has direct and signifi cant impact on er. imran and allil: organizational justice impact on employee retention: evidence from oman international review of management and marketing | vol 6 • issue 2 • 2016248 3. methodology the researcher controlled samples of 148 respondents from employees working in omani airports were selected to collect data for the study using a structured closed-ended questionnaire. measurement items used in this research have been adapted from literature. er items were adopted from kyndt et al. (2009). also, dimensions of organizational justice were measured using a 20-item scale developed by niehoff and moorman (1993). the distributive, procedural and interaction dimensions of justice comprised of 5, 6, and 9 items, consequently. all the items were measured at fi ve-point likert-type scale ranging from 1 to 5 (strongly disagree strongly agree). the sample consists of 80% males and 20% females, maximum respondents are between 26 and 40 years old. 18% of the respondents held higher school certifi cate, 27% held diploma, 40% were graduate. 8% were postgraduate and 7% had any other qualifi cations. 4. results descriptive analysis of the study variables (table 1) shows that the mean values ranges from 3.05 to 4.44 for dj and er. also, correlational analysis was applied to confi rm the validity of the construct. table 2 shows the reliability analysis and correlation matrix for the study variables. the table 2 shows that scales are highly reliable to be used with alpha values ranging between 0.74 and 0.92. the correlation matrix reveals that er is positively and signifi cantly related with dj (r = 0.449, p < 0.01); pj (r = 0.516, p < 0.01); and ij (r = 0.495, p < 0.01). table 3 reveal results of regression analysis of all dimensions of organizational justice (i.e., dj, pj and ij) with er. the table 3 shows that all dimensions of organizational justice (i.e., dj β = 0.241, pj β = 0.232 and ij β = 0.242) f = 25.536, p < 0.001 has a positive and signifi cant impact on er. 5. discussion findings of this study suggest that distributive, procedural and ij play important role in strengthening ers in oman particularly in airports. these fi ndings are consistent with previous researches (al-zu’bi, 2010; bakhshi et al., 2009; yao et al., 2004). organizations in order to retain employees invest their efforts in identifying the factors that can help in this regards. organizational justice is considered to be an important factor contributing in retaining the employees. if employees perceive that their organization is treating them fairly and equitably according to their efforts then their loyalties with the organization increase and they want to stay with the organization (al-zu’bi, 2010). thus organizational justice is a considered to be a strong predictor of employees’ intentions relating to their retention within an organization (bakhshi et al., 2009). the likelihood that employees will stay with their current organization increase if they perceive they are fairly treated (yao et al., 2004). this research has theoretical and practical implications for both academic researchers and managers. theoretical contribution of current research is in the fi eld of organizational justice as this is among the few researches exploring organizational justice as a predictor of er. previous literature focuses on turnover intentions but less empirical evidence is available for er. current study is an important contribution in existing literature as it fi lls this gap. in addition, managers and policy makers in oman can take advantage of the fi ndings of current research and create perceptions of organizational justice through fairness of policies, procedures and rewards system in order to retain their skilled workforce. this study suffers from certain limitations which can be the focus of future researches. the research only explores the relationship between organizational justice and er. it did not examine other variables and it did not examine the interrelationship among justice dimensions. thus, future researches may explore the procedural justice (pj distributive justice (dj) interactional justice (ij employee retention (er) ) ) figure 1: proposed research model table 1: descriptive statistics of study variables (n=148) variables number of items mean sd min max i er 5 4.44 0.889 1 5 ii dj 5 3.05 0.732 1 5 iii pj 6 3.32 0.763 1 5 iv ij 9 3.65 0.766 1 5 sd: standard deviation, er: employee retention, dj: distributive justice, pj: procedural justice, ij: interactional justice table 2: reliability analysis and correlation matrix of study variables (n=148) variables number of items i ii iii iv i er 5 (0.74) ii dj 5 0.449* (0.78) iii pj 6 0.516* 0.491* (0.83) iv ij 9 0.495* 0.389* 0.685* (0.92) *p<0.001, (chronbach’s alpha in parenthesis). er: employee retention, dj: distributive justice, pj: procedural justice, ij: interactional justice table 3: regression analysis of justice dimensions with er (n=148) model r2 f b se β t 1 (constant) 0.347 25.536* 1.628 0.330 4.929* dj 0.298 0.094 0.241 3.102* pj 0.270 0.114 0.232 2.362 ij 0.281 0.108 0.242 2.609* *p<0.001. dj: distributive justice, pj: procedural justice, ij: interactional justice, er: employee retention, se: standard error imran and allil: organizational justice impact on employee retention: evidence from oman international review of management and marketing | vol 6 • issue 2 • 2016 249 interrelationship and the role of other variables like employee engagement, leadership, organizational culture and climate. secondly, the research is limited to one sector. future researches can replicate the same study in different sectors. references abbasi, s., hollman, k. 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5.0 and later.) >> /namespace [ (adobe) (common) (1.0) ] /othernamespaces [ << /asreaderspreads false /cropimagestoframes true /errorcontrol /warnandcontinue /flattenerignorespreadoverrides false /includeguidesgrids false /includenonprinting false /includeslug false /namespace [ (adobe) (indesign) (4.0) ] /omitplacedbitmaps false /omitplacedeps false /omitplacedpdf false /simulateoverprint /legacy >> << /addbleedmarks false /addcolorbars false /addcropmarks false /addpageinfo false /addregmarks false /convertcolors /noconversion /destinationprofilename () /destinationprofileselector /na /downsample16bitimages true /flattenerpreset << /presetselector /mediumresolution >> /formelements false /generatestructure true /includebookmarks false /includehyperlinks false /includeinteractive false /includelayers false /includeprofiles true /multimediahandling /useobjectsettings /namespace [ (adobe) (creativesuite) (2.0) ] /pdfxoutputintentprofileselector /na /preserveediting true /untaggedcmykhandling /leaveuntagged /untaggedrgbhandling /leaveuntagged /usedocumentbleed false >> ] >> setdistillerparams << /hwresolution [2400 2400] /pagesize [612.000 792.000] >> setpagedevice . international review of management and marketing | vol 6 • special issue (s4) • 201680 international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2016, 6(s4) 80-85. special issue for “asia international conference (aic 2015), 5-6 december 2015, universiti teknologi malaysia, kuala lumpur, malaysia” role of gender diversity in organizational effectiveness and its implications naima bibi* ms scholar of business school, university of central punjab, lahore, pakistan. *email: honeyofbusiness@yahoo.com abstract even though considerable recognition of women at organizations, quantity of females at managerial positions (middle level and top management level) is increasing, but still too female percentage has a minor increase now a days as they were in the past years. as females are working in a male dominated society and their set procedures and practices, most of the time females face too many hurdles that minimize their pace towards upper level positions in their career growth. negative perceptions, discrimination and a glass ceiling for females as mangers is the main reason that there is a small number of female executives in organizations. accordingly, we wonder to know that gender has direct effect on organizational effectiveness and what are the barriers which women face during their professional career growth. this paper is an exploratory research to highlight different type of factors that affect organizational effectiveness and on the true reasons that push back women from proceeding to middle and top positions in organizations. structured in depth interviews of top-level managers and focus group of middle-level managers were conducted to a convenient sample with the aim of knowing their attitudes and behavior towards role of gender in organizational effectiveness and to recognize its implications that are the reason of biasness, mental block and stereotyping against female at workplace. keywords: male dominated society, discrimination, glass ceiling, interviews jel classifications: j10, m10 1. introduction humans are always different from each other on the basis of different attributes and skills. managing the humans is also an art. diversity is a sprouting notion. diversity is that people are different due to race, gender, physical and mental skills, religion, work and family standards, appearances, origins, sexual orientation and cultural orientation. every person is made uniquely and he/she is recognized by different attributes. managing diversity is a big challenge for organizations, especially managing gender diversity in top management team of organization. heterogeneous groups provide diversity advantages such as innovation and formulating new ideas. primary dimensions secondary dimensions age religious beliefs gender education ethnicity and origin geographic location sexual orientation income race work background workplace diversity does not mean only to bring the different workforce to an organization. it is to bring diversified talent to the organization. due to social and gender diversity group members will have expectation and belief that different people have different perspectives among the group and through this people will learn how to change their behaviors with other members of group/team. supporters of a group which is homogenous will have the collateral to some extent that they will reach to agreement with each other, they will easily understand the beliefs and perspectives of one another and it will lead them to one single decision. but when members of a group notice that they are socially different from one another, they change their expectations. they anticipate differences of opinion and perspective. they assume they will need to work harder to come to a consensus. this logic helps to explain both the upside and the downside of social diversity: people work harder in diverse environments both cognitively and socially. they might not like it, but the hard work can lead to better outcomes. bibi: role of gender diversity in organizational effectiveness and its implications international review of management and marketing | vol 6 • special issue (s4) • 2016 81 through all this process diversity brings productivity and benefits to the organization. now a day’s world of business is much more different than it was 50 years ago. improvement in work and family roles of women has made its contribution in the business improvement of the 21st century. females are now getting employment in male dominated professions such as legal advocacy firms, sports, army and top level corporate management. it is observed that due to gender diversity at workplace organizations have increased their productivity and output. women who are working at multiple roles generally feel better than the women who engage themselves in only household or in some other positions (simons, 1992; thoits, 1992; wethington and kessler, 1989; qureshi et al., 2014). zaman et al (2011) reports that women feel that problem such as difficulties in their career growth toward upward promotions still exist in organizations. though there are many female employees entered in organizations at middle level positions but still they are not advancing to topmanagement positions. success of business requires that organizations should utilize their talent best, irrespective of male and female. accordingly, if organizations want to use their employees’ talent best, difficulties to vertical growth of females should be improved. many difficulties are seen as biasness against females in their offices when there is concern of upward growth, pay/wages, and career progression opportunity to next level of positions. this is the reason that firms not fully utilize a major portion of their talent pool, which shows loss of millions of dollars annually as a result. “moreover, females face discrimination when it comes to their job pay. in britain, a female working full-time earns just 82% of her male colleague’s salary, a fee that for a part-time female worker sinks to 60%. the pay gap costs a woman with average qualifications about $250,000, during her lifetime.” with all such difficulties, women are also facing other stones in their paths to reach to organizations and then on career growth. some of the issues are mentioned below: • women have less opportunities to career growth activities and training and development • maternity leave undermine their promotions • paid less wages in part time • lack of access to baby day care centers • sexual harassment • stereotyping • lack of equal employment opportunities laws. there is a famous quote by margaret thatcher “if you want something said, asks a man. if you want something done, ask a woman.” mckinsey (2012) has describe that 70% of the females consider their performance equal to their male colleagues, while in males 70% believe that their performance is higher than of their female colleagues. specific designations give specific set of authorities and power. women and men both practice their authority in a different manner. women use authority to develop a culture of mentoring and relationship building. men use authority to develop a culture of hierarchy in which they give orders and they expect certain obedience from their subordinates. the main focus of this study is to explore the role of gender diversity in efficiency and effectiveness of organization and to understand the problems in its implications faced by the organization in managing gender diversity. the main objective of this study is to explore the link between gender diversity and organizational effectiveness and what are the implications in managing gender diversity. most of the organizations claim that they are equal opportunity employers then why females are hired at lower level designations and what are the biases and stereotypes which stop organization to be fair with both genders at work. • to explore the behaviors and attitudes gender diversity in organizational context. • identify the image that how respondents rate female managers in terms of productivity and decision making. • identify the problems which hinder women’s to promote upward. • explore those biased behavior and attitudes which hit the self-respect of females in the organizations. • find some suggestions that how females can be more effective for organizations if the barriers are moved away. • develop policies to manage gender specific sensitive issues at workplace • create a change in working environment for the individual and organization to get maximum level of efficiency. • to find the processes and ways to make aware to society and organizations about acceptance of gender diversity. as (moore, 1999) cited in kreitz (2007), diversity is focused on both specifically, individual employee and upon whole organization and its context as it is explained by societal concepts. many researchers have defined this term of diversity as an important difference which creates distinction among the staff members. specific attributes upon which human being differ from each other. some people are white and some are black. some differ from each other upon the basis on religion. some belong to specific origins. globally in organizational perspective and especially in pakistan it is a big challenge for organizations to manage gender diversity. previously gender diversity was measured as a social issue and it was considered as the image of the organization. but now gender diversity is moved towards the major value driver in corporate governance and organizational strategic management (joana marinova and chantal, 2010). 2. theoritical description in this part of study literature is reviewed on gender diversity, organizational effectiveness and implications to maintain gender diversity in context of social identity theory. there have been many bibi: role of gender diversity in organizational effectiveness and its implications international review of management and marketing | vol 6 • special issue (s4) • 201682 researches done on the gender diversity in context of organizational effectiveness. past researches show that women are treated with discrimination and most of the time they are appointed as nurses, secretaries and teachers. on the other side men are hired as elite professions and top management positions (grusky and grusky, 2004). in pakistan women are 48.6% of total population. labor force statistics (lfs) of 2012-13 shows that from 180 million estimated population only 12.51 million females are doing some kind of jobs. “according to the lfs, the unemployment rate was 8.3% in 2001-2002, but the rate for females it was 16.5%. that declined to 9% in 2012-2013 which was higher than the 6.2% for male employees which is another positive point.” in 2013-14 lfs female unemployment rate is lowered from 6.2 to 6.0 which is a good improvement that now females are moving toward job industry more enthusiastically (lfs, 2015). deaux and farris (1977) found that the success of men’s is attributed towards their cognitive ability even at the same time women’s successes were attributed towards hard work, matter of luck, or an easy task. if any women fails it was attributed towards her lack of skills and ability, but if any man was failed to achieve the success then it was attributed that they had difficult task, or their bad luck and less effort. in 1980 nieva and gutek indicated that there is biasness between the evaluation of men and women “men are generally evaluated more favorably than women. for example, men job applicants are selected more frequently than equally qualified women applicants for managerial, scientific, and semi-skilled positions. men applicants are given more positive assessment than women applicants on factors such as ability to adapt & accept and productivity (service potential).” even now situation is improved in many of business sectors as technology, finance and retial and a good change has been seen now is that male and female are being equally treated at their work places but still high proportion of diversity in not achieved. 2.1. some impacts of gender diversity • surveys have shown that “fortune 500 companies with more women on their boards tend to be more profitable.” • report by mckinsey showed that “companies with a higher proportion of women at board level typically exhibited a higher degree of organization, above average operating margins and higher valuations.” • in another report “it was concluded that women’s leadership styles have been characterized by task orientation, mentoring others, and concern with the needs of others. according to nasa, crew members have reported general sense of ‘calmer missions’ with women on board. plus, 75% of male crew members also noted a reduction in rude behavior and improved cleanliness.” • women managers create a better environment and bring in a strong team oriented culture. • if gender diversity will be in increasing proportion then corporate performance will be stronger. some year earlier or may be decades ago organizations had two different perspectives while hiring a female employee. it was their thought that if we will hire an unmarried girl then she would get married in some years and either she will leave her job to be a housewife or she will move to any other place with her life partner. even if she does not leave her job and stays in organization, then she will be asking for maternity leave and its medical benefits. it’s also a common perception that they will become less efficient after having child and they would pay less attention to their job tasks. it was considered that women will be more careful for their kids than their offices. “in addition, it was a widespread belief that women were not as capable as men, either physically or mentally or emotionally.” women’s mobility concerns and maternity leaves are considered weaknesses to further growth and working on a senior manager role; most of the women feel that responsibilities of family are an obstacle in their promotion path. the good solution is to emerge a working atmosphere that has harmony with family time, which will be plus point for all employees (men and women), flexible working hours, agile working and day care services for children of staff at workplace. according to ferdman and davidson in 2004 gender stereotyping is a big issues that working females should deal with. at workplace behavior and attitude of male and female is same. might be some differences were observed in past but now such differences are decreased very rapidly. there is work and family life balance conflict, but it is only attached with female staff and it affects their working environment and their efficiency. researches have shown that women who are working in more rigid office timings have more cognitive and social issues of their families than those women who are working in flexible work schedules. there would be many difficulties which may decrease women representation at top management level positions. it’s a big challenge that women are always perceived inferior than of men, but then too it’s a main factor in achieving the success for any of the organization through diversity. but with the passage of time scenario has been changed, now male and females are given equal opportunities in organizations. but still there is very less number of females in organizations. according to a study “(china has seen the greatest improvement over the past 6 years: only 6.5% of companies had any gender diversity at board level in 2005, but this increased to 50% by end of 2011).” organizations should realize and foster in their employees that by accepting the strengths of both gender, working relationships will be more productive, their mutual understanding will increase respect and trust among them. 2.2. social cognitive theory it is the society which socializes the female and male children into both genders’ adults (masculine and feminine). there are some important aspects in human’s lives such the intelligence and talent they have, how they conceptualize to themselves and other people, sociostructurally benefits and constraints they face, their career path and societal and social life are prescribed by societal “gender-typing.” upon these primary basis individuals are differentiated in their daily lives. even some of bibi: role of gender diversity in organizational effectiveness and its implications international review of management and marketing | vol 6 • special issue (s4) • 2016 83 the gender differences are founded biologically, some stereotypic characteristics and roles which are specified for women not designed biologically but it is designed culturally (epstein, 1997). this research paper provides a link between social cognitive theory and gender role in organizational context. children in our society develop in themselves concepts like gender stereotypic. when they are grown up they behave accordingly in their groups. this stereotyping for gender works when they are men and women at adult age. it also affects their thinking and actions when they are at work. 3. research methodlogy this research is an exploratory study in its nature and interpretive approach is used for this case study. qualitative research explores that how people make sense of many realities in the context of interpretation of the experiences of these realities (denizin and yvonna, 2013). yin in 2003 has described the case study approach as “an empirical inquiry that investigates a contemporary phenomenon within its real-life context, especially when the boundaries between phenomenon and context are not clearly evident.” case study method is considered a suitable method to study complex constructs like organizational effectiveness and gender role in it, in order to explore and interpret how the phenomenon is evolved (yin, 2003). due to this case study method is selected to explore and interpret the relationship between gender diversity and organizational effectiveness. in depth structured interviews and focus groups were used to collect data from the respondents. through interview method we can understand detailed perspective of interviewee to explore the complex phenomena like organizational effectiveness and role of gender diversity (alvesson, 2003). for this case study, through in-depth structured interviews were conducted of 6 top level managers form pakistani leading government and non-government organization from services and manufacturing sector in order to cover different areas rather than to stress a specific sector. each interview was already scheduled and significance and objective of study was discussed with mangers. each interview was of 60-90 min. one focus group was conducted of 8 middle and lower level employees of different organizations. notes were taken during the focus group. focus group time duration was 120 min. 4. data analysis work sheets are used for data analysis. thematic data analysis approach is used. data was coded firstly and then analyzed to determine emerging themes. data is cross validated by using triangulation. interviews and focus groups both are used to get rigorous responses. 4.1. discussion and thematic data analysis in data analysis both converging and diverging aspects came in front. major themes are discussed below: 4.1.1. gender specific facilities data shows that organizations should realize that all men and women are human beings having family concerns as well as their work place life. through these points keeping in view organizations can have flexible timing and schedules for their employees. specially for women, organizations should provide flexible working hours as different work timings, their job patterns can be changed such as job duties can be shared, work locations can be changed (telecommuting), baby day care centers in supervision of organization. 4.1.2. gender specific issues study has shown that even there are genders specific facilities are there in organizations but their practice implication is missing. male dominancy is seen in most of the sales force and top management of organizations. proper transport is not provided to females to which creates mobility issues for them. female staff has the problem of lacking in confidence to speak up with their male supervisors and top managers. 4.1.3. gender specific policies study has shown that most of the organizations implanted gender specific policies to make their workplace culture trustworthy and productive. but in some organizations policy implication is week due to lack of monitoring and checking of compliance. if the monitoring is strong then females will be more comfortable. to finish gender biasness and sexual harassment at workplace, many of the organizations have introduced zero tolerance policy for all such acts of biasness and harassment. 4.1.4. portion of females in horizontal and vertical growth recruitment teams should better understand the job skills and job specifications required for organization success. “the job analysis for male gender-typed jobs will help identify the characteristics, behaviors, skills, and past experiences presumed to be necessary for success in a particular job, rather than depending on vague personality characteristics that can be distorted to fit gender stereotypes (welle and heilman, 2007).” organizations should make structured design of promotions and career growth and then ensure that male and female both staff is being evaluated at same criteria. it should involve right assessment of employees’ participation, using some unique psychological assessments to check performance, how much tasks assigned and target achieved, how much income generated (welle and heilman, 2007). 4.1.5. managers should be responsible for their own decisions managers should be responsible for their decisions and they should be given full authority to decide well for the organization well-being and efficiency. they should describe specific criteria for hiring, evaluation and distribution of job vacancies among individuals without any gender discrimination. there should be equal opportunities for all. bibi: role of gender diversity in organizational effectiveness and its implications international review of management and marketing | vol 6 • special issue (s4) • 201684 4.1.6. major difference in culture in major parts of countries, this is culture and among all continents even, daughters are brought up in a special way, to be obedient, to be friendly, to do small household work, to take care of their toys and dolls, and to help their elder family members at home. little boys are brought up in totally a different way to build castles, to play with their friends. such conditions have made them to think themselves as superior to girls, girls don’t try to compete. through this way, men are developed such characteristics since very minor age to take top positions; whereas, women are brought up from their child hood to be only obedient followers. 4.1.7. support of top management senior managers should realize and admit that diversity at workplace is a highly competitive edge. if they are not agree to change their mindsets then all steps taken will add nothing to raise the numbers of females in the organizational work force (mckinsey, 2007). 5. conclusion from the study it is concluded that organizations are ready to accept gender diversity inclusion at the workplace. even though many policies are made to run this process smoothly but there is the gap in execution phase. policies are there only in hr manuals in organizations but lack of proper implementation and execution and continuous monitoring of these policies and procedures affect the organizational effectiveness. because due to nonimplementation of managing gender diversity polices, most of the time employees decide to quit the organization or they fail to work with full potential and productivity. this curtails organizational effectiveness and efficiency because when any employee leaves the organization, he/she takes his/her specific knowledge with himself/herself. so there is the need for the management to make some modification in existing policies specific to managing gender diversity and introduce some new policies according to the employee’s need and then implement them properly and make it possible to have continuous monitoring of these policies to be operationalized. 6. suggestions based upon the formal discussion with interviewees organizations are now realizing that many of the issues are there which affect gender diversity at work place. organizations know that if they will provide remedies to such issues then their staff will be more productive in terms of efficiency. family management is necessary for both mother and father. so workplace policies are beginning to change. many organizations have introduced flexible work hours for men and women. likelihood of career growth for females will also improve with the passage of time. mentoring is also necessary part for women career advancement. organizations provide such trainings and activities especially to women to enhance their skills. organizations have now developed social networking so that females can meet to other organizations females and share their knowledge. success of organization lies in addressing such issues. women have reached now to top positions of many organizations but still there is a less number of them to be seen at top positions. still there is an inequality when there is the matter of salaries, promotions, entering special fields. women should show extraordinary performance that if they are competed with their men workers, then they should have same skills and abilities to perform all tasks. organizations should revise their gender specific policies according to concerns of both genders. proper implementation of policies should be done and continuous monitoring is needed to overcome such issues. women should stop themselves from stereotyping about themselves that this task would never be done by us. if they will not believe in themselves then no one will believe in their skills. cultural constraints should be minimized with continuous efforts. organizations should conduct effective exit interviews. references alvesson, m. 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(2011), the impact of culture and gender on leadership behavior: higher education and management. management science letters, 1(4), 531-540. . international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2016, 6(3), 528-531. international review of management and marketing | vol 6 • issue 3 • 2016528 impact of job stressors factors on employees’ intention to leave mediated by job engagement and dispositional factors kavitha ramamurthi1*, amin vakilbashi2, siti zaleha abdul rashid3, mozhdeh mokhber4, rohaida basiruddin5 1international business school, universiti teknologi malaysia, kuala lumpur 54100, malaysia, 2international business school, universiti teknologi malaysia, kuala lumpur 54100, malaysia, 3international business school, universiti teknologi malaysia, kuala lumpur 54100, malaysia, 4international business school, universiti teknologi malaysia, kuala lumpur 54100, malaysia, 5international business school, universiti teknologi malaysia, kuala lumpur 54100, malaysia. *email: kavitha@hss.com.my abstract the purpose of this study is to determine the relationship between job stressors factors, job engagement factors (job stress, job commitment and job satisfaction), job dispositional factors (locus of control, self-esteem and social support from peers and supervisors) and the employees’ intention to leave. due to that this study is proposed a framework to study the impact of job stressors factors on employees’ intention to leave moderated by job engagement factors and job dispositional factors. the findings can be used by the firm employers or management to take necessary approach to reduce high turnover rate in their companies. keywords: job stressors, job engagement, dispositional factors, employees’ intention to leave jel classifications: m100, m140, m0 1. introduction employees are the backbone of every industry specially the service based organization whereby employees are the main resources of the company to run the company’s business operation. due to the nature of business the employees faces various problems, job stress and level of job satisfaction and influence them to search better opportunities and leave the current company. most of the time, the employees’ intention the leave the business organization is not because of the salary or wages but rather job stress and dissatisfaction. the employees want their company to recognize and care for them. perhaps the satisfied employees will understand their supervisor’s and the organization expectation that they work under. the employees who are committed to their work and company will have lots of control of their future in the organization. the turnover rate among employees has increased radically for the past few years. the turnover rate of the younger generation is higher compared to the older generation and the reasons are basically due to the better opportunities and high wages from other company or business organization. even though money is one of core reasons people leaving but there are several reasons that influence the employees intention to leave. those employees who are apart of top management of the company highlights that the reason for them to leave is due to the better benefits and privileges offered by the other company compared to the current company. meanwhile the professional employees and supporting staff tend to leave for their growth in term of knowledge and better career opportunities. the employee’s turnover rate and intention to leave is a key issue to every organization. this issue leads to frustration to most of the company as the employee’s high turnover rate causes the service disruption, customer dissatisfaction and unnecessary cost when the company needs to recruit, hire and train the new employees. there are various factors that affect and influence the employees’ intention to leave a company. the factors that influence the employee’s intentions to leave are job stress, job dissatisfaction, low pay and lack of benefit packages, stressful work condition, ramamurthi, et al.: impact of job stressors factors on employees’ intention to leave mediated by job engagement and dispositional factors international review of management and marketing | vol 6 • issue 3 • 2016 529 poor job matching, bad working conditions, lack of organizational commitment and other dispositional factors such as self-esteem, supervisor support and locus of control. in addition, there are other indirect factors that do affect the employee’s job satisfaction which are such as lack of interaction between staff and management, lack of appropriate training to newcomers and non-conducive working environment, economy, the performance of the organizations itself, the culture adapted in organizations, characteristics of the job, unrealistic expectations from higher management, demographics and the person itself. based on the research conducted by firth et al. (2004) job stressors impact the employee’s intention to leave. the study indicated that there is a relationship between employees’ intention to leave with dispositional factors and job engagement variables although not all dispositional factors contribute to the intention. dispositional factor such as employees’ locus of control does not influence employee intention to leave their job. however the above mentioned study were conducted in australia in various industry, hence arise need to conduct study on the impact of job stressors that influence the employees intention to leave by using the job engagement and job dispositional factors in other contexts. therefore this research aims to provide a framework to study the impact of job stressors on employees’ intention to leave moderated by job engagement factors (job satisfaction, job commitment and feelings of stress) and job dispositional factors (locus of control, self-esteem and supervisory support). 2. literature review 2.1. intention to leave intention to leave can be defined as an employee’s plan to leave or quit from their current job or company and move forward by looking another better offer (purani and sahadev, 2008). based on a study on the dissatisfaction of nurses (shields and ward, 2001), the factors that lead to employees intention to leave are low salaries, low fridge benefits, inflexible working hours or schedule, career advancement prospect, poor management, job stress, family obligation, early retirement, length of service, low levels of motivation, emotional exhaustion and burnout and poor social image. all the factors highlighted are still fall under job commitment, job satisfaction, job stress, locus of control, selfesteem and social support categories. in addition, according to firth et al. (2004) self-esteem and social support are positively related to employees’ job commitment. where by the employees with high self-esteem are very much committed to their job and task assigned to them. perhaps the employees high self-esteem and good social support usually will stay longer in their current job as the employees are very happy, satisfied with their job and the environment (rousseau and aubé, 2010). 2.2. job stressors job stressors can be defined as scenario or contributing factors that lead an employee to leave a company. the situation happen when the employees are unable to face the job challenges as the challenges are beyond their capability, pace and insufficient resources. the stressors vary from one person to another person dependent on their personal capabilities. firth et al. (2004) concluded that there are no direct links between stressors and employees intention to leave. thus there are other sub factors that indirectly impact employee’s intention such as locus of control; self-esteem and social support do indirectly affect employee’s intention to leave (firth et al., 2004). 2.3. job stress job stress is considered to be the nonspecific response of the body to any demands made upon it which is an internal state or reaction to anything we consciously or unconsciously perceive as a threat, either real or imagined (nilufar et al., 2009). these negative symptoms are frustration, worry, anxiety, depression and many work related issues. according to pawar and rathod (2007), job stress can be negatively related to job satisfaction. additionally mohani et al. (2005) have studied organizational sources of stress such as conflict, blocked career, alienation, work overload, and unfavorable work environment. 2.4. job commitment job commitment is also defined as psychological and emotional linkages between the employee and their job. according to labatmediene et al. (2007) there is a negative correlation between the employees job commitment and employees intention to leave as the employees are more prone to stay at their current job if they have high commitment to their job or company. employees will be committed to their job probably due to following reasons, which are he or she is effective and efficient in their job task, the cost living their current job are relatively high and he or she feels socially responsible towards his or her job. according to firth et al. (2004) there are several factors may affect the employees’ job commitment in an organization such as job stress and job satisfaction and the factors that indirectly influence job commitment are self-esteem, and social support. in addition kuean et al. (2010) stated that organization commitment does affect the employee’s turnover rate, behaviour and job performance. 2.5. job satisfaction job satisfaction has been closely related with many organizational phenomena such as motivation, performance, leadership, attitude, conflict, moral etc. researchers have attempted to identify the various components of job satisfaction, measure the relative importance of each component of job satisfaction and examine what effects these components have on employees’ productivity commitment (rafael and enrique, 2005). according to nilufar et al. (2009) job satisfaction is the sum of job facet satisfaction across all facets of a job. job satisfaction and dissatisfaction not only depends on the nature of the job, it also depends on the expectation from the job (mohani et al., 2005). job satisfaction is a complex phenomenon with multi facets (nilufar et al., 2009); it is influenced by the factors like salary, working environment, autonomy, communication, and organizational commitment (rafael and enrique, 2005). 2.6. locus of control in the psychological term, locus of control is defined as an individual’s extent of believe that internal and external factors control the events in his or her life (anuraghini, 2012). there were several studies conducted to explain the locus of control on both ramamurthi, et al.: impact of job stressors factors on employees’ intention to leave mediated by job engagement and dispositional factors international review of management and marketing | vol 6 • issue 3 • 2016530 internal and external perspectives (karimi and alipour, 2011). internal locus of control can be defined as an events and outcomes that can be influenced by the individual’s beliefs and actions. the external locus of control considers that all the outcomes or results happened in life are directly related to external factors such as chance, fate, managers (karimi and alipour, 2011). the internal and external locus of control may impact the job performance, job commitment and job satisfaction. the employees with high internal locus of control tend to be more manageable, good control of stress, more contented, less miserable (anuraghini, 2012). 2.7. self-esteem self esteem are defined as personal judgement about someone whereby is can be either positive or negative impression and always relates to an individual characteristic (kundu and rani, 2007). self esteem is one of the factors that can be used to assess employee capability and predict their future performance in the organization. the employees with high self-esteem will produce good quality and more efficient job which will make the employee feel satisfied and happy with their job. in addition, self-esteem plays an important role in impelling the workers turnover intentions, job satisfaction, organizational commitment, fundamental motivation and behaviours (abraham, 1998). 2.8. social support social support means sharing information, knowledge transfer and emotional, social or practical help to others to solve the job related (shirey, 2009). the social support and guidance by the supervisors and subordinates is very crucial factor that will affect employees’ job satisfaction and job commitment in the company. the people who obtain emotional support feel that he or she is valued and appreciated by team and company. 2.9. impact of job stressors on job engagement factors according to firth et al. (2004) the job stressor such as role conflict, role ambiguity, work overload and work and family conflict have positive impact on the employees job stress. nevertheless job stressors have negative impact on job commitment and job satisfaction. in addition the job stressor such as workload and conflict between work and family contribute to higher level of stress to the employees (savery and luks, 2001). the employees with high job stress will have lower level of motivation to work and not satisfied with their job (savery and luks, 2001). the employees that are not happy with the working environment and conditions due to the role ambiguity and unclear job scope will be less productive and lack of job commitment (aziri, 2011). in addition the employees with high level of stress will be unhappy and dissatisfied with their current job, work place and have less commitment or engagement with the company. anyway stressors such as job condition or job environments are the fundamental factors that cause stress to employees. 2.10. impact of job stressors on job dispositional factors the job stressors such as role conflict, role ambiguity, and work overload and work-family conflict have negative impact on the job dispositional factors such as locus of control, self-esteem and social support (firth et al., 2004). however according to spector and o’connell (1994) job stressors such as autonomy, role ambiguity, role conflict and workload have a positive impact on employee locus of control. basically the social support from the superior, supervisor and peers will help the employees to overcome their stress. perhaps it will help to reduce the impact of job stressors in the company. the social support has moderate effect on the relationship between stressors such as work overload and workfamily conflict and psychological malfunctioning. moreover, the job stressors have very minimal impact on employees’ self-esteem (jex and elacqua, 1999). 2.11. impact of job engagement, job dispositional and job stressors factors on intention to leave the job engagement factors such as job stress, job satisfaction and job commitment have positive impact on employees’ intention to leave from the company or organization (firth et al., 2004). the employees with high level of stress have lower job commitment and satisfaction (fairbrother and warn, 2003), and thus, increase their intensity to quit their jobs (lam and zhang, 2003). in addition calisir et al. (2011) highlighted that the employees with high level of stress have higher possibility to leave their job. job stress associates with employees’ job satisfaction and job commitment (firth et al., 2004). according to calisir et al. (2011) the employees’ intention to be also relatively depends on employees’ job satisfaction. job commitment plays an important role in influencing employees’ intention to leave (michael et al., 2009). the employees those have high intention to leave the company will have lower job commitment compared to those employees’ with lower intention to leave (calisir et al., 2011). job commitment is also directly related to employees’ job satisfaction. the organization commitment normally has more impact on the employee’s intention to leave compared to job satisfaction (lam and zhang, 2003). job dispositional factors are such as self-esteem, social support and locus of control have positive impact on employees’ intention to leave their current job and company (lo and ramayah, 2011). low self-esteem, lack of social support from supervisors and subordinates and lack of locus of control will increase the employee’s intention to leave. therefor job dispositional factors can be considered as factors which directly impact the intention to leave. job stressor such as role ambiguity, role conflict, work overload and work-family conflict have no direct link with the employees intention to leave (firth et al., 2004). in addition, the employees intention to leave influence by job stressors through the social support and job engagement factors such as job satisfaction, job commitment and job stress. the employees’ intention to leave is moderately related to the employees’ job commitment and satisfaction towards the company they are currently working (calisir et al., 2011). 2.12. conceptual framework previous studies mostly investigated the influence of job stressors on intention to leave while it is not clear how it may impact it. based on the literature, job engagement and job dispositional factors are major factors in intention to leave. therefore the purpose of this research is to address the critical gaps by reviewing ramamurthi, et al.: impact of job stressors factors on employees’ intention to leave mediated by job engagement and dispositional factors international review of management and marketing | vol 6 • issue 3 • 2016 531 the existing research on employees’ intention to leave the job while providing a framework to measure the influence of job stressors, job engagement and job dispositional factors receptivity toward employees’ intention to leave (figure 1). this research contributes to the body of knowledge via developing a conceptual framework to examine the mediating effect of job engagement factors and job dispositional factors on the relationship of job stressors factors and employee’s intention to leave, in order to bring more insight into this relationship. 3. conclusion this study investigates the relationship of job stressors factors with employees’ intention to leave work, and the mediating role played by job engagement and job dispositional factors. by providing empirical evidences on these perceptions, this research may support leaders and their firms to identify the source of organizational turnover. to recognize the external competitiveness and future survival, organizations need to deal with challenges of human resource. undoubtedly, leadership styles have certain influences toward the employees, they enhance employees’ ability to carry out tasks and motivate them to perform beyond expected. job stressors play a vital role for intention to leave. this research can be empirically implement for any further studies in the different industry to check whether the framework applicable to others contexts. however the different industry will have different factors, thus it is important to find the influencing factors before proceed with this study. the future researcher can even into focused into smaller group such as professional employees only the supporting staff only. lastly in this study the moderators’ effects are not considered thus the future researchers can test the moderators and mediators effects of all the proposed variables. references abraham, r. (1998), emotional dissonance in organizations: conceptualizing the roles of self-esteem and job-induced tension. leadership & organization development journal, 20, 18-25. aziri, b. (2011), job satisfaction: a literature review. management research and practice, 3(4), 77-86. calisir, f., gumussoy, c.a., iskin, i. (2011), factors affecting intention to quit among it professionals in turkey. personnel review, 40(4), 514-533. fairbrother, k., warn, j. (2003), workplace dimensions, stress and job satisfaction. journal of managerial psychology, 8(1), 8-21. firth, l., mellor, d., moore, k.a., loquet, c. (2004), how can managers reduce employee intention to quit. journal of managerial psychology, 19(2), 170-187. jex, s.m., bliese, p.d. (1999), efficacy beliefs as a moderator of the impact of work-related stressors: a multilevel study. journal of applied psychology, 84(3), 349-361. kuean, w., kaur, s., wong, e. (2010), the relationship between organizational commitment and intention to quit: the malaysian perspective. journal of applied sciences, 10 (19), 2251-2260. kundu, s.c., rani, s. (2007), human resources’ self-esteem across gender and categories: a study. industrial management & data, 107(9), 1366-1390. labatmediene, l., endriulaitiene, a., gustainiene, l. (2007), individual correlates of organizational commitment and intention to leave the organization. baltic journal of management, 2(2), 196-212. lam, t., zhang, h.q. (2003), job satisfaction and organizational commitment in the hong kong fast food industry. international journal of contemporary hospitality management, 15(4), 214-220. lo, m.c., ramayah, t. (2011), mentoring and job satisfaction in malaysian smes. journal of management development, 30(4), 427-440. mohani, a., hashanah, i., noor, i.h.j. (2005), job satisfaction among executives: case of japanese electrical and electronic manufacturing companies. malaysia: universiti putra malaysia. nilufar, a., zaini, a., david, y.g.f., syed, s.a. (2009), a study of job stress among university staff in malaysia: empirical study. malaysia: universiti teknologi mara and multimedia university. pawar, a.a., rathod, j. (2007), occupational stress in naval personnel. medical journal armed forces india, 63(2), 154-156. purani, k., sahadev, s. (2008), the moderating role of industrial experience in the job satisfaction, intention to leave relationship: an empirical study among salesmen in india. journal of business & industrial marketing, 23(7), 475-485. rafael, m.b., enrique, f.m. (2005), job satisfaction as an indicator of the quality of work. spain: universidad de salamanca. karimi, r., alipour, f. (2011), reduce job stress in organizations: role of locus of control. malaysia: university putra malaysia. rousseau, v., aubé, c. (2010), social support at work and affective commitment to the organization: the moderating effect of job resource adequacy and ambient conditions. the journal of social psychology, 150(4), 321-340. savery, l.k., luks, j.a. (2001), the relationship between empowerment, job satisfaction and reported stress levels: some australian evidence. leadership & organization development journal, 22(3), 97-104. shields, m.a., ward, m. (2001), improving nurse retention in the national health service in england: the impact of job satisfaction on intentions to quit. journal of health economics, 20(5), 677-701. shirey, m.r. (2009), authentic leadership, organizational culture, and healthy work environments. critical care nursing quarterly, 32(3), 189-198. spector, p.e., o’connell, b.j. (1994), the contribution of personality traits, negative affectivity, locus of control and type a to the subsequent reports of job stressors and job strains. journal of occupational and organizational psychology, 67(1), 1-12. figure 1: conceptual framework . special issue for "management of education: problems and perspectives" international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2016, 6(s2) 247-252. international review of management and marketing | vol 6 • special issue (s2) • 2016 247 the management of youth employment in a lifelong engineering education system marina v. morozova1*, tatyana s. kust2, elvira y. sokolova3, svetlana i. osipova4, natalya vladimirovna gafurova5, valentina i. vaganova6, vladimir a. ovchinnikov7, ruben o. agavelyan8 1yurga institute of technology (affiliated) national research tomsk polytechnic university, yurga, russia, 2yurga institute of technology (affiliated) national research tomsk polytechnic university, yurga, russia, 3national research tomsk polytechnic university, tomsk, russia, 4siberian federal university, krasnoyarsk, russia, 5siberian federal university, krasnoyarsk, russia, 6east siberia state university of technology and management, ulan-ude, russia, 7kuzbas regional institute of vocational education, kemerovo, russia, 8novosibirsk state pedagogical university, novosibirsk, russia. *email: morozovamarina-1@mail.ru abstract the formation of lifelong engineering (technical) education based on the interaction and collaboration among education, industrial plants and business structures contributes to the creation of a youth employment management system which, in turn, makes a contribution to the development of human potential that will be able to satisfy the modern social and economic needs of a country. the system of lifelong engineering education allows: to create conditions for pupils’ professional orientation toward technical and engineering specialization in their future vocational training; to provide conditions to engineering university students for the formation of their skills, habits and professional competence enabling to solve professional problems in real industrial production environment with the use of high-technology equipment; to manage and control the graduates’ placement through the solution of the above mentioned tasks by increasing the number of young specialists being employed within 1 year after graduating from a university and getting an education. the system of lifelong engineering (technical) education enables to cover a large segment of the population by vocational training programs, retraining, post-secondary technical and advanced training on the basis of multi-functional centers of applied qualifications and educational-sectoral clusters. practical outcomes of the above specified work will be the formation of an efficient youth employment management system and the provision of russian economy with high-qualified personnel in the priority directions of modernization and technological development. upon the obtained results of this research some scientific problems and priority directions requiring further consideration can be distinguished: the study and generalization of foreign and russian engineering university experience concerning the development of youth employment management system through the implementation of innovative models of engineering education organization; seeking new areas of activity which will have a positive impact on the quality of lifelong technical education and youth employment. the material of the article can be useful and significant for specialists and managers of educational organizations, job centers and production-and-training centers by the determination of forms and methods of interaction, as well as selection and arrangement of the instructional content of techniciansand-engineers’ collaborative training. keywords: lifelong education, youth employment, interaction jel classifications: a20, i21, i28 1. introduction the creation of innovative models intended for high-qualified engineering lifelong training, the collaboration of educational organizations and business structures, active participation of the members of educational process in international educational and technological space are the priority objectives of vocational training development in accordance with the needs of rapidly changing economic environment and the goals of community and state development. thus, these priority objectives are one morozova, et al.: the management of youth employment in a lifelong engineering education system international review of management and marketing | vol 6 • special issue (s2) • 2016248 of the most efficient tools of youth employment management (russian federation national program development of education in 2013-2020, 2013). one of the factors of the system effectiveness associated with vocational education is the number of higher vocational institution graduates and secondary vocational school leavers who were employed in accordance with their major (specialization) within 1 year after getting an education. the population of young people at the age from 14 till 30 makes up 37 million people which constitutes 34 % of economically active population of the russian federation. it is to be emphasized that young citizens of the country possess economic and social mobility, imitativeness and have physical health, intellectual activity and open-mindedness to scientific and technological innovations which is a necessary condition of their adaptation to new socioeconomic environment. the number of officiallyregistered unemployed young people constitutes about 37% in russia. the share of young people being employed in a real sector of economic activity is about 9-18% compared to 62% of young people being in the job market. thus, there is a sustainable tendency of human capital loss among young people: these are the consequences of the inefficient use of the available potential and pose a threat to the state by decelerating its economic growth and declining the living standard. the release of labor force due to the demographic processes of decrease in youth population at the age from 17 till 25 on 12-15% by 2016 compared to 2010 will cause a new tendency in this active labor market segment, e.g. the demand in high productive workplaces which will result in the improvement of human recourse personnel training quality enabling their high performance (pokholkov and pakhomova, 2015). current situation in the youth employment market generates a need for developing new approaches to the solution of the problem associated with unemployment through the youth employment management which is possible in lifelong education environment since it creates optimal organizational and pedagogical conditions for personal successful professional adaptation, socialization and self-realization (irismetov et al., 2013; ivanov et al., 2014a; 2014b; zaitseva, 2013; dmitrieva et al., 2015; sabirov et al., 2015; gallyamova, 2014). the relevance of this research is determined by the contradiction between the engineering education quality and of potential employers’ needs which results in low demand in engineering university graduates in the labor market. the analysis of the above mentioned contradiction shows that the employers are interested in hiring specialists who are able to be fully engaged in the professional sphere, to realize the key types of professional activity and capable of thinking and working independently and autonomously from the very first working day at the enterprise (priymak et al., 2015; khairullina et al., 2016). the above listed requirements necessitate the need to overcome gaps in vocational training, to include some changes in graduates’ theoretical knowledge, skills and practical experience, to develop the ability to predict future problems and consequences associated with these problems, to create advanced models aimed at coping with these problems (kupriyanov et al., 2015; kozhanova et al., 2015; kalimullin and masalimova, 2016). it is unfair to state that scientific and pedagogical community has conservative views on the engineering education system (engineers and technicians’ vocational training) and are against the implementation of new paradigms in vocational education. the state standards of new generation and conceive-designimplement-operate initiatives intended to eliminate contradictions between theory and practice in engineering education adopted by the majority of engineering universities in russia issue the challenge to develop innovative technologies of lifelong engineering personnel training (crawley, 2011). lifelong engineering personnel training ensures competent and well-timed professional orientation to technical specializations, the formation of professional competence of future specialists capable of successful actions based on practical experience, skills and knowledge by the solution of professional problems in real production environment which will result in considerable reduction of time spent on engineering vocational training and retraining in accordance with the changing economic requirements, using formal and informal organization of education by engaging business in the educational process. all these measures, in aggregate, allow creating an efficient management system of engineering university graduates’ employment (magomedov and kutepova, 2009). 2. methodological framework 2.1. empirical research method since the aim of the research is to find methods and forms to realize a lifelong engineering education system based on the collaboration and interaction between education and business as a factor of youth employment management, the analysis of observation data concerning the changes of secondary school leavers’ professional intentions and inclinations, the results of surveys and interviews conducted among secondary vocational school leavers, graduates and employers on the issue of their satisfaction with vocational training quality are the most important initial stages of this research. the authors of this study applied a range of allied to pedagogics sciences by data gathering, its storage and processing concerning secondary engineering university graduates’ placement. the place of data gathering was the siberian federal district. we studied the documents and outcomes of educational activity in engineering universities and secondary technical schools in the form of written, statistical, technical and other materials, where the percentage of engineering university graduates’ employment in accordance with their specialty (major) within 1 year after getting an education and percentage of youth employed in the production and service spheres were taken as a target. 2.2. methodological principles lifelong education and employment comprise a very complicated system which effective study can be provided by the use of the morozova, et al.: the management of youth employment in a lifelong engineering education system international review of management and marketing | vol 6 • special issue (s2) • 2016 249 complex of general scientific and specific pedagogical research techniques and methods. the authors of this research have chosen the following methodological principles: determinism which specifies the need to study the causes of youth unemployment from the point of view of their causality due to the impact of one or another factors; systemacy requiring the definition of youth employment management style, the type of management and control of lifelong technical education and collaboration and interaction among education, industrial plants and business as coherent components of a social and educational comprehensive whole; dialectical principle which recognizes the continuity of changes, transformation and development of a vocational training system, manufacturing and labor market. 2.3. literature review some studies conducted by russian scientists were very significant for the subject of the given research. pokholkov and pakhomova (2015) presented system analysis of the problem associated with the quality of vocational education, ignatyev and tretyakova (2014) analyzed the management of lifelong technical education, piralova (2010) focused on the optimization of modern engineering education. the study done by bagautdinova (2004) is of great importance with relation to the management of engineering education system at regional, federal and municipal levels, vinokurov et al., (2011) investigated the problem of engineering and technical personnel certification; koulz et al. (2009) were concerned with the development of national engineering personnel certification scheme. the works conducted by simonyantz (2014), bibik and il’yaschenko (2014), kozlov and minayev (2004), vlazneva (2014), loshchilova et al. (2015), vlasyuk (2007), shvabauehr (2006), minzer and babayeva (2012), buresh and zhuk (2009) are of particular interest for studying the problem of youth employment management through the lifelong technical training system. simonyantz (2006) presented various education technologies of engineering training through students’ immersion in vocational environment of an industrial plant; bibik and il’yaschenko (2014) analyzed the teaching experience of practice-oriented approach by engineering and technical personnel training; the practice of using special purpose-oriented method of intercompany engineering training was investigated by kozlov and minayev (2004), palyanov et al. (2013) performed the analysis of youth employment management system through vocational training modernization; vlazneva (2014) focused on the technologies of the collaboration and interaction between the labor and educational service markets; loshchilova et al. (2015) considered the models of networking interaction between universities and job centers; vlasyuk (2007) described the motivation techniques of future engineers’ career guidance and analyzed the problem of graduates’ vocational adjustment and social adaptation; shvabauehr (2006) devoted his research to theoretical and methodological grounds of lifelong education design; minzer and babayeva (2012) focused on the design technology of vocational education programs based on the integration of formal and informal education; the issues associated with the development and foundation of educational and research-and-production clusters as a strategy of competitive recovery of a region were discussed by buresh and zhuk (2009). upon the analysis of scientific literature devoted to the problem of this research we came to the conclusion that some socioeconomic aspects of lifelong technical education are still unstudied. there is a lack of research where the problem of engineering university graduates’ employment is considered as a pedagogical problem and the system of lifelong technical training is studied as a management tool of youth employment. 3. results and discussions 3.1. the creation of multifunctional centers of applied qualifications (mcaq) as a factor of conflict resolution between the quality of engineering training and employers’ needs the data analysis of empirical studies allowed the authors of this paper to determine the key problem which is in the contradiction between the quality of engineering and higher education specialists’ training who are able to work at engineering posts (bachelors and masters) and employers’ needs (their requirements to specialists). the quality of graduates’ education in some russian universities does not meet the current requirements due to the deterioration of material and technical resources, the lack of up-to-date laboratory equipment and crisis in the research and educational personnel training (vinokurov et al., 2011). employers are interested in the following qualities essential for modern engineers: the ability of critical thinking (systematic and independently) and the efficient solution of professional problems using their knowledge, skills and professional competences obtained in university; the ability to work in a team; the knowledge of technological processes and industrial and business environment; the ability to generate, endorse and implement a novel idea; the ability to present their own ideas (ignatyev and tretyakova, 2014). the instructional content of engineering educational programs and currently used educational technologies hinder from the formation of professional competences. the current engineering personal training system is not oriented to changing industrial needs. there is no adequate prediction system which is able to analyze the industrial needs in certain specialists and there is also lack in the development of engineering special-purpose training courses (bagautdinova, 2004). the most important direction on improving quality of engineering personnel training should be the activity enabling the collaboration and interaction between education and business based on the principle of a social partnership, vested by the federal law of the russian federation about employers’ participation in the development and implementation of state policy in the field of professional education, adopted in 2007 and the law adopted in 2009 which allows universities to establish small innovation enterprises. the results of regular monitoring conducted by the soviet of the federation of legislative and regulatory enforcement practice of the adopted laws, however, demonstrate lack of the expected effect (matviyenko, 2013). morozova, et al.: the management of youth employment in a lifelong engineering education system international review of management and marketing | vol 6 • special issue (s2) • 2016250 the unresolved contradiction between the quality of engineering training and the employers’ needs (requirements to engineers) resulted in turning out specialists for job centers, because they still do not satisfy the industrial needs, which leads to aggravating the problem associated with youth unemployment (palyanov et al., 2013). a promising direction of the model development of youth employment management through the development of lifelong technical education system based on the collaboration and interaction between education and business is the creation of mcaq on the basis of branch resource centers operating at industrial plants. mcaq will be a connecting link of engineering personnel lifelong education as informal education lasting the whole life. the main principle of this education is training in accordance with the demands in close association with practice, flexibility of educational programs, timetable and places where the training is conducted (minzer and babayeva, 2012). the main objectives of mcaq include: the increase of youth employment rate through efficient job search by engineering university graduates in accordance with their major (specialization); individual support given to students and graduates concerning their career choice and job placement; the cooperation and interaction with potential employers on the issue of steady working practice and pre-graduation apprenticeship organization and personal graduates’ appointments (distribution) to industrial plants; the implementation of probation period programs in high-tech companies and plants intended for students and young specialists; the formation of consultative committees arranging the cooperation of engineering universities, job centers and potential employers concerning vocational adjustment and youth employment management. the efficiency of networking forms of interaction between education and business based on mcaq is determined by some factors: the use of modern technological sites equipped with high-technology facilities being at industrial partners’ disposal for educational institution needs; the use of high-qualified research and educational potential, e.g., pre-graduation apprenticeship heads (tutors) capable of working on high-technology equipment and lecturers using efficient innovative educational technologies; the implementation of a wide range of a short-term vocational training, retraining and advanced programs; rendering of an additional educational service on some certain specialties; the use of distance learning technologies. 3.2. the creation of educational-sectoral clusters as a factor of youth employment management through a lifelong vocational education system under the conditions when educational institutions of higher education aimed at training of technical and engineering specialists lost the support of base plants, the perspective to improve multilevel and multidisciplinary vocational education system with the use of partnership between engineering universities, implementing network forms and employers, including companies of all patterns of ownership, is of great importance. this partnership forms an educational-sectoral cluster, consisting of a group of plants and cooperating organizations, including educational institutions, supplementing each other through their interaction and collaboration by solving the problem of engineering personnel training possessing professional competences, satisfying the needs of innovative industry (loshchilova et al., 2015). the structure of the educational-sectoral cluster in the system of lifelong technical education includes: engineering universities training specialists majoring in certain professional fields; educational institutions dealing with the secondary vocational education and senior stage of profession-oriented schools which train technicians and engineering university entrants; plants requiring qualified staff to solve professional problems in industrial environment. science is a constituent part in this type of cooperation. the employer is a consumer of the results of scientific, technical and technological advances who realizes his interests by the selection of entrants and influences the instructional content of entrants’ education and retraining and also takes part in the assessment of graduates’ training quality in the framework of federal state educational standards (as members of state attestation commissions). education as worthwhile welfare is carried out for the benefit of people, family, society and state and satisfies the needs of society through the satisfaction of the interests of industry and business aimed at providing high standards of living and competitiveness in the world market (buresh and zhuk, 2009). the principle of the educational-sectoral cluster system operation is as follows: industrial plants transmit information concerning the required specialists to their branch ministries and, thus, the claim for a certain specialist is carried out through the system of a government order. industrial plants and business provide apprenticeship on modern high-technology equipment and guarantee to employ the graduates after their graduation from university. the concentration of educational institutions of different types of educational level around the engineering university allows uniting scientific, educational, methodical, material and technical resources of industrial production and business in order to implement lifelong technical education system. at the same time, the collaboration and interaction between engineering universities and basic schools through the introduction of university grades in these schools help young people in their vocational engineering major choice (specialization choice). in the case, when the leavers of branch (profession-oriented) colleges have a chance to reduce the time spent on a course completion, the opportunity to enter the university-partner increases which helps to solve the problem of entrants’ enrolment (simonyantz, 2014). thus, the participants of educational-sectoral clusters get the opportunity to: • manage the training of high-qualified engineering personnel according to the real industry needs • increase the number of high-performance working places • participate in the system of social partnership on the principles of a project-based management. morozova, et al.: the management of youth employment in a lifelong engineering education system international review of management and marketing | vol 6 • special issue (s2) • 2016 251 educational-sectoral clusters established on the basis of taking into account socioeconomic features of a certain region combine efforts of all educational organizations, industrial plants, business, job centers aimed at the formation of high-qualified engineering personnel; contribute to enhancing (expanding) of vocational information and education environment; allow to reduce the youth unemployment rate through the creation of employment management system; enable to supply industry with young specialists. 4. conclusion in the course of a detailed study of the problem associated with youth employment management through the development and creation of a lifelong technical education system by the interaction and collaboration among education, industrial plants and business, the key vectors of activities aimed at improving engineering personnel education system and increasing engineering university graduates’ employment rate were determined. the factors contributing to improving engineering personnel education system and increasing engineering university graduates’ employment rate include: re-orientation of vocational training to developing partnership with industrial plants and business; the introduction of a lifelong engineering personnel training which will ensure the required knowledge, skills and professional competences; the development of cooperation and interaction among the participants of youth labor market which will contribute to their qualitative modernization (standards of conduct, roles of market participants, value orientation of future specialists; the increase of information access); the development of employment system for young specialists taking into consideration the regional personnel needs through the conduction of measures for the advancement of employment. the distinguish feature and the novelty of a lifelong technical education system is a stimuli to increase the motivation and improve the quality of vocational training of both, students and professional and teaching staff. a technical university gets the opportunity to increase its image due to mobilization of industrial and material recourses, the availability of high-technology places for apprenticeship and graduates’ employment, strengthening of relations between university and professional associations, making of business agreements (commercial contracts) with industrial plants, the opportunity to get high-technology and high-paid working places, including executive positions. the forms of interaction and collaboration among education, industrial plants and business which lead to improving professional competences of engineering university graduates and contributing to their successful employment include: the participation of industrial plants and business in the development and formation of educational programs intended for future engineers and assessment of education quality; the conduction of special-purpose and profession-oriented training, continued post-secondary technical training and education and retraining on the basis of mcaq and educational-sectoral clustes; the conduction of scientific research on the themes proposed by industrial plants and business; the organization of apprenticeship in a real industrial production environment on high-technology equipment; graduates’ placement and employment; making of commercial contracts with industrial plants and business concerning collaborate scientific research. upon the obtained results of this research we can distinguish a range of scientific problems and perspective directions requiring further consideration: the study and generalization of practical experience of leading russian and foreign universities on the issue of the development of a youth employment management system through introduction and implementation of innovation models of technical education, the search of new scopes of activities which will have a positive impact on education quality of engineering universities and graduates’ placement and youth employment. the materials of this article can be useful for specialists, heads of educational institutions and production-and-training centers, special placement services and job centers by the definition of forms and methods of interaction and collaboration, as well as the choice and structuring of the instructional content of collaborate engineering staff training. references bagautdinova, n.g. 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(2013), the role of education system in adaptation of graduates from russian institutes and colleges at european enterprises (by example of service companies). middle east journal of scientific research, 13(5), 693-697. . international review of management and marketing | vol 6 • special issue (s2) • 2016172 special issue for "management of education: problems and perspectives" international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2016, 6(s2) 172-176. the manageability of the educational system: characteristics and optimization elena y. levina1*, nikolai y. kruglikov2, irina v. krasina3, yuliа v. mishina4, alina n. lugova5, olga v. railian6, olga v. ruzakova7,8, irina z. shakhnina9 1the institute of pedagogic and psychology of professional education of russian academy of education, kazan, russia, 2chuvash state pedagogical university named after i. y. yakovlev, cheboksary, russia, 3kazan national research technological university, kazan, russia, 4national university of science and technology “misis”, moscow, russia, 5national university of science and technology “misis”, moscow, russia, 6national university of science and technology “misis”, moscow, russia, 7ural state academy of architecture and arts, yekaterinburg, russia, 8ural state mining university, yekaterinburg, russia, 9kazan (volga region) federal university, kazan, russia. *email: frau.levina2010@yandex.ru abstract modernization of education implies substantial changes in the management of educational systems and processes for the transition of educational systems to a qualitatively new state and to a higher level of functioning. the aim of the article is to describe the phenomenon of manageability of education systems, which consists in the real possibility to influence on the course of processes in order to improve their performance in a high dynamism and activity of the managed elements of the system. the basis of the research is the stakeholder approach, which establishes an increasing degree of responsibility of all agents of education for their actions within the system. the authors identified the specifics of educational systems’ manageability based on the characteristics of educational agents and the balance of their requirements and expectations. the principles of the stakeholder approach’s implementation in education are proposed, which allowed offer a way to increase the controllability of educational systems. the paper submissions can be useful for experts of education authorities, teachers of pedagogical and management profile, managers and staff of educational organizations, researchers who are involved in the manageability of educational systems and processes. keywords: education, educational systems, management, manageability, stakeholders approach jel classifications: i21, i25, i28 1. introduction 1.1. background under the educational system, basing on the definition of novikov and glotova (2004), a set of educational institutions can be understood implementing successive educational curricula of different levels and profile. the development of the education system depends on the other following systems economic, political, technological and social, so when these systems are changed the priorities, goals, structural elements, conditions of implementation of education also are changed (muhametzyanova, 2005; shamova, 2005; novikov, 2009; kalimullin and masalimova, 2016; kozhanova et al., 2015). considering the manageability as a universal characteristic which is peculiar to any system or process, it is necessary to take into consideration some aspects: the definition of the specificity of this concept in the system of categories of sociology; description of the characteristics which are inherent to manageability, and identifying of properties of manageability. these aspects give to the social phenomenon some new quality (zarubin and nachkin, 2015; sabirov et al., 2015; klimentyeva, 2013). management of educational systems, like any other object, seeks to change its current state and trajectory of development in order to achieve goals. thus, goal setting is the start point and means the setting of parameters, conditions and mechanisms of management. levina, et al.: the manageability of the educational system: characteristics and optimization international review of management and marketing | vol 6 • special issue (s2) • 2016 173 1.2. status of a problem the vocational educational system is complex and dynamic one and is variable in time and is active when controlled elements of the system can change their state independently (novikov, 2009; borytko and solovtsova, 2006; potashnik and solozhnin, 2012; nizhegorodtsev, 2015). representatives of the synergetic approach formulated the understanding of the problem of complex systems’ management which was based on the analysis of internal trends in the self-development of the systems and the detection of environmental areas and temporal moments of unpredictability and lack of controllability (vasiliev and glukhov, 1999; prigozhin, 2015). followers of the synergetic approach recognize the importance of manageability, paying attention to the ratio of the organization and self-organization, and effects of management thinking. within the scope of any social system, including the educational one, there is a continuous oscillatory development of the interaction participants’ preferences, which depends as on the expectations of everyone so on the variable (perhaps not always adequate) individual or public manifestations that reveals not only problems of management (impact), but also the problems of manageability (institutional response). 1.3. the research hypothesis taking into account the complexity the content of the category “manageability” means the maintenance and development of socially significant standards, the complexity of the managerial process and the qualitative transformation of the social environment. as a result the “manageability” is presented not as an abstract category or many everyday judgments, but as a cognitive model designed to describe the actual practice of any organization, due to economic, social, political and spiritual processes. 2. materials and methods 2.1. the stakeholder approach to the management of educational systems for educational system a specific set of stakeholder groups is formed, influencing the formation of external and internal environment of the educational system. educational agents or stakeholders implement the activities or accept the educational systems activities’ results, which include: government authorities; business structures, personality, society, staff of educational institutions. management of vocational educational system, like any active system should “take into account the activity manifestation of the managed entities” (novikov, 2009), which depending on their own level of preferences, values and motives change managerial impact. then, under these conditions, the managerial problem is reduced to finding of optimal trajectory of management with its maximum efficiency’s achieving. currently, in the studies on the development of institutional strategies and strategic management, there is a formation of the so-called stakeholders approach (ivashkovskaya, 2008; gumerov, 2012; levina, 2015), which shows the growing degree of responsibility for the results of their activities in the economic, social and political sphere. a similar function in this sense belongs to educational systems, with the level of responsibility of the system to the community is not only significantly higher but also determined by personal characteristics of each member. social responsibility of education is of global significance because it acts as an indicator of social, scientific and technological progress of society, setting the framework for actions, the states’ boundaries and the mechanism of interaction between agents of the educational system on the basis of the current ideals and values. the implementation of this approach in the framework of transition to state-public management means the increasing role of education in economic, social and political sphere of society and at the present time there are following steps for the implementation of this idea: high integration of all kinds (horizontal and vertical) of educational systems; implementation of corporate and cluster education; the interaction of educational agents in the form of nonprofit organizations, carrying out public monitoring of educational processes (associations), etc. 2.2. the specifics of educational systems’ manageability the research works of scientists in the study of agents’ behavior allows state that the determination of the behavior largely depends on the institutions, institutional arrangements and the institutional environment, i.e., existing and newly created restrictive ties and motives. thus, weber (1994) points to the fact that interaction between agents determines the individual behavior that affects the normative characteristic of society. veblen (yadgarov, 2000) believes that the needs and desires, goals and aspirations, ways and means, scale, and orientation of the individual’s behavior – all these institutional regularities, the nature of which is extremely complex and absolutely unsustainable. frank knight (yadgarov, 2000) believes that the needs in the short term really are represented as the driving forces of economic or other activities, while in the long-term needs are dependent variables, for largely because they are formed in the result of the emerging economic and social reality. therefore, based on the deduced by murdal (yadgarov, 2000) a pattern which defines that an object of scientific research should be the entire social system, including, in addition to the so-called economic laws, anything that can influence future events, we believe that speaking about the research aspect of education it makes sense to mention about heterogeneous natural manifestations of society and of individual relationships and institutional relations as various structural subsystems of education. on the basis of this idea it is worth to systematize the main characteristics of the educational agents (table 1). 3. results 3.1. principles of implementation of stakeholder approach in education one of the tasks of the modern period of educational modernization and the transition to state-public management is a structuration levina, et al.: the manageability of the educational system: characteristics and optimization international review of management and marketing | vol 6 • special issue (s2) • 2016174 and interests’ providing of educational agents (stakeholders) taking into account their interaction, inherent conflict of interest and level of influence. the analysis of the situation, regulatory documents and research in the field of formation and development of statepublic management of education, allow us to identify a number of principles and conditions that determine the methodology of its implementation. the principles of implementation of state-public management of education: • justification and determination of educational agents’ positions in the educational systems’ management as a social task; • the activity of educational agents in the management of educational systems; • the definition of the legal boundaries of the constructive engagement of educational agents; • the achievement of a balance of the educational agents’ interests in the field of efficiency of education systems. implementation conditions of state-public management of education: • the formation of normative base of educational agents’ definition and interaction at all levels of educational systems; • the formation of resource (material-technical and informative) base of educational agents’ interaction at all levels of educational systems; • the dissemination of ideas of state-public management of educational systems at all levels of education; • the formation of motivation of educational agents’ interaction at all levels of the educational systems in management field; • the development of the concept and programs of public administration at all levels of educational systems and in educational organizations; • development of scientific-methodological support of interaction between educational agents at all levels of educational systems; • staff training (managerial and pedagogical) for implementation of the state-public management at all levels of educational systems and in educational organizations. at this stage of state-public management system’s formation an important role belongs to the definition of authorities’ boundaries for all educational agents, the development of an adequate regulatory framework and system of educational agents’ interaction (agent networks) through different forms, which are appropriate to the available resource, territorial and institutional conditions. 3.2. optimizing of educational systems’ management this process of management of the education system is limited by the time during which the system needs to achieve the objectives and comply with resource constraints, that is, in the framework of educational courses (quarter, semester, academic year, the learning cycle at the stage of education) the planning of scheduling parameters of the process is assumed, which are characterized by the degree of manageability and are determined by the ratio of controlled and uncontrolled parameters. basing on research in management and using the qualitative performance evaluations’ possibilities of the educational system we associate the manageability of the educational system with quality of management and quality of reactions (system response) on the management, relying on the possibility of rational intervention in the process by all educational agents and improvement of their social responsibility’s level while maintaining a possible balance of the needs and expectations (table 2). a prerequisite for strategic decision-making in the balance formation of the educational agents’ interests the economic factor (such as cost of capital or profits achieving in commercial organizations) cannot act. the position of educational systems in society and the achievement of its performance is quite difficult to evaluate, there are obvious contradictions in the interests of educational agents. here are some examples: • standardization of education (the agent “authority”) is contrary to the interests of personal development (the agent “person”); • businesses need professionals with certain narrow professional qualities (competencies) that causes problems and contradictions related to the fundamentalization of education (the agent “personality”), and requires pedagogical readiness to innovate (agent, “employees of educational organizations”); • the demand for certain professions in the labor market (agent “business”) can contradict the possibilities of educational systems (agent, “employees of educational organizations”) or the students’ desires (the agent’s “personality”) and so on. the optimization problem setting in educational systems’ management consists of: table 1: the main characteristics of the agents of educational systems group characteristics of the group “personality” (pupil, student) implements his/her learning needs based on personal features and abilities; is a consumer of educational services “society” provides social regulation of educational systems’ activities, defining the public opinion, the level of social responsibility and other factors; is a consumer of educational services “employees of educational organizations” provides educational and organizational activities in the framework of educational institutions, by type of activities interacts with the other educational agents, taking into consideration their interests; is the producer of educational services “the business community” (employers) uses the results of the educational system (graduates’ employment) for profit; is the consumer of educational services “the authorities” carry out education’s management, training and implementation of development’s strategies, setting targets and regulatory base of educational activities levina, et al.: the manageability of the educational system: characteristics and optimization international review of management and marketing | vol 6 • special issue (s2) • 2016 175 1. the definition of the parameters of the managerial function f(x1, x2.,xn) and the optimization criterion; 2. taking into account of the restrictions (conditions) on the parameters of development’s management; 3. corridors’ identifying of parameters’ variation, which are created by an active system. according to the theory of active systems (burkov and novikov, 1999), the model of active educational system is characterized by a set of parameters: • the totality of participants in the system (learners, their families, social and professional groups, administrative institutions and the institutions of civil society); • a set of relationships between the entities of the system (managerial, hierarchical, information); • by sequence of operation (focusing of managerial and information flows); • dynamic nature of functioning (length of cycles to manage the entities of the educational system); • the level of impact (the degree of influence of system’s entities on the state of the system); • the performance efficiency parameters of the system’s state (management criteria); • the operation conditions (the set of acceptable states for the entities of the system); • the certainty of participants and stakeholders of the system (the level of awareness when making decisions). these parameters define the mechanism of interaction of its elements, i.e., the possible mechanism of its functioning management from different positions. 3.3. the manageability’s criteria defining of educational systems the applied aspect of the study of the category “manageability,” according to prigozhin (2015), includes decisions’ capability to be implemented; consistency of purposes and actions; stability of the organizational order, and each of these indicators, definitely, cannot be absolute and attainable. as a result, the dimension of manageability takes several parameters. first of all, consistency of purposes and actions of managing elements and entities which implement the solutions. manageability presented as the coherence of the objectives and actions is defined by purposes’ quality, namely, clarity, coherence, consistency and accessibility. quality parameters of the objectives are: high strategic objectives (desired image of the future); long-term goals of the organization (mission and strategy); operational objectives (utility functions of departments and employees); the degree of motivation of the entities of education on the achievement of these objectives; state of educational and organizational processes. thus, manageability, represented in the decision-making process, is considered as a process of influence on the level of the individual, group, organization. in addition, the manageability detects the restriction of freedom in the decision-making process by personified dominant entity. the manageability process is possible only if it is possible to form adequate to the existing problem the personalized sociocultural “body” and create such a dominant entity, which is able to build up into a social process some adaptive mechanism of managerial type. in this dimension the specifics of manageability is that the creative nature of social processes predominates over their destructiveness, and the definition of the manageability boundaries and retention mechanisms of social processes within these boundaries is a more significant goal than practical results’ achieving. finally, the content of the category “manageability” is expressed in the intensity’s indicators of the process. it is characteristic that determines the degree of influence of relationships and connections in the organization. manageability can be high, average and low. the design includes not only the conceptualization and operationalization of the category “manageability,” but the creation of a typology of this phenomenon depending on the type of organization (zarubin and nachkin, 2015). 4. discussions prigozhin (2015) determines the category of “manageability” as a complex integrated indicator of the organization’s functioning, efficiency of its management. in this regard, he offers the most general measuring of manageability in the relationship between table 2: the demands and expectations of educational systems’ agents agent requirements the type of agent the expectations of the agent systematic development of educational curricula, profession mastering, realization on the market of labor “personality” (pupil, student) implementation of educational needs, personal development, quality education, the demand on the labour market the positioning of educational systems at any level as a factor of socialization “society” socialization of students, employment of population, quality education getting, active and industrious member of society the provision of quality educational services “employees of educational organizations” provision of jobs, adequate working conditions, the demand on the market of educational services, personal, creative and pedagogical development provision of jobs, demand regulation for training directions and identification of requirements to the quality of the graduate of educational institutions “the business community” (employers) cooperation with educational systems at all levels, the demand for graduates’ training needed by the labor market, taking into account of the demands the transparency of the management of the education system, normative and other regulation, control of activities, development of educational systems “the authorities” (management of education at all levels) the active participation of the educational agents in the management and governance of educational systems, social partnership of all interested agents, the increasing of agents’ responsibility levina, et al.: the manageability of the educational system: characteristics and optimization international review of management and marketing | vol 6 • special issue (s2) • 2016176 organizational goals and the results achieved. moreover, the approach is applied as to broad planning objectives so individual management decisions. tambovtsev (1997) believes that this approach takes place only in the case when the targets are measurable, quantitative. based on these attitudes and taking into account the specificity of the educational systems, we believe that the objectives of the educational processes can perform qualitative and quantitative characteristics inherent in the requirements to the process of education – educational standards, developed on their basis educational curricula with clear targets (norms, levels of assimilation). this means that to improve the manageability of the educational system, harmonization of educational agents’ requirements is necessary to conduct at the design stage of the educational process, the selection of content considering the time lag between the beginning and the end of the learning process. the high dynamism and heterogeneity of the educational system, the differences and complementarities in a temporary gap between the management (the impact) and manageability (the crowd) are should be taken into account (deming, 2014). 5. conclusions to improve the efficiency of management or of manageability of the educational system is possible, while ensuring of the adequacy of the object’s model and purposes of management, compatibility of the method in the description of the controlled object and types of the applied managerial impacts taking into account the requirements and expectations of educational agents with their high level of social responsibility for their actions within the system. in this dimension the specifics of manageability is that the creative nature of educational processes predominates over their destructiveness, and the definition of the boundaries of manageability and mechanisms of retention of educational processes and systems within these boundaries is a more significant goal than achieving of utilitarian results. references borytko, n.m., solovtsova, i.a. 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(2004), models and mechanisms of management of educational networks and complexes. moscow: institute for education management rao. p140. potashnik, m.m., solozhnin, a.v. (2012), education management at the municipal level. moscow: russian pedagogical society press. p480. prigozhin, a.i. (2015), management idea: what position you want to take on the market? how should change your organization? moscow: lenand press. p480. sabirov, i.t., ponkratova, l.a., gracheva, n.a., kiselev, s.v., fatikhova, l.e., chudnovskiy, a.d. (2015), the formation and development trends of the consulting market in russia. mediterranean journal of social sciences, 6(2s3), 188-195. shamova, t. (2005), management of educational systems. moscow: academy press. p384. tambovtsev, v.l. (1997), the state and transition economy: the limits of control. moscow: teis. p125. vasiliev, y.s., glukhov, v.i. (1999), economy and organization of university management. saint petersburg: publisher “doe”. p448. weber, m. 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(2015), manageability: the experience of designing a social phenomenon. kazan pedagogical journal, 4(1), 186-190. tx_1~at/tx_2~at international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2023, 13(4), 14-22. international review of management and marketing | vol 13 • issue 4 • 202314 investigating the influence of a product-harm crisis on consumer buying behaviour: a focus on the listeriosis crisis siyasanga mgoduka1*, shalen heeralal2 1school of development studies, university of mpumalanga, south africa, 2department of business management, university of zululand, south africa. *email: siyamgduka@gmail.com received: 17 february 2023 accepted: 20 june 2023 doi: https://doi.org/10.32479/irmm.14118 abstract product-harm crises often lead to negative publicity which substantially affects the consumers intention to make a purchase. this study attempts to investigate the influence of a product-harm crisis on consumer purchasing behaviour. consumers are the most essential stakeholders for any organization, their core behavior is very vital for financial affluence and successful marketing. this study aims to investigate the influence of a product-harm crisis on consumer purchasing behaviour, with reference to the listeriosis crisis. data was collected from 384 randomly selected food retail store shoppers at empangeni and richards bay, using a quantitative research approach. data was collected through the use of questionnaires. the findings from this study revealed that there was a positive significant correlation between the level of education and post-purchase behaviour. these findings suggest that consumers that are more educated tend to be more critical in analyzing a crisis. this study contributes to the existing body of knowledge on brand management by examining the influence of a product-harm crisis on consumer purchasing behaviour. the research concludes that brands should always have a positive relationship with consumers. mainly because this current study has revealed that consumers response to a brand crisis is determined by the relationship they share with the brand along with the prior expectations they had about the brand. keywords: brand crisis, product-harm crisis, listeriosis, consumer purchasing behaviour jel classifications: m3, m31 1. introduction crisis events are characterized as the most important, unexpected situations that threaten the existence of a company (pangarkar et al., 2022). a product – harm crisis which is of interest to this study is a performance related crisis (mgoduka et al., 2021). product-harm crises can be recognized as business issues that can cause physical harm to human beings, occur in the output stage of the transformation process, are likely to be highly scrutinized by stakeholders and entail a great likelihood that the company will be regarded as highly responsible (vassilikopoulou et al., 2011). mgoduka et al. (2021), alludes that product-harm crises can negatively affect a firm’s corporate image, reputation and credibility. the most well-known examples of product-harm crises include the oil giant bp and oil–spill crisis in the gulf of mexico, tiger brands and the enterprise foods listeriosis scandal, johnson & johnson and its tylenol scandal, dell and its faulty lithium–ion battery scandal, or toyota’s faulty accelerator pedal recall (botes, 2022). these brands all experienced a product–harm crisis and faced extreme consumer backlash, most of which could not recover despite numerous rescue attempts. irrespective of the cause, product-harm crises can cause a significant damage on the firm’s market share, revenue and purchase intentions because of the associated negative publicity (pangarkar et al., 2022). this negative publicity affects consumers attribution of blame, and these negative perceptions can be controlled and minimised through effective crisis communication (botes, 2022). consumers responses to a crisis are not only based on the assumption of the rationality of the observer, but also on the impact of the individuals’ values, which produce effects of blame, emotion and intention (fusaro, 2015). therefore, understanding consumer’s responses this journal is licensed under a creative commons attribution 4.0 international license mgoduka and heeralal: investigating the influence of a product-harm crisis on consumer buying behaviour: a focus on the listeriosis crisis international review of management and marketing | vol 13 • issue 4 • 2023 15 and selecting an appropriate corporate response to a product-harm crisis is essential (botes, 2022). the corporates’ response to a crisis has a significant impact on the consumers purchase intention. thus, the aim of this study is to investigate the influence of a product-harm crisis on consumer purchasing behaviour, with the listeriosis crisis as an area of focus. the originality of this study is that this study contributes to the existing body of knowledge on brand management by examining the influence of a product-harm crisis on consumer purchasing behaviour. this study will also provide insight on how organisations can utilize social media to positively influence consumers response to a crisis. the next section of this study will present the research objectives. 1.1. research objectives • to investigate the influence of a product-harm crisis on consumer buying behaviour. • to investigate the influence of a product-harm crisis on the consumer’s decision-making process. 2. conceptual theoretical framework 2.1. attribution theory/attribution of blame attribution theory is often used in product-harm crisis literature to acquire a deeper understanding of how and why consumers respond the way they do (botes, 2022). according to mansor and kaderali (2017), when blame attribute is viewed from the context of consumer behaviour, it is described as the process whereby consumers construct attributions of responsibility to harm the affected brand. during a brand crisis consumers make attributions and casual judgements based on the response of the affected company, information available from the media and other sources (mcdonald et al., 2010). the response of the affected organisation has a major influence on how consumers act or view the crisis. according to mcdonald et al. (2010), a company faced with a brand crisis can respond in five ways: no response, denial, excuse, justification and concession. according to mcdonald et al. (2010), there are no studies that show significant results for justification. moreover, the scholars further indicated that confession shows high responsibility acceptance compared to justification, excuse and denial which have the lowest responsibility acceptance. on the other hand, no comment is known for avoiding addressing responsibility. findings from the studies conducted by mcdonald et al. (2010); lee (2005); dean (2004); coombs and holladay (2009), show that confession and its components which are compassion, apology, compensation have positive effects on consumers and other stakeholders. 2.2. consumer buying behaviour and product-harm crisis buying behaviour is the decision processes and acts of people involved in buying and using products (doan, 2021). usually the buying behaviour takes many forms of consumer’s choices that can vary depending on a broad set of factors such as: earnings, demographics, social and cultural factors (mansoor and jalal, 2011). sharma (2014) alludes that there are four types of consumer buying behaviours, there is routine response or programmed behaviour which involves buying low involvement frequently purchased low cost items that need very little search and decision effort, examples include soft drinks, snack foods and milk. limited decision-making refers to buying products occasionally, this requires a moderate amount of time for information gathering (haralayya, 2021). extensive decision making requires high complex involvement because it has high degree of economic, performance and psychological risk, examples include house, cars and education (sharma, 2014). lastly impulse buying refers to no conscious planning (haralayya, 2021). for this current study, the area of interest were the food retail stores shoppers which means that data was collected from buyers of routine response or programmed behaviour. mansoor and jalal (2011) indicate that the needs of consumers can be met through predicting consumer behaviour. consumer buying behaviour is influenced by a consumer having access to knowledge or information and being orientated with the brands (reddy, 2016). the information can either be positive or negative. previous studies have shown the detrimental effect of negative information on consumer perceptions which ends up having a negative influence on consumer behaviour (ahluwalia et al., 2000; dean, 2004; de matos and rossi, 2007). consumer behaviour is negatively influenced by a brand crisis (haiying and gouliang, 2013). the findings from the study by haas-kotzegger and schlegelmilch (2017) revealed that consumer responses differ between the crisis types. negative information about a brand results in a brand crisis, which ends up having an influence on the consumer‘s decision making process. the most used tool for sharing information is social media, therefore is it important to recognize the role social media plays with regards to the sharing of information (botes, 2022). product-harm crises are considered as well-publicized occurrences, because during these crises consumers often receive negative information about the firm (mgoduka et al., 2021). cui et al. (2013) highlights that consumers today are more likely to become aware of such productharm crises through social media. consumers are increasingly consulting social media sites during crises for information updates and opinions (botes, 2022). therefore, the way in which the communication is framed by brands has an influence on the consumers purchasing behaviour and on how it is interpreted and responded to (botes, 2022). 2.3. decision – making and product-harm crisis previous studies have revealed that product-harm crises affect consumers attitudes, beliefs and future intentions about products (haiying and gouliang, 2013; cui et al., 2013; ping et al., 2015; mgoduka et al., 2021). product-harm crises have an impact on the decision-making process of consumers (ping et al., 2015) (figure 1). the decision-making model suggests that consumers pass through five stages when making a purchase: need recognition, information search, evaluation of alternatives, purchase decision mgoduka and heeralal: investigating the influence of a product-harm crisis on consumer buying behaviour: a focus on the listeriosis crisis international review of management and marketing | vol 13 • issue 4 • 202316 and post-purchase (panwar et al., 2019). however, in more routine purchases, customers often skip or reverse some of the stages (panwar et al., 2019). for instance, a university student buying a favorite soft drink would recognize the need which is thirst and go right to the purchase decision, skipping information search and evaluation. however, the model is very useful when it comes to understanding any purchase that requires some thought and deliberation (panwar et al., 2019). product-harms crises have a negative impact on the consumers intention to make a purchase (yang, 2013). moreover, mgoduka et al. (2021), insinuates that product-harm crises can turn into a disaster if they are not handled properly. however, ping et al. (2015) alludes that a good reputation shields a firm during a product-harm crisis. in this connection, a previous study by siomkos (1999), puts forward that firms having bad reputations are mostly held responsible for a crisis. conversely, customers believe products of reputed firms are less dangerous and attribute less blame to highly reputed brands in case of a product-harm crisis (ping et al., 2015). it therefore becomes vital for every organisation to have a positive relationship with consumers because crises are unexpected and there is no organisation immune to a brand crisis (mgoduka et al., 2021). 2.4. the listeriosis crisis (a product-harm crisis) in south africa the listeriosis crisis is a product-harm crisis (mgoduka et al., 2021). listeriosis is caused by eating food contaminated with the bacterium called listeria monocytogene (boatemaa et al., 2019). the national institute for communicable diseases confirmed the south african outbreak on the 25th of october in 2017 (van der vyver, 2018). between january 2017 and march 2018, there were 978 laboratory listeriosis cases with 674 illnesses confirmed in south africa (boatemaa et al., 2019). according to the who (world health organization), about 30% of these patients died (who, 2018b). according to the media statement that was issued by the minister of health, aaron motsoaledi, on the 3rd of september 2018, the listeriosis disease was triggered by listeria (health24; 2018). a listeria bacterium was found at two enterprise processed meat factories and one rainbow chicken polony factory. as a result of the listeriosis outbreak, all major retailers withdrew enterprise and rainbow products from their shelves (van der vyver, 2018). in addition to grave health implications and fatalities, the listeriosis outbreak had widespread economic and political repercussions (lamprecht et al., 2022). the listeriosis outbreak resulted in a lot of people dying, some lost their jobs, emotions were stirred, and justice was demanded (lamprecht et al., 2022). all of these aspects were intensively reported in the media. according to doh (2018), the listeriosis crisis had the implicated manufacturers recall more than 5,812 tons of potentially affected food products and that caused severe economic repercussions. lamprecht et al. (2022), adds that the broader south african pork industry was also affected as consumers resorted to self-protective behaviour by avoiding all pork products, raw or cooked. 3. research methodology this study employed a quantitative research method, where data was collected from 384 randomly selected food retail store shoppers at empangeni and richards bay. the researcher used questionnaires for data collection because the nature of the study required data to be collected from the malls. data was collected from the shoppers that frequently visit shoprite, checkers and pick n pay at empangeni (sanlam centre) and richards bay (boardwalk) respectively. the richards bay boardwalk management insinuates that the number of customers that frequent boardwalk on a rational monthly basis is roughly 1.2 million. the sanlam centre management on the other hand insinuates that 700,000 customers frequent sanlam centre on a rational monthly basis. a convenience sampling approach was employed because the nature of the study required data to be collected from shoppers at malls, and there was no way each and every member that visited the mall was going to have a known chance of being selected. in this connection, a previous study by archarya et al. (2013) indicates that convenience sampling approach respondents are selected because they are at the right place at the right time. with reference to uma sekaran’s sampling table, if the population size is more than 75,000, the sample size should be 384 (sekaran, 2003). according to the store managers at empangeni, the population of customers that frequent shoprite, pick ‘n pay and checkers is 138,000, 27,129 and 106,454 respectively. at richards bay, shoprite has 82,660 while pick ‘n pay has 36,400 and lastly checkers has 15,208 customers that frequent their stores every month. consequently, the sample size for this study was 384, as the population size was >75,000. the researcher made use of the statistical package for social science (spss) version 24 to analyse the data. the researcher also employed the descriptive and some inferential stats. the findings were coded on spss and they were then presented through the use sources: reddy (2017. p. 16) figure 1: the decision making process mgoduka and heeralal: investigating the influence of a product-harm crisis on consumer buying behaviour: a focus on the listeriosis crisis international review of management and marketing | vol 13 • issue 4 • 2023 17 of bar graphs, pie charts, percentages and cross-tabulations. the researcher also used statistical mean, mode and median in the data analysis. furthermore, the researcher also employed correlation analysis to determine the significant correlation and the significant difference between the variables. 4. findings • research objective: to investigate the influence of brand crisis on consumer purchasing behavior. to address this objective a 5-point likert scale was used, and the items were grouped according to the steps in the decision-making process (information gathering, evaluation of alternatives and postpurchase behavior). 4.1. information gathering from figure 2, it can be observed that 315 consumers (82%) indicated that they used the social networks and the media to update themselves about the listeriosis crisis, 23 (6%) were not sure and about 46 (12%) were between disagree and strongly disagree. these findings corroborate the notion that millennials spend most of their time consuming information from social media platforms (golway, 2017). also, 315 respondents indicated they used social networks and the media to update themselves about the crisis. meanwhile, 280 consumers (73%) indicated that their friends and family members kept them updated about the listeriosis crisis, 50 consumers (13%) were between disagree and strongly disagree. it can also be observed from figure 2 that about 207 consumers (54%) indicated that they kept checking the notices inside retail stores to update themselves about the products from rainbow and enterprise, while 111 (29%) were between disagree and strongly disagree. about 199 consumers (52%) confirmed that they followed the death cases of the ill due to the listeriosis crisis in order to make a decision either to or not to purchase from rainbow and enterprise, 153 consumers (40%) were between disagree and strongly disagree. lastly, 161 consumers (42%) were between agree and strongly agree to the statement which indicated that before purchasing from rainbow and enterprise they waited for other consumers to post about their experience with the products after the crisis, while 165 consumers (43%) were between disagree and strongly disagree. however, about 58 consumers (15 %) indicated they were not sure. these findings suggest that majority of the consumer relied on social media to provide them with information regarding the listeriosis crisis. 4.2. evaluation of alternatives according to figure 3, it can be observed that 250 consumers (65%) indicated that the crisis resulted in them switching from polony and viennas to other substitute products when making their lunchboxes. only 115 consumers (30%) were between disagree and strongly disagree. however, the findings also reveal that 238 consumers (62%) indicated that after the listeriosis crisis they continued to purchase from rainbow and enterprise. a large portion of the consumers (207 consumers = 54%) indicated that during the listeriosis crisis they switched to other competitive brands. on the other hand, 146 consumers (38%) were between disagree and strongly disagree. about 176 consumers (46%) indicated that the listeriosis crisis had a huge influence on them deciding to buy from private label brands because they felt they were safe, however, 153 consumers (40%) were between disagree and strongly disagree. these findings suggest that during the figure 2: information gathering mgoduka and heeralal: investigating the influence of a product-harm crisis on consumer buying behaviour: a focus on the listeriosis crisis international review of management and marketing | vol 13 • issue 4 • 202318 listeriosis crisis, consumers purchasing behaviour was negatively affected however, the negative effects due to the crisis were reduced after the listeriosis crisis. suffice to state that majority of the consumers indicated that they continued to purchase from rainbow and enterprise after the crisis. a further analysis on the evaluation of alternatives is presented in the table 1. according to the grading table (table 1), it can be observed that the consumers‘ responses to statements ―after the listeriosis crisis i continued to purchase from rainbow and enterprise‖ and ―during the listeriosis crisis i switched to other competitive brands‖ had mean scores which reflect that they agreed or strongly agreed with these statements (with mean scores of 3.64 and 3.62 respectively). moreover, consumers responses to statements “before the crisis i used polony and viennas to make a lunch box but now i have switched to other substitute products” and ―the listeriosis crisis had a huge influence on me deciding to buy from private label brands because i feel they are safe brands‖ had a mean score which reflects that they were indifferent (with mean score of 3.53 and 3.12 respectively). these findings suggest that the negative effects caused by the listeriosis crisis on the consumers purchasing behaviour were reduced after the crisis because consumers continued purchasing from the brands when they were declared listeria free. based on table 1 it can be observed that the standard deviation of item 2 and 3 are close to the mean, while item 1 (1.399) and 4 (1.426) were differed from the mean score. 4.3. post-purchase decision according to figure 4, it can be observed that 251 consumers (66%) indicated that the crisis resulted in them boiling not only products from rainbow and enterprise but also other brands just to be on the safe side. meanwhile, 103 consumers (27%) were between disagree and strongly disagree and 30 consumers (8%) were not sure. about 250 consumers (65%) agreed to the statement that after observing the dangers of listeriosis they now fry polony before eating, 46 consumers (12%) were between disagree and strongly disagree and 88 consumers (23%) were not sure. however, majority of the consumers (234 consumers = 61%) indicated that the products from rainbow and enterprise tasted the same even after the listeriosis crisis, only 54 consumers (14%) disagreed with the statement. a further analysis on post-purchase decision is presented in the table 2. figure 3: evaluation of alternative table 1: evaluation of alternative items label low (%) medium (%) high (%) mean standard deviation item 1 before the crisis i used polony and viennas to make a lunch box but now i have switched to other substitute products 30 5 65 3.53 1.399 item 2 after the listeriosis crisis i continued to purchase from rainbow and enterprise. 30 9 62 3.64 1.221 item 3 during the listeriosis crisis i switched to other competitive brands. 38 8 54 3.62 1.282 item 4 the listeriosis crisis had a huge influence on me deciding to buy from private label brands because i feel they are safe brands. 40 14 46 3.12 1.426 mgoduka and heeralal: investigating the influence of a product-harm crisis on consumer buying behaviour: a focus on the listeriosis crisis international review of management and marketing | vol 13 • issue 4 • 2023 19 according to the grading (table 2), if consumers obtained a mean score of 2.5 and less, it indicates that consumers were between disagree and strongly disagree to the items measuring post-purchase decision. however, 2.6 to 3.5 indicates they were neutral, while 3.6 and more indicates customers were between agree and strongly agree to the items measuring post-purchase decision. consumer‘s responses to the statement “the crisis resulted in me boiling not only products from rainbow and enterprise but also other brands just to be on the safe side” had a mean score of 3.63 which reflects that consumers felt that boiling products before eating them was going to keep safe from listeriosis. the statement “after observing the dangers of listeriosis i now fry polony before eating it” had a mean score of 3.60 which also suggests consumers felt that frying polony before eating it was a safer option against listeriosis. the statement after the rainbow and enterprise products were detected listeria free, i bought them again and the result was dissatisfaction‖ had a mean score of 3.56 which indicates that consumers were indifferent regarding the statement. the statement after the crisis i did not trust the products from rainbow and enterprise so i ate them first before giving it to my kids to eat‖ had a mean score of 2.98 which also suggests that consumers were indifferent. these findings suggest that although consumers were affected by the crisis which is reflected by them boiling food before eating, they are still loyal to these brands because they defended them. moreover, based on table 2 it can be observed that majority of the standard deviation scores were close to the mean. however, item 1 (1.418) and 5 (1.339) are more spread out. the tables 3 present the correlation of consumer behaviour (information gathering, evaluation of alternatives and postpurchase decision) against level of education, occupational status and the level of income. table 3 is an indication of the correlation for consumer purchasing behaviour against the level of education. in order for the researcher to examine the level of correlation between consumer purchasing behaviour and the level of education, one-way anova was used so as to assess the differences between consumers in terms of consumer purchasing behaviour against the level of education, correlation was employed to check if there was a significant correlation between the groups; anova and correlation were combined. the anova p-values were extracted and are presented as sig. (f) in table 3 where the level of significance assigned was α ≤ 0.05. correlation is presented as sig. based on table 3, it can be observed that there was a positive (rho = 0.101) significant correlation of (0.048) between the level of education and evaluation of alternatives. these findings suggest that the more educated consumers get means they will be aware of the fact that there are more alternatives to choose from if the brand they are used to is affected by a crisis. moreover, it can be observed that there was a significant difference (p = 0.045) between the level of education and evaluation of alternatives. this was used to determine the influence of brand crisis on consumers‘ purchasing behaviour at a p ≤ 0.05 level of table 2: post-purchase decision items label low (%) medium (%) high (%) mean standard deviation item 1 the crisis resulted in me boiling not only products from rainbow and enterprise but also other brands just to be on the safe side. 27 8 66 3.63 1.418 item 2 after observing the dangers of listeriosis i now fry polony before eating it. 23 12 65 3.60 1.292 item 3 the products from rainbow and enterprise tasted the same even after the listeriosis crisis. 14 25 61 3.66 1.096 item 4 after the rainbow and enterprise products were detected listeria free, i bought them again and the result was dissatisfaction. 18 26 56 3.56 1.233 item 5 after the crisis i did not trust the products from rainbow and enterprise so i ate them first before giving it to my kids to eat. 40 16 44 2.98 1.339 table 3: anova and correlation of consumer purchasing behavior against the level of income correlation level of education mean median mode sd sig. (f) rho sig. information gathering primary school 1.78 2.0 1 0.833 −0.004 0.94 high school 2.30 2.0 3 0.738 diploma 2.58 3.0 3 0.691 0.989 bachelor degree 2.32 3.0 3 0.809 postgraduate 2.25 3.0 3 0.853 evaluation of alternative primary school 2.22 2.0 2 0.667 0.101 0.048* high school 1.96 2.0 2 0.682 diploma 2.34 2.0 3 0.696 0.045* bachelor degree 2.18 2.0 2 0.732 postgraduate 2.26 2.0 2 0.711 post-purchase behaviour primary school 2.67 3.0 3 0.500 0.134 0.009*** high school 2.19 2.0 2 0.714 diploma 2.34 2.0 2 0.638 0.015** bachelor degree 2.36 2.5 3 0.715 postgraduate 2.57 3.0 3 0.605 mgoduka and heeralal: investigating the influence of a product-harm crisis on consumer buying behaviour: a focus on the listeriosis crisis international review of management and marketing | vol 13 • issue 4 • 202320 significance. it can also be observed in table 3 that there was a positive significant correlation (rho = 0.134) between the level of education and post-purchase behaviour. these findings suggest that the more educated consumers get, the more critical they will be in analysing the crisis. moreover, there was a significant difference (p = 0.015) between the level of education and postpurchase behaviour. 4.4. anova and correlation of consumer purchasing behaviour against level of income table 4 is an indication of the correlation for consumer purchasing behaviour against the level of income. based on table 4, it can be observed that there was a positive (rho = 0.12) significant correlation of (0.025) between the level of income and the evaluation of alternatives. these findings suggest that the increase in income results to an increase in other alternatives that consumers may have as a way of saving themselves from the listeriosis crisis. moreover, there was also a significant difference (p = 0.021) between the level of income and the evaluation of alternatives. 5. discussion and conclusion 5.1. information gathering earlier in the chapter, the findings revealed that consumers were fully aware of the listeriosis crisis. in this present study it was also observed that consumers used social media to keep themselves updated about the listeriosis crisis. it was also observed that consumers waited for other consumers to post about their experience with the affected brands after the crisis before they could purchase from them (figure 2). earlier in this chapter it was also observed that majority of the respondents were figure 4: post-purchase decision table 4: influence of brand crisis on consumers purchasing behaviour by level of income correlation level of income mean median mode sd sig. (f) rho sig. information gathering r0-r7200 2.33 3.00 3.00 0.794 0.188 0.01 0.871 r7201-r16500 2.49 3.00 3.00 0.738 r16501-r33400 2.19 2.00 3.00 0.811 r33401-r57400 2.63 2.00 3.00 0.518 r57400 and above 3.00 3.00 3.00 evaluation of alternative r0-r7200 2.12 2.00 2.00 0.719 0.021** 0.12 0.025** r7201-r16500 2.22 2.00 2.00 0.659 r16501-r33400 2.32 2.00 2.00 0.760 r33401-r57400 2.38 2.50 3.00 0.744 r57400 and above 3.00 3.00 3.00 post-purchase behaviour r0-r7200 2.32 2.00 2.00 0.668 0.134 0.10 0.062 r7201-r16500 2.35 3.00 3.00 0.744 r16501-r33400 2.53 3.00 3.00 0.658 r33401-r57400 2.13 2.50 3.00 0.991 r57400 and above 3.00 3.00 3.00 mgoduka and heeralal: investigating the influence of a product-harm crisis on consumer buying behaviour: a focus on the listeriosis crisis international review of management and marketing | vol 13 • issue 4 • 2023 21 millennials, therefore the findings from this present study revealed that consumers use social media as their source for gathering and sharing information. the findings from this current study are in accordance with the findings of paulin, ferguson, jost and fallu (2014) which revealed that millennials are also referred to as the ―net generation or generation y‖ because they are the first generation to adopt social media as their primary mode used for acquiring and sharing information. this shows that consumers rely on social media for information; therefore brands faced with crises can use these platforms to communicate with their consumers. 5.2. evaluation of alternatives the findings from this study revealed that during the listeriosis outbreak, consumers switched to other competitive brands. however, it was also found that after the listeriosis crisis, consumers continued to purchase from the affected brands (figure 3). the findings from this current study suggest that consumers are familiar with rainbow and enterprise as it was observed earlier in this chapter when it was found that these are the brands they frequently purchase; hence, they continued to purchase from them after the listeriosis crisis. the findings of this current study substantiate the findings from a study undertaken by haaskotzegger and schlegelmilch (2017) which aimed to provide a holistic picture of consumers‘ experience of product-harm crises, and revealed that well-known brands are able to get the benefit of doubt and consumers perceive the mistake as less hazardous. the findings of this current study also suggest that the respondents were strongly attached to these brands. the findings from this current study substantiate the findings of lisjak et al. (2012) which revealed that the personal connections that the consumers have with the brand result in forgiveness and the consumer ends up overlooking things. hence, majority of the consumers purchased from the affected brands after the listeriosis crisis because they forgave them. the findings from this current study also corroborate the findings from a study conducted in the uk by veloutsou (2015), which revealed that the strength of the consumer brand relationship is a very strong predictor of brand loyalty. therefore this current study is consistent with that of veloutsou (2015). the findings from this study also revealed that there was a positive significant correlation between the level of education and evaluation of alternatives. these findings suggest that the more educated consumers get means they will be aware of the fact that there are more alternatives to choose from if the brand they are used to is affected by a crisis. 5.3. post – purchase decision in this present study, it was observed that consumers highlighted that the products from rainbow and enterprise tasted the same even after the listeriosis crisis. these findings suggest that consumers have forgiven these brands and moved on from the listeriosis crisis. the findings from this study are in accordance with the findings from the study undertaken by vassilikopoulou et al. (2011) which revealed that the effects of a crisis are minimized a few months after the crisis occurred. this is due to the fact that consumers tend to forget about the crisis and its negative effects especially if the company took responsibility during the outbreak. the findings from this study also revealed that there was a positive significant correlation between the level of education and post-purchase behaviour. these findings suggest that the more educated consumers get means they will be more critical in analysing the crisis. this study aimed to examine the influence of a product-harm crisis on consumer buying behavior. the findings revealed that there was a positive significant correlation between the level of education and post purchase behavior. these findings suggest that consumers that are more educated tend to be more critical in analyzing a product-harm crisis. moreover, the findings also revealed that a good reputation shields a firm during a product-harm crisis. the researcher therefore concludes that organizations should always have a positive relationship with consumers because crises are unexpected and there is no organization immune to a brand crisis. references archarya, j.p., acharya, i., waghrey, d. 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(2013), repair purchase intention in product harm crisis. advanced materials research, 655, 2266-2269. . international review of management and marketing | vol 6 • special issue (s2) • 2016 161 special issue for "management of education: problems and perspectives" international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2016, 6(s2) 161-165. psychological conditions for the acceptance of religious education by a new generation of russians tatiana n. knyazeva1*, lidiya e. semenova2, anna v. chevachina3, marina b. batyuta4, elena v. sidorina5 1nizhny novgorod state pedagogical university named after k. minin, nizhny novgorod, russia, 2nizhny novgorod state pedagogical university named after k. minin, nizhny novgorod, russia, 3nizhny novgorod state pedagogical university named after k. minin, nizhny novgorod, russia, 4nizhny novgorod state pedagogical university named after k. minin, nizhny novgorod, russia, 5nizhny novgorod state pedagogical university named after k. minin, nizhny novgorod, russia. *email: tnknyazeva@mail.ru abstract the relevance of the problems stated in the article is determined by fundamental changes in the entire russian society, which affected its foundations and traditional values. amidst weakening of regulative influence of religion over various aspects of social life in the late twentieth century, the level of religiosity of the citizens, including youth, significantly increased. in this connection, this article aims to identify the nature of religiosity of russian youth and the specifics of relationship of religiosity with pragmatic life goals. the leading method to study this problem is problem-oriented interviews, allowing to reveal the attitude of modern russian youth towards religion under the conditions of new social realities. the article reveals that among the russian youth there is a predominance of those who do not consider themselves to be true believers, who express doubts about the existence of true believers, who demonstrate some skepticism as regards religiosity of their contemporaries and explain the appeal towards religion by ignorance, fashion and human influence of significant others. at the same time, along with their peers, claiming to be true believers, they tend to view religion as a means of consolation and support, attributing to it the function of protection and not that of moral perfection and spiritual renewal. the article also provides the facts, manifistating the presence among true youth believers of egoistic religious motivation and relationship to god from the standpoint of personal well-being, which suggests its pseudo-religiosity. materials of the article are of practical value for the use of this information for educational purposes and in educational courses with religious content. keywords: religion, faith, religiosity, education, religious content, student youth jel classifications: a23, i23, i26 1. introduction in the twentieth century, the attitude towards religion, church and believers in russia was not univocal. however, the dynamics of processes of socio-historical and socio-political nature in recent years have contributed to the change in this situation, by making religion the most important social phenomenon of the modern russian society. presently, there are wide discussions of issues of religious education, religious upbringing and promotion of religious values in various social institutions (schools, universities, army, media, medical establishments, crisis centers, etc.). as it is known, the essential attribute of religion is faith. in psychological research, this phenomenon has been attributed a special place (granovskaya, 2004; dvoynin, 2005; zenko, 2009). without going into a detailed analysis of various aspects of faith psychology, we will note the most significant issues in the context of our study. the psychological phenomenon of belief, defined as the inner attitude of a man to the world in which the construction of subjective reality takes place (dvoynin, 2005), is a selective and active-effective component of consciousness in general and of religious consciousness in particular. the selectivity of faith knyazeva, et al.: psychological conditions for the acceptance of religious education by a new generation of russians international review of management and marketing | vol 6 • special issue (s2) • 2016162 (in religious context) is tied up with the significance of some religious teachings in comparison with others. active-effective nature of faith is a motivator for the construction of a particular subjective reality and an incentive to action in accordance with it. thus, the effectiveness of faith is logically determined by the degree of influence of religious ideas, rules, values, attributes, etc. accepted by a human being, on his behaviour and activities, which is characterized by the concept of “religiosity.” however, it is possible that religiosity may be supplanted by the concept of “pseudo religiosity” (“external religiosity”). therefore quite natural is the question about the extent of real acceptance of religious values by a person (knyazeva et al., 2015). a number of studies have found out that “claiming to be orthodox, many respondents refer primarily to their origin from the relevant ethno-cultural environment and identify themselves not so much with the orthodox church as with orthodox cultural tradition. this consideration does not automatically classify them as believers” (matvienko, 2014). therefore, not every piece of information of religious nature may be positively looked at by a subject. new format of appeal to religion in modern russia led to spreading in various educational institutions of special courses with religious content. while in primary and secondary schools these courses are mainly informative and educational, in special and higher education institutions, they have value-semantic orientation. however, many young students have already formed the basis of the worldview that may already contain established attitude towards religion, positive or negative in nature. therefore, popularization and introduction of courses with religious content may produce the effect of rejection of faith and religious values (grosheva, 2011; lebedev, 2004; englert, 2002; lohrer, 2012). psychological studies (andreeva, 2010; golov, 2008; klinetskaya, 2009; lebedev, 2007; matvienko, 2014; popov, 2008) have shown that for accepting this or that information the person should have inner readiness for it. readiness of this kind includes motivation for perception of information, availability of primary awareness about the subject matter, the intersection of life experience of the person with substantive aspects of information. in addition, one must take into consideration the “effect of novelty” of the presented information and personal interest of the subject in it. thus, before the introduction of courses with religious content into educational process, it is necessary to determine the extent of readiness of the audience to the adoption of this content. the effectiveness of promotion and conduction of courses with religious content depends on demand for them. this kind of research in russian psychology is undertaken occasionally and does not yet have wide coverage in scientific periodicals (lebedev, 2007). we have made an attempt to analyze the nature of the relationship to faith and religion among students. these data are necessary to understand the factors that determine the efficiency of introducing courses with religious content into educational system and their positive perception by students. 2. materials and methods in this publication, the authors present the analysis of comparative empirical research, allowing to determine students’ subjective attitude towards religion as a factor in their acceptance of religious knowledge. our study involved young subjects students of higher and secondary specialized educational institutions of nizhny novgorod numbering 106 people aged 18-22 years. as a main method of research, we used the problem-oriented interview, including the following questions: • do you consider yourself a true believer? • have you appealed to god? in what situations? • why does a modern man need religion? • under what conditions in the learning process a course with religious content will be in demand? interview data processing was made using open coding procedure, implying the distribution of all responses into meaningful categories. selection of semantic categories was carried out by the expert group of 4 people. 3. results and discussions the first stage of the analysis was the distribution of all subjects into two groups calling themselves the true believers (group 1) and those not referring themselves to true believer (group 2) according to their answers to the question “do you consider yourself a true believer?” group 1 consisted of 31 people (29% of the total number of study participants); group 2 comprised 75 people (71% of subjects). despite the fact that only a small part of our respondents identified themselves as true believers, the subjects in both groups reported that they appealed to god a number of times, namely, 82.3% of girls (51) and 77.3% of boys (34). among them, there were all our subjects of group 1 and 72% of subjects of group 2. overall, according to our survey participants, their appealing to god happened in the following circumstances (table 1). as can be seen from table 1, no significant differences in the reported circumstances for personal appealing to god in the subjects of groups 1 and 2 are observed. all of them almost equally mention the difficulties of life and situations that cause a feeling of hopelessness, and more often than not speak about help to themselves than others. this concurrence of responses between respondents who identify themselves as true believers and those who do not consider themselves as such, allows us to view these factors as the most important for students. it cannot be ruled out that the latter fact can be important to the contents of courses on religious topics, where special emphasis should be placed on the importance of religion as one of the resources of psychological support for the personality. knyazeva, et al.: psychological conditions for the acceptance of religious education by a new generation of russians international review of management and marketing | vol 6 • special issue (s2) • 2016 163 to this end, it should be noted that such circumstances for appealing to god as requests for assistance, refer, to a greater extent, to requests for help for the very self and much less for help to the dear ones, i.e., even among the students’ true believers dominant motivation is selfish, consonant with considerations for personal gains. that is why religious courses introduced into educational practice of the growing generation should by all means incorporate the task of changing the orientation of young people’s religious motivation from selfish and pragmatic one to that of altruistic, spiritual, moral, so as to ensure the personality growth of young men by raising their attentive and caring attitude towards the loved ones. no less important is the fact that among the circumstances for personal turning to god and religion by students, matters of cognitive plan take the last place, that is, cognitive needs are to a lesser extent connected by young generation with religion’s ability to give answers to vital questions. most likely this is due to the fact that to get answers to their queries, young people turn to the internet community or internet sources, in which religious and educational organizations may popularize their ideas. the views of the respondents on the conditions and situations in which other people usually turn to god and religion, ae presented in table 2. judging by the students’ responses, the predominant motif in both groups of subjects is the focus on life’s difficulties and human sense of despair, when only god remains the last hope: “i think that people usually turn to god when in trouble, when they tried out all available methods and those didn’t help. then comes despair, and people go to church, ask god for help” (group 1); “god is the last hope of the doomed” (group 2); “god for many is helper and protector. moreover, people need such support. especially those who believe in it” (group 1). “god is the last resort for those utterly desperate and their hope for the best” (group 2). at the same time, much rarer were mentions of happy moments in life as motivators for appeals to god, of the feeling of gratitude to him and of religious holidays and traditions. table 2 also demonstrates that such arguments for appealing to god as solidarity with other significant people and attempts of blaming god were mentioned only by respondents who do not consider themselves true believers. we shall illustrate the latest opinions by giving specific examples of statement of subjects from group 2. “there are such people for whom there is no difference between going shopping and going to the church to pray. the main thing is to be in company. to keep up with others;” “many a time did i watch people first pray, and then get drunk and use foul language;” “it is something like sort of conformism, i would say. the desire not to be black sheep. demonstration of belonging and loyalty to those who, for whatever reasons, are important”; “it happens that someone even blames god for not helping, for not meeting his requests.” thus, it turns out that for modern students mainly those aspects of religion that are associated with their personal problems are mostly in demand. from the point of view of teaching courses with religious content, it means that they should reflect the link between personal requirements and matters of faith. perhaps, when introducing such type of courses, it would be worth noting that certain aspects of religious influence are similar to the mechanisms of psychological support to a person. the respondents’ answers to the last question of the interview concerning the conditions for relevance of courses with religious content, are reflected in table 3. as per assumptions of our subjects, among the conditions under which courses with religious content may be relevant, are the following: primarily, search for purpose of life, presence of life difficulties, need for protection and help. moreover, such was the opinion of respondents of both groups. however, for subjects who define themselves as true believers, a person’s sincere belief in god was a specifically significant condition, whereas respondents who do not refer themselves to true believers, named, among conditions for starting up courses with religious content, fashion for religion and everything associated with it, including religious knowledge, rites and attributes, search for more support in life and desire of a man to repent in that way. besides, particularly the subjects of the latter group singled out such conditions as aspiration to become a believer, and human ignorance, which did not emerge in the responses of true believers. table 1: circumstances for personal appealing to god by russian youth subjects categories group 1 group 2 final ranknumber (%) rank number (%) rank life difficulties 17 (43.6) 1 29 (43.9) 1 1 hopelessness 8 (20.5) 2 11 (16.7) 2.5 2 appeal for help to oneself 6 (15.3) 3 11 (16.7) 2.5 3 gratitude 5 (12.8) 4 9 (13.6) 4 4 appeal for help to dear ones 2 (5.2) 5 5 (7.6) 5 5 questions 1 (2.6) 6 1 (1.5) 6 6 table 2: human motives for turning to god and religion subjects categories group 1 group 2 final ranknumber (%) rank number (%) rank life difficulties 26 (34.2) 1 41 (28.7) 2 1 hopelessness the last hope only in god 21 (27.6) 2 47 (32.9) 1 2 pleadings for help and protection 18 (23.7) 3 33 (23.0) 3 3 joy experiences. happy life moments 6 (7.9) 4 5 (3.5) 5 4 religious holidays and traditions 1 (1.3) 6 9 (6.3) 4 5 feelings of gratitude 4 (5.3) 5 3 (2.1) 7 6 solidarity with others 7.5 4 (2.8) 6 7 blaming god 7.5 1 (0.7) 8 8 knyazeva, et al.: psychological conditions for the acceptance of religious education by a new generation of russians international review of management and marketing | vol 6 • special issue (s2) • 2016164 let us quote most typical answers as examples confirming the above stated opinions of group 1 and group 2 subjects. “true believers honoring god will be happy about the introduction of such courses and will, by all means, attend them. for them, they are really useful and interesting” (group 1); “to be a believer today has become fashionable. it is fashionable to go to church, to read and quote the bible. nevertheless, that does not mean anything. same fashion can bring a man to special religious courses as well” (group 2); “such courses may be of interest to a person of poor education, not well familiar with scientific facts, because it’s silly to believe in something that cannot be proved” (group 2). at the same time, we cannot but mention some convergence of views of both groups’ subjects regarding conditions under which educational religious courses can be relevant. in particular, on the one hand, it relates to comparable degree of significance of such a personality factor as disappointment of a man in life, and, as a consequence, his conversion to religion and religious knowledge. a similar opinion was met quite often, as evidenced by the 5th and 6th ranks of this factor in groups 1 and 2 readings, respectively. on the other hand, it is quite demonstrative that not only those students who do not profess to be true believers, but even true believing youths have rarely identified religious knowledge as a necessary component of the education of a modern man, as evidenced by the 14th rank of this factor from among 17 possible. of course, this fact cannot be ignored in the introduction of religious courses into the system of russian education (especially higher education). thus, the data obtained in the study suggests that the range of conditions for the demand for courses with religious content is wide enough. however, when developing such courses, one has to take into account that they primarily may be in demand among young people, who need support, got entangled in difficult life situation and among those who are in search of the purpose of life. at the same time, as alternative educational disciplines, courses of psychological education and psychological assistance can be suggested and arranged. 4. conclusion the data obtained allow concluding of the following: today’s pupils and students in their majority are not positioning themselves as true believers. nevertheless, quite a number of students do not deny the facts of their appealing to god in situations of life difficulties and despair. therefore, it is possible to speak of situational relevance of faith among the young generation of russians. contemporary russian youths view solving various life problems, sometimes with distinct selfish interests, as the main motivators for turning to god. god and faith in him is considered by the majority of young people in the context of personal well-being. this imposes certain requirements to be met when compiling program content for religion-oriented courses, with a lot of emphasis to be placed on the importance of altruistic motivations of true believers. when comparing personal motivators of interviewed subjects for turning towards religion and their deliberations about the relevance of religion for other people, it becomes apparent that there is a narrower semantic field of personal motivators with an emphasis on life difficulties, and a wider range of perceptions about the needs of other people for turning to god, among which stand out unselfish intentions and appeals pertaining to positive events, namely: a sense of gratitude, joy experiences and happy life moments. it means that in case of other people students have more divergent views about the relationship of man and god, than about their own relationship with him. as the main conditions of demand for educational courses with religious content, students name search for purpose of life, life difficulties faced by a person, need for protection and help, which may partly be provided by introduction to religious knowledge and religious values. however, at the same time, regardless of considering themselves as true believers or non-believers, the majority of young people does not look at religious courses as a table 3: attribution of conditions for relevance of courses with religious content subjects categories group 1 group 2 final ranknumber (%) rank number (%) rank search for purpose of life 27 (23.7) 1 22 (13.7) 1.5 1 presence of life difficulties 26 (22.8) 2 22 (13.7) 1.5 2 need for protection. help 18 (15.8) 3 19 (11.8) 3 3 sincere faith in god 11 (9.6) 4 8 (5.0) 8 4 disappointment in life 7 (6.1) 5 11 (6.8) 6 5 search for additional support 4 (3.5) 6.5 13 (8.1) 4.5 6.5 desire to repent 4 (3.5) 6.5 13 (8.1) 4.5 6.5 fashion for religion 2 (1.8) 11 9 (5.6) 7 8 presence of fear 3 (2.6) 9 7 (4.4) 10 9 search for harmony in oneself 2 (1.8 11 7 (4.4) 10 10.5 search for social identity 2 (1.8) 11 7 (4.4) 10 10.5 loneliness 1 (0.9) 12.5 6 (3.6) 12.5 12 desire to become a believer 14.5 6 (3.6) 12.5 13 necessary part of education 3 (2.6) 9 3 (1.9) 15 14 search for answers 3 (2.6) 9 2 (1.2) 16.5 15 human ignorance 14.5 4 (2.5) 14 16 attempt to explain the inexplicable 1 (0.9) 12.5 2 (1.2) 16.5 17 knyazeva, et al.: psychological conditions for the acceptance of religious education by a new generation of russians international review of management and marketing | vol 6 • special issue (s2) • 2016 165 necessary component of modern man’s education, and thus at the awareness in the religious sphere as an important indicator of his personality development. it is important that the data obtained in the study is taken into consideration when promoting courses of religious orientation in the russian educational system. this should be carried out unobtrusively, with respect for the opinions of non-believing people; moreover, when popularizing such information the factor of preparedness of the subject to its perception has to be accounted for. references andreeva, l.a. (2010), religiosity of russian youth in higher education institutions in the context of religiosity of russians. proceedings of the international scientific conference “freedom of religion and democracy: old and new challenges”. kiev. available from: http:// www.religiopolis.org/documents/840-la-andreeva-religioznostmolodezhi-rossijskih-vysshih-uchebnyh-zavedenij-v-kontekstereligioznosti-rossijan-materialy-mezhdunarodnoj-nauchnojkonferentsii-svoboda-religii-i-demokratii-starye-i-novye-vyzovykiev-avg. dvoynin, a. (2005), psychological investigation of the phenomenon of faith. development of personality, 2, 96-111. englert, r. (2002), ziele religionspädagogischen handels. in: bitter, g., englert, r., miller, g., nipkow, k.e., editors. neues handbuch religion spädagogischer grundbegriffe. münchen: kösel verlag. p53-58. golov, a.a. (2008), religiosity, and what people find in religion. levadacenter. available from: http://www.levada.ru/press/2008031104. html. granovskaya, r.m. (2004). the psychology of faith. st. petersburg: spb.: it. p576. grosheva, l.i. (2011), the formation of religious education in russia: problems and contradictions. religions of russia; problems of social service. the conference proceedings. moscow, n. novgorod: publishing house medina. p125-129. klinetskaya, n.v. (2009), religion and youth in the regions of russia. sociological studies, 8, 70-77. knyazeva, t.n., semenova, l.e., chevachina, a.v. (2015), social pragmatism and religiosity of contemporary russian youth. mediterranean journal of social sciences 6, 135-140. lebedev, s.d. (2004), on the interaction of secular and religious education in russian. religion and law, 2, 40-57. lebedev, s.d. (2007), attitude of students towards religion. sociological studies, 7, 87-97. lohrer, j. (2012), call for papers: tagung religion slehrerbildung in der krise? rpi virtuel. 28.02. available from: http://www.info.blogs.rpi-virtuell. net/2012/02/28/callforpapersreligionslehrerbildungtagunginderkrise. matvienko, v.a. (2014), constructing religious identity in the context of social activity of the russian orthodox church in contemporary russia. proceedings of the vi international scientific-practical conference social ontology in the structures of theoretical knowledge. izhevsk: publishing house of udmurt university. p327-334. popov, n.p. (2008), how pious we are. the world of measurements, 5, 54-61. zenko, y.m. (2009), the psychology of faith. 2nd ed. saint petersburg: piter. p552. international review of management and marketing vol. 2, no. 2, 2012, pp.83-91 issn: 2146-4405 www.econjournals.com attributions for poverty: a survey of student’s perception yeboah asuamah samuel marketing department, sunyani polytechnic, ghana. phone: 0244723071. e-mail: nelkonsegal@yahoo.com kumi ernest marketing department, sunyani polytechnic, ghana. email: kwgenesty@yahoo.com abstract: in this paper, attribution for poverty have been investigated using 147 marketing students of sunyani polytechnic who were selected through the use of convenient sample method. the paper is based on exploratory quantitative survey. with the use of self design questionnaire primary data were obtained from the field and analysed using spss 16.0. percentages and frequencies as well as one-way anova were used for the analysis. the results indicated that individual perspective of poverty attribution dominates among structural and fatalistic explanations. it was also revealed that success depends significantly on the individual effort and that work is one’s contribution to society. future research should increase sample size, and also consider the relationship between educational level and poverty attributions. keywords: attribution; poverty; individualistic; structuralist; fatalistic jel classifications: i31; i32 1. introduction there are many people in need in all economies, developing and developed. poverty has been one of the issues in development. governments have introduced many policies to solve the issue of poverty. some of these policies are intended to reduce poverty levels while others are intended to eradicate poverty. yet in all societies people are poor. the issue seems to have become intractable in societies. there are many explanations for the causes of poverty from many disciplines such as economics, psychology, sociology, political science, philosophy, and religion. there are also many attitudes and perceptions of the causes of poverty among countries (alberkt, 2006; cerami and vanhuysse, 2009; inglot 2008; szikra and tomka, 2009; tomka, 2006; kallio and niemela, 2010; lepianka, 2007; halman and oorschot, 2000). people in a society see themselves differently. some consider themselves to be poor while others also find it difficult to admit that they are poor. some researchers (dudwick et al., 2003) attribute poverty to the type of economic system such as capitalism, socialism, command economy, and mixed economy. african countries are considered poor (garcia and fares, 2008), and as such there has been many policy interventions to address the poverty issues. in ghana, successive governments have introduced various polices to solve the problem of poverty such as the development of infrastructural facilities. policies (growth and poverty reduction strategy, gprs ii) are put in place to ensure economic growth so as to solve the poverty issue. under the livelihood empowerment against poverty (leap) policy gh¢500,000.00 was released for disbursement to beneficiaries under the leap, and about 2,000 households with orphans and vulnerable children (ovc) have benefited from an initial bi-monthly conditional cash transfer of between gh¢6-gh¢8/month to meet their basic needs and other services in health and education. in addition under gprs ii, seven out of the 10 employment modules have been rolled out and are being implemented nationwide. a total of 107,114 youth have been engaged on the seven modules as at august 2007 (budget statement, 2008). in addition to these, a total of 186 functional women’s groups international review of management and marketing, vol. 2, no.2, 2012, pp.83-91 84 from 6 regions comprising of 12,255 women were trained in basic book keeping, credit repayment, savings, entrepreneurial skills, and micro-finance to equip them with basic skills that will enhance their output, and reduce poverty in the long run. the 2008 budget statement of ghana indicates that “from 3% in 2000, gdp has risen to 6.4% in 2007. poverty levels have reduced substantially and ghana is tipped to become one of the few third world countries to achieve the millennium development goal of cutting extreme poverty by half by the scheduled date of 2015”. the minister of finance stated that the “economy of ghana has witnessed sustained growth and positive changes in the lives of the people of ghana by maintaining the broad policy orientation of reducing the country’s level of poverty whilst providing the appropriate environment for private business to grow and thrive”. it is again reported “that poverty has reduced significantly and ghanaians are obviously better off today than they were seven years ago. the indicators show a downward trend in poverty from 39.5 per cent in 1998/1999 to 28.5 per cent in 2005/2006” (budget statement, 2008). studies has shown that public opinions shape or influence government policies. hence, knowing what the lay people think of the causes of poverty will help policy makers to introduce the appropriate policies to solve this issue. to the knowledge of the researcher little work has been done on the public perception of the causes of poverty in ghana and no such work has been done in the study area. this work intends to fill in the gap. also some studies have produce mixed result and this study contributes to the debate. in spite of many policies to solve the problem of poverty in ghana, there are many people living in poverty. this has motivated the researcher to embark on this study. the focus of this study is to explore public perceptions of the causes of poverty and the determinants of such perceptions. this the researcher belief will help in determining if the various interventions are and will be appropriate in solving the poverty issues. there are many theories on the causes of poverty. some researchers indicate individual blame, individual fate, social fate, and social blame, while others also provide theories such as individualistic, structural, and fatalistic (kainu and niemelia, 2010). the individualistic, structural, and fatalistic explanations are attributed to feagin (1972, 1975). according to the individualistic explanation one is poor because of him or herself. that is, as a results of certain behaviours or features of the individuals such as laziness, immoral or indecent lifestyle. the structural theory indicates that one is poor as a result of the structures of the society such as the demand for certificate when looking for employment, attending school and passing an examination, attending interviews, requiring job experience from job seekers. the fatalistic explanation holds that one is poor as a result of uncontrollable, unforeseen factors that one could not avoid such as illness, not having lack or having bad luck (kainu and niemelia, 2010; feagin, 1972, 1975). according to van oorschot and halman (2000) there are four theoretical explanations for poverty which are individual blame, individual fate, social fate, and social blame. the individual blame has it that one is poor as a result of personal attributes or inadequacies such as not been intelligent. the individual fate indicates that one is poor due to individual bad luck. in the case of the social blame poverty is as a result of social factors which are caused by factors that are impersonal and inescapable by the poor. economic crisis is an example of such factors which the control is beyond the poor. the social blame theory explains that poverty results from acts caused by certain groups, institutions or parties in the society and that the poor cannot control the activities of these groups. these groups or parties need to be blamed for the causes of poverty of the individual (kainu and niemelia, 2010). there have been many empirical studies on the causes of poverty in developed and developing economies such as the united state of america (usa), canada, russia, estonia, czech republic, and hungary. in all these studies there have been various reasons for the causes of poverty. in a study by reutter et al. (2006) on the canada, it was revealed that there is variation in the public understanding of the causes of poverty and that structural explanation was strongly favoured. poverty was attributed to government policies and unequal opportunities for citizens. about 30% of the respondents favoured the fatality explanation of poverty with over one half respondents favouring the intergenerational explanation. in an opinion poll by ipsos news centre (1999) the findings were that 30% of the respondent considered the individual explanation of poverty, and that people are poor because of their own attributions for poverty: a survey of student’s perception 85 choices and actions, while 51% support the structural explanation of poverty, and stated that people are poor for no fault of their own. on the determinant of the causes of variation in the responses of respondents, it has been revealed in some studies that demographic variables such as gender and age explain little (reutter et al., 2006; van oorschot and halman, 1999). in a study by carr and maclachlan (1998), and cozzarelli et al., (2001), and hunt (1996) it was revealed that women support structural cause of poverty than men. other variables such as education, income levels have been found to explain the variation in responses significantly (reutter et al., 2006). respondents who are rich tend to support the individual explanation of the causes of poverty and provide less support for the structural approach (reutter et al., 2006; hunt, 1996; bullock, 1999). also, respondents who are rich in a study tend to support intergenerational explanation of poverty (bullock, 1999; reutter et al., 2006). however, other researchers such as nasser and abouchedid (2001) indicated that high income earners support structural attribution of poverty than low income earners. studies have also indicated that respondents who are low income earners expect the future economic life not to be good (reutter et al., 2006; stewart et al. 2004). other researchers have also revealed mixed results or results that are inconclusive in the examination of the determinants of attributions of poverty (shirazi and biel, 2005). in a study by other researchers (bullock et al., 2003; cozzarelli et al., 2001; habtamu, 1995; molvaer, 1980) culture has been identified as the causes of poverty according to respondents. according to a study by wollie (2009) the youths in bahir dar in ethiopia, are more inclined to attribute poverty to structural factors and that there are three main dimensions of poverty attributions which are fatalistic, individual and structural. the results also indicated that demographic and socio-economic variables significantly affect attributions of poverty. gender determines fatalistic attribution whiles education is the main determinants of individual attributions of poverty. parents’ income status significantly determined structural attribution of poverty. krediel (1998) and guimond et al., (1989) studies revealed that respondents are more sensitive to structural basis for poverty indicate that society operates in a way that makes people poor since they are unable to improve their competence levels. aside the within country studies of the causes of poverty there has been comparative studies on developing, and developed economies. these have produced interesting results. in a study by kainu and niemela (2010), it was shown that in general social blame type of explanation was most popular in european post-socialist countries. this was followed by individual blame, social fate and then individual fate. the study indicated that ukraine, moldova, hungary, and russia support social blame. lepianka (2007), and lepianka et al., (2010) studies indicated that czech republic support individual blame type of explanation. in some studies in us findings indicated that structuralist explanation is less favoured and that the most favoured explanation of poverty is the individual explanation (alesina and glaeser, 2004; kluegel and smith, 1986; feagin, 1975). feather (1974) study shows that americans are more likely to support individual explanation than australians. australians tend to disagree with the individual explanation of poverty. they support the structuralist explanation of poverty (saunders, 2002). other studies (albrekt, 2006; van oorschot and halman, 2000) in countries such as denmark, netherlands, norway, and sweden, the individual explanation are not favoured while it is favoured inaddition to the structuralist explanation in eastern european countries by other researches (lepianka, 2007; gorshkov and tikhnova, 2006; stephenson, 2000). 2. objective of the study the paper aims at contributing to the body of knowledge that exists in the area of poverty by assessing the attributions of poverty from student’s perspective. specifically, the paper seeks among other issues to: i. analyse public perceptions of the causes of poverty, ii. explore determinants of poverty attribution, iii. examine respondents perception of work. international review of management and marketing, vol. 2, no.2, 2012, pp.83-91 86 3. research questions the following research questions were asked and answers provided for through the analysis and discussion of the results. what do people attribute poverty to and what variables influence their attribution? 3.1. hypothesis from the empirical studies reviewed the following hypotheses are formulated: i) social and individual blame types of explanation will more be endorsed, ii) individual and social fate types of explanation will be less endorsed, iii) demographic features will influence poverty attributions, iv) economic circumstances will influence poverty attributions; v) ethnicity will influence poverty attributions, vi) values and attributes will influence poverty attributions. 3.2. scope of the study and limitation the study was conducted in the sunyani polytechnic using survey. the paper does not look at the policy interventions on poverty and their effectiveness. respondents were selected using nonprobability sample method and hence results may suffer from external validity. there is the tendency that some respondents might have being responding in a socially desirable way would tend to bias results against findings. 3.3. significance of the study the findings of the will study provide information to policy makers as to what the lay person consider as the causes of poverty and that will help to develop the appropriate policy to solve the issue of poverty. the findings are also expected to serve as a reference material for future researchers. the findings will also contribute to theories of poverty. 3.4. methodology of the study the study is based on quantitative descriptive survey design. the target population for the study is workers and students in sunyani polytechnic. data for the study was collected from the respondents through self designed and self administered questionnaire covering the various reasons provided in the literature. non-probability convenience sampling technique was adopted. this study is based on primary data collected in 2011 from the study area and secondary data were obtained from literature. in all 147 respondents were used for the study. the purpose of the study was explained briefly and respondents were made to agree to partake in the study. a literature review is made on both primary and secondary resources. this covered all the key concepts that were used in the study to provide the theoretical framework and background against which an important tool of the study, the questionnaire was developed. the review in addition, provides the basis for discussions and support for many views that were presented in the study. it also, adds weight to the conclusions drawn, and recommendations made. data obtained were analysed using descriptive statistics such as frequencies of response, percentages, mean and standard deviation. in addition, one-way anova was performed with the use of spss 16.0. 4. results and discussions demographic profile of respondents of the 147 students in the study, 100(68%) were males and 46(31.3%) were females, with one missing response. majority 138(93.9%) belong to the age group of 18-29, followed by 5(3.4%) in the age group of 30-44 with four missing responses. larger number 133(90.5%) of them were christians, followed by muslim 12(8.2%), and 1(0.7%) of them not attending church, with 1 (0.7%) missing response. most 48(32.7%) of them attend religious service once a week. the rest are: more than once a week 43(29.3%); never 3(2%); every meeting day 40(27.2%); occasionally 11(7.5%); other 1(0.7%); missing response 1(0.7%). in all of the 147 students, 93(63.3%) were in hnd1 and 52(35.4%) were in hnd2 with 2(1.4%) missing response. majority 94(63.9%) belong to middle income group. this is followed by low income group 22(15%), then high income group 11(7.5%), and those who did not know 18(12.2%), with 2(1.4%) missing response. the sources of income for the households are employment 61(41.5%), social benefit/pension 6(4.1%), private transfer/remittance/gifts 28(19%), other sources 49(33.3), with 3(2%) missing responses. majority of the households work to obtain income. attributions for poverty: a survey of student’s perception 87 majority 56(38.1%) did not know whether they belong to ethnic minority or not with 53(36.1%) indicating that they belong to ethnic minority, and 35(23.8%) saying they are not. there were 2(1.4%) missing responses. the ethnic language of majority 115(78.2%) are written and learned in the various institutions. a small number 14(9.5%) indicated that their language is not written with another 14(9.5%) not aware if the language is written or not, and 4(2.7%) missing responses. majority of the respondents were from the ashanti region of ghana followed by brong ahafo 25(17%); eastern 16(10.9%); upper west 14(9.5%); northern 11(7.5%); western 9(6.1%); central 8(5.4%); upper east 6(4.1%); volta 5(3.4%); and greater accra 3(2). majority of the respondents 86(58.5%) belief in maintaining order in the nation. this is followed by belief in giving people more says in important government decisions 34(23.1%); fighting rising prices 8(5.4%); protecting freedom of speech 16(10.9%); others 3(2%). perception of poverty reduction and life significant majority 108(73.5%) agreed/strongly agreed that the gap between the rich and the poor should be reduced in ghana with 26(17.7%) neutral responses and 13(8.8%) disagreeing/strongly disagreeing. a large majority 95(66%) think the state should be involved strongly 95(66%) in reducing the gap. another 29(17.7%) of them think moderate involvement is good with 9(6.1%) thinking that the state should not get involve. four (2.7%) did not know what the state should do with 8 (5.4%) missing responses. on respondents perception of life, majority 64(43.5%) indicated that they are satisfied with life with 41(28.6%) remarking that they are not satisfied with life. there were 39(26.5%) neutral responses and 3(2%) missing responses. in addition, majority 88(59.9%) indicated that they have control over life with 27(18.4%) not having control over life. another 30(20.4%) were neutral with 2(1.4%) missing responses. perception of causes of success on the factors contributing to success, various factors were identified. the most important variable according to the respondents is personal effort (95.3%). this is followed by skills (93.2%); intelligence (84.3%); political factor (27.2%); and criminal/corrupt ties (7.5%). popular explanation among the respondents is individualist approach. poverty attributions on the causes of poverty four main variables were identified. the most important variable is injustice (67.4%); laziness (59.9%); inevitable part of modern life (32.6%); and unlucky (27.7%). these were obtained by ranking of responses. as a control variable a question was asked for only one response. “in your opinion what is the main reasons why there are some people in need in our country today”? majority 66(44.9%) indicated that people are poor because of laziness and lack of will power. this was followed by luck 28(19%) and injustice in the society 28(19%); inevitable part of modern life 11(7.5%); with 11(7.5%) not knowing why people are in need. there were 3 missing responses. the results indicated that majority 96(65.3%) considered themselves as not being poor with 15(10.2%) seeing themselves as poor, while 21(14.3%) did not know whether they are poor or not. there were 15(10.2%) missing responses. but when asked if they were rich, majority 54(36.7%) responded no while 50(34%) saying yes with 30(20.4%) not knowing whether they are rich or not. there were 13(8.8%) missing responses. when asked if they know poor people within their communities, greater majority 98(66.7%) indicated yes with 27(18.4%) saying no, and 16(10.9) not knowing poor people within the community. there were 6(4.1%) missing responses. respondents were also asked if it is difficult for people to admit that they are poor. a significant number 75(51%) said yes, 44(29.9%) said no with 23(15.6%) indicating that they do not know. there were 5(3.4%) missing responses. perception of work on work, majority 100(68%) indicated that work should come first even if it means less spare time. also 93(63.3%) said one needs to have a job to fully develop his/her talent. in addition, 128(87%) agreed/strongly agreed that work is a duty towards society with 100(68%) indicating that people who do not work turn lazy. majority 63(42.8%) indicated that it is not humiliating to receive money without having to work for it. in all respondents have positive attitude towards work. the results are shown in table 2. international review of management and marketing, vol. 2, no.2, 2012, pp.83-91 88 table 1. responses on attitude towards work statements strongly agreed freq/% agreed freq./% neutral freq./% disagreed freq./% strongly disagreed freq./% missing response freq./% total freq./% humiliating to receive money without having to work for it 19(12.9%) 34(23.1%) 28(19%) 30(20.4%) 33(22.4) 3(2%) 147(100) people who don’t work turn lazy 56(38.1%) 44(29.9%) 11(7.5%) 28(19%) 5(3.4%) 3(2%) 147(100) work is a duty towards society 54(36%) 74(50%) 14(9.5%) 3(2%) na 2(1.4%) 147(100) work first if even less spare time 35(23.8%) 65(44.2%) 31(21.1%) 9(6.1%) 5(3.4%) 2(1.4%) 147(100) you need to have a job to fully develop your talent 50(34%) 43(29.3%) 17(11.6%) 23(15.6%) 12(8.2%) 2(1.4%) 147(100) source: field survey, may 2011. one-way anova one way analysis was used to compare the means of responses given by respondents on the various questions. all the responses given were not even across the sample. demographic variables significantly affected some responses given by the people. gender significantly affected the following: ‘state involvement in reducing poverty’ (f=2.867; p=0.093); ‘if people find it difficult to admit poverty’ (f=2.875; p=0.092); ‘if respondents were rich’ (f=3.405; p=0.067); ‘satisfied with life’ (f=2.864; p=0.093); ‘you need to have a job to fully develop your talent’ (f=6.148; p=0.014). age significantly affected the responses on ‘poor people are unlucky (f=3.965; p=0.048). in addition, the year of respondents also affected the responses significantly. ‘skills’ (f=3.895; p=0.050); ‘injustice’ (f=3.037; p=0.084); difficult to admit to been poor (f=3.700; p=0.056); ‘need to have job to fully develop talent’ (f=5.905; p=0.016); ‘work is a duty towards society’ (f=3.542; p=0.062). further, religious affiliation also significantly affected the responses. ‘intelligence’ (f=2.633; p=0.075); ‘skills’ (f=3.131; p=0.047); ‘criminal/concepts’ (f=5.102; p=0.007); ‘unlucky’ (f=2.741; p=0.068); ‘people who do not work turn lazy’ (f=4.178; p=0.017). the frequency of attending religious services also significantly affected some of the responses. ‘skills’ (f=3.017; p=0.013); ‘individual effort’ (f=2.364; p=0.043); ‘control over life’ (f=2.017; p=0.080); ‘work is a duty towards society’ (f=2.078; p=0.072). furthermore, region of respondents significantly affected the responses. ‘the gap between the rich and the poor should be reduced’ (f=2.380; p=0.016); ‘skills’ (f=1.687; p=0.098); ‘criminal/corrupt ties’ (f=2.699; p=0.006); ‘unlucky’ (f=2.101; p=0.033); ‘need to have job to fully develop talent’(f=1.924; p=0.053); ‘people who do not work turn lazy’(f=2.448; p=0.013). further still, household income level also significantly affected some of the responses. ‘laziness of poor’ (f=2.390; p=0.054); ‘whether respondents know poor people’ (f=2.460; p=0.048); ‘work first’ (f=2.345; p=0.058). the sources of household’s income affected some of the responses. ‘injustice’ (f=2.377; p=0.073); ‘difficult to admit that one is poor’ (f=4.538; p=0.005); ‘whether respondents are rich’ (f=2.171; p=0.095). lastly, the type of beliefs respondents hold also significantly affected the responses. ‘whether the gap between the rich and the poor should be reduced’ (f=2.591; p=0.039); ‘skills’ (f=2.926; p=0.023); ‘political’ (f=2.292; p=0.062); ‘whether respondents know poor people’ (f=2.772; p=0.030); ‘if it is difficult to admit been poor’ (f=2.210; p=0.071); ‘humiliating to receive money for not working’ (f=2.417; p=0.052); and ‘work is a duty towards society’ (f=5.353; p=0.000) attributions for poverty: a survey of student’s perception 89 5. discussion in this study it has been found that there is variation in how public understands the causes of poverty. both structuralist and individual, and fatalistic explanations are found in this study. overall, however, respondents were most likely to favour individualistic perspective that attribute poverty to the individual effort such as laziness (44.9%) and unluckiness, and least likely to support the structural explanation. this finding is contrary to previous finding in other countries (kainu and niemela, 2010; wollie, 2009; reutter et al., 2006; ipsos news centre, 1999; krediel, 1998). but the findings support earlier findings by other researchers (lepianka et al., 2010). all the respondents were in tertiary institution with majority belonging to the middle income group. this might have influenced their attribution to favour the individual perspective. this finding support the feagin (1972) argument that people within middle income group and are of considerable education support the individual explanations of poverty. on the keys for success the main variable was personal effort (95.3%). according to kainu and niemela (2010) “those who see effort and hard work as a key for success are more likely to endorse individualist explanations”. this statement is supported by the findings in this study. the findings also revealed that demographic variables such as gender, age as well as socioeconomic variables such as household income level, religious affiliation, region and sources of income of households are functions of responses given for poverty attributions, attitude towards success, and work. on demographic variables these findings are supported by some previous studies (feagin, 1972; carr and maclachlan, 1998; cozzarelli et al., 2001; hunt, 1996). in the case of socioeconomic variables some earlier studies are in lined with this (bullock, 1999; nasser and abouchedid, 2001). majority of the respondents belong to the middle income group. members in this group favour individual explanation. the political belief one hold also significantly affects the responses on attitude towards work and success. 6. conclusion the paper has established that the three main poverty attributions operate in the study area. these are individual perspective, structural explanation, and fatalistic concepts of poverty. the primary or dominant view is the individual perspective which does not reflect the general assertion that developing societies place responsibility for reducing poverty on the state. effort must be put in place to change individual orientation to modify behaviour. the structures of the state must also be looked at since it also impact on poverty. social environment must also be attended to. measures to reduce poverty must be holistic to cover all the areas involved in poverty. respondents have positive attitude towards work and belief that working is ones contribution to society. socio-demographic variables significantly affect the responses given by respondents on poverty attrition, attitude to work, and success, which suggest that respondents had different concepts for explaining poverty, success and the reasons people work. the findings will help policy maker’s economist, politicians, and other stakeholder to better understand poverty issues and how to solve them. future studies should look at the relationship between parent education and poverty attribution. also future research should look at the relationship between levels of education, employed and unemployed sample to enrich the discussion. in addition future study should increase the sample since and employ structural models to establish cause and effect. future researchers should look at public understanding of the effect of poverty. references albrekt, l,c. (2006). the institutional logic of welfare attitudes. how welfare regimes influence public support. aldershot: ashgate. alesina, a., glaeser e.l. (2004). fighting poverty in the us and europe: a world of difference. oxford university press, toronto, on. bullock, h.e. (1999). attributions for poverty: a comparison of middle-class and welfare recipient attitudes. journal of applied social psychology, 29(10), 2059-2082. bullock, h.e., wendy, r.w., wendy, l.m. (2003). predicting support for welfare policies. the impact of attributions and beliefs about inequality. journal of poverty, 7(3), 35–56. international review of management and marketing, vol. 2, no.2, 2012, pp.83-91 90 carr, s., maclachlan, m. (1998). "actors, observers, and attributions for third world poverty: contrasting perspectives from malawi and australia. " the journal of social psychology, 138(2), 189-202. cerami, a., vanhuysse, p. 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(2006). east central europe and the european social policy model: a long-term view. east european quarterly, 40(2), 135. van oorschot, w., halman, l. (2000). blame or fate, individual or social? an international comparison of popular explanations of poverty. european societies, 2(1), 1-28. wollie, c.w. (2009). causal attributions for poverty among youths in bahir dar, amhara region, ethiopia. journal of social, evolutionary, and cultural psychology, 3(3), 251-272. 11_kurbatskaya.indd international review of management and marketing | vol 5 • special issue • 2015 73 special issue for "media as the tool: management of social processes" international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2015, 5(special issue) 73-78. hotel business advertising specifi city and its psychological examination procedure tatyana borisovna kurbatskaya1*, svetlana georgievna dobrotvorskaya2, pavel nikolayevich ustin3 1the branch of kazan federal university, naberezhnye chelny, 68/19, respublika tatarstan 423812, russia, 2kazan federal university, ul. kremlevskaya, 18, kazan 420000, russia, 3kazan federal university, ul. kremlevskaya, 18, kazan 420000, russia. *email: t.b.kurbatskaya@rambler.ru abstract the article substantiates the need of the preliminary psychological examination of advertising. an overview and analysis of contemporary conceptual lines of the hotel advertising are given in the article. features of advertising messages are shown on the example of some hotels. the effects arising from the improper construction of the advertising composition are given. conclusions, revealing features of advertising strategies in the hotel business, in contrast to advertising in the commodity market are made. keywords: hotel business, advertising, hotel advertising, advertising features, advertising composition jel classifi cations: l14, l19, m37 1. introduction hotel business is the central part in the system of touristexcursion service (volkov, 2003; carter, 1991; morozov and morozova, 2008; zaitsev, 2003; brymer, 1995). accommodation and provision of temporary housing with a standard set of other services, as a rule, are included in any tourist program. the main aim of hotels is to help guests to have a rest and feel comfort, get information about the services, the location and time of the different units of service (restaurant, bar, hairdresser, post offi ce, shops, rental, etc.). in this regard, the choice of hotel by consumers of tourist services largely depends on the effi ciency of its positioning in the advertising market. in this case, advertising, fi rst of all, must refl ect the image of the hotel, as well as its specifi city. according to some western experts (batra, 2001; medlik and ingram, 2012; walker, 2008; wells et al., 2008), in the hotel business advertising is required the following major objectives: • all services in the hotel should have a tangible view that it would be clear for the potential consumer what he is proposed • hotel should promise benefi t or problem solution • the advertisement must display the differences of this hotel from its competitors • advertising should be capitalized through oral distribution. the main types of hotel advertising in the internet are banners, context and targeted promotional units. they are the best variant of the placement of small banners (promo-blocks) in the country, large region, or a resort. promo-block is a block with text and graphics, including the illustration, a short text and contacts. alternative methods include social networks, videos, press releases, as well as fl ash mobs, twitter or youtube. there are also the following types of advertising the hotel (depending on destination): external, internal (silent), print, oral (sound) (feofanov, 2000; germogenova, 1994; mokshantsev, 2011; pronina, 2000). an analysis of the current situation in the market shows that advertizing of advertising services has specifi c features and characteristics, which allows us to achieve the best results in the competition. study hotel advertising can contribute to the prevention of errors advertising and increase its effectiveness. the effectiveness of the hotel advertising, in turn, is estimated kurbatskaya, et al.: hotel business advertising specifi city and its psychological examination procedure international review of management and marketing | vol 5 • special issue • 201574 in increasing of the sales level and changes in the ratings of the company. 2. methods let’s make an analysis of modern conceptual lines of the hotel advertising. one of the interesting and innovative types of the hotel advertising is an ethnic advertising, proposed by hotel chain meliá. in the composition (figure 1) there is ethnic specificity, recognizable complex symbols that, in fact, attract the target audience. it is known that among the tourists you can often fi nd people who like frequently visit one or more countries that are psychologically close to them. in this case, the mentality of a person and characteristics of the country are matched. this situation creates a target audience that will be focused on the repeated trips to the country. another option is a conceptual line is creative advertising of the hotel hotel camino real oaxaca. the idea of this creative advertising (figure 2) is that in this hotel every piece of furniture has a story. any painting or cabinet door has a story or a novel. even if there is no skeletons in old wardrobe, surely there is a couple of stories about the expensive and respected piece of furniture. hence the slogan is: “there are too many stories in every corner.” hidden symbol on the print is a book that is a symbol protecting against evil spirits, crystallized knowledge, aristocracy, interest in the world, the possibility of knowledge. one more variant is shangri-la hotels ads. the slogan of its advertising campaign is as follows: “it is in our nature” that can be interpreted as the highest level of hospitality this refers to the visitor as one of us. in advertising, there is nothing resembling hotels (figure 3). chain of asian hotels is advertised by showing cold permeating winter, wind, snow, himalaya mountains, loneliness and despair. the purpose of this campaign is using metaphors, allegories and short, but vivid stories to tell about the philosophy of the brand, the attitude of hotels to their customers and how they see their work. president ceo “shangri-la hotels and resorts” greg dogan says it this way: “this distinguishes asian hospitality: the unique care and respect to the guests and each other. for us it is more important than talking about palaces and beautiful places.” advertising variant of the budget hotel hans brinker budget hotel in amsterdam is also interesting. this variant of the advertising company is considered to be one of the most popular, successful and long-term (1998-2010). rather than talk about its advantages, it emphasis on the disadvantages of the proposed living conditions (figure 4). all the negative aspects of youth hostel are represented as elements of a great demand: dog feces on the doorstep, no toilet paper, unfi t for recreation facilities, broken equipment, dirty pillows, one bathroom for 354 numbers, painful bruises on the body after a night spent on a mattress of the hotel, infection in hotel rooms. at the same time, just among these drawbacks, developers are figure 1: ethnic advertizing of meliá hotels figure 2: concept of advertizing of camino real oaxaca hotel figure 3: advertizing print of the hotel chain “shangri-la” figure 4: samples of the advertizing concept of hans brinker budget hotel kurbatskaya, et al.: hotel business advertising specifi city and its psychological examination procedure international review of management and marketing | vol 5 • special issue • 2015 75 trying to show the advantages and exclusivity of the advertised hotel. author and developer of these concepts christian bunyan says, “i like everything that we have done for our old customers hans brinker budget hotel. this youth hostel in the center of amsterdam, which demonstrates that they have the worst service. as a result, people think that it is very cheap, so guests crammed into all the cracks.” in the advertising campaign of chains ibis, potential customers are informed about the main advantages the standard soundproof rooms. the composite shows the stories about the dog, which by fl ags rather than barking indicates what it wants (figure 5); a musician, drummer, music conveys the idea of music by gestures; fi re car with the siren off. slogan of advertising messages reads: “in the silence of hotels ibis. now all our rooms are upgraded to soundproof.” in the advertising campaign of hotel chain etap main character of the composition is a specialist with the problems: programmer, offi ce worker, engineer. the hotel can be a good place for them to rest. the concept is based on the fragments from the life of hotel guests (figure 6). they come to the hotel with their problems from professional life. this method is intended to show that the person gets out of hell straight to paradise vacation. perception executes the applied function. the task of demonstrating visual or verbal images is human impulse to activate the behavior. the ultimate goal is to persuade a potential customer to a decision on the acquisition of liked product or service. in this connection, advertising actively uses various strengthening techniques. the most effective method is the impact on the emotional state of a person. for example, by using a selection of colors, music, scents, composition to demonstrate of sensual motivation, joy, sadness, or even aggression (for the effect of contrast). considerable infl uence advertising can provide and through its impact on human consciousness. the greatest effects gives images clearly and convincingly demonstrate the expected benefi ts for the consumer. for example, the advertising message of the possibility of obtaining a higher percentage when choosing certain types of savings deposits. the perception of advertising is largely determined by the interaction of cognitive and affective factors. traditional models of advertising exposure usually suggest that affective responses appear after cognitive processing of the message even updating and changing it. according to this scheme, an ideal advertising message should include, depending on its purpose, a combination of four features: • to attract attention • awakening interest • the excitement of desire • offer a plan of action. at the same time, some of researchers have the opinion, according to which the cause of action is often the primary relation to the object, followed by the assessment of these dispositions. so affective reactions precede cognitive evaluation and processing, although hereinafter there can follow secondary affective reactions. thus, fi rst person forms an emotional attitude to advertising and product, and then produces the cognitive processing of information about them. assessment and decision-making on advertising and product, as a rule, are carried out unconsciously at the level of primary affective reaction. but then you want to get more information about the object, to make the formation of a decision more informative. thus, cognitive processing is not neutral it serves to support and explain the basic affective reaction. the secondary affective reaction usually differs a little from the primary, but it is more detailed and based on the results of cognitive analysis. new information about the object in a certain way correlates with the existing knowledge for the purpose of determining whether it is compatible with the existing aim of the person or not. if the aim contains contradiction information (“cognitive dissonance”), for example, either perceived benefi t or harm to the object under the infl uence of new information and rational arguments may occur changes. thus, the perception of the advertisement, including hotel, affects the emotional condition of the recipient. the emotional tone of pleasure or displeasure, delight or disgust accompanies not only feelings, but also the impression of being in the process of perception of advertising messages. this perception of the figure 5: samples of the advertizing concept of the hotel chain “ibis” figure 6: samples of the advertizing concept of the hotel chain “etap” kurbatskaya, et al.: hotel business advertising specifi city and its psychological examination procedure international review of management and marketing | vol 5 • special issue • 201576 emotional tone of the advertising can be both positive and negative. most people are set to receive positive emotions, therefore, advertising messages should cause positive emotions. moreover, if the proposed recipient like advertising images, he is less critical to the arguments accompanying the text of the ads. consequently, the message becomes more persuasive if it is associated with positive feelings. it should be noted the following aspects. firstly, a positive attitude is more necessary for advertising, creating a mood than advertising that represents goods by means of rational information. secondly, when using positive mood effect will be greater for new and unknown market brands than for well known. in the third, the challenge of positive emotions is more important at low interest to the goods than at the high. the disadvantage of advertising messages aimed at stimulating positive emotions is the complexity of the acts in the perception of the rational information. this is due to the peculiarities of mental activity of the person in the process of emotional experience. and if the advertising message makes him positive emotions, he is less prone to thinking about the content of the provided information. use of negative emotions in advertising messages is due to the fact that people usually tends to step back from negative information and unpleasant experiences. this type of information includes everything with feelings of fear, disgust, anger or embarrassment. fear is a powerful means of infl uence and recipients tend to pay attention to ads that cause fear, disgust or discomfort. the value of such advertising effect is primarily dependent on its strength. if the level of fear in the ad is very low, the ads will attract little attention. if it is very high, then people try to ignore the information offered to their attention. thus, as nazaykin (2002) notices, the level should be noticeable, but not threatening. a person may feel fear for himself, for his families or friends. therefore, it can affect a person using the corresponding images. for example, the mother in the fi rst place would be afraid for their children, and her husband for his family. therefore, the most effective advertising is one that is based on fears related to the prevention of any threats. however, advertising messages associated with negative emotions, may have the opposite effect. first, the recipient of the advertising message may appear more doubts about a particular product, and he will need more arguments for a positive perception of the product. secondly, using the negative supply, the image of the advertised goods or services may be incorrectly gaining a foothold in the consumer’s mind. in addition, the fear game is not always be able to make the message more effective. if the audience does not explain how to avoid danger, frightening message may simply not be perceived. fear message are more effective, if the advertisement consists not only the belief of people at risk and the likelihood of adverse effects. for example, not only warning of the probability of death from lung cancer due to smoking, but also the offer of effective protection strategies. overall, the analysis shows that a negative approach is less effective than positive, in which there are no wrong associations or doubt. however, when the advertising is aimed at people for whom the trouble is not theoretically possible in the future but real at the moment, the image of the suffering character or a negative situation is appropriate. if the illustration shows potential trouble, the person usually thinks that this will not happen to him. in our view, in addition to positive or negative emotions, advertising messages may be accompanied by ambivalent emotions. perception in this case is accompanied by a special dual emotional attitude this fact vygotsky (1998) called the “binary” affect where coexist joy, optimism, hope and cautious attitude, fear and sadness. this ambivalent complex appears immediately in the perception of the recipient of advertising illustration. ambivalent affective background is recorded in the analysis from the recipient story, because at this moment there is unite both opposite emotionally plans in one act, exposing its opposite, bringing controversy to its climax. there is disagreement in advertising environment about the validity and usefulness of non-standard advertising tools and elements whose task is to provoke controversial reactions in order to attract attention to the product. it is believed that such a strategy is ineffective, as the indignation and disgust cannot cause positive emotions of the consumer. however, the hype around the forbidden or prevented by censorship advertising more often provides such advertising a “second life,” such as in the internet. as a rule, consumers of shocking advertising react negatively to its individual elements and subject to harsh criticism violence, nudity, etc. at the same time condemning and discussing the negative components of shock advertising, one consumer will inevitably tell others about the product. consumers’ emotions can be characterized by several features. firstly, the emotion expresses the condition of the subject and its relation to the object. second, they are usually different polarity, i.e., they have a positive or negative sign: the pleasure displeasure, happy sadness, joy sorrow, etc. both poles are not necessarily externality. in complex human emotions, they often form a contradictory unity: jealousy passion coexists with burning hatred. emotions can range from violent explosions of passion to the subtle nuances of the mood. in the early xxth century, among the various “senses” began to stand out affects. according to vitvitskiy into an independent group. affect is a sensual state that “gains very signifi cant strength and becomes a common rapid of mental life.” he attributed to affects such emotional reactions as fear, horror, anger, etc. (witwicki, 1946). stumpf considered feeling as a kind of sensations, singled out affects as a special kind of psychic phenomena (stumpf, 1913). gradually, it confi rmed an idea of some kind independence of an affect how an emotional phenomenon and in the classifi cation this phenomenon have been providing along with the emotional tone, mood and emotions properly. thus, leontiev (1971) writes that affects arise in kurbatskaya, et al.: hotel business advertising specifi city and its psychological examination procedure international review of management and marketing | vol 5 • special issue • 2015 77 response to the situation that has actually happened and in this sense they are shifted to the end of the event. affect is nothing as strong expression of emotion. any emotion can reach the level of affect, if it is caused by severe or particularly meaningful to human stimulus. affective manifestations of positive emotions are delight, excitement, enthusiasm, attack merriment, laughter and affective manifestations of negative emotions are rage, anger, fear, despair, often accompanied by stupor (frozen in a fi xed position). according to rubinstein, affect is a fast-paced and rapidly fl owing emotional process of an explosive nature, which can discharge in action not subordinated to the conscious volitional control. affects are primarily associated with shocks (rubinstein, 2015). according to levinson negative emotions cause stronger physiological responses than positive, regardless of gender, age and cultural background (levinson, 1992). during the study it was found that in the process of perception of advertising recipients may experience affective state of shock. shock it is growing acute pathological process caused by the action of a super strong stimuli and is characterized by disturbances of the central nervous system. the psychic shock psychosis, occurs in case of sudden life-threatening circumstances or situations and causing a pronounced affect of fear. affective shock can occur in different ways: 1. maximum (hard) shock. advertising causes sharp rejection and strong negative emotions. the shock is caused by the use of such techniques as showing violence, blood, mutilated bodies of people and animals, the appeal to the theme of death, etc. such advertising pursue certain objectives: to draw the attention of the target audience, remember (focus on negative emotions), make to remember a shocking picture or similar situation (or indirectly in contact with the data) conditions. advertise with hard shock is designed to cause negative emotions, and therefore stress. this advertising works on the rejection by the negative. 2. minimal (mild shock) is a “softened” version of shock. these include shocking advertising, which has no obvious “direct” shocking elements. in advertising, there must always be a certain, limited shockmeasure. otherwise, it may be that in the framework of the campaign “shocking creativity” will override the actual advertising, instead of being in it logically. in other words, if an advertiser deliberately set the task to shock, then it should be limited to the fact that the shock should only be a part of the campaign, but not its main purpose. otherwise, the effect could be a sharp drop in sales, and sometimes the loss of reputation of the brand. advertisement of hotel services is characterized by the laws formulated by the american specialist politts. the fi rst law says that advertising promotes a good product and speeds up the failure of the poor. it shows what features the product does not have, and help the user to quickly fi gure it out. the second law says that the advertisement calling the feature of the good that contained in it in small quantities and that the consumer himself unable to identify, helps to establish the fact that this feature is practically absent, and thus speeds up the failure of the product (lyapina, 2011). analysis of hotel advertising shows that it is characterized by such features as non-personal, one-sided, the uncertainty in terms of the measurement of the effect, as well as anonymity. the main problems of modern advertising were and still are questions for measuring of its effectiveness. often it is simply impossible to count the number of advertising respondents, fi nd out their social characteristics, fi nancial situation, interests and intents. it is very diffi cult to isolate results of a particular campaign from the general results of the marketing. at this stage, the effectiveness of advertising is estimated by level of sales, as well as a change in the rating of the company. specifi c features distinguishing the hotel ads from other types of advertising are: intangibility, non-storage ability, inseparable from the process of provision, impermanence quality. intangibility of services provides specific requirements for information content. respondents seeing ads often do not trust it and try to get more information on the forums from people who have already tried the quality of these services. the support in this case is carried out on the mechanism of persuasion. it is believed that the specifi cs of hotel and tourism services should be based on visual tools. on this basis, fi lms and photographs, izoproducts are often used. advertising forms an intention, but the service, as opposed to goods, cannot be returned. this type of advertising has to take into account the geographical, cultural and mental differences between the producer of the service and its potential consumers. thus, the characteristic feature of the hotel advertising is a clear focus on the target segment with all its psychological characteristics, lifestyle, etc. however, in its focus on consumer advertising of tourist services does not lose its color, and even, on the contrary, uses a national motives to attract the attention (as, for example, the concept of ethnic advertising hotel meliá). the integration of national and international, as a rule, is a paradox of hotel advertising. although to avoid the culture shock the goal of advertising is not only the formation of the intentions of the potential consumer, but also to provide complete information about the features of the environment. advertising of hotel services is highly seasonal. high and low seasons have to be taken into account in the design, since the main task is to maintain the high season demand, and in the low season stimulate demand. in addition, you must also take into account the fact that the territorial fragmentation of services and consumer products affects on the services in the hotel industry, as well as the need for personal contact with the supply-demand services. tourist considers service quality made if it justifi ed his expectations. modern advertising is a non-personalized and mass communication medium. therefore, here it is diffi cult to organize an individual approach to every potential customer. solution of the problem is seen in the orientation of advertising and advertised object to preferences and tastes groups. kurbatskaya, et al.: hotel business advertising specifi city and its psychological examination procedure international review of management and marketing | vol 5 • special issue • 201578 3. conclusion thus, in the hotel business advertising is characterized by the following features: 1. advertising of the hotel is tend to be the dominant criterion of infl uencing the consumer’s choice of tourist services 2. the hotel advertising is characterized by all the features inherent in traditional advertising messages, but it has a number of specific features, which are based on the characteristics of the services themselves, on the one hand, and the features of the hotel industry on the other 3. the hotel ads is characterized by the completeness of advertising information and the responsibility for the accuracy of the provided information 4. hotel ads is very emotional and convincing with the dominance of the visual component 5. the scope and content of advertising messages is determined by the seasonality factor, inherent in tourist business 6. the target audience of hotel advertising is geographically fragmented; in connection with it the advertising combines national characteristics of the host country and the international characters of advertising 7. tourism and hotel industry is characterized by a clear separation of business and consumer advertising, on the one hand, and, on the contrary, the synthesis of image and sales kinds of advertising, on the other. highlighted features distinguish hotel advertising from advertising of the commodity market. in addition, the hotel advertising as a marketing tool plays a greater role in the hotel market than in commodity. further studies of the prospects for advertising hotel services are seen in the study of the mechanisms of universal perception of promotional products in order to expand the target audience. these mechanisms will allow creating promotional products to the masses of consumers and minimizing production costs. references batra, r. 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(2002), effective advertising sales. moscow: delo. pronina, e.e. (2000), psychological examination of advertising: theory and methodology of the analysis psychotechnical advertising. moscow: sps holding. rubinstein, s.l. (2015), fundamentals of general psychology. moscow: peter. stumpf, k. (1913), phenomena and mental functions. new ideas in philosophy, 3, 50-101. volkov, y.u. (2003), introduction to hospitality and tourism. rostov: phoenix. vygotsky, l.s. (1998), psychology of art. 5th ed. moscow: labyrinth. walker, j. (2008), introduction to hospitality. 4th ed. moscow: unity dana. wells, u., moriarty, s., burnet, j. (2008), advertising: principles and practice. st. petersburg: peter. witwicki, w.l. (1946), psychologia. t. 1. krakow: zakład narodowy im. ossolińskich. zaitsev, n.a. 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5.0 and later.) >> /namespace [ (adobe) (common) (1.0) ] /othernamespaces [ << /asreaderspreads false /cropimagestoframes true /errorcontrol /warnandcontinue /flattenerignorespreadoverrides false /includeguidesgrids false /includenonprinting false /includeslug false /namespace [ (adobe) (indesign) (4.0) ] /omitplacedbitmaps false /omitplacedeps false /omitplacedpdf false /simulateoverprint /legacy >> << /addbleedmarks false /addcolorbars false /addcropmarks false /addpageinfo false /addregmarks false /convertcolors /noconversion /destinationprofilename () /destinationprofileselector /na /downsample16bitimages true /flattenerpreset << /presetselector /mediumresolution >> /formelements false /generatestructure true /includebookmarks false /includehyperlinks false /includeinteractive false /includelayers false /includeprofiles true /multimediahandling /useobjectsettings /namespace [ (adobe) (creativesuite) (2.0) ] /pdfxoutputintentprofileselector /na /preserveediting true /untaggedcmykhandling /leaveuntagged /untaggedrgbhandling /leaveuntagged /usedocumentbleed false >> ] >> setdistillerparams << /hwresolution [2400 2400] /pagesize [612.000 792.000] >> setpagedevice . international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2016, 6(1), 11-15. international review of management and marketing | vol 6 • issue 1 • 2016 11 effect of advertising on the brand loyalty of cosmetic products among college students abraham gyamfi ababio1, emmanuel erastus yamoah2* 1department of economics, valley view university, accra, ghana, 2department of marketing, valley view university, accra, ghana. *email: yamoahemmle@yahoo.com abstract this study explored the relationship between advertising and brand loyalty of cosmetic products. the multinomial logit model was used to ascertain the effect of advertising on different loyalty profiles for cosmetic products among college students. based on a survey of 200 ghanaian students drawn randomly, findings indicated that advertising plays no significant role on college students’ loyalty for cosmetic products. it can be argued, however, that the most promiscuous buyer is more amenable to price dispersion and friends’ recommendations. keywords: brand loyalty, advertising, college students, cosmetic products jel classifications: m31, m37 1. introduction marketers regard advertising as one of the most powerful and effective promotional tools to reach customers. advertising gives information, persuades, reminds, corrects false impressions and convinces as well as creates a brand image for buyers of a product or service. not surprisingly, advertising expenditures has shown astronomical growth in recent years. this is due to strongly held perceptions that advertising spending has direct as well as indirect effect on brand loyalty (ha et al., 2011). whereas some believe that advertising is effective when it generates sales, others are of the opinion that advertising is effective when it generates activity in the cognitive and affective stages of the hierarchy of effects model. the former belief can be interpreted to mean that advertising can develop brand loyalty and hence ensure repeated purchases which can enhance revenue flows. many scholars regard brand loyalty as an enormous asset for the business. as cited in guráu (2012), studies by (baldinger and robinson, 1996; hallowell, 1996; mittal and lassar, 1998; rust and zahorik, 1993) noted that loyal customers are less costly; they are not too responsive to changes in price, and hence ensures that there is a regular and smooth flow of income and revenue for the business. guráu (2012) himself noted that such customers make repetitive purchases and also recommend the brand to their friends. the objective of this study was to investigate the relationship between advertising and brand loyalty of cosmetic products among college students. 2. literature review the literature is replete with enormous evidence of the effect of advertising on brand loyalty. lambin captures brand loyalty with a measure of consumer inertia. for the distributed-lag model, lambin (1976) observes that the lagged-sales coefficient may be generally interpreted as a measure of consumer inertia. he finds significant inertia effects in most markets. using various measurements of advertising intensity, however, lambin fails to find a positive and significant relationship between brand inertia rates and brand advertising intensity. tellis (1988) reports that experience is the strongest determinant of purchase behavior, and those other marketing variables like price are more important than advertising. advertising appears to have only a small effect on brand choice. kanetkar et al. (1992), also find that the direct impact of advertising appears small in comparison to other marketing variables like price. ababio and yamoah: effect of advertising on the brand loyalty of cosmetic products among college students international review of management and marketing | vol 6 • issue 1 • 201612 krishnamurthi and raj (1985) reports that the demand for the brand becomes significantly more inelastic in the test panel of families once advertising is increased. guadagni and little (1983) report that brand and size experience are the most important attributes in explaining consumer brandsize choice. for 251 households in a test city, tellis (1988) reports that experience is the strongest determinant of purchase behavior, and those other marketing variables like price are more important than advertising. advertising appears to have only a small effect on brand choice. kanetkar et al. (1992), also find that the direct impact of advertising appears small in comparison to other marketing variables like price. deighton et al. (1994) find a large inertia (loyalty) effect, in that a buyer is likely to purchase the same brand as was bought on the previous shopping trip and that advertising does little to change the repeat-purchase probabilities of consumers that have just purchased the brand. advertising can be effective, however, in attracting consumers who have not recently purchased the brand. ackerberg (2001) constructs a binary logit model to show that advertising’s effect on inexperienced consumers is positive and significant, whereas advertising has only a small and insignificant effect on experienced consumers. he also finds that the effectiveness of advertising declines as the consumer becomes more experienced (i.e., as the number of previous purchases increases). erdem and keane (1996) report that consumers are risk averse and that experience is much more informative than advertising. the model thus provides insight into how brand loyalty is formed: due to risk aversion, consumers are loyal to brands that have delivered positive use experiences. what has been an issue of contention in the literature (especially, marketing) relates to the definition of brand loyalty. as a solution to the problem, there has emerged a continuum of categorization characterized at one extreme by customers who are very loyal and the other extreme by others who are very brand promiscuous. there are however very few empirical studies on the effect of advertising on the brand loyalty using some of these categorization. this study seeks to understand the effect of advertising on the brand loyalty of college students using the categorization by brown (1953). our choice of college students is informed by the assertion of some scholars including (noble et al., 2009; rich, 2008; bakewell and vincent, 2007; martin and turkey, 2004) as cited by guráu (2012) that this category of consumers are homogenous in their brand loyalty. 3. methodology of the study the study used cross sectional data on 200 individuals drawn randomly from various departments in a college of a metropolitan area. the dependent variable used in this study is brand loyalty for a cosmetic product (brdloyty). we defined cosmetic product to include only hair and skin products. as already stated, in the marketing literature, it has been recognized that there has been a significant change in the pattern of customer loyalty (griffin, 2002; jones and sasser,1995; rowley and dawes, 2000) because as noted by guráu (2012), postmodernism based on perpetual change and forced obsolescence only encourages the use of new products. he observes as others like (chandrashekaran et al., 2007; lam et al, 2004; mittal and kamakura, 2001) that customer satisfaction no longer can adequately measure brand loyalty. against this background, in the marketing literature, there have emerged two measures of brand loyalty. as cited by guráu (2012), whereas (mcmullan and gilmore, 2008; oliver, 1999) developed a continuum scale of customer loyalty, others like (brown, 1953; dick and basu, 1994; knox, 1997) have defined several loyalty categories. in this study, as our dependent variable, we adopt the latter approach. we used brown (1953) loyalty profile. he identified promiscuous switcher who regularly switches between brands for various reasons. a constrained buyer has limited brands and faces some constraints to choose one of these brands. a habitual buyer buys the same brand out of habit and has no reason to change and is amenable to influence. an active loyalist buys the same brand and has some reasons to be loyal. the committed will buy no other brand. they are rare and extreme activists. our major explanatory variable is advertising exposure (advert). following the conceptual framework developed by aamna et al. (2011), wherein likeability, persuasiveness and brand personality were identified as the key drivers which pushes the consumer in the direction of purchase, respondents were asked to tell their frequency of advert encounter on cosmetic products and to indicate the medium of the ad and whether they liked the ad, the personality used in the ad or were persuaded by the message in the ad. we used as control variables price, friend’s recommendation (as a proxy for experience), education (educatn), age (age), gender (gender) and employment status (emplmt). for price (price), the study used three states of consumer’s perception of prices. we used relatively cheaper, relatively expensive and indifferent about price to capture the influence of price on consumers loyalty for a given brand of cosmetic product. we measured consumer’s experience (recommtn) as the external influence by friends/family/ colleagues who have used the cosmetic product and who will be willing to make a recommendation to these consumers to buy such cosmetic products. 3.1. statistical techniques and regression model we used both descriptive and inferential statistics for the data analysis. for the regression model, our choice of the dependent variable naturally tells which econometric technique to use. we used the multinomial logit model which is estimated with the maximum likelihood estimator. this regression model is suitable for studies as this where there is more than one dependent variable and where the dependent variable is just categorical. the multinomial logit model has the form: prob j w w w ji i i j j i j (y = = ¢ å ¢ ¢ = = | ) exp( ) exp( ) , ,....., a a0 4 0 1 4 (j=0,1,….,4) is the set of categories including promiscuous switchers, habitual buyers, constrained buyers, active loyalists and ababio and yamoah: effect of advertising on the brand loyalty of cosmetic products among college students international review of management and marketing | vol 6 • issue 1 • 2016 13 the committed. we set constrained buyers as our base outcome. is the vector of explanatory variables. w price recommtn ageemplmt educatn gender adverti i i i i j i=( , , , , , ) we expect all the coefficients to be positive, i.e., β1 > 0, β2 > 0, β3 > 0, β4>0, β5 > 0, β6 > 0, β7 > 0 for the marginal effects. a positive coefficient marginal effect would mean the explanatory variable increases the probability of a given category occurring. 4. results and discussion to d e t e r m i n e w h i c h m e d i a g r e a t l y a t t r a c t s p e o p l e o n advertisements on cosmetic products, this study compared the different levels of attraction for five different media including television, radio, newspaper, billboard and the internet. figure 1 provides the findings in the study. for the respondents sampled, over 61% admitted that tv attracts them the most. strangely, this was followed by billboards with 17%. radio followed with 12%. the internet and the newspaper recorded 6% and 3% respectively and just a little over 1% of the respondents were not influenced by adverts on cosmetics carried on these media. this is partly as a result of the fact that cosmetic products need to be demonstrated and the best place to do this is to use television where the combination of sound and sight help generate the desired effect needed to be achieved with the advert. one of the major implications that most people are attracted and influenced by advertisement carried on television is that the use of important personality, message content and the background music should matter to people. this study sought to find which elements of advertisement: the message, personality and background sound exerts the greatest influence on people who have encountered advertisement on cosmetic products. close to 65% of respondents were greatly influenced by the message carried in the advert. the use of important personalities influenced 26% of the respondents and only 7% of the people surveyed admitted that they were influenced by the background song. this study was also very interested in uncovering which content of message: rational, emotional or moral exerts the greatest influence on people who encounter advertisement on cosmetic products. rational appeal messages emphasize the functional benefits of the product. emotional appeal attempts to stir up either positive or negative emotions that can trigger a purchase whilst moral appeal messages are directed towards the consumer’s sense of good or bad or right and wrong. figure 2 shows the level of impact of message, its source and format on people. figure 3 shows the message content that generates the greatest impact on potential buyers of cosmetic products. it was realized from this study that most people were attracted by the rational and moral appeals in messages carried in adverts on cosmetics. of the respondents who submitted that they were influenced by messages, 54% were influenced by the rational aspect of the message. this was followed by the moral appeals in the message. in this study, we sought to find out whether the messages they encountered on cosmetics were environmentally friendly. only 13% were influenced by the emotional appeal of the message. this is illustrated in figure 3. which personalities whether as actors/actresses, tv/radio presenters, musicians or footballers greatly attracts the attention of people in cosmetic adverts is an important dimension to assessing the impact of adverts on people. we uncovered in this study that the use of actors/actresses in cosmetic adverts is quite catchy. 67% of respondents said they were influenced by actors/actresses. musicians and footballers constituted the least influence of cosmetic adverts on people. for the background song used in adverts, people who were influenced say that they were mostly influenced by an unknown creative song specifically for the product. their number represented 60% of the respondents who were influenced by the background music on cosmetic products. figure 1: levels of attraction of various media figure 2: influence of the message, personality and background song in cosmetic adverts figure 3: influence of rational, emotional and moral messages in cosmetic adverts ababio and yamoah: effect of advertising on the brand loyalty of cosmetic products among college students international review of management and marketing | vol 6 • issue 1 • 201614 we used constrained buyers as the base outcome. this means all other brand loyalty profile results are interpreted relative to these constrained buyers. our results as shown in table 1 show that consumers’ perception of the price level significantly affects their buying decision of cosmetic products. however, this result is only true for promiscuous buyers. this is also highly expected as promiscuity corresponds with lower loyalty profile and price inducement may suffice to increase sales. more importantly, for promiscuous buyers, there is an inverse relationship between the price level and cosmetic purchases. we also found that habitual buyers are significantly influenced by friend’s recommendation. this is also expected as buyers in this category are amenable to influence. the interesting result is why they are not amenable to the influence from advertisement. we found as expected that for loyal buyers, the decision to buy a cosmetic product is independent of any variable as none of the explanatory variables significantly explains the buying behavior of loyal customers. consumers who are loyal to a product act independently of any underlying factor and this result is highly significant. similar results also explain the behavior of committed buyers. their decisions, as can be seen from the results are independent of any explanatory variable. 5. managerial implications and recommendations using the five loyalty profile in the marketing literature, our results show that higher brand loyalty profile is independent of the effect of advertisement. the huge advertising expenditure which is mainly passed onto pricing cannot be justified. they only appropriate consumer surplus without any increase in their welfare. we rather found friends’ recommendation and price to significantly affect one’s buying decisions. we recommend to managers to use other selling techniques rather than advertisement as the later appears not to be effective in inducing sales especially among college students. government regulation in the form of the stipulation of how many adverts a company can run in a given period can help control excessive advertising expenditure. references aamna, s.a., ali, m.b.a., ali, n.a. 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(2004), customer table 1: model estimation: advertisement and brand loyalty brand loyalty promiscuous habitual coefficient p-value coefficient p-value gender −0.371 (0.542) 0.494 −0.275 (0.589) 0.67 education −0.221 (0.557) 0.691 −0.936 (0.574) 0.103 age 0.099 (0.628) 0.874 −1.02 (0.762) 0.177 employment 0.199 (1.00) 0.843 −0.86 (1.08) 0.426 price −0.63 (0.294)** 0.031 −0.071 (0.365) 0.844 advertisement 0.08 (0.52) 0.8700 0.943 (0.667) 0.157 recommendation 0.89 (0.591) 0.129 1.636 (0.639)** 0.010 constant 0.505 (3.500) 0.885 2.16 (3.568) 0.545 brand loyalty loyal committed coefficient p-value coefficient p-value gender 0.27 (0.455) 0.554 0.416 0.402 education 0.167 (0.566) 0.768 0.599 0.30 age 0.073 (0.468) 0.875 0.289 (0.505) 0.56 employment 0.14 (0.726) 0.846 −0.947 (0.681) 0.16 price −0.234 (0.251) 0.351 0.353 (0.276) 0.201 advertisement 0.580 (0.468) 0.216 0.891 (0.51) 0.081 recommendation 0.038 (0.57) 0.947 0.521 (0.544) 0.338 constant −1922 (3.02) 0.545 −4.671 0.135 **implies statistically significant at 5% significance level. numbers in parenthesis are robust standard errors ababio and yamoah: effect of advertising on the brand loyalty of cosmetic products among college students international review of management and marketing | vol 6 • issue 1 • 2016 15 value, satisfaction, and switching costs: an illustration from businessto-business service context, journal of the academy of marketing science, 32(3), 293-311. lambin, j.j. 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(1999). whence consumer loyalty? journal of marketing, 63(4), 33-44. rich, m. (2008), millennial students and technology choices for information searching, the electronic journal of business research methods, 6(1), 73-6. rowley, j., dawes, j. (2000), disloyalty: a closer look at non-loyals, journal of consumer marketing, 17(6), 538-547. rust, r.t. zahorik, a.j. (1993), customer satisfaction, customer retention, and market share, journal of retailing, 69(2), 193-215. tellis, g.j. (1988), advertising exposure, loyalty, and brand purchase: a two-state model of choice. journal of marketing research, 25, 134-144. tx_1~at/tx_2~at international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2023, 13(4), 9-13. international review of management and marketing | vol 13 • issue 4 • 2023 9 relationship model of compensation, motivation, job satisfaction and employee performance dorothea wahyu ariani* universitas mercu buana yogyakarta, indonesia. *email: ariani1338@gmail.com received: 14 march 2023 accepted: 24 june 2023 doi: https://doi.org/10.32479/irmm.14464 abstract employee performance (ep) is an important variable that can improve company performance. many studies have examined various factors that influence ep. compensation, motivation, and job satisfaction (js) are three important variables that have been shown to have an effect ep. this study aimed to examine the model of the relationship between the four variables. by using 520 government company employees in yogyakarta, indonesia, the results of model testing proved that compensation, motivation, and js were related to ep. the results of the mediation model testing using structural equation modeling (sem) found that motivation also played a role as a mediating variable for the relationship between financial rewards and ep. in this relationship model, motivation was able to increase js, but employees who feel satisfied cannot guarantee that they will perform better. keywords: compensation, motivation, job satisfaction, performance jel classifications:  m120, j30 1. introduction ep is always sought to be achieved because high ep can support the achievement of high organizational performance. there are many factors that affect ep, which can be grouped into internal or dispositional and external or situational factors (robbins and judge, 2007). motivation and js are internal or dispositional factors that influence ep. meanwhile, awarding or compensation is an external factor that influences ep. motivation is an individual’s desire to do a particular task or job. high motivation can improve performance (kori et al., 2016). motivation is referred to as the mover of organizational behavior because it influences ep and employee productivity (cerasoli et al., 2014; fischer et al., 2019). motivation has indeed been widely researched and proven an effect on ep. motivation can be caused by external factors such as giving awards or compensation (ryan and deci, 2020). according to self-determination theory (sdt), giving awards will strengthen extrinsic motivation (kuvaas et al., 2017). giving awards can also improve ep (naidu and satyanarayana, 2018). kuvaas et al. (2016) found that motivation is related to performance. in addition, giving awards can also improve performance (cerasoli et al., 2016). motivation has indeed been shown to improve ep (see for example cerasoli et al., 2014; ekundayo, 2018; girdwichai and sriviboon, 2020; lencho, 2020). meanwhile, employee js is an attitude or how satisfied employees are with their work (parvin and kabir, 2011). js has also been shown to improve ep (see for example, chao et al., 2015; wolomasi et al., 2019). however, the effect of js on ep is inconsistent. this is because js is a variable that has several dimensions (pang and lu, 2018). each dimension has a different effect on performance (bakan et al., 2014). bowling et al. (2015) found that in testing the relationship between js and ep, moderating situational variables this journal is licensed under a creative commons attribution 4.0 international license ariani: relationship model of compensation, motivation, job satisfaction and employee performance international review of management and marketing | vol 13 • issue 4 • 202310 are needed. the purpose of this study was to test the model of the relationship between compensation, motivation, js and ep. 2. literature review and hypothesis development motivation is an enigmatic topic in organizational science (tremblay et al., 2009). robbins and coulter (2014) define motivation as the process by which individuals get energized, directed, and encouraged to achieve goals. motivation is a psychological process that directs goals and behavior as well as internal strength to satisfy needs (conrad et al., 2015). motivation determines individual behavior by influencing direction, goal, and persistence in work. motivated individuals are an important competitive advantage and become a strategic asset of the organization. in organizational research, motivation is the subject of various theories and topics and is the basis for the formation and effective improvement of theory (steers et al., 2004). motivation arises in employees because there is a drive to achieve certain goals. there are two theories of motivation, namely content theory and process theory, both of which can explain how individual behavior is activated and directed (seiler et al., 2012). motivation is driven by intrinsic factors that come from work and employees, while extrinsic factors come from the reward system (legault, 2016). motivation can drive the ability of employees so that employees can perform well. motivation can almost always be proven to has effect on ep (see for example cerasoli et al., 2014; ekundayo, 2018; girdwichai and sriviboon, 2020; lencho, 2020). the relationship between motivation and performance is almost always positive. several previous studies have found that financial compensation or visible rewards can improve ep (see for example afriyie et al., 2020; naidu and satyanarayana, 2018; jeni et al., 2020; seng and arumugam, 2017; zaraket and saber, 2017). giving visible rewards can improve quantitative performance (garbers and konradt, 2014; cerasoli et al., 2016). based on sdt, giving compensation can increase extrinsic motivation but damage intrinsic motivation (kuvaas et al., 2017). these two dimensions of motivation can be independent but can coexist in one person (deci and ryan, 2008). these two motivations can also affect ep (manzoor et al., 2021). providing compensation can indeed increase employee motivation and js which in turn can improve their performance. however, compensation is a form of extrinsic motivation which can also directly affect ep (zaraket and saber, 2017). the results of previous research found that awarding or compensation did not directly affect js in the long run, but was mediated by work motivation (rasool et al., 2017). in addition, the existing literature always links motivation and js (springer, 2011). js includes several dimensions, such as satisfaction with the salary they receive, with the leadership, with colleagues, in the work environment, in processes related to human resource management, and so on (robbins and judge, 2007). js can encourage employees to work diligently because of the joy they feel at work. previous research has proven that js is indeed related to and influences performance (see for example, bowling et al., 2015; chao et al., 2015; wolomas et al., 2019). based on the results of previous studies, the hypothesis proposed is: h1: compensation is positively related to performance h2: motivation is positively related to performance h3: js is positively related to performance. 3. methods this study uses primary data collected by survey using a questionnaire distributed government company employees in yogyakarta. however, this study used samples taken by the convenience sampling method for 2 months. the number of samples was determined based on multivariate criteria, namely 5 times the number of question items in the questionnaire (hair et al., 2014). this study uses a questionnaire taken from the results of previous studies. the variable of motivation uses 10 items questionnaire from siagian’s research (2016). variable js using research 10 items questionnaire researched by parwita (2013). meanwhile, the cp variable uses 10 items questionnaire researched by simamora (2006), while the ep variable is taken from 10 items questionnaire researched by poluakan (2016). therefore, the number of samples suggested by multivariate criteria is at least 200 people. this study used 520 respondents from 700 questionnaires distributed to employees of government companies in yogyakarta and its surroundings. the questionnaire was tested for validity and reliability using factor analysis and internal consistency using cronbach’s alpha (sekaran and bougie, 2013). data testing is done by examining the relationship between research variables using bivariate correlation. next, testing the relationship model, both directly and mediated models using sem with amos 17 version. 4. results and discussion before testing the model, the measuring instruments used are tested for validity and reliability. factor analysis was used to test the validity of the questionnaire with a kaiser-meyer olkin (kmo) of 0.5 or more and a loading factor of more than 0.5 (significant criteria according to hair et al., 2014). furthermore, internal consistency using cronbach’s alpha was carried out to test the reliability of the questionnaire (sekaran and bougie, 2013). if the cronbach’s alpha coefficient value is >0.6, then the questionnaire as a measuring tool is considered reliable (zikmund et al., 2010). the results of validity testing using factor analysis found that 10 items of ep questions were valid, with a loading factor of 0.626-0.909 and kmo 0.907. likewise, the 10 motivational question items were declared valid with a loading factor of 0.776-0.887 and kmo 0.860. furthermore, 10 items of cp questions were declared valid with a loading factor of 0.770-0.929 and kmo 0.918, while 10 items of js were also declared valid with a loading factor of 0.812-0.915 and kmo 0.876. ariani: relationship model of compensation, motivation, job satisfaction and employee performance international review of management and marketing | vol 13 • issue 4 • 2023 11 furthermore, the results of the reliability test using internal consistency with cronbach’s alpha showed that the questionnaires used in this study were reliable. this can be seen from the results of the reliability test showing cronbach’s alpha 0.951 for ep, 0.954 for motivation, 0.966 for js, and 0.967 for cp or more than the required size, which is 0.6 (zikmund et al., 2010). before testing the effect of compensation, motivation, js on ep, it is necessary to test the correlation between research variables. the results of testing the reliability and correlation between research variables and statistic descriptive are presented in table 1. table 1 shows that the four variables studied have high reliability, which is more than 0.95 (zikmund et al., 2010). the mean of each variable was moderate to high (ep mean 3.5930; motivation mean 3.6415; js mean 0.966; cp mean 3.4387), as well as the standard deviation which is classified as moderate (between 0.5447 and 0.6046). the correlation between the variables studied was significant and quite strong. this shows that compensation, work motivation, and js related to performance (h1, h2, and h3) were supported. based on the results of testing the direct influence model of the three independent variables on the dependent variable using sem with amos, it shows that the model is recursive. recursive is the existence of a unidirectional dependency between exogenous variables so that it must be tested separately, not together (byrne, 2010). this means that there are independent variables that have a direct effect on the dependent variable and there are variables that have an indirect effect. in other words, there needs to be a mediating variable in the relationship model. several previous studies have found that motivation and js are variables mediating the relationship between compensation and performance (see for example, amanda and trinanda, 2021; candradewi and dewi, 2019; manzoor et al., 2021). the results of testing the mediation model using sem are presented in tables 2 and 3. the results of the mediation test show that the second model is the best model. this is indicated by the values of the normed fit index (nfi), incremental fit index (ifi), and the tucker lewis index (tli) which are greater than the first model. the goodness of fit index (gfi) and comparative fit index (cfi) values are also >0.90. according to byrne (2010), if these values are >0.90, then the model is fit with the data. this shows that the model is fit with the existing data. this model proves that motivation mediates the effect of compensation on ep. providing financial compensation can increase motivation and js. meanwhile, motivation can also increase employee js. the results of this model mediation test show that js has no effect on ep. in addition, the provision of financial compensation does not directly affect ep, but through increasing motivation. the test results using multiple linear regression show that compensation, motivation, and js are significantly related to ep. compensation is a form of extrinsic reward that needs to be received by employees so that their performance increases. the results of this study support several previous research results which prove that providing compensation to employees is related to and has effect on ep (see for example, jean et al., 2017; jeni et al., 2020; okwudili and ogbu, 2017; seng and arumugam, 2017). the results of this study further strengthen previous research that motivation is indeed related to ep. research on work motivation and performance has been carried out by many researchers before. in line with the results of previous research, the results of this study also found that motivation can improve ep. the results of this study support the research results of joy et al. (2022), mohamud et al. (2017), olusadum and anulika (2018), pang and lu (2018), shahzadi et al. (2014). motivation is indeed the variable that has the strongest influence on ep. meanwhile, the results of this study prove that js has an inconsistent effect on ep. in testing the relationship between js and performance it shows that js has a significant positive relationship with ep. this is in line with several previous studies (see for example, alromaihi et al., 2017; dizgah et al., 2012; helmi and abunar, 2021; platis et al., 2015). meanwhile, the results of testing the mediation model found that js has no effect on ep. this is consistent with the research results of bakan et al. (2014) and the results of research by bowling et al. (2015). meanwhile, although not very strong, financial compensation, motivation, js, and ep are variables that are related to one another. these four variables are indeed very important variables table 2: model 1 results of the motivation mediates the effect of compensation and job satisfaction on performance relationship beta critical ratio compensation  motivation 0.621 7.889 job satisfaction  motivation 0.509 8.271 motivation  performance 0.975 13.471 χ2=58.417, χ2/df=24.208, gfi=0.951, cfi=0.969, nfi=0.968, ifi=0.969, tli=0.908 table 3: model 2 ‑ results of the motivation and job satisfaction mediate the effect of compensation on performance relationship beta critical ratio compensation  motivation 0.645 18.181 compensation  job satisfaction 0.530 17.831 motivation  job satisfaction 0.464 15.448 motivation  performance 0.905 27.792 job satisfaction  performance −0.208 −5.521 χ2=27.929, χ2/df=27.929, gfi=0.975, cfi=0.985, nfi=0.985, ifi=0.985, tli=0.912 table 1: correlation and statistic descriptive variables composite reliability mean σ cp mo js ep compensation (cp) 0.967 3.4387 0.6046 1.000 0.620** 0.798** 0.570** motivation (mo) 0.954 3.6415 0.5598 1.000 0.786** 0.787** job satisfaction (js) 0.966 3.5363 0.5885 1.000 0.643** performance (ep) 0.951 3.5930 0.5447 1.000 **significant<0.01 ariani: relationship model of compensation, motivation, job satisfaction and employee performance international review of management and marketing | vol 13 • issue 4 • 202312 in influencing the progress of the company. this also happened to government company employees which is a service company that emphasizes ep. therefore, companies need to pay attention to the provision of appropriate financial compensation for employees. employee motivation also needs to get attention, and employee js must continue to be sought. these three variables will greatly affect the improvement of ep. furthermore, the results of testing the mediation model found that motivation mediates the effect of compensation on ep. this aligns with previous research results (see for example, amanda and trinanda, 2021; candradewi and dewi, 2019; manzoor et al., 2021; setiawan et al., 2018). in addition, the results of this study found that motivation mediates the effect of compensation on employee js. the results of this study are in line with the results of research by rukayah et al. (2019). although correlated with js, ep is not necessarily influenced by their js. this is in line with the research results of bakan et al. (2014). the results of this study further strengthen the results of previous research that compensation and motivation affect employee js (helmi and abunar, 2021). 5. conclusion and recommendations providing financial compensation to employees cannot be ignored because it can affect their motivation and js. motivation is a very important variable to improve ep. motivated employees will feel the urge to perform better. however, js does not always improve performance. in addition to examining the direct effect of the independent variable on the dependent variable, this research also tests the mediation model. however, a model that fits the existing data is a mediation model because the direct relationship model is recursive. it can be said that testing the relationship model between variables has been carried out completely. although it has been able to provide suggestions for companies, this research is not free from weaknesses. the use of cross-section data can make the mediation model a little disturbed. in addition, the use of self-assessment in this study can cause a beta bounce. a larger number of respondents will also help in generalizing the research results regarding this relationship model. references afriyie, e.o., twumasi, a., sarpong, e., darko, l.o. 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(2010), business research methods. 8th ed. singapore: south-western cengage learning. tx_1~at/tx_2~at international review of management and marketing | vol 12 • issue 1 • 2022 43 international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2022, 12(1), 43-50. capital regulation and risk-taking behavior: empirical evidence for islamic banks yomna daoud1*, aida kammoun2 1research laboratory in economics and management, university of sfax, tunisia, 2department of management, higher institute of business administration, sfax, tunisia. *email: yomna.daoud@yahoo.fr received: 01 october 2021 accepted: 22 december 2021 doi: https://doi.org/10.32479/irmm.12612 abstract this paper investigates whether regulatory pressures have an impact on the relationship between change in capital and bank risk-taking. on the basis of a well-developed theoretical background, capital regulation constitutes the core of prudential regulation within the banking sector. several researches have investigated this relationship between capital and risk in conventional banks, and this subject has gained in interest since the last financial crisis. this study is one of the few studies that have attempted to provide empirical evidence on this issue for islamic banks. we use data of islamic banking sectors over the period 2010–2014. the results reveal that islamic banks tend to behave differently at each level of capital adequacy. in addition, we provide some evidence that change in capital is positively related to the change in risk for highly capitalized islamic banks. keywords: islamic banking sector, regulatory pressure, total capital, risk-taking jel classifications: g21, g28, g29, g32 1. introduction as our understanding of the determinants of financial stability, three interrelated factors in the banking sector are gaining attention from analysts and policymakers: regulation, capitalization, and risk-taking. the relationship between these three elements is provided by an article by shrieves and dahl (1992), who argues that change in capital is positively related to the change in the level of risk for banks with capital ratios above the minimum regulatory levels. however, few researchers have investigated empirically if and how regulations, such as capital requirements and supervisory authority, interact to influence the risk-taking behavior of islamic banks (ib) (smolo and kabir, 2010). islamic financial intermediation (grais and kulathunga, 2007) has attracted increasing attention from national regulators, policymakers and academics. efforts for standardization, regulation and supervision of these institutions have intensified in recent years. several international islamic institutions are working to develop shariahcompliant standards and procedures to strengthen the financial sector architecture in various countries, but the most influential are the organization of accountants and auditors of islamic financial institutions (aaoifi), the islamic financial services board (ifsb), the international islamic financial market (iifm), and the international islamic ratings agency (iira). capital regulation attempts to ensure that banks maintain a minimum of capital appropriate to their risk exposure and that their capital decisions respond to changes in their risk position caused by endogenous or exogenous factors (sundarajan and errico, 2002). yet, if not properly conceived, capital requirements can produce adverse consequences via moral hazard and information asymmetry inducing banks to overrisk (kahane, 1977; leland and pyle 1977; koehn and santomero, 1980; kim and santomero, 1988; gennotte and pyle, 1991; santos, 1999). despite the development of ib, international regulators have not taken into consideration the specificities of islamic banking activities. so, compliance of ib with international standards and guidelines (such as the capital requirements set by the basel iii accord), while this journal is licensed under a creative commons attribution 4.0 international license daoud and kammoun: capital regulation and risk-taking behavior: empirical evidence for islamic banks international review of management and marketing | vol 12 • issue 1 • 202244 respecting the principles of islamic shariah, is the most important challenge. and this is not an effortless process, as ib are faced to specific risks (such as displaced commercial risk, reputation risk and sharia compliance risk). the profit-and-loss sharing (pls) partnership affects the nature of the risks incurred by ib, as they do not transfer the risks to their customers. the global economic crisis (in europe, usa, etc.), seems to be related to financial crises caused by financial products using interest rates and which are prohibited by the sharia. the main characteristics of the islamic financial system, which are the backing of the transaction with real assets and the principle of profit-and-loss sharing, may lead to more stability in the financial system (daoud and kammoun, 2014). an appropriate level of capital ensures that the financial institution has sufficient capital to support its activities and that its net value is sufficient to cover the devaluation of its assets without it becoming insolvent. in this study, we focus on the empirical analysis of the relationship between changes in capital and changes in risk taking in islamic banks (ib). we try to find out whether this interaction between capital and risk differs depending on the level of ex-ante regulatory capital of ib. the rest of the article is structured as follows. section 2 presents a theoretical discussion to support our choice to study the relationship between regulation, capital change and risk taking. section 3 examines the data for the study. section 4 presents the empirical model and discusses the results. section 5 suggests further investigations and section 6 concludes the paper. 2. literature review several empirical studies seek to investigate the impact of regulatory constraints on bank risk-taking and capitalization1, and the relationship between changes in capital and changes in risk levels. these researches are based on the econometric specification proposed by shrieves and dahl (1992), jacques and nigro (1997); aggarwal and jacques (1998); ediz, michael and perraudin (1998), rime (2001), aggarwal and jacques (2001), van roy (2008 ); saadaoui (2008). shrieves and dahl (1992) analyze the relationship between capital regulation, risk changes and capital changes on a large sample of american banks during the period 1983-1987. for the study period, a requirement on the unweighted risk capital ratio of 7% was imposed on american banks. the sample consists of approximately 1800 independent commercial banks insured with the federal deposit insurance corporation (fdic) and affiliated bank holding companies with assets in excess of $100 million as of december 1984. the authors use the ratio of equity to total assets as a measure of book value of capital. equity includes common stock, non-operating earnings, retained earnings, capital reserves, and foreign currency. the results show that the change in capital is positively related to the change in risk for banks with capital ratios above the minimum regulatory levels, and that for undercapitalized banks the regulation was at least effective 1 theoretical and empirical work has shown that the reaction of banks to shocks varies according to their level of capitalization. in order to study the impact of the level of equity on the lending behavior of banks, three main categories have been identified: highly capitalized, adequately capitalized and undercapitalized (baglioni, 2005). during the period covered. the findings suggest that bank’s capital evolution over the study period was “risk-based.” aggarwal and jacques (1998) conduct an empirical study of 2552 fdic-insured commercial banks with total assets equal to or greater than $100 million over the periods 1990-1993. the authors use two risk measures: the ratio of risk-weighted assets to total assets and the ratio of non-performing loans to total assets. for undercapitalized and adequately capitalized banks, regulatory pressure has led to an increase in their capital ratio and a reduction in their risk (risk-weighted assets). ediz et al. (1998) study the impact of capital regulation on the capitalization of 94 uk banks from the fourth quarter of 1989 to the fourth quarter of 1995. these authors find that capital requirements lead banks to increase their capital ratio. this increase in the capital ratio is done through an increase in capital and not through a substitution between low-weighted and highweighted assets. these results therefore highlight that capital requirements appear to be an important regulatory instrument, as they enhance the stability of the system without restricting the asset choices of uk banks. rime (2001) selects a sample of 154 swiss banks for a period from 1989 to 1995. the author uses two definitions of capital, the ratio of capital to total risk-weighted assets and the ratio of capital to total assets (used by shrieves and dahl (1992)). the first definition was used by jacques and nigro (1997), aggarwal and jacques (1998) and ediz et al (1998). regarding the risk measure, the author refers to the ratio of risk-weighted assets to total assets (rwa). the justification for this measure is that the risk of the portfolio can be determined mainly by the distribution of assets across the different risk categories. an obvious advantage of rwa is that it reflects banks’ risk-taking decisions. this approach, however, supposes that the risk weighting correctly reflects the economic risk of the different asset categories. the author utilizes two measures of regulatory pressure (table 1). the first measure is a probabilistic measure. the regulatory pressure variable reg is equal to unity if the bank’s capital ratio is in a set interval around the minimum capital requirement and 0 otherwise. the second approach is based on the proactive corrective action (pca), implemented in the usa. two regulatory variables are then constructed. the first variable (pcau) is equal to unity when the risk-weighted capital ratio is below 8% and 0 if not. the second variable (pcaa) which measures the behavior of adequately capitalized banks takes the value 1 if the capital ratio of the bank is between 8 and 10% and 0 otherwise. the author finds that swiss banks approaching the minimum regulatory capital requirements tend to increase their capital to rwa ratio. this indicates that regulatory pressure has a positive and significant impact on the risk weighted capital ratio. in addition, regulatory pressure has a positive and significant impact on the capital to total assets ratio, but no significant impact on banks’ risk taking. for adequately capitalized banks, regulatory pressure has no effect on the level of capital or on risk. finally, the author finds a positive relationship between changes in the unweighted capital to total assets ratio and risk taking, however changes in the risk weighted capital ratio did not affect risk taking of swiss banks. daoud and kammoun: capital regulation and risk-taking behavior: empirical evidence for islamic banks international review of management and marketing | vol 12 • issue 1 • 2022 45 van roy (2008) utilized a simultaneous equation model to examine the behavior of 576 commercial banks in six g-10 countries over the period 1988-1995. he considers a dummy variable to measure regulatory pressure. it takes the value of unity if the total capital ratio is below 10% or the tier 1 capital ratio falls below 6% and 0 otherwise. the findings show that only in the usa under capitalized banks increase their total capital ratio faster than the highly capitalized banks. this is explained by regulatory pressures. calem and rob (1999) examine the impact of capital regulation on risk-taking using data on american banks between 1984 and 1993, hypothesizing that banks’ risk-taking varies with their initial capital level. this relationship can be represented by a u-shaped curve. undercapitalized banks hold a large share of risky assets in their portfolio and they decrease their risk as their capital increases. then, at a certain level of capital, the bank increases its risk-taking when the capital increases. thus, both undercapitalized and highly capitalized banks take more risk than adequately capitalized banks. however, the basis for risk-taking for these two types of banks is not the same. for undercapitalized banks the high risk-taking is due to a moral hazard problem, plus they have minimal losses in case of default. however, highly capitalized banks increase their risk-taking because they hold a very high level of capital to cover their risk. camara (2010) focused on a sample of 3411 commercial bank, cooperative and mutual and european savings institutions over a period from 1992 to 2006. the author tried to determine whether the impact of changes in capital on risk taking depended on the level of ex ante regulatory capital. in this study banks are classified into three categories according to their risk-weighted capital ratio (rwr): highly capitalized banks rwa ≥10%, adequately capitalized banks 8% ≤rwa ≤10% and undercapitalized banks rwa ≤8%. the author applied a model based on the econometric techniques of panel data and estimated the risk measures (nonperforming loan ratio, the risk-weighted asset ratio, and the 3-year moving average of the standard deviation of the return on assets sd_roa) in terms of variation. the results obtained show that banks with different levels of ex ante regulatory capital react distinctly in terms of risk taking when they change their capital. while undercapitalized banks decrease their risk-taking, adequately and highly capitalized banks increase it. regarding the literature on islamic banking, the regulatory process in islamic banking systems is quantitatively and qualitatively distinct from that in conventional banking systems. in addition, providing alternative methods for calculating adequate capital is important (e.g. abdel karim, 1996; ariss and sarieddine, 2007; basher et al., 2017). however, certain other researchers maintain that ib could adopt the same international standards and guidelines used by conventional banks (such as the capital requirements set by the basel iii accord) (e.g. errico and farahbaksh, 1998; hassan and dicle, 2005). there are only a few studies that document relationship between bank capital and risk of ib. ghosh (2014) analyze the simultaneous relationship between capital and risk among 100 gcc banks during the period 1996-2011. the result indicates that under regulatory pressure islamic banks increase their capital in response to an increase in risk, and not vice versa, more than conventional banks. table 1: definitions of regulatory pressure author (s) definitions of regulatory pressure shrieves and dahl (1992) dummy variable that takes the value of unity if the capital adequacy ratio is below 7% and zero otherwise jacques and nigro (1997) two variables: one is equal to the difference between the inverse of the bank’s total capital ratio and the inverse of the regulatory minimum for all banks with a total capital ratio below 7.25%, and zero otherwise. the other is equal to the difference between the inverse of the regulatory minimum and the inverse of the bank’s total capital ratio for all banks with a total capital ratio greater than or equal to 7.25%, and zero otherwise. aggarwal and jacques (1998) two dummy variables: one takes the value of unity if the bank is sufficiently capitalized by pca standards and zero otherwise. the other takes the value of unity if the bank is undercapitalized, significantly undercapitalized, or critically undercapitalized by pca standards and zero otherwise. ediz et al. (1998) two dummy variables: one takes the value of unity if the bank has experienced an upward adjustment in its regulatory trigger rate in the previous three quarters and zero otherwise. the other takes the value of unity if the bank’s capital ratio is below a bank-specific standard deviation above the bank’s trigger and zero otherwise. rime (2001) two approaches. (1) binary variable that takes the value of unity if the bank’s capital ratio is one standard deviation from the minimum capital requirement and zero otherwise. (2) two dummy variables, one that takes the value of unity for banks with a capital ratio of less than 8% and zero otherwise and a second that takes the value of unity for banks with a capital ratio between 8% and 10% and zero otherwise. stolz (2007) three approaches: (1) binary variable that takes the value of unity if a bank has a normalized equity buffer equal to or less than the median normalized equity buffer over all observations, and zero otherwise. (2) splitting the sample according to the threshold defined in (1) and estimating the two subsamples separately (3) the rolling window approach, which allows for a continuous change in behavior as a function of the size of the equity buffer van roy (2008) dummy variable that takes the value of the unit if the total capital ratio is less than 10% or if the tier 1 capital ratio falls below 6% and 0 otherwise. tanda (2015) two variables: one measures the difference between the bank’s capital ratio and the minimum capital ratio, which is 8%, and a second represents the product of the gap between the minimum requirement of 8% and the level of the capital ratio at the starting point of the period (capt−1) and indicates the rapidity with which banks adjust their capital. daoud and kammoun: capital regulation and risk-taking behavior: empirical evidence for islamic banks international review of management and marketing | vol 12 • issue 1 • 202246 ghosh (2017) examines the factors influencing the capital buffer of islamic and conventional banks located in the mena region for 2001-2012. the result shows that when credit risk increase ib tend to increase their capital buffer. basher et al. (2017) assess the interaction between risk taking and capital regulations of a sample of 22 ib during the period 20072013. they find a positive relationship between total capital and the levels of asset risks. lately, bougatef and korbi (2018) assess the interactions between changes in capital buffer and changes in credit risk of islamic and conventional banks from the middle east and north africa (mena) region for 1999–2016. their results suggest that an increase in the changes in capital buffer has a negative effect on the changes in credit risk for the two types of banks. 3. study data 3.1. bank capitalization referring to shrieves and dahl (1992), we use the ratio of capital to total assets. capital (cap) includes tier1 items (equity and reserves) and tier2 items. we use the annual changes in cap of bank j defined as: ∆cap cap capj t j t j t, , ,= − −1 this study tries to determine whether the impact of changes in capital on the risk taking of ib is different depending on the level of ex-ante regulatory capital of the bank. thus, we proceed to the classification of banks into different categories according to the level of regulatory capital adequacy ratio (car) of the previous period. the car is calculated as the ratio of regulatory capital (tier1 and tier2) to risk-weighted assets. based on the work of calem and rob (1999), aggarwal and jacques (2001), rime (2001) and camara (2010), we will classify islamic banks into three categories: undercapitalized (under), adequately capitalized (adc) and highly capitalized (high). for most islamic banks, capital requirements greatly exceed the basel minimum of 8 percent (rizwan et al., 2012; bitar and madiès 2013). in the majority of countries where islamic banks operate, the central bank represents the regulatory authority that sets the capital requirement for these banks (table 2). the countries in which central banks set a minimum car level of: • 8% are: bahrain, djibouti, egypt, indonesia, iran, malaysia, saudi arabia, thailand, turkey, united kingdom, yemen. • 10% are: south africa, bangladesh, brunei, pakistan, sri lanka. • 12% are: united arab emirates, iraq, jordan, kuwait, sudan, qatar. in line with previous empirical works (e.g., shrieves and dahl (1992), jacques and nigro (1997), aggarwal and jacques (1998), ediz et al. (1998), rime (2001), stolz (2007), van roy (2008)) we consider three dummy variables to classify the ib in our study: • high for highly capitalized banks with a car≥12% • adc for adequately capitalized banks with a 10%≤car<12% • under for under capitalized banks with a car <10%. 3.2. risk measures two risk measures are used: the ratio of risk-weighted assets to total assets (rwa) and the ratio of non-performing loans to total loans (npl). the ratio of risk-weighted assets to total assets (rwa) represents the definition of risk according to the basel accords (for conventional banks) and according to the ifsb standards (for islamic banks). the measure of this ratio corresponds to the allocation of bank assets between the major asset categories weighted at 0, 20, 50 and 100%. some authors have used the rwa variable as a measure of risk: shrieves table 2: distribution of islamic banks by country country number of selected banks regulatory authority 1 south africa 1 central bank 2 saudi arabia 5 sama (saudi arabian monetary agency) 3 bahrain 14 central bank 4 bangladesh 6 central bank 5 brunei 1 ambd (autority monetary brunei darussalam) 6 djibouti 1 central bank 7 egypt 2 central bank 8 united arab emirates 5 central bank 9 britain 2 central bank 10 indonesia 2 central bank 11 iraq 3 central bank 12 iran 1 central bank 13 jordan 2 central bank 14 kuwait 2 central bank 15 malaysia 11 bnm ( bank negara malaysia) 16 pakistan 10 sbp (state bank of pakistan) 17 sudan 3 central bank 18 sri lanka 1 bac (board audit) comitee 19 qatar 3 central bank 20 thailand 1 ministerial regulation 21 turkey 4 bddk ( banking regulation and supervision agency) 22 yemen 1 central bank total 81 daoud and kammoun: capital regulation and risk-taking behavior: empirical evidence for islamic banks international review of management and marketing | vol 12 • issue 1 • 2022 47 and dahl (1992) then by jacques and nigro (1997), aggarwal and jacques (2001), van roy (2005) and jokipii and milne (2010). this ratio allows us to study the impact of changes in capital on banks’ portfolio reallocations between different asset categories. the ratio of non-performing loans to total loans (npl) is also used as an indicator of loan quality and an ex-post measure of risk following shrieves and dahl (1992), aggarwal and jacques (2001) and camara (2010). we consider changes in the two risk measures (∆rwa and ∆npl), since the objective of this study is to examine the adjustments between changes in risk and changes in capital. 3.3. sample composition the data used in this study is obtained from bankscope and the websites of each financial institution. and we retain only those for which we have information on financial condition, capital regulation, and non-performing loans for the period from 2010 to 2014. our sample consists of a panel of data of 81 ib established in 22 countries: bahrain, iran, jordan, kuwait, qatar, saudi arabia, united arab emirates, yemen, turkey, brunei, indonesia, malaysia, philippines, bangladesh, pakistan, egypt, thailand, south africa, sri lanka, united kingdom (table 3). 4. the model and result in light of the considerations in the theoretical and empirical literature reviewed above, we specify the empirical model to test our main hypothesis: the impact of changes in capital (∆capj,t) on islamic banks’ risk taking (∆riskj,t) is different depending on the bank’s ex-ante regulatory capital level (highly capitalized, adequately capitalized, and undercapitalized). model: ∆ ∆ ∆ risk under ad cap cap u j t j j t j t j t j t , , , , , , * = + + + + − −α α α α α 0 1 1 2 1 3 4 nnder cap ad control j t j t j t j t j t , , , , , *− −+ + + 1 5 1 6 α α ∆ ε interactive variables are introduced by multiplying cap by each dummy variable. however, to avoid the singularity problem in the matrix of explanatory variables we eliminate the dummy variable high as well as the interactive term related to this dummy variable (∆capj,t*highj,t−1). therefore, highly capitalized banks represent the reference to compare the estimated coefficients associated with the capitalization variables. the coefficient α3 is associated with the changes in capital of highly capitalized banks. and the coefficients (α3 + α4) and (α3 + α5) measure the impact of capital changes on risk changes for undercapitalized and adequately capitalized banks, respectively. we test the significance of these two coefficient sums using a fisher test. for a panel data sample, we first need to detect the nature of the model: fixed effect model or random effect model. the hausman test can be used to determine the appropriate model (table 4). 5. result table 5, shows results that are consistent with the hypothesis stating that the impact of changes in capital on risk taking depends on the bank’s ex ante regulatory capital level. first, as expected, our results show a positive relationship between changes in capital and changes in risk (for both risk measures ∆rwa and ∆npl) for highly capitalized banks (α3 is positive and significantly different from zero). this result shows that highly capitalized banks invest in riskier assets when they increase their capital. second, we find a positive relationship between changes in capital and changes in risk (measured by ∆rwa) for adequately capitalized banks that are acting like highly capitalized banks. however, the absence of an explicit regulatory requirement in the majority of countries where ib operate could explain the performance of these banks. but if we consider non-performing loans as a measure of risk, we find a negative and significant relationship. this is explained by the fact that adequately capitalized banks have a higher probability of becoming undercapitalized, so they should be more conservative in their business operations. third, we find a negative and significantly non-zero sum of the two coefficients α3 and α4 which means that, for undercapitalized banks, changes in capital negatively affect changes in asset risk. undercapitalized banks thus seem to adopt a prudent policy when they increase their capital in order to conform to regulations. they aim to avoid specific risks (reputational risk, displaced business risk) by rebuilding their capital ratio. (jacques and nigro (1997), rime (2001), jokipii and milne (2011), altunbas et al. (2007)). regarding our control variables, we find that size (ta) has a positive effect on risk taking (∆rwa and ∆npl) which means table 3: distribution of the sample years/banks undercapitalized adequately capitalized highly capitalized total number of ib 2010 8 26 47 81 2011 6 25 50 81 2012 4 30 47 81 2013 4 32 45 81 2014 6 25 50 81 total 28 138 239 405 there are three categories of ib: undercapitalized if car<10%; adequately capitalized if 10% <= car<=12% and highly capitalized if car>12%. the total number of undercapitalized, adequately capitalized and highly capitalized ib is greater than the total number of banks in our sample because the same bank can move from one category to another and from one year to another daoud and kammoun: capital regulation and risk-taking behavior: empirical evidence for islamic banks international review of management and marketing | vol 12 • issue 1 • 202248 that large ib take more risk. this result supports the “too big to fail” hypothesis. and this is may be attributed to best credit quality systems and corporate governance in small ib (laeven and levine, 2009). as expected, the ratio of costs to income (eff) is negatively related to changes in the ratio of nonperforming loans (∆npl). a reduction in bank costs leads to greater risk taking. in this case for risk-averse leaders as they may decide to incur greater screening and monitoring costs in order to minimize the risk of loan portfolio, this leads to trading modest revenues for higher loan quality. the influence of macroeconomic conditions (gdp) on islamic banks’ risk taking is found to have negative impact on ∆npl indicating that favorable macroeconomic conditions contribute to reducing the amount of non-performing loans and increases bank soundness. the absence of a significant effect of gdp on islamic banks’ risk taking measured by ∆rwa suggests that the process on banks’ portfolio reallocations between different asset categories is based exclusively on bank-specific factors. 6. further investigations 6.1. differentiation between small and large banks first, the estimates are conducted by dividing the sample in two groups based on the size of the bank. we tried to assess the size effects on the relationship between the change in capital and risk taking of ib. this distinction allows us to analyze the behavior of small banks and large banks separately. we use a value of one billion to discriminate between large and small banks. table 6 presents the results obtained from this estimation. the results show that for undercapitalized banks, the positive relationship between changes in capital and changes in risk-weighted assets (∆rwa) is significant only for small banks. the small, and undercapitalized, banks try to take more risk with the expectation of achieving sufficient profitability to increase their capital level. indeed, an increase in capital may lead to increase default risk for small, and highly capitalized, banks. thus, the results for large banks (which represent the majority of our sample) are consistent with those found for full sample. 6.2. differentiation between positive and negative changes in capital the previous results have been interpreted in terms of an increase in capital (positive changes). however, some banks, usually those that are highly capitalized, may reduce their capital level (negative changes). thus, the sign of variation in capital can affect a bank’s risk-taking in a different way. for this reason, the estimates of the econometric model are carried out on two subsamples, considering positive and negative changes in capital separately (table 7). first, concerning the sub-sample with positive changes, the results show that highly capitalized banks that proceed to increase their capital take more risk (∆rwa) as a consequence, consistently with the results of full sample. second, regarding the subsample with negative changes in capital, change in capital and risk are positively and significantly related only for adequately capitalized banks. these banks reduce their risk-taking when they decrease their capital. however, we observe a negative relationship between negative changes in capital and changes in risk for highly capitalized banks (this is different from the result on the full sample). these banks invest in riskier assets when they reduce their capital level (negative changes). 6.3. analysis with ∆rwa as an explanatory variable as a robustness check, change in risk-weighted assets (∆rwa) is introduced in specifications for which ∆npl is the explained variable. this specification was used by shrieves and dahl (1992) who showed that increases in risk-weighted assets can result from the selection of highly weighted assets (e.g. loans to private firms) and this may lead to an increase in non-performing loans. the results in table 8 show a positive but insignificant relationship between change in risk-weighted assets and change in non-performing loans. table 4: definitions of variables independent variables measure associated coefficient expected sign annual changes in the capital ratio of high ∆cap cap capj t j t j t, , ,�= − −1 ( ) , cap equitytotalassetsj t  α3 + annual changes in the capital ratio of under (α3 + α4) +/annual changes in the capital ratio of ad (α3 + α5) + ta: bank size natural logarithm of total assets α6 + eff : efficiency cost to income ratio α7 − gdp : economics growth growth rate of the gross domestic product α8 +/− table 5: changes in capital and risk-taking of islamic banks variables ∆npl ∆rwa under (α1) 0.028 (0.36) −0.065 (−1.02)* ad (α2) −0.005 (−0.61)* 0.083 (2.68)*** ∆cap (α3) 0.093 (1.62)** 0.575 (5.61)*** ∆cap*under (α4) 0.054 (0.14) −0.578 (−0.57)* ∆cap*ad (α5) −0.091 (−1.45)* 0.046 (0.91) ** ta (α6) 0.008 (1.66) ** 0.028 (0.68)* eff (α7) −0.009 (−0.58)* 0.048 (0.76)* gdp (α8) 0.008 (0.43)* −0.017 (−0.20) f. test : α3+α4 = 0 0.148 (0.37) −0.003 (4.10) ** α3+α5 = 0 0.002 (15.40) ** 0.621 (13.48) ** observations 405 405 r-squared 0.0913 0.1309 ***, **, and * indicate the level of significance at the 1%, 5%, and 10% level. numbers in parentheses represent t-statistics. f.test is fisher’s test of the significance of the sum of the coefficients and the numbers in parentheses represent the value of fisher’s statistic. definition of variables: ∆npl = annual variation in the ratio of non-performing loans to total net loans, ∆rwa = annual variation in the ratio of risk-weighted assets to total assets, under = 1 if the risk-weighted capital ratio car < 10% and 0 otherwise, ad = 1 when car is between 10% and 12% and 0 otherwise. ∆cap = annual change in capital over total assets. ta = logarithm of total assets, eff = total bank costs on income generated, gdp = the growth rate of gross domestic product daoud and kammoun: capital regulation and risk-taking behavior: empirical evidence for islamic banks international review of management and marketing | vol 12 • issue 1 • 2022 49 7. conclusion in this study, we examined the interplay between regulations, changes in capital, and bank risk-taking. based on well-developed theoretical considerations, we have limited our investigation on regulations to capital requirements. an important result is that the impact of capital changes on risk taking depends on the bank’s ex ante regulatory capital level. in terms of supervisory perspective, our insights suggest that the capital adequacy guidelines for islamic banks should be strengthened to reflect their specific risks exposures. our research analyzes the behavior of a sample of islamic banks and examines research topics previously little treated. however, the extension of this sample to all islamic financial institutions for a longer period of time is greatly appreciated. references abdel karim, r.a. (1996), the impact of the basle capital adequacy ratio regulation on the financial and marketing strategies of islamic banks. international journal of bank marketing, 14(7), 32-44. table 6: change in capital and risk-taking of small and large islamic banks variables small ib large ib ∆npl ∆rwa ∆npl ∆rwa under (α1) 0.028 (0.44)** 0.063 (0.33) 0.007 (0.36)* −0.216 (−0.88) ad (α2) −0.075 (−1.37)* 0.239 (2.04) ** −0.001 (−0.1) 0.145 (1.5)* ∆cap (α3) 0.202 (0.85) 1.470 (4.46) *** 0.001 (0.01) 4.035 (11.44)*** ∆cap*under (α4) 0.958 (0.43) 15.391 (3.31) *** 0.037 (0.12) −8.575 (−2.59)** ∆cap*ad (α5) −3.290 (−4.21)*** −1.362 (−1.07) −0.008 (−0.15) 2.574 (5.90)*** ta (α6) 0.005 (1.19) −1.362 (−1.07) −0.002 (−0.31) −0.311 (−1.37)** eff (α7) −0.028 (−1.52)* −0.001 (−0.04) −0.040 (−0.30)* −0.078 (−0.51) gdp (α8) −0.019 (−0.130)*** −0.012 (−0.22) 0.001 (1.570)** −0.004 (−0.05) f. test : α3+α4=0 1.160 (0.80) 16.861 (0.92) 0.038 (3.02)* −4.140 (2.20)* α3+α5=0 −3.088 (7.12)*** 0.108 (10.46)*** −0.007 (0.37) 6.6097 (10.37)*** observations 98 98 307 307 r-squared 0.3650 0.3745 0.1070 0.5358 ***, **, and * indicate the level of significance at the 1%, 5%, and 10% level. numbers in parentheses represent t-statistics. f.test is fisher’s test of the significance of the sum of the coefficients and the numbers in parentheses represent the value of fisher’s statistic. definition of variables: ∆npl=annual variation in the ratio of non-performing loans to total net loans, ∆rwa=annual variation in the ratio of risk-weighted assets to total assets, under=1 if the risk-weighted capital ratio car<10% and 0 otherwise, ad=1 when car is between 10% and 12% and 0 otherwise. ∆cap=annual change in capital over total assets. ta=logarithm of total assets, eff=total bank costs on income generated, gdp=the growth rate of gross domestic product table 7: negative and positive change in capital and risk taking of the largest islamic banks variables negative change in capital positive change of capital ∆npl ∆rwa ∆npl ∆rwa under (α1) 0.037 (0.580)* −0.235 (−0.940) 0.015 (0.280) 0.430 (1.910)** ad (α2) 0.006 (0.360) 0.474 (5.890)*** −0.070 (−0.240) 0.063 (0.450) ∆cap (α3) 0.035 (0.270) −0.344 (−0.730)* −0.018 (−0.190) 5.110 (13.570)*** ∆cap*under (α4) −0.476 (−0.240) −1.082 (−0.180) 0.172 (0.170) −4.661 (−1.280)* ∆cap*ad (α5) 0.055 (0.360) 6.964 (16.410)*** −0.289 (−1.210)* 0.093 (0.071) ta (α6) 0.130 (1.310)* −0.138 (−1.040)* 0.01 (0.66)* −0.138 (−1.040)* eff (α7) −0.014 (−0.840)* 0.017 (0.180) −0.065 (−4.10)*** −0.01 (−0.190) gdp (α8) 0.0017 (0.76) −0.001 (−0.250) −0.033 (−2.38)*** 0.011 (0.140) f. test : α3+α4=0 −0.441 (0.09) −1.426 (0.11) 0.154 (0.20) 0.449 (1.2)* α3+α5=0 0.090 (0.10) 6.620 (30.50)*** −0.315 (0.02) 5.203 (0.13) observations 246 246 159 159 r-squared 0.1760 0.6935 0.2914 0.7874 ***, **, and * indicate the level of significance at the 1%, 5%, and 10% level. numbers in parentheses represent t-statistics. f.test is fisher’s test of the significance of the sum of the coefficients and the numbers in parentheses represent the value of fisher’s statistic. definition of variables: ∆npl=annual variation in the ratio of non-performing loans to total net loans, ∆rwa=annual variation in the ratio of risk-weighted assets to total assets, under=1 if the risk-weighted capital ratio car<10% and 0 otherwise, ad=1 when car is between 10% and 12% and 0 otherwise. ∆cap=annual change in capital over total assets. ta=logarithm of total assets, eff=total bank costs on income generated, gdp=the growth rate of gross domestic product table 8: analysis with ∆rwa in explanatory variables variables ∆npl ∆rwa 0.002 (0.14) under (α1) 0.033 (1.05)* ad (α2) −0.001 (−0.07) ∆cap (α3) 0.013 (0.170) ∆cap*under (α4) 0.007 (0.01) ∆cap*ad (α5) −0.076 (−0.58) ta (α6) 0.008 (1.03)* eff (α7) −0.048 (−4.190)*** gdp (α8) 0.0001 (0.06) f. test : α3+α4=0 0.02 (0.10) α3+α5=0 −0.063 (0.314) observations 404 r−squared 0.068 ***, **, and * indicate the level of significance at the 1%, 5%, and 10% level. numbers in parentheses represent t-statistics. f.test is fisher’s test of the significance of the sum of the coefficients and the numbers in parentheses represent the value of fisher’s statistic. definition of variables: ∆npl=annual variation in the ratio of non-performing loans to total net loans, ∆rwa=annual variation in the ratio of risk-weighted assets to total assets, under=1 if the risk-weighted capital ratio car<10% and 0 otherwise, ad=1 when car is between 10% and 12% and 0 otherwise. ∆cap=annual change in capital over total assets. ta=logarithm of total assets, eff=total bank costs on income generated, gdp=the growth rate of gross domestic product daoud and kammoun: capital regulation and risk-taking behavior: empirical evidence for islamic banks international review of management and marketing | vol 12 • issue 1 • 202250 aggarwal, r., jacques, k. 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(2002), islamic financial institutions and products in the global financial system: key issues in risk management and challenges ahead. imf working paper 02/192. washington, dc: international monetary fund, monetary and exchange affairs department. p27. tanda, a. (2015), the role of regulatory pressure in banks’ capital and risk decisions. international journal of euro-mediterranean studies, 8(1), 5-23. van roy, p. (2005), the impact of the 1988 basel accord on banks’ capital ratios and credit risk-taking: an international study. germany: working paper european centre for advanced research in economics and statistics. tx_1~at/tx_2~at international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2022, 12(3), 31-36. international review of management and marketing | vol 12 • issue 3 • 2022 31 relationship between government financial grants, internal revenue and maternal mortality rate in south africa seshoka l. muila, collins c. ngwakwe* turfloop graduate school of leadership, university of limpopo, south africa. *email: collins.ngwakwe@ul.ac.za received: 28 february 2022 accepted: 06 may 2022 doi: https://doi.org/10.32479/irmm.13060 abstract funding of public hospitals and access to quality health care is a universal problem especially in developing countries. this paper aims to examine the relationship between government financial grants, internal revenue and maternal mortality rate. previous literature has suggested that to achieve better health outcomes, multiple factors including but not limited to finance must be taken into consideration. secondary data from audited annual health reports (2014/15-2018/19) of the nine south african provinces was analyzed with the employ of panel data regression technique. internal government revenue was statistically significant at a 5% level of significance (p < 0.05) and government financial grant was not statistically significant (p > 0.05). maternal mortality rate is therefore dependent on internal revenue and not on government financial grants. the findings change the ancient saying that maternal health outcomes shall improve when the government pumps more finances into the health system. instead, the study reveals that internal revenue generation has an impact on the maternal mortality rate thus bringing in another approach in the fight against maternal mortality. the study adds value to the public health administration in that it brings a different perspective on the fight against the maternal mortality in south africa. keywords: financial grants, internal generated revenue, public health management, public health expenditure, maternal mortality rate jel classifications: h51; e62; h83; i11 1. introduction the primary intention of the study is to analyze the relationship between government financial grants, internal revenue and health service delivery in south africa. this approach is inspired by the fact that funding of the health care system remains one of the essential tools for successful delivery of health care services across the globe, in underdeveloped countries in particular, and this becomes more essential in the realization of the sustainable development goals relating to health (stenberg et al., 2017). according to the world health statistics (whs), developing countries still spend lower than 8% of their gross domestic product on health (whs, 2016). this research therefore seeks to examine if health care financing (i.e. government financial grants and internal revenue) has a relationship with the health care service delivery and if indeed the existing relationship will enable us, as a country, to reach the said goals in all south african provinces within the prescribed timelines. financial grants are nonrepayable funds given by the government with no expectation of repayment or accrual of interest, and may have strict guidelines for usage (entrepreneur, 2016). in an attempt to expedite and improve the health care service delivery in line with the south african developmental plan and global sustainable development goals, government has introduced numerous conditional financial grants in addition to the annual health budgets. however, the national tertiary services grant (ntsg) and health professions training and development (hptd) grant aims to improve the health care services at the tertiary hospitals and the training of more specialist medical practitioners respectively. these are structured in such a manner that provinces that are inherently under-resourced and struggling to attract more medical specialists, will always receive fewer grants and thereby worsening the service delivery in such provinces, as well as the quality of training of more specialists. riman (2012) and akpan (2012) examine how the nigerian health this journal is licensed under a creative commons attribution 4.0 international license muila and ngwakwe: relationship between government financial grants, internal revenue and maternal mortality rate in south africa international review of management and marketing | vol 12 • issue 3 • 202232 care outcome relates to the health care financing and health facility utilization with the focus on the childbearing women. the study found that health care financing in nigeria inadequate for effective running of clinics. quality health care provision primarily relies on the availability of, amongst others, sufficient funding. borghi et al. (2006) indicate that: for a country to provide quality maternal health care services, adequate funding for pharmaceutical products (i.e. drugs and consumables) medical supplies, human resource and food for patients are necessary. we can therefore infer that the inadequacy or lack of funding presents a palpable threat to the wellbeing of the health care sector in any country, underdeveloped in particular. it is also documented that cuts on budgets of public health represents an untrue economy (masters et al., 2017). indeed, without funding, the ongoing crisis of maternal, newborn and neonatal deaths shall continue (murray, 2007). therefore, the objective of the study is to examine the relationship between government financial grants, internal revenue and maternal mortality rate and the question posed is therefore; what is the relationship between government financial grants, internal revenue and maternal mortality rate? 2. literature review governments of developing countries acknowledge the ongoing responsibility of offering financial support to the ever-rising expectation by citizens for better health services. however, despite the common endeavors and strides made thus far, the brics countries still differ in their capacity to increase financial investments in ministries of health (jakovljevic et al., 2017). sengupta (2015) indicated that expenditure on health taken alone does not necessarily exert a positive impact on the health outcomes; instead, such expenditure should work in tandem with other parameters such as education, poverty level of the users as represented by per capita income and spending of the allocated funds by the health ministry or government. in addition, policies on public health financing must be separate and specific to the individual sectors within the country, with the chief aim of ensuring good health outcomes across the poor and the rich sectors of the society (senguta, 2015). another research by hooda (2014) corroborates the other findings that amount of public expenditure on health is not necessarily the only factor to quality health. public financial management of such funding and proper governance is also of the essence in utilisation health funds to provide desired quality health care. in their research, rahman et al. (2018) found that the increase in total health expenditure coupled with transparency and responsibility on the usage of public funds, yielded positive health outcomes in the south asian association for regional cooperation (saarc) and association for south east asian nations (asean). another similar research found a significant relationship between life expectancy and the health financing (jaba et al., 2014). furthermore, aísa et al. (2014) supported the view that spending on public health has an important role to play in enhancing life expectancy. similar research by gallet and doucouliagos (2017) suggested that healthcare financing remains the greatest influencer on mortality. rahman et al. (2018) applied a panel data approach to examine the existence of fixed and random implications of health expenditure on health outcomes. the major variables of their study includes public and private heath financing, life expectancy, infant mortality rate. they find that a combination of public health financing and private health financing has a significant effect on reduction of infant mortality. however, they also find that private health financing has greater influence on health care than public health expenditure. this finding informs the need for other sources of finance rather than reliance on governance finance alone. in another closely related research, jaba et al. (2014) examine the link between health expenditure and life expectancy by applying a panel data statistical analysis on a group of 175 countries located in different geographical zone with similar income data for a period of sixteen years. they find that health expenditure relates significantly with life expectancy – thus confirmation other previous studies such as (rahman et al., 2018). using a fixed effect regression model, aísa et al. (2014) examine the effect of public health expenditure on longevity in oecd countries and finds that although public health care expenditure does have effect on longevity but that this effect reduces with increase in size of public health expenditure on the gdp. bein et al. (2017) study the influence of health expenditure on life expectancy of east african countries with data from the global development index. applying a panel data approach, they find that health expenditure is has a positive influence on life expectation of men and women, but document that health care expenditure has more positive effect on women’s life expectancy than the men counterparts. on the contrary, the study found that health care spending has a negative effect on the rate of infant and neonatal mortalities. according to alkema et al. (2016), the ratio of maternal mortality showed a downward trend globally from 385 mortality per 100,000 live births in 1990-216 in the year 2015. however, the decrement differs between the regions and the state of development of each continent or country. it is worth noting that eastern asia recorded the highest decline whilst the caribbean recorded the lowest performance during the same period. in year 2015, the sub-saharan region of africa recorded about 546 maternal deaths while the developed regions recorded 12 maternal deaths per 100,000 live births. to achieve the sdg target, countries with the maternal mortality ratio of less than 432 per 100,000 live births in 2015 should report an annual reduction of 7.5%. alkema et al. (2016) reports that both cambodia and rwanda experienced a hastened decrease of maternal mortality due to improvement of government investment in access to health care service report it. this was made possible by; the increment of midwives as well as financial incentives to the health workers. in rwanda, the government won the battle through the implementation of certain policies such as the nationwide placement of 45 000 community health care workers to help fight maternal mortality (alkema et al., 2016). in west african countries (i.e. benin, nigeria, mali, ghana, burkina faso and senegal), the aim of delivering excellent services for the improvement of maternal, newborn and child health has proved to be very challenging because of insufficient funding to develop and maintain the health care system, (agyepong, 2017). furthermore, the out-of-pocket payments at the service delivery point acted as a restrictive factor to the use of services and therefore exposed mothers and their families to calamitous expenditures. in their muila and ngwakwe: relationship between government financial grants, internal revenue and maternal mortality rate in south africa international review of management and marketing | vol 12 • issue 3 • 2022 33 research, bijlmakers et al. (2019) made effort to comprehend the variations between maternal health coverage and outcomes within the various regions of rwanda. they found that the conditions and differences between the regions or districts must be taken into consideration at all times, when financial resources are being allocated, so as to realize the delivery of quality maternal care and outcomes in all the districts. between 1990 and 2015, both rwanda and cambodia experienced a rapid decrease in maternal deaths at a rate of reduction of 7·4% (80% ui 5·6–8·7), and 6·0% (4·5-7·4) respectively (alkema et al., 2016). in both countries, direct or indirect funding played a key role in improving the maternal mortality reduction rates. in addition, alkema et al. (2016) suggests that more effort is required in order to reach the sustainable developmental target. they suggest that countries with a maternal death rate of <432 mortality per 100,000 live births in 2015 will require an annual continuous rate of reduction of 7.5% for 2016–30, which is beyond the rate of 5.5% that was required to meet mdg 5. in nigeria, the most populous country in africa, maternal mortality sits at about 630 per 100,000 live births, with 145 women dying during labor every day, one every minute and one in every 13 pregnant mothers dying (piane, 2019). the ratio remains the highest in the continent of africa and by far higher than the worldwide average of 290 per 100,000 live births (piane, 2019). among others, bazuaye (2013) and okonofua (2013) in their article titled: “tackling maternal mortality in africa after 2015: what should the priorities be?” identify that funding for proper health care is one of the key strategies which will include free or subsidized services, as well as appointment of more doctors, betterment of hospitals and increase in their numbers, remains the cornerstone of improving maternal survival outcomes. paradoxically, putting an end to donor reliance for funding is also identified as one of the key strategies in decreasing maternal mortality in africa (bazuaye and okonofua, 2013). what remains clear is that political will must reign supreme in prioritizing women’s health both in monetary terms and in policies. (piane, 2019). the launch of the global strategy for the health of children, adolescents and women in year 2015 demonstrated that reducing maternal deaths remains a key priority of the international development community (kuruvilla et al., 2016). it must also be noted that sustainable development goal number three, aims to improve maternal and newborn health (kuruvilla et al., 2018). though challenging for this ideal to be realized, health financing involving revenue collection, pooling of risk and purchasing systems must be in place to ensure a smooth running of the health care system (zaman and hossain, 2017). borghi et al. (2006) indicate that the scarcity of resources and underinvestment in maternal health negatively affects the realization of good maternal survival results. in 2018, machira and palamuleni further pointed out that the majority of developing nations still have maternal mortality as the chief public health challenge in spite of the longstanding pledges and declarations aimed at providing quality maternal health care service and ultimately decreasing poor maternal health outcomes. this is further supported by piane (2019) who concludes in his study of maternal mortality in nigeria, that governments and their leaders must prioritize health of women and mothers both in policies and budgets. in his paper entitled “america’s maternal mortality crisis: policy proposal” eidson (2019) asserts that america is one of the thirteen countries where the rate of maternal mortality is far worse than it was fifteen years ago for it registered an increase in maternal deaths of 26.6% between year 2000 and 2014. mann et al. (2019) supports the above assertion by saying that “women in the united states are more likely to die from childbirth-related or pregnancy-related causes than women in other high-income countries, with black women dying at a rate 3-4 times that of white women”. the assertion by eidson is attributed to, pre-existing medical conditions, race, geographic location, poverty and access to healthcare and it is further reported that it is only in california where there is an improvement in maternal health compared to states such as texas where the government has reduced funding maternal health (eidson, 2019). eidson (2019) further indicates that, compared to canadian women, american women are three times more likely to die of causes related to childbearing. proulx et al. (2017) revealed that canada took a conscious decision to fund its maternal, neonatal and child health through deep cuts in almost all other facets of the country’s development assistance. searing (2019) and ross (2019) conducted a study in america which concludes that lower maternal mortality rates are strongly associated with medicaid expansion and thus showing 1.6 fewer maternal deaths per 100,000 live births. such medicaid comes with significant increase in access to health care before, during and after pregnancy, which then allows early detection and management of pre-existing medical conditions which may pose risks to the pregnancy itself or the life of the mother. this therefore suggests that the realization of a good health care system comes with significant sacrifices by the government when funding is prioritized. approximate figures from the global metrics and institutional reports suggest that south africa has made noteworthy progress in decreasing both neonatal and maternal mortality even though it has not attained the mdg targets as envisioned by (damian et al., 2019). we must therefore evaluate the south african health care funding (i.e. government financial grant or internal revenue) against the maternal health outcomes so as to assess if the country is on track in its efforts to realize the 2030 vision of driving down maternal mortality from 500 to less than 100 per 100,000 live births (national planning commission, 2013). 3. methodology the data used is the secondary data obtained from the audited annual reports (2014/15 – 2018/19) of nine provincial health departments in south africa. the panel data regression analysis method was employed to analyze the relationship between the government financial grant, internal revenue and maternal mortality rate. the regression model used is as follows: to examine the relationship between government financial grants, internal revenue and maternal mortality rate; y1= b0 + b1x1 + b2x2 +e (1) muila and ngwakwe: relationship between government financial grants, internal revenue and maternal mortality rate in south africa international review of management and marketing | vol 12 • issue 3 • 202234 where; y1: maternal mortality rate(mmr) b0: regression intercept b1: regression co-efficient x1: government financial grant x2: internal revenue e: error term the dependent variable was compared using bar graphs. the data set consisted of maternity mortality rate (measured as total maternal death per 100,000 live births) and for further exploration, averages per province were computed. maternal mortality among south african provinces fluctuates from year to year. the province with the highest average mmr per 100,000 live births was free state with 158,425 per 100,000 live births, followed by northwest province with 145,65 per 100,000 live birth and western cape having the least at 62,318 per 100,000 live births. figure 1 shows a summary of all provinces. the multiple regression model analysed the relationship between gfg, igr, and maternal mortality rate (mm). the regression model had an r square of 0.264 (adjusted r-square of 0.224), thus the model explained 26.4% of the variance. the regression model was significant with f (2.40) =7.187, p<0.05, the model is strongly significant. table 1 presents the coefficients of the variables. table 1 shows that the variables igr were statistically significant at a 5% level of significance p<0.05 and gfg was not statistically significant p>0.05. the research, therefore, concluded that the maternal mortality rate is dependent on internal revenue and not on government financial grants. 4. discussion during the period under survey over r825 trillion worth of government grants was allocated. the province of gauteng (about 12 million population and 76.3% depends on public health care, stats sa 2011) received the highest portion (23%), closely followed by kzn (about 10 million population and 87.8% dependant on public health care, stats sa 2011) that received 22%. the northern cape (about 1 million population and 87.1% dependant on public health care, stats sa 2011) received the least of 2%. in the same period, internal revenue was over r10.61 trillion of which western cape (5.8 million population and 75% dependant on public health care, stats sa 2011) had the highest portion of 28%, followed by gauteng at 27%. similar to gfg, northern cape (1%) had the lowest. figure 2 shows the percentage of government financial grant allocations per province and internally generated revenue per province. it was thought provoking to observe that western cape received only 12% in government financial grants and yet had internal revenues of 28%. thus, internal revenues were more than double when compared to the government financial grant. in contrast, kzn received 22% in government financial grants and had 13% internal revenue. table 1 shows that the variables in internal revenue (igr) were statistically significant at a 5% level of significance p<0.05 and government financial grant (gfg) was not statistically significant p >0.05. the paper therefore concluded that the maternal mortality rate (mmr) has a significant relationship with internal revenue and no significant relationship with government financial grants. this is supported by the western cape province which has the highest internally generated revenue and lowest maternal mortality ratio compared to the other provinces that demonstrated the contrary. the lack of relationship between maternal mortality rate and government financial grants suggests two financial management possibilities, namely either the allocated funds are too little to enhance quality health service for maternal health or the funds are enough but mismanaged by administrators in such a way that the maternal health programmes are left with little funds to provides expected maternal health care. therefore, accountability on public health funds needs to be interrogated further by further researchers. findings of this paper lends support to prior research findings such as arthur and oaikhenan (2017), who found that in sub-saharan africa, spending on health by government bears a sizeable funding but with less impact on health outcomes such as mortality rates. 131.7 117.684 115.74 145.65 130.5 99.425 62.318 158.425 108.6 lip average gp average mp average nw average ec average nc average wc average fs average kzn average figure 1: average maternal mortality per 100,000 live births between financial years 2014/15-2018/19 lip total 10% gp total 23% mp total 7% nw total 5% ec total 13% nc total 2% wc total 12% fs total 6% kzn total 22% gfg lip total 8% gp total 27% mp total 4% nw total 3% ec total 9% nc total 1% wc total 28% fs total 7% kzn total 13% igr figure 2: gfg and igr comparison of provinces between financial years 2014/15-2018/19 table 1: multiple regression analysis results: dependent variable mm variables estimate (b) se 95% ci p ll ul gfg 0.566 0.524 −0.493 1.626 0.287 igr −100.712 30.177 −161.701 −39.722 0.002 (constant) 132.945 8.362 116.045 149.846 0.000 f (2.40)=7.187**, p<0.05, r2=0.264. government financial grant (gfg), internal revenue (igr), n=42. ci=confidence interval; ll=lower limit; ul=upper limit muila and ngwakwe: relationship between government financial grants, internal revenue and maternal mortality rate in south africa international review of management and marketing | vol 12 • issue 3 • 2022 35 5.1. implications of the study the study findings significantly change the long held saying that maternal health outcomes improve significantly, when the government pumps more financial resources into the health system. on the contrary, the study reveals that internal revenue generation may have an impact on the fight against maternal mortality rates thus bringing in another approach to the fight against maternal mortality. the study adds value to the health system and school of public health as well as public administration in that it brings a different perspective on the fight against the maternal mortality in south africa through improved public health expenditure and administration. 6. conclusion western cape achieved the lowest maternal mortality rate at 62.3 maternal deaths per 100,000 live births whilst free state had the highest maternal mortality rate at 158.4 maternal deaths per 100,000 live births over the period between 2014/15 -2018/19. in addition, western cape generated the highest internal revenue compared to all the other provinces. subsequent to the analysis made, the researcher concluded that the maternal mortality rate (mmr) is dependent on internal revenue and not on government financial grants. the non-dependency of maternal mortality rate on government financial grant is suggestive of the notion that either the health budget allocation is inherently too little to reach the maternal health programmes or the health budget allocation is enough but mismanaged or does not prioritize the maternal health programmes thus raising the question of responsibility and accountability of the respective managers or authorities. this finding is in line with the reviewed literature which highlighted that spending alone on health by government does not necessarily equate to excellent outcomes on maternal health (arthur and oaikhenan, 2017), in fact, quality of financial systems plays a critical role in achieving better outcomes (kulkarni, 2016). the non-dependency of maternal mortality on government funding (i.e., how much money health facilities are given) reveals to us that the human factor may be a contributor to the maternal mortality in south africa. furthermore, the level of knowledge and skills of health professionals has to be interrogated with the aim of establishing better health care, thus effectively addressing maternal mortality. more research is thus recommended to uncover more possible reasons which could explain the non-dependency of maternal mortality rate on government 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(2017), universal health coverage: a burning need for developing countries. journal of medical research and innovation, 1(1), 18-20. tx_1~at/tx_2~at international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2023, 13(3), 9-15. international review of management and marketing | vol 13 • issue 3 • 2023 9 brand name language: is it true that foreign brand names are more quali ied, luxurious and modern? sutisna*, tata rustandi master management, bina bangsa university, serang, indonesia. *email: sutisna0902@gmail.com received: 16 january 2023 accepted: 07 april 2023 doi: https://doi.org/10.32479/irmm.14231 abstract the purpose of this study is to see whether product brand names that use foreign languages, especially english, are perceived as higher quality, more luxurious, and more modern than product brand names that use local languages by consumers in developing countries. the population in this study were residents of banten province, indonesia. data collection using a questionnaire distributed via google form and collected as many as 275 respondents’ answers. the analysis method uses paired sample mean difference test. the results showed that foreign brand names that use foreign languages are perceived as higher quality, more luxurious, and more modern than brand names that use local languages. therefore, giving product brand names whose markets are consumers in developing countries, using foreign language brand names, especially english, will be preferred by consumers. keywords: brand name, foreign language, quality, luxurious, modern jel classification: m31 1. introduction the central statistics agency (bps) based on the 2020 population census recorded that indonesia’s population in september 2020 was 270.20 million people. since indonesia held its first population census in 1961, the population has continued to increase. the sp2020 results compared to sp2010 showed an increase in the population of 32.56 million people or an average of 3.26 million every year. in the last 10 years (2010-2020), indonesia’s population growth rate was 1.25% per year. indonesia is categorized as a middle-income country (world bank, 2022) with a per capita income of idr 62.2 million or us$ 4,349.5 (bps, 2022). the large population, although still categorized as a middle-income country, and still categorized as a developing country, is certainly a potential market for various types of products offered. those who can offer better value to consumers will be the winner. consumer preferences for the various products available are influenced by many variables. among the many variables that influence consumer choice is brand name. as a developing country, consumer behavior in purchasing also always refers to products from developed countries. consumers in indonesia consider that brands of products from abroad are better than local products, and consider domestic product brands to have a lower image (sulhaini et al., 2019; sutisna et al., 2020). consumer brand choice of product brands is influenced by many variables, ranging from price, product quality, brand image, price, and advertising (adnan et al., 2019; sudaryanto et al., 2019) and of course, the brand name matters too (bulle and cengel, 2020). the brand name is one aspect that is taken into consideration in deciding to buy a product (shehzad, 2014). the brand name contains certain values felt by consumers, such as feelings of pride, feelings of security, and feelings of luxury (han et al., 2010). therefore, in giving brand names, companies need to be careful and consider brand names from various aspects, ranging from ease of pronunciation, (kim, 2017) and ease of remembering (khurram et al., 2018) to the brand language used. giving brand names using certain brand languages will have a different impact. consumers in developing countries, tend to judge this journal is licensed under a creative commons attribution 4.0 international license sutisna: brand name language: is it true that foreign brand names are more qualified, luxurious and modern? international review of management and marketing | vol 13 • issue 3 • 202310 that brand names that use foreign languages are better than brand names with local languages (ergin et al., 2014) research on how consumers in developing countries tend to prefer brand names with foreign languages, especially english as an international language has been widely done. however, the aspects that are the reason why consumers in developing countries prefer foreign brands have not been done. in addition, this study wants to see whether brand names using foreign languages differ in perception between the categories of consumer products and shopping products. therefore, this study will reveal what aspects are the reasons for consumers to judge that brands in foreign languages, especially english, are perceived better than brand names using local languages. 2. theoretical review the brand name is an important part of a product. brand names are advised not to be too complicated, not difficult to pronounce, easy to remember, and simple because brands are the basis for developing brand awareness and brand image (soto et al., 2009). the brand name contains several meanings such as brand image, quality symbol, product characteristics, and product quality (kohli and labahn, 1997; wang, 2012). the brand image includes several aspects such as brand territory that show competence, brand quality that shows how high quality the product is offered, product differentiation, and brand personality (kapferer, 2008). brands also have two types of benefits: functional benefits and symbolic benefits. functional benefits of product brands relate to product performance, physical justification, the effectiveness of use, value for money, availability, and habit reliability. meanwhile, symbolic benefits are in the form of compatibility with lifestyle, can express themselves, can show self-identity, helping order and structure life, social acceptance, feeling prestige, and show likes and dislikes (del rio et al., 2001). the brand name is the foundation for consumers’ foreign brand and local brand perception. foreign brands, especially in developing countries, are often perceived as better product brands (yu et al., 2022 ; kashi, 2013) and can be used as social status (millan and mittal, 2017) and symbols of luxury (inwon et al., 2022). therefore, consumers in developing countries prefer foreign brands for purchasing their products (yu et al., 2022). many consumers from developing countries feel cool when using products whose brands come from abroad. products labeled with foreign brands can make consumers make product choices. the reason consumers choose foreign brands is that foreign brands have product features that local brands do not have, good product quality, and a positive brand image (momen et al., 2022). large product variations, different colors, shapes, and sizes are the main product features that attract consumers to buy foreign products (haque et al., 2015). consumers in developing countries perceive that products originating from abroad have premium quality compared to local products. meanwhile, according to khashi (2013), consumer purchasing behavior toward foreign brands is due to seeking uniqueness, perceived quality, and emotional value. apart from product features and product quality, foreign brands are preferred by consumers also because of brand image. foreign brands are valued more highly by consumers from developing countries. research by dao and heit (2018) conducted in vietnam shows that consumers rate sony and honda brands better than local brands. brand image has three dimensions, namely affective and conative cognitive components. country image and product confidence a study on indonesian consumers conducted by sulhaini et al. (2020) found a very surprising situation. the research respondents were 233 young students in mataram lombok indonesia. the results revealed that young people have negative emotions and a passive hatred for domestic brands, and therefore a reason for them to worship foreign brands more. meanwhile, foreign brands are perceived by consumers in developed countries as less qualified, or in other words, consumers in developed countries perceive their domestic brands as better than brands from abroad (, ahmed and d’astous, 2008; bilkey and nes, 1982; samiee, 1994). 2.1. phonetic symbolism and brand names a common method of categorizing vowel sounds is to distinguish front versus back mentions. this distinction refers to where the tongue is positioned when a word is spoken. consider tee, tin, and toot. when saying tee, the tongue is more towards the front of the mouth than when saying tin. conversely, when saying toot, the tongue is more towards the back of the mouth than it is when saying tin (klink, 2000). yorkson and menon (2004) studied a phenomenon known as sound symbolism, where the sounds of a word convey meaning. in particular, brand names are made up of individual sounds called phonemes and it was analyzed how the phonetic structure of these brand names influences consumers’ evaluation of the product and its attributes. the results show that consumers use the information they gather from the phonemes in brand names to infer product attributes and evaluate brands. the analysis also shows that the phonetic effect of brand names manifests automatically while it is uncontrollable, unconscious, and effortless. lowrey and shrum’s (2007) experimental results show that brand names are preferred when their vocal sounds have attributes that have positive connotations. making a brand name must be in line with the attributes contained in the product. for example, the brand name of ice cream must contain meaning, sweet, cream, and rich flavor. in other words, the brand name must contain the symbolic meaning of the product category. for example, a snack brand name would be more suitable if the brand name contains the meaning of taste, crispy, crunchy, and savory. still according to yorkson and menon (2004), creating a successful brand name depends not only on creating a name that fits the product category, but a name that phonetically matches the positioning of the brand in the product category. the congruence between the product category and the brand name affects consumers’ memories, preferences, and conclusions (lowrey et al., 2003). brand perception can be enhanced by matching product attributes with sound symbols. the better the match between the sound symbol and the product attribute, the more positive the perception of the brand. from the above explanation, it appears that the easier the brand name is to pronounce, the more preferred it will be by consumers. sutisna: brand name language: is it true that foreign brand names are more qualified, luxurious and modern? international review of management and marketing | vol 13 • issue 3 • 2023 11 meanwhile, the more the brand name matches the product characteristics or product attributes, the more favored it will be by consumers compared to the brand name whose sound symbol does not match the product attributes. 2.2. language of brand name language is part of the culture (ahimsa-putra, 2011) and every culture produces cultural artifacts in the form of goods (oktaviany et al., 2019). language as part of culture is also a means of communication both interpersonal and between entities. language has become very broad in its dimensions in human life activities, including in terms of product brand naming. product brand names are one of the cultural artifacts. language is very important in business and marketing activities. language becomes a strategic tool for managing impressions on target consumers to build brand equity (luna et al., 2018), therefore language becomes a very important tool in building brand positioning. one of the important functions of language is brand naming. brand naming is both an art and a science (luna et al., 2018). in consumers in developing countries, the use of local language is less preferred, and prefers nonlocal brands (batra et al., 2000). therefore, marketers need to pay attention to this aspect of language use for brand names so that their marketing strategies can be successful. even for local products, when naming their product brands in foreign languages, especially english, consumers will be preferred (citra and syahlani, 2008). the results of research by soto et al. (2009) on jeans, cameras, and mouthwash brands show that jeans products with english brand names are more hedonic. even for all product categories, the use of brand names in english. the results of this study are different from the results of research conducted by diantanti et al. (2018) which states that the use of product brand names using foreign and local languages does not affect attitudes towards products and purchase intentions. the respondents even suggested that when branding local products, they should use brand names based on the characteristics of the product origin. 3. hypothesis development 3.1. language of brand name and quality perception product brand names using foreign language names, especially english, are perceived to have better quality (porto and da silva soyer, 2018). consumers consider that product brands that are in foreign languages have better quality than brands that use national languages. this is shown by the results of the research (yu et al., 2022). which found that consumers in developing countries prefer foreign brands, and product quality is a moderating variable for the effect of decision focus (buying for others or themselves) on consumer choice. in other words, when consumers decide to buy products for others, they will choose foreign brands over national brands. consumers in developing countries such as bangladesh also perceive that foreign brands are better than domestic brands in particular they consider that foreign brands have more brand value, and better product features (momen et al., 2022). however, in some groups of consumers who have a high level of entrocentrism, they consider that the quality of domestic product brands is better than the quality of foreign brand products, even though objectively the quality of foreign product brands is better than domestic product brands. the perception that domestic brand products are better than foreign products when in fact the opposite is true, is referred to as domestic product quality syndrome. this bias occurs because consumers have a high ethnocentric spirit (bakti et al., 2020). the results of other research related to foreign branding show that strategies that combine foreign branding and experiential value produce better product quality perceptions (azzahra and balqiah, 2017). therefore, around the world, many apply product brand naming using foreign languages to create better quality perceptions. brands from developing countries use many foreign brand strategies to attract consumer interest (zhou et al., 2010). the effect of this has an impact on the likelihood of purchase. domestic products that are labeled abroad (incongruent) result in a decrease in consumer purchase interest, especially for hedonic products, and utilitarian products, the incongruity between domestically made but foreign branded products (for example, made in indonesia given an english brand name) does not have a significant effect on consumer purchase interest (melnyk et al., 2012). h1: product brand names that use foreign languages are preferred over brand names using national languages. h2: product brand names that use foreign languages are more qualified than brand names that use national languages. 3.2. language of brand name and modernity mandal (2001) states that globalists promote english as synonymous with economic growth, technology, and modernity. english becomes a means of globalization and modernity (paolo, 2012). in indonesian society, english is very important and english is a requirement for many things, for example, applying for a job, as a symbol of education, modernity, and technological progress (gunarwan, 1998; lauder, 2008). english for indonesians has functioned as an identity of modernity for educated urban people and for those who aspire to be part of urban modern society (lowernberg, 2007) therefore the use of english for product brand names will be able to imply a sense of modernity to consumers. brand naming is very important because it will have an impact on brand value. consumers will make the brand name as a reference in assessing a product. product brand names that use foreign languages are considered to have better quality, cutting-edge technology, and reliability, are more modern and have a contemporary appeal compared to product brands with local languages (gupta and verma, 2017). this research also produces findings that by buying foreign brands, there is a feeling of superiority in consumers. they consider foreign brands to be of higher quality, more durable, and safer. the pronunciation of brands using foreign languages and therefore sounding foreign creates the illusion of reputation and status. among the foreign languages used as brand names, the use of italian is the most preferred, and english is next. consumers perceive that local product brand names are perceived as selling counterfeit products (gupta and verma, 2017). h3: foreign language brand names are perceived as more modern than national brand names. 3.3. language of brand name and luxury luxury is an elusive cultural concept (ott, 2018). at one time, certain products could be categorized as luxury goods, motorcycles in the 1970s were included in luxury goods. mobile sutisna: brand name language: is it true that foreign brand names are more qualified, luxurious and modern? international review of management and marketing | vol 13 • issue 3 • 202312 phones in the mid-1990s were categorized as a luxury. even soap in medieval times was considered a luxury (chevalier and mazzalovo 2008). this is what is referred to as the concept of luxury, where these goods go above and beyond what is needed in life (sombart, 1913). the concept of luxury is different from luxury brands. looking back at the examples above, today the three products are still considered luxury goods, but it is no longer determined by the type of product, but by the brand and type of product. harley and bmw brand motorcycles are currently included in luxury goods. iphone cell phones and samsung with its s-type are included in luxury goods. jo malone blackberry and jo loves pomelo bath soaps are currently included in luxury goods. the luxury is obtained from the distinction based on the brand. luxury can also differ from one individual to another. for the lower class, eating at a fast food restaurant is a luxury, but for the middle class, it is an ordinary thing. therefore, what is considered a luxury and what is not, will depend on the individual and the context. something that is initially considered a luxury by someone at some point will turn into something ordinary (virgneron and johnson, 2004).  luxury can also come from the country of origin (coo) of a product’s brand name. external brands are perceived as more luxurious than domestic brands (kinra, 2006). even for unknown brand names, as long as they do not use national or domestic brand names, they are perceived to show more luxury (meng and clark, 2007). the perceived origin of the brand name has a strong impact on perceived luxury, and subsequently, the willingness to pay a premium price, regardless of whether the brand is fictitious and only sounds as if it comes from a certain country, or a real brand (krupka et al., 2014). h4: foreign language brand names are perceived as more luxurious than national brand names. 4. research methods this research is a comparative study that compares differences in mean scores. data were collected online and obtained from 275 respondents from the banten province area. after checking, 228 respondents completed the questionnaire. respondents were given two fictitious product brand names using the indonesian language (national) which are categorized as convenience goods (kotler and keller, 2012) namely murni for mineral water and bening for bath soap brands, and two foreign brands namely pure for mineral water and freshlife for bath soap. as for the shopping goods category (kotler and keller, 2012), respondents were given two brand names using the indonesian language (national), namely serasi for clothing and denis for shoes, and two foreign brand names, namely youthful for clothing and bertolini for shoes. for the overseas brand names, respondents were asked to rate three aspects, namely: (1) product quality; (2) product modernity; (3) product luxury. the method of analysis used is paired sample mean difference test to see whether the respondents’ perceptions of the various product brand names are significantly different or not based on the aspects of quality, modernity, and luxury. 5. research results from data processing, the characteristics of respondents were obtained, namely based on gender, 66.7% of men and 32.9% of women, and those who did not fill in their gender as much as 0.4%. the age of the majority of respondents is <25 years old as much as 64%, then 26-40 years old 21.5%, and more than 40 years old as much as 14.5%. when viewed from the education of respondents, 35.1% have secondary education, 47.4% have undergraduate education and 17.5% have postgraduate education. 5.1. overseas brand names and national brand names in this study, as explained above, respondents were asked several questions regarding brand names that use foreign languages and brand names that use local languages. the following are the brand names that use foreign languages and local languages (table 1). to see whether brand names using foreign languages are rated better than brand names using national languages, a paired t-test was conducted as presented in table 2. table 2 explains that the average local brand value score (3.6593) is smaller than the average overseas brand name score (4.1296). this means that respondents rate overseas brand names better than local brand names. the t sig value of 0.000<0.05 indicates that overseas brand names are rated better than local brand names, and therefore hypothesis number 1 can be accepted. furthermore, it is necessary to investigate further, what aspects make foreign brand names better than local brands. 5.2. foreign and local brand name quality to see more about the differences in respondents’ assessment of foreign and local brand names, a paired mean difference test was conducted between foreign brand names and local brand names. the following are the processing results (table 3). table 3 shows that the local brand names murni, and pure in terms of quality do not appear to be different from the foreign brand names denis and bertolini (4.4693 vs. 4.4561 and 3.8465 vs 3.8684). meanwhile, the local names bening and serasi appear to be rated as less qualified than the foreign brand names freshlife and youthful (3.4956 vs. 4.1842 and 3.5683 vs. 4.0396). after testing the sig value for the brand name murni versus pure sig value is 0.907 > 0.05, for the brand name bening versus freshlife sig value is 0.000 < 0.05, for the brand name serasi versus youthful sig value, is 0.000 < 0.05 and for the brand name denis versus bertolini sig value is 0.814 > 0.05. thus, hypothesis number 2 is accepted for two local brand names (bening and serasi) versus two overseas brand names (freshlife table 1: foreign and local brand name pairs product type overseas brand name local brand name convenience goods pure pure convenience goods freshlife clear shopping goods youthful serasi shopping goods bertolini denis sutisna: brand name language: is it true that foreign brand names are more qualified, luxurious and modern? international review of management and marketing | vol 13 • issue 3 • 2023 13 and youthful). whereas two local brand names (murni and denis versus two overseas brand names (pure and bertolini) do not support hypothesis number 2. 5.3. foreign and local brand name validity another aspect that can differentiate the assessment of foreign and local brand names is luxury. just like the differences based on quality, this study used four pairs of fictitious foreign and local brand names. the results show the average respondents’ assessment of the four pairs of brand names as follows (table 4). table 4 shows the respondents’ perceptions of the luxury of overseas and local brand names. the average perception of respondents for the overseas brand names pure, freshlife and youthful is higher than the brand names murni, bening, and serasi. meanwhile, the local brand name denis and the overseas brand name bertolini appear to be no different. after significance testing, it was found that the sig value for the difference between the local brand names murni, bening, and serasi versus the overseas brand names pure, freshlife, and youthful was 0.000 <0.05. this means that the overseas brand names represented by pure, freshlife, and youthful are perceived as more luxurious than the three local brand names pure, bening, and serasi. therefore hypothesis number 3 is supported by the research data. as for the pair of local brand names denis versus bertolini, the significant value is 0.285 > 0.05, which means that there is not enough evidence to say that foreign brand names are considered more luxurious than local brand names. for the denis versus bertolini brand name pair that shows no difference in perception, it is very likely due to respondents’ perception of the denis brand name as a domestic brand name. from the descriptive statistics of the perception of certain brand names as foreign-origin brand names, the average score of the denis brand name as a foreignorigin brand name of 3.48 far exceeds the perception of the pure, bening, and serasi brand names (2.7719, 2.6053, 2.6344). thus, the reason why there is no difference in the perception of luxury for the brand names denis and bertolini is because respondents give the same assessment of the two brand names, which have a luxurious impression. 5.4. the modernity of foreign and local brand names the final aspect assessed was the modernity of the brand name. processing the data using comparative statistics, it appears that three fictitious foreign brand names and their pairs show different results. as for one overseas brand name and its counterpart, the results do not appear to be different as follows (table 5). table 5 shows that the foreign brand names (pure, freshlife, and youthful) have a greater mean value of perceived modernity than the three local brand names (murni, bening, and serasi). as for the brand names denis and bertolini, respondents’ perceptions do not appear to differ in terms of the luxury aspect. the significance test results for the difference in perceptions of the brand names murni, bening, and serasi versus pure, freshlife, and youthful have a significance value of 0.000 <0.05 which indicates that the foreign brand names are perceived as more modern than the local brand names. as for the denis and bertolini brand names, there is no difference in the perception of modernity (0.294 > 0.05) from the respondents. again, specifically for the brand names denis and bertolini, they are perceived to be no different table 3: average quality of foreign and local brand names brand pair mean n sd pair 1 perceived quality of pure brand name 4.4693 228 1.51466 perceived quality of pure brand name 4.4561 228 1.44588 pair 2 perceived quality of bening brand name 3.4956 228 1.58878 perceived quality of freshlife brand name 4.1842 228 1.37994 pair 3 perceived quality of serasi brand name 3.5683 227 1.57369 perceived quality of youthful brand name 4.0396 227 1.45833 pair 4 perceived quality of denis brand name 3.8465 228 1.48060 perceived quality of bertolini brand name 3.8684 228 1.55381 sd: standard deviation table 4: average luxury of foreign and local brand names brand pair mean n sd pair 1 perceived luxury pure brand name 3.8684 228 1.55097 perceived luxury pure brand name 4.3070 228 1.46998 pair 2 perceived luxury bening brand name 3.4035 228 1.60791 perceived luxury of freshlife brand name 4.1886 228 1.40623 pair 3 perceived luxury of serasi brand name 3.4693 228 1.54633 perceived luxury of youthful brand name 4.0658 228 1.44505 pair 4 perceived luxury of denis brand name 3.8114 228 1.50899 perceived luxury of bertolini brand name 3.9211 228 1.53172 sd: standard deviation table 5: average modernity of foreign and local brand names brand pair mean n sd pair 1 perceived modernity pure brand name 3.8553 228 1.50802 perceived modernity pure brand name 4.4123 228 1.45905 pair 2 perceived modernity bening brand name 3.3421 228 1.61124 perceived modernity of freshlife brand name 4.3377 228 1.31577 pair 3 perceived modernity serasi brand name 3.4956 228 1.57205 perceived modernity youthful brand name 4.2061 228 1.43172 pair 4 perceived modernity denis brand name 3.8333 228 1.46270 perceived modernity bertolini brand name 3.9386 228 1.52677 sd: standard deviation table 2: average difference between foreign and local brand names pair mean n sd local brand name 3.6593 227 1.24634 overseas brand name 4.1296 227 1.11396 sd: standard deviation sutisna: brand name language: is it true that foreign brand names are more qualified, luxurious and modern? international review of management and marketing | vol 13 • issue 3 • 202314 in the aspect of modernity because respondents consider both brand names to be from abroad, so they are equally perceived as modern brand names. 6. discussion and conclusion the results show that all research hypotheses are accepted, although several pairs of foreign and local brand names show no difference in quality aspects, namely the pure and pure pair and the bertolini and denis pair. for the bertolini and denis pair, the results were not significantly different because the majority of respondents considered that both brand names were from abroad. for the pure and purni brand name pair for mineral water products, the absence of differences in perception from respondents is very likely due to the convenience goods product category. for consumer goods products, consumers no longer prefer brand names based on quality. consumers consider that the quality of global and local brand products is no longer too different (siswati et al., 2020). the results of this study are in contrast to those conducted by fahmi and chairy (2020) which show that local brands (murni) will be preferred by consumers over foreign brand names (pure). as for the aspects of luxury and modernity, all pairs of brand names analyzed show significant differences in perception, that foreign brand names are perceived better than local brand names. this is in line with research conducted by soto et al (2009) which shows that brand names using foreign languages, especially english, are better than local languages for hedonic, hybrid, and functional products. thus the results of this study strengthen previous findings conducted (porto and da silva soyer, 2018; yu et al., 2022), as well as having better product features (moment et al., 2022). english for indonesians has become a symbol of modernity (gunarwan, 1998; colluzi, 2011). meanwhile, product brand names that use foreign languages, especially english, are considered to show more modernity than local languages (gupta and verma, 2017). another aspect of foreign brand names is luxury. the results of this study strengthen previous studies on the perception of foreign brand names which show that foreign brand names are considered to show more luxury (kinra, 2006; meng and clark, 2009; krupka et al., 2017). thus, giving brand names that use foreign languages, especially english in developing countries, will affect consumer perceptions. the use of brand language is very important to increase consumers’ positive perceptions of the brand name of the product offered. in developing countries, the use of foreign languages or appearing to come from abroad is an important aspect considered in entering the market. brand names that use foreign languages, especially english, are considered better than brand names that use local languages. in addition, brand names using foreign languages, especially english, are considered more qualified than brand names using local languages. brand names that use foreign languages, especially english, are considered to show more luxury than brand names with local languages. finally, brand names using foreign languages are considered more 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(2019) ‘local brand origin knowledge of young consumers in a developing country’, int. j. applied management science, 11, pp.72-90. muhari, s., yusuf f.a., (2020), brand image of domestic products: empirical evidence from indonesia, psychology and education 57, 2117-2129. microsoft word 1ok okey huriye sabanci.doc international review of management and marketing vol. 2, no. 2, 2012, pp.75-82 issn: 2146-4405 www.econjournals.com the role of family control on financial performance of family business in gebze huriye sabanci özer phd student okan university, business administration programme, istanbul, turkey. e-mail: huriye@samopar.com abstract: this paper analysis the role of family control on financial performance of family business by using the key financial data of family businesses of 16 firm registred to gebze chamber of commerce. in this paper, financial performance of a family business is measured by using return on assets, return on sales and total debt/total assets ratios. the family member ceo is more successful as far as roa ratios concerned, but is less successful as far as td/ta ratios concerned, in comparison to non family member ceo. in other words, the non family member ceo is more successful as far as td/ta ratios concerned, but is less successful as far as roa ratios concerned, in comparison to family member ceo. additionally, as far as ros ratios concerned, there is no significant difference between family member ceo and non family member ceo. overall, the results are consistent with the hypotheses that there is difference between roa of family member ceo and non family member ceo, and there is difference between td/ta of family member ceo and non family member ceo. keywords: family business; family control; financial performance jel classifications: g32; g34 1. introduction in recent years, firm performance has received considerable attention as a substantial academic subject for investigating family business in the financial and management literature. researchers and academicians have chosen different approaches for the exploration of this issue. in the previous studies, the effect of family ownership, family control, control-enhancing, family business versus nonfamily business and founders versus second following generations have analyzed on firm performance by financially and non-financially. family businesses’ performance is better than nonfamily businsesses, for both profitability and financial structures; and on the other hand, the level of family control strongly influences performance, at least in terms of profitability (allouche et al., 2008). family firms controlled by the founders are generally run more efficiently, and have greater value as measured by the market equity / book equity ratio than other firms have and also, carry less debt in comparison to other firms (mcconaughy et al., 2001). bhagat and bolton (2008) mentioned that the stock ownership of board members and the board independence are positively correlated with poor firm performance. zahra (2003) shows that family involvement in management makes a significant difference in explaining its internationalization with higher sales in the international operations of family firms. chrisman et al., (2004) found out that the short-term sales growth for small family and nonfamily firms are statistically equal. assuming all other things constant, family firms are better off in terms of faster growth and bigger profitability. firms, in which founding family members participate in management, perform even better. despite their stronger growth, no evidence is found that family firms are less stable than other firms in the long run (lee, 2006). the role of family control on financial performance of family business in gebze 76 anderson and reeb (2003) found that family firms with founding family ownership and a family ceo, significantly show better performance than nonfamily firms by using profitability-based measures of firm performance. however, family firms with founding family ownership and a founding family ceo or a nonfamily ceo combination accumulate higher market value creation. the role of family control on financial performance is an empirical issue. it is investigated in this study and this paper is structured as follows: first, an introductory section, then, a literature review on family business, governance system, family control, firm performance related to finacial ratios is analyzed. this is followed by hypotheses and creation of a model describing the effect of family member ceo and non family member ceo on firm financial performance. later, a sample of 16 family-owned companies in gebze is examined with respect to return on assets, return on sales and total debt / total assets from financial ratios to determine the effect of family member ceo and non family member ceo on financial performance of family business. the sampling and methodology are described, and the results of study are obtained, evaluated and explained. the last section includes the conclusion with leading the way for future researches. the frame of research question is to seek an answer to the question of that “does family control play a role on financial performance of the family business in gebze?” 2. literature review 2.1 family business family businesses have significant role in the world economy. studies show that three tenth of family businesses are transfered to the second generation, while the average life of a family business is 24 years which is significantly short. there are different definitions of family business and no clear consensus has emerged concerning the definition of family business. content, purpose and family influence are the common aspects of the family business definitions. most definitions are focused on ownership, family involvement, family control and the intention to transfer the family firm, etc. issues like ownership, governance and trans-generational are also included to the definition of family firm for analyses purposes. in brief, some definitions are still open to discussion, but the elements of involvement and the core approaches seems to be overlapping (chrisman et al., 2005). according to the bowman-upton’ s (2009) simplified definition, a majority of the ownership or control are under a family, and two or more a majority of the ownership or control are under a family business which is like any business. churchill and hatten (1987) who say the family owned business is a founder-operated business where there is the anticipation that a younger family member will assume control of the business from an elder member. between the various definitions, chua et al. (1999) propose a definition in their research which is inclusive of all other definitions in the literature. according to this definition, the family business is a business governed and/or managed with the intention to shape and pursue the vision of the business that is shared by a dominant coalition controlled by members of the same family or a small number of families in a manner that is potentially sustainable across generations. another definition is focusing on components of family business, such as ownership, governance, management, and transgenerational succession; and the definition concerning on what is a family business, including the intent of the family to keep control, firm behavior, and idiosyncratic resources that arise from family involvement, are differentiated by chrisman et al. (2005). astrachan et al. (2002) developed the family power experience culture scale to measure family involvement in business and in the new definitions; the common points are family, management, ownership, and business but they include culture into the family business definitions. the culture should be included since family’s specific culture becomes business culture in time. therefore, the definition of family owned business builds up from all these concepts. it is sure that family business is a complicated set of relationships between the family as an entity, individual family members, and the business itself. the effective management of the overlap between family and business, rather than on resources or processes in either the family or the business systems, is the key ingredients of the success of family firms (olson et al., 2003). beyond the definitions above, type of governance system, management structure, and type of managers in this structure plays a definitive role in defining the family firms. composition of international review of management and marketing, vol. 2, no.2, 2012, pp.75-82 77 corporate board and the top executive position i.e. ceo position are undeniably effecting the both operational and financial performances of family firm. 2.2 corporate governance system and family control in the family owned businesses, one of the most crucial problems is the sustainability; and one of the best ways of overcoming this problem is to form a corporate governance system. according to gillan and starks (1998) corporate governance is as the system of laws, rules, and factors that control operations at a company. the pillar of corporate governance is to endorse the core values accountability, transparency, fairness, disclosure and responsibility; that are pertinent to the success of all business, and are irrelevant to its source (gulzar and wang, 2010). system for corporate governance; not only includes the processes, structures, policies and laws for the purpose of managing a company, but also contains the approach of the board for watching over to the company's operations, and also the accountability of board members to the company and its shareholders. in short, the family business’ governance system is the system of structures and processes by which the family business is directed and controlled. the most outstanding governance mechanism of the internal control system of a firm is the board of directors’s structure (jensen, 1993). high family involvement and long tenure in management are often characterized with family firms. thus, family-controlled firms could have better sense of recognizing opportunities and uncertainties, and also long-term planning horizons. this could not only lead to increased continuity, but also stronger patience during the investment period in new business opportunities to create family wealth (zahra, 2005). villalonga and amit (2006) claim that there are at least three similarities in family business that are: (1) one or more families hold a significant part of the capital; (2) family members have significant control over the company, which is paralel to the distribution of capital and voting rights between non family shareholders, with possible statutory or legal restrictions; and (3) top management positions are held by family members. within publicly listed family businesses, if family members control the majority of board seats as ceo, the firm has experienced lower stock market valuation (wong et al., 2010). families are often intented to limit executive management positions to the family members, which is a restriction of labor pool resulting lack of potentially qualified and capable talents; resulting loss of competitive disadvantages relative to non family firms. there are two primary concerns in family ceos: first, family ceos’ performance is potentially magnified in the family business. the second concern is the cost of excluding more capable and talented outside ceo, since ceo succession is potentially one family member ceo to another family member ceo (anderson and reeb, 2003). however, as far as the board memberships are concerned, study performed by barontini and caprio (2005) shows family-controlled firms seem to perform worse than non family firms when the family is not represented in the board. arosa et al. (2010) stated the independent directors do not improve firm performance. family management creates value only when the founder serves as the ceo of the family firm or as its chairman with a non family ceo, in contrast descendants destroys value when they serve as chairman or ceo in the firm (villalonga and amit, 2006). mcconaughy and phillips (1999) agreed that founder-controlled firms grow faster and invest more in capital assets and research and development. however, despite the findings of villalonga and amit (2006), mcconaughy and phillips (1999) found that descendant-controlled firms are more profitable. 2.3 sustainability and financial performance universal definition of the sustainability relates to the factors which influence the ability to help meet today’s needs while nosacrifices are made to the ability of future generations to meet their own needs (wced, 1987). the sustainability of family business system as a holistic entity and endangers the equitably of family and business system (danes et. al., 2008). the function of both business success and family functuanality is sustainability of a family business (stafford et. al., 1999). the key issue of family business sustainabiliy is the need to secure the long term survival and continuity of the business in terms of ownership meanwhile balancing the need to energize the business entrepreneurially and managerially. valuable, rare, inimitable and lack of substituted resources around which how well managers build their organizations is a function of firm performance. all assets, capabilities, organizational processes, the role of family control on financial performance of family business in gebze 78 firm attributes, information, knowledge etc. that are controlled by a firm, are the resources. for impoving its efficiency and effectiveness, those resources make the firm able to conceive of and implement strategies (barney, 1991). efficiencies in terms of utilization of resources and meanwhile the accomplishment of organizational goals are refered to performance, as broadly defined (dyer, 2006). firm performance can be measured by financially and non-financially (neely et al., 2000). firm financial performance is to measure the results of a firm's policies and operations in monetary terms. how well a firm can use assets from its primary mode of business and generate revenues is a subjective measure that is also used as a general measure of a firm's overall financial health over a given period of time. firms incline to operate in the dark without measurement including the financial ones, since they have no reference to work with. the two key categories for the measurement of firm financial performance are; accounting based measures and market based measures. accounting based measurement uses historical data, and is a more backward and inward looking focus. nevertheless, nicholson and kiel (2003) have included roa as a measure of corporate performance as this is a common measure used in the literature. maury (2006) stated that family control is associated with higher firm valuation by using financial ratios of family business. controversially, smith and amoako-adu (1999) found that long-term industry adjusted return on assets (roa) improves significantly more with the appointment of nonfamily insiders and outsiders than family members. according to brown and caylor (2009) no former ceo serving on the board is significantly and positively related to return on assets (roa), and positively linked to the operating performance. financial performance suffers in case of, first, ownership or control is too concentrated or dispersed, secondly, control is exercised without much ownership, and finally, too many family members clash or drain resources (miller and le breton-miller, 2006). in finance, the role of family control is under-studied, and the stability of business and long-term planning are secured by family ownership (chahin, 2007). in the modern literature, researchers have utilized roa, ros and total debt/total assets, as the most important financial ratios in the measurement of family firm performance. some of those researchers are bhagat and bolton (2008), navarro et al. (2011), mcconaughy and phillips (1999), barontini and caprio (2005), anderson and reeb (2003), and maury (2006). the brief definitions of roa, ros and total debt / total assests are at below. return on assets (roa) is a profitability ratio (net income / total asstes). the roa formula reflects a management’s ability to generate income during the course of a given period, usually a year. return on sales (ros) is a profitability ratio (net income / net saless). the ros shows how efficiently management uses the sales dollar, thus reflecting its ability to manage costs and overheads and operate efficiently. total debt to total assets is a debt ratio. it is used to measure a company's financial risk by determining how much of the company's assets have been financed by debt. the lower this ratio generally the better off the company. 3. hypothesis in this study the hypotheses were made as follows: h1a : there is difference between roa of family member ceo and non family member ceo. h1b : there i differene between ros of family member ceo and non family member ceo. h1c : there is difference between total debt/total assets of family member ceo and non family member ceo. 4. methodology 51 companies registered to the gebze chamber of commerce are contacted for the interview via telephone. however, 35 companies declined the request for interview since they do not want to share key financial information for corporate confidentiality policies. for the rest, ceos of 16 companies are face-to-face interviewed. all the 16 interviewed companies are family business, of which, 4 companies’ 51% or more shares are owned by a single family. the rest 12 companies’ 100% shares are under the ownership of a single international review of management and marketing, vol. 2, no.2, 2012, pp.75-82 79 family. from the perspective of ceo position, 4 of those companies have non family member ceo and 12 of those have family member ceo. all the financial data obtained from the companies are from the fiscal year 2008-2010. in this study, mann-whitney test is utilized. roa, ros and total debt/total assets were selected as dependent variable. family member ceo and non family member ceo were selected as independent variable. diagramme i illustrates the effect of family member ceo and non family member ceo on financial performance of family business. return on assets family member ceo return on sales t. debt/t. assets financial performance of family business return on assets non family member ceo return on sales t. debt/t. assets diagramme i. model for measuring the effect of family member ceos versus non family member ceos on financial performance of family business 5. results according to the results shown in table 1, 2, and 3, there is significant difference in roa criterion regarding family member ceo or non family member ceo. this result is confirmed by descriptive statistic table (table 4) yielding roa of family member ceo being 1.6 and non family member ceo 0.428. as for comparing the total debt/total assets ratio descriptive statistic table shows the values for family member ceo as 1.216 whereas 0.0950 for non family ceo total debt/total assets. the difference is significant at 0.0064. in other words, total debt/total assets ratio of family member ceo is significantly greater. finally, for ros ratio, it can be concluded that there is no significant difference between family member ceo and non family member ceo at 0.2994 significance level. table 1. mann-whitney test and ci: fmemceoroa; nonfmemceoroa n median fmemceoroa 12 1,760 nonfmemceoroa 4 0,245 point estimate for eta1-eta2 is 1,400 95,5 percent ci for eta1-eta2 is (0,121;1,880) w = 120,0 test of eta1 = eta2 vs eta1 not = eta2 is significant at 0,0338 the role of family control on financial performance of family business in gebze 80 as a result, it can be said that family member ceo is more successful in the roa ratio of the company, but less for the total debt/total assets ratio. the probable reason is that family member ceo is more likely to make aggressive investment for the future of the company. on the other hand, non family member ceo is less successful in roa ratio, but more successful in total debt/total assets ratio. the probable reason is that non family member ceo is more carefull about borrowing. table 2. mann-whitney test and ci: fmemceodebtassets; nonfmemceodebtassets n median fmemceodebtassets 12 1,2850 nonfmemceodebtassets 4 0,0700 point estimate for eta1-eta2 is 1,2350 95,5 percent ci for eta1-eta2 is (0,5699;1,6400) w = 125,0 test of eta1 = eta2 vs eta1 not = eta2 is significant at 0,0064 table 3. mann-whitney test and ci: fmemceoros; nonfmemceoros n median fmemceoros 12 0,0800 nonfmemceoros 4 0,0300 point estimate for eta1-eta2 is 0,0500 95,5 percent ci for eta1-eta2 is (-0,0199;0,5000) w = 111,0 test of eta1 = eta2 vs eta1 not = eta2 is significant at 0,3026 the test is significant at 0,2994 (adjusted for ties) table 4. descriptive statistics variables abbrevation mean stdev family member ceo total debt / total assets fmemceodebtassets 1,216 0,523 family member ceo return on sales fmemceoros 0,1867 0,2176 family member ceo return on assets fmemceoroa 1,600 0,802 nonfamily member ceo total debt / total assets nonfmemceodebtassets 0,0950 0,0900 nonfamily member ceo return on sales nonfmemceoros 0,03250 0,01258 nonfamily member ceo return on assets nonfmemceoroa 0,428 0,531 6. conclusion the most common form of business organization is family business in the world. family businesses have different characteristics which seperate them from the businesses owned by diverse shareholders, and these characteristics may result greater efficiency and higher profitability than other firms. finacial performance is one of the most important indicators for family business’ sustainability. in the literature, there is no study focusing on relationship between family control and financial performance in turkey, and this article is an example to fill this gap. in this study, financial data obtained from the companies regarding the fiscal years 2008-2010. the difference between roa of family member ceo and non family member ceo, and the difference international review of management and marketing, vol. 2, no.2, 2012, pp.75-82 81 between total debt/total assets of family member ceo and non family member ceo were found significant. mann-whitney test was performed for measuring the effects of family member ceo and non family member ceo on the financial performance of family business. moreover, there is no significant difference between family member ceo and non family member ceo as far as return on sales ratios concerned. the model structured in this study can be expanded by adding other significant financial ratios for making more predictions. as far as the analysis in this study is concerned, following recommendations can be made: increasing sample size and nation wide sampling. more comprehensive financial data, including market value analysis, longer period of time for financial data can be used. for further analyses, the following issues can be studied: founder run family business versus second and more generation run family business for financial performance, family businesses versus nonfamily businesses for financial performance. in the literature, there are a limited number of articles about family business in turkey. considering the importance of this issue, it is necessary to study of different components of family businesses in turkey. references allouche, j., amann, b., jaussaud, j., kurashina, t. 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(2006), “how do family ownership, control, and management affect firm value?”. journal of financial economics, 80(2), 385–417. wced (1987), “report of the world commission on environment and development: our common future, un documents”. available at: www.un-documents.net/wced-ocf.htm . wong, y.j., chang, s.c., chen, l.y. (2010), “does a family-controlled firm perform better in corporate venturing?” corporate governance: an international review, 18(3), 175–192.192 zahra, s. (2003), “international expansion of u.s. manufacturing family businesses: the effect of ownership and involvement”. journal of business venturing, 18(4), 495–512. zahra, s. (2005), “entrepreneurial risk taking in family firms”. family business review, 18(1), 2340. “return on assets” http://www.qfinance.com/balance-sheets-calculations/return-on-assets “return on sales” http://www.qfinance.com/performance-management-calculations/return-on-sales “total debt to total assets” http://www.investopedia.com/terms/t/totaldebttototalassets.asp 08_bykov.indd international review of management and marketing | vol 5 • special issue • 2015 55 special issue for "media as the tool: management of social processes" international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2015, 5(special issue) 55-61. codes of journalism ethics in russia and the united states: traditions and the current practice of application aleksei yuryevich bykov1*, elena savova georgieva2, yuliya sokratovna danilova3, anna vitalyevna baychik4 1saint-petersburg state university, university embankment, 7/9, saint-petersburg 199034, russia, 2saint-petersburg state university, university embankment, 7/9, saint-petersburg 199034, russia, 3saint-petersburg state university, university embankment, 7/9, saint-petersburg 199034, russia, 4saint-petersburg state university, university embankment, 7/9, saint-petersburg 199034, russia. *email: a.y.bykov@spbu.ru abstract the purpose of the article is to identify the main categories stated in the codes of journalism ethics in russia and the united states, as well as the principles of their practical application. as a part of the comparative analysis of the codes of the journalism organizations of the two countries, we identify factors affecting the adoption and contents of the documents and the approaches to the regulation of different areas of professional activity which were refl ected in these documents. the author applies the method of historical study (comparative historical method), the logical method of a comparative analysis of documents, i.e., the codes of professional ethics (the attention is paid both to substantive and quantitative aspects), elements of the situation analysis. the key issues addressed in the article include the legal, political and professional traditions that predetermined the emergence of the codes of journalism ethics in russia and the united states of america; the algorithm of regulating a journalist’s relationships with other participants of his professional career (a journalist and the audience of a publication, a journalist and the sources of information, etc.); practical approaches to resolving ethical issues arising in the process of journalist’s work. the fi ndings of the study show that the historical conditions of the development of the two states, as well as their political traditions, infl uenced the development of journalism and formation of the professional journalism culture. these factors predetermined the specifi c features of the codes of journalism ethics in russia and the united states, in particular, the time of the adoption of the fi rst codes, the current number of such codes, their substantive features, specifi cs of their implementation. keywords: code of ethics, journalism standards, freedom of speech, political traditions jel classifi cations: z13, z18 1. introduction practice of the application of codes of journalism ethics dates back several decades. over these years, a large number of documents have appeared which have been adopted at different levels and have different status. cultural and political traditions of the states largely predetermined the practice of the application of these documents, their substantive specifi cs. democratic principles of the western countries, the existing culture of political relations between the authorities, the society and the mass media were to provide the conditions for the seamless establishment of selfregulation of the journalistic community. such process became a reality in the united states, where since the beginning of statehood liberal values have been assimilated and dynamically implemented. on the contrary, a more rigid “vertical of power” in the eastern world, including the historically developed foundations of autocracy and absolutism in russia suggested a different model of self-organization of the journalistic community. it is obvious that the current situation cannot be understood without realizing the reasons of the establishment of the practice of ethical regulation of journalistic activity and the specifi city of its development. 1.1. codes of ethics in the media industry of the united states the assumption of the earlier establishment of the ideas of selfregulation of media in the western world is substantiated by bykov, et al.: codes of journalism ethics in russia and the united states: traditions and the current practice of application international review of management and marketing | vol 5 • special issue • 201556 historical facts. the discussion of the mission of a journalist and the mission of journalism in general began in the united states at the time, when the fi rst newspapers were published in boston and then in philadelphia at the turn of the 18th century. the fi rst codes of journalism ethics appeared in europe and the united states at the turn of the 20th century. the earliest ethics documents for journalists adopted in the united states are considered to be the kansas code of ethics for newspapers and the oregon code of ethics for journalism adopted by the oregon newspaper publishers association in 1922 (pratte, 1995). these were two local sets of rules, adopted by the newspaper editors of kansas and oregon respectively. one of the keynotes of these texts was a declaration of commitment to the norms of balanced coverage of events and restrained creation of sensations. the next step was the development of a national instrument, the canons of journalism (code of ethics or canons of journalism, 1923). this code was adopted in 1923 by the american society of newspaper editors. the main provisions of the code were the articles concerning the responsibility of a journalist and the need to take care of the interests of the society, the freedom of the press, the independence of journalists from different infl uences, except for the infl uence of the public interest, thorough and accurate presentation of information, etc. one of the articles provided for the obligation to inform the public about the mistakes made in a publication. the text was approved by many publishers in the united states, who expressed willingness to follow the declaration. among them were the detroit news, the chicago tribune, the chicago daily news. these newspapers were gaining popularity with the readers and cared about their reputation, while trying to dissociate themselves from scandalous tabloids. soon thereafter the new documents of this kind emerged, which either claimed the national status or, more often, reflected the interests of a certain organization. in 1926, the society of professional journalists code of ethics was adopted. this code obliged journalists to fi nd and communicate truthful information, to minimize any harm resulting from journalistic activity, to commit to independence and openness, to educate the audience. 3 years later, the national association of broadcasters adopted its codes of practices (1929), targeted primarily at radio journalists. since 1952 it has extended to television broadcasters. along with the general provisions on the mission of radio and television journalists, there is some evidence for specifi c restrictions, concerning the amount of advertising, particularly that of medicines, the programming standards, etc. one can also list some other well-known organizations that adopted this kind of documents: american auto racing writers and broadcasters association, american society of newspaper editors, association of health care journalists statement of principles, associated press managing editors, college media advisers, national association of black journalists, national association of science writers, national press photographers association, online journalism review, poynter online, radiotelevision news directors association, society of american business editors and writers, society for news design. as a rule, such documents are recommendatory, but many members of the association or organization declare that they support the declared principles. for example, the codes of practices adopted by the national association of broadcasters in 1929 was supported by about half of radio broadcasting companies and a little less than two-thirds of television broadcasting companies. the situation is different with the codes of ethics, adopted at the level of individual editorial boards and media: they can be binding for their staff. for example, the requirement to follow the code of ethics is included into the employment contract, and then it becomes mandatory. among the documents adopted at the editorial level, we can name the editorial ethics policy (chicago tribune), the los angeles times ethics guidelines (los angeles times), the businessweek code of journalistic ethics (bloomberg business week). currently dozens of ethics codes have already been adopted. to take a closer look at these documents, one may refer to the collection presented in the media section on the website of the illinois institute of technology (codes repository). 1.2. codes of journalism ethics in russia codes of journalism ethics appeared in russia much later, although the idea of a journalist’s responsibility to the society had already been expressed several centuries before. for example, in the 18th century m. v. lomonosov in his work “on the duties of journalists in course of writing compositions,” intended to maintain the freedom of philosophy outlined the rules that must be followed by a journalist. among them are impartiality, independence in working with words and others (nazaretyan, 2010). these approaches are refl ected in many codes adopted much later, as well as codes which are currently in force. a code of journalism ethics in russia is a product of the 20th century. until then, moral standards of the profession were discussed in journalistic collectives and in the press, they often became the subject of scientifi c research, were studied by future journalists at universities. in other words, journalism ethics in russia and the soviet union attracted the attention of professionals and of the society in general and often became a matter of argument. sometimes the ussr acted as an initiator of the discussion of the issues of journalism ethics at the international level. this, for example, is evidenced by the participation in the creation of the international organization of journalists after the second world war in 1946, and the further work under its auspices. one of the areas of activity of the organization was to draw the attention of the international journalism community to the issues of journalism ethics and to develop a dialogue in this area. the codes of journalism ethics in the form of written documents began to appear in the 1990’s. among the fi rst most important documents were the codes of journalism ethics, adopted in 1991 and 1994. their development and adoption were coordinated by the russian union of journalists, and the discussion began within the framework of the all-union organization, the union of journalists of the ussr. these documents stipulate the need for compliance with existing norms and laws, declare commitment to the principles of disseminating reliable information, making a bykov, et al.: codes of journalism ethics in russia and the united states: traditions and the current practice of application international review of management and marketing | vol 5 • special issue • 2015 57 distinction between facts and opinions. a journalist should correct errors in case of publication of incorrect or false information, refrain from using confi dential information for personal purposes, comply with the copyrights, etc. in 1994, the journalists from various media outlets, concerned about the further development of the russian journalism, developed and signed the declaration of the moscow charter of journalists. 27 signatories, among them representatives of the leading russian media (the echo of moscow, the kommersant, the moscow news and others), offered 11 provisions and expressed readiness to follow them in their work. the provisions of this declaration and of the code of journalism ethics of the russian union of journalists (1994) have much in common. the declaration also refers to the need to disseminate accurate information, stipulates the inadmissibility of plagiarism, emphasizes that a journalist’s professional activity is stopped when he takes up arms. the development of television and radio broadcasting in the new post-soviet conditions predetermined the development of the specifi c rules of professional conduct. they were formalized in the “charter of broadcasters” of 1999. the document was adopted on the initiative of the largest broadcasting companies of the time – the all-russia state television and radio broadcasting company, the public russian television, ntv, tv-5 moscow, tv-center, ren tv and a number of others. some rules of the document duplicated provisions of the codes and the declaration mentioned above, for example, articles on the reliability of the information, on making a distinction between facts and comments, on the correction of errors and inaccuracies. there were also some entirely new sections. among these one can mention the block on the protection of rights and legitimate interests of citizens and organizations, public health and morals. it stipulates the importance of respect for the citizens privacy (exceptions can be made only for the purposes of protection of public interest), refusal to demonstrate excessive cruelty and violence. for the fi rst time there was provision on the inadmissibility of organizing information campaigns aimed at purposeful discrediting individuals and organizations for opportunistic purposes (charter of broadcasters, 1999). russian journalists’ associations as well as individual editorial boards also adopted other codes of journalism ethics. for example, in 1997 the declaration of the russian guild of court reporters was published. it dealt with the professional conduct of journalists with regard to the specifi cs of the coverage of legal and judicial issues. a recent example is the development of ethical rules of work in social networks for journalists of the echo of moscow radio station at the end of 2014. these rules became the basis for the draft addendum to the charter of the radio station, which was published on its website on march 3, 2015. in this document there are theses regulating the political activity of journalists. for example, journalists should “refrain from any agitation and political activism in favor of any political party or politician during the election campaign.” they should also avoid “public criticism of editorial policy, colleagues, shareholders or guests of the editorial offi ce; this doesn’t refer to the criticism of their public positions” (draft addendum to the charter of the echo of moscow radio station, 2015). thus, there are obvious differences in the experience of formalization of the standards of journalism ethics in russia and in the usa. in russia, this process started much later, in the late twentieth century, while in the united states, the fi rst documents of this kind began to appear at the beginning of the 20th century. the quantitative ratio of codes in the two countries is also different. there are no exact statistics, but the rough estimates show that the number of american codes, including those adopted by national organizations of journalists, media industry associations, individual editorial boards, amounts to several hundred (account should be taken of the widespread practice of adoption of codes of ethics at the editorial level). the russian experience shows that there are only a few examples: the most famous codes adopted by the russian union of journalists and a number of moscow organizations have already been listed. in the non-metropolitan areas and among the members of journalistic community the initiatives of this kind are scarce. perhaps in this case one can talk about just a few dozens of such documents. the problem is to identify the causes of such differences, to assess factors which affected the adoption of codes of ethics and the practice of their application in russia and the united states – the two countries, representing different political cultures. 2. methodology as a part of refl ection on the problems that have been identifi ed, the authors apply several methods to reveal the historical and current specifi cs of the application of the codes of journalism ethics in russia and in the united states, to compare the special aspects of their implementation in different countries, to identify the causes of this state of affairs. the comparative historical method makes it possible to compare the standards of moral and ethical regulation of a journalist’s work in the two countries in different time periods. this method is typical for historiography and other areas of historical research. it is based, on the one hand, on a comparison, which is typical for almost any scientifi c research: any data analysis is impossible without comparison and identifi cation of common or different characteristics. on the other hand, the historical comparison involves studying the form and content of the processes or phenomena during different historical periods. that makes it possible both to discover essential manifestations of the studied phenomena at a certain stage and trace their dynamics. in the context of our study it is important to pay attention to the stage of appearance of the codes of journalism ethics in russia and the united states, as well as to the further establishment of the practice of application of the ethical standards in historical hindsight. the method of logical analysis involves the reconstruction of the development of a phenomenon or a system. at the same time a researcher uses the tools of theoretical analysis, explores the elements and relationships of a system. it is important to take into account the development of this system, instead of studying it separately, detached from the environment. a formalization of the process of the study and its results is also required. in our study the logical method is applied to the comparative analysis bykov, et al.: codes of journalism ethics in russia and the united states: traditions and the current practice of application international review of management and marketing | vol 5 • special issue • 201558 of documents, in particular – the codes of journalism ethics. while using a certain degree of formalization and identifying a number of substantive and quantitative characteristics, the documents are studied in the context of historical circumstances, the specifi cs of the activity of organizations by which they were adopted, the extent and effi ciency of infl uence on journalistic processes. because of the need to analyze the real situations which journalists encounter in addressing ethical confl icts, and to study the specifi cs of the application of the codes of journalism ethics on a case-bycase basis, the elements of the situation analysis are also applied. we identify typical situations and typical types of behavior of journalists, the effectiveness of the application of the codes of journalism ethics. it should be noted that these methods are used conjointly in the process of the study, which makes it possible to get more consistent results. 3. results the study shows that in russia and the united states the adoption of codes of journalism ethics was infl uenced by different factors. 3.1. development of the standards of journalism ethics in the united states: factors and priorities in the united states, these processes were largely caused by the dissatisfaction of a part of the journalistic community with the direction of the development of the press. the state of the american journalism at the turn of the 20th century was largely determined by the strengthening of the so-called “yellow press,” the development of the movement of muckrakers, the ambiguous economic status of media. the commercialization of the press, speculation on scandalous topics provoked discussion on the mission of the journalist in the society. this issue has become the subject of public discussion. some publications appeared that criticized the processes of commercialization of media, the impact of capital on print media. other targets of criticism were the monopolization of the mass media market, the concentration of media assets, reduced competition in some areas (for example, decreasing number of cities where two or more competing city newspapers were published). the corrupt practices, merging of the interests of the business and political elite and the media were also identifi ed. this sentiment, in particular, was refl ected in the studies and publications by sinclair (1920), seldes (1935), lippmann (1920; 1965), etc. the issues of journalism ethics were often raised in the works by these and other authors. after a couple of decades the american society became the stage of debates on the responsibility of the press to the society. in particular, the commission established in 1942 on the initiative of henry luce, the owner of the time magazine, came to disappointing conclusions concerning the status of the press freedom in the us. the situation required taking action to change the state of affairs, including self-recovery efforts in the journalistic community. an important factor which influenced the emergence of professional codes, was the creation of organizations, aimed at bringing journalists together and helping them to solve the arising problems. these processes became more intense in the early 20th century, although there were also some examples in the earlier history. for example, in 1887 the american newspaper publishers’ association (anpa) was established. among the goals of the anpa there was the organization of mutual assistance among its members, solving economic and other issues. among the organizations which appeared in subsequent years, there were a lot of well-known associations which were active throughout many decades. let us enumerate some of them. the national press club was established in 1908 and brought together journalism organizations, public funds and other associations. its goal was to develop collaboration between journalists, as well as to establish the ethical standards of the profession. in 1912 the american association of teachers of journalism was established. despite the fact that its main mission was to hold annual conferences and compile statistics, its activity greatly infl uenced the development of the profession of a journalist in the united states and identifying a set of competencies for journalism education. another union, the american society of newspaper editors (1922) is considered to be one of the fi rst major professional associations, which started to work at the national level. other associations, which include the american newspaper guild (1933) and anpa (1937), also contributed to self-organization of journalists. at about the same time the development of professional journalism education was under way in the united states. the attempts to start training journalists in educational institutions took effect only in the early 20th century. schools of journalism were established at columbia university, the university of missouri, the university of wisconsin and some others. the beginning of 20th century was dominated by a practice-oriented approach to the training of future journalists. subsequently the educational curricula began to include theoretical disciplines that enhanced the knowledge of graduates, who got an idea of the place of journalism in the society, its functions, goals and mission. professional publications for journalists were established. some of them were issued on the initiative of journalism organizations, as the bulletin of the american society of newspaper editors (asne bulletin, 1922). some publications appeared on the initiative of the professionals engaged in education. these include the journalism bulletin (1924), founded by lawrence murphy of the university of illinois. the american association of teachers of journalism began to prepare textbooks for students. the emergence of some of the professional media – broadcasting and cable, television quarterly an others – was also caused by the development of new types of media (shvetsova, 2009). the aforementioned print media addressed the problems of the journalism industry, the prospect of its development, the issues of professional conduct. these factors have largely predetermined the emergence of codes of journalism ethics in the united states, and have infl uenced their content. bykov, et al.: codes of journalism ethics in russia and the united states: traditions and the current practice of application international review of management and marketing | vol 5 • special issue • 2015 59 3.2. conditions of formation of the standards of ethics regulation of journalistic activity in russia the emergence of codes of journalism ethics in russia was predetermined by different historical and socio-political conditions. in the early 20th century, after the revolutionary turmoil, the development of media was regulated by the documents issued by the communist party and the government agencies. traditionally, the fi rst to be mentioned is the decree on press, issued on october 27, 1917 by the council of people’s commissars. this move, as well as the establishment of revolutionary tribunal of the press in 1918, involved encouraging media support for the new government. it brought about the closure of print media which were unfriendly towards the ruling party policy. before the late 1980s and early 1990s the bodies of the leading party of the ussr issued dozens of resolutions and decisions which determined the media activity. these included, for example, the decree of the council of people’s commissars of the ussr no. 21 “on the reorganization of the planning and regulation of the press” (1931), the decree of the central committee of the all-union communist party of the bolsheviks “on the workers’ press” (1932), the decrees of the central committee of the cpsu “on improving the management of the mass movement of correspondents of the workers’ and peasants soviet press” (1958), “on improving the radio information” (1964), etc. in these conditions, the standards of conduct for journalists were determined by resolutions and decisions of local party organizations. the fi rst code of journalism ethics was adopted only in 1991, at the congress of the union of journalists of the ussr. the appearance of the codes of journalism ethics in russia, as in the united states, was influenced by the creation of professional journalism organizations and unions. their rapid development began in the 1990s (prior to that, the most authoritative and virtually non-alternative organization was the union of journalists). the associations established in this period included the academy of russian television (1994), the russian public relations association (1991), the association of directors of communications and corporate media of russia (2004) and many others. the beginning of their activity was related to the adoption of declarations, which specifi ed the aim and objectives of the activities of almost each organization. they attracted interested professionals, held conferences and meetings, organized discussion of internal corporate issues, developed relevant documents. the development of journalism education encouraged the discussion of the work rules of media correspondents. the prototype of the modern journalism faculties and departments, which existed in russian universities over 100 years ago, was the practical training courses opened in moscow in 1905 under the guidance of professor vladimirov. it is also known that in 1909-1911 the leaders of the russian revolutionary movement (lenin, lunacharsky, etc.) taught the basics of journalism in the party schools which existed abroad. journalism training schools, and subsequently journalism faculties and departments were established in the major cities of the soviet union in the 1920s and 1930s. the researchers note that later training of journalists became more fundamental; curricula began to include courses in political science, cultural studies, religion, social studies, natural sciences, as well as a course of journalism ethics (kikhtan, 2015). schools of journalism studies were established at the universities, research papers in this fi eld began to appear. obviously, it does not make sense to analyze works on the history of journalism in general, because it is beyond the scope of this article. let us pay attention to the interest of researchers to the subject of journalistic ethics. among the authors who addressed these problems we can mention avraamov (2003), kirichek and fedotova (2004), lazutina (1999), richter (2002), tulsanova and dorsky (2011) and many others. these researchers, who represented different scientifi c schools and universities, characterized the situation with the development of journalism ethics in russia and abroad, identifi ed key problems, offered an analysis of the main documents, and outlined their vision of the further development of the situation. their works have become a basis for studying journalism in the russian universities and for further scientifi c inquiry. it should be noted that recently a number of works have appeared, where ethical issues are considered either in the context of the interdisciplinary research, or in relation to the functioning of the new media. in this respect one can refer to the studies by litvinenko (2012), nikonov (2013), potolokova and kurysheva (2013). the authors address directly the problems of political communication, information society, internet technologies; however, ethical issues get new meanings and solutions in this context. summing up the results of the study, we may note that in the united states formalized documents for journalists concerning the issues of moral and ethical conduct (ethics codes) appeared much earlier than in russia. the time lag is approximately 70 years: between the fi rst decades of the 20th century and the 1990s. this may indicate the presence of certain conditions in the society essential for the emergence of relevant documents. at the very minimum, the media institutions should get some autonomy and freedom; the relevant organizations and structures should begin to develop – professional journalism organizations, a system of training and a theoretical base for the fundamental understanding of the phenomenon. it is evident that this set of factors developed in russia only at the turn of the 21st century, whereas in the american society it existed several decades earlier, though in a slightly different form. besides, the historical analysis highlights a variety of the key factors which infl uenced the formation and development of journalism ethics in the two countries. in the united states, the attention was drawn to these issues due to the negative impact of the “yellow press,” the increasing amount of scandalous, negative information in the media. the response to this situation was the establishment of professional unions and associations, development of codes of ethics. in russia the phenomena of this kind are also observed to a certain extent: after becoming independent in the 1990s, the press became virtually unregulated, journalists from some media outlets did not feel any bykov, et al.: codes of journalism ethics in russia and the united states: traditions and the current practice of application international review of management and marketing | vol 5 • special issue • 201560 responsibility to the society, often “sailed close to the wind” in the legal fi eld. in this respect, the adoption of ethical standards helped to set some limits. however, in this case account should be taken of the decades-long dependence of journalists from the party-state structures, continuous work in the conditions of censorship. exemption from this dependence required new approaches to the regulation of mass-media. alongside with the legislative acts, the adopted codes of ethics could also perform this compensatory role. 4. discussion the discussion in the research literature on the emergence and the practice of current application of ethics codes is focused on several problematic aspects. as the russian author k. a. nazaretyan rightly points out, one point of view is based on the fact that journalism ethics emerged and developed alongside with the development of the journalism itself (nazaretyan, 2010). this view is shared by kumylganova, who points out the development of the moral consciousness of a journalist in the course of professional activity (kumylganova, 1992). another view of the problem assumes that journalism ethics began to develop alongside with the formation of the professional community of journalists, which took place in the middle and in the second half of the 19th century (avraamov, 2003). another debating point is related to the identifying of the reasons for the adoption of codes of ethics, the increasing interest in the self-regulation of media. this aspect of the problem is also addressed by different researchers. some of them believe that this development can be attributed to external factors. for instance, white asserts that codes of ethics are always adopted “under pressure from the outside, which induces the development of self-regulation.” mcquail shares the same opinion. he expresses confi dence that the moral principles of journalism are most clearly and vividly articulated in times of crisis and at the turning points in the history of the society (pattyn, 2000). a slightly different view of the problem is expressed by kaplar and maines, who focus on the journalists’ ability to take independent decisions. for example, they point out the main ethical principles taken by journalists from the classical liberal theory – independent gathering of information and skepticism towards authorities (kaplar and maines, 1995). among the issues under discussion is the possibility of the development of professional ethics by the journalistic community in authoritarian countries, which include the soviet union. the view that everything, including ethical principles, was determined by the party structures and government authorities, is questionable. while agreeing in general with these arguments, we have to note that in practice there were examples which did not fi t in this schema. for instance, the major editorial boards followed the rules that were currently refl ected in the ethics document of the journalism organizations‎ in different countries. these principles include, in particular, careful work with facts and revalidation of received data (dissemination of false or misleading information could have serious consequences for the author and the editor of a newspaper). another rule was that of inadmissibility of plagiarism. violation of this principle could also entail punishment. the principle of the social responsibility of journalism was also implemented. print media gave coverage to problem situations; the criticism was often followed by the authorities’ response and appropriate measures. systematic work with readers’ letters was underway. thus, the situation with the ethical standards in journalism in the soviet times was not unambiguous; many standards that were adopted by individual editorial boards were then refl ected in the codes of journalism ethics. 5. conclusion it is important to emphasize that the sphere of ethical standards and rules of journalism is not some rigid formation. despite the fact that the provisions of the basic documents seem to be fi rmly established and are often repeated in various texts, new codes are adopted, draft amendments to the existing codes appear. for example, in the fall of 2014 there were reports of the plans for introducing changes in the codes of ethics of the american journalists (spj). it was proposed to introduce amendments to the code adopted by the society of professional journalists, to add an article on providing access to the original information to the audience, when it is appropriate. it was also noted that journalists should not have to pay for news, and when this occurs, the published information should be indicated by a special mark. among the innovations introduced by another organization, the radio television digital news association was the recommendation for journalists to verify information, “to tell the remaining part of the story and acknowledge the absence of important additional information” (sadovskaya-komlach, 2014). this approach means that journalists are aware of the need to explain information, to help a reader, a listener or a viewer to get an understanding of the events which take place. this adjusts the earlier principles suggesting that a journalist is just an intermediary whose task is to transfer information from the source to the audience. further discussion should take place in the context of the political culture of different countries. this article only makes an assumption that the model of ethical regulation of journalistic activity is correlated with the social and political traditions of the society. what are the mechanisms and consequences of this infl uence? to what extent is it true for other countries, for the regions of eastern and northern europe, asia, etc.? it is evident that such research requires the use of additional methods, including polling, sociological surveys, and content analysis. certain transformations of the codes of ethics are likely to take place with the further development of the new media and means of communication. it is clear that in this situation the issues of the protection of privacy and personal information become particularly acute. the problems of the reliability of information, determining authorship of texts also become increasingly relevant. along with the existing universal approaches, unique ways of solving these problems are also possible in certain countries, which is in no small measure determined by the political and cultural traditions of their development. these issues require further attention of researchers. bykov, et al.: codes of journalism ethics in russia and the united states: 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/untaggedcmykhandling /leaveuntagged /untaggedrgbhandling /leaveuntagged /usedocumentbleed false >> ] >> setdistillerparams << /hwresolution [2400 2400] /pagesize [612.000 792.000] >> setpagedevice . international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2015, 5(4), 253-258. international review of management and marketing | vol 5 • issue 4 • 2015 253 the social environment and business communication in english: a small-scale research on front-line staff performance in russia, spain and france maria rubtsova1*, elena kapustkina2, ruben karapetyan3, ivan kovalev4, sergey rasskazov5 1department of social management and planning, faculty of sociology, saint petersburg state university, russian federation, 2department of economic sociology, faculty of sociology, saint petersburg state university, russian federation, 3department of economic sociology, faculty of sociology, saint petersburg state university, russian federation, 4department of social analysis and mathematical methods, faculty of sociology, saint petersburg state university, russian federation, 5department of social management and planning, faculty of sociology, saint petersburg state university, russian federation. *email: m.rubtsova@spbu.ru abstract the performance measuring of the english everyday use of the front-line personnel remains an important topic of theoretical and practical study. using a method of participant observation, the authors compared the st. petersburg business environment with two cities in spain (madrid, girona) and one in france (perpignan). the observers carried out 64 visits in four cities. the sampling method is a convenience sample. the research in spain and france was carried out in march-april, june-august 2014 and in russia in june-july 2015. the observers checked how the front-line staff performed business communication in english. the authors draw conclusion that st. petersburg demonstrates the worst results in the front-line interaction in english. keywords: front-line staff performance, business communication in english, assessment jel classifications: m12, m14, m53 1. introduction english became a foreign language for educational purposes in russia only in the 1970s (alpatov, 2000. p. 104). german was the main foreign language before (comrie, 1981). english became prestigious quickly; as a result, schools with more serious education in english appeared in all regions of the ussr (grenoble, 2003). parents estimated these schools as having a higher level. after the soviet union collapse, english became an extremely popular subject of study (alpatov, 2014). many parents enthusiastically gave their children the opportunity to learn english. parents paid to this subject much attention, even sending their children to language courses and foreign training. however, state and regional policies in support of this movement were not formulated (vahtin and golovko, 2004; rubtsova, 2007; rubtsova, 2011; pavenkov et al., 2015). contrary to the russian state, the spanish government and the government of autonomies have recently paid more attention to the support of english (lasagabaster and zarobe, 2010). so we are going to focus on the comparison between the russian and the spanish contexts with a view to the characteristics the english language use in russian social environment. we will consider the results of sociological research studies and census in russia and eurobarometer research studies in spain. the russian sociological organization “levada center” published the results of the survey “foreign language skills” (levada center, 2014). the survey took place between 25 and 28 april 2014 and was conducted throughout all of russia in both urban and rural settings. the survey was carried out among 1602 people over the age of 18 in 130 localities in 45 of the country’s regions. table 1 shows that 70% of the respondents did not speak any foreign languages, and 11% could speak fluently (more or less) in english. rubtsova, et al.: the social environment and business communication in english: a small-scale research on front-line staff performance in russia, spain and france international review of management and marketing | vol 5 • issue 4 • 2015254 in fact, the levada center data looks overtly optimistic against the background of official statistics. according to the official statistics census (2010), not more than 5.48% of russians think they can speak english. in 8 years a very small success was achieved from 4.84% to 5.48% (table 2). we will compare these results with those obtained in spain. we can use data from eurobarometer, which regularly conducts the study “europeans and their languages (2006, 2012).” the eurobarometer research shows more successful promotion of the english language among the young. the table 3 and the figure 1 give information about eurobarometer respondents’ answers. while only 5.9% of the population aged 55 or older speak english, among younger groups, the percentage of english language speakers reaches 45.9% for groups between 15 and 24 years old. despite the fact that we have not got enough information for the exact comparison, we can assume that spaniards speak english better than russians almost two times more (if we compare with levada center) and 4 times more (if we compare with russian official statistics). in both countries, parents have made efforts to ensure the future of their children. however, in one case, the spanish state and the regional governments have made much more effort; for example, they have organized a network of schools with bilingual programmes, while in russia the state does not do that and tries to protect the russian language only (rubtcova, 2015a; 2015b). perhaps that is why we have such differences. we would like to consider what effect the prevalence of the english language to the real business communication (blommaert, 2010). using a method of participant observation (garfinkel, 1967; noel, 1972; goffman, 1981; giddens, 2001), we decided to conduct a small-scale research of reactions of the st. petersburg business staff towards english. this type of research on the social and business environment is popular because it is inexpensive and can be performed without special training of interviewers, who may be commercial service visitors (usiaeva et al., 2015). we have already written in our papers (martyanova et al., 2013; malinina et al., 2015; rubtcova et al., 2015a; rubtcova et al., 2015c; vasilieva et al., 2015), that the communication in russia may essentially depend on the sustainable models of conduct of the professional communities. it is necessary to consider that the staff as a member of corporate relations in russia has a low level of satisfaction of its anticipations (tarando et al., 2015. p. 126). so there may be the staff`s resistance to innovations, such as communication in english (rubtcova, 2010). the method of participant observation allows us to find out how the employees in the commercial sector use english. it is a good way to know how employees actually relate to the english language and whether they can solve their everyday work tasks with the help of english. it should be noted that the language of business communication imposes other requirements (rubtcova et al., 2015b). for example, it is very important to understand the many accents and dialects (luckmann, 2009.). so small-scale research “the social environment and business communication in english in st. petersburg” addressed the following question: • how does front-line staff perform business communication in english? 2. data and methodology the data collection method was participant observation. our observers carried out 64 visits with 16 visits in each of the following four cities: st. petersburg (russia), madrid (spain), girona (spain), perpignan (france). there were eight visits to a bank and eight to mobile shopping (from 16). four observations were made in tourist areas and four observations in the outskirts of the city (from 8). one visit was made to each shop. cities in spain and france were chosen for comparison with the situation in st. petersburg the observed operations were: operations of bank accounts; assistance with atm; problems with the account; question about banking services; purchase of sim cards; change of mobile phone tariff; replacement of sim card for ipad; buying mobile phone. table 2: “i can speak…” the results of the two official censuses in russia (2002, 2010), federal state statistics service (2015) number of spread language i can speak… total, people 2002 group % 2002 total % i can speak… total, people 2010 group % 2010 total % growth from 2002 to 2010, % growth from 2002 to 2010, people 1 russian 142573285 99.18 98.21 137494893 99.41 96.25 −3.56 −5078392 2 english 6955315 4.84 4.79 7574303 5.48 5.30 8.90 618988 4 german 2895147 2.01 1.99 2069949 1.50 1.45 −28.50 −825198 11 french 705217 0.49 0.49 616394 0.45 0.43 −12.60 −88823 31 spanish 111900 0.08 0.08 152147 0.11 0.11 35.97 40247 table 1: do you speak more or less free in any foreign languages, and if so, on what: age distribution (multiple answers are possible), levada center, russia (2014) languages total age (years) 18-24 25-39 40-54 55 older english 11 22 17 9 3 german 2 2 3 3 2 spanish 2 2 1 1 2 french <1 1 <1 <1 <1 chinese <1 <1 1 <1 <1 other 2 1 1 2 2 speak some foreign language, but with big difficulty 13 21 18 10 7 generally, i do not speak foreign languages 70 49 61 74 83 rubtsova, et al.: the social environment and business communication in english: a small-scale research on front-line staff performance in russia, spain and france international review of management and marketing | vol 5 • issue 4 • 2015 255 the research in spain and france was carried out in march-april, june-august 2014. the observers were four russian tourists who do not speak spanish and french. their english level was basic, with a strong russian accent. the sampling method is a convenience sample. the research in russia was carried out in june-july 2015. the observers were two international students who do not speak russian. their english level was native-speaker (american observer) and basic (chinese observer). the sampling method is a convenience sample. all studies were conducted according to the professional ethical code of sociologists by the russian society of sociologists. it means that according to requirements of anonymity, the signed participant consent agreement cannot be asked for. all participants were asked to participate in the study and informed about the objectives of the research. participant consent to participate was gained. they were assured of the anonymity of their responses through the use of pseudonyms to report the results and were guaranteed the confidentiality of collecting data. they allowed to use the data for research purposes. 3. results in order to compare business communication in english in st. petersburg with other cities, our observers made 16 visits in st. petersburg and 48 visits in madrid (spain), girona (spain) and perpignan (france). other cities were selected by convenience sampling, because the study did not have funding. from these 16 visits in each city, there are eight visits to a bank and eight to mobile shopping. four observations were made in tourist areas and four observations in the outskirts of the city (from 8). the observed operations were: • operations of bank accounts; assistance with atm; problems with the account; question about banking services; • purchase of sim cards; change of mobile phone tariff; replacement of sim card for ipad; buying a mobile phone. the research in spain and france was carried out in marchapril, june-august 2014. observers are russian tourists (4 persons) who do not speak spanish or french. the english level is basic with a strong russian accent. the research in russia was carried out in june-july 2015. the observers were future international students (2 persons) who do not speak russian. the english level was: native (1 person), basic (1 person). our observers checked how the front-line staff performed business communication in english. in this section we discuss the results of these observations, which are presented in table 4. each case contains eight observations. if observation confirm feature it marked by a sign (+), if not, it marked by a sign (−). for example, the characteristic “the first employee, whom we asked, speaks english (1)” in column 2 means that only once observers met a first employee answered in english (+1) and seven times (−7) a first employee did not speak english. 4. discussion spaniards showed the loyal relation and readiness to help. even if the staff does not speak english, they often understand it. if they listen to a question in english, they can give a relevant answer in spanish. spaniards can have colleagues (compañeros) who speak english and ask them for help. usually, the younger staff speaks english. in girona the older generation in banks speaks english, however, it is usually one special person in the bank who speaks english very well. observers do not see this practice in madrid. our observers noted that “in girona bank employees speak english better than in madrid.” this is a small difference because the main part of the observers’ problems was solved in both cities. also girona is a bilingual community (spanish and catalan) and that might explain the difference. table 3: question d48b: “and which other language, if any, do you speak well enough in order to be able to have a conversation”: distribution of responses by age, spain age (years) language speak well: english (total) total yes (%) not 15-24 frequency 56 (45.9) 66 122 expected frequency 26 96.0 122.0 25-39 frequency 98 (34.9) 183 281 expected frequency 59.9 221.1 281.0 40-54 frequency 39 (15.9) 206 245 expected frequency 52.2 192.8 245.0 55 and older frequency 21 (5.9) 335 356 expected frequency 75.9 280.1 356.0 total frequency 214 790 1004 europeans and their languages, 2012 figure 1: question d48b: “and which other language, if any, do you speak well enough in order to be able to have a conversation”: distribution of responses by age, spain (europeans and their languages, 2012) rubtsova, et al.: the social environment and business communication in english: a small-scale research on front-line staff performance in russia, spain and france international review of management and marketing | vol 5 • issue 4 • 2015256 ta bl e 4: t he e ng lis h ev er yd ay u se o f t he fr on tlin e pe rs on ne l i n st . p et er sb ur g (r us si a) , m ad ri d, g ir on a (s pa in ) a nd p er pi gn an (f ra nc e) t he o bs er ve d op er at io ns st . p et er sb ur g (r us si a) m ad ri d (s pa in ) g ir on a (s pa in ) p er pi gn an (f ra nc e) b an k p ho ne b an k p ho ne b an k p ho ne b an k p ho ne 1 2 3 4 5 6 7 8 9 t he fi rs t e m pl oy ee , w ho m w e as ke d, sp ea ks e ng lis h (1 ) + (1 ) − (7 ) + (3 ) − (5 ) + (2 ) − (6 ) + (3 ) − (5 ) + (2 ) − (6 ) + (5 ) − (2 ) + (0 ) − (8 ) + (2 ) − (6 ) t he fi rs t e m pl oy ee , w ho m w e as ke d, s pe ak s e ng lis h: a pp ro xi m at e ag e (2 ) 25 -3 5 ye ar s ( 1) 25 -3 5 ye ar s ( 3) 25 -3 5 ye ar s (2 ) 25 -3 5 ye ar s (2 ) 35 -4 5 ye ar s (1 ) 35 -4 5 ye ar s (1 ) 45 -5 5 ye ar s (1 ) 25 -3 5 ye ar s (3 ) 35 -4 5 ye ar s (1 ) 45 -5 5 ye ar s (1 ) 25 -3 5 ye ar s (2 ) t he fi rs t e m pl oy ee , w ho m w e as ke d, s pe ak s e ng lis h: a pp ro xi m at e na tio na lit y (a ti tu la r/ tit ul ar fa m ily o r m ig ra nt /m ig ra nt fa m ily : i n co m pl ia nc e w ith th e r us si an c la ss ifi ca tio n. t he e ur op ea n u ni on d oe s no t u se th is ap pr oa ch ) ( 3) 25 -3 5 ye ar s ( 1) r us si an 25 -3 5 ye ar s ( 3) r us si an 25 -3 5 ye ar s (1 ) sp an is h 35 -4 5 ye ar s (1 ) a pp ro xi m at e m ig ra nt (r us si an ) 25 -3 5 ye ar s (1 ) sp an is h 25 -3 5 ye ar s (1 ) a pp ro xi m at e m ig ra nt (c hi ne se ) 35 -4 5 ye ar s (1 ) sp an is h 35 -4 5 ye ar s (1 ) sp an is h 45 -5 5 ye ar s (1 ) sp an is h 25 -3 5 ye ar s (2 ) sp an is h 25 -3 5 ye ar s (1 ) a pp ro xi m at e m ig ra nt (c hi ne se ) 35 -4 5 ye ar s (1 ) sp an is h 45 -5 5 ye ar s (1 ) a pp ro xi m at e m ig ra nt (n ot id en tifi ed ) 25 -3 5 ye ar s (1 ) fr en ch 25 -3 5 ye ar s (1 ) a pp ro xi m at e m ig ra nt (a ra bi an ) t he fi rs t e m pl oy ee , w ho m w e as ke d, sp ea ks e ng lis h: t he a pp ro xi m at e le ve l o f e ng lis h (o bs er ve rs w er e no t e ng lis h te ac he rs , a s ub je ct iv e op in io n) (4 ) • a ge • n at io n • a pp ro xi m at e le ve l o f e ng lis h 25 -3 5 ye ar s ( 1) r us si an , b as ic 25 -3 5 ye ar s ( 3) r us si an , b as ic 25 -3 5 ye ar s ( 1) r us si an , b eg in ne r 25 -3 5 ye ar s (1 ) sp an is h, b as ic 35 -4 5 ye ar s (1 ) a pp ro xi m at e m ig ra nt (r us si an ) un ab le to e st ab lis h, sw itc he d to r us si an 25 -3 5 ye ar s (1 ) sp an is h, b as ic 25 -3 5 ye ar s (1 ) a pp ro xi m at e m ig ra nt (c hi ne se ), b eg in ne r 35 -4 5 ye ar s (1 ) sp an is h, b as ic 35 -4 5 ye ar s (1 ) sp an is h, f lu en t 45 -5 5 ye ar s (1 ) sp an is h, u pp er in te rm ed ia te 25 -3 5 ye ar s (2 ) sp an is h, b as ic , b eg in ne r 25 -3 5 ye ar s (1 ) a pp ro xi m at e m ig ra nt (c hi ne se ), be gi nn er 35 -4 5 ye ar s (1 ), sp an is h, b as ic 45 -5 5 ye ar s (1 ) a pp ro xi m at e m ig ra nt (n ot id en tifi ed ) b as ic 25 -3 5 ye ar s (1 ) fr en ch , b as ic 25 -3 5 ye ar s (1 ) a pp ro xi m at e m ig ra nt (a ra bi an ), ba si c st af f ( so m eb od y) s pe ak s e ng lis h in th e of fic e (5 ) + (2 ) − (6 ) + (3 ) − (5 ) + (4 ) − (4 ) + (6 ) − (2 ) + (7 ) − (1 ) + (7 ) − (1 ) + (1 ) − (7 ) + (3 ) − (5 ) st af f d oe s no t s pe ak in e ng lis h, bu t u nd er st an ds it . w e ca n ha ve a re le va nt a ns w er in s pa ni sh (s pa in ), fr en ch (f ra nc e) o r r us si an (r us si a) it w as u se d w he n th er e w er e no e ng lis h sp ea ki ng s ta ff (6 ) + (1 ) + (3 ) + (1 ) + (1 ) + (1 ) + (2 ) n ob od y fr om s ta ff u nd er st an ds e ng lis h, b ut w e ca n ne go tia te w ith th e he lp o f g es tu re s, d ra w in gs , e tc ., o th er c lie nt s ca n he lp u s (7 ) + (1 ) + (1 ) + (1 ) + (1 ) + (1 ) + (1 ) t he h os til e/ im po lit e re ac tio n to th e e ng lis h, th e re je ct io n of co m m un ic at io ns (8 ) + (5 ) + (1 ) + (5 ) + (2 ) t he p ro bl em w as d ec id ed (9 ) + (2 ) − (6 ) + (4 ) − (4 ) + (6 ) − (2 ) + (8 ) − (0 ) + (8 ) − (0 ) + (8 ) − (0 ) + (2 ) − (6 ) + (6 ) − (2 ) a pp ro xi m at e ef fe ct iv en es s of co m m un ic at io n (1 0) (% ) 25 50 75 10 0 10 0 10 0 25 75 rubtsova, et al.: the social environment and business communication in english: a small-scale research on front-line staff performance in russia, spain and france international review of management and marketing | vol 5 • issue 4 • 2015 257 in perpignan (france) it is possible to see the hostile/impolite relation to english. it can be expressed in the full unwillingness to understand english and to answer questions. as a result, only two of eight visits to the banks were successful. in perpignan one of the office-workers escaped from the shop after hearing the english speech, while we certainly cannot prove that this was the reason. the shop remained without any supervision. it is interesting that it was in the tourist center of perpignan. in st. petersburg distinctions between the tourist center and residential areas of the city were very clear. in the residential areas, it was not possible to solve any problem, including the purchase of sim cards. nobody spoke english and wished to help. moreover, our observers said that the seller in one of the mobile phone shops behaved aggressively and answered: “yankee go home.” after that, he started shouting something loudly and they were compelled to leave this shop quickly. in the tourist center the relation was loyal, however, two banks could not find english-speaking personnel, and the problem was not solved. all operations with mobile phones were performed successfully, and the personnel spoke english well and was friendly. in our study we compared the st. petersburg social and business environment with two cities in spain (madrid, girona) and one in france (perpignan) and draw conclusion that st. petersburg demonstrates the worst results in the interaction in english. st. petersburg front-line personnel could show some disloyalty to people speaking english, especially in distance from the tourist center. although we have fixed one intolerant case in 16 visits, it causes our concern because other similar cases of xenophobia toward americans have been described (herrera, 2013). therefore, this situation has to be a subject of the special care. 4.1. limitation of the study although the small-scale research has been justified as an appropriate approach for addressing our research questions, a 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(2015), personal targets for public servants and their support the governance’s performance conception in russia. international review of management and marketing, 5(4), 1-7. . international review of management and marketing | vol 6 • special issue (s4) • 2016 91 international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2016, 6(s4) 91-100. special issue for “asia international conference (aic 2015), 5-6 december 2015, universiti teknologi malaysia, kuala lumpur, malaysia” knowledge management in the palestinian higher education: a research agenda abdullah waleed almudallal1*, syaharizatul noorizwan muktar2, norhani bakri3 1faculty of management, universiti teknologi malaysia, 2faculty of management, universiti teknologi malaysia, 3faculty of management, universiti teknologi malaysia. *email: as.modallal@gmail.com abstract this research tries to highlight on how knowledge management (km) will act as a good tool to connect all the university’s stakeholders such as: students, teachers, researchers, business and external entities, with work processes and technologies. today, the quality of higher education in developing countries has become more complex as they have to keep pace and compete with the international higher educational institutions (heis) standards. the purpose of this research is to provide empirical evidence that increases an understanding of km practices in heis within the context of instable environments, focusing on the unique geopolitical situation of the occupied palestine. a primary focus of this paper is to investigate the social phenomenon without explicit expectations or early assumptions, asking a deep qualitative questions of “why” people of palestine look for knowledge, “how” they use this knowledge, and “how” they face the instability of the complicated situation in order to develop a knowledge society. keywords: knowledge management, higher education, palestine jel classifications: d83, m10, i23, d74 1. introduction establishing the knowledge society appears to be one of the essential pillars for creating competitive and modern society (žarkovic et al., 2014). knowledge society, as stated by arayici (2014), refers to a society where knowledge is the main resource of production instead of other financial and raw resources, while human activities and development become dependent on a huge and unique capacity of knowledge. in the meanwhile, gherardi (2008) pointed out that knowing is something that people and groups do together in eve ry activity, by negotiating the meanings of words, actions situations and material artifacts. they all participate and contribute in our socially and culturally structured world, which is constantly reconstituted by the activities of all those who belong to it. the use of knowledge in a knowledge society, says roy (2014), is the main essential process in all domains of society such as economic, politics, instead of being limited to its pure societal cognition. furthermore, roy argues that knowledge society is characterized by the intensive connection between knowledge and action, as he is supporting the idea of seeing knowledge in books that still in books, as an information, if not mere data. it is only considered as knowledge when a man applies it practically in an action by do something. even though, every society has its own knowledge resources, however, sharma et al. (2009) argue that if a nation contains people of diverse skills, experiences, attributes, education and beliefs, is it simply considered as knowledge societies and others as less-developed societies? well, sharma et al., finds it hard to classify societies according to their knowledge capital because knowledge is interchangeable and transferable commodity that loses its value if remained inactive. in an increasingly complicated world, lifelong learning becomes indispensable, while education is no longer the privilege of an elite, nor a matter for one age group only; it tends to cover the entire society and the whole lifetime of the individual (unesco, 2005). referring to drucker (1994. p. 66) “education will become the center of the knowledge society, and the school its key institution. what knowledge must everybody have? what is ‘quality’ in learning and teaching? these will of necessity become central almudallal, et al.: knowledge management in the palestinian higher education: a research agenda international review of management and marketing | vol 6 • special issue (s4) • 201692 concerns of the knowledge society, and central political issues.” consequently, kamens, (2012) confirms that powerful and modern societies are built around the expansion of science and universities. additionally, kamens argues that universities, in the contemporary time, lose their limited and specialized function of career training, to become the main source of human capital development for a society, whereas everyone is deemed educable and education for all. in fact, universities, as learning organizations, will be able to increase knowledge skills, produce top quality, enhance creativity, and contribute effectively to knowledge production and human development (pinto, 2012). higher educational institutions (heis) are considered as knowledge hubs, where several activities are carried out to create, store, share, and apply knowledge. whereas teachers, students, and researchers are integral parts of academic institutions and all are engaged in the above activities (hoq and akter, 2012). hoq and akter (2012) continues, to spot the light on another group of people that are considered to be critical for setting and implementing the “knowledge agenda” of the university, called knowledge workers (kws) who act across all functions and departments of a university, and they are people who, when working, use their brain more than their muscles (mládková, 2011). as well as universities, firms are also seeking for flexible and adaptable kws in order to gain the competitive advantage. on another hand, ramakrishnan and yasin (2012) argues that modern universities have a vital role and huge responsibility to produce highly qualified graduates to go beyond the present and be able to respond to a future which cannot be easily predicted; these people are considered to be the intellectual capital of a nation, that are expected to have the ability to lead, produce new knowledge, identify problems, and provide creative solutions. due to the intangible character of knowledge, being deeply embedded in practice, which means that knowledge work does not lend itself particularly well to knowledge capture or standardication, hence, those who are engaged in this type of work need to be able to make decisions independently about what and how to do their work (mládková, 2011; newell et al., 2009). the quality of work of kws, as mládková (2011) argues, depends not only on their ability to create, share and use of knowledge, but also on how the work with knowledge is organized and managed in their organizations. therefore, knowledge scholars and researchers (e.g., syaharizatul, 2013; mládková, 2011; newell et al., 2009; spender, 2008; rao, 2006; hislop, 2005; drucker, 1994), have pointed out the significant role of today’s organizations to prepare an environment and facilitate a system where kws are effectively empowered to produce and share new creative knowledge, whereas knowledge management (km) helps organizations to meet this competitive role. in today’s new competition, organizations become aware about the importance of having a systematic approach to create, store, and share knowledge. km is a systematic effort to increase useful knowledge within the organization, by encouraging communication, offering opportunities to learn, and facilitating the sharing of knowledge (mcinerney, 2002). effective km systems identify and leverage the know-how embedded in practice, with a focus on how it will be applied (kidwell et al., 2000). significantly, learning and km are processes that involve change towards new levels of cognition and ways of understanding among individuals in an organization or a society (kamens, 2012; mcinerney, 2002). today’s heis as knowledge providers are aware of their valuable intelligences, and have adopted a changing role in a society, particularly the pace of evolution has entered a rapid speed, and those who can not learn, adapt, and change, are simply will not survive (laal, 2011; mohayidin et al., 2007). academic sector have significant opportunities to apply km practices to support their education, research, and public service mission (kamens, 2012; ramakrishnan and yasin, 2012; laal, 2011). according to mohayidin et al. (2007), the reason of considering university environment as very suitable for implementing km systems, is due to the nature of universities as an educational environment which involves in itself various kinds of knowledge creating and sharing processes, besides to the possess of modern information infrastructure. in addition, mohayidin et al., continues to point out that km principles have been proposed to be employed by heis for the purpose of doing essential and applied research, teaching suitable curricular program, utilization of knowledge for management decision support, increase knowledge shareing level, and application of knowledge for a qualitative change in the educational process. mainly, the influence of km on the performance of todays organization is actually derived from the importance of knowledge it self as a competitive added value for humans, organizations, and nations (cariša et al., 2014; erickson and rothberg, 2014; radmila et al., 2014). in spite of the consensus between all scholars and researchers on the high importance of knowledge for organizational development and success (e.g. de la vega, 2010; newell et al., 2009; gherardi, 2008; tsoukas, 2003; blackler, 1995; drucker, 1994; nonaka, 1994; wiig, 1993), they still stand on different views when it comes to the meaning of the concept of knowledge. this variance is clearly obvious between the two main epistemological camps of knowledge: objectivist perspective, and practice-based perspective (hislop, 2005; cook and brown, 1999). generally, contemporary managerial approaches and knowledge researches in organizations have remained focused on considering knowledge detached from the human actions and practices (souto, 2013), treating knowledge as a tangible objective entity that people can possess and could be separated from people or activities (virtanen, 2010; hislop, 2005; nonaka et al., 2000). in most of the studies and approaches conducted so far, knowledge in organizational context has been disconnected from its users, and so, these approaches have been mostly designed without been adapted to how and why knowers need a specific knowledge to contribute and support knowledge creation in their work practices (souto, 2013; souto, 2010), which led to limited designs of supportive approaches for such knowledge practices in todays organizations. mainly, individuals in dynamic organizational contexts and complicated environments, who regularly need and use complex and new knowledge cannot rely on knowledge approaches that are based only on what knowledge needed for, or used for, or what one knows. rather, they should contemplate on how and why practitioners need specific knowledge to create almudallal, et al.: knowledge management in the palestinian higher education: a research agenda international review of management and marketing | vol 6 • special issue (s4) • 2016 93 meanings in specific knowing situations (souto, 2013; corradi et al., 2008), as knowing is not separated from doing and the practice-based perspective connects both (souto, 2013; mládková, 2011; tsoukas, 2003; cook and brown, 1999). this study, therefore, is adopting the knowledge practice-based perspective, as knowledge is considered to be embedded in a situated activity and everyday life, where people create new knowledge by contributing cognitively and practically, in this socially and culturally structured life (syaharizatul, 2013; gherardi, 2008; tsoukas, 2003). whereas, practice-based perspective brings a deep understanding of how knowledge is situationally constructed, activated, transformed, emerged, mobilized and how it contributes to knowledge creation and is institutionalized (souto, 2013; corradi et al., 2008). on the other side of this research, as mentioned earlier, heis are the main productive instrument of societies for the effective use of knowledge. while the main concern of today’s universities is to develop top quality graduates, who should possess analytical and problem solving skills, and interpersonal understanding as part of their learning achievements, thereby, contributing to the national goal of developing a knowledge society (mohayidin et al., 2007). accordingly, km in heis will provide a set of practices for linking people (i.e. students, teachers, researchers, business and external entities), processes and technologies. it also focuses on how institutions can promote strategies and practices that help the different actors and practitioners to share, manage and apply new knowledge (pinto, 2012). back to year 2000, rowley claimed that higher education is in the core of knowledge business, pointing out that effective km may require significant change in culture and values, organisational structures, and reward systems. rowley’s article was titled by asking a major question “is higher education ready for km?” only few educational institutions are found to have a full-fledged km practice in place (devi et al., 2013; songsangyos, 2012; cranfield, 2011), while there is a rich and growing interest of research into km in commercial environments and public sector organizations (fullwood et al., 2013; sandhu et al., 2011). after reviewing the previous literature on km as applied in the hei sector, it was substantially lacking and limited. moreover, it was claimed by devi et al. (2013), fullwood et al. (2013) that the majority of related studies on km practices and its strategic key enablers, for example, policy and leadership, organizational culture, information technology, and measurements (devi et al., 2013; girard, 2005; stankosky, 2005; mcelroy, 2000), have focused on the commercial sector with only a handful on the heis. amongst the studies that focused on heis, the majority of the “handful” was not supported by empirical evidence except for a few. accordingly, there is a growing demand for more research that empirically assess km practices and its key enablers at heis in the context of complexity and instable environment. another important matter, that even though the focus on km has grown sharply in the past recent years, which sparked a plethora of definitions, a variety of explanations, and encompasses diverse disciplines (cranfield and taylor, 2008), however, these literature reviews are still remain elusive and lacking, when it comes to study km in a complex cultural and societal contexts (syaharizatul, 2013; van wijk et al., 2008; nonaka and takeuchi, 1995). moreover, most of the previous km liteature, particularly in the educational sector, were based on the western developed context and few other developing countries (perry, 2014; syaharizatul, 2013; barnard, 2013; ghaffari et al., 2012; sinha et al., 2012; awang et al., 2011; cranfield, 2011; ali, 2009; mohayidin et al., 2007; jack, 2004). within the context of palestinian higher education, universities have become ineffective as a result of their incapability to adaptively respond to various critical environmental challenges and pressures (shah, 2014). that is due to the israelpalestine conflict which remains one of the most intractable and polarizing in the world; whilst political and military elements of the conflict receive widespread media coverage and academic interests (penfold and ali, 2014; horton, 2009), the educational status is less well reported. literature on higher education sector in palestine suggests that most of the studies focus on easily quantifiable indicators such as teacher versus students’ ratios, access to higher education and equity (koni et al., 2013), however, these studies rarely assess the quality of education system in terms of knowledge process from the pointview of various stakeholder such as students and academic staff. generally, education in palestine is very unique because it is one of the very few places in the world that has been forced to develop under continuous challenges from external forces (silwadi and mayo, 2014). in this study, it will focus on this unique geopolitical situation of the occupied palestinian territories. while this current research will have the initiative to study deeply the case of km practices in the palestinian heis, in particular the case of gaza strip. this study will also investigate more about the impact factors that posses its affects on managing the palestinian heis and its knowledge resources towards developing potential kws. 2. knowledge as a practice-based concept during the mid-1990s, many organizations became more interested in the nature of knowledge, partly as a result of the introduction of information technology, which provided the promise of ability to manage knowledge as a corporate asset (syaharizatul, 2013). since then, knowledge was placed to be the most important and valuable asset in today’s organizations (žarkovic et al., 2014; minati, 2012). it has been seen as a strategy and a resource to be managed; and has gained popularity in business management in both theory and practice (syaharizatul, 2013; fenwick, 2008; lopes et al., 2005). the uprising significance of knowledge has raised desires of management studies scholars (e.g., tsoukas, 2003; brown and duguid, 2000; cook and brown, 1999; spender, 1996; blackler, 1995; nonaka, 1994; wiig, 1993) to grub deep on the meaning of knowledge. they have wrestled over what is knowledge (newell et al., 2009), representing one of the most fundamental questions that humanity has grappled with, and occupying the minds and interests of philosophers for centuries (hislop, 2005). as a result, it is obviously seen that there are two broad epistemological camps in the literature of knowledge: objectivist perspective, practice-based perspective (hislop, 2005). these two approaches, according to schultze (1999), are actually derived from, firstly, an almudallal, et al.: knowledge management in the palestinian higher education: a research agenda international review of management and marketing | vol 6 • special issue (s4) • 201694 objective stance which implies a realist ontology, which asserts that reality is independent of human perception, and a positivist epistemology, which claims that reality can be structured in terms of a priori concepts and categories. secondly, a subjective stance which implies a nominalist ontology, which asserts that reality is socially constructed as a result of individuals’ interactions with it, and an anti-positivist epistemology, which claims that reality is based on human experiences in this world. on the one hand, objectivists see knowledge as something exist in the human head and is acquired, modeled, and expressed precisely in the most objective and explicit terms possible (cook and brown, 1999). they believe that knowledge exists as an object, and is waiting to be discovered by humans (schultze, 1999), while knowledge is treated as an entity that people can possess (virtanen, 2010). according to hislop (2005), objectivist see that social world can be studied scientifically, and so social phenomena can be quantified and measured. as in table 1, hislop (2005) and nonaka et al. (2000) are also supporting the idea that explicit knowledge has the privilege over tacit knowledge. nonaka et al. (2000) believe that new knowledge is created dynamically and continually through a dialogue between tacit and explicit knowledge. hislop (2005) claims that developing and producing knowledge comes from a process of intellectual reflection, and is mainly a cognitive process. on the other hand, practice-based approach conceptualizes knowledge as socially constructed, embedded within and inseparable from practice and human activity (spender, 2008; hislop, 2005; tsoukas, 2003; gherardi, 2000). this means that knowledge is not seen as an objective entity that can be separated from people or activities (virtanen, 2010). further, knowledge “is neither possessed by any one agent, nor contained in any one repository” (schultze, 1999. p. 164). it is not resides in anyone’s mind, instead, knowledge exists in practice (becerra-fernandez and sabherwal, 2010). it is continuously shaping, and being shaped by the social interaction practices of communities and individuals (schultze, 1999). in addition, as practice-based perpective believe that tacit and explicit knowledge are inseparable (table 1), tsoukas (2003) clarify that tacit knowing is essential to every thought and action, therefore, it can not be converted into explicit knowledge. tsoukas argue that “tacit and explicit knowledge are not the two ends of a continuum, but the two sides of the same coin: even the most explicit kind of knowledge is underlain by tacit knowledge” (p. 425). the creation of new knowledge (from the practice-based perspective) is not when tacit knowledge becomes explicit, but when our skilled performance is punctuated in new ways through social interaction (tsoukas, 2003). as gaining knowledge comes through learning, gherardi (2000) mentioned that the concept of knowing in practice enables us to focus on the fact that, in everyday practices, learning and knowing are not separate activities, but they takes place in the experience flow, with or without our awareness of it. in meanwhile, we might know much more than we know we know, therefore, practice is a system of activities in which knowing is not separate from doing (gherardi, 2006; gherardi, 2000). moreover, blackler (1995) claims that rather than considering knowledge as something that we have, he suggets that knowing is better regarded as something we do. cook and brown (1999. p. 87) stated that “knowledge is commonly thought of as something we use in action but it is not understood to be action.” they used the term “knowing” to refer to the epistemological dimension of action itself, which is not meant to be something that is used in action or necessary to action, it is however a part of action or practice. cook and brown (1999. p. 388) then concluded that “we must see knowledge as a tool at the service of knowing not as something that, once possessed, is all that is needed to enable an action or practice.” stenmark (2002) clarifies that knowledge is not meant to result in action in order to exist, even though the ability to take an action is necessary, but knowledge will be worthless if it remains inactive. 3. km the different perspective of each knowledge epistemological camps, objectivists and practice-based, has led to a different perceptions of km (syaharizatul, 2013; newell et al., 2009; hislop, 2005; alavi and leidner, 2001). from the objectivists side, knowledge is considered as an object that people can possess (schultze, 1999; nonaka, 1994), thus, km should focus on building and managing knowledge stocks (alavi and leidner, 2001), by transfering or converting knowledge from one type (e.g., tacit, explicit) or location (e.g., individual, organizational) to another (newell et al., 2009), while the role of information technology involves gathering, storing, and transferring knowledge (alavi and leidner, 2001). on the other side, practice-based scholars sees knowledge as socially constructed and embedded in practice (gherardi, 2006; tsoukas, 2003; davenport and prusak, 1998; blackler, 1995); in this case, km should focus on knowledge flow and the processes of creating, sharing, and distributing knowledge (alavi and leidner, 2001), by sharing, translating, and legitimating knowledge amongst interacting groups and overlapping practices (newell et al., 2009), while the role of information technology is to provide link among the sources of knowledge to create wider breadth and depth of knowledge flows (alavi and leidner, 2001). generally, its argued by alvesson and kärreman (2001. p. 995) that “knowledge is an ambiguous, unspecific and dynamic phenomenon, table 1: objectivist and practice-based epistemologies of knowledge objectivist epistemology practice-based epistemology knowledge derived from an intellectual process knowledge is embedded in practice knowing/doing inseparable knowledge is a disembodied entity/object knowledge is embodied in people knowledge is socially constructed knowledge is objective “facts” knowledge is culturally embedded knowledge is contestable knowledge is socially constructed explicit knowledge (objective) privileged over tacit knowledge (subjective) tacit and explicit knowledge are inseparable and mutual constituted distinct knowledge categories knowledge is multidimensional almudallal, et al.: knowledge management in the palestinian higher education: a research agenda international review of management and marketing | vol 6 • special issue (s4) • 2016 95 intrinsically related to meaning, understanding and process, and therefore difficult to manage.” therefore, a critical discussion was conducted by hislop (2005) via asking a main serious question: is knowledge manageable? hislop argues that without considering knowledge as an amenable resource to management control, then the feasibility of km become questionable. as mentioned earlier, knowledge is not easily measured and very difficult to control and manage, that is because knowledge is intangable, invisible, and inseparable from humans beliefs and actions (davenport and prusak, 1998; tsoukas, 2003; hislop, 2005; gherardi, 2006). in brief, we can say that “while you may be able to manage related organizational processes like community building and knowledge exchange, you can not manage knowledge itself” (von krogh et al., 2000. p. 17). even though knowledge may not be amenable to a direct control, however, hislop (2005) highlights that its typically well understood that the management does have some ability in way or another to influence and control the process of knowledge. therefore, hislop argues that km is viable, while knowledge can be managed more indirectly by encouraging workers to share and implement their knowledge in a specific ways. 4. the role of higher education in a society “education will become the center of the knowledge society.” so wrote peter drucker (1994. p. 66), as well as many other recent researchers, all agreed that higher education, in particular, has a critical role to play in the transition towards a knowledge society (e.g., foo, 2013; ramachandran et al., 2013; hoq and akter, 2012; pinto, 2012; cranfield, 2011; goede, 2011). universities, as heis have always served the needs of society and should continue to do so (thomas, 2010). higher education is considered to be a very unique intellectual contributor to a society, where powerful and modern societies are actually built around the expansion of science and universities (kamens, 2012). in order to understand more about the role of hei in today’s societies, cranfield (2011) has addressed a main question, what is the role of universities today, and what function do they have in today’s society and economy? for this matter, cranfield pointed out to palfreyman’s (2001) point-view, as he outlined the role of a university in terms of inputs-processes-outputs (figure 1). palfreyman proposal suggests that the inputs of hei are students, staff, finance, and infrastructure, which are transformed by the university and its processes (e.g., teaching, peer pressure, collegiality), into outputs (employable graduates, research and technology transfer, a wider social role) (palfreyman, 2001). another proposal in line with palfreyman’s point-view was suggested by metaxiotis and psarras (2003). they highlighted three main roles of universities. firstly, teaching which aim to improve the student’s abilities to become successful lifelong learner. secondly, research, to create and develop the human knowledge, and to promote creativity. thirdly, service, by participating in community outreach activities, which serve the local, national, and international communities. today, the economical and societal environment is rapidly changing; whereas the traditional role of universities as providers of knowledge is greatly challenged (kamens, 2012; pinto, 2012; rowley, 2000). university mission has been expanded to contain new roles not only in teaching and research, but also as an innovation source, and a think-tank for policy formulation and decision making at various levels. today’s societies expect new ideas and concepts to be developed by the universities (hoq and akter, 2012). based on the ideas of boulton and lucas (2011), universities should act upon five major roles, as they are considered to be the best respond to the modern educational and research practices, and current priorities for outreach and innovation. as shown in figure 2, universities should mainly serve to educate, to conduct research, to innovate and create new opportunities, to engage on different levels with the local and international community. boulton and lucas emphasis on the important role of university education by focusing on developing not only what is learned, but also how it is learned, whereas universities should serve to make students think. students should learn how to understand and seek meaning, how to find the truth, and how to distinguish between the true and the merely seemingly true; they should learn how to resolve problems by rational argument supported by evidence (boulton and lucas, 2011). in the 21st century, this world is getting more interconnected, more integrated, and more accelerated; therefore, heis, must be aware about these challenges, and respond rapidly to their changing role in a knowledge-based society (cranfield and source: developed by cranfield (2011. p. 25), adapted from palfreyman (2001) students staff finance infrastructure teaching peer pressure collegiality employable graduates research and technology transfer a wider social role process outputsinputs • • • • • • • • • • figure 1: the process of a university figure 2: the roles of a university source: adapted from boulton and lucas (2011) international engagement public engagement innovation research education almudallal, et al.: knowledge management in the palestinian higher education: a research agenda international review of management and marketing | vol 6 • special issue (s4) • 201696 taylor, 2008; birgeneau, 2005; rowley, 2000). they need to develop their knowledge assets, and recognize the value of their intellectual capital to their continuing role in society (rowley, 2000). moreover, in light of these challenges, universities need to think about the way in which they teach, conduct research, and manage the institution and its various stakeholders (cranfield and taylor, 2008). indeed, as learning organizations, they will have to engage effectively in knowledge production, enhance creativity and innovation, be interconnected with the industry and society, and be able to produce top quality graduates (pinto, 2012). on the other hand, metaxiotis and psarras (2003) go further to say that even students are not anymore satisfied with the level of education quality. they are now aware that the future will belong to those who can acquire and apply a very unique knowledge and skills which the global markets demand. metaxiotis and psarras argue that today’s students require regular updating of their knowledge, skills, and competences; hence, universities need to jumb to higher levels of innovative learning and research. 5. the higher education in palestine in developing countries, higher education is recognized as a key force for development (bunoti, 2011). however, the quality of higher education in developing countries is influenced by complex factors such as: the destruction of existing infrastructures, the underdevelopment of research infrastructures, the brain-drain towards the more developed countries, the digital divide and knowledge revolution, the linguistic and cultural barriers, rapid demographic change, and the reduction of public funding (bunoti, 2011; bloom and rosovsky, 2007; unesco, 2005). in addition to these challenges, the issue of conflict, particularly the armedconflict, has detrimental effects on the educational status in many developing countries (gates et al., 2012). war kills; however, as gates et al. (2012) elaborate more, the consequences extend far beyond these direct deaths; it leads to forced migration, refugee flows, capital flight, the society infrastructure will be destroyed, social, political, and economical status will be harmed badly. the consequences of war for development are profound (gates et al., 2012; lai and thyne, 2007), in another words, civil war and conflict are “development in reverse” (collier et al., 2003), whereas conflicts create a development gap between those countries that have experienced armed conflict and those who have not (gates et al., 2012). for over 67 years, the people of palestine have been witness a long conflict with israel and faced displacement, ongoing insecurity and violence, restrictions on movement and goods, poor service provision and internal fragmentation of the population (shah, 2014; jayousi and zatari, 2012). in such an instable and complex environment, education services struggle to deliver meaningful, protective, and enabling education. in fact, the contenious aggression of the israeli occupation into the palestinian territories have had huge impact on the educational process, and made serious shocks on palestinian education system, which is considered to be as the corner stone of any knowledge society. this negative and harmful impact includes: ongoing settler violence and harassment in west bank, house and school demolitions in east jerusalem and west bank, and restrictions on movement and access for students and teachers within east jerusalem (shah, 2014; jayousi and zatari, 2012). besides, many students, academic, and support staff have been killed, over and above the continual danger of detention and abuse at the occupation’s barriers and checkpoints (mbrf and undp, 2009). in addition, according to the world bank report (2009) on equity and access to tertiary education in the middle east and north africa region, palestine faces many difficulties related to education and knowledge production such as: the socioeconomic profile of its students, the geopolitical situation, and the population boom among college age of palestinians. therefore, it becomes very essential to build self-sustaining education capacities in regions of conflict and instability such as palestine (penfold and ali, 2014). moreover and in particular, gaza strip also suffer from various isralei policies that harms the education badly, as not only kindergartens, primary and secondary schools and other education centres, but also heis were directly targeted during the hostilities, sustaining significant injury and loss of life among staff and student populations, as well as damage to buildings and equipment (unesco, 2014). all of these challenges holds an affect, in away or another, on the implementation of km practices in palestinian heis. in spite of that, the occupied palestinian territories hold an advanced position among the arab countries with regard to a number of indicators related to knowledge in general and education in particular (mbrf and undp, 2009) for instance, the literacy rate of palestinians (15 years and over) in year 2014 equals 96.4% (palestinian central bureau of statistics, 2014). besides, it is a stunning achievement for the palestinian education that in the short span of 40 years and in the face of extraordinary obstacles, almost four dozen postsecondary instittions have been founded in palestine, a rate of nearly one per year (koni et al., 2013; cristillo, 2009). largely funded and sustained through private donations and tuition, nearly (43) educational institutions devided into: (11) universities, (13) university colleges, and (19) community colleges, offer more than (300) educational fields of study across the arts and humanities, the social sciences, and mathematics, science, and technology (cristillo, 2009). like many heis in the region and worldwide, palestinian heis struggle to fulfil the educational demands of palestinians, while trying to maintain high quality and relevant style of education (koni et al., 2013). 6. methodology 6.1. purpose of the study this research uses the practice-based perspective of knowledge as a theoretical basis, to develop a deeper and more grounded theory in km. the purpose of this current study is to extend this stream of research, hence, it requires the research to provide empirical evidence that increases an understanding of km practices. therefore, the aim of this study is first and foremost exploratory since it seeks to find out how the palestinian heis, particularly in gaza strip, face the daily challenges, exploring the growth and impact of these institutions and how this contribute to develop a almudallal, et al.: knowledge management in the palestinian higher education: a research agenda international review of management and marketing | vol 6 • special issue (s4) • 2016 97 palestinian knowledge society. moreover, a primary focus of this study is to investigate the social phenomenon without explicit expectations or early assumptions, asking a deep qualitative questions of “why” people of palestine look for knowledge and get education, “how” they use this knowledge for there own benefits, and “how” they face the instability of the complicated situation in order to have a knowledge society. more specifically, the research attempts: 1. to explore the perceptions and practices of km within the context of heis in gaza strip. 2. to identify the influence of heis’ role in developing potential kws in gaza strip. 3. to examine other contributing factors that promote the implementation of km practices within the context of heis in gaza strip. 6.2. method and case of study heis in palestine either in the west bank and gaza strip, are almost (43) educational institutions divided into: (11) universities, (13) university colleges, and (19) community colleges, offer more than (300) different educational fields of study. for the purpose of this research, universities in gaza strip will be included in this study, while the colleges were excluded. this study uses the qualititative methodology to begin to unpack the issues related to the implementation of km practices within heis in gaza strip. this research also uses case studies as a research method, which offer an approach for analysing social change as well as providing as answers to “how” and “why?” questions. the core method of this research to generate data to answer the above research aims will be in-depth semi-structured interviews. besides, as a supplement to the main study tool, documentary analysis will be used to provide an additional source of evidence for further contextual understanding. the research will use a multi-case of all (5) universities in gaza strip. additionally, a semi-structured, one-to-one interviews will be conducted at the case locations. the study will spot the light on a multiple stakeholders: academic staff and senior managers in heis, expected university graduates, policy makers at the palestinian ministry of education, human resources managers in palestinian companies. 7. conclusion the concept of “knowledge” has been expanded and contained various meanings as consistent with the evolution of the socalled “era of knowledge.” yet, knowledge is not any more abbreviated to the stored knowledge in human minds, references, and data banks; however, this concept has been developed to be including and embodying cumulative experiences and skills, that gained over social interactions, practice, and continuous learning. while the most important part in the creation of new knowledge arises from the practicing process of human mind and other senses in an action (souto, 2013; syaharizatul, 2013; mládková, 2011; souto, 2010; gherardi, 2008; tsoukas, 2003; cook and brown, 1999). as a matter of fact, this study focuses on how and why people of palestine need to have knowledge, rather than trying to spot on what they know. in particular, this research paper provides a theoretical framework and empirical evidence that increases an understanding of km practices in heis within the context of instable environments, focusing on the unique geopolitical situation of the occupied palestinian territories. another essential point to be highlighted here within the case of this paper, is that km practices and initiatives in the palestinian heis have been facing great external challenges due to the political and economic instability over there. certainly, human security, freedom of expression, thoughts, information, and movement are indispensable requirements for the development of knowledge societies (undp, 2015; robinson, 2010; unesco, 2005); however, these basic human rights are considered to be main challenges for education and knowledge development in palestine, mainly in the higher education sector. consequently, heis in developing countries, particularly in palestine, are urged to show greater flexibility in adapting and anticipating the needs of society, where there is an urgent need to establish new university models, better geared to needs and conducive to national aspirations, and to regional and international cooperation (alfoqahaa, 2015; silwadi and mayo, 2014; koni et al., 2013; romahi, 2010; unesco, 2005). while attempting to imitate the model of universities in the developed regions would be a mistake (unesco, 2005), likewise not from the business and commercial sector (petrides and nguyen, 2006). references alavi, m., leidner, d. 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(2014), creating holistic projectknowledge society through project management education in research and development. procedia social and behavioral sciences, 119, 210-218. 11_1296 funda yalim ok okey.indd international review of management and marketing | vol 5 • issue 3 • 2015 129 international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2015, 5(3), 129-134. the reasons of young consumers’ choice on chain café stores: a research on starbucks serkan akgün1, funda yalım2* 1department of communication design, nişantaşı university, faculty of arts and design, istanbul, turkey, 2department of public relations and advertising, nişantaşı university, faculty of economics, administrative and social sciences, istanbul, turkey. *email: funda.yalim@nisantasi.edu.tr abstract corporations providing services and making goods are forced to ensure customer satisfaction, to build brand loyalty, to change the way being in service by taking some changes into consideration, such as changes in living conditions, in consumers’ supply and demand, fi erce competition environment. at this point, chain café stores are appeared as preferred ones by especially young consumers in direct proportion to changes in consumers’ supply and demand. young consumers, while going for a chain café store, pay regard to several criteria, such as store image, store atmosphere, goods/services specifi cations, and price policies. this study aims to measure the effect of young consumers going for starbucks chain café stores on customer loyalty. this research, according to the analysis of surveys taken by 187 persons, reveals that brand image and brand follow-up have an effect on brand loyalty. keywords: brand, consumer behaviors, chain café store brands jel classifi cation: m 1. the definition “brand” several academic and professional researches have been carried out regarding the notion “brand” which is an essential fact based on consumers’ demand nowadays. all the corporations providing services and making goods in such fi erce competition environment give preference to brand in order to shine amongst its rivals and build secured and long-term relationships with its consumers. many operations are carried out between the periods when a brand is created and its familiarity, image and loyalty are constructed. brand has been defi ned in signifi cantly different ways. american marketing association defi nes brand as “name, term, design, symbol, or any other feature that identifi es one seller’s good or service as distinct from those of other sellers” (keller, 2003. p. 8). almost all the defi nitions of brand in the literature close to the defi nition stated by american marketing association. according to mucuk, “brand is name, symbol, term, design or a combination of them all which introduce a seller’s good or service and differentiate it from those of other sellers” (mucuk, 2001. p. 135). elitok defi nes brand as “a name and/or symbol like a logo or package design which differentiate the goods or services from others, and identify goods and services conducted by a seller or a selling group” (elitok, 2003. p. 2). 1.1. corporate-wise importance of brand a brand, which helps products of a company be known easily, helps increase the demand, stabilizes the sales in the long run and has a growth potential, is of help and prime importance to the companies. those help and importance are stated briefl y, as follows (mucuk, 2007. p. 141): • helping promotion and having an effect on generating demand • leading to create consumers’ loyalty to the corporation • minimizing the risk based on sales decrease because of substitute goods • putting the goods on marketing channels, because a wellknown brand is in great demand by intermediary fi rms • having a great infl uence on price stability. trademark holder gains control over the fact that intermediary fi rms price the goods out variously • corporate value is in demand with brand value. international review of management and marketing | vol 5 • issue 3 • 2015130 akgün and yalım: the reasons of young consumers’ choice on chain café stores: a research on starbucks 1.2. consumer-wise importance of brand consumers, while buying any goods or services, are infl uenced by several factors. brand is one of primary importance. accordingly, the brand is not just of importance for the corporations but for the consumers. millison and moon (millison and moon, 2000. p. 30-31) defi nes brand as “makes decision making easier, gives brief about the good, provides the consumer a protected area and quality assurance, decreases perceived risk, helps the consumers express themselves and offers friendships and pleasure by giving them be involved in a social circle.” 1.3. basic concepts related to brand • brand personality: brand personality, which stands for representing its core features with a set of human concepts and experience, is based on the assumption that a set of human characteristics are attributed to a brand name, and is defined as transferring human-related adjectives (e.g., modern, young, sophisticated, conservative, old) to a brand (yılmaz, 2011. p. 20). • brand image: brand image is defi ned as a total of emotional and aesthetic impression gained by the consumers. it is the whole of features and connotations related to the brand (aktuğlu, 2004. p. 34-35). brand image is a total of consumers’ perceptions relating to the goods and services, and consists of several components as the following (kavas, 2004. p. 18): • features directly related to the product: basic physical and chemical characteristics, color, size, style, fl avor, taste, shape, design, etc. • add-on features to the product: package, tag/label, brand name, its origin, etc. • product benefi ts provided by the brand: functional, symbolic, emotional benefi ts, etc. • personal attitude against the brand • other factors evoked from the brand. brand image plays a significant role in consumers’ buying behavior. one of the most important factors in building brand loyalty is the positive image in consumers’ minds. • brand awareness: brand awareness is that the consumer is aware of seeing the brand in the market or any advertisement. the consumer is familiar with the brand. not having brand awareness means that the brand is not known by the consumer or is not realized even if the consumer sees it. the most important point of branding process is the brand’s acclaim. brand awareness consists of two categories named after “brand recognition” and “brand recall” (saruhan et al., 2006. p. 149). • brand preference – brand loyalty: brand preference is defi ned as “preferring a brand in the buying process after evaluating the brand with customers’ needs and their beliefs and attitude.” brand loyalty is that the costumers do not buy just in the time and/or period when they are in but also in the future (aktuğlu, 2004. p. 36-37). 2. customer’s buying behavior and decision process consumption is “people make use of economic goods and services produced in order to satisfy their personal and public needs1. consumer is a person who buys or has the capacity of buying marketing parts for personal or domestic wish, demand and needs (altunışık and i̇slamoğlu, 2010. p. 5). consumer is the person who oneself buys to use the goods and services, does not re-sell to make profi t or to use for another production (http://www. hakkinda-bilgi-nedir.com/tuketici-kimdir-tuketici-nedir+tuketicikimdir-tuketici-hakkinda-bilgi). in the past marketing experts could get fell of consumers’ buying behavior, but nowadays they need to go towards consumer research when fi rms and markets grow. a few questions, like “who buys? how do they buy? when do they buy? where do they buy? why do they buy?” are the basic questions to be answered by these researches (kotler and armstrong, 1994. p. 135). consumer behaviors are in a complex process recognized under the infl uence of many internal and external factors. consumer behaviors consist of specific characteristics. some of these specific characteristics are as the following (altunışık and i̇slamoğlu, 2010. p. 11): • consumer behavior is not just an activity. it consists of several activities. these activities are pre-buying researches, information gathering, walking in stores, weighing others’ advices, observing, carrying out buying activities, consumption experience, post-consumption activities • consumer behaviors exist as a result of specifi c motivation • during consuming process, consumers play roles such as “decision making,” “initiating,” etc. • consumption process consists of not only simple decisions on buying “salt” or “bread,” but also complex decisions on buying a “house” • consumer behaviors are affected by environmental factors. 2.1. consumers’ buying decision process decisions always contain choosing one among different behaviors. although marketing experts take choosing among objects (goods, brands, stores) as reference, consumers choose among behaviors including these objects. the key process in buying decision process is the combination of evaluation to choose one among the information and two or more behavior alternatives. the outcome of this integration process is the process a customer goes through when buying a product (bük, 2010. p. 31). a. need realization: a consumer realizes his/her needs with the help of physiological, mental and external stimulus. external stimulus may be given both by the consumer’s parents or friends and by the marketing stimulus related to the product. for instance, the market campaigns regarding the distribution of food in the evening causes the people feel and realize that they are hungry and make them buy other products. the factors creating needs in consumers’ decision making process are as the following (koç, 2008. p. 298): • the products in consumers’ stocks • displeasure of available goods and services • changes in environmental conditions • changes in fi nancial conditions. 1 h p://www.genelbilge.com/tuke m-nedir.html/ erisim international review of management and marketing | vol 5 • issue 3 • 2015 131 akgün and yalım: the reasons of young consumers’ choice on chain café stores: a research on starbucks b. information gathering: at this stage, the consumer gathers information regarding what type of product meets his/her need. the person in information gathering process applies both internal (background information and education) and external (his/her parents, friends, shop assistants, sales representatives, brochures, reports, statistics, etc.) resources (koç, 2008. p. 299). c. choice setting: consumers have an opportunity to compare the goods produced by the brands with his/her needs with the help of the information reached at the end of researches and background experience. consumers choose the brand, which they think that they could get satisfi ed at most, as a result of alternative evaluation (yükselen, 1994. p. 74). d. buying decision and practice: a consumer buys a product/ service by going to the most appropriate store for himself/ herself. the most important factors for a consumer to decide on which store s/he will go and buy are such as easy access to the store, easy parking facilities, getting out of turn, qualifi ed and good-humored services (tek, 1999. p. 215). e. post-buying process: each buying is learning for consumers. the consumer learns new things for further buyings or strengthens previous learnings. at this last stage, the topics like satisfaction given by the product, the defi ciencies of the products, the avoidance of used product, namely disposing, etc. are the factors consumers take into consideration. this stage is an important stage all the corporations should focus on (koç, 2008. p. 304). because consumers sometimes do not feel warm-and-fuzzy, so-called “cognitive regret – contradiction,” after expensive shopping such as buying durable consumer goods, music set, video, etc. then, they would like to get it back. hence, the works carried out by marketing experts are not fi nished just after consumers’ buying but still goes on in the post-buying process (tek, 1999. p. 215-216). as seen in figure 1, there are several factors effecting on consumers’ buying behavior. those factors are based on either consumer-oriented or marketing communication or the general conditions of market. consumers’ buying behavior is affected particularly by the messages given with product, price, place and promotion in marketing communication. in addition to this, the fact that the features of characteristics regarding the economic, socio-cultural, technological and political conditions in the market, and consumers’ demographic, psychological and socio-cultural features is also essential. 2.2. factors effecting on consumers’ buying behavior although different classifi cations are defi ned in several sources, the factors effecting on consumers’ buying behavior are generally categorized as the following (köseoğlu, 2002. p. 98): 1. personal factors 2. socio-cultural factors 3. economic factors 4. psychological factors. personal factors counted in consumers’ buying behavior include demographic and situational factors. demographic factors are personal factors, such as age, sex, income, educational background, marital status. consumers show buying behaviors according to their having such characteristics. being young or old, man or woman, married or single, educational background or their jobs affect consumers’ buying behavior, and consumers from different demographic features show different attitudes to buying. situational factors are consumer’s current situation and condition based on consumers’ buying decision. consumers decides whether they buy or not by taking their current situation and condition into consideration (eroğlu, 2012. p. 21). socio-cultural factors are also other type of factors to effect consumers’ buying behavior. social class is defi ned as a social structure having the same public prestige, being in close relationship with each other and having people who anticipate similarly (odabaşı and barış, 2003. p. 296). culture affects people’s lives, choices, and people’s view of live. reference groups are a group of people who affect people’s attitude, ideas, value judgment, and behaviors directly or indirectly, and they are important to provide consumers such information. this group consists of family, friends, colleagues, neighbours who are not in a direct relationship, but affect and direct a person’s decision (balcı, 2010. p. 48). economic conditions people are in are factors effecting consumers’ choosing a product or brand. while a person who is underpaid fulfi lls his/her primary needs, a marketing stimulus *product *price other stimulus *economy *technology characteristics of buyer *cultural *social *personal buyer buying decision process of buyer *definition of problem *information gathering *evaluation of choices *buying decision decisions of buyer *product selection *brand selection *retailer selection *time to buy source: kotler (2000) figure 1: buying behavior models and factors effecting on buying behaviors international review of management and marketing | vol 5 • issue 3 • 2015132 akgün and yalım: the reasons of young consumers’ choice on chain café stores: a research on starbucks person who is highly paid is able to spend money in addition to his/her primary needs. besides, economic conditions affect how a person pays out. marketing experts should follow-up consumers’ tendency, saving and interest types depending upon their personal income (balcı, 2010. p. 51). psychological factors effecting on consumers’ buying decision are motivation, perception, learning, attitude and beliefs. motivation is basically a key fact to push people to act. it may also be defi ned as induced need. they have two functions: the fi rst is to motive people and push them to act; the second is to direct people’s behaviors. because of this, the reason of behaviors is revealed only by looking at the motives (muter, 2002. p. 24). perception is related to the observation of environment, people, objects, smells, sounds, movements, tastes and colors. it is also a sense perception and a process to convert them into meaningful. in another defi nition, perception is defi ned as the brain gives the data taken by our senses meaning (muter, 2002. p. 43). learning means relatively permanent change in behavior and adaptation. learning is a change in behavior. it is a change gained with repetitive acts and experience. learning is a permanent change in behavior as a result of reinforced repetition and experience (baysal and tekarslan, 1996. p. 66). other personal factors in consumers’ buying behavior are beliefs and attitudes. belief is defi nes as a person’s supplementary thought on anything. attitude is a tendency of a person to show positively or negatively against objects, opinion or conditions (eroğlu, 2012. p. 27). 3. method 3.1. sample in order to measure the effect of service quality on customer loyalty depending upon starbucks, 300 surveys was made with starbucks customers, and 187 of them were approved to be analyzed with 62% repondency rating. 59.4% of the whole sample is woman, and 40.6% is man. 51.3% of the survey participants’ level of income is <500 turkish liras (tl), 24.1% is between 500 and 1000 tl and 24.6% is higher than 1000 tl. 3.2. measurement tool in order to measure and evaluate the service quality of starbucks coffee stores, scales of service quality (parasuraman et al., 1988) pre-used in the literature were used and re-formed based on starbucks café stores according to the literature. four questions were asked to measure customers’ loyalty levels. the scale includes 22 items and the participants are asked for scaling between six interval scales (1 = agree strongly; 5 = strongly disagree) based on to what extent they agree with the items. 3.3. research model the core aim of this research is to measure the effect of customer service quality extents on starbucks coffee stores. the results of factor analysis and regression analysis are presented in the following parts. in figure 2, a research model is given on whether service quality affects loyalty or not. 4. analysis 4.1. factor analysis of service quality factor analysis is a statistical approach used to analyze the relations between many variances with each other. the basic aim of factor analysis is to summarize the information gathered from many variances, and to set new and mixed factors and extents with the least information lost (hair, 1998). this factor and extent set is smaller than the information set gathered at fi rst. the purpose is to analyze easily by lessening the numbers of variance. in factor analysis, the differenciation of dependent and independent variable are not applied. factor analysis is not a fi nal analysis, but is a substructure for further analysis, and a statistical analysis method used to reduce dimension to analyze the data easily. as stated in the previous section, the survey includes two different scales. the fi rst one is based on service quality and the other one is based on loyalty. measure of sampling adequacy kaiser–meyer–olkin (kmo) and variance of equality bartlett are applied to test the suitability of data set to factor analysis in the factor analysis applied to defi ne the substructures of service quality. the value of kmo is over 0.50, and bartlett is over 0.05, which are in accordance with the factor analysis of data set (kmo = 0.937, χ2 bartlett test = 2654,323, p = 0.000). basic components method and varimax method are used to analyze the questions. the questions, which of sampling adequacy is <0.50, is a widow line under the factor, have similar factor weight and factor weight is <0.50, were taken out from the analysis. as a result of the last factor analysis, two factors including 15 questions are derived. total variance is 73,261%. the factors are respectively named after “brand image” and “follow-up.” the result of this factor analysis shows us that service quality is collected under two titles. the results of factor analysis are summarized in the table 1. cronbach’s α values are used to calculate internal consistency of factors. cronbach’s alpha is a model to measure internal consistency, in other words, is an index to show how successful an item in a scale measures the same notion. as a result of reliability analysis, the fact that cronbach’s α values of all the items are measured high is an evidence of the result of internal consistency. in other words, the reliability of factors was found high. the values of the factors are summarized in the table 2. 4.2. results of loyalty factor analysis the factor analysis of four questions based on loyalty was applied in this research and just a dimension was found. the results of conducted factor analysis are modeled as follows. the regression analysis of this model was done. as seen in figure 3, two factors, namely brand image and followup, are revealed as a result of factor analysis carried out regarding service quality loyalty figure 2: research model international review of management and marketing | vol 5 • issue 3 • 2015 133 akgün and yalım: the reasons of young consumers’ choice on chain café stores: a research on starbucks service quality. the model seen in figure 3 is used to analyze the effects of those factors on loyalty. 4.3. multilinear regression analysis of model regression analysis is a statistical process for estimating the relationship between a dependent variable and one or more independent variables. above all, regression analysis is used for estimating the quality of relationships among variables. if a variable is used as an independent variable, it is simple regression; multiple regressions may be mentioned if one or more variable are used (kurtuluş, 1998. p. 390). in this research, it was expected that there was an effect of service quality on loyalty. in this section of this research, it was aimed to determine the effect of service quality on loyalty. in this context, regression analysis was used. to see the regression analysis, the effect of variables “brand image” and “follow-up” (which are substructures of service quality summarized at the end of factor analysis) on “loyalty” is tabled as follows in table 3. as going into the table 3, “brand image” and “follow-up” variables which are the substructures of service quality reveals loyalty. the rate of reveal is relatively high (r = 0.450; r2 = 0.202 f (4) = 14.945; p = 0.000). 5. conclusion in this current competitive world, the needs to search brand personality and to focus on this topic by the fi rms come to light with brands coming into prominence. while brand personality is examined that corporations create a separated perception in table 1: the results of factor analysis on service quality factor titles and questions in factors factor weight factor explanatoriness (%) brand image 54.699 starbucks has sweet and impressive smell of coffee 0.866 0.960 at starbucks i can fi nd any kind of coffee i am looking for 0.851 i fi nd starbucks products of good quality 0.835 at starbucks the staff is skilled on products and newness 0.818 starbucks provides a comfortable and warm setting 0.797 i like the decoration and furniture at starbucks 0.782 i like the staff’s attitude to customers at starbucks 0.777 the appearance of the staff at starbucks is good 0.777 at starbucks there are internet connection, and a good working place for business meeting or preparing homework 0.767 the range of coffees and foods at starbucks is fantastic 0.762 at starbucks serving is fast 0.743 at starbucks i like cups, plates, spoon, etc. used to serve starbucks products 0.738 at starbucks there is enough staff 0.729 follow-up 18.562 i follow-up social responsibility projects conducted by starbucks 0.927 0.901 i follow-up the innovations regarding starbucks on its website 0.898 total variance (%) 73.261% kmo sampling adequacy 0.937 bartlett test chi-square 2654.323 sd 105 p 0.000 sd: standard deviation, kmo: kaiser–meyer–olkin table 2: the results of loyalty factor analysis factor titles and questions in factors factor weight factor explanatoriness (%) loyalty i recommend starbucks to other people 0.955 0.927 i think i am a loyal customer of starbucks 0.909 i would not change starbucks for any other coffee store 0.896 i believe that starbucks has a good brand image 0.861 total variance (%) 82.064% kmo sampling adequacy 0.816 bartlett test chi-square 630.425 sd 6 p value 0.000 sd: standard deviation, kmo: kaiser–meyer–olkin brand image follow-up loyalty figure 3: post-factor analysis research model international review of management and marketing | vol 5 • issue 3 • 2015134 akgün and yalım: the reasons of young consumers’ choice on chain café stores: a research on starbucks customers’ minds compared to their rivals, it is also important for them to reach at their targets. in this article, starbucks was a sample to analyze its brand image. a meaningful relation between starbucks’ brand image and follow-up factor including such questions “i follow-up social responsibility projects conducted by starbucks” and “i follow-up the innovations regarding starbucks on its website” was found statistically. while brand image is the most effective factor on customers’ loyalty, social responsibility projects and websites follow-up increase customers’ loyalty. the atmosphere of the café stores and the service quality are the foremost factors to creat and continue customers’ loyalty when starbucks brand image dimension is analyzed deeply. references aktuğlu, i.k. 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(1994), temel pazarlama i̇lkeleri. ankara: adım yayıncılık. p74. table 3: the results of model’s regression analysis dependent variable: loyalty independent variables beta t value p brand image 0.526 9.884 0.000 follow-up 0.376 7.053 0.000 r=0.797, r2=0.636; f value=160.669; p=0.000 << /ascii85encodepages false /allowtransparency false /autopositionepsfiles true /autorotatepages /all /binding /left /calgrayprofile (dot gain 20%) /calrgbprofile (srgb iec61966-2.1) /calcmykprofile (u.s. web coated \050swop\051 v2) /srgbprofile (srgb iec61966-2.1) /cannotembedfontpolicy /warning /compatibilitylevel 1.4 /compressobjects /tags /compresspages true /convertimagestoindexed true /passthroughjpegimages true /createjdffile false /createjobticket false /defaultrenderingintent /default /detectblends true /detectcurves 0.0000 /colorconversionstrategy /leavecolorunchanged /dothumbnails false /embedallfonts true /embedopentype false /parseiccprofilesincomments true /embedjoboptions true 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/untaggedcmykhandling /leaveuntagged /untaggedrgbhandling /leaveuntagged /usedocumentbleed false >> ] >> setdistillerparams << /hwresolution [2400 2400] /pagesize [612.000 792.000] >> setpagedevice 1253 sarkindaji okey.indd international review of management and marketing | vol 5 • issue 3 • 2015122 international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2015, 5(3), 122-128. the moderating infl uence of trust on the relationship between institutional image/reputation, perceived value on student loyalty in higher education institution noor azmi bin hashim1, aliyu olayemi abdullateef2, bashir danlami sarkindaji3* 1othman yeop abdullah graduate school of business, universiti utara malaysia, 06010 sintok, kedah, malaysia, 2faculty of business and design, swinburne university of technology sarawak campus, malaysia, 3othman yeop abdullah graduate school of business, universiti utara malaysia, 06010 sintok, kedah, malaysia. *email: bashirsdaji77@yahoo.com. abstract this survey investigates the moderating infl uence of trust on the relationships between institutional image/reputation, perceived value on student loyalty. the methodology utilises primary data obtained from questionnaire administered to a sample of 304 postgraduate international students in universiti utara malaysia using simple random probability sampling. multiple regression technique was employed to analyse data via spss statistical package. results established that institutional image and perceived value have signifi cant positive infl uence on student loyalty. institutional image has signifi cant positive infl uence on perceived value. the infl uence of image on student loyalty is greater followed by image on student perceived value. furthermore trust was found to insignifi cantly moderate between institutional image and perceived value on student loyalty. it is recommended that to successfully compete in a dynamic and complex world of academic excellence universities must be seen to portray favourable image/reputation in terms of practices and actions that invariably transforms to higher perceived value and student loyalty behaviour. keywords: institutional image, perceived value, student loyalty jel classifi cation: m3 1. introduction the concept of student or customer loyalty has been widely researched by scholars and practitioners. with increased competition globally, higher education institutions are continuously advancing and repositioning their strategy in an effort to ensure long term student loyalty. realising the importance of student loyalty to their continued survival institutions have strived to forecast, understand and satisfy students’ needs and preferences. since institutions are competing for loyalty using different marketing strategies, students trust to the institution might be infl uenced by favourable image and perceived value of products or services offerings. and that both student perceived value and institutional image/reputation are key determinants of customer loyalty (tarus and rabach, 2013), and exceptionally for specialised service fi rms (zabala et al., 2005). hence vision about student loyalty as well as the factors responsible for their loyalty behaviour should be of ultimate concern when determining the most suitable organizational strategy (yap et al., 2012; helgesen and nesset, 2007). prior studies have examined in varying context, the relationships between student (customer) loyalty and constructs such as satisfaction, perceptions of reputation (helgesen and nesset, 2007), satisfaction and performance (helgesen, 2006; zeithaml, 2000; kotler and fox, 1995), satisfaction (wilkins and balakrishnan, 2013), service quality (zeithaml et al., 1996), perceived value (petruzzellis and romanazzi, 2010; yang and peterson, 2004), service quality, student satisfaction (agarwal and teas, 2001; teas and agarwal, 2000; johnston, 1995), perceived service value, service quality and social pressure, customer satisfaction, corporate image (tarus and rabach, 2013), customer trust and commitment (garbarino and johnson, 1999), customer satisfaction (lai et al., 2009; chandrashekaran et al., 2007), and corporate image (gummesson and gronroos, 1988; hart and rosenberger, 2004). to a large extent, researches regarding factors international review of management and marketing | vol 5 • issue 3 • 2015 123 hashim, et al.: the moderatıng infl uence of trust on the relatıonshıp between instıtutıonal image/reputatıon, perceıved value on student loyalty ın hıgher educatıon instıtutıon accountable for student or customer loyalty behaviour unfold. due to the nature of industry (jones and sasser, 1995; de rutyer et al., 1998; eskildsen et al., 2004), complexities of customer and the different institutional techniques in delivering quality products or services and its perception by students (stodnick and rogers, 2008). according to tarus and rabach (2013), “the determinants of one industry cannot be generalized in other industries.” the intensity of implementation and measures used varies with organizations (sarkindaji et al., 2015). even though studies have examined drivers of customer loyalty, literature on university image as perceived by its students and how this image affects their behaviour remains scarce (alves and raposo, 2010). in addition, few studies have comprehensively examined the effect of institutional image on customers’ trust (lin and lu, 2010). empirical studies also suggested that trust is more vital in safeguarding loyalty compared to satisfaction (caceras and paparoidamis, 2007; ranaweera and prabhu, 2003). furthermore, while researches have focused on investigating the link between loyalty and different relationship constructs the combined effect of institutional image/reputation and perceived value on student loyalty with trust as moderator remains inadequate especially in higher education industry. loyalty concept has been inadequately applied in higher education (alves and raposo, 2010). this paper seeks to investigate the infl uence of institutional image/ reputation and student perceived value on student loyalty. it further examines the moderating infl uence of student trust among the study variables. the paper comprised of the following sub-topics namely; introduction, theoretical background and hypotheses, methodology, discussion of results and concluding remarks. 2. theoretical background and hypotheses as a spread out on relationship marketing literature, studies have developed a complete model of the antecedents of relationship marketing outcomes (kaur and soch, 2013). this study proposes a framework that investigates the relationships between institutional image/reputation, perceived value, trust and student loyalty. what differentiates this framework from past researches are; loyalty is measured from composite perspective and is unusual to fi nd empirical studies focusing solely on trust as moderator of relationships between institutional image/reputation, student perceived value, and loyalty. 2.1. student loyalty the concept of customer or student loyalty in the marketing literature can be substituted (ali dehghan et al., 2014). from the perspective of both a corporate and educational institution their administration requires comparable methods and share common qualities (hoyt and howell, 2011). previous studies have regarded educational institutions as service providers and students as customers (helgesen and nesset, 2007; hennigthurau et al., 2001). the competitive nature of higher education institutions globally has resulted in a situation where survival depends on their capability to maintain current and potential students as their primary raw materials. student loyalty is vital to academicians and has become the subject of strategic concern to higher education institutions (ali dehghan et al., 2014). therefore, this study considers composite perspective of student loyalty comprising of both their behavioural and attitudinal loyalty (tarus and rabach, 2013). focusing on both attitudinal and behavioral loyalty creates truly loyal students (harsandaldeep and harmeen, 2013). behavioural perspective considers student’s consistent and future loyalty behaviour (sarkindaji et al., 2014a; bodet, 2008; rauyruen and miller, 2007). it provides a rational approach of a brand’s market performance compared to its rivals (o’malley, 1998) yet the determinants have been unable to differentiate between true and false loyalty (dick and basu, 1994). attitudinal perspective measures loyalty in terms of consumers’ psychological process (jacoby and chestnut, 1978), and his affection strength with respect to a brand (baloglu, 2002; petrick, 2004a). in such situation, customers develop love for the business and prefer to constantly be remaining loyal to the business, than to competitors. it focuses on consumer testimonies instead of real buying (kelvin et al., 2013) and that may not necessarily account for a true picture of reality (odin et al., 2001). 2.2. institutional image and student loyalty institutional image is conceived as the outcome of the interactions among person’s impression, prevailing beliefs, thoughts, and feelings about an entity (lin and lu, 2010). in a study to ascertain the degree of students satisfaction with their university in uae, factors such as lecturers excellence, accessibility and quality of resources, and effective technology in use were to be most infl uential (wilkins and balakrishnan, 2013). several studies have examined the relationship between institutional image and student loyalty in the education sector (alves and raposo, 2010; weiwei, 2007; helgesen and nesset, 2007; eskildsen et al., 1999; nguyen and leblanc, 1998). to date, institutional image/reputation has remained the focus and concern of both students and other stakeholders in the choice of an institution instead of internal specifi c-attributes such as excellent infrastructures, quality staff, and sound admission requirements. corporate image performs a moderating infl uence in student’s behaviour (tarus and rabach, 2013). knowledge of what inform students’ behaviour toward choice of a particular university offers ample opportunity for management to develop effective loyalty strategy. reputation management is one major factor that accounts for students’ loyalty (helgesen and nesset, 2007). within the higher education context, nguyen and leblanc (2001) established that higher tendency of student loyalty exist when perception of institutional image/ reputation are favourable. that the interaction between the two constructs explains more on student loyalty. tarus and rabach (2013) emphasised that realizing the benefi ts of customer loyalty depends on a company’s ability to invest in good corporate image. they however, contended that ordinarily fi rms with good corporate image may infl uence the manner customer’s sense their products value. offering quality products or services and responding more effi ciently to students’ needs and preferences that could result in good image/reputation requires institutions focusing more on innovation (sarkindaji et al., 2015). studies have found image to have strong infl uence on higher education student’s loyalty (weiwei, 2007; eskildsen et al., 1999). for higher education institutions to compete through image there is need to evaluate the university image held by its students and that image is vital international review of management and marketing | vol 5 • issue 3 • 2015124 hashim, et al.: the moderatıng infl uence of trust on the relatıonshıp between instıtutıonal image/reputatıon, perceıved value on student loyalty ın hıgher educatıon instıtutıon to attract and retain student (alves and raposo, 2010). sequel to these arguments the following hypothesis is offered: h1: institutional image has signifi cant positive impact on student loyalty. 2.3. institutional image and student perceived value the association between institutional image/reputation and perceived value is essential in the determination of student behaviour. scholars have established that a favourable image will increase in students’ perceived value that ultimately infl uences their loyalty. institutional existing image/reputation is often more signifi cant than quality since it is the perceived image that actually inspire choices made by potential students (kotler and fox, 1995). the signifi cance of image/reputation on satisfaction will ultimately be projected on the basis of their customer-related outcomes i.e. perceived value (keith and wiedmann, 2006). good image are looked upon to be delivering higher value products/services and thus considered as satisfaction-driven. a favourable perception of image/reputation is supposed have signifi cant positive infl uence on student loyalty (macmillan et al., 2005). within the italian higher education context, high dissatisfactions occur due to different methods applied by institutions in the offering of quality services and its perception by students (stodnick and rogers, 2008). institutional image was found to have a strong moderating relationship between perceived value and student loyalty (tarus and rabach, 2013). higher education institutions should place more emphasis on the value offered to students and the needs of other stakeholders. h2: organizational image has signifi cant positive impact on student perceived value. 2.4. perceived value and student loyalty several studies have established perceived service value as a strong determinant of customer loyalty (tarus and rabach, 2013; andreassen and lindestad, 1998). in an effort to offer high value products or services universities could enhance student loyalty (petruzzellis and romanazzi, 2010). within the retailing context, value absolutely facilitates the infl uence of frontline employee trust on loyalty (sirdeshmukh et al., 2002). mcdougall and levesque (2000) found perceived value as the most signifi cant driver of customer satisfaction and loyalty. switching cost only moderates the relationship between customer satisfaction and loyalty when perceived value is above average (yang and peterson, 2004). although researchers have investigated the association between perceived value and customer loyalty. yet empirical evidence linking perceived value and student loyalty calls for further research especially that perceived value is seen to be a strongest determinant of stakeholder’s loyalty to institutions. students tend to build confi dence and prefer to remain loyal as they perceive an institution’s products or services value as high or acceptable. oftentimes students understanding of high value institutions is based on the capability of the institution to interact with public, offer excellent graduates and facilities, and effective learning atmosphere. this could help build long-term loyalty among students and institution. on the basis of the aforementioned arguments the following hypothesis is proposed: h3: perceived value has signifi cant positive infl uence on student loyalty. 2.5. institutional image, trust and student loyalty morgan and hunt (1994) conceive trust as a confi dence built regarding the reliability and integrity of one party by another in an exchange relationship. it is also considered as the consumers’ dependence on organization’s offered service quality and reliability (garbarino and johnson, 1999). trust is presumed to moderate the relationship amongst institutional image/reputation and student loyalty. studies have argued that favourable corporate image helps build trust in an organisation and attract the stakeholders that facilitates success (fombrun and shanley, 1990; van riel, 1995). students have their anticipations that usually direct their loyalty decision. in general, these anticipations depend on the image/ reputation of the institution such that institutions with favourable image/reputation might affect the manner they trust and patronise their products or services. lin and lu (2010) established that corporate image has signifi cant positive infl uence on trust and trust infl uence consumer purchase intention. they argued that since different types of corporate image exhibit different levels of infl uence on consumer trust. the infl uence of trust on purchase intention must be considered. corporate image helps facilitate consumers’ knowledge on products or services offered by a certain company and reduce uncertainty while making buying decisions (robertson and gatignon, 1986). higher education institutions should invest in favourable corporate image/reputation so that they can benefi t from student trust and loyalty behaviour. h4: trust moderates the relationship between organizational image and student loyalty. 2.6. perceived value, trust and student loyalty student perceived value is believed to infl uence trust and loyalty when institutional image is favourable (figure 1). students’ trust and purchase behaviour increases when perceived value is high. to earn trust; the actions of one party must be believed by another party that it will bring about positive results and the party should perceive value or quality as positive (aydin and ozer, 2005). so, in building trust, the customer should not only perceive positive outcomes but also believe these positive outcomes will continue in the future (yap et al., 2012). nguyen et al. (2014) found trust to have signifi cant moderating infl uence on the relationship between customer perception and their loyalty. they, however, argued that consumers’ unfavourable perception severely decreases perceived value institutional image student trust student loyalty h1 h2 h4 h3 h5 figure 1: conceptual framework adopted from european customer satisfaction index model revised by ball et al. (2006) international review of management and marketing | vol 5 • issue 3 • 2015 125 hashim, et al.: the moderatıng infl uence of trust on the relatıonshıp between instıtutıonal image/reputatıon, perceıved value on student loyalty ın hıgher educatıon instıtutıon their loyalty intentions with trust strengthening the relationship. institutions must identify and manage students’ knowledge effectively in order to satisfy their perceived needs and preferences that could assist in building trust and loyalty behaviour (sarkindaji et al., 2014b). there is a strong relationship between trust and loyalty when student have greater perceived value than those with very low perceived value. trust raises loyalty intentions at the expense of unfavourable perceptions (nguyen et al., 2014). h5: trust moderates the relationship between perceived value and student loyalty. 3. methodology using simple random probability questionnaires were administered to a sample size of 318 students chosen from a population of 1541 postgraduate students in universiti utara malaysia (uum) in accordance with yamane (1967). overall, only a total of 304 questionnaires representing 95.6% response rate were successfully used in the fi nal analysis. measurement items of all constructs were adopted from past studies namely institutional image from (andreassen and lindestad, 1998; bloemer and de ruyter, 1998; nguyen and leblanc, 2001), trust (morgan and hunt, 1994), perceived value adapted from (lai et al. 2009) and composite loyalty (chaudhuri and holbrook, 2001; evanschitzky et al., 2006; gremler and brown, 1996; zeithaml et al., 1996). these items were all measured on a seven-point likert scale ranging from “strongly agree” to “strongly disagree.” regression analysis was employed to test the hypothesised relationships. 4. discussion of results results of regression analysis in table 1 shows the correlation score between the study’s constructs. student perceived value is positively correlated with institution image (0.345). student trust of the university has a signifi cant correlation with institution image (0.446) and perceived value (0.465) of the university’s activities. similarly, student loyalty is correlated with commitment (0.821) and reputation (0.752). the most highly correlated construct is trust 0.707, followed by institution image and perceived value. the results in table 2 reveal the confi rmatory factor and reliability analysis of items used in this study. overall, a total of 18 items were employed to measure 4 constructs. two items comprising of tru4 and sloy2 were deleted due to lower loadings retaining only 16 items. factor loading of items on each construct which is a measure of convergent validity are all within the minimum acceptable threshold of above 0.7 as very significant and 0.5 as signifi cant (costello and osborne, 2005). there is also high internal consistency among the study constructs as cronbach’s α values stand between above 0.5 (george and malley, 2003) and 0.7 (nunnally, 1978). the mean score criterion for constructs namely; institutional image (m = 12.919, sd = 5.4721), perceived value (m = 5.135, sd = 2.8188), trust (m = 10.472, sd = 5.4021), and student loyalty (m = 12.829, sd = 6.8844) were all above 5.00. this implies that uum’s postgraduate students’ are loyal because they perceived the university’s image and value to be very high and that resulted in their trust to the university. 4.1. testing hypotheses this study employed multiple regression analysis tools to assess the hypothesised relationships. results of the analysis reveal the durbin–watson values for paths 1-3 in table 3 were 2.063, 1.604, and 2.063 respectively. hence, are within the general rule of thumb of between 1.5 and 2.5. this implies that no autocorrelation existed within the 1% signifi cance level between the residual items. results in table 3, displays the relationships among the study variables. testing the relationship between institutional image and student loyalty scores where β = 0.434, t = 9.051, p < 0.001. this statistical value reveals that uum’s image has a signifi cant positive infl uence on student loyalty behaviour, hence h1 was supported. this is consistent with opinion that attaining the benefi ts of customer loyalty depends on a company’s ability to invest in good corporate image (tarus and rabach, 2013). on the infl uence of institutional image on student perceived value the results shows β = 0.345, t = 6.387, p < 0.001. thus, implies that university with favourable image/reputation tend to have strong positive infl uence table 1: correlation analysis construct image perceive value trust student loyalty image 1.000 0.000 0.000 0.000 perceive value 0.345 1.000 0.000 0.000 trust 0.446 0.465 1.000 0.000 student loyalty 0.546 0.473 0.707 1.000 table 2: reliability, factor and mean analysis construct item factor loading cronbach’s α mean sd institutional ımage img1 img2 img3 img4 img5 0.792 0.641 0.916 0.661 0.916 0.726 12.919 5.4721 perceive value pv1 pv2 0.942 0.506 0.503 5.135 2.8188 trust tru1 tru2 tru3 tru5 0.714 0.732 0.704 0.704 0.818 10.472 5.2041 student loyalty sloy1 sloy3 sloy4 sloy5 sloy6 0.789 0.736 0.604 0.736 0.789 0.888 12.829 6.8844 sd: standard deviation table 3: hypothesised analyses path hypothesis standard beta t value signifi cant decision img-sloy h1 0.434 9.051 0.000*** supported img-pv h2 0.345 6.387 0.000*** supported pv-sloy h3 0.323 6.734 0.000*** supported ***p<0.001, **p<0.05, *p<0.01. img: image, sloy: student loyalty, pv: perceive value international review of management and marketing | vol 5 • issue 3 • 2015126 hashim, et al.: the moderatıng infl uence of trust on the relatıonshıp between instıtutıonal image/reputatıon, perceıved value on student loyalty ın hıgher educatıon instıtutıon on their students’ perception of the value attached to the institution, thus h2 was supported. the result was in agreement with kotler and fox (1995) that current institutional image is frequently more important than quality because it is the perceived image that actually inspires choices made by potential students. also, results examining the relationship between perceived value and student loyalty were β = 0.323, t = 6.734, p < 0.001, confi rming that institutional perceived value has signifi cant positive effect on student loyalty to the institution. hence, h3 was supported. the fi nding is supported by sarkindaji et al. (2014b) who emphasised that universities must identify and manage students’ knowledge effectively in order to satisfy their perceived needs and preferences that could assist in building trust and loyalty behaviour. 4.2. moderation test results of regression analysis of model 1 in table 4 depicts student loyalty regressed on the presumed moderator variables. testing the moderating effect of trust on institutional image and student loyalty the scores in model 1 where r2 = 0.58, β = 0.324, p < 0.001. in model 2, as the interaction variable i.e. imgtru was integrated the scores where r2 = 0.57, β = 0.757, p < 0.001 resulting in decrease in the total variance explained by r2 value from 58% to 57%. the outcome of this interaction signifi es absence of moderation. thus, confirmed that trust does not moderate the relationship between university image and student loyalty to the institution, hence h4 was not supported. this is inconsistent with a study that confi rmed institutional image to have signifi cant positive infl uence on trust and trust infl uence loyalty intention (lin and lu, 2010). their opinion postulated that different types of corporate image exhibit different levels of infl uence on consumer trust. although the result of this study is not in support of the proposed hypothesis, yet other factors such as satisfaction, relationship and service quality, social pressure, commitment and perceived value may have played a very crucial moderating role in strengthening the relationship among uum’s image and postgraduate student loyalty. this might be due to different cultural and countries background of the composition of uum’s postgraduate international students. similarly the results show a reduction in the r2 value from 53% to 46% when examining the infl uence of trust on perceived value and student loyalty. hence, established that trust does not moderate the association among student perceived value and their loyalty to the university, therefore h5 was not supported. 5. conclusion based on the study’s conceptual framework fi ve relationships were hypothesised. overall fi ndings supported three hypotheses while two were not supported. from the results the importance of institutional image and perceived value cannot be undermined as they play a very crucial role in infl uencing student loyalty. however, institutional image and perceived value was found to have positive significant influence on uum’s student loyalty. this was established by nguyen and leblanc (2001) that there exists a greater propensity of loyalty attitude as the students’ perception of institutional image/reputation is seen to be favourable. results further established that institutional image has a strong positive impact on uum’s student perceived value. an institution’s perceived image is what truly inspires decisions made by potential students (kotler and fox, 1995). consequently, in establishing the moderating infl uence of trust on the relationships between institutional image and perceived value on student loyalty, fi ndings affi rmed absence of moderation between the variables and therefore provided no support for the two hypothesised relationships. although trust does not moderate the relationships between uum’s image and perceived value with student loyalty, other factors such as satisfaction, quality of service, and excellent facilities might have played a signifi cant role. furthermore the population of this survey focused solely on uum’s international postgraduate students without considering undergraduate international students and possibly other students who are malaysian indigenes. this poses a limitation and reduces the strength of our fi ndings. future study should widen the scope and identify other possible drivers of student loyalty, in addition to investigating other moderating factors on the relationships between image and perceived value on loyalty such as commitment, satisfaction and social value. references agarwal, s., teas, k.r. 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5.0 and later.) >> /namespace [ (adobe) (common) (1.0) ] /othernamespaces [ << /asreaderspreads false /cropimagestoframes true /errorcontrol /warnandcontinue /flattenerignorespreadoverrides false /includeguidesgrids false /includenonprinting false /includeslug false /namespace [ (adobe) (indesign) (4.0) ] /omitplacedbitmaps false /omitplacedeps false /omitplacedpdf false /simulateoverprint /legacy >> << /addbleedmarks false /addcolorbars false /addcropmarks false /addpageinfo false /addregmarks false /convertcolors /noconversion /destinationprofilename () /destinationprofileselector /na /downsample16bitimages true /flattenerpreset << /presetselector /mediumresolution >> /formelements false /generatestructure true /includebookmarks false /includehyperlinks false /includeinteractive false /includelayers false /includeprofiles true /multimediahandling /useobjectsettings /namespace [ (adobe) (creativesuite) (2.0) ] /pdfxoutputintentprofileselector /na /preserveediting true /untaggedcmykhandling /leaveuntagged /untaggedrgbhandling /leaveuntagged /usedocumentbleed false >> ] >> setdistillerparams << /hwresolution [2400 2400] /pagesize [612.000 792.000] >> setpagedevice . international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2019, 9(1), 123-128. international review of management and marketing | vol 9 • issue 1 • 2019 123 islamic human resource management, organizational commitment and employee performance: a case study on sharia bank in south sumatera muhammad ichsan hadjri*, badia perizade, taufiq marwa, agustina hanafi faculty of economics, universitas sriwijaya, indonesia. *email: ichsanhadjri@fe.unsri.ac.id received: 08 november 2018 accepted: 03 january 2019 doi: https://doi.org/10.32479/irmm.7529 abstract the study was conducted in south sumatra, indonesia, where the percentage of sharia banking assets in south sumatra is below the average assets of national sharia banking. research topics on the islamic human resources management (ihrm) are also very limited in indonesia, especially in south sumatra. most of the research on islamic management deals only with islamic finance and accounting, islamic marketing, islamic leadership, islamic work ethics, gender and management in islam. this study aims to determine the effect of ihrm on organizational commitment and employee performance. the population in this study were 245 sharia bank employees in south sumatera, indonesia, where the respondents were selected 136 by using slovin formula and proportional stratified random sampling method. the instrument in measuring the variables in this study is the questionnaire distributed to the respondents. the results showed that ihrm consisting of islamic recruitment and selection variables, islamic training and islamic compensation positive and significant impact to organizational commitment and employee performance. keywords: islamic human resources management, organizational commitment, employee performance, sharia bank jel classifications: m12 1. introduction indonesia is one of the countries with the largest muslim population in the world. however, based on data from the financial services authority of indonesia (otoritas jasa keuangan [ojk]), the total assets of sharia banking in indonesia only reached 5.3% in 2016 (ojk, 2017). some countries like saudi arabia and malaysia have sharia banking assets that are much larger than indonesia. based on information from the saudi arabian monetary authority (sama), the total assets of sharia banking in saudi arabia reached 51% in 2016 (sama, 2017). similarly, malaysia, where the total assets of sharia banking in the country based on information from bank negara malaysia (bnm) reached 27% (bnm, 2017). one of the provinces in indonesia that has sharia banking assets below the national average is south sumatra. based on sharia banking statistics report from ojk of 2016, the total assets of sharia banking in south sumatera is only 4.47% or below the assets of sharia banking in indonesia of 5.3% (ojk, 2017). one of the causes of non-optimal organizational performance in sharia banks in south sumatra is due to the lack of optimal performance of human resources (hrs). hr has a very important role in the success of an organization, in which the performance of hr affects the overall performance of the organization (mathis and jackson, 2011). this is supported by research conducted by ascarya and yumanita (2008) entitled “comparing the efficiency of sharia banks in malaysia and indonesia.” those outcomes demonstrated that one important factor making inefficiency in sharia bank in indonesia is the low quality of hr. sharia banks conduct banking operations based on sharia principles, so it is logical to expect this organization to embed islamic principles in the practice of hr management (hrm) and this journal is licensed under a creative commons attribution 4.0 international license hadjri, et al.: islamic human resource management, organizational commitment and employee performance: a case study on sharia bank in south sumatera international review of management and marketing | vol 9 • issue 1 • 2019124 their policies. islamic hrm (ihrm) is based on al-quran and hadith of prophet muhammad pbuh (rahman et al., 2011). the practice of ihrm is important but few discussed in the literature (hashim, 2009). branine and pollard (2010) suggested that few studies discuss ihrm, so further study is needed. rana and malik (2017) also revealed that only a few studies have raised the topic of ihrm. this is supported by research conducted by khan (2015), where there is a lack of research on hrm in sharia banking. according to mellahi and budhwar (2010), although in the last two decades there has been an increase in research interest on islamic management, but most research focuses only on islamic finance and accounting (chong and liu, 2009; napier, 2009), islamic marketing (haque et al., 2010; hashim and mizerski, 2010), islamic leadership (ahmad, 2009; weir, 2008), islamic work ethic (ali and al-owaihan, 2008; kumar and rose, 2010), as well as gender and management in islam (metcalfe, 2006; 2007). research on ihrm, so far, the number is still very limited (tayeb, 1997). this research is conducted on the basis of the research gap, which is still limited number of empirical research on ihrm conducted in sharia banking. several previous studies on ihrm suggest that further research can be performed using more variables. hashim’s research (2008) is limited to job satisfaction, organizational justice, and turnover intentions and suggested further research on the impact of ihrm on employee performance. further research from hashim (2010) also suggested in conducting further research on the impact of ihrm on employee performance. this is supported by rahman et al. (2013) who suggested that further research on ihrm can be undertaken on employee performance, job satisfaction, and organizational commitment. fesharaki and sehhat (2017) also examined the impact of ihrm on organizational justice and organizational commitment in iran and suggested that further research on islamic hrm can be possible on other variables that have not been studied. the purpose of this study was to determine the influence of ihrm on organizational commitment and employee performance, so it can be known whether it is useful to apply ihrm to sharia banks. previous research on ihrm has largely focused on the objects of the arab countries, pakistan, iran and malaysia. the object of research in indonesia is still very limited and has never been conducted in south sumatra. this research was conducted in an effort to fill the research gap and become a value for the originality of the research. this research is expected to provide insight for practitioners in sharia organizations in managing hrs based on ihrm and can be a reference for further research. 2. literature review 2.1. islamic hr management (ihrm) ihrm practice can be applied to various sharia organizations, including sharia banking. ihrm is based is based on ethical values, beliefs, and motivation (khan, 2016). according to azmi (2015) and fesharaki and sehhat (2017) there are several dimensions of ihrm, namely islamic recruitment and selection, islamic training, and islamic compensation. 2.2. islamic recruitment and selection recruitment and selection are very important hrm practices. recruitment and selection are considered complex and complicated tasks within the organization (ali, 2005). the qur’an provides guidance in the process of recruitment and selection of prospective employees, including ability, knowledge, specialization, experience, personal ability, potential, character, perseverance, and compliance with organizational rules and religious law (salleh, 2012). islamic guidelines cover five conditions that must be met for selection: (1) competence, (2) experience, (3) responsibility, (4) organizational fit, and (5) reputation (ali, 2005). islam emphasizes that prospective employees are selected based on merit and competence, not influenced by friendship, blood relations, kinship, age, wealth, race or political power (alorfi, 2012). 2.3. islamic training training and development in islam include intellectual, moral, spiritual, physical development (hashim, 2010), social, psychological (khan, 2016), emotional (husain and ashraf, 1979) and human growth. some concepts of islam are directly related to training and development. the first concept is etqan, awareness in self improvement, refers to efforts to improve themselves to achieve better performance (branine and pollard, 2010). the second concept is al falah, the desire to achieve excellence and perfection. because of these values, the desire to excel in personal and professional matters becomes an ideal for muslims. this implies that employees are required to always do better, improve the quality of their contributions and work results by learning new skills and knowledge (siswanto, 2014). the third concept is ihsan, where islamic tradition shows that business and spiritual obligations must be balanced with one another (ali, 2005). 2.4. islamic compensation azmi (2015) stated that compensation practice is very important in hrm. islam encourages employers to respect their employees according to their qualifications, experience, knowledge, abilities and the amount of work they do. according to mansor and ghani (2005), all employees should also be given benefits, bonuses, overtime wages, salary increases, leave and medical treatment without discrimination. all compensation payment requirements must be clearly explained in the offer letter that employees must consider before they accept the offer. islam emphasizes that the compensation offered to employees must be reasonable and sufficient. islam instructs that compensation should be established on the basis of mutual consent and deliberation (ahmad, 1995; ali, 2005; khan et al., 2010). 2.5. organizational commitment meyer and allen (1997) classified the dimension of organizational commitment to the organizational commitment scale into three dimensions: affective commitment, normative commitment, and sustainable commitment. hashim (2010) has conducted research on the influence of ihrm on organizational commitment in islamic organizations in malaysia. the results of the study concluded that ihrm had a positive and significant effect on organizational commitment of employees in islamic organizations in malaysia. the impact of ihrm on employee commitment research was also conducted by fesharaki and sehhat (2017) with an employee hadjri, et al.: islamic human resource management, organizational commitment and employee performance: a case study on sharia bank in south sumatera international review of management and marketing | vol 9 • issue 1 • 2019 125 analysis unit at sharia banks in iran. the results revealed that there was a positive and significant relationship between ihrm on employee commitment. 2.6. employee performance according to islamic principles, employee performance assessment must be based on fairness, accountability, caring, and can be accounted for the specified criteria (rahman et al., 2013). poor design in the form of employee assessment, for example, subjective judgment which leads to unfair evaluations resulting in unfair treatment of some employees, several cases of dismissal, and improper promotion (sadeq, 1990). dimensions to measure employee performance individually include quality, quantity, timeliness and effectiveness (robbins, 2008). some previous studies concluded that employee performance is directly influenced by recruitment and selection (bako and kolawole, 2016), training (athar and shah, 2015; elnaga and imran, 2013), and compensation (hameed et al., 2014; njoroge et al., 2015). 3. research model and hypothesis the research model is illustrated in figure 1. based on the literature review, the hypotheses built from this research are: 1. islamic recruitment and selection had an influence on organizational commitment. 2. islamic training had an influence on organizational commitment. 3. islamic compensation had an influence on organizational commitment. 4. islamic recruitment and selection had an influence on employee performance. 5. islamic training had an influence on employee performance. 6. islamic compensation had an influence on employee performance. 4. methodology the population in this study were employees of sharia banks in south sumatra province, indonesia, as many as 245 employees. by using the slovin formula, obtained the number of samples as many as 136 employees. sampling technique using proportional stratified random sampling method. a sample of 136 employees became respondents in this study. distribution time and questionnaire collection is 5 days. instruments used to measure research variables are as follows: 1. islamic hr management (ihrm): the instrument used to measure ihrm was a questionnaire developed by hashim (2010) as many as 20 items of questions about hrm based on al quran and hadith. question items contain variables that describe ihrm, namely islamic recruitment and selection (irs), islamic training (it), and islamic compensation (ic). the questionnaire was measured using five likert scale points (1-5). 2. organizational commitment (oc): the instrument for measuring organizational commitment was a questionnaire developed by meyer and allen (1997) as many as 10 items of questions. question items contain indicators of affective commitment, normative commitment, and ongoing commitment. the questionnaire was measured using five likert scale points (1-5). 3. employee performance (ep): the instrument used to measure employee performance was questionnaire developed based on literature review from robbins (2008) as many as 10 items of questions. question items contain indicators of employee performance, namely quality, quantity, timeliness, and effectiveness. 5. findings from the 136 questionnaires distributed, 128 questionnaires were returned by respondents. table 1 illustrates the profile of the majority of respondents in this research. table 1 shows that most of the respondents’ gender is female (52.7%) with age range of 26-30 years (35.3%). the education level of the majority of respondents is bachelor level (59.4%) with a working period of 6-10 years (33.9%). the instrument is said to be valid and reliable if it meets the requirements for validity and reliability tests. instrument validity test is performed by comparing pearson correlation values with r values obtained from r table. with the number of respondents as many as 128 people, for two-way test with a significance level of 5%, obtained r table value of 0.1736. the instrument is said to be valid if the item of each question on the questionnaire has a pearson correlation value > r value of the table. table 2 illustrates the results of the instrument validity test used in this study. islamic human resource management (ihrm) ` islamic training islamic compensation islamic recruitment and selection organizational commitment employee performance figure 1: research model hadjri, et al.: islamic human resource management, organizational commitment and employee performance: a case study on sharia bank in south sumatera international review of management and marketing | vol 9 • issue 1 • 2019126 table 2 shows that all question items on the instrument are valid. furthermore, reliability test was conducted to test whether the instrument used is reliable. the instrument is said to be reliable if the cronbach’s alpha value of each questionnaire item is >0.6. table 3 illustrates the results of the reliability test conducted. table 3 shows that all the instruments used to measure the variables in this study are reliable. the study continued with normality test. data normality test was analyzed using kolmogorov-smirnov test. the data is said to be normally distributed if the value of asymp. sig. (2-tailed) is >0.05. table 4 illustrate the results of the kolmogorov-smirnov test of the built-in research model. table 4 show the normality test results for the influence of ihrm on organizational commitment and impact of ihrm on employee performance. the result of asymp value. sig. (2-tailed) in both tables are 0.558 and 0.507, respectively, where the value is >0.05. this means that all data in this research model is normally distributed. after the data was confirmed to be normally distributed, then multiple regression test was conducted to determine the relationship between independent variables and dependent. tables 5 and 6 illustrate the results of regression tests on the impact of ihrm on organizational commitment and employee performance. 6. discussion and conclusion the research results support the hypotheses that have been formulated. the first hypothesis group stated that ihrm had an influence on organizational commitment. based on the results of the research, all ihrm variables of islamic recruitment and selection, islamic training, and islamic compensation had positive and significant effect on organizational commitment. islamic recruitment and selection variable had the greatest influence on organizational commitment with a beta value of 0.368, followed by islamic training variable and islamic compensation variable with beta values of 0.357 and 0.233 respectively. the significance level of all ihrm variables is below 0.05 which indicates a significant influence on organizational commitment. the results of this study support the results of previous research conducted by hashim (2010) and fesharaki and sehhat (2017). the second hypothesis group formulated that ihrm had an influence on employee performance. the results showed that all variables ihrm namely islamic recruitment and selection, islamic training, and islamic compensation had a positive and significant effect on employee performance. islamic recruitment and selection variable had the most influence on employee performance with a beta value of 0.515, while the beta value of islamic training and islamic compensation variables are 0.339 and 0.225 respectively. the regression results also reveal that the significance level of all ihrm variables is below 0.05 which indicates a significant effect on employee performance. some previous studies concluded that employee performance is directly influenced by hrm which consists of recruitment and selection (bako and kolawole, 2016), training (athar and shah, 2015; elnaga and imran, 2013), and compensation (hameed et al., 2014; njoroge et al., 2015). this study concludes that all hypotheses that have been formulated are acceptable. ihrm which consists of islamic recruitment and selection, islamic training, and islamic compensation variables had a positive and significant effect on organizational commitment and employee performance at sharia banks in south sumatera province. table 1: respondent profile type of demography profile percentage gender woman 52.7 age range 26-30 years old 35.3 education level bachelor 59.4 working period 6-10 years 33.9 table 2: results of the instrument validity test question items pearson correlation r table value remarks irs 1-7 0.298-0.470 0.1736 valid itr 1-6 0.364-0.449 0.1736 valid ico 1-7 0.240-0.466 0.1736 valid oc 1-10 0.281-0.323 0.1736 valid ep 1-10 0.270-0.325 0.1736 valid table 3: results of instrument reliability test variable croanbach’s alpha remarks irs 0.691 reliable itr 0.724 reliable ico 0.680 reliable oc 0.711 reliable ep 0.747 reliable table 4: kolmogorov-smirnov test results on the research model research model asymp. sig. (2-tailed) remarks ihrm on oc 0.558 normal ihrm on ep 0.507 normal table 5: results of regression test on the impact of ihrm on organizational commitment model unstandardized coefficients sig. b standard error 1 (constant) 15.991 3.959 0.000 irs 0.368 0.083 0.000 itr 0.357 0.091 0.000 ico 0.233 0.084 0.006 table 6: results of regression test on the impact of ihrm on employee performance model unstandardized coefficients sig. b standard error 1 constant 12.240 3.631 0.001 irs 0.515 0.076 0.000 itr 0.339 0.083 0.000 ico 0.225 0.077 0.004 hadjri, et al.: islamic human resource management, organizational commitment and employee performance: a case study on sharia bank in south sumatera international review of management and marketing | vol 9 • issue 1 • 2019 127 this research is expected to be a reference for other researchers interested in ihrm variables. this study has limits on the number of sharia organizations that are the units of analysis and respondents. further research is expected to involve more areas of islamic organizations such as islamic insurance organizations and other sharia organizations, as well as increasing the number of other variables such as organizational justice, trust, and others. references ahmad, k. 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(2008), islamic perspectives on management and organization. international journal of islamic and middle eastern finance and management, 1(1), 64-78. . international review of management and marketing | vol 6 • special issue (s1) • 2016 293 special issue for "socio-economic and humanity-philosophical problems of modern sciences" international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2016, 6(s1) 293-299. research of category “motivation” as a basic tool of personnel management olga a. koryakovtseva1, iuliia i. doronina2, tatiana m. panchenko3, irina s. karabulatova4*, zishana m. abdullina5 1yaroslavl state pedagogical university named after k.d. ushinsky, yaroslavl, russia, 2moscow state university of mechanical engineering, moscow, russia, 3institute of continuing education, moscow state university of food production, krasnodar, russia, 4institute of social and political research of the russian academy of sciences, moscow, russia, 5ufa state university of economics and service, ufa, russia. *email: radogost2000@mail.ru abstract according to authors such as zhuravlev, odegov, shekshnia, solomandina, complex model of porter lawler is the best among the procedural theory, which argues that the motivation is not a simple element in the chain of causality. it is within a single system integrates a large number of concepts (effort, ability, results, compensation, satisfaction and perception). however, it appears that the limitation in this theory is still present. the theory is based on the principle of complexity that is not fully realized because the model does not reflect factors such as the needs, interests, and others. from domestic developments in the field of motivation is best known typological concept of gerchikova. it focuses on issues of stimulating effective work performance. the concept is based on the idea of the author of motivation, as the prevailing (and therefore not situational, stable) and perceived human motivations that determine the behavior of his labor. keywords: personnel management, motivation, incentives, efficiency of the enterprise jel classifications: m12, d61, p13 1. introduction consideration of the application threads must begin with the interpretation of the economic categories of “motivation.” thus, the “motivation” (from the latin “movere”) is to urge edition; a dynamic process of psychophysiological plan to control the behavior of man-eating, by its direction, organization, activity and stability; person’s ability to actively meet their own needs (motivation, 2015). “the potential productivity” calculated value that shows how much product can be released in the theoretically achievable in these natural conditions at this level of civilization (e.g. best of the having on the market of materials using advanced technologies and installation of the most modern of the existing market equipment), if all the delays and the delay will be reduced to zero (workforce productivity, 2015). it should be noted that the change (up or down) flow rate of labor forces to man, the effectiveness of the work of which is determined, it is heavily concentrated his motivation, in particular labor motif, under certain conditions of work and the use of advanced technologies. according to experts, the range of human aspirations and desires of such a huge motivation to work in the preceding that measure it just is not worth the money (maksimtsov et al., 2015). it is no accident today, many business leaders in the process of hiring a potential employee trying to figure out his inner motivation. leaders are not against high wages, but it must be sure that the co-staff member, first of all, is not motivated by love for the big money, and the interest in the new case. if we compare the practices of japanese and american management, it may seem that their “creators” adhered to the principle of “do the opposite” because liu-fighting element of management practices demonstrates the opposite approach (the great thinkers of the west, 1999, p. 88). koryakovtseva, et al.: research of category “motivation” as a basic tool of personnel management international review of management and marketing | vol 6 • special issue (s1) • 2016294 getting to the consideration of aspects that characterize the labor motivation, we must first determine the meaning of the term “motivation” imposed by schopenhauer. he first used this term in his article (schopenhauer, 1900). “the four principles of sufficient reason” (1900-1910). then the term “motivation” was widely used in everyday life scientists to full and complete explanation of human behavior. beginning in 1920. there are first motivation theories describing the behavior of human labor. work motivation is widely used in control theory. in addition to the basic functions of management (planning, management, accounting, control, analysis), the motivation of employees included in the block of the urgent tasks to solve the problems associated with the need to improve productivity and quality control. in our opinion, the motivation the concept is interdisciplinary, since it is widely used in various scientific fields (labor economics, sociology, law, etc.). this leads to a great diversity of its definitions. obviously, the complexity of interpretation in this case is predetermined by the complexity of the motivation as a process and phenomenon. therefore, we consider it necessary to consider the content of the term “motivation” in the framework of basic concepts: motivation, incentive, motivational structure of personality, its needs and interests, goals and related expectations, values motivational sphere workers. 2. research methodology the study used the methods of analysis and synthesis, groupings and classifications, system analysis and scientific observation. working hypothesis was the assumption that efficiency gains generated in the enterprise organizational and economic system of motivation is the direction of productive activity of employees of enterprises in the conditions of post-crisis recovery of economic activity. the practical significance of the work lies in the fact that its position on the concept and the formation and development of system of motivation of employees form the basis for the effective functioning of the enterprise in modern economic conditions. 3. main part the essence of the motivation lies in the fact that the individual is the subject of motivational relations, which has a set of needs and motivational systems. they determine the type of behavior that is created under the influence of a set of external and internal factors, and management actions. thus, the motivation appears to us as an objective process where interaction of the subjects of labor and the environment. since the labor motivation is aimed at reducing production costs, the impact on the motivation of the labor process, from an economic point of view, helps to reduce the difference between a productive time worked and the amount of paid time. motivation is inextricably linked with the needs of the person (employee). the needs in the “dictionary of russian language” ozhegov understood “the need, the need for anything requiring satisfaction” (ozhegov, 1972). in the first section, particular significance to study basic interpretations investigated category of “need.” table 1 shows several interpretations of the concept of “need,” clearly showing the closeness of views of foreign and domestic researchers. after analyzing the content of the term “need,” it should be noted that the points of view of scientists do not always coincide. nevertheless, they contribute significantly to the definition of the essence of human needs and a comprehensive examination. thus, we can formulate its own definition. demand a phenomenon of a permanent nature, reflecting the internal state of the individual, his conscious or unconscious feeling of need for certain comfortable and safe conditions of life and work, and sufficient funds in his opinion, for their own development. after studying the needs, it may be noted that every person at some point in their lives tend to the large number of requirements. these needs may belong to completely different categories, but somehow they are always in a certain ratio to each other. the presence of these needs determine the motives, which determine human behavior. motive (lat. “motive” motion) this is something that belongs to the stakeholders, what is it sustainable personal property, prompting the subject inside the commission of specific actions (heckhausen and heckhausen, 2010). that is, the motives are the very factors that make people able to perform a job. thus, there is need for detailed consideration of the concept of “motive,” defining it helps to understand more deeply the motivational structure of personality. currently in the scientific literature there are a large number of points of view relating to the definition of the motif. table 2 shows those that, in our view, most fully reveal this concept (subbotin, 1999). so, motives can be described qualitatively and quantitatively. qualitatively motives are divided into internal and external (with respect to the content of the activities). quantitative characteristic of act degree of its manifestation. each of the separate motives shall contribute to the overall motivation of activity, both positive and negative. there is reason to believe that the number of motifs is activated and guides the activities, determines the overall level of motivation. however, in the overall level of motivation and it makes a great contribution to each individual motive. in classical and foreign literature on the motivation of the economy it has different meanings. consider how interpret this concept encyclopedias and dictionaries of economics and management (table 3). thus, we can identify a number of key points found in the above interpretation of the concept of motivation (motivation to work): • incentive to active employment; • needs through work; • the process of creating incentives; koryakovtseva, et al.: research of category “motivation” as a basic tool of personnel management international review of management and marketing | vol 6 • special issue (s1) • 2016 295 • the dynamic process of the formation of a motive; • purposeful actions of the individual; • certain set of factors (the causes, processes, internal and external driving forces, mechanisms, incentives, etc.) • human behavior is directly related to the root causes of his behavior; • creation of conditions and the choice of certain methods to achieve goals employee. despite the fact that the interpretation of the concept of motivation are quite different, it is possible to note the common features of the concept. the motivation of all actions aimed at achieving certain goals (individual or corporate) for greater efficiency of employees. so, every motivation to have specific goals. consider the example of a schematic display of the mechanism of motivation (figure 1). analyzing figure 1 it can be noted that the choice of forms and methods of motivation is important to consider the motives of the person (employee), namely, his motivations, guides to specific actions. the main tasks of motivation include: table 1: the approaches to the definition of “need” author (source) definition comments ilyin (ilyin, 2003) need reflected in the establishment of needs, often experienced as internal stress and encourages mental activity associated with goal setting the need is impelling the beginning. however, it is doubtful that the author interprets as a reflection of a need need in mind. it appears that in addition to the needs of conscious nature, and may be unconscious brentano, 1921 need every negative feeling, coupled with the desire to eliminate it, by removing the dissatisfaction caused by its the demand is considered as a negative feeling. however, in certain specified active character needs: a clear link the needs and aspirations of its suit romashov, 2015 need individual care of providing for themselves the necessary means and conditions of a decent existence and survival, the desire to maintain balance with life and social environment this definition provides the broadest interpretation of the needs from the perspective of the theory of systems: any system (including man as a biological system and the social element) has a mechanism of homeostasis the evolutionarily developed the ability to maintain stability under the influence of destabilizing factors external and internal environment ozernikova, 2001 need the internal characteristics of the subject, reflecting a sense of need (conscious or unconscious) in the objective conditions, objects, circumstances, etc., required the subject to maintain its existence, operation and development this definition is based on a systems approach, but unlike the previous one, is more complete and specific table 2: the approaches to the definition of “motive” author (source) definition comments psychological dictionary (1990) motives a set of external and internal conditions that cause the activity of the subject and determining its orientation. the correlation of motives with external and internal conditions. controversial is the fact that motives determine the course of action, since the activity defined objectives burns (1999), ushakov (1999), dictionary of foreign words (ozhegov and shvedova, 1999; krysin, 1998; vasjukova, 1999; modern dictionary of foreign words, 1992) the motive a motive reason, a reason for any action motive is considered as an incentive, a reason for the implementation of the action, but there is a clear relationship with the action. therefore, it will best be assumed that even in the presence of the motif, the action cannot be realized and yadov (1982) motive a concrete incentive to action, inner impulse activity, the essence of which is the desire to meet the needs and requirements of the specification, all available for individual forms and conditions this definition is more specific, designated by the link between motivation and the desire to act. the motive is understood as an inner impulse, the impulse to activity adair (2009) motive inner desire of the individual, is not always fully informed, often half, having a clear effect on the will and causing action the motive is described as an inner need, desire, having an unambiguous impact on the will of the individual. in this definition, the author of the motive designated causation: motif-will-action. this addition explains the possible cause of the “gap” between the impulse to real activity and human actions leontiev (1983) “... only as a result of the meeting needs to tell her subject, she first becomes able to guide and regulate. meeting the needs of the subject of ... an act of objectifying needs filling its content is drawn from the environment. this translates to the need for proper psychological level, i.e., in tune” the author presented and described the tune as an ideal way of existing in the human mind. this energy-rich image of what a man is so necessary for his perfection koryakovtseva, et al.: research of category “motivation” as a basic tool of personnel management international review of management and marketing | vol 6 • special issue (s1) • 2016296 • each worker must be clearly formed understanding of the meaning and essence of motivation; • each head should be formed democratic approach to management; • for workers and managers it is important to learn the basics of psychological organizational communication. it is obvious that to successfully address the challenges outlined above requires a detailed analysis of the entire process of motivation in the company. if there is a relationship between the individual and group work motivation, it is necessary to explore and strengthen this relationship. motivational activities of the employee must be changed every time a change occurs in the workplace and the environment surrounding it. before we consider in detail the theory of motivation, should analyze classical scientific approaches to the study of motivation. the first attempt, in the study of aspects of human activity and to determine its causes were the works of ancient philosophers platon, aristotle, democritus (the great thinkers of the west, 1999). platon identifies the causes of human behavior and divides them into two categories: lower (start longing) and the highest (of passions of the soul). aristotle attempts to classify the motives of human activity. he first proves the connection between human behavior and its objectives. democritus lays the groundwork for materialist determinism and enters into scientific concept of cause (bogomolov, 1985). after a fairly dynamic development of the doctrine about the causes of human activity comes a long period of feudalism and the renaissance, when all knowledge is based on knowledge and an excellent understanding of the bible, it is strictly prosecuted. only in the xii-xiii centuries. the ideas of platon (1971), aristotle and democritus are developed in the writings of scholars like descartes, condillac, holbach, spinoza and other philosophers. during this period, as the root causes of human activity are beginning to address the needs. in his famous “treatise on sensations” condillac describes in detail the mechanism by which the needs of human activity (condillac, 1982). table 3: the definition of “motivation” in encyclopedias and dictionaries of economics and management author of definition definition of motivation ambartsumov and sterlikov (1993) motivation the process of encouraging, promoting someone (an individual or group of people) in the activities aimed at achieving individual and common goals of the organization. motivation is essential for a productive implementation of decisions taken and planned works vechkanov and vechkanova (2002) motivation motivation person to active entity (individual, social group, community of people) associated with the desire to satisfy certain requirements. on object saturation needs motivation may be material and spiritual, more detailed classification economic, social, and ideological. by main activities are divided into the motivation of the cognitive-intellectual, practical and transformative, communicative, etc. borisov (2003) motivation (1) an explanation, bringing the arguments in favor of any decision, action; (2) encouraging the subject of the activities and how to initiate koch (1999) motivation the reason to force people to work or to stimulate their energy zhuk (2008) motivation the relationship between human behavior and the reasons that cause this behavior; a set of psychological phenomena, which reflects the presence in the human psyche certain preparedness guide to the goal. unconscious or perceivable image of the target, which stimulates behavior orients it to meet specific needs, called motive. at the same purpose and motive are not the same manilovsky (1997) motivation conscious motivation, commitment to perform certain actions to address the material, spiritual and social needs pass et al. (1998) motivation the power or process that cause people to behave in this way, how they behave. the definition of work motivation can be considered as a factor in determining whether an employee is taking all the necessary efforts in order to achieve its performance goals baburina (2005) motivation a set of factors that determine the willingness to achieve goals; what causes a person to act and behave in a certain way raizberg et al. (2006) motivation external or internal motivation to the activities of the economic entity in order to achieve any purpose, there is an interest in such activities and ways of motivation, initiation kolesnikov and dashkov (1994) motivation the basic element of human interest a conscious desire to certain actions to address the needs; a system of interrelated and interdependent reasons rumyantseva (2008) motivation in economic science is one of the functions of management; selection of appropriate management practices and creating an environment in which the motives of artists contribute to the overall goals of the organization. motivation is determined by two major factors the system of remuneration and working conditions prevailing in the organization and the individual characteristics of the head (leadership styles). figure 1: the mechanism of motivating employees koryakovtseva, et al.: research of category “motivation” as a basic tool of personnel management international review of management and marketing | vol 6 • special issue (s1) • 2016 297 in the xix century, questions of motivation are the new subject of study, only the emerging science psychology. during this period, a great influence on the development of ideas about motivation have evolutionary theory of charles darwin and the theory of instincts mcdaugoll and freud. widespread recognition of these theories is obtained in the xx century. in their behavior is considered a purely biological position. these theories explain those manifestations of human behavior, which are caused by the influence of innate unconscious instincts. however, the theory was not able to describe those aspects of human behavior that are acquired through training and experience. in xx century, understanding of the problems of motivation gets practical importance in economic science. the study of human needs leads to two global theories of motivation. they are divided into: substantive and procedural. substantial theories of motivation are based on the identification of those inner impulses, called the needs that make people act the way they do. devoted to this work: maslow, mcclelland and herzberg, alderfer, yadov, lewin (maksimtsov et al., 2001). the division of labor motivation in the determination of the types and in this regard, methods of stimulation, give our opinion, the concept of typological gerchikova applied focus. the underlying theory of motives and ways of influencing them are of considerable practical importance for today’s leaders. a wide range of instruments of motivation involves internal and external factors of motivation that will ensure more efficient use of labor resources at the optimum combination of motives and incentives of employees of the enterprise. thus, the above procedural theories of motivation can determine a list of basic motivational components that are most often used by authors to describe motivation as a process. these components are: the ability of the worker and his expectations, both internal and external rewards, goals, and satisfaction from their achievements, employee awareness of its own role in the labor process, the perception of fairness (or vice versa, injustice) in relation to itself. remedial theories of motivation are more versatile compared to meaningful as they explore motivation as the process of changing the state, form a labor behavior, which provides greater efficiency of the employee. it is said that the content of the theory of motivation (herzberg, mcclelland, maslow) focus on finding the optimal structure of the list of the needs of workers. an important beginning, a call to action is the worker’s needs, which are presented as a conscious lack of something, which in turn causes a call to action. need is a conscious lack of something that causes the urge to rational action. the theory shows that genetically laid primary needs secondary formed during cognitive activity and practical experience. within the theoretical study found that procedural theory identifies needs motivating role of the employee (person), yet his motivation objective content viewed from the perspective that sends an employee to intensify efforts to achieve multiple objectives. we emphasize that the theoretical model lawler porter based on the understanding that motivation serves the needs, makes the company’s employees expect fair remuneration of their labor. according to the model designation is the effectiveness of labor satisfaction, and not vice versa, as the advocates of the theory of human relations. the main meaning of the theory: the central element the remuneration and the degree of certainty a level of effort, the appropriate level of remuneration. the foregoing analysis, the main areas of american and japanese companies in the motivation shows components of a modern, universal approach to motivation: 1. long-term ties with the company’s employees. with increasing duration of these bonds are increasing opportunities to optimize the motivation system. in japan, it is implemented within the lifetime employment, and in the leading us corporations are motivated by long-term relations relevant material and moral means to improve productivity. 2. constant and general education and training of personnel. high rates of technological progress cause an increasing rate of “amortiza-of” knowledge. therefore, a process of continuous in-house training, training and retraining, as well as regular training is not a pre-continuously. this increases staff motivation, because worker with a high-coy qualification is the most valuable frame for the enterprise and, respectively, brings greater productivity. 3. broad participation of employees at all levels in the administration. this part has a different configuration from the delegation of employees to higher management bodies to the government workplace. self-management is manifested in the fact that the executive-tieliu (within its competence) in the workplace have the right to self-parking-enforcement to carry out the planning, organization, control and management productivity, labor productivity. he is right to make and implement solutions to optimize their productivity. the main approaches to the motivation and productivity in the united states, japan, you can clearly see the causes of this rapid and that much important, stable economic development (including the manufacturer of the labor). each of these countries has found for itself a reasonable proportion of mothers and intangible approaches to motivation. this balance is built on the principle that the two approaches complement each other. counting on persian-cash, spatially localized economies of these countries and still achieve good results. the question of why, in practice, the global model of motivation and did not take root in russia, modern scientists have not agreed to a common opinion. scientifically all believe that the fault of the mentality, traditions that have historically folding the centuries, other researchers, who believe that russian leaders still simply “not mature enough” to the proper professional level that would be able to not only adequately assess and correct apply the techniques of western motivation work. one of the main reasons is the poor supply of provisory reforms necessary personnel capable of non-traditional, high-pro-level professional to solve complex problems of transition to a market economy. every solution of the problem should contribute to an elaborate koryakovtseva, et al.: research of category “motivation” as a basic tool of personnel management international review of management and marketing | vol 6 • special issue (s1) • 2016298 system of work motivation of labor, which is generally reflected in the productivity of labor. the current system is inefficient increasingly obvious, any radical changes are undergoing. russian leaders believe that only money can fully regulate labor productivity. while the west has long taken into account the social aspect of the question. foreign practice motivation originated much earlier than russia, and through trial and error got to that level, which is now trying to master and implement many spatially localized economies. meanwhile, over the last 20 years in the world of work motivation management underwent major measurable ion. and these changes have helped many foreign countries to raise their economy on a high level. however, an increasing number of domestic enterprises, enterprise takes attempts to introduce the concept of foreign labor motivation. these efforts are not always, or rather, almost never ends well. often, these failures do not depend on the socio-economic conditions, which remains the enterprise, and directly from the warehouse of the mind and character of a leader. in russia, most business leaders do not consider it necessary to invest in their employee’s money and knowledge, because return process takes a long time and it is not always come quickly. plus, the highly qualified staff may require increased labor costs, and this is not one most coveted item of expenditure. at the same time, the management as it does not want to understand that the more invested in personnel, the better it works, more profitable and, consequently, the company takes on a more competitive level. understanding this proportion becomes almost the main issue for local leaders. it should be noted that in recent years become a popular training areas for senior and middle managers, in the course of which explains the benefits of foreign practice of motivation, a method of implementing complex systems of motivation or individual elements on russian companies. despite numerous attempts to wrap foreign experience in motivation from the theoretical to the practical, it becomes obvious that in russia such a motivation system to settle down very hard, but this does not exclude the fact that you can borrow and implement the most suitable to our approach in the management of labor motivation, the individual elements of the american or japanese model of motivation. 4. conclusions thus, we select some of the best practices of international practices to increase motivation: 1. introduction of the shifted schedule. the company’s employees have the opportunity during the week (month) to freely dispose of their working time, which is useful in everyday life, eliminates the tension on production due to the impossible-opportunity at the right time to solve their everyday problems 2. bonuses time. employees are given the opportunity to perform the application of the rules at the time at which they are able to do so. surplus-time worker can be used for its intended purpose 3. the introduction of fees for rationalization proposal for which you once, pays the fee 4. introduction of the annual staff appraisal. by special program and methodology to assess the number and quality of work for the year. from the results of independent certification and assignment of a christmas bonus of the next class, discharge, etc. 5. the annual competition of professional skills. the contest is held by individual mass professions 6. informal communication in the team. the practice of regular informal meetings, to help rally the team, allow to allocate the informal leader, through which further questions can be solved by workers. thus, it is not surprising that the lack of motivation to work is ranked third in the list of reasons for preventing the growth of regional business spatially localized economies. the manager must be aware of the importance of motivation, that it affects the productivity of the enterprise as a whole. in addition, the experience of western leaders show that success is achieved by those who not only puts the task subordinates or by any means to pursue them, and has the ability to be interested, light, inspire staff to perform the tasks of the company, to form a team of like-minded. this means that the motivation of 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(2008), management: glossary. moscow: ankil. p1024. tx_1~at/tx_2~at international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2023, 13(2), 10-18. international review of management and marketing | vol 13 • issue 2 • 202310 inter-role conflict and intention to quit with psychological strain as a mediator sri sundari1*, heru kurnianto tjahjono2, arif hartono3, wisnu prajogo4 1wijaya kusuma university, purwokerto, indonesia, 2muhammadiyah university of yogyakarta, indonesia 3indonesian islamic university, yogyakarta, indonesia, 4ykpn college of economics yogyakarta, indonesia. *email: ssundari.ku@gmail.com received: 22 december 2022 accepted: 01 march 2023 doi: https://doi.org/10.32479/irmm.14192 abstract researches on inter-role conflict between work and family were initially carried out in developed countries with individualistic cultures based on western cultural contexts. however, currently, there has been an increasing number of researches on the same topic conducted in asian countries with its collectivistic cultural contexts. one of the direct consequences of work-family conflict is the emergence of psychological strain, thus leading to the intention to quit. this study examines the effect of work-family conflict and family-work conflict on the intention to quit working with the mediating role of psychological strain. the research was conducted on 270 employees of rural bank in indonesia, a country with collectivistic culture. data were analyzed using the structural equation modeling method. work-family conflict has a direct effect on intention to quit, as well as an indirect effect mediated by psychological strain. psychological strain has a direct effect on intention to quit. family-work conflict had an indirect effect on intention to quit, mediated entirely by psychological strain. psychological strain has mediated the effect of work-family conflict and family-work conflict on intention to quit. keywords: work-family conflict, family-work conflict, intention to quit, psychological srtain jel classifications: m12, m54, o15 1. introduction work and family are two important entities to be managed properly. both of these domains demand a thorough individual involvement, since they may lead to inter-role conflict. work-family conflict is a type of inter-role conflict since the demands of roles of one domain (work or family) do not match the demands of roles of other domains (family or work). work-family conflict refers to the extent to which work and family roles interfere with each other, occurring when the demands of one role affect a person’s ability to meet the demands associated with the other role (greenhaus and beutell, 1985). kahn et al. (1964); greenhaus and beutell (1985) examined work-family conflict as a single dimension although their definition implies a twoway relationship (allen et al., 2000). in subsequent developments, it was found that work-family conflict consists of two different forms related to the role conflicts resulted not only on how work interferes with the family, but also on how the family interferes with work (netemeyer et al., 1996). likewise, frone et al. mentioned that dual role conflict can occur in two directions: either work that interferes with family or family that interferes with work (frone et al., 1997). one of the consequences of work-family conflict is the intention to quit working (nohe and sonntag, 2014; billing et al., 2014). workfamily conflict is a predictor of intention to quit (rode et al., 2007). intention to quit is defined as an employee’s plan to leave his current job as a way to find another job in the near future (masroor and fakir, 2010). work-family conflict contributes to the employees’ intention to quit working (sidin et al., 2015). a research conducted by spector et al. compared work-family conflict on employee turnover intentions in two different cultures: individualist and collectivist culture (spector et al., 2007). it was revealed that workfamily conflict has a positive and significant effect on employee this journal is licensed under a creative commons attribution 4.0 international license sundari, et al.: inter-role conflict and intention to quit with psychological strain as a mediator international review of management and marketing | vol 13 • issue 2 • 2023 11 turnover intentions in both cultures, with stronger impact in anglo individualistic countries than that in collectivist countries, such as asia, eastern europe, and latin america. zhang et al. found that work-family conflict is not associated with turnover intention for chinese managers (zhang et al., 2012). chen et al. who examined the relationship between work-family conflict and intention to quit among hotel employees in china and the us demonstrated that work-family conflict is positively related to intention to quit. the relationship between the two is stronger among female employees in china than that in the us (chen et al., 2018). the inconsistency in these findings urges the researchers to conduct a research related to the effect of work-family conflict on employees’ intention to quit working in collectivist cultures, by focusing on two forms of conflict: work-family conflict and family-work conflict with the mediating variable of psychological strain based on the standing ground that the greater the prevailing conflict, the greater the psychological burden of a person, which will eventually result in the intention to quit. the literature review denotes that correlation between workfamily conflict (wfc) and the intention to quit has been widely explored by researchers, especially in western societies. this study deems it necessary to examine the relationship between work-family conflict and the intention to quit work as mediated by psychological strain (sundari et al., 2017). 2. literature review and hypothesis formulation 2.1. theoretical basis researchers use the theory of conservation of resources to explain why workfamily conflict affects psychological strain and subsequently affects the intention to quit working. conservation of resources (cor) theory proposes that individuals are motivated to acquire or retain resources. this theory denotes that a loss of resources will result in stress, while a profit will result in eustress, such as well-being (hobfoll, 1989). inter role conflicts may lead to stress due to lost resources in the process of combining the two roles, namely work and family. this theory states that time and energy are expendable commodities (grandey and cropanzano, 1999). cor theory asserts that once used, the time and energy owned is no longer available to complete other tasks, either in the same domain, or in a different domain. thus, the high demands and expectations in one role (e.g. work), will lead to diminishing availability of resources for other roles (eg family), because the amount of time and energy of an individual’s remains constant. 2.2. work-family conflict kahn et al. (1964) defined work-family conflict as a dual role conflict commonly experienced by employees. work-family conflict occurs when the demands of one role affect a person’s ability to meet the demands of the other role. work-family conflict constitutes three aspects, namely: time based conflict, behavior based conflict, and strain based conflict (greenhaus and beutell, 1985). netmeyer et al. (1996) revised the definition of kahn et al. (1964), also greenhaus and beutell (1985) by proposing two specific terms and definitions: work-family conflict and family-work conflict (netemeyer et al., 1996). dual role conflict can occur in two directions: work family conflict as a type of inter-role conflict where a person is unable to fulfill responsibilities in the family owing to the demands, time allocation, and stress/tension created by work, and family work conflict as a type of inter-role conflict in which a person is unable to fulfill responsibilities at work by reason of general demands, time allocation and stress/tension created by the family domain (frone et al., 1997). the consequences of wfc can be classified into three categories: those related to work, non-work, and stress. job consequences consists of job satisfaction, organizational commitment, intention to quit, absenteeism, job performance, career satisfaction, and career success. non-work consequences incorporates life satisfaction, marital satisfaction, family satisfaction, family free time, and family performance. stress consequences covers general psychological health, somatic/physical indications, depression, alcohol abuse, fatigue, work stress, and family stress. the results showed that the intention to quit is the variable mostly related to wfc (burhanudin et al., 2016). 2.3. intention to quit intention to quit is defined as an employee’s plan to leave his current job to find another job in the near future (masroor and fakir, 2010). intention to quit is the employee’s desire to quit from his current job. previous researches revealed that wfc and fwc were positively and significantly correlated with itq (ajaz et al., 2015). turnover intention can be defined as an employee’s intention to leave their organization. several other terms are used interchangeably with the term turnover, such as quits, attrition, exits, mobility, migration, or succession (alniacik et al., 2013). resigning from work can be seen as a coping reaction in response to inappropriate work and family demands. in particular, when an employee experiences wfc, he or she may tend to quit and look for a new, more family-friendly job to eliminate the occurrence of wfc (nohe and sonntag, 2014). similarly, when an employee’s family responsibilities interfere with job assignment (fwc), he or she may perceive quitting as a means to reduce fwc and to better fulfill family obligations (boyar et al., 2003). meta-analyses in cross-sectional studies generally support a positive relationship between wfc and fwc with intention to quit (allen et al., 2000; amstad et al., 2011). several studies on the effect of inter-role conflict in collectivist countries yielded different findings. research on doctors in china found that wfc had an effect on intention to resign (lu et al., 2017). research on employees of various industrial sectors in india found that fwc contributed more to resignation intention than wfc (aboobaker et al., 2017). meanwhile, research on bank employees in india found that fwc had no effect on resignation intentions while wfc had a positive effect on resignation intentions (aboobaker and edward, 2020). thus, the first and second hypothesis are written as follows: sundari, et al.: inter-role conflict and intention to quit with psychological strain as a mediator international review of management and marketing | vol 13 • issue 2 • 202312 hypothesis 1: work-family conflict has a positive effect on intention to quit. hypothesis 2: family-work conflict has a positive effect on intention to quit. 2.4. psychological strains work-family conflict allows a rapid response within the individual, which results in tension, either psychologically or physiologically. strains are psychological, behavioral, and physiological reactions to environmental demands, threats, and challenges (i.e. stress) and embrace various responses, such as fatigue, depression, and headaches (thomas and ganster, 1995). psychological stress is frequently mentioned, for example in the form of: emotional exhaustion and irritation, anxiety and depression, and general psychological stress (nohe et al., 2015). there have been many studies to examine the relationship between work-family conflict and psychological strain (allen et al., 2000; amstad et al., 2011). strain is a dangerous condition and usually has a bad impact on the individual who suffers from it. strain is an individual’s psychological, physical, and behavioral response to a stressor. strain is experienced when a person’s perceived environmental demands or constraints exceed his resources or capacities. psychological strain, or emotional exhaustion, is considered a core dimension of stress-induced fatigue (tromp et al., 2010). the most popular interpretation assumes that both forms of work-family conflict precede strain. studies have consistently found positive simultaneous correlations between wif and fiw and strain (amstad et al., 2011). hypothesis 3: work-family conflict has a positive effect on psychological strain. hypothesis 4: family-work conflict has a positive effect on psychological strain. there are many models in the literature that assume that work-family conflict affects strain, for example (frone et al., 1992; frone et al., 1997), but they do not recognize the potential influence of strain on work-family conflict. nohe et al. revealed a reciprocal relationship between the two forms of work-family conflict and strain by extending the existing model to take into account the reciprocal effects (nohe et al., 2015). researchers aiming to build future models of workfamily conflict and strain are expected to explicitly acknowledge reciprocal effects. thus, this study proposes a model that correlates between psychological strain with intention to quit, which was proven to be one of the consequences of work-family conflict. hypothesis 5: psychological strain has a positive effect on intention to quit. 2.5. mediating role of psychological strain on the effect of work-family conflict and family-work conflict on intention to quit billing et al. who examined the effect of work-family conflict on intention to quit with psychological strain as a mediator found that psychological strain partially mediates the relationship between work-family conflict and intention to quit. this results were found to be true in the five countries studied: the united states, canada, india, indonesia, and south korea (billing et al., 2014). psychological strain in this research model is a direct effect of work-family conflict, which in turn will lead to a detrimental effect of the intention to quit. referring to the research of billing et al. this study aims to develop a model of the effect of work-family conflict on the intention to quit with the mediating role of psychological strain, given the assumption that prior to making a decision to quit working, an employee who experiences work-family conflict will suffer from unbearable psychological strain. the greater the conflict experienced, the greater the psychological burden, which eventually will result in the intention to quit. psychological strain in this research model is a resulted from a direct influence of work-family conflict and familywork conflict, which in turn has an impact on the intention to quit working. hypothesis 6: psychological strain plays a role in mediating the positive effect of workfamily conflict on intention to quit. hypothesis 7: psychological strain plays a role in mediating the positive effect of workfamily conflict on intention to quit. 3. research methods 3.1. population and sample this study involved 558 permanent employees of bank bpr (rural banks), particularly in the working area of bpr-bkk purwokerto with banyumas regency area, bank bpr-bkk purbalingga with purbalingga regency, and bank bpr-bkk mandiraja with banjarnegara regency area as the research population. bank employees of bprbkk were selected as the research population because bank employees are prone to a family-work conflict since they are fully in charge of their task that requires full attention, and long and inflexible working hours. research samples were selected by purposive sampling method sekaran (2000) based on several criteria: married/ever married employees, being in a household with dual earner or single parent, and having children under their responsibility (children are unmarried and not working). the questionnaire given to the research sample was 283 employees from the three bpr-bkk, but which could be analyzed were as many as 270. 3.2. variable measurement a scale of 1 to 6 was used to collect data with 6 indicating the strongest agreement. 3.3. work-family conflict (wfc) the indicators used in the study aim to identify three types of workfamily conflict as measured by 9 questions. this measurement was developed by (carlson et al., 2000). 4. family-work conflict (fwc) the indicators used in the study identified three types of familywork conflicts as measured by 9 question items. this measurement was developed by (carlson et al., 2000). sundari, et al.: inter-role conflict and intention to quit with psychological strain as a mediator international review of management and marketing | vol 13 • issue 2 • 2023 13 4.1. intention to quit to measure the desire to quit working, 4 indicators are used (alniacik et al., 2013). 4.2. psychological strain to measure psychological tension, 4 indicators are used: (wan and martin, 2006). 4.3. analytical method 4.3.1. confirmatory factor analysis (cfa) cfa or factor analysis is used to test the theoretical construct dimension or to test the validity of a theoretical construct. validity refers to the proper ability of indicators as a tool to measure constructs or variables (tjahjono, 2021). in testing using cfa, the indicator is considered valid if it generates the loading factor of 0.50. 4.3.2. reliability test reliability test aims to measure the trustworthy or reliability extent of a measuring instrument. the generally accepted level of reliability is indicated by the value of cr (construct reliability) of >0.70. in addition, the reliability test can be further strengthened by the measurement of the mean ve (variance extracted). the generally accepted measurement of the mean ve is >0.5, (ghozali, 2014). 4.3.3. hypothesis testing hypothesis testing was carried out with a structural equation modeling approach using amos version 22. this study used a significance level of (α) 5% (ghozali, 2014). 5. analysis and discussion 5.1. validity and reliability tests the cfa analysis revealed that the overall indicator has a loading factor value of ≥0.5. from this result, all indicators are declared valid. the cr and ve analysis indicated that all variables have construct reliability values of >0.70 and variance extracted of >0.5. from these results, it is conclusive that all variables are declared reliable. 5.2. sem assumption evaluation sem constitutes of four assumptions: number of samples, outliers, normality and multicollinearity. the following is an evaluation of sem assumptions: 5.2.1. number of samples the number of respondents who were free from outliers amounted to 265 respondents. this number has met the criteria for using the sem testing method, since the minimum number of samples needed for sem testing is 100-200 samples or the number of indicators multiplied by 5-10. 5.2.2. outliers test the results of the outlier test show that there is no data that exceeds the number 54,051 at the mahalanobis distance value. therefore, it can be concluded that there are no outliers. 5.2.3. normality test the distribution of data is said to be normal at a significance level of 0.01 if the critical ratio (c.r) for skeweness or for curtosis is no more than ±2.58. from the normality test using univariate analysis, it was revealed that most of data were not normally distributed because the resulting c.r value was greater than the provision of ±2.58. similarly, the multivariate normality test indicated that the value of c.r. was greater than ±2.58. thus, the data were not distributed normally. however, by referring to hair, et. al. (2006), the data that has exceeded 200 is assumed to be normally distributed. 5.2.4. multicollinearity test multicollinearity and singularity are indicated by determinants of the extremely small sample size of covariance matrix that is close to zero (ghozali, 2014). the multicollinearity test produces the output determinant value of the covariance matrix of thus, multicollinearity and singularity do not occur because the determinant value of the covariance matrix sample is very small or close to zero (ghozali, 2014). 5.3. evaluation of goodness of fit index before presenting the goodness of fit index, the following figure 1 presents the full initial model of the study with valid items. once the sem assumption is met, the subsequent step is testing using multiple conformity indices to measure the “truth” of the proposed model. this test is known as the goodness of fit test. the results of the fit test showed that the level of goodness of fit in the model was cfi, tli, nfi, ifi, rmsea, and rmr. while those that do not fit in the model are: chi square, significancy probability, cmin/df, gfi and agfi. 5.4. hypothesis test the results of the hypothesis test in this study refer to items that have met the validity and reliability tests and data that have been free of outliers. hypothesis will be supported if the value of p < α 0.05 (table 1). the test results indicate that: the effect of work-family conflict (wfc) on intention to quit (iq) was supported (β = 0.392, p =*** (0.001) < 0.05). the effect of family-work conflict (fwc) on intention to quit (iq) was not supported (β = 0.040, p = 0.629 > 0.05). the effect of work-family conflict (wfc) on psychological strains (ps) was supported (β = 0.509, p =*** (0.001) < 0.05). the effect of family-work conflict (fwc) on psychological strains (ps) was supported (β = 0.413, p =*** (0.001) <0 .05). the effect of psychological strains (ps) on intention to quit (iq) was supported (β = 0.721, p =*** (0.001) < 0.05). the test revealed that: the effect of work-family conflict on intention to quit through the mediating role of psychological strains was supported. the test was carried out by comparing the standardized direct effect value of 0.355 with the standardized indirect effect value of 0.332, while still referring to either the significance or insignificance of the direct effect of exogenous variables on the mediating variable sundari, et al.: inter-role conflict and intention to quit with psychological strain as a mediator international review of management and marketing | vol 13 • issue 2 • 202314 figure 1: full model of structural equation modelling table 1: hypothesis test results estimate s.e. c.r. p description wfc → iq 0.392 0.087 4.531 *** supported fwc → iq 0.040 0.083 0.483 0.629 not supported wfc → ps 0.509 0.067 7.587 *** supported fwc → ps 0.413 0.072 5.743 *** supported ps → iq 0.721 0.110 6.542 *** supported ***p<0.05. source: processed data 2020 and the direct influence of the mediating variable on endogenous variables (table 2). these results delineate that the direct effect value is greater than the indirect effect value, so the sixth hypothesis in this study is supported; although the psychological strain variable only plays a part in mediating the effect of workfamily conflict on intention to quit. 6. discussion the hypothesis testing in this study generated the following results in table 3. from testing hypothesis 1 it was found that work-family conflict (wfc) had a positive effect on intention to quit (iq). from the data analysis, it is evident that workfamily conflict has a significant positive effect on the intention to quit working. this finding supports the matching-domain perspective, in the sense that the wfc basically affects the domain from which this conflict originates, in the form of work-related responses. this finding supports the matching-domain perspective, in the on sense that the wfc basically affects the domain from which this conflict originates in the form of work-related responses. this finding supports the previous research of chen et al. (2018), which examined the relationship between work-family conflict and intention to quit among hotel employees in china and the us. this previous research found that work-family conflict was positively related to intention to quit, while workfamily conflict family was more strongly associated with intention to quit among men than women. the correlation between work-family conflict and intention to quit was also stronger among chinese hotel female employees than their us counterparts. likewise, aboobaker and edward discovered that turnover intention was more significantly associated with workfamily conflicts, thus providing evidence for the emergence of the matching-domain hypothesis in work-family research [23]. on the other hand, the researcher’s findings are different from the findings of zhang et al. (2012), which revealed that there was no correlation between wfc and turnover intention for chinese managers. from testing hypothesis 2 it was found that family-work conflict (fwc) had no positive effect on intention to quit (iq). from the results of data analysis, it is evident that family-work conflict does not have a significant positive effect on the intention to quit. this finding is attributed to the fact that social and cultural norms have an important influence on values, beliefs, and roles related to wfc. eastern countries, like china highly value collectivism, while western countries like the us widely hold individualism. individuals in collectivist (vs. individualistic) cultures are more likely to build closer relationship to their friends and coworkers (eg, willing to share personal information). some researchers have demonstrated that collectivist countries, such as china, highly consider work in terms of its benefits to one’s family zhang et al. (2012), instead of to the individual as is the prevailing view in individualistic cultures. hence, in china, people work for the benefit of the whole family members by way of supporting individual work priority behaviors, for example by providing daycare. the findings in this study are also different from the finding of previous studies, including that revealed by li, li, wang et al. that addressed the relationship between family attachment and wfc in the context of collectivist culture and the sundari, et al.: inter-role conflict and intention to quit with psychological strain as a mediator international review of management and marketing | vol 13 • issue 2 • 2023 15 effect of these variables on intention to quit. it was revealed that closer tight between family members reduce fwc levels, which in turn lowers turnover intention (li et al., 2019). wang et al. (2004) who examined employees working in the banking sector of the us and china highlighted that wif was more positively related to job withdrawal intentions among individuals with high levels of idiocentrism, while fiw had a greater positive relationship to job withdrawal intentions for those with high levels of allocentrism (collectivism) or low idiocentrism. from testing hypothesis 3 it was found that work-family conflict (wfc) had a positive effect on psychological strain (ps). from the results of data analysis, it is evident that work-family conflict has a significant positive effect on psychological strain. research on wfc among different groups of employees has consistently reported a significant relationship between wfc and increased psychological strain kalliath et al. (2012) reported significant associations between wfc-time, wfc-behavior, wfc-strain and increased psychological strain among australian social workers. the same study also discovered that fwc-behavior and fwcstrain were significantly related to psychological strain. likewise, other studies have demonstrated a significant relationship between wfc and psychological strain (grandey and cropanzano, 1999). other empirical studies have depicted support for a significant relationship between wfc and psychological strain, although not all using the same measurement. for example, a metaanalysis of fourteen studies by allen et al. (2000) delineated a positive relationship between wfc and psychological strain. these findings suggest that work stress extends to the family domain and adversely affects participation at home, which consequently adds to psychological strain. from testing hypothesis 4 it was found that family-work conflict (fwc) had a positive effect on psychological strain (ps). from the data analysis, it is evident that family-work conflict has a significant positive effect on psychological strain. this finding supports the results of previous research that according to the cross-domain model, individuals are dissatisfied with their role whenever they have difficulty meeting the demands as a result of interference from other roles kalliath et al. (2017). thus, both the fwc that was negatively related to work outcomes, and the wfc’s that were negatively related to outcomes in the family domain, resulted in stress because personal resources were lost in the process of combining the two roles. from testing hypothesis 5 it was found that psychological strain (ps) had a positive effect on intention to quit (iq. from the data analysis, it is proven that psychological tension has a significant positive effect on the intention to quit working. this finding supports billing et al. (2014), who articulated a positive relationship between psychological strain and the intention to quit, although the relationship is much weaker in indonesia when compared to other countries (united states, canada, india and korea south). from testing hypothesis 6 it was found that the effect of workfamily conflict (wfc) on intention to quit (iq) through psychological strain (ps) was supported. the test was carried out table 2: testing results of hypothesis 6 and 7 variable standardized direct effect standardized indirect effect standardized total effect fwc wfc ps fwc wfc ps fwc wfc ps ps 0.420 0.548 0.000 0.000 0.000 0.000 0.420 0.548 0.000 iq 0.034 0.355 0.606 0.254 0.332 0.000 0.288 0.687 0.606 source: processed data 2020 table 3: summary of hypothesis test results no. hypothesis statistical value conclusion 1. work-family conflict has a positive effect on intention to quit β=0.392, p=*** < 0.05 hypothesis accepted 2. family-work conflict has a positive effect on intention to quit β=0.040, p=0.629>0.05 hypothesis rejected 3. work-family conflict has a positive effect on psychological strain. β=0.509, p=*** < 0.05 hypothesis accepted 4. family-work conflict has a positive effect on psychological strain β=0.413, p=*** < 0.05 hypothesis accepted 5. psychological strain has a positive effect on intention to quit β=0.721, p=*** < 0.05 hypothesis accepted 6. psychological strain plays a role in mediating the positive effect of workfamily conflict on intention to quit st. direct effect=0.355>st. indirect effect=0. 332 effect of wfc on intention to quit: β=0.392, p=*** < 0.05 effect of psychological strains on intention to quit: β=0.721, p=*** < 0.05 hypothesis accepted 7. psychological strain plays a role in mediating the positive effect of workfamily conflict on intention to quit st. direct effect = 0.034 < st. indirect effect=0.254 effect of fwc on intention to quit: β = 0.040, p=0.629 > 0.05 effect of psychological strains on intention to quit: β = 0.721, p=*** < 0.05 hypothesis accepted source: processed data 2020. sundari, et al.: inter-role conflict and intention to quit with psychological strain as a mediator international review of management and marketing | vol 13 • issue 2 • 202316 by comparing the standardized direct effect value of 0.355 with the standardized indirect effect of 0.332, while still referring to significance or insignificance of the direct effect of exogenous variables on the mediating variable and the direct influence of the mediating variable on endogenous variables. these results indicate that the direct effect value is greater than the indirect effect value. with the results that work-family conflict affects psychological tension and psychological tension also affects intention to quit, the sixth hypothesis in this study is supported; although psychological tension only partially mediates the effect of work-family conflict on intention to quit. this finding corresponds with the results revealed by billing et al. (2014), which stated that psychological pressure partially mediates the relationship between work-family conflict and intention to quit, even though his research used the work-family conflict variable as one dimension that comes from two domains, namely work and family. this finding is also consistent with ekawarna (2019), who denoted that work-family conflict has a direct effect on intention to quit. in addition, he also stated that work-family conflict also has an indirect effect on intention to quit through job stress (ekawarna, 2019). from testing hypothesis 7 it was found that the effect of family-work conflict (fwc) on intention to quit (iq) through psychological strain (ps) was supported. the test was carried out by comparing the value of the standardized direct effect of 0.034 with the standardized indirect effect of 0.254, while still referring to the significance or insignificance of the direct effect of exogenous variables on the mediating variable and the direct influence of the mediating variable on endogenous variables. from these results, it is known that the direct effect value is smaller than the indirect effect value, so the seventh hypothesis in this study is supported. in this case, psychological strain fully playing a mediating role in the positive effect of family-work conflict on intention to quit. the data analysis proves the effect of work-family conflict on the intention to quit working through psychological tension. hence, the hypothesis testing of the second and seventh hypotheses indicated the indirect effect of work-family conflict on the intention to quit working. this finding is somewhat different from the research by billing et al. (2014) which used the work-family conflict variable as a dimension derived from two domains: work and family, and revealed that psychological pressure only partially mediated the relationship between work-family conflict and intention to quit. table 2 delineates that the work-family conflict variable with a value of 0.687 has the highest total value of effect on intention to quit. this result denotes that workfamily conflict has the most dominant impact on intention to quit, psychological strain has a total value of direct effect of 0.606, while family-work conflict has a total value of direct effect of 0.288 on intention to quit. 7. conclusions, limitations and suggestions 7.1. conclusions there have been many studies examining the relationship between work-family conflict and family-work conflict with psychological strain and intention to quit. the results of this study are expected to increase understanding of the relationship between these variables. it was found that work-family conflict had a direct positive effect on intention to quit, while family-work conflict had no direct effect on intention to quit. work-family conflict has a direct positive effect on psychological strain, family-work conflict also has a direct positive effect on psychological strain. psychological strain has a direct positive effect on intention to quit. psychological strain partially mediates the effect of work-family conflict on intention to quit and fully mediates the effect of familywork conflict on intention to quit. 7.2. implications 7.2.1. managerial implications this research was conducted in a country with a collectivist cultural context, but it is still proven that work-family conflict has the highest total influence on intention to quit. these results indicate that work-family conflict has the most dominant influence on intention to quit. work-family conflict (wfc) apart from having a direct positive effect on intention to quit, it also had a direct positive effect on psychological tension. thus, management must be aware of the occurrence of work-family conflict faced by employees. thus, organizations can reduce employees’ intention to quit by reducing their work-family conflict by way of offering supporting policies, such as providing emotional support when their employees experience work-family conflict. this effort can be done by enhancing the effectiveness of the counseling program for employees related to the problems they encounter. this program is expected to help employees by reducing their burdens and providing solutions to any of their problems. this counseling program also aims to solve work-family conflicts as a way to create a balanced portion between work and family interests. family-work conflict did not have a direct positive effect on intention to quit but had a direct positive effect on psychological tension. the absence of the influence of family-work conflict (fwc) on intention to quit is in line with the opinion of many researchers, that the condition of society in collectivist countries is that people see individuals in social networks, the role of work is seen as serving the needs of groups rather than individuals. people will try hard to work at the expense of their group (eg family) and they enjoy support from family. however, from the results of this study there are things that need to be watched out for, namely family-work conflicts which have a direct impact on psychological tension so that it will indirectly affect the intention to quit. from the results of the analysis, it is known that psychological tension fully mediates the effect of family-work conflict on intention to quit. thus, management must be aware of the occurrence of familywork conflicts faced by employees. through this counseling program, management can also provide confirmation to employees about applicable work policies/rules in relation to relationships with employees’ families to avoid the occurrence of family-work conflict which can have an impact on psychological strain of employees and interfere with their role at work. sundari, et al.: inter-role conflict and intention to quit with psychological strain as a mediator international review of management and marketing | vol 13 • issue 2 • 2023 17 7.2.2. theoretical implications hypothesis testing resulted in several findings to be developed by future researches. first, work-family conflict (wfc) has a direct positive effect on intention to quit and on psychological strain. the positive effect of work-family conflict (wfc) on intention to quit supports the matching-domain perspective of previous studies (allen et al., 2000, netemeyer et al., 1996, nohe and sonntag, 2014). there is also an indirect effect of work-family conflict on intention to quit which is partly mediated by psychological strain. second, psychological strain has a direct positive effect on intention to quit. third, family-work conflict does not have a direct positive effect on intention 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(2012), work‐family conflict and individual consequences. journal of managerial psychology, 27(7), 696-713. 15_bodrunova.indd international review of management and marketing | vol 5 • special issue • 2015 97 special issue for "media as the tool: management of social processes" international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2015, 5(special issue) 97-104. twitter-based discourse on migrants in russia: the case of 2013 bashings in biryulyovo svetlana sergeevna bodrunova1*, anna alexandrovna litvinenko2, dmitry petrovich gavra3, aleksandr vasilievich yakunin4 1saint petersburg state university, universitetskay naberejnay 7/9, st. petersburg, 199034, russia, 2saint petersburg state university, universitetskay naberejnay 7/9, st. petersburg, 199034, russia, 3saint petersburg state university, universitetskay naberejnay 7/9, st. petersburg, 199034, russia, 4saint petersburg state university, universitetskay naberejnay 7/9, st. petersburg, 199034, russia. *email: svetlana.s.bodrunova@rambler.ru abstract according to a number of scholars, twitter possesses big potential to become a “crossroads of discourses” due to its openness, de-hierarchization, and spontaneity (miller, 2010; shirky, 2008). at the same time, substantial criticism has risen towards political and deliberative effi cacy of twitter (fuchs, 2014). the authors aim at analyzing the features of the twitter-based agenda setting within the hybrid media system in russia (chadwick, 2013; bodrunova and litvinenko, 2013a). the research question is whether the use of twitter in the russian socio-political context potentially leads to the formation of the “crossroads of opinions” or, in contrast, to closing-up of political discussion and to further fragmentation of public discourse. the research focuses on structural and content aspects of discussion on anti-migrant bashings in biryulyovo (moscow) that happened in october 2013. our research methods include automated vocabulary-based web crawling, word frequency analysis, manual coding of tweets, and interpretation of statistical data. preliminary results suggest an unexpectedly high level of mediatization of the discussion; the hypothesis about the “crossroads” nature of the discussion on the russian twitter seems to be proven, which makes this platform differ from the russian facebook where, according to another recent study (bodrunova and litvinenko, 2013b), political discussions are held mostly in closed-up communicative milieus, or “echo chambers” (sunstein, 2007). keywords: twitter, russia, web crawling, social media, migrants, echo chambers jel classifi cations: o32, z13 1. introduction 1.1. literature review with the growth of internet penetration in the world, media systems have been undergoing qualitative shifts in their shape, borders, and relations with outer society, including the political sphere. among many conceptualizations of this process, one of the recently developed concepts is the concept of a hybrid media system (chadwick, 2013) where technological changes are causally related to the reshaping of socio-political cleavages in the societies. under hybridization of a media system, we understand the two trends: (1) growing transformation of offl ine media into the so-called “convergent” media characterized by multiplatform production and multichannel delivery of content; (2) growth of the new segment of the media sphere, namely online-only professional media outlets and web 2.0 aggregated individual media (bodrunova and litvinenko, 2013b). understood this way, media hybridization framework allows for posing questions on the quality of online public discussion with high effi cacy. parameters that may show whether an online networking/communication platform, is, indeed, a place where competing or even hostile discourses meet are better developed as media hybridization parameters, as the concept unites traditional media research areas such as, e.g., agenda setting research, with political internet studies. media hybridization research today focuses on several important issues. among those, one of the most important questions is what factors – national-bound or universal/global – infl uence online discussions more within the language-/nation-bound public spheres (adam bodrunova, et al.: twitter-based discourse on migrants in russia: the case of 2013 bashings in biryulyovo international review of management and marketing | vol 5 • special issue • 201598 and pfetsch, 2011). under national-bound factors, scholars usually mean national context, including both technological factors (like internet penetration or the structure of online/offl ine parallelism) and public sphere factors (deliberative traditions, representation of confl ict sides, local issues etc.). cross-national or global factors are often bound to platform features: presumably, facebook, twitter and other globally popular platform organize the online discussions in their own ways, thus infl uencing the deliberative quality of the online discourse. in particular, it is interesting to know what media today play the leading roles in formation of agendas (bodrunova and litvinenko, 2013a; mancini and mazzoni, 2013) and how intermedia agendas work (mccombs, 2005) – e.g. how the agenda fl ows are directed (from/to online media), whether there are boundaries for agenda spill-overs, and how coherent the agenda formation in different media is. despite early studies showed no difference in online agenda setting with “old” media (rogers et al., 1991; lee, 2007), today is research brought a revival to long-established research on two-step fl ow of political information (katz and lazarsfeld, 1957) and “spiral of silence” in political discussions (noelle-neumann, 1984). but, being rooted in media and political research, media hybridization studies are still poorly connected to internet studies that perceive media in a more technical way (as platforms). in our research, we try to look at twitter as a part of a hybrid media system but also address previous fi ndings of political research on twitter as a communicative milieu. as it is widely known, in 1990s and early 2000s, many authors claimed that internet penetration would lead to democratization via bigger citizen involvement and horizontalization of communication. this was believed to be especially true for transitive democracies, including russia (rohozinski, 2009; kuchins, 2007). with the rise of micro blogging since 2006 (predominantly on twitter), this democratization potential of internet, in theory, was expected to increase even more: first, because of the growing informational openness in social networks, as twitted had no options of closing posts from other users (miller, 2010); second, due to the nature of the 140-digit-limited posts that seemed more engaging than on other, more monologue-oriented, social platforms. but recently optimism gave place to demarcation of optimists and pessimists, where the former still perceive twitter as a capable catalyst of political discussion while the latter consider twitter a noisy dump of de-politicized content oriented to sex, pop music, gaming, spam, and trivia (fuchs, 2014). research on online deliberative publics (grönlund et al., 2014), as well as media exposure studies, have both shown signifi cant criticism towards political effi cacy of twitter. within these studies, there may be traced a critical line that tells of fragmentation of the audiences via encapsulation of online mini-discussions (tewksbury, 2005), which clearly has political implications, as the discussions become less involving and representative. these closed-up online milieus are described as “public sphericules” (gitlin, 1998), “echo chambers” or “enclaves” (sunstein, 2007), or “filter bubbles” (pariser, 2011); their formation prevents communication platforms from becoming “virtual fi replaces” or “crossroads of opinions.” despite all existing criticism, twitter is still perceived as more capable of forming the “crossroads of opinions” than longer-text-based platforms. it is particularly important whether twitter-based discussions, presumably the most involving ones, are still inclined to form encapsulated “clouds.” thus, the research that we present today has three parts. first, we look at the structure of the twitter-based discussion in terms of its representative quality: who takes part in the discussion, how the confl ict sides are represented, who are the “discussion infl uencers” (vaccari, 2013) and to what extent they are institutionalized, and whether there are “echo chambers” that lower the potential of deliberative “opinion crossroads.” as to the infl uencers, according to american and swedish studies, the biggest infl uencers are experts, professionals and established organizations (ruthl 2012); but this may vary depending upon the national context (vaccari et al. 2013). second, we look (and partly present the results in this article) at the role of twitter in intermedia agenda setting – that is, what media work better as news alert providers on twitter and beyond, what directions (traditional to web 2.0 media or vice versa) agenda spill-overs take, and what relations media accounts in social networks form with other infl uencers. here, one needs to add that, in the west, twitter has been described as an “alert system,” a “springboard for news stories,” and a tool for reporting (hermida, 2010; mancini and mazzoni, 2013; vis, 2013). the third part of the research is dedicated to frame analysis of the discussion (de vreesel 2005; dimitrova and strömbäck, 2012), which in future will allow us, among other, to describe the patterns of distribution of guilt, responsibility, and solidarity, as well as to compare the levels of hate speech, call for action, and presence of nationalist discourse in the discussions. 1.2. russian hybrid media system as a research object today, russia constitutes a nearly perfect object for research upon political implications of media hybridization – due to at least four reasons. 1. today, russia is described as a fundamentally fragmented society (zubarevich, 2011), with cosmopolitan post-industrial, town-based post-soviet, rural, and caucasian/migrant “russias” co-existing but not fully merged. the russian media system seems to refl ect these divisions to a great extent, with post-soviet media still occupying a big share in newspaper, tv, and radio markets (vartanova, 2013). this implies that we need to assess how the media spheres of the “four russias” are represented and interact in online discussions. 2. russia has low online/offl ine media parallelism (toepfl , 2011): in early 2000s, a big number of online-only media formed an alternative news arena. this implies we need to assess how the online/offl ine parallelism is effectively represented on twitter. 3. russia has already experienced formation of “echo chambers” in blogs, fi rst and foremost on livejournal (gorny, 2009). thus, we expect twitter sphere to have similar tendency. 4. in 2009-2013, russia repeatedly became “the most socially networked country in the world” in terms of user engagement bodrunova, et al.: twitter-based discourse on migrants in russia: the case of 2013 bashings in biryulyovo international review of management and marketing | vol 5 • special issue • 2015 99 (synthesio, 2013). this means that the role of social networking platforms in russia is high and grows higher (but perhaps depends upon the “four russias”). thus, partial political modernization is complemented by an online-only-oriented media hybridization trajectory; the country is very likely to provoke closing-up of online communicative milieus on competing platforms. our own earlier research fi ndings (bodrunova and litvinenko, 2013b) suggest that, in 2010s, online media, especially facebook and media of specialized and alternative agenda, have played a “cultivational” role in forming a negative political consensus within the community of the “for fair elections” protesters of 2011-2012. we also tracked evidence of platform dependence in political engagement, as facebook became an attraction for the ex-livejournal community, the “meeting point” for the “creative class” and a clearly identifi able political community while, e.g., its russian counterpart vkontakte did not. what we observed was a platform-dependent and online-mediabased formation of a post-industrial urban “public counter-sphere;” its divergence from the mainstream still deepens. by far, we had mixed data on the “crossroads” nature of the russian twitter. one research group (greene, 2012) showed that, indeed, the russian twitter of 2012 could be perceived as “crossroads” in terms of presence of pro-establishment and oppositional clusters; pro-establishment networks, though, were better organized and more active. this fi nding was only partly supported by berkman center for internet and society at harvard (kelly et al., 2012) which, for 2010-2011, identifi ed topic-oriented clusters in the russian twitter. thus, the questions on the “crossroads” stance of the russian twitter remain unanswered, while the relevance of twitter in russia grows, with rough estimation of usage as 5 million out of circa 78 million of monthly internet users aged over 12 (data by tns). 1.3. the biryulyovo bashings case in the context of ethnic relations in russia in the post-soviet times, russia has witnessed huge migration fl ows from the ex-soviet states, including south ones with dominant muslim population (tajikistan, uzbekistan, kazakhstan), directed to urban areas in european russia. it coincided with a comparable wave of resettling of north caucasian people (that is, russian citizens) to urban centers up north (moscow, st. petersburg, and others). this has created a distorted public perception of both streams as one, both immigrants from cis countries and north caucasus being labeled as “migrants” in media discourse and everyday speech. this infl ow has already provoked several major anti-migrant bashings like in kondopoga (near st. petersburg) in 2006 or in moscow of 2010 and 2013. the latest one took place in the moscow district of biryulyovo in october 2013, being provoked by an alleged killing of a russian youngster egor scherbakov by an immigrant orkhan zeinalov. within several days, local dwellers partly destroyed a local warehouse where mostly migrants worked and called for a “popular gathering” to attract authorities’ attention. this case is ideal for our purposes, as it represents an “active” period of the (anti-) migrant discourse in the russian twitter. it combines a line of events (alleged egor scherbakov’s killing, orkhan zeinalov’s arrest, warehouse bashings, the people’s gathering, urged retirement of moscow civil servants etc.) and the issues surrounding migrant life in moscow (migrant crime, nonlicensed trade, undercover dwelling, and lack of assimilation of the incoming migrant population). thus, the case, in theory, may create a reference discussion point for further framing of migrant discourse on the russian twitter. 1.4. the research hypotheses as stated above, our research aims at describing structural features of the discussion, some aspects of intermedia agenda setting, and content features based on issue-oriented framing (de vreese, 2005). for the fi rst stage of the project, we have developed four hypotheses on the structural and agenda-setting aspects. the general idea is to test whether the russian twitter replicates the trajectory of formation of an anti-establishment “echo chamber” analogue to russian facebook; this would mean that national context is more powerful than platform features. h1: character of the discussion. the discussion will have an “explosive” character with a peak at the beginning and micropeaks as the discussion developed. the discussion will be robust, as large number of users not connected otherwise would participate in it. h2: presence of “opinion crossroads” and the role of media in it. divergent opinions will be, indeed, found in the discussion on the whole, but the “crossroads” nature won’t show up, as the discussion will be polarized to the extent that clear “echo chambers” will be visible; these may be based upon political views, institutional or group belonging. the visible clusters will form around in-platform non-institutional infl uencers (who mostly organize the discussion by frequent tweeting and are the key reference authors for less active tweeters). media accounts will play a big role in posting information but will not be themselves actively engaged into the discussion. h3: replication of fragmentation of the media-based public sphere in twitter. online-only media will cast more impact than the hybrid media; among the former, anti-establishment and alternative-agenda media (bodrunova and litvinenko 2013b) will gain the most attention. h4: involved media content. linking to media content by the users will be online-centered, with web 2.0 media being most quoted, online-only media in the middle, and hybrid media least quoted. the data collected to test h4 also allows for meaningful interpretation of the discussion, that is, for exploring issue-oriented discussion frames. it is beyond the scope of this paper to present the results of this analysis; we would just note that the discussion was quite heated. violent topics (the alleged murder, the bashings and police actions) were discussed 1, 2 times more than nonviolent ones, negative emotional discourse dominated over rational commenting (but not over the tweets containing news, facts, and details); 15% of tweets put blame on someone; 10% contained nationalist speech; 11% had hate speech. bodrunova, et al.: twitter-based discourse on migrants in russia: the case of 2013 bashings in biryulyovo international review of management and marketing | vol 5 • special issue • 2015100 2. methods 2.1. mixed methodology of the project to map the discussion on biryulyovo bashings in october 2013, we used vocabulary-guided web crawling (blekanov et al., 2012) and subsequent analysis of the obtained tweets, word frequencybased vocabularies, and web graphs. hashtag collections selected by manual reading of over 1000 tweets have constituted the vocabularies for a specially designed web crawler robot. as the results of the crawling, the following items were received: (1) a web graph reconstructing the hashtag-based discussion; (2) lists of the most active users (who tweet and comment) and the most infl uential users (who get retweeted and commented); (3) a discussion vocabulary of high relevance and clarity; (4) collections of tweets for manual coding (analysis in progress). to assess the “crossroads” nature of the discussion, we looked at two data pieces – namely, the web graphs and the lists of active users; we were mostly looking for mediatization parameters. these data can show us: (1) whether there is a real “crossroads of opinions” of various stakeholders in the russian twitter; (2) whether the existing cleavage between media of the “fi rst” and “second” russias (mainstream/counter-sphere) is repeated. 2.2. the work-in-progress report the works of the project so far have included several steps. 1. we analyzed the russian twitter trending topics at trendinalia. com to select the research period (october 1 to 31, 2013) and the relevant hashtags. the search for hashtags started on trendinalia.com and was fi nalized via manual reading of over 1000 tweets per each period. 6 hashtags were selected for the fi rst-step crawling: #biryulyovo (in russian), #biryulyovo (in english, with variations), #zeinalov, #warehouse, #migrants, and #populargathering (all in russian). the selection was later cross-validated by co-hashtagging analysis. 2. with the help of a specially developed web crawling robot, we have run primary hashtag-based web crawling and received the collection of tweets for the designated data (dates and hashtasg). as a result of crawling, 3734 users were found to be tweeting under the hashtags in october 2013; 10715 tweets were downloaded. 3. the web graph of the discussion was created (figure 1). the graphs included not only the users who were discovered via hashtagging but also the users connected via reposting or commenting to each primary tweet collection. thus, for biryolyovo, the fi nal number of graph nodes (users) was 12040, over 3, 2 times more than initially. to our viewpoint, this reconstructs the discussion in a more accurate way, without losing meaningful inter-user connection. as our programming capacities allow for vocabulary-based web crawling, another option to create a more precise web graph is collecting data on tweets based on the discussion vocabulary. we have created such a vocabulary by gathering all tweets on biryolyovo in a “bag of words,” stemming them, cleaning the stem dataset, ranging the stems by frequency, and manual clearing out the fi rst 6000 stems to get the list of the most relevant stems. after several stages of cleaning, 443 stems remained. in future, we will compare the hashtag-based and stem-based web graphs. wу also used the vocabulary for semantic grouping of stems to see which lexical strings were especially relevant. 4. we visually analyzed the web graph and its 20 key nodes. the graph on biryulyovo was analyzed for users’ classic betweenness, input capacity (the number of comments and reposts by the user), output capacity (the number of comments and reposts the user received), and overall capacity (input+output capacity). 5. we ranged users who posted for biryulyovo to create 3 lists: by frequency of posts – “active users,” by received comments – “authoritative users,” and the combined list – “junction users.” 6. we assessed media accounts among the 72 most active users who tweeted on biryulyovo 20 or more times in october 2013 to see who the most active users actually are, whether media are present in this list, and what media are winning the battle. 7. selection of tweets for manual coding was performed. as we were interested fi rst of all in the active creators of the discussion and their discourse, the 3734 users of the initial biryolyovo dataset were ranged according to quantity of their posts. to defi ne the threshold for sampling, we introduced the measure k = 20 tweets per user. k was defi ned as the mean for the “noisy” section of the graph (marked with a red dot with coordinates [20; 6]). 8. the 72 most active users altogether posted 2800 tweets. 1120 tweets were selected for further manual analysis by random choice of 40% of tweets from each of the 72 users to preserve their respective weight in the discussion; after cleaning this dataset from fully irrelevant, non-russian (english-and ukrainian-language) tweets, self-reposts, and spam, there remained 1014 tweets, a feasible dataset at the same time representing almost 10% of the full primary collection. over 90.5% of the automatically formed dataset proved to be unique and relevant, and the number of irrelevant tweets was less than 3%. 9. the codebook was created and tested via kappa measurement to analyze the fi nal dataset (all parameters fi nally showed kappa over 0.6, mostly close to or higher than 0.7). we (with the help of 24 coders) manually triple-coded the 1014 figure 1: the web graph representing 20 key “junction” user bodrunova, et al.: twitter-based discourse on migrants in russia: the case of 2013 bashings in biryulyovo international review of management and marketing | vol 5 • special issue • 2015 101 biryulyovo tweets of the 72 most active users. manual coding of tweets included 25 parameters, of which 6 are metadata, 5 discuss the status of author of the tweet, 3 are communicative features of the tweet (like presence of quotes or news/comment content), 2 on the topic and mentioned actors, 4 on discursive features (like hate speech), 4 on frames (guilt, responsibility, comparison to other confl icts, and spatial dimension of the confl ict), and the last one on media content links in a tweet. all non-agreed coding units were discussed within the working group and re-coded. by today, we have analyzed data for 673 tweets of the 1014; full results will be available by june 2015. 3. preliminary results and discussion h1: character of the discussion. the discussion on biryolyovo was, as expected, a sustainable research object. there were enough users who participated in at least one dialogue (tweeted 4-6 times); it is over 120 users who tweeted 10 times or more, presumably following the case for days. it was not a short few-actor discussion; it did not stop after the bashings and created a reference point on the discussions on migrants. being quite intense for 120 users or so, the discussion also had the “buzz” component, with over 3200 users involved within 20 days (october 11-31, as fi rst news on the case arrived on october 11); this was enough to bring the case to the trending topics. the discussion had a character of an explosion. this, fi rst of all, tells us again that the discussion chosen was robust enough for studying. second, the biryolyovo discussion did not fade rapidly but lasted for 2 weeks, as expected. but, contrary to expectations, the line of events did not infl uence its intensity in any visible manner: there were no micro-peaks on the time-series graph. this was also a focused discussion. this may be concluded out of the assessment of the automated vocabulary. its confi guration shows that the 443 stems that may be considered discussion descriptors are situated not in the middle of the vocabulary after general lexicon of high frequency but in the upper part of the list. other sources of texts concerning biryulyovo could not produce ontology of such a high relevance; on twitter, we have received a practically full semantic list describing the discussion. probably, it is the format of twitter as a platform (the 140 symbols limit) that makes users select the most relevant words for expression. if we look at the structure of the web graph of the discussion, we will see that it is characterized by weak connectedness and high evenness; that is, we see an even conglomerate of non-connected users with no “clouds” in it. this is contrary to what was expected, and this supports the vision that the “crossroads” potential of the russian twitter is higher than expected (we emphasize “potential,” as we still do not know whether we are seeing an “opinion crossroads” or one big “echo chamber”). another side of the “crossroads” potential is the users with high betweenness centrality. only 46 of the 12040 users had centrality of ≥0.001 (and two – of >0.12); thus, the “clouds” could have been interconnected did they appear, but the majority of discussants were just individual contributors. h2: presence of “opinion crossroads” and the role of media in it. as stated above, there are no identifi able “clouds” in the discussion. the hypothesis of internal discussion milieus is, thus, wrong, and, as stated above, we witness either “one big cloud” where all the space is occupied by one echo chamber – or a real crossroads of opinions where any user can freely participate in any part of the discussion. it is hard to support either of the two explanations before we look at who the infl uencers are and what their positions are. to see which tweeters have a potential to become “junction users,” we have looked at their input/output capacity. the lists of most active users (with the highest number of tweets per user) and the most infl uential ones (with the highest overall capacity) do not fully correspond. of top20 most infl uential users, only 5 (25%) are those who are within top20 tweeters. thus, it is in rare cases only that a user can gain infl uence just by frequent tweeting, though this may be one of the key elements of the popularity-rising strategy. the overall user capacity depends to a much higher extent on output (on the user is commented and retweeted) than on frequency of their tweeting. this may be a sign that twitter discussions can be more rational and content-oriented than expected. also, there is a cleavage between those who tweet and those who retweet and comment without producing content themselves. on the whole, there is just one user (@borisalv) who is the only real infl uencer who possesses all the necessary features (high input, output, and betweenness centrality). second, in our dataset of 1014 tweets for coding, there were only 5 retweets found (cf. to 51 self-retweets), which tells that those who actively tweet do not retweet from other active users. twitter in russia may become not only “opinion crossroads” but also an “echo chamber;” but in this particular case the “crossroads” potential seems to outweigh the “echo chamber” one. a possible explanation may be quite simple. as the “bridging” users are not homogeneous, it could be that, on the russian twitter, there is not yet any stratum of “infl uencer commentators” through whom discussion clouds are connected; their place is partly occupied by media and trash accounts. as to the role of media in forming the “opinion crossroads,” we fi rst of all need to underline the unexpectedly high mediatization of the whole discussion. it shows in the structure of discussion vocabulary, hashtagging, and the lists of the most active and most infl uential users. news-related hashtags were very popular (#breakingnews, #news, #it is reported, #russian information agency, #media, #lifenews [a publishing house], #russia today). semantic analysis of stem has shown the stem group dedicated to media to be the 5th in size, being comparable to city descriptors, migrant-related lexicon, and descriptors of police activities, which is also surprising and proves that not only activities of the media themselves helped mediatize the discussion but the role of users in it was also high. but the most striking is that, of 72 most active tweeters, 27 are media or journalists (and 27 are ordinary users); of the top72 most infl uential ones, there are 21 media/journalist’s accounts; of the bodrunova, et al.: twitter-based discourse on migrants in russia: the case of 2013 bashings in biryulyovo international review of management and marketing | vol 5 • special issue • 2015102 top20 in each case, 7 most active and 9 most infl uential accounts belong to media (with 8 in each case belonging to ordinary users). obviously, media are both very active and infl uential in this twitter-based discussion. and, of the top72 most active users, it is only media (6 accounts, of both proand anti-establishment media outlets) that made their way into top20 infl uential users. beside the conclusion on mediatization, this also disproves the hypothesis of power of non-institutional infl uencers. this, though, may be explained via the fact that our data collection was hashtag-based, which might have distorted the picture, especially for the “active” time when biryulyovo provided news. and if media’s active tweeting is very understandable as a strategy, their unexpectedly high role as infl uencers cannot yet be explained in full. but the other part of our hypothesizing on media strategies on twitter proves right: media accounts do not engage in intense discussion, they tend just to tweet and self-retweet. only 2 in top72 users with high input (that is, who are engaged into discussions) are media, and they are not the leading infl uencers. thus, the results on media accounts seem to support the notion of “real opinion crossroads.” but the russian twitter in the case of biryulyovo appears to be a defi nitive echo chamber in terms of representation of the confl ict sides. migrants are practically absent from the discussion as well as ngos. just fi ve tweets of over 670 (less than 0.8%) were marked by the coders as belonging to a pro-migrant author. in most active tweeting, 7 nationalist accounts outperform 2 pro-migrant ones 2, 6 times (236 vs. 90 tweets). perhaps this is why the blame was put to migrants and local and federal authorities, not to the local majority or business. h3: replication of fragmentation of the media-based public sphere on twitter. so far, analysis of pro-/anti-establishment supports the “real crossroads” version. twitter represents a picture quite different from, e.g., the russian facebook where oppositional, anti-establishment (including business newspapers), and alternative-agenda media dominate. on twitter, pro-government media outperform anti-establishment and independent news media in activity nearly 3 times, but independent media also have signifi cant presence and are able to form audiences without putting into twitter the efforts comparable to those by proestablishment media entities like lifenews or voice of russia. thus, twitter, unlike facebook, effectively gives voice to proand anti-establishment media. this may be explained by the fact that the average user profi le of the russian facebook user would differ from that on twitter (though there is no available statistics on that): if facebook has become an enclave for the russian cultural and business elite, other social networks have the public with the features of mass audience, and twitter is closer to this stratum. media that are most active in case of biryulyovo are midand low-market (lifenews), state-funded (voice of russia), or depoliticized (metro); oppositional grani.ru or business paper kommersant, both being leaders in their audience segments, were almost 7 times less active than lifenews; the same goes for radio liberty and even both moscow news outlets – they should have been most interested in the case being local media but neither of them is low-market-oriented. thus, twitter is, indeed, a crossroads for media representation, but by far pro-establishment and low-market media win the battle in the aspect of presence in the issue-oriented content, providing twitter users with views not deprived of political slant. h4: involved media content. these results for h2 and h3 are cross-validated if we take a look at what media content users link to. we expected dominance of web 2.0 content in linking, but the fi rst 673 tweets show that hybrid and online media are represented absolutely equally. it is also evident that the discussion is not encapsulated within twitter, as references to it are rare. as to the “crossroads” thesis, the pro-/anti-establishment representation basically repeats the one in supporting our opinion on the alleged user profi le and media use patterns. 4. conclusion in general, we had like to say that twitter in russia shows more potential to become a real “crossroads of opinions” than the russian facebook dominated by anti-establishment discourse or vkontakte where political discussions are much less visible and, even when do exist, are community-oriented. the discussion on biryulyovo became highly mediatized and politicized, which shows that media and political actors may fi nd an interested audience on the russian twitter. but by far pro-establishment media of midand low-market nature dominate this communicative milieu in terms of infl uence as well as in frequency of tweeting and linking, though independent media are also represented among the most active and most infl uential accounts. hybrid media easily compete in twitter with online-only media, outperforming them in all positions. visualization of the web graph has demonstrated that media of various nature have really become central nodes of the discussion, and the mainstream part of the fragmented public sphere is winning the game. our results combined with previous research (bodrunova and litvinenko, 2013b) show that, contrary to today is dominant opinion that the social context is the primary definer for how the online discussions develop in different countries, online communicative milieus in the same country may differ signifi cantly in how political cleavages are reconstructed, as well as in the level of involvement and representativeness of social groups. our research adds to the evidence that platform features and especially the mean user profi le play an important role in the development of online discussions. the current article presents only partial results on structural and agenda-setting aspects of twitter-based discussions in russia; full results on these aspects will also be complemented by the results on framing of the issue, and we will get the full picture of how the infl uencers shape the discussion and who they are. our research on mediatization aspects and agenda setting on twitter within migrant-/racial-oriented discussions has already been expanded within the next research project at spbu, “the role of twitter in agenda formation in various socio-political contexts” (2014-2015). within it, twitter-based discussions in four countries (russia, germany, france, and the usa) will be studied in “confl ict” and “calm” month-long periods. as the “confl ict” cases, the biryulyovo bashings, the killing and violence at bodrunova, et al.: twitter-based discourse on migrants in russia: the case of 2013 bashings in biryulyovo international review of management and marketing | vol 5 • special issue • 2015 103 ferguson, usa, the killings at the editorial offi ce of charlie hebdo magazine, and the pegida rallies in germany were chosen. this research will allow for comparative assessment of both media and sociological features of the twitter-based discussions and will provide evidence on whether national-bound or platform-oriented factors play a bigger role in formation of the discussion structures and in agenda setting on twitter. another extension of the current research is involvement of texts of hybrid (“offl ine-fi rst”) mainstream media in assessing whether explosive discussions on twitter play a role in setting the agenda in mainstream media. this is planned for the years 2016-2017 for all the four countries. 5. acknowledgments the authors are grateful to the school of journalism and mass communications, spbu, for a research grant “hybrid media systems and political agendas” (2013-2014, grant #4.23.2203.2013). the authors also express gratitude to dr. ivan s. blekanov and alexey i. maximov for developing the web crawling software and conducting of the crawling procedures. the authors acknowledge the big role of student participants of the project as raters (coders) of the tweet samples and are grateful for their contribution to the overall outcomes of the research. the authors contributed equally to the study. references adam, s., pfetsch, b. 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/untaggedcmykhandling /leaveuntagged /untaggedrgbhandling /leaveuntagged /usedocumentbleed false >> ] >> setdistillerparams << /hwresolution [2400 2400] /pagesize [612.000 792.000] >> setpagedevice 01_vasilieva.indd international review of management and marketing | vol 5 • special issue • 2015 1 special issue for "media as the tool: management of social processes" international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2015, 5(special issue) 1-10. slang toponyms and newsmakers’ nicknames as a communicative contact and indicator of comic culture in the modern russian journalism viktoria vladimirovna vasilieva1*, natalia anatolievna prokofeva2 1saint-petersburg state university, 199034, st-petersburg, russia, 2saint-petersburg state university, 199034, st-petersburg, russia. *email: vasilievaviktoriavladimirovna@mail.ru abstract the article deals with the study of phatic communication in political mass media discourse. it was made clear, that the use of slang words is one of the means to implement phatics, as such units actualize the background knowledge and act as the speech signal to form the inner communication circle. the descriptions of situations are presented, and the structures of toponyms and politicians’ nicknames in modern russia are analyzed; the semantic shifts are explained; they result in reconsideration of reality in ironic form one of the leading in mass media comic culture. less active ways of russian word formation are shown; they result in appearance of extraordinary, sometimes exotic naming units. at that, the stylistic (evaluative) meaning of slang words turns out to be primary in relation to the word lexical meaning. the events and facts from the political life, causing the audience’s mistrust or discontent with the authorities, become ironically reconsidered in the slang words. keywords: phatic communication, the language of the mass media, the mass media political slang, irony, comic culture jel classifi cations: z1, z13, z19 1. introduction 1.1. relevance of study the study of the mass media language got a new impulse, when a new discipline media linguistics was introduced into scientifi c use; it is being developed in co-ordination with such traditional scientifi c fi elds, as cultural linguistics, cognitive linguistics, sociolinguistics, pragmalinguistics, political linguistics, linguistic ecology and others, and with particular linguistic disciplines. at present, praxiological approach to media speech is being developed, “providing an opportunity to set the rules of effective language use in professional speech, to explain the formation of different language occurrences” (duskaeva, 2014). the study of speech practice of the mass media in praxiological perspective raises a question about the constituents of professional speech activity in the mass media. such constituents involve the phatic contact establishing communication (phatic communication) and the manifestations of comic culture. the phenomenon, which allows considering the phatic mass media communication and the way to implement the comic in media texts under the total angle, is the political mass media slang the key words of the present situation (shmeleva, 1993), conceptualized in the political mass media text. the integration of such words into system in case of wide interpretation of the “slang” term presents a reply to the demand of the praxiological approach: the same as in any professional communication, the mass media speech forms special naming units, the use and understanding of which is possible, if the author and addressee are involved in the mass media communication about defi nite political situation. the analysis of use of the mass media slang words is of practical value in two aspects, at least. firstly, such analysis contributes to the search of new tools, taking into consideration the tasks of media linguistics, as “the polyphony of communicative means causes the polyphony of research procedures” (skowronek, 2013). this aspect is important as a prove of methodological openness of media linguistics, which is connected not with the defi cit of vasilieva and kornilova: slang toponyms and newsmakers’ nicknames as a communicative contact and indicator of comic culture in the modern russian journalism international review of management and marketing | vol 5 • special issue • 20152 theoretical base of linguistics and lack of precise tools, but with the fact, that the media speech is subject to constant changes, and it is being enriched with new phenomena. secondly, the process of the suggested analysis provides the elaboration of evaluation criteria of the professional media speech, as the use of any slang word always raises a question about ethic norms and speech aesthetics. 1.2. hypothesis of the study slang naming units, widely spread in the mass media, in the majority of cases are created on the basis of ironic reconsideration of reality and demonstrate the manifestations of comic culture in journalism. the article deals with the analysis of modern (of the last quinquennium) speech material, which provides an opportunity to reveal the number of features and links, determining the specifi city of mass media phatics. 1.3. empirical material empirical material presents a selection from the russian texts, placed in electronic archives of the mass media, accessible in the rf territory. the newspapers: kommersant daily, komsomolskaya pravda, novaya gazeta, izvetiya, nezavisimaya gazeta, moskovskie novosti, mir 24, continent. online media: zaks.ru, grany.ru, gazeta.ru, newsland.com, utro.ru. news agencies: lenta.ru, regnum. television channel 100 tv, radio stations: echo of moscow, vesti fm, voice of america, finam fm. the belonging of lexical unit of the elements of mass media political slang was determined as per several parameters. the indicator of shift of the occasional word into slang one is the use of the word or word combination in context, not connected directly with the situation, where this unit was formed; the appearance of fi gurative meanings, the participation of units in word formation. 1.4. the procedure of study the procedure of study was developed by the authors of the present article on the basis of presumption of the interpretative approach (demyankov, 2003), and it involves three conventional stages: (1) the discursive fi eld of the slang word is described (vasilyeva and salimovsky 2010) (the situation, its participants, possible meanings); (2) the linguistic tools to create the specifi c slang naming unit are analyzed; (3) the mechanisms of ironic reconsideration of events, presented in the media text, are revealed based on the connection of the “fi eld” and “tools.” 2. assumptions 2.1. phatics a concept of phatics for the time of its study was subject to signifi cant changes, going far away from the narrow understanding of phatics as idle-speech communication (malinowski 1923). according to modern studies, phatic function of the language is implemented at any talk exchange. yakobson defi ned the phatic function of the language (yakobson, 1975), which is still the impulse to investigate the phatic communication: “the function of the ‘language’ is contact establishing, phatic function. one of the language functions, as distinct from the communicative, which is manifested in situations, where the speaker does not tend to communicate the defi nite information to the listener, but just wants to make the mutual presence natural, to prepare the listener to perceive the information, to pay his attention, etc.” (akhmanova, 1968). essentially, malinovsky and yakobson described the phenomenon of phatic speech behavior and formed a concept of its peculiarities for a long time. in the opinion of these scientists, phatic speech behavior serves to establish a contact, presents an idle-speech communication (insignifi cant exchange of words or “small talk”) and etiquette (ritual) communication. however, the problems of essence of phatic communication and its expression in speech are left open. the solution of this problem was partially suggested in the work of the famous russian language researcher vinokur. she suggested to consider the speech practice in terms of opposition and interaction of two intensions (communicative intension) phatic and informative (vinokur, 1993). such view on phatics allows explaining the variety of phatic manifestations in speech, which is presented as only one intention of the text, polyintensional by nature. this intension is aimed at harmonization of communication, the creation of favorable conditions for communication. “the motives, generating phatic speech behavior, can be called as the symbolics of social existence, requiring contact for the sake of contact and establishing the speech contact as a palliative of nonverbal activity. consequently, the speech contact is, fi rstly, the social-psychological contact; in this quality, it is the main purpose of phatic speech behavior” (vinokur, 1993). a social-psychological contact, established in the process of phatic communication, generates the formation of defi nite social circle (socium) and conveyance of so called communicative information (andreeva, 2006), which presents us an idea about speaker’s personality, his speech competence, his relation to the speech subject, to himself and interlocutor. 2.2. phatic communication at present, phatic communication is understood as the fi eld of communication (murzin, 1998) and as an integral part of any speech act. at that, the inner and outer “aura of communication” is implemented (in this way murzin calls metaphorically the information, which we get apart from proper linguistic meanings). the inner aura is connected with the language itself: individual speech peculiarities, associative and context connections of words in speaker’s view, subjective-modal meanings. the outer aura is connected with perception: orientation at the interlocutor, creation of communication, taking into consideration the fact, what and in what form he wants to hear, the use of associative way of thinking in global cultural and historical context. it is this aspect of phatic communication presents interest for the authors of this article. when considering the media speech from the viewpoint of its phatic constituent, the speaker and the interlocutor are in the center, the initial point of communication is the presentation of the speaker of the speech situation, and, consequently, the selection of speech means in accordance with the situation. no matter how the speaker treats one or another fact or event, being the speech object in the media text, to change it is beyond his control, but establishing or destruction of contact with the interlocutor depends vasilieva and kornilova: slang toponyms and newsmakers’ nicknames as a communicative contact and indicator of comic culture in the modern russian journalism international review of management and marketing | vol 5 • special issue • 2015 3 on this attitude. it is possible to say, that emotional involvement of interlocutors into communication is the implementation of phatics. any communicative interaction with involvement can be conventionally called phatic communication. despite the fact, that phatic communication is still studied in colloquial-everyday communication (burke, 1950; boxer, 2002; vinokur, 1993; dementyev, 1997; formanovskaya 2006), the last observations over phatics allow stating, that it plays a signifi cant role in media discourse (dementyev, 2006; kluev, 2004; chepkina, 2000; chernyshova, 2007; duskaeva and kornilova, 2011). at the same time, let us note, that such purposes of phatic communication, as psychological safety valve, entertainment and consolidation of personal prestige, can act as a goal in itself in the media discourse the problem is only in the specifi city of manifestation of phatic intentionality in media (kornilova, 2014). 2.3. indirect communication phatics is a kind of indirect communication (dementyev, 2006); it is expressed in wide variety of linguistic means. in whole, it is the delivery of communicative information, the perception of which requires additional interpretative efforts from the addressee. the function of socialization shall be mentioned from all the functions of phatic communication in the mass media. phatic communication in the media functions as a social symbol of communication (vinokur, 1993; chernyshova, 2007). essentially, it is the invitation to communication in terms of definite community, organization of “your own” circle, the circle of initiates. the appeal to speech slang is one of the methods to create such human community. as slang is expressive by nature and gravitates towards the use of comic forms, it can be fully referred to the means of phatic communication, which becomes more high-demand in political mass-media discourse. 2.4. political mass media discourse the political mass media discourse is understood as media mediated political discourse. in other words, the informative fullness, thematic integrality of the political discourse are supplemented by the special sphere of its existence media sphere. the peculiarities of this sphere lay proper limitations and extension on discourse formation and functioning, which turns out to be under double system pressure: the pressure of environment and pressure of theme. we understand the thematic organization of political media discourse wider, than the fi eld of struggle for power (compare, for instance, sheygal, 1998). a person, appealing to the mass media, involves to political thematic not only the news about politicians (the appointments, posts, scandals), about the struggle for power (pre-election events, elections, defamation, opposition speeches, conferences), but also any events, which he, the person, perceives as political (currency corridor, rates, oil prices, business amalgamation and bankruptcy). such perception is connected with the fact, that the addressee, fi rstly, sees in these events somebody’s interests, connected with the struggle for power, with the desire for management activity, and secondly (it is more important) perceives these events as the ones, infl uencing on his own life, which he perceives as the part of the social life. the sphere of political in the mass media is extended by the journalists themselves, when the author’s intension is aimed at the involvement of the event to the political sphere. 2.5. slang special naming units function in terms of political mass media discourse; they can be referred to slang, serving for this type of discourse. it is known, that, alongside with direct expressions of evaluations of political events and parties of political struggle, implicit evaluations are widely spread in the mass media. intensity of emotional attitude towards the events is shown in speech expression, manifested in jargonization of the media speech of this sphere. indirect character of phatic communication requires the attraction of such means of linguistic expression, which maximally extend the semantic potential of speech. irony is one of such means (semantic shift and semantic reconsideration), which is identifi ed in text on the text plane in combination with the wide context (dronyaeva, 1998; tsoneva, 2012; ilyasova, 2015). the addressee can identify the ironic attitude to the subject of naming unit, only if he has the background for it. for the political media discourse, it is important, that the perception of naming unit as ironic depends on the addressee’s viewpoint on the event, on his position to the text topic. from the variety of topics of the political media discourse, the mass media audience is mainly aware of the officially presented political events, public campaigns and political actors (newsmakers of different levels). thus, the language games with names are quite wide spread in the mass media; they are motivated by the politicians’ names, and are included to media texts “for fi guratively-expressive modeling of the content, frequently with brightly expressed comic effect” (tsoneva, 2010). the names of places of events and political campaigns are also signifi cant for the audience. slang words, built on proper names (toponyms and nicknames), present the bright speech material, which allows revealing the number of features and connections, determining the specifi city of the mass media phatics. 3. analysis and results 3.1. moscow-abad (moskvabad) let us begin the study of toponyms with the word moscow-abad (moskvabad). the new name states the transformation of the russian capital into asian or oriental city because of the great number of migrants from the central asia. the word is formed by joining of the part abad (city) to the name moscow in accordance to the model of toponyms ashkhabad, dzalal-abad. no, of course, i understand the whole frightening associative array: hole russia, the symbol of which will become the mosque, the hordes of guest workers, overcrowding everything around, the capital of russia named moscow-abad (orekh, 2013). vasilieva and kornilova: slang toponyms and newsmakers’ nicknames as a communicative contact and indicator of comic culture in the modern russian journalism international review of management and marketing | vol 5 • special issue • 20154 the toponym moscow-abad is a cultural hybrid, unnatural phenomenon, got by junction of principally incompatible ways of life. this slang word contaminates the names of the native city and the names of foreign cities of those countries, where the migrants frequently come from turkmenia, kirghizia. as distinct from the toponym moscow-city, offi cially existing in modern pejorative connotation, expresses negative, pejorative evaluation of new, oriental image of moscow. similar to mechanical contamination in linguistic hybrid, the foreign culture is mechanically included to the life of russian capital. if the moscowites agree to live in the city, then, they are not attracted by the life in abad, as the asian city for the majority is the symbol of absence of civilization, the place, where the law does not work, and the disorder reigns. for 20 years before moscow-abad (the title). the thousands of migrants execute the begging work, aggravating the ecology and city image, only for the bureaucrats to steal money at that (latynina, 2013a). the use of the word moscow-abad demonstrates general orientation of communicants: not so much negative attitude towards the dominance of migrants, as the accusation of pauthorities in connivance of such situation. at that, there are no pretensions to the migrants themselves, they stir up sympathy. ...for some reason, the girl gulya turned out to be on job with four sorts of grape. differing from the moscowites, she apologized, when dropped the one-hundred not on my foot: thus, moscow, in front of your eyes, turned into moscow-abad <…> but the moscowites totally cannot apologize (maltsev, 2013). the ironic coloring of the word moscow-abad is supported by the fact, that the word lives in close connection with such slang words, as zamkadye, zamkadysh, and it is included to the group of slang toponyms and naming units, derived from them. 3.2. zamkadye, zamkadysh the slang words zamkadye, zamkadysh (behind the moscow ring road) present the single family of words that is why it is logical to consider them together. the word-motivator in this case is the abbreviation mkad (moscow ring road). it is a peculiar boundary inside the city, separating its center from the outskirts. in russian language, this phenomenon is quite frequent, when the abbreviation, ending in consonant, starts to function as the masculine, and the word itself becomes a core of the family of words: for instance, vuz vuzovsky (the higher educational institution institutional). at present, a word formative model prefi x za+ root + suffi x -jis non-productive. the words, derived in such a way, usually have the name of river or another natural boundary as a root morpheme (compare: zamoskvorechie district, zabaikalye (transbaikal), zauralie (transurals) and others and denote something, staying outside the object, named by the motivating word, and, directly adjoining to this object. in the soviet times, the word zakordonye was derived as per this model. cordon is a boundary, set by a person, a conventional line, separating the states. in this case, a cordon is a boundary, separating the ussr from the other countries. the additional meaning of the word zakordonye is something remote. possibly, the functioning of this word in the mass media slang of the previous years left its mark on the meaning of modern slang word: zamkadye is the slighting name of the territory outside mkad. the lexical meaning is extended by inclusion of the moscow district to zamkadye, as well as the whole russia outside the boundaries of moscow. a toilet, equal to the match box in size, soviet sanitary ware, cardboard walls with dingy wallpapers, dull view from the window to zamkadye (mayantseva, 2007). let us pay attention to the graphic game: the name of the territory toponym essentially is written from the lower case letter, and the abbreviation, motivating the slang word, is written in capital letters. graphic potential of the slang word extends wider its lexical meaning. in the following example, the word is being developed into the synonym of beggar hole: biryulevo chronicles: the life on the outskirts of moscow (title). further on is only endless zamkadye. in the offi cial documents, biryulevo is divided into two municipalities: western and eastern (pankratova, 2013). zamkadysh adjoins to zamkadye; it is a colloquial, substandard name of zamkadye citizen, generalized name of citizens of outskirt area: a special project of the moskovskie novosti (title): zamkadyshy (sub-title). the histories about the citizens of the near moscow, who consider themselves the moscowites (lead) (gladin, 2012). the suffi x -ish (-ysh) actively manifests itself in colloquial speech, brings expressive endearing or (frequently) slighting coloring. in this case, the slighting characteristic of naming unit object is deepened by the background knowledge about the opposition moscow other russia. the abovementioned subtitle is very indicative: zamkadyshy is the depreciating name for the people, who do not have the right to do in this way, try to penetrate into the sphere of life, inaccessible for them. the same as in any language for inner use (the slang is, undoubtedly, such language), the political mass media discourse conceptualizes the relation to the life sides, important for the community. this group presents the ironic-depreciating view on all non-moscow. 3.3. hyde park the use of english toponym hyde park, as a slang word, is connected with those additional meanings, that the participants of media communication read in the notion “a venue for mass public events, not requiring coordination with the executive authorities.” according to the materials of the mass media, as distinct from the london royal park of 1.4 km in area in the center of london, “russian hyde park” frequently presents a remote place, far away from the center of the city, having the vasilieva and kornilova: slang toponyms and newsmakers’ nicknames as a communicative contact and indicator of comic culture in the modern russian journalism international review of management and marketing | vol 5 • special issue • 2015 5 territory, insuffi cient for the stated political campaign. in the majority of contexts, the hyde park presents the antiphrasis the irony in narrow meaning of the term (the use of word in meaning, opposite to the literal one). i did not write about this campaign, as i was sure, that we would be turned back and sent somewhere to the hyde park or the taras shevchenko embankment. as far as i know, for the last decade, there were only few coordinated meetings on the triumphal. a cursed place for the revolt. today i have been telephoned and informed, that the meeting was coordinated! (ilya varlamov and maksim kats, 2013). a prompt to understand the ironic meaning in the naming unit hyde park at the text level, is the stable colloquial construction i would be sent somewhere to the hyde park, as in russian, it is usually “sent” somewhere “far away.” here is the association with the dirty expression, such as “fuck you + rude word.” in the mass media communication, the irony is frequently connected with the distrust of power and of contacts with authorities. at the same time, it acts as a signal to establishing the communication with the adherents of views. the london park is famous for its corner of public speakers, where anyone who wishes, can propagate his views and opinions to the gathered public. the necessity to coordinate the public political event, even on the provided territory, essentially deprives the russian “hyde parks,” which were organized in some cities, of their main function. the naming unit hyde park gets a wider meaning in the media texts “public gathering, purposeless crowd.” those, who gathered in such place, are not concerned with the socially signifi cant problems, they just spend time, where it is usual to gather in large parties. mismatch of the essence of the hyde park notion and dawdle (frequently with illegal actions with participants) causes bitter irony in those, who spent much time to gain the right to speak in the “hyde park” of his city. nobody saw nothing, nobody was caught obviously, wellorganized vandals-invisible creatures act in the centre of petersburg (the field of mars), in hundred meters from the hermitage. either the rough sleepers warm near the eternal fl ame, or start the snow fi ghts, or chase the representatives of different communities. russian hyde park is the fun at the cemetery (kutarenko, 2014). the presented fragment is taken from the article, describing vandalism towards the memorial “the eternal fl ame” on the field of mars in st. petersburg. the last phrase russian hyde-park is the fun at the cemetery is addressed to those, who share the author’s understanding of the value of “russian hyde parks,” who know about their purpose. 3.4. putinjugend and demschizos the naming units of people and organizations in slang always present the interesting material to study. let us consider the number of slang words. putinjugend is the naming unit of youth organization, the supporters of the president v. putin, organized in the beginning of 2005 by the president’s administration. the offi cial name of the organization nashi youth group produced one more slang word: nascist the member of the abovementioned organization. negative expressive-evaluative connotation of both words is connected with the fact, that these slang words are based on such words-motivators (hitlerjugend, fascist), which are the bearers of special symbolic meanings in the modern russian culture. the naming unit putinjugend belongs, more likely, to valeriya novodvorskaya, famous for her keen evaluations, using the words communism and fascism as the synonyms. novodvorskaya: our people cannot have the democratic goals by defi nition, as the servile organization of putinjugend cannot be democratic, the same as hitlerjugend cannot be democratic as well (samsonova and navodvorskaya 2009). let us note, that obviously pejorative evaluation in the statement of novodvorskaya does not have the ironic coloring: the author states some fact, obvious for him. it is presented, that the naming units, taken up by the media community, are perceived more like language game, like the successful use of, fi rstly, sound association, and, secondly, coincidence of accent structures in word-motivators and offi cial names of political actors. in modern media speech, the outer similarity of sound frequently fascinates the word creators, who are ready to give up the content in favor of the form. in this case, one aspect of purpose of the organization’s activity is taken from the referent content of naming units hitlerjugend and fascist: adherence to the politician, without deepening into the reasons of this adherence, without comparison of ways and methods of activity. thus, the example below states about the commercial nashi youth groups, i.e., about people, participating in the organization not due to the ideological reasons, but only for money. .,,, for sure, the rating of the comment was charged by the commercial nashi youth groups. it is good, that our opposition has a huge staff of perfect analysts, who are able to explain our narrow-minded population, what is going on (klava, 2013). those, who use this word, do not compare putin with hitler, do not accuse putin of new fascist ideology, do not refer to the organization “nashi” and its members the whole spectrum of characteristics, determined by the semantics of words-motivators. however, slang oriented media discourse breaks ethic (and legal, in some specifi ed sense) norms for the sake of bright fi gurativeness. the observations show, that the slang word frequently functions in the mass media as a label, attached to the ideological opponents. such nominative units in action, in speech journalistic practice, demonstrate the functioning of means of phatic speech as the social symbol of existence (vinokur, chernyshova), the way to create proper circle of contacts. the use of slang words in such function provides mutual understanding between the author and the recipient; they speak one language and understand each other, vasilieva and kornilova: slang toponyms and newsmakers’ nicknames as a communicative contact and indicator of comic culture in the modern russian journalism international review of management and marketing | vol 5 • special issue • 20156 literally, from the half word. the addresser speaks in such a way the addressee expects from him, it allows creating the semiotic community. the word demschizos demonstrates the mentioned feature of slang. demschizos was formed as a result of contamination of words democracy and schizophrenia. let us specify that the russian speech usage frequently has the desemantization of terms, connected with the names of sickness: schizophrenic, paranoic, idiot. they are perceived as not the cynic jests about sickness or sick person, but, more likely, as the familiar, jocular naming unit, frequently in the circle of folks. such nomination in speech in relation to the unknown person is inadmissible. a bright manifestation of the abovementioned tendency is the existence of the slang word schiza, formed by stem reduction of the term schizophrenia. being a word, not included to the literary language, it is used as sharply negative characteristics of the denoted phenomenon: it describes inexplicable behavior, irrational, frequently hysterical. the new described slang word presents the fusion of apocopic stems: dem + schiza, resulting in the appearance of dirty word, preserving the features of the word, known to slang, and denoting people, preaching the democratic values fanatically, overzealously. the whole demschiza was gathered, the half program was devoted to recollections about popov and gaydar, who denounced what and where we go now the other way round (minaev, 2007). generally, it is necessary to say, that demschiza, when it extremely worries about the fact, that the bloody regime accuses of somebody, it always, you know, frequently confuses the names (latynina, 2013b). the symbolic meanings are ambivalent: depending on the circle of contacts (target audience of the mass media), demschiza is understood as different groups of people: it is either nickname for political force, similar in views to the democratic russia movement, or, in wider sense, the label, attached by the left radical press to all democratic force. 3.5. kremlyad, liberast the political mass media slang has straightly rude, obscene naming units. the slang words kremlyad and liberast present the contamination of stylistically neutral words with dirty, obscene lexemes: kremlin + obscene word with the meaning “fl esh peddler,” liberal + obscene word with the meaning “man-homosexual.” the selection of lexemes themselves for fusion provides the huge potential of pejorative evaluation of newly derived words. the lexical meaning of these words is predetermined by the second component, included to the slang word. russian language speakers give weight to the dirty word as the extreme to express the feelings (besides, different in nature). word formative possibilities of these lexemes are predetermined by their hypertrophic fi gurativeness. the addition of any component to the well-known dirty words provides the new naming units with brightness and strength of impact on the addressee. the second obscene component of the slang word dominates in determination of the word lexical meaning. the slang word kremlyad is used in relation to people, getting money from the information support of power. in russian mentality, the power is opposed to the nation that is why only shysters can serve for power in the opinion of those, who use this slang word. this word appeared in the language of mass media in the material of the publicist of d. olshansky: there is nothing to do with the bright kremlyad she is practically unconquerable, the same as every varnished, slippery dirtiness (olshansky, 2006). let us pay your attention to the fact, that in russian speech usage, the word glamorous also has negative evaluative connotation (“brilliant in appearance, but empty inside”), making impact on the lexical meaning and functioning of the word in language. it is clear, that these additional meanings are accessible only to that part of the audience, which knows the origin of the word. of course, kremlyad is detestable, but, for life, vladimir vladimirovich putin is similar neither to liputin, nor andrey antonovich fon-lembke. many of leaders of non-system opposition could compete in devilry with nashi youth groups fi dgety, lying, self-affected and light-fi ngered (boyko, 2012). thanks to the power of the image, created by the author, the word gains popularity, and the language game becomes a peculiar password to understand the text: i can only guess, who stands for dpni (a movement against illegal immigration). i suppose that the kremlyad presents their tutors. would the god that i mistake. nothing reasonable will result from this union (lanskaya, 2007). understanding is the guarantee of general emotional reaction, caused by a word, which becomes a translator of communicative information. for the native speaker, the obscene vocabulary is full of semantic overtones, and, as per the theory of bakhtin (bakhtin, 1979), each new usage of word is laden with the meanings of the previous contexts. in this case, the slang word brings the great variety of meanings to the text, individual for each person in dependence on speech experience. the situation is the same with the second of the analyzed slang words liberast. it is necessary to note, that the word liberal and cognate words have the old tradition of ironic usage: the policemen did not become liberal and put the rubber hoses in motion (pchelkina and korobatov, 2011). the new slang word refl ects maximally expressed non-admission of liberal ideas, naming them as some social distortion. the russians traditionally treat the homosexuality irreconcilably, that vasilieva and kornilova: slang toponyms and newsmakers’ nicknames as a communicative contact and indicator of comic culture in the modern russian journalism international review of management and marketing | vol 5 • special issue • 2015 7 is why the derived word sounds quite provocatively. the evaluative potential of the word is so huge, that it comes to the fore: the stylistic meaning of the word becomes primary in this naming unit. the mechanism of work of this word is the same, as in the previous example: the fi gurativeness of obscene vocabulary + imposed notion, drawn strong criticism from the speaker. phatic component overlaps the informative one, what is supported in general aggressive tone of the utterances. certainly, different liberasts of st. petersburg parliament also felt inspired. panegyrics started to write in relation to euromaidan participants and hint: if we would have this. in your dreams! (smirnova, 2014). jewish liberasts use ks as a screen for their dirty deeds. they are not better than the kremlyads. they are cheats, who are not allowed to cheat. they make term with the kremlin behind our backs, surrendering the protest and sabotaging the protest work (azar, 2013). let us pay your attention to the analyzed lexical units (liberast, kremlyad), existing side by side in one journalistic material. they exist in one semantic fi eld, fulfi lling similar function of sharply negative attitude to the above named phenomena. 3.6. twitter-president mass-media slang words frequently appear as a result of critical interpretation of reality, which, fi rstly, connected with disapproval of actions of the authorities. one of the most relevant issues, which produced the great number of slang words, is the situation with the presidency of d. medvedev. coordination of actions of v. putin and d. medvedev brought the word tandem in to the world, where the person of the president d. medvedev was not perceived seriously by the signifi cant part of the mass media audience. this circumstance explains the great quantity of nickname naming units of d. medvedev, appeared, fi rstly, in the internet-community, and then passing into the legally registered mass media. one of such nicknames twitter-president appeared, when d. medvedev logged in the microblog in twitter. newly derived word contains the shade of ironic attitude to the speech object: the use of borrowing-barbarism, unadapted in the grammatical system, always creates a comic effect in the russian speech usage, adds the touch of irony into the speech. in this case, there is mockery in some degree. the analytical structure of the slang word (the way of formation is word combination) can be translated into russian as the president of twitter. the meaning of the word twitter-president can be determined as “the president of twitter company,” in other words, the power of whom is constrained by the internet-space. the derogative sense of the word is proved by the context of its use: the twitter-president dmitry medvedev opened a reason of revolution in libya. it is nothing less than the corruption of qadaffi and popular discontent. it is the search for bloody western secret services. previously, they prepared such scenario for us, he told urbi et orbi. and now they will try to bring it into action all the more (latynina, 2011a). in our energy sahara, the sand begins to cost more, than in the himalaya. the twitter-president medvedev begins to bemoan the unreasonable electric rates. don’t you know the reason, mr. president? don’t you know, how much does gas cost? (latynina, 2011b). using new technologies of operative communication with the electorate, d. medvedev causes laugh in that part of the audience, which does not consider the favor of internet-communication as the worthy mean to come closer to the electorate. there is a paradox. there is the twitter-president, medvedev, who says something about foreign investments. there is the prosecutor general, chaika, who, by the way, is considered to be the confederate of medvedev. when this bad situation with the prosecutor’s son occurred, with the casino around moscow, with the murder of eyewitness, medvedev called on the carpet the central fi gures (latynina, 2011c). essentially, the internet-communication makes impact on the audience’s attitude to the prime minister. the communication in internet differs by its general familiarity of speech behavior and ease (address to the unknown people on a fi rst-name basis, the use of home nicknames, obscene words etc.). hence, there is another nickname of d. medvedev iphonechik. the internet users name in such a way d. medvedev’s love for the apple mobile devices, with the help of which he performs his internet-communication. the slang word combines the borrowed stem and russian colloquial suffi x with the diminutive meaning: iphone+chik. as is known, the russian diminutive-hypocoristic suffi xes can express both positive and negative characteristics of the speech object. in the analyzed example, outwardly positive word form is revealed in the analysis as sharply negative, proved by the synonymic row, which includes the naming unit in the following quotation: i am absolutely sure, that if medvedev did not raise this wave with modernization and innovations, there were twice less people on bolotnaya, they left physically. these people can tell about medvedev, that he is cero absoluto, iphonechik, controllable man (masyuk, 2013). such ways of occasional word formation intensify comic effect, when perceiving the naming object, underline the ironic origin in the created naming unit: the admirer of western pop-groups, arch-advanced in terms of the internet, medvedev, who was christened iphonechik by the internet community, saw in modern means of communication only useful technical innovation, facilitating the inclusion of russia to the world family of civilized nations (salutsky, 2012). let us pay your attention to the context, where the analyzed word is used: the combination of vocabulary layers bookish vasilieva and kornilova: slang toponyms and newsmakers’ nicknames as a communicative contact and indicator of comic culture in the modern russian journalism international review of management and marketing | vol 5 • special issue • 20158 and colloquial creates the ironic context. the characteristics arch-advanced deserves special attention; it describes the internetcompetence of d. medvedev. the word is formed by joining the prefi x archto the lexical unit of the youth slang “advanced” “to possess any skill, to be well-informed in any sphere.” the combination of bookish element and the element, existing outside the system of literary language, consciously nonstandard, creates another comic hybrid: arch + advanced. a word combination archadvanced iphonechik is the quintessence of relation expression to management capabilities of d. medvedev on the part of the audience, denying him. 3.7. premiersident the word premiersident belongs to the abovementioned nickname naming units; it appeared shortly before v. putin was elected for the second president term. putin on ice (subtitle). premiersident played hockey with the veterans under his public relations campaign (tlisova, 2011). inter-word fusion, which creates the presented lexical unit, provides an opportunity to interpret the word meaning in twoways. on the one hand, it is the expression of undoubted assurance, who will become the president after the elections (the prime minister will become the president). on the other hand, it denotes duality of status of the actual president, as the real president is the current prime minister. a visitant khlestakov, according to his words, is on friendly footing with oligarchs and comedy club actors, lives in metropolitan penthouse, wears the coat from armani, writes books under the pseudonym dontsova, dates up in vkontakte, and, if necessary, can become the premiersident at any time (regnum, 2011). the language game, admitting double interpretation of word, adds sub-text meanings to the context of journalistic piece, serving not only to establish a contact with the reader, but to buildup the dialogic interaction in terms of separate publication. a peculiar competitiongame starts between the addressee and addressor (guessing the additional meanings), the associative thinking is involved, the background knowledge of native speakers become actual. it is supplemented by the ironic evaluation meanings, which become the key to understand the communication, bear evidence of the identity of the text author’s and speaker’s positions, united in their attitude to the speech object. the worlds become closer to each other in the media-texts, as per the fi gural remark of n.d. arutyunova. as a matter of fact, our premiersident (one of the successful jokes of the anniversary club of the cheerful and sharp-witted) is a master to tell jokes. for instance, recently, visiting the health center in belgorod region, he sat the local governor to the dental chair, ordered him to open the mouth and, taking the dental drill, promised to use it as intended, if the patient, by the next visit of the prime, will not buy the required equipment for the health care center (petrovskaya, 2011). the slang naming unit alpha-white crane is one more nickname of v. putin. the situation, that provoked the appearance of such word, was widely and ambiguously discussed in the mass media and internet. the events were developed around white cranes saving the birds, which are exposed to extinction. as the young species cannot fi nd way to the south without the mature leader, putin acted as a pack leader: on the 5th of september in 2012, being dressed in white suite, showed on the delta plane the direction of the fl ight to the birds. the nickname alpha-white crane, derived as per the model of alpha-male “a dominant species in aggregations of social animals,” was immediately taken up by the mass audience. we have the alpha-white crane he, personally, leaded the smelt for spawning, personally drove the battle-plane, extinguished the fi re, did something on combine harvester, and he is the alpha-biker. (aslanyan, 2013). a regular action with participation of v. putin initiated the actualization of some previous events and making play sometimes kind, sometimes evil with the president’s love for extreme. for instance, the comment, related to this topic, is quite indicative: an exhibition “twelve achievements of putin took place in moscow” (subtitle). if to see the exhibition “twelve achievements of putin” in moscow, it causes bewilderment, if putin is praised or laughed at!? (mustafa, 2014). amphoras, found by v. putin in august of 2011 on the bottom of taman bay on the place of greek city phanagoria, were considered to be the symbols to deceit the audience by means of the organized pr-events. in the opinion of the mass media, the history with amphoras is one of the loudest pr-collapses of v. putin’s preelection campaigns. now russian bureaucrats, used to communicate with the nation by means of previously prepared press-releases and amphoras, do not understand sincerely: what was wrong? (voytsekh, 2014). 4. conclusions the use of slang words is one of the means to implement the phatics, to establish a contact with the addressee and to create the speech community, based on common evaluations. the units of political mass media slang are produced in conditions of burning situation as nonce words, having the authors. gaining the figurative meaning in the media discourse, they start to function as abstract lexical units, able to express, name not even the defi nite situation, phenomenon, but the number of phenomena. the lexical meaning of the slang word is being extended, gaining the symbolic content. the major part of the slang naming units express the distrust of the authority, suspicion in incompetence of power holders, disapproval of social politics. the pragmatics of political mass media slang is bidirectional, at that, both vectors act in interconnection: firstly, it is the actualization of background knowledge; secondly, it is a speech signal for those, who are able to decode the meanings and evaluations, expressed in slang. vasilieva and kornilova: slang toponyms and newsmakers’ nicknames as a communicative contact and indicator of comic culture in the modern russian journalism international review of management and marketing | vol 5 • special issue • 2015 9 when forming the slang words, low-active ways of word formation are used, resulting in appearance of extraordinary, frequently exotic naming units. at that, the stylistic (in particular, evaluative) meaning of slang words is primary in relation to the word lexical meaning. comic culture in the mass media slang is implemented through the ironic reconsideration of political events and people, involved into these events. irony frequently acts as the most frequently used way to express the attitude towards the political reality. 5. discussion we suggested the procedure to study the peculiarities of the mass media language, which, from our point of view, can be used not only for further investigations, but also for creation of special vocabularies. full perception of word use in any professional sphere is impossible without the lexicographical stage. one of such stages was refl ected in the teamwork (mochenov et al., 2003), which included the study of russian media of 1990-beginning of 2000: the vocabulary describes nearly 350 words and expressions, many of which have left to the history together with the authors of these naming units and the mass media, that ceased to exist. the authors of the abovementioned vocabulary “tried to systematize the neologisms and slang words, appeared in the mass media, to write on paper new linguistic realias, which clearly refl ect the consciousness, mentality and multistructurality of modern russian society” (mochenov et al., 2003). the study of naming units, presented in our article, is a part of large material, prepared for the new book “the vocabulary of mass media political slang,” including nearly 200 words and expressions of the russian mass media in the period from 2004 to 2014. it is important, that the material of 2014, we limited by the publications, appeared before crimea was joined to russia, as in “post-crimea” period, the russian media experiences active formation of new political language, the slang form of which is to be studied and recorded in special vocabularies. one more argument for the preparation of new vocabulary, refl ecting the last decade of existence of the russian mass media, is the fact, that some issues, that generated the bright slang words, are closed today (for instance, the online-newspaper “grany.ru”). the verbal world of the mass media needs regular description and explanation. 6. acknowledgments the authors express gratitude for elmira pirieva (st. petersburg), participated in collection of empiric material. references akhmanova, o.s. 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5.0 and later.) >> /namespace [ (adobe) (common) (1.0) ] /othernamespaces [ << /asreaderspreads false /cropimagestoframes true /errorcontrol /warnandcontinue /flattenerignorespreadoverrides false /includeguidesgrids false /includenonprinting false /includeslug false /namespace [ (adobe) (indesign) (4.0) ] /omitplacedbitmaps false /omitplacedeps false /omitplacedpdf false /simulateoverprint /legacy >> << /addbleedmarks false /addcolorbars false /addcropmarks false /addpageinfo false /addregmarks false /convertcolors /noconversion /destinationprofilename () /destinationprofileselector /na /downsample16bitimages true /flattenerpreset << /presetselector /mediumresolution >> /formelements false /generatestructure true /includebookmarks false /includehyperlinks false /includeinteractive false /includelayers false /includeprofiles true /multimediahandling /useobjectsettings /namespace [ (adobe) (creativesuite) (2.0) ] /pdfxoutputintentprofileselector /na /preserveediting true /untaggedcmykhandling /leaveuntagged /untaggedrgbhandling /leaveuntagged /usedocumentbleed false >> ] >> setdistillerparams << /hwresolution [2400 2400] /pagesize [612.000 792.000] >> setpagedevice . special issue for "management of education: problems and perspectives" international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2016, 6(s2) 82-86. international review of management and marketing | vol 6 • special issue (s2) • 201682 students virtual and social identity in the process of humanities study: the problems of its correction gulzida f. magadieva1*, nazilya n. melikhova2, vyacheslav t. volov3, svetlana m. konyushenko4, aygul a. garipova5, irina v. karpova6, elena v. makarova7 1kazan (volga region) federal university, kazan, russia, 2kazan national research technological university, kazan, russia, 3samara institute of fundamental investigations (private), samara, russia, 4immanuel kant baltic federal university, kaliningrad, russia, 5kazan (volga region) federal university, kazan, russia, 6pacific national university, khabarovsk, russia, 7ulyanovsk state agricultural academy named after p. a. stolypin, ulyanovsk, russia. *email: gulzida@mail.ru abstract the relevance of the research problem is reasoned by global use of internet technologies, altering the forms of personal self-identification: a transition of the external world and human individuality in a digital code, the creation of informational imprint in space of the worldwide web, the alienation of the student youth in society, the substitution of reality by virtual world. in this direction a significant potential belongs to humanities, studying of which contributes to the interpenetration and mutual reinforcement of students’ social and virtual identification based on universal norms, values, value orientations, correction of virtual identity redundancy in real society. this article is aimed at scientifically-methodical substantiation of structure and content of pedagogical correction of higher school students’ self-identification in the process of humanities’ study. the leading method in this problem study is a method of modeling of the structure and content of students’ self-identification pedagogical correction in the process of humanitarian disciplines’ study. the article presents the theoretical and methodological foundations of the design and implementation of student’s social and virtual identity correction’s model, its discursive content and mechanisms, structure and new forms’ content in the process of humanities’ study. the presented materials in the article contribute to evidence-based correction of students’ virtual and social identity in the process of humanities’ study and are recommended to use for teachers, methodologists, university information departments’ programmers, improvement of qualification and teacher retraining courses’ attendants. keywords: pedagogical correction, social self-identity, virtual self-identity, internet space jel classifications: a23, i23, i26 1. introduction the creation, use and further development of highly complex technologies, the implementation of computer and information technology put forward for higher school the task of training a new generation of specialists, professionals intelligent, possessing flexible mechanisms of self-identification as a stage in their development, outstripping the needs of the labor market. in the works of the leading specialists in the design and implementation of learning innovative models in higher education (vyugina, 2015; novikov, 2000; slastenin, 2003; shaidullina et al., 2015b; khairullina et al., 2016), in the experience of large university complexes and in humanities teachers’ innovative pedagogical experience (shchelkunov, 2010; zakirova et al., 2016) the focus of humanitarian training on the process of self-identification of the student future specialist becomes a methodological principle of mechanisms cognition of personality self-development and self-transformation in the study of the humanities, as well as self-organization of humanitarian knowledge which is directed on multidimensionality, complexity and the polyphonic nature of cognition processes of personality self-identification in humanitarian training, on detection of them in undisclosed or insufficiently disclosed conditions, based on openness, co-creation, self-development. the results of the study indicate that the productivity of students’ self-identification new forms in the process of humanities studying is largely determined by pedagogical magadieva, et al.: students virtual and social identity in the process of humanities study: the problems of its correction international review of management and marketing | vol 6 • special issue (s2) • 2016 83 correction mechanisms of virtual social identity, reinforcing the integrity of the organic interpenetration and mutual reinforcement of social and real self-identification and their pedagogical potential, which is necessary for the reproduction of a qualitatively new product a specialist focused on the use of humanitarian samples and norms of an open civilized society in future professional activity (kupriyanov et al., 2015; ibragimov et al., 2015). 2. methodological framework 2.1. the concepts and theories the theoretical basis of the study includes the following concepts: • self-identification of personality in professional activity (vyugina, 2015; tikhonov, 2013; shaihitdinova, 2004). • pedagogical correction of students’ virtual and social identity in humanitarian training (asmolov, 2013; zhichkina, 2005). • a synergic approach to students’ humanitarian training (boguslavsky, 1999; vinenko, 2001). 2.2. key notions the theoretical basis of the study is presented by the following key notions: • identification assimilation, equating, likening. • self-identification the process of emotional or other identification of the individual with another person, group of people, social samples. in pedagogical literature the term acquired more broader meaning, denoting, on the one hand, emulation, imitation, and on the other hand especially in studies of the personality the emotional merging with an object of identity. • social self-identification the process of man identification with traditional qualities of social order and structure of society, which are the basis of norms of behavior, specimens, activity, coordination and behavior correction for him or her. • virtual self-identification a modern form of self-identification defined by the network interactions of the personality in the space of internet. • pedagogical correction the complex of pedagogical techniques, aimed at overcoming difficulties in the process of the interpenetration and mutual reinforcement of students’ social and the virtual self-identification in humanities study. • mechanisms of correction of students’ virtual and social selfidentification in the process of humanities studying a set of organizational structural, content, technology, criterionrelated elements of humanitarian disciplines aimed at the harmonization of social and virtual self-identification. • simulacrum copy, which does not have original in reality. • internet space sphere of online communication for different types of social interactions of the individual, the quality of which is constantly renewed under the influence of technical achievements. 2.3. principles of pedagogical correction of students’ social and virtual self-identification as pedagogical correction principles of students’ virtual and social self-identification, we propose: • the principle of personal goal setting the focus on the identity of the student possessing flexible mechanisms aq1 of virtual and social self-identification, anticipating requirements of the labor market to the qualifications of a specialist. • the principle of network communication implementation of online social interactions on the internet and in the real world. • the principle of self-presentation a creating the image of someone as an erudite person, capable of deep emotions, original thinking, creativity and reflection (sakhieva et al., 2015a; 2015b; 2015c; shaidullina et al., 2015a). • the principle of virtualization internet computer reality as a modern technological manifestation of social reality, characterized by qualities such as immateriality of the impact, the conditionality of the parameters and the ephemeral. the combination of these qualities makes the internet space more comfortable space for self-identification and social interactions. being in virtual reality is perceived by the user as an internally motivated activity, followed by meaningful sense and a sense of control over the situation. • the principle of correction providing for the harmonization of students’ social and virtual self-identification in the study of the humanities. 3. results 3.1. the essential characteristics of students’ virtual and social self-identification correction model in the process of humanities study correction model of students’ self-identification in the process of humanities study is a complex, multi-level, theoretically and practically well-grounded process of interpenetration and mutual enrichment of social and virtual self-identification with its goals, structure, content, criteria and technology base. the virtual image complements the real “i” and does not oppose it as something fancy, which weakens the virtual reality of the internet. the results of the study confirm the trend that this process means the increasing of social self-identification’s role in internet communications. in relation to models of virtual and social self-identification correction a high level of significance for its implementation belongs to form of self-representation of the student on the internet. the specifics of the technical resources of the internet creates unprecedented opportunities for self-expression in forms which are free from external influences: nickname instead of a name, an avatar instead of appearance, social network page, in which one can successfully represent some aspects of one’s own individuality ignoring the other. these forms of self-presentation, due to their complete dependence on the user’s will are able to create the feeling of a breakthrough to one’s own genuine personality. personal self-identification with network forms of selfpresentation brings about the illusory aspect of self-identification of the student. the results of the study confirm the assumption that an adequate reflection of self-identification on the internet is made possible through the efforts directed not on self-image but on the external object and through the interaction with the identity of another person. magadieva, et al.: students virtual and social identity in the process of humanities study: the problems of its correction international review of management and marketing | vol 6 • special issue (s2) • 201684 3.2. the structure and content of students’ virtual and social self-identification correction model in the process of humanities study the model structure includes: theoretical justification: the formation of the information base of the educational scientific knowledge; the goals and objectives’ definition of the contents’ correction of students’ virtual and social self-identification; the creation of conceptual schemes, projects of educational curricula documentation (nabiyeva et al., 2015); the contents’ relationship justification of students’ virtual and social self-identification in the process of humanities study; definition of the design principles of self-identification’s content; rethinking of conceptual-categorical apparatus of social and virtual self-identification’s correction; scientific and methodological justification of the choice of students’ social and virtual forms of self-identification in humanities studying process. 1. structural semantic updating of the content of humanitarian training, which is determined by virtual and social selfidentification’s correction: scientific justification of principles of educational material’s content and structure selection; definition of scientific knowledge system, providing training’s and practical knowledge’s profoundness which form the basis of self-identification; the establishment of interdisciplinary, network linkages in the conjugate spaces of social and virtual self-identification; the selection in the content of virtual and social self-identification of the basic interaction components, in which the virtual self-identification is considered as a technological embodiment of modern simulacrum social reality. 2. methodological support of pedagogical correction’s model content of students’ social and virtual self-identification: preparation of technological cards of self-identification (goal setting; design of social and virtual forms of self-presentation, communication; forms of diagnostic and correctional work of self-identification; taking into account of students’ individual and age features; characteristics of co-creation of lecturers and students in the creation of new channels of social and virtual self-identification. 3. technological support is focused on the full implementation of interactive, design and computer technologies. installed set of technologies is based on the development of students’ intellectual activity, on the harmonious combination of social and virtual self-identification which is manifested in their readiness for self-presentation in social reality and in the virtual space of the internet as well as to the self-evaluation of this activity. 3.3. educational-curricula support of pedagogical correction of students’ social and virtual selfidentification in the process of humanities’ studying educational-curricula support of pedagogical correction of students’ social and virtual self-identification in the process of humanities’ studying is based on the updating of curricula, teaching content of humanitarian disciplines, the activities of teachers in its selection, structuring and presentation for students, educational activity of the student in the correction of social and virtual selfidentification, the integral structure and content of normative and methodological materials, contributing to the objectives’ realization in harmonization of students’ social and virtual selfidentification. it presents justified and proved in educational practice, a set of interrelated, complementary and reasoned each other techniques and methods of correction of virtual and social self-identification of teachers’ and students’ subject activity. this aggregation is based on the content of academic disciplines, on the activities of teachers for the selection, structuring and presentation of educational content to students, on educational activity of students, on the technology of design and implementation of training and methodical materials’ complex (erdyneeva et al., 2015). the activity of the teacher in conditions of students’ selfidentification correction is primarily the activity in forecasting of complementarities and interpenetration of social and virtual self-identification in the process of humanitarian content studying. it is aimed at the development of appropriate training materials, organizing of student activities, creating of necessary conditions for the objectives’ effective solution. the second arrangement is training activity which is performed by the students. outwardly it is manifested in the transformation in the learning process of their own already existing experience, as revised by the teacher and presented to students in the form of educational materials to be learned, as well as in updating of the structure and content of personal social and virtual self-identification (nabiyeva et al., 2015; erdyneeva et al., 2015). 3.4. criteria and indicators of the correction efficiency of students’ social and virtual selfidentification criteria of correction efficiency of students’ social and virtual selfidentification consist of motivational aspect, assuming the students willingness to participate in social and virtual self-presentation; the cognitive aspect, including knowledge of the content being taught and its use in social and virtual self-identification; activity aspect, which includes the experience implementation in different social and virtual forms of self-identification; axiological aspect that involves the relation to the content and object of social and virtual self-identification; aspect of emotional-volitional reflection, suggesting a relationship to forms of self-presentation on social networks in real life. as indicators of correction efficiency of students’ social and virtual self-identification the following ones are identified: completeness, structure, volume, stability, consistency, integrity of educational content assimilated by the students; personal, educational, social and professional forms of students’ self-presentation; individual readiness to the synthesis of a new, to generation of ideas in the use of new online channels in the sphere of educational, professional, social and cultural life; the value orientation (common ideological, vocational, information technology, communication), behavioral manifestations in social and virtual self-identification. 3.5. the results of the experiment on mechanisms’ testing for students’ social and virtual selfidentification correction in the process of humanities studying results from testing of mechanisms for students’ social and virtual self-identification correction in the process of humanities magadieva, et al.: students virtual and social identity in the process of humanities study: the problems of its correction international review of management and marketing | vol 6 • special issue (s2) • 2016 85 studying confirm their effectiveness in the modern specialist training, advancing the requirements of the labor market. the formative experiment’s data indicate that the features of the virtual self-identification allows the internet user completely to control the impression of oneself. however, not all modern users of the internet realize this opportunity. in the course of the study, we conducted a conditional differentiation of students into three groups: “hackers,” “lovers” and “pragmatists.” hackers apart from other groups are mostly inclined to the perception of users of different internet – resources as a special social category with their own rules of behavior, and identify themselves with them. pragmatists use the internet occasionally and using internet resources are guided by utilitarian considerations. therefore, they have not identifications with online communities, due to their rare use of the network. lovers are not identified with the community of network users, but are not limited to the use of the internet for utilitarian purposes (table 1). 4. discussions the emergence of new information and communication technologies penetrating all spheres of human activity is one of the reasons of transition to a new form of social reality that requires new qualities and values from the individual. in modern scientific works this process is denoted as “the virtualization of social reality,” that is understood as the transition of the basic forms of social interaction in the virtual space of the internet, in which a substitution of the “real” institutional practices by simulation take place. a contemporary man is immersed in a virtual reality by simulation and perceives the life-world as a conditional gaming environment. with the development of virtual reality technologies and their implementation in everyday life, the individual feels a natural need to be manifested in this new space. today, the fact of person’s being online is one of the main conditions of his or her identity (shaihitdinova, 2004). the majority of people believe the internet is the main space for various social interactions, and for the majority of young people today, the internet is a place of meetings, entertainment and recreation. for modern student being present in the two opposing spaces social and virtual, the task of self-identification possesses a new perspective. social world as a totality of various social institutions, clearly structures the person’s life and limits his behavior. the virtual world is infinite and does not impose on the person any restrictions in the process of his or her self-identification. the openness and incompleteness of identity are the features of contemporary youth culture. due to this change the understanding of traditional identities’ properties change (gender, class, ethnicity, nationality, religious beliefs, education, professional activity). devaluation of social institutions affecting the processes of identification take place, which leads to the creation of new forms in the virtual space (asmolov, 2000). the allocation of specific forms of “virtual self-identification” is the result of a process of personality splitting between social and virtual spaces. in each of these spaces the identities manifests themselves under its current rules. internet, enabling identities testing of various aspects of their real self-identification, generates special types defined by network interactions. the only reality of the person in the virtual space is reality of representation. today, as it is noted by many researchers (zhichkina and belinskaya, 2014), the “i” as governing and sense-making structure becomes redundant. often socially necessary is only dramatization of personality, whereby personality manifests itself only through the “façade i.” because of actual loss of social reference points of the personality there is a growing need to construct social relations and self-identification with them, especially because in modern conditions the network (virtual) identification doesn’t require giving up the real social identification. to enter the network it is necessary only to follow the generally accepted rules of self-presentation that makes these new forms of communication particularly attractive for students. the results of the study indicate that at this stage of information technologies’ development, there is no creation of new social forms in the internet space: users reproduce patterns of behavior, taken from real life. but the interpenetration and mutual reinforcement of students’ social and real self-identification in educational process of higher education still differs by redundancy of virtual forms (shaihitdinova, 2004; vlasova et al., 2015). the installed disparities have a strong impact on the choice of strategies of student’s self-identification in the process of humanities’ studying, orientations to authority, existing in the internet space. modern conditions of life, giving the student ample scope of self-identification, do not give him support in the form of immutable authority needed to gain self-confidence. when found, these authorities become only one of the many possibilities of self-identification. the desire to be in the internet space, where everything is simple and clear, can be explained by the lack of personality’s readiness to the realities of life, his or her “escape” from himself or herself, from responsibility, from feelings of anxiety in difficult social conditions. these symptoms are present in students. psychological instability of students, accompanied by feelings of fear, anxiety, dissatisfaction with a career choice, insecurity are some of the devastating effects that impact the relationship of the student with himself, the environment, society and, as a result, the escape into virtual reality. here there are such issues as the ratio of external assessment and self-assessment; the ratio of the experiences of their social and virtual self-identification, and reflecting on them; the ratio of the rational attributing of themselves to a certain group or position and the realization of this assignment on value and emotional and behavioral levels. 5. conclusion the study confirms the significance of the problem of students’ social and virtual self-identification correction in the process of humanities studying. the study establishes that at the moment the impact of the internet on students’ social self-identification is not so much. users mostly reproduce patterns of behavior, taken from real life. thus, it can be assumed that the current level of development aq1 table 1: the classification of the relationship between students’ social and virtual self-identification hackers virtual communication affects social self-identification 65% lovers virtual communication affects personal self-identification 45% pragmatists virtual communication has no effect on the self-identification 76% magadieva, et al.: students virtual and social identity in the process of humanities study: the problems of its correction international review of management and marketing | vol 6 • special issue (s2) • 201686 of information technologies is able to give the students a sense of stability of self-identification. this stability is a consequence of their virtualization. in addition, the virtual self-identification presented in the network, and social self-identification are in a state of interpenetration and complementarity. references asmolov, a.g. 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(2015), pedagogical conditions of university students professional core competencies formation in the process of humanitarian training. journal of sustainable development, 8(6), 60-68. novikov, a.m. (2000), russian education in the new era. paradoxes of heritage. vectors of development. moscow: academia. p143. s a k h i e v a , r . g . , g i l m a n s h i n a , s . i . , g i l m a n s h i n , i . r . , kosmodemyanskaya, s.s., akchurina, i.r., sagitova, r.n. (2015a), a portfolio as an alternative means of presenting the university student’s achievements. asian social science, 11(3), 162-167. sakhieva, r.g., majkova, l.v., emelyanova, m.v., gavrilova, n.g., sharonova, e.g., gatina, a.r., pavlova, n.a., baklashova, t.a. 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(2015), information and logistic foundations of pedagogical education design and content education. review of european studies, 7(4), 54-58. vyugina, s.v. (2015), modernization of pedagogical system of technological university in the development of the intellectual potential of students. kazan: kgu. p97. zakirova, v.g., masalimova, a.r., nikoghosyan, m.a. (2016), the contents, forms and methods of family upbringing studying based on the differentiated approach. international electronic journal of mathematics education, 11(1), 181-190. zhichkina, a.e., belinskaya, e.p. (2014), strategies of self-presentation in the internet and their connection with the real identity [electronic resource]. phlogiston: psychology first hand. available from: http:// www.flogiston.ru/articles/netpsy/strategy. author query??? aq1: kindly provide reference details . special issue for "management of education: problems and perspectives" international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2016, 6(s2) 92-96. international review of management and marketing | vol 6 • special issue (s2) • 201692 didactic possibilities of formation of university students professionally significant personal qualities raisa i. platonova1, larisa p. lazareva2, anatoly m. pechenyuk3, anatoly e. polichka4, aleksandr i. ikonnikov5, natalya v. semenova6, ekaterina k. dvoryankina7, leonid v. blinov8, alexey v. bastrikov9 1north-eastern federal university named after m.k. ammosov, yakutsk, russia, 2pacific national university, khabarovsk, russia, 3pacific national university, khabarovsk, russia, 4pacific national university, khabarovsk, russia, 5pacific national university, khabarovsk, russia, 6pacific national university, khabarovsk, russia, 7pacific national university, khabarovsk, russia, 8pacific national university, khabarovsk, russia, 9kazan (volga region) federal university, kazan, russia. *email: platonova_raisa@mail.ru abstract the modern society needs highly educated professionals, who are not only capable of navigating in difficult work situations, working in a team and taking responsibility for the completed tasks’ results, but also willing to take decisions under conditions of frequent change of professional activities’ technologies. the goal of the article is to justify and experimentally verify didactic possibilities of formation of future specialists’ professionally significant personal qualities in the process of students’ professional modules mastering. the leading approach is a design approach that contributes to organization of a focused process for the development of professionally significant personal qualities and the formation of students’ competencies, as well as realizing of professional modules’ potential in the educational process. the authors reveal, justify and experimentally check up didactic possibilities that contribute to the project approach’s effective implementation in the organization of educational process at the university. this article is recommended for teachers, researchers, heads of educational institutions engaged in training of bachelors and masters. keywords: higher education, project approach, professional modules, didactic possibilities jel classifications: a23, i23, i26 1. introduction 1.1. background modernization of higher education in rapidly developing socioeconomic conditions implies a systematic reforming of future specialists’ professional training. the modern society needs highly educated professionals, who are not only capable of navigating in difficult work situations, work in a team and take responsibility for the results of completed tasks, but also willing to make decisions under conditions of frequent change in technology of professional activities. the strategic goal of russian education is the provision of qualitative education services to promote the harmonious development of each individual. therefore, in order to train a competent specialist, one should use effective forms and methods of educational process organization (barabanova and ivanov, 2012; irismetov et al., 2013). in the context of the increasing globalization of all spheres of the existing reality, the most important feature of pedagogical science is the realization of the paradigm of the design approach to the educational process that is recognized by many researchers (belkin, 2004; semenov, 2009; khairullina et al., 2016; masalimova et al., 2016). this fact gets reflection in the legislative acts, normative documents in the form of social order on greater attention paying to problems of projecting in pedagogy. the designing is interpreted as one of the leading principles for the projecting of the educational process, a way of its improvement for the realization of the main task the education of the individual, platonova, et al.: didactic possibilities of formation of university students professionally significant personal qualities international review of management and marketing | vol 6 • special issue (s2) • 2016 93 development of professionally significant personal qualities, general and professional competencies (priymak et al., 2015; tararina et al., 2015). 1.2. status of a problem project approach to the organization and realization of educational process in higher education provides the opportunity for personal development, and conditions’ making for its determination and socialization on the basis of vocational, social, cultural and moral values that contribute to the organization of the future professional activity (polivanova, 2008; rubtsov, 2002; aleksandrov et al., 2015). problems of formation of professionally significant personal qualities were considered in research (arestova, 1998; balter, 2010; bodrov, 2001; derkach, 1993; dmitrieva, 1979; popov, 2011; rubinstein, 2002; ukhtomsky, 2002; ushinsky, 2005; shadrikov, 1996; masalimova and nigmatov, 2015). questions of competence-based approach and competencies are reflected in the works of (baydenko, 2005; dneprov, 2006; zimnaya, 2004; ibragimov, 2012; markova, 1996; mukhametzjanova, 2005; khurlo, 2009; prokofieva et al., 2015; shaidullina et al., 2015). the study of psychological and pedagogical sources shows that a definite scientific and theoretical basis for the further development of the paradigm of the design approach to the educational process has been developed in modern didactics. 1.3. the research hypothesis the implementation of the objectives of the educational process organization requires justification and implementation of innovative methodological approaches, their leading ideas and principles, one of which is the project approach, reflecting the integrative project paradigm. however, all the diversity of the previous research does not solve the problem of the didactic projecting of university students’ professionally significant personal qualities’ formation and requires its theoretical and practical development. 2. materials and methods 2.1. methods of research in the research process the following research methods were used: theoretical (content analysis of the scientific literature on the problems of the project and competence-based approaches to the educational process; the implementation of the educational potential of professional modules in the educational process); empirical (participant observation, interviewing, questionnaires, interviews, testing, pedagogical experiment); mathematical and statistical processing of research results. 2.2. the basis of the research the experimental work was conducted in the period from 2009 to 2014 in the federal state budget institution “tomsk polytechnic university.” the ascertaining stage of the experiment included 300 students and the forming stage included 104 students. 2.3. the stages of the research the first stage was directed to identify the state of the research problem’s development in theory and practice. the analysis of domestic and foreign scientific literature on the problems of project-based approach, data collecting, as well as ascertaining stage’s conducting of the pedagogical experiment were carried out. on the second (pilot) stage the new content’s approbation was carried out, the problems of implementation of the project approach to the formation of professionally significant personal qualities of university students in the process of professional modules’ mastering were studied. the third stage involved the generalization and systematization of the results of the experimental work, a reflection of the obtained results and conclusions’ making. 3. results 3.1. project approach in the educational process a specific scientific and theoretical basis of the problem’s development of the project approach to the educational process is revealed which is reflected in numerous studies (aitov, 2006; bedov, 2012; korotaeva, 2007; matyas, 2000; rubtsov, 2002; slobodchikov, 2006; vlasova et al., 2015). the analysis of the concept of the project approach to learning process has allowed conclude that, due to its multidimensionality in the scientific literature there is no consensus on its interpretation. the majority of opinions of researchers in this field agree that the project approach in teaching can be seen as an effective means of all-round personality development through independent, focused, productive searching, processing and updating of knowledge in the form of a complex of ongoing projects by the student. the study of psychological and pedagogical sources showed that there is a certain scientific and theoretical basis for the development of problems of various design approaches to the educational process (project-target, process design, project-oriented, project-modular, design software, project-reflexive, project developmental, etc.). through the integration of the most essential points of view and analysis of the results of the study, the following its working definition was formulated. project approach to the educational process is a set of conceptual ideas that provides the strategy design of a holistic process of identity’s development, formation and development, its general and professional competences on the basis of professionally significant personal qualities. 3.2. modular curricula of teachers training to implement project-based approach the authors have developed a specific mechanism of practical application of the technology how to realize the educational potential of the professional modules, namely, they identified educational units of each topic in specific professional modules in the learning process, which do not only allow to build and improve professionally important personal qualities of future specialists and their cultural competence, but also to intensify the whole educational process. platonova, et al.: didactic possibilities of formation of university students professionally significant personal qualities international review of management and marketing | vol 6 • special issue (s2) • 201694 the study showed that the educational potential of professional modules contributes to the students’ formation of the scientific world view, true values, social and professional interests, providing their personal self-assertion in modern society, developing need in creativity and teaching them the means of self-organization, autonomy, self-realization and self-development. 3.3. didactic possibilities of realization of the project approach on the analysis of psychological and pedagogical literature and experimental data didactic possibilities were revealed: integration of invariant and variant content of vocational modules; the use of educational technology how to implement project approach; development of a modular curriculum of teachers’ training to implement project-based approach, contributing to the formation of professionally significant personal qualities of university students. identified and justified conditions contribute to the effectiveness of the implementation of the project approach to organization of educational process at the university. the implementation of the first condition includes the following directions of the research stages: analysis (definition) of professional and general competencies of students in the field of quality management; the professional competences’ and specialists professionally significant personal qualities’ conjugation trajectory identification in quality management; determination of the trajectory of professional competence and professionally significant personal qualities’ connection of the specialist in the field of quality management of an invariant and variant content of the educational modules. in the second condition implementing process the pedagogical technology of university students’ professionally significant personal qualities’ forming on the base of project approach was used. presented by the authors, the technology represents an optimal combination of its main characteristics (being focused, serialization, process, feedback). the realizing of technology main characteristics’ presence in the project process as a process of interaction allowed participants to lift on a new level of selforganization of their own activities. the implementation of the third condition includes a modular curriculum of teachers’ training was developed to implement project-based approach in the educational process. effectiveness of modular training was evaluated in two units: innovativeprofessional and social (personal communication) at each stage of the educational process. as evaluation criteria the social and professional competences were chosen. the conducted scientific study has proved that training of the teaching staff and administration of the university is one of the didactic possibilities for the implementation of project approach in education with the aim of improving of professional and social competencies. 3.4. professionally important personal qualities in the formation of competencies we share the view of some researchers that the competence as the planned learning result cannot be directly formed and measured, therefore it is important to identify indirect external signs (indicators), in this case professionally important personal qualities with the help of which it is possible to estimate the competences. learning results can be divided into two components: • cognitive component, which reveals the requirements for learning results and is reflected in the size and content of the knowledge, skills and practical experience of professional modules; • activity component, which contains the essential characteristics of each competence of the professional module, external signs (indicators) of the competences’ developmental manifestation, which include a set of psycho-physiological, emotional, character personal qualities (professionally significant personal quality), motives, abilities, behaviors’ models. activity component of the student’s formed competence is evaluated on the basis of the results processing of teacher’s observations of relevant external signs (indicators), to which the professionally important personal qualities belong, carried out throughout the school year with the help of standardized tests, observation and assessment cards of external signs (indicators). 3.5. didactic possibilities’ efficiency criteria of the project approach in the process of professional module’s mastering standardized tests are used to determine not only knowledge, abilities and skills, but also to assess the level of formation of professionally significant personal qualities of the student. tests are created in the form of creative tasks (cases with more creative tasks), which allow on a definite case study to teach students to assess the manufacturing situation in general, to use different points of view and to accept in the result a specific decision to solve the problematic situation. in the beginning of the experiment, at the summative stage, the initial level of students’ professionally significant personal qualities’ formation was recorded. systematic monitoring was composed of a radar chart of the dynamics how the students’ professionally significant personal qualities were formed in the process of various projects’ implementing. the largest shift occurred in such professionally significant personal qualities and peculiarities of students as creativity, creative imagination, aesthetic taste (by 2.9 points); commitment, spatial and rational thinking (by 2.5 points). in general, multiple indicator growth was observed, characterizing the level of formation of professionally significant personal qualities, which in turn are the basic elements of general and professional competencies. the level of formation of professionally significant personal qualities of students in the process of professional modules’ mastering was checked through integrated qualitative assessment of level of future specialists’ competences formation too. a modular methodology for integrated assessment of competences’ development (modules: general; professional) allows comprehensively and objectively: to evaluate the professionally platonova, et al.: didactic possibilities of formation of university students professionally significant personal qualities international review of management and marketing | vol 6 • special issue (s2) • 2016 95 important personal qualities of a technical designer in the process of professional modules’ mastering (creativity, creative imagination, aesthetic taste, activity, adequate perception of criticism, self-discipline, commitment, etc.); to give students and teachers reasonable recommendations for the implementation of the project approach in the educational process. so at the beginning of the experiment (respondents students of the first course of march 27 2002 specialty “quality management”) the average degree of students’ professional competences expression before the experiment was 3.5 points and the average degree of general competencies expression before the experiment was 7.2 points (table 1). the most weakly manifested competencies are professional, their average severity during the experiment changed on average by 1.5-2.5 points (table 2). the results of the experiment (the same respondents, but the students of the fourth course on march 27, 2002 specialty “quality management”) revealed that the most brightly manifested students’ competences are general ones, their average rating was hesitated around 8 points. general competences were changed a little 0.3-0.8 points, and some of them were not changed at all. statistical processing of data carried out during the summative and formative stages of the experiment (the significance of differences in arithmetic mean for each competency (“before” and “after”) was assessed with the help of t-test; the significance level was identified with the help of statistical tables. in general, for many indicators there was an increase that characterized the degree of influence of the students’ formed professionally significant personal qualities on the level of general and professional competencies’ formation. 4. discussions in the course of theoretical analysis and experimental work the obtained results and developed on their basis recommendations about project approach implementation to the formation of university students’ professionally significant personal qualities in the process of professional modules’ mastering do not reveal all aspects of this multifaceted and complex problem. the search for and study of other ways of their forming could be the subject of a further special study. 5. conclusion the study established that the implementation of the design approach to the formation of students’ professionally significant qualities in the process of professional modules’ mastering will be effective when the following didactic possibilities are available: integration of invariant and variant content of vocational modules, contributing to the formation of professionally significant personal qualities of university students; using of educational technology of project approach implementation which is appropriate to the university students’ professionally significant personal qualities’ formation in the process of professional modules’ mastering; development of teachers’ training curriculum to implement project-based approach, table 2: comparative indicators of the degree of professional competences “before” and “after” experiment competence scores before after difference level of significance pc 1.1 3.2 5.2 2.0 0.01 pc 1.2 3.1 5.3 2.2 0.01 pc 1.3 3.0 5.4 2.1 0.01 pc 2.1 3.3 5.8 2.5 0.01 pc 2.2 3.0 5.9 2.9 0.01 pc 2.3 3.1 5.0 1.9 0.01 pc 2.4 3.3 5.3 2.0 0.01 pc 3.1 3.3 5.8 2.5 0.01 pc 3.2 3.6 4.8 1.2 0.01 pc 3.3 3.3 5.2 1.9 0.01 pc 3.4 3.7 5.7 2.0 0.01 pc 4.1 3.2 5.6 2.4 0.01 pc 4.2 2.6 2.7 0.1 pc 4.3 3.6 4.8 1.2 0.01 pc 4.4 3.5 4.5 1.0 0.05 pc 5.1 3.2 4.3 1.1 0.01 pc 5.2 3.1 3.9 0.8 0.05 pc 5.3 3.2 4.2 1.0 0.05 pc 5.4 3.2 5.6 2.4 0.01 pc 6.1 3.0 5.2 2.2 0.01 pc 6.2 5.0 5.8 0.8 0.05 pc 6.3 4.9 5.6 0.7 0.05 pc 6.4 3.8 4.8 1.0 0.05 pc 6.5 3.7 4.2 0.5 0.05 pc 6.6 3.1 5.3 2.2 0.01 pc 6.7 3.2 5.2 2.0 0.01 pc 6.8 3.3 5.8 2.5 0.01 pc 6.9 3.0 5.4 2.1 0.01 pc 6.10 3.0 5.9 2.9 0.01 pc 6.11 3.1 5.0 1.9 0.01 pc 6.12 3.3 5.3 2.0 0.01 pc 6.13 3.5 5.5 2.0 0.01 pc 6.14 3.6 4.8 1.2 0.01 pc 7.1 3.3 5.2 1.9 0.01 pc 7.2 3.2 5.6 2.4 0.01 pc 7.3 3.7 5.7 2.0 0.01 pc 7.4 2.6 2.7 0.1 pc 7.5 3.6 4.8 1.2 0.01 table 1: comparative indicators of severity of general competences “before” and “after” experiment competence scores before after difference level of significance gcc 1 9.5 9.6 0.1 gcc 2 8.4 8.6 0.2 gcc 3 8.3 8.6 0.3 gcc 4 7.7 8.2 0.5 gcc 5 7.4 8.1 0.7 0.05 gcc 6 7.6 8.3 0.7 0.05 gcc 7 7.0 7.1 0.1 gcc 8 7.1 7.9 0.8 0.05 gcc 9 7.2 7.8 0.6 0.05 gcc 10 9.5 9.5 platonova, et al.: didactic possibilities of formation of university students professionally significant personal qualities international review of management and marketing | vol 6 • special issue (s2) • 201696 contributing to the formation of professionally significant personal qualities of university students. references aitov, v.f. 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(2004), key competence as effectively-targeted basis of competence approach in education. moscow: research center challenges the quality of training. p20. . international review of management and marketing | vol 6 • special issue (s2) • 2016 69 special issue for "management of education: problems and perspectives" international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2016, 6(s2) 69-75. pedagogical support of foreign students social adaptation in russian university tatyana v. pavlushkina1*, neile k. schepkina2, ekaterina k. dvoryankina3, viktor a. kazinets4, irina a. ledovskikh5, natalya p. tabachuk6, nadezhda a. shulika7, gulnaz s. ashrafullina8 1the far east higher military command college (the military institute), blagoveshchensk, russia, 2amur state university, blagoveshchensk, russia, 3pacific national university, khabarovsk, russia, 4pacific national university, khabarovsk, russia, 5pacific national university, khabarovsk, russia, 6pacific national university, khabarovsk, russia, 7pacific national university, khabarovsk, russia, 8kazan (volga region) federal university, kazan, russia. *email: sh210@mail.ru abstract social adaptation of foreign students in russian high schools is a process of active adaptation to the conditions of a new socio-cultural and educational environment. the article is directed on the development of pedagogical support, contributing to the efficiency of this process. the following leading methods for the mentioned problem‘s solving are chosen: modeling, survey, interview, test, ranking, observation, mathematical processing of experimental data. the experiment involves foreign students of the 1st and 2nd courses. the article deals with the specifics of foreign students’ social adaptation in russian universities, including socio-cultural, socio-psychological, pedagogical aspects; presents the internal and external factors that influence the process of social adaptation of foreign students studying in russian universities; represents the developed model of pedagogical support of foreign students’ social adaptation in russian universities, including conceptual, target, process, evaluation-criteria parts; reveals the necessary and sufficient organizational and pedagogical conditions of pedagogical support of foreign students’ social adaptation in russian universities. comparison of experimental work results proves the effectiveness of pedagogical support of foreign students’ social adaptation in russian universities if the necessary and sufficient organizational and pedagogical conditions are created (initiation of foreign students to the traditions and values of the multinational russian culture, organization of intercultural communication of foreign students with each other and with russian students; adaptive works organization to form and develop foreign students’ general educational abilities and skills necessary to adapt to the educational process, development of sustained interest and motivation for the future professional activities). keywords: social adaptation, foreign students, pedagogical support, russian university jel classifications: a23, i23, i26 1. introduction 1.1. the relevance of the study the current reform of the russian professional education is directed, in particular, to improve its accessibility and openness to foreigners. the process of social adaptation is complicated by the fact that the trained foreigners represent the community, combined by internal connections on the basis of culture, language, national consciousness and interests related to system of prevailing attitudes, values and norms (kupriyanov et al., 2015; masalimova et al., 2016). being for a long time in a new, unfamiliar, foreign socio-cultural environment, they face difficulties when interacting with those whose culture differs significantly from their own. 1.2. features of social adaptation of foreign students in russian high school the specifics of foreign students’ social adaptation in russian universities are determined by the fact that this process involves socio-cultural, socio-psychological and pedagogical aspects. 1.3. socio-cultural aspect socio-cultural aspect is considered in terms of acculturation, which is defined as the entry into a new culture, the gradual development pavlushkina, et al.: pedagogical support of foreign students social adaptation in russian university international review of management and marketing | vol 6 • special issue (s2) • 201670 of its norms, values and patterns of behavior. analysis of works by lebedeva et al. (2003), stefanenko (1999), yuzhanina (2009) and others shows that the process of acculturation of international students allows determine the trajectory of their entry into the new society, focus and motivation to intercultural interaction and social activity. as the indicators of foreign students’ social adaptation is taken the degree of their acceptance of socio-cultural values and traditions of the new community, as well as alignment of their own behavior in accordance with them and ethnic tolerance. 1.4. socio-psychological aspect socio-psychological aspect of foreign students ‘social adaptation in russian universities is updated in the light of the nature of formal and informal relationships and status-role structure of the student group. significant indicators of social adaptation are the state of satisfaction with the interpersonal interaction in the studying group. 1.5. pedagogical aspects the pedagogical aspect of foreign students’ social adaptation in the russian university is opened from a position of the organization’s features of educational process in it and it is associated with an abrupt change of the content, scope, nature of educational material, forms, methods, tools and the need for their mastering, which is often accompanied by the absence of necessary skills of foreign students. the indicators of this aspect of foreign students ‘social adaptation are the availability of motives of educational activities aimed at training activities, matching of levels of developed general abilities and skills to the requirements of the curricula in russian universities. 1.6. factors of social adaptation social adaptation of personality is influenced by external and internal factors. analysis of the problem of foreigners’ social adaptation studying in russian universities, allows to summarize important as internal (biographical, national, cultural and religious features, linguistic competence, willingness to learn, motivation in training, communication skills, values, personality orientation, etc.), so external factors which are characteristic for each of the abovementioned aspects of it. the socio-cultural aspect of international students social adaptation is influenced by the multinational russian culture, values, views, moral and ethical mentality of russian society, the socio-cultural environment of the city, the environment of the university (lipaev and alekseeva, 2011; lipaev et al., 2010; alekseeva et al., 2015). accordingly, the socio-psychological aspect is affected by relations in the team, morale and psychological climate in it; the pedagogical aspect by value components of the content of education, educational technology of general cultural training and vocational training, methodical support of general learning skills’ formation. 2. literature review different sources devoted to the issues of human adaptation to an unfamiliar socio-cultural environment, including educational institutions (vitkovskaya and trotsuk, 2005; yuzhanina, 2009; koroleva, 2009; lebedeva et al., 2004; stefanenko, 1999; filimonova, 2009; hudyshkina, 2010) note that the social adaptation of personality is complicated due to the impact of different factors. pedagogical support contributes to overcoming the difficulties of social adaptation and reducing their negative impact. the existing research identify the conceptual foundations of human support in education (mudrik, 2000; berezhnova, 2007; zinkovsky, 1997); consider pedagogical support of adaptation process of university students (khusainova, 2005; krys’ko, 2002; savotina, 2004; korepanova, 2003), reveal various aspects of pedagogical support of cadets’ adaptation to training conditions in military academies (davydov, 1980; kiselev, 1998). but the problem of foreign cadets’ social adaptation trained in russian military high schools and their pedagogical support has not received adequate reflection in above mentioned previous studies. an analysis of the scientific literature on the social adaptation of personality in general and social adaptation of foreign students in universities allow to clarify the basic concepts, to develop understanding of the essence of international students’ social adaptation in russian universities. based on a systematic approach, it is carried out a categorical clarification of the conceptual apparatus within the study. pedagogical support of foreign students’ social adaptation in the russian military high school means humanistic oriented, specially organized pedagogical activities of all the entities of the educational process with the contingent with different socio-cultural mentality, aimed at helping students in adaptation problems’ solving and difficulties’ overcoming in a foreign environment. 3. methodology 3.1. algorithm of pedagogical support of foreign students’ social adaptation at the university in its most general form the basis for pedagogical support of foreign students’ social adaptation is the problems’ solution of values’ and traditions’ understanding in russian culture, the successful adaptation to the statutory formal and ethnic informal relationships, responsibilities, the experience’s enriching in modern educational technologies’ mastering of general professional training, the development of sustained interest and motivation in professional activities. algorithm of pedagogical support of foreign students’ social adaptation in the university is shown in figure 1. the first step involves information verifying on the empirical situation in the field of foreign students’ adaptation in russian universities. therefore it is necessary first of all to carry out a comprehensive analysis of the potential abilities of the university in terms of the social adaptation of foreign students, to study specific personal difficulties connected with their entry into the new socio-cultural, educational environment. the second step involves goals’ and objectives’ setting. the strategic goal of pedagogical support is considered a successful social adaptation of foreign students in russian universities. pavlushkina, et al.: pedagogical support of foreign students social adaptation in russian university international review of management and marketing | vol 6 • special issue (s2) • 2016 71 the third stage of the algorithm includes the development of curriculum and plans of pedagogical support of foreign students’ adaptation. there are the following main thing for the developers of such a curriculum and plans: to identify and describe the conditions, principles and technology (equipment) of pedagogical support, to develop criteria and indicators of the effectiveness of the activities taking into account the features of social adaptation of foreign students in russian universities. the fourth stage actually involves the implementation of curriculum and plans, which provides for the direct organization of the process to achieve this goal, the implementation of the necessary organizational and pedagogical conditions. the fifth step involves monitoring and evaluating of changes in the dynamics of social adaptation of foreign students in russian universities. quantitative and qualitative assessment of the changes is made on the basis of internal and external criteria, which are characterized by certain indicators. the sixth stage reflects the feedback establishment for pedagogical support’s correction of social adaptation’s process under the influence of negative factors or the use of inefficient methods, forms and techniques of these activities to further possible collection of the missing data on the educational environment, and others. 3.2. model of pedagogical support of foreign students’ social adaptation in russian universities while developing the model of pedagogical support of foreign students’ adaptation in russian high school (figure 2) the basic ideas of humanistic and activities approaches, the ideas of entity the supporting and the supported ones, ideas of respect of dignity and individual rights of the latter were summarized; the main provisions of a student-centered approach contributing to students’ adaptive capacities’ revealing in educational activities were defined; the essential characteristics of a systems approach allowing consider the pedagogical support system as a consistent and whole phenomenon were concluded; axiological approach was identified as that one which considers pedagogical support as valuable actions in one’s own definition of valuable orientations, which imply the willingness to accept new values by the personality. based on the analysis of the main methodological approaches principles of pedagogical support of foreign students’ social adaptation in the russian high school were identified: individualization and taking into account of foreign students values base, subjectivity, activity stimulating and tolerant interaction. the main goal of pedagogical support is ensuring of foreign students’ social. adaptation’s success in russian universities. as urgent tasks can be defined the following ones: to contribute to russian general cultural values’ accepting, norms, traditions’ and rules’ assimilation of the new team by the international students; to form students’ valuable attitude to the future professional activities; to help to overcome the difficulties of entering into the system of formal and informal interpersonal relationships; to assist in the formation of skills related to the peculiarities of training and mastering of training curricula in the russian high school. in specific problems’ solving of foreign students’ social adaptation in the russian high school the pedagogical support provides a consistent change of tactics in its implementation, where some degree of personal involvement of the supporter and the autonomy of the supported by a companion dominates. as priorities tactics the following were identified: pedagogical assistance, teachers’ collaboration, pedagogical support. organization of pedagogical support is carried out through the creation and implementation of the organizational and pedagogical conditions as: foreign students’ adoption to the traditions and values of the multinational russian culture, the organization of intercultural interaction among themselves and with russian students; adaptation works’ organization to form and develop foreign students’ general educational skills necessary to adapt to the educational process; development of sustained interest and motivation for professional activity. the result of pedagogical support of foreign students’ social adaptation in russian universities is their adaptability which is defined by internal and the reflection of the respective indices. 4. results and discussions experimental work was carried out from 2010 to 2014 on the basis of the far eastern higher military school (military institute) named after marshal of the soviet union rokossovsky. the figure 1: algorithm of pedagogical support of foreign students’ social adaptation in the university pavlushkina, et al.: pedagogical support of foreign students social adaptation in russian university international review of management and marketing | vol 6 • special issue (s2) • 201672 participants of pedagogical experiment were the representatives from africa, the middle east, southeast asia, central america 40 people who were randomly divided into control (cg-20 people) and experimental (eg-20 people) group. on stage of ascertaining experiment with the help of pearson’s criterion the uniformity was established in experimental and control groups (results of comparison at the 5% significance level χ2кр (0.05, 2) = 5.99; χ2кр(0.05, 1) = 3.841), which allowed to consider them as samples of one and the same general integrity. the process of social adaptation of respondents of control group in the russian military high school took place naturally, in the experimental group it was accompanied by organizational and pedagogical conditions. experimental work was aimed at the implementation and verification of organizational and pedagogical conditions’ effectiveness shown in figure 2 of pedagogical support of foreign students’ social adaptation in russian universities. 4.1. implementation of the first condition foreign students’ involvement to the traditions and values of the multinational russian culture the first condition is foreign students’ involvement to the traditions and values of the multinational russian culture as in academic hours’ study, in the study of subjects (russian language, culture), so during extracurricular time. within the study of figure 2: model of pedagogical support of foreign students’ social adaptation in russian universities pavlushkina, et al.: pedagogical support of foreign students social adaptation in russian university international review of management and marketing | vol 6 • special issue (s2) • 2016 73 discipline “russian language” in the classroom and during extracurricular reading at the preparatory department the texts used, which had regional geographic and cultural information. topics of texts as well as their timing in the study corresponded to the logic of learning of russian language by foreign students. this contributed to gradual and appropriate to their language skills getting acquainted with the values and traditions adopted in the russian society. to integrate foreign students in the sociocultural environment it is important to be based not only on the knowledge of customs, norms and values, but also on a personal interest in their understanding and active participation in the activities with elements of creativity. effective for this problem’s solving, as it is shown by practice, are training sessions in the form of role-playing games, building of mini-stories that reflect the characteristics, traditions and values of russian culture, meeting with this culture’s students from other educational institutions, artistic groups and others. in the experiment, following the aim of foreign students’ familiarizing to the values of the multinational russian culture a series of events was organized including: the party dedicated to the ancient russian traditions and rituals; master class on the technique’s carrying out of gzhel and khokhloma painting, thematic discussion on the topic “etiquette in the life of the russian people,” the party of questions and answers, etc. 4.2. implementation of the second condition the organization of intercultural interconnection of foreign students with each other and with russian students the second organizational and pedagogical condition the organization of intercultural interconnection of foreign students with each other and with the russian students was realized through cultural and leisure activities. each of them pursued a specific purpose for example, the discussion of meaningful symbols adopted in the culture, familiarization with the differences in the perception of personal space, the space-time orientation, interpersonal distance and comparison of these elements in various cultures around the world, forming of foundations of human actions’ prediction, and the lines of their behavior depending on the specific elements of national culture, awareness of eclecticism of stereotypes in the perception of people of different cultures, and others. one of the important events both for foreign students and russian students was a show-concert “dialogue of cultures”. international students were invited to participate in the competition of guitar songs, and in the party of humor organized by the russian students. traditional events become soccer matches between national teams, master classes in athletics and kyokushinkai karate, in which actively participated as foreign students, so the teaching staff of the university. these activities contributed to the high emotional spirit of foreign students, their better understanding of human and national features, developing of their interest in other cultures, tolerance and respect for its representatives. 4.3. the implementation of the third condition the organization of the adaptation work on the formation and development of foreign students’ general educational abilities and skills the third organizational and pedagogical condition the organization of the adaptation work on the formation and development of foreign student’s general training abilities and skills necessary to adapt to the educational process-was implemented with the introduction in the educational process of elective course. it is designed for 30 h of study time and consists of two modules. during the study of the first module of training material foreign students’ acquainted with the features of the basic forms of training in russian high school and practiced almost all necessary general educational abilities skills. the second module of electives, including subjects related to the military professional culture of cadets, the culture of their relationship, the role of the military rituals and traditions in forming the culture of the individual student, contributed to the development of sustained interest and motivation for professional military activities (the fourth organizational and pedagogical condition). additionally, the foreign cadets were involved in the work of the military and scientific community dvvku in which they prepared reports and presentations on topics related to their military profession, practiced in military-professional games. 4.4. the course and results of the experiment during the formative experiment reference sections were provided in order to diagnose the dynamics of the main indicators of internal and external criteria of foreign soldiers’ social adaptation in the russian military college. in the control stage of the pedagogical experiment the main indicators’ measurement of foreign students’ social adaptation in russian military college was carried out. the results of the experimental work suggest that indicators of social and cultural aspects of the social adaptation of foreign students were significantly improved in eg. so from 10 to 50% the number of foreign students, with the average level of ethnic tolerance was increased. the degree of acceptance of socio-cultural values and traditions of the russian society was changed and their behavior complied with social norms, traditions, values and attitudes of the new society. significant positive changes of the socio-psychological indicators of foreign students’ social adaptation in russian universities took place. satisfaction by the interpersonal interaction in the eg group was improved in all three components: emotional, behavioral and cognitive. so, from 15 to 85%, the number of tested, positively assessing the knowledge of team members’ features was increased, 75% of respondents started to like the members of the academic staff, it was a pleasure to work with them, from 10 to 70% the number of foreign students was increased who wanted to learn, to perform professional duties, communicate with team members in the field of leisure. in addition, there was a reduction in the number of violations in the eg of regulations governing relations from the 70 to 20% in 1 month, to 40% for one semester, and 65% for the academic year. pavlushkina, et al.: pedagogical support of foreign students social adaptation in russian university international review of management and marketing | vol 6 • special issue (s2) • 201674 the dynamics of changes in indicators of pedagogical aspect of foreign students’ social adaptation in the eg was traced. if at the beginning of the experiment such motives of educational activities as a diploma possession, continuous receipt of salaries, the approval of parents and others had been expressed, after the experiment, the dominant motives in their educational activities were aimed at professional activities (study successfully, ensure the success of future professional activities, to become a highly qualified specialist, etc.). experts’ estimations of general learning abilities and skills’ formation, given by the faculty of the university, pointed to their significant improvement in the egf or example, if before the experiment there was a low level of abilities and skills’ formation in abstracts’ making among 85% of foreign students, after its conducting 90% of students showed a high level. the data presented in table 1, show that the index of positive emotions among foreign students in the eg in the performance of their duties changed from the weak one at the beginning of the experiment (95% of respondents) to expressed one (65% of respondents). the number of foreign students who experienced a cute negative emotions was reduced in the expressed form (from 85 to 0%), as well as anxiety and depression (from 100 to 0%). comparison of the dynamics of social adaptation indicators in cg and eg after the experiment with the help of pearson criterion, u-mann–whitney test shows significant differences between the results obtained before and after the ascertaining stage of the experimental work. thus, the obtained differences in the eg are not accidental-they were formed under the influence of the organizational and pedagogical conditions’ implementation of pedagogical support, necessary and sufficient for successful foreign students’ social adaptation in russian universities. 5. conclusion the study shows that the social adaptation of foreign students in russian universities is a process of active adaptation to the conditions of a new socio-cultural and educational environment. the specifics of foreign students’ social adaptation in russian universities are determined by the fact that this process involves socio-cultural, socio-psychological, pedagogical aspects. the core of the study is the basic concept-pedagogical support of foreign students’ social adaptation in russian universities, it is understood as humanistic oriented, specially organized pedagogical activities of all entities of the educational process with the contingent, with different socio-cultural mentality, aimed to help students in solving adaptation problems and difficulties in foreign environment. the study shows that the characteristics of pedagogical support of foreign students’ social adaptation studying in russian universities are reasoned by the influence of internal (nationalcultural, individual personal characteristics of students) and external (socio-cultural environment of the university, regulated laws of relationships, moral and psychological climate in the team, educational technology of general vocational training, requirements for a future professional activities and others) factors. the novelty of this study is theoretically justified, developed and integrated into the practice the model of pedagogical support of foreign students’ social adaptation in russian universities, including four parts: a conceptual, target, process and evaluation-criteria. theoretical and practical value is represented by the identified and empirically proven necessary and sufficient organizational and pedagogical conditions of pedagogical support of foreign students’ social adaptation in russian universities: the adoption of foreign students to the traditions and values of the multinational russian culture; organization of intercultural interconnection of foreign students with each other and with russian students; adaptive works’ organization to form and develop foreign students’ general educational abilities and skills necessary to adapt to the educational process; development of sustained interest and motivation for future careers. comparison of experimental work proves the effectiveness of pedagogical support of foreign students’ social adaptation in russian universities in case of the necessary and sufficient organizational and pedagogical conditions’ creation. references alekseeva, l., shaidullina, a., lipaev, a., sadykova, 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(2009), sociocultural adaptation to inter-ethnic interactions. moscow: mgu engineering. p273. zinkovsky, a.v. (1997), program adaptation of foreign students to study in russian universities. st. petersburg: univ spbgtu. p137. tx_1~at/tx_2~at international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2023, 13(3), 16-24. international review of management and marketing | vol 13 • issue 3 • 202316 examining the impact of sensory marketing on young consumers: a mcdonald’s case study vusumuzi david mbatha, aaron koopman, tinashe chuchu* university of the witwatersrand, south africa. *email: tinashe.chuchu@wits.ac.za received: 02 february 2023 accepted: 26 april 2023 doi: https://doi.org/10.32479/irmm.14320 abstract in recent years research on sensory marketing has attracted the attention of marketing researchers and scholars alike. the purpose of this study is to investigate the impact of sensory stimuli that is used to create arousal, and to examine whether this arousal influences consumer attitudes and purchase intentions. previously documented literature was used as a foundation for this research while additional opportunities to expand this topic’s literature was identified. while previous studies and results on sensory marketing exist, there is a lack of south african related literature on the concept. the quantitative research approach was used to measure the proposed conceptual model and hypotheses, and the convenience sampling method was chosen as the technique to acquire the required sample. to facilitate this study, a seven-point likert scale was used with questions and statements adapted from previous literature. of the 300 distributed surveys, 279 were returned, deemed viable, processed and interpreted. the findings of this study support all the proposed hypotheses. furthermore, this study’s findings and conclusions contribute towards comprehension of sensory marketing from a young consumer’s perspective. keywords: sight, attitude, purchase intention, sensory marketing jel classifications: m3, m37 1. introduction sensory marketing is a notion that has been mentioned within the marketing world for years, with little sense having been made of it and minimal utilisation of the practice millennials in particular are being actively pursued as far as sensory marketing is concerned because they are viewed as the technology generation that will change the world (singh et al., 2023). consumers are bombarded with marketing stimuli that primarily engages their hearing as well as their sight, and consequently they have become immune to these marketing triggers due to the high volumes they are exposed to and the lack of uniqueness from one piece to another (sendra and carbonell-barrachina, 2017). according to krishna (2012), sensory marketing implies an understanding of sensation and perception as they apply to consumer behaviour. this definition is based on the notion that sensory marketing engages the consumers’ senses and affects their behaviours. hulten (2017) highlights that a multi-sensory experience is a powerful brand-enhancer where a strong and lasting connection can be established with the consumer. a multi-sensory experience that is offered by a brand brings with it an emotional connection that potentially facilitates the creation of an individual and personalised experience. a firm develops sensorial strategies to distinguish their brand from competition, especially when functional or rational attributes such as price or quality are largely similar. hence, sensorial strategies are based more on emotional and psychological elements than on functional attributes when clarifying a brand’s identity and values. the main purpose of sensorial strategies is to facilitate the multisensory brand-experience that is expressed through means such as sensors, sensations, and sensory expressions in relation to the five human senses (hulten, 2011). by engaging a consumer’s senses, sub-conscious triggers are created, and messages are cognitively planted. sayadi et al. this journal is licensed under a creative commons attribution 4.0 international license chuchu, et al.: examining the impact of sensory marketing on young consumers: a mcdonald’s case study international review of management and marketing | vol 13 • issue 3 • 2023 17 (2015) explain that these triggers bring about a feeling within the consumer that impacts various parameters such as the time they spend in a store; the level of satisfaction it brings them to engage with the product or brand; the level of decision-making undertaken during the purchase, and the level of interest when doing so. sensory marketing provides extra motivations to consumers and it can stimulate sensory stimuli thereby resulting in the formation of a relationship between the brand and the consumer (sendra and carbonell-barrachina, 2017). farhadi et al. (2017) acknowledge that the sensory stimuli that is associated with a product or a brand can translate differently from consumer to consumer, thereby emphasising that it is the aim of all the brands to solicit positive reactions from their consumers during all the ‘moments of truths’ that are experienced with a brand to invoke a positive perception. according to hussain (2014), several brands have trouble retaining consumers in highly competitive environments and through the strategic application of sensory marketing, a competitive advantage is plausible. the purpose of this study is to investigate and to assess the impact of sensory characteristics on the attraction and arousal to a product and whether this influences the consumers’ purchase intention, with specific reference to mcdonalds. in addition, this study aims to assess each sensory factor’s level of influence. the study also intends to highlight which sense is foremost in establishing a positive predisposition or arousal, which in turn influences the consumers’ attitude and purchase intention. the present study will contribute to existing literature by examining three theories which are, the sensory marketing theory, the theory of planned behaviour and the theory of reasoned action. the theories are discussed first and, thereafter the conceptual model and the hypothesis statements are developed. 2. literature review and development of hypotheses the objective of the study is to determine the impact of the five senses; sight, taste, touch, smell and sound on product arousal, and the impact that product arousal has on consumer attitude and by extension on purchase intention. based on the objective of the study, it was considered appropriate for the study to be grounded by the following theories: the sensory marketing theory, the theory of planned behaviour and the theory of reasoned action. at the foundation of the sensory marketing theory is the insight that much of the current literature on sensory marketing examines sensory techniques individually. it further reiterates that rarely do humans process marketing information this way. when a shoe marketer, for example, appeals to consumers, the colour and the texture of the shoe are ways that the multisensory cues are used to appeal to the market. the lemon or lavender smell of cleaning products and the use of packaging with bright colours such as white, pink and yellow is another way to dynamically engage consumers, thereby communicating the intended message. the crisp sound emphasised in the marketing for potato crisps is used to signal the freshness of the product and the lack of this sound would be interpreted otherwise (elder et al., 2010). as explored by dissabandara and dissanayake (2019), the impact of sensory marketing affects the consumers’ discernments and decisions, as well as their eventual behaviour. literature further indicates that consumers can be influenced by visual, atmospheric, auditory, tactile and gustative elements. the sensory marketing theory as a science, has been a topic of interest for academic practitioners due to its ineffectual methods of marketing (hulten, 2017). the key objective of sensory marketing is to send communication to the brain so that it can; create curiosity, influence purchase decisions and create a lasting connection and impression (dissabandara and dissanayake, 2019). from a research standpoint, the sensory marketing theory implies that an understanding of sensation and perception is linked to consumer behaviour (farhadi et al., 2017). this study uses this theory or paradigm to measure whether the consumers are impacted by sensory marketing stimuli and if they affect their eventual purchase intention. the theory of reasoned action (tora or tra) aims to explain the relationship between attitudes and behaviours within human action. it is used mainly to predict how individuals will behave based on their pre-existing attitudes and behavioural intentions. the tra was built on the theoretical underpinnings of fishbein's (1967) theory of attitude and previous research in social psychology, persuasion models, and in attitude theories. the primary purpose of the tra is to understand an individual’s voluntary behaviour by examining the underlying basic motivation to perform an action. the tra, which is depicted graphically in figure 1 below, states that a person’s intention to perform a behaviour is the main predictor of whether they perform that behaviour (ajzen et al., 2007). developed from the theory of reasoned action, was a theory that saw the addition of perceived behavioural control as a factor in determining behavioural intention. this theory is known as the theory of planned behaviour (madden et al., 1992). the theory of planned behaviour differs from the theory of reasoned action as it acknowledges that perceived behavioural control has a direct effect on behaviour and an indirect effect on behaviour through intentions (madden et al., 1992). intentions determine the level of efforts an individual is willing to invest to perform a behaviour, and according to the theory of planned behaviour, an individual will be more willing and will have a stronger intention to perform a behaviour if they hold a positive attitude towards it. the intention and capability to perform the behaviour therefore determines the likelihood of the behavioural action (mcdermott et al., 2015). 2.1. sight to date, visual marketing remains the most used tactic to communicate to consumers, which is understandable given that it is the most seductive of the senses. it is reported that it takes 45 ms for the human eye to detect a visual object and it is also highlighted that 80% of all the information that is consumed is through the eyes (liegeois and rivera, 2011). visuals facilitate information processing within the consumers’ cognitive awareness and even in cases such as radio and written communication where visuals are not present, the communicator will often use descriptive language that allows the receiver to build a mental picture. the chuchu, et al.: examining the impact of sensory marketing on young consumers: a mcdonald’s case study international review of management and marketing | vol 13 • issue 3 • 202318 underexplored elements of vision include colour, shape and size. marketers explore these elements when deciding with what to associate their brand with because research has shown scientific evidence that these elements have a more subconscious effect than previously understood (elder et al., 2010). liegeois and rivera (2011) argue that although visual cues are the primary tactic in marketing, they are also the hardest to change if the need arises. according to zhou and aitamer (2011), the interpretation of visual stimuli differs from culture to culture. asian cultures for example tend to focus more on focal points, whereas western cultures look at the whole object. where colour is concerned, research has shown a general preference for the colour blue across all cultures while other colour interpretations will differ from culture to culture. mcdonalds makes use of bright colours, patterns and shapes in its restaurant to emphasise the high energy environment. the play area is often painted in numerous colours to attract children and by effect, their parents (lorre, 2017). 2.2. smell liegeois and riviera (2011) explain that 75% of the human emotions are generated from and by the smell sense. a signature scent and ambient can often be remembered and it can create an environment that consumers want to be in because of how it makes them feel. according to liegeois and riviera (2011), the sense of smell takes up to ten times longer to register in the brain. when the memory of a smell registers, it is more likely to remain at the top of the mind in comparison to visuals, due to the efforts involved in registering a smell. grzybowska-brzezinska et al. (2013) argue that the generic smells that are linked to certain ambiences reach the brain a lot faster and are more direct than other senses. they do so unconsciously, thereby evoking powerful memories and sometimes changing human emotions. the use of fragrance in stores has been seen to positively impact the consumers’ response. the consumers can either elect to stay longer in a store, thereby allowing for more time for the marketer to engage with them, or they can return to a store more often due to the positive experience and the feeling that is created by the scent. 2.3. touch the skin is the largest organ of the body. research involving the haptic stimulus is still in its infancy. what has become apparent in consumer behaviour is that consumers need motivation to touch and the three key aspects that are important when making use of touch in marketing are: the consumer, the environment and the product. how individuals engage a product through touch and the perception that follows has been reported to be formed by individual and referent principles. for some, the interaction with the product through touch is a way of validating the quality of the product while others may be conscious of many other people who may have touched the same surface or product and would refrain from doing so for hygiene purposes (elder et al., 2010). touch is a way of evaluating a product for many consumers and prohibiting them from doing so could lead to frustration. to involve consumers in the purchase journey, mcdonalds has introduced touch screens within selected restaurants, allowing those who choose to place and select their own orders to do so. this is a tactile marketing strategy and through touch, consumers can design their own meal experience by navigating through the numerous options that are available (suhonen and tengvall, 2009). 2.4. taste traditionally, taste as a marketing stimulus has seen limited exposure, as it is often reduced to taste demonstrations that are set up in some stores. what accompanies the display is an individual who will try to engage a prospect customer to purchase the product. this is not always a practice that is supported by shoppers due to the frequent forcefulness of the promoter (hulten et al., 2009). due to the challenge of first having to attract a consumer to taste a product, retail marketers are making visual advertisements and communication much more about taste. the technique relies on photographing food in the most appetising and appealing way, to simulate the act of tasting. in addition, fast food restaurants such as mcdonalds, kfc and burger king will often pilot a product in one or two stores to gauge the reaction of consumers before releasing it to the broader audience. the objective is to understand how audiences respond to the taste of the product, before deciding to make it available elsewhere (machala, 2014). taste can elicit very strong and often unchangeable attitudes towards a product. 2.5. hearing sound in marketing is frequently used to enhance and dramatise an idea or communication and although some jingles and sounds that are associated with some brands may be short and simple, the development of a unique sound that accompanies a brand takes extensive detail to develop (hulten et al., 2009). for many individuals, music and sound is a way of expression. brands look to communicate to consumers through sound and the brave will often aim to do so using a jingle (machala, 2014). for a brand such as mcdonalds, the intended behaviour and mood its sound cues hope to evoke, is happiness. in 2003, justin timberlake was commissioned by mcdonalds to record the ‘i’m lovin’ it’ jingle for which he received a sum of $6 million (blistein, 2016). 2.6. arousal arousal can be defined as the awakening or energising of the organism which results in a state of alertness (belanche et al., 2014). according to menon and kahn (2002), psychology researchers have studied the effects of arousal under varying circumstances. many have found that high levels of arousal can lead to a low level of decision making when favourable, and a high level of avoidance behaviour when less favourable. this means that if a high level of arousal is achieved by stimuli, an individual spends less time deciding on whether to act on a behaviour and will often do so impulsively. in the retail environment, a store environment with strobe lights and loud music can contribute towards the arousal of customers. the layout of a store and the atmosphere that is created through various stimuli is an important factor to arousal as it is a determinant to the time spent in store by the prospective customers. 2.7. attitude attitude can be defined as a learned predisposition to behave in a consistently favourable or unfavourable manner with respect to a given object (schiffman and kanuk, 2014). attitudes are learned and developed as a result of a direct experience with the product, word of mouth or exposure to mass media advertising or social chuchu, et al.: examining the impact of sensory marketing on young consumers: a mcdonald’s case study international review of management and marketing | vol 13 • issue 3 • 2023 19 media marketing (shciffman and kanuk, 2014). ikechukwu et al. (2012) add that attitudes are not always observable but are evident in what people do or say. ikechukwu et al. (2012) further state that to understand the attitudes of consumers, one must either observe or ask questions relating to their behaviour. the challenge and opportunity for marketers is that the attitudes are often consistent and are long term. they can change if a new stimulus presents itself strongly enough to challenge the existing attitude but, in most cases, a formed attitude dictates subsequent behaviour. 2.8. purchase intention anggie and haryanto (2011) report that purchase intention can also exist because a certain level of satisfaction was acquired before. ferrand et al. (2010) as cited by dalle ave et al. (2015) further mention that the consideration for repurchasing a specific product or service is also determined by the service attributes, price and previous purchase behaviour. the study’s conceptual model and hypotheses development is presented in the following section. 3. conceptual model and hypothesis development figure 2 represents the proposed conceptual model for the study. the conceptual model also forms the basis from which the hypotheses statements are developed. 3.1. hypotheses development 3.1.1. sight and arousal photoreception, brand identification and the arousal thereof primarily happen through the eye. sight is the primary sense that is relied upon when driving initial impressions and arousals (rupini and nandagopal, 2015). brengman (2002) as cited by jang and lee (2019) investigated the sense of sight and in particular store colours and their effect on desire and arousal in customers. the study acknowledged and provided evidence that such a relationship does exist. therefore, this study proposes the following hypothesis: h1: there is a positive relationship between sight and arousal. 3.1.2. hearing and arousal numerous studies that reviewed the ability of music to induce a behaviour and thus arouse consumers to behave in a specific manner have been conducted. the two aspects that have been discovered by research where sound is concerned are music and time duration, as well as music and customer attention. music if used correctly can act as a differentiating factor for a brand (dalle ave et al., 2015). dalle ave et al. (2015) further conclude that music can enhance the customer’s experience in store. as such, the hypothesis is that: h2: there is a positive relationship between hearing and arousal. 3.1.3. smell and arousal the studies in consumer behaviour that have sought to analyse the effect of odours in retail environments indicate that scents have a positive effect and could potentially result in a positive product or environment arousal. the review of products, the image perception of a store, whether a customer will return to it or not and how likely they are to purchase could be influenced by a positive scent. although scent is a lot more difficult to sight hearing taste touch smell arousal attitude purchase intention source: authors’ own work (2023) figure 2: research conceptual model attitude behavioural intention behaviour subjective norm source: madden et al. (1992) figure 1: theory of reasoned action chuchu, et al.: examining the impact of sensory marketing on young consumers: a mcdonald’s case study international review of management and marketing | vol 13 • issue 3 • 202320 identify than other stimuli, it is said that its arousal after-effects are more long-lasting (goldkuhl and styven, 2007). as a result, the hypothesis is that: h3: there is a positive relationship between smell and arousal. 3.1.4. touch and arousal the need for touch and its link to interest for purchase is derived from the consumers’ preference to use touch to obtain more information and security on the product, motivate for its acquisition, understand its shape and size and as a determinant of its quality (manzano et al., 2016). research supports retailers who encourage consumers to touch the product as this strategy allows more favourable responses (sendra and carbonell-barrachina, 2017). therefore, the hypothesis is that: h4: there is a positive relationship between touch and arousal. 3.1.5. taste and arousal sayadi et al. (2015) documented taste as an important factor where competition in the marketplace is fierce and marketers are looking for ways to arouse consumers in order to have them behave in a certain manner. restaurant owners use descriptive wording when detailing the characteristics of a meal as a way to appeal to consumers, thereby arousing them to select the said meal. therefore, the hypothesis is that: h5: there is a positive relationship between taste and arousal. 3.1.6. arousal and attitude when consumer arousal is achieved by a brand, a feeling of understanding and joy is said to be evoked. when this occurs, a favourable attitude is formed and a positive cognitive state is established (hameed et al., 2019). belanche et al. (2014) advise that arousal is challenging to analyse, with some authors, indicating that the use of neuroscience may be the best way to identify the existence of arousal in consumers. as such, the hypothesis is: h6: there is a positive relationship between arousal and attitude. 3.1.7. attitude and purchase intention the relationship between attitude and purchase intention is one that has been extensively studied and documented by researchers with the theory of planned behaviour which is primarily referenced as the grounding theory for this relationship. attitude directly and positively impacts intention (koenaite et al., 2019). furthermore, yang et al. (2014) note that behavioural intention is one’s likelihood to perform an action and this is likely to be affected to some degree by their attitude. the authors further document that attitude has been discovered to be an important predictor of how consumers not only perceive and understand certain behaviours but also how they decide to act in moments when deliberating whether to purchase or not. there is thus a strong indication that a relationship is prevalent between these two variables. the hypothesis is that: h7: there is a positive relationship between attitude and purchase intention. 4. research methodology the research study was quantitative and deductive in nature, and a positivist approach was employed to examine the relationship between the dependent and independent variables. the measurement item was compiled by adapting the existing scales from prior literature. data was collected from 279 young consumers who purchased fast food from mcdonald restaurants located in johannesburg, south africa. data was collected through self-administered questionnaires consisting of close-ended questions. the questionnaire made use of a seven-point likert scale with consumer responses ranging from strongly disagree to strongly agree. the variables that were used were measured by adapting existing scales: sight (hartmann and apaolaza-ibanez, 2012), hearing (jain and jain, 2016), taste (jang and lee, 2019), touch (grohmann et al., 2007; randhir et al., 2016), smell (gvili et al., 2017; sliburyte and vaitieke, 2019), arousal (jang and lee, 2019), attitude (roudposhti et al., 2018; ližbetinová, and weberova, 2016) and purchase intention (roudposhti et.al., 2018; ližbetinová and, weberova 2016). the following section presents the data analysis and interpretation of results. 5. data analysis and results 5.1. descriptive statistics this study recorded a stronger response rate from females as they accounted for 64.9% of the total sample. males represented the remaining 35.1%. with respect to age, most individuals belonged to the 26-35-year-old category (36.6%) or the 36-45 years old category (29.7%). the remaining respondents fell within the other classifications. from an ethnic perspective, the majority of individuals indicated that they are either caucasian (50.5%) or black african (40.5%). the remaining respondents indicated that they are either coloured (4.7%), indian (3.9%) or other (0.4%). the sample profile is illustrated in table 1 below. 5.2. structural equation modelling (sem) for further scrutiny of the study’s data, structural equation modelling (sem) was used. sem is best used for hypothetical table 1: sample profile descriptive frequency percentage gender female 181 64.9 male 98 35.1 total 279 100.0 age 18-25 46 16.5 26-35 102 36.6 36-45 83 29.7 46-55 27 9.7 56 and older 21 7.5 total 279 100.0 ethnicity/race caucasian 141 50.5 african 113 40.5 coloured 13 4.7 indian 11 3.9 other 1 0.4 total 279 100.0 chuchu, et al.: examining the impact of sensory marketing on young consumers: a mcdonald’s case study international review of management and marketing | vol 13 • issue 3 • 2023 21 constructs that are represented by latent variables (hox & bechger, 1998). the study’s r squared, and q squared values are discussed below. regression analysis is a goodness-of-fit measurement, measuring the strength of the relationship between the model and the dependent variables under the assumption that all the other factors remain static (hamilton et al., 2015). according to frost (2019), studies such as this one where human behaviour is being explained or examined, the r squared values of less than 0.5 are common. although a figure closer to 1, is more favourable. q squared values are attainable through two methods: cross validated communality and cross validated redundancy. for this study, the latter was used and attained by forecasting the uncertain blocks using the latent factors. researchers have indicated an acceptance level of 0.5 for q squared levels with some acceptance of values between 0.4 and 0.5 at times. the figures in the below table were deemed acceptable (table 2). 5.3. confirmatory factor analysis through sem, the confirmatory factor analysis (cfa) was performed. cfa was used to measure the relationships between the indicators and the factors. the scale accuracy analysis is detailed in the table below. this is followed by a discussion of the measurement scale’s reliability and validity. table 3 above illustrates accuracy scale statistics. all necessary thresholds were met. the mean and standard deviation values table 2: r and q squared values variable r squared values q squared values arousal 0.623 0.442 attitude 0.651 0.425 purchase intention 0.661 0.454 table 3: accuracy scale statistics research construct descriptive statistics α value cr value ave value factor loadings mean value standard deviation sight s1 4.650 3.960 0.992 1.785 0.760 0.764 0.522 0.593 s2 4.650 1.811 0.819 s3 4.140 1.669 0.656 s4 4.100 1.874 0.676 hearing h1 5.510 5.360 1.566 1.504 0.857 0.894 0.678 0.808 h2 4.960 1.379 0.870 h3 5.610 1.366 0.839 h4 5.370 1.704 0.773 smell sm1 4.510 4.030 1.941 1.365 0.728 0.842 0.644 0.650 sm2 4.340 1.757 0.877 sm3 5.190 1.646 0.504 sm4 3.230 1.760 0.847 touch t1 4.270 4.760 1.497 1.466 0.802 0.872 0.630 0.824 t2 4.320 1.596 0.842 t3 5.370 1.189 0.752 t4 5.090 1.582 0.752 taste ta1 4.730 4.360 1.624 1.732 0.796 0.868 0.625 0.869 ta2 4.110 1.750 0.810 ta3 4.600 1.859 0.830 ta4 4.990 1.696 0.634 arousal ar1 3.940 3.720 1.685 1.666 0.899 0.928 0.723 0.886 ar2 3.690 1.602 0.907 ar3 3.480 1.625 0.921 ar4 3.110 1.726 0.852 ar5 4.340 1.692 0.657 attitude att1 4.060 1.639 0.773 att2 4.580 4.020 1.767 1.732 0.871 0.907 0.663 0.879 att3 4.370 1.735 0.879 att4 5.270 1.840 0.835 att5 4.790 1.679 0.689 purchase intention pi1 4.720 3.560 1.831 1.928 0.893 0.922 0.702 0.827 pi2 4.170 1.788 0.857 pi3 4.480 1.936 0.878 pi4 4.780 1.901 0.774 pi5 5.650 2.183 0.850 α value: cronbach’s alpha, cr: composite reliability, ave: average variance extracted chuchu, et al.: examining the impact of sensory marketing on young consumers: a mcdonald’s case study international review of management and marketing | vol 13 • issue 3 • 202322 showed normal distribution with the mean values all being close to each other and the standard deviation values ranging from −2 to +2. cronbach’s alpha values all exceed 0.7 which is required for reliability and the composite reliability values all surpass the recommended value of 0.6. the average variance values all exceed 0.5 necessary to confirm validity and the factors loadings also surpass the recommended value of 0.5 for validity. table 4 below presents the results of the hypotheses and path coefficients, and it is followed by a brief discussion. as indicated in the above table, all hypotheses are supported, however, two do not meet the required threshold for t and p values (less than 1.96 and 0.02 respectively) and are therefore deemed insignificant. it can therefore be concluded that the relationships measured by hypotheses h2 and h4 are supported, however, they have no significance due to the fact that the required confidence interval was not attained (5%). upon further analysis, the relationships between arousal and attitude as well as attitude and purchase intention are the strongest of all hypotheses that were developed with a path coefficient of 0.807 and 0.813 respectively, and a t value of 36.12 and 40.37 respectively. the remaining hypotheses (h1, h3, h5) show a moderately significant relationship between the said variables thereby indicating that there is a positive relationship between these variables. 6. conclusion the study intended to investigate the impact of the various senses (sight, smell, hearing, taste and touch) on arousal and attitude and by extension on purchase intention. a quantitative study was adopted in which 279 questionnaires were completed. the developed conceptual model proposed that sight, hearing, taste, touch and smell influence arousal, and by extension attitude and purchase intention. the study was successful in that all the hypotheses were supported, however, the relationship between hearing and arousal (h2) and touch and arousal (h4) was deemed insignificant. in addition, the study provided insight into how marketers can make use of stimuli to best appeal to consumer senses and increase purchase intention, thereby highlighting the most important senses to engage. 6.1. implications of the study by measuring the relationships between the independent and the dependent variables as outlined by this study’s hypotheses and conceptual model, this study has empirically demonstrated that sensory marketing has an impact on product arousal, consumer attitude and purchase intention. while some relationships were shown to be weak between variables, all of them were supported. the study contributes to the existing theory and knowledge by re-iterating the importance for marketers to engage consumer senses with their various stimuli. the study was successful in demonstrating that sight, smell and taste have a strong impact on product arousal, while hearing and touch have a lesser impact on product arousal. the study also shows the importance of techniques such as store merchandising, colour palette selection, demonstrative photography and motionless storytelling when wanting to create product arousal and appeal. in an environment where practitioners are not only competing with other competitors, both in and out of categories but also small screen visual advertising, the use of multisensory marketing is a strategy that needs to be explored for sustainable competitive growth. 6.2. limitations of the study and future research in terms of further research from a conceptual perspective, potential hypotheses not tested in the present study could be examined. for instance, direct relationships between all five senses (sight, hearing, taste, touch and smell) and attitude as well as direct relationships between these five senses and purchase intention. testing these potential hypotheses could help explain young consumers attitude towards purchase intention of fast food. stemming from a practical perspective for limitations were observed. the first recognised limitation and future research opportunity is geographically related, where the study’s sample was made up of south african based individuals only. while the insights and recommendations will contribute to future literature, a comparative study done in other countries could give further insight, specifically in countries where mcdonald’s has a bigger footprint. the second limitation and future research opportunity relates to the used method of research. while there is merit to the used quantitative research technique, it does not allow for further exploration where there may be a requisite. a future study to carry forward the insights from a quantitative research, into one that is exploratory in nature would provide further and potentially more accurate conclusions. the third limitation and future research opportunity concerns the lack of health benefits of mcdonalds that may have influenced how respondents answered the survey. the fourth limitation and future research opportunity is in relation with south africa’s economic state, the number of individuals who can afford mcdonalds, and how accessible and available mcdonalds is to the population of south africa. according to stats (2020), 23.3% of south africa is unemployed and the standard of living within the majority of the country remains below an acceptable standard. in addition to all of the above, mcdonald’s restaurants are predominantly positioned in more urban areas in south africa. the study was centred on a single restaurant using a sample of respondents of similar age table 4: hypotheses testing results hypothesis relationship path coefficient t value p-value result h1 sight and arousal 0.146 2.436 0.015 supported and significant h2 hearing and arousal 0.014 0.398 0.691 supported and insignificant h3 smell and arousal 0.174 2.440 0.015 supported and significant h4 touch and arousal 0.078 1.574 0.116 supported and insignificant h5 taste and arousal 0.504 6.916 0.000 supported and significant h6 arousal and attitude 0.807 36.12 0.000 supported and significant h7 attitude and p.intent 0.813 40.37 0.000 supported and significant chuchu, et al.: examining the impact of sensory marketing on young consumers: a mcdonald’s case study international review of management and marketing | vol 13 • issue 3 • 2023 23 groups all from a single region. this could have created respondent bias as all the participants were exposed to the same environment. further research could consider a more diverse sample, more geographical regions and more than just one restaurant brand or franchise so that a more diverse pool of insights can be obtained. references ajzen, i., albarracín, d., hornik, r. 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(2011), motives and guidance for the use of sensory marketing in retailing: the case of nature a découvertes. masters thesis, karlstad university. tx_1~at/tx_2~at international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2023, 13(2), 1-9. international review of management and marketing | vol 13 • issue 2 • 2023 1 nurses’ emotional intelligence, satisfaction in lebanon: the mediating role of job stress suzan al kadi*, abdul rahman beydoun, alaa elddine abbas department of business administration, beirut arab university, lebanon. *email: suzaneel_kadi@hotmail.com received: 02 december 2022 accepted: 20 february 2023 doi: https://doi.org/10.32479/irmm.14005 abstract this study aims to examine the direct effect of nurses’ emotional intelligence (ei) on their job satisfaction, as well as the indirect effect through the mediating role of job stress (js). the sample consisted of 365 nurses working in lebanese hospitals during the covid-19 period. the results revealed that ei elements (self-awareness, self-management, social-awareness and relationship-management) had a significant positive effect on nurses’ job satisfaction. the existence of the negative mediation of job stress between the four ei skills and attitudes was found. the generalizability is limited to the lebanese registered nurses in hospitals. future research needs to incorporate other samples like the private nurses. a comparative study to provide further clarify the effect of ei and js on the nurses at different levels is needed. this study extends research on organizational behavior to eastern culture by examining the direct effect of ei on attitudes as well as the indirect effect through the mediating effect of js which was not previously tackled. it suggests that the four skills of ei have a significant positive effect on nurses’ attitudes. it emphasizes the full mediation role of js. the obtained results indicated that hospitals can increase job satisfaction bettering the employees’ ei. keywords: emotional intelligence, nurses attitudes, job satisfaction, job stress, covid 19 jel classifications: m0, m1 1. introduction the job stress has become an area of focus for almost all organizations as employees are an organization’s heart and soul. when an individual is faced with stress, his/her quality of performance and behavior are adversely affected (universari and harsono, 2021). the term “stress” stems from the latin word “stringere” meaning “to pull tight.” seyle (1936) in burman (2018) defines stress to be a syndrome created by a group of harmful factors. also explains stress to be a non-specific reaction of the body in the face of harmful stimuli. stress happens when demands overwhelm the resources an individual has (burman, 2018). nursing is deemed to be one of the most stressful career choices (reeves, 2005). contemporary studies have demonstrated that levels of chronic stress amongst nurses vary between 37.8 and 74.8% and as such, stress levels were considered to be continuously at or above average (chen et al., 2020). to that effect, it has been asserted that stress continuously stems from common stressors such as the daily interaction with colleagues including fellow nurses, medical practitioners, and patients and the condensed work schedule due to staff shortage among other factors. the exposure to such a high level of stress on a daily basis results in shaping their attitudes at work, a reduced commitment and satisfaction of the health worker toward the organization (lambert et al., 2007). essentially, one’s attitude is a mental state by which the individual views, processes and perceives objects in his environment (saari and judge, 2004). it has been noted that when the aforementioned stressors are experienced by the nurses, they have the potential to have a direct effect on satisfaction levels (giorgi et al., 2012). there is a positive correlation between the increased levels of stress and turnover intentions (cartledge, 2001) as well as an increase in absenteeism this journal is licensed under a creative commons attribution 4.0 international license al kadi, et al.: nurses’ emotional intelligence, satisfaction in lebanon: the mediating role of job stress international review of management and marketing | vol 13 • issue 2 • 20232 (gandham, 2000). with nurses experiencing such heightened levels of negativity, they are in dire need of a technique or approach that reduces their stress to a desirable tolerable level. one of the many approaches that an individual may potentially adopt in order to effectively deal with such a heightened level of stress as well as its percussions is emotional intelligence (kheirmand and kheeirmand, 2016 as cited in rakhshani et al., 2018). the concept of emotional intelligence has become increasingly appealing to scholars from a plethora of academic backgrounds (lambert et al., 2007). the term emotional intelligence (ei) generally refers to a set of skills/competences, and/or capacities that permit its possessor to be aware of not only one’s emotional states but that of others (abbasi et al., 2018). this also includes the ability to control or harness emotions to create a positive effect on an individual’s ability to survive the stresses and needs of the environment (abbasi et al., 2018). since goleman introduced the term in 1995, it has gained a considerable level of momentum in both the sphere of mainstream culture as well as the business (mattingly and kraiger, 2019). in turn, within the last 20 years ei has managed to become a prominent topic in the field of academia with particular attention to education, psychology, and management (pradhan and nath, 2012). with regards to organizational research, emotional intelligence has become the most practical construct (tamta and rao, 2017). ei is divided into four branches or skills and consists of: self-management, self-awareness, social skills and social awareness (mayer et al., 2001). contextually, lebanese nursing sector is a tempting one to study the impact of emotional intelligence where nurses stress, satisfaction, turnover and migration is common (el-jardali et al., 2009). there is also the sheer magnitude of disorder caused as a result of the pandemic within the health care sector highlights the array of challenges workers of the sector are subjected to, especially nurses. some of the challenges include, the work requirements, prolonged working modality, increasing demand and the priority of their own wellbeing while being faced with shortage in the essential protective equipment such as ppes (sakr and romani, 2020). the current crisis that has hit the country has driven a number of medical centers to lay off nurses in december 2019, this has in turn resulted in an increased level of responsibility on the remaining staff and as such putting more stress on the nurses. in parallel with the tremendous pressure exerted by the pandemic, nurses were already facing acute pay reductions due to the pressing economic situation and the collapse of the local currency; in fact, many health care workers were forced to take unpaid leaves (doumit, 2020). elements such as a hectic schedule, fear of virus spread, conflict with colleagues, as well as lack of support from the hospitals with the ongoing crisis pushed the patients to misbehave; a substantial constituent of job stress among the nursing staff. according to what was presented earlier, one may conclude that there is a gap in the literature linking emotional intelligence, attitudes with job stress as a mediator, particularly in the nursing sector. some previous study showed that there is a significant positive effect of ei on job satisfaction (ashraf et al., 2014; samanvitha and jawahar, 2012), while other studies showed such as those of (jung and yoon, 2016), confirmed that the social awareness as ei skill does not affect employee’ level of job satisfaction. whereas, (lopes et al., 2006) asserted that social awareness as a subscale of emotional intelligence affect positively the employee attitudes. accordingly, due to these contradictory results; we propose to study job stress as a mediator to solve this problem. following a literature review and establishing beyond doubt the lebanese nurse’s stress and the emotional exhaustion they have. in an attempt to reduce the literature gap on the above addressed topic, this study focuses on suggesting a theoretical and empirical examination in a comprehensive model that incorporates the ei skills to efficiently improve the job stress satisfaction relationship within in hospital nurses. the aim of this research is two-fold: to investigate how does job stress affect the lebanese nurses’ work attitudes? and how does emotional intelligence mediate the relationship between work stress and job satisfaction? 2. literature review and hypotheses development 2.1. emotional intelligence emotional intelligence first proposed by thorndike (1920), who perceived the intelligence as the sum of the three parts abstract intelligence, mechanical intelligence, and social intelligence. thorndike (1920) noted that it was of value in human interactions and relationships. he concluded that social intelligence was discrete from academic abilities and was a key to success in the practicalities of life. within the group of social intelligences, gardner (1993) distinguished between two types of personal intelligences: interpersonal and intrapersonal. interpersonal intelligence was concerned with the ability to understand other people and to work well in co-operation with them. intrapersonal intelligence involved being able to form an accurate picture of one’s self and to use this to operate successfully in life. the latter included the ability to be self-aware, to recognize one’s own feelings and to take account of them in social behavior. there were four separate abilities within interpersonal intelligence. they included the ability to organize groups, negotiate solutions, make personal connections and engage in social analysis. according to goleman (1995) these skills demonstrate ‘interpersonal polish’ and facilitate social success. people who possess such skills can form connecting relationships with others easily, read other people’s feelings and responses accurately, lead and organize other people and handle disputes successfully. mayer and salovey (1993) are more explicit when they describe ei, indicating that it involves verbal and non-verbal assessment and expression of emotions, control of emotions and the use of emotion in solving problems. goleman (1995), expanded upon the term “emotional intelligence” where the researcher considered emotional intelligence to be a fundamental element of one’s skill set. emotional intelligence has five elementary fields. the first is considered to be the foundation of ei and is the ability to identify one’s own emotions and monitor al kadi, et al.: nurses’ emotional intelligence, satisfaction in lebanon: the mediating role of job stress international review of management and marketing | vol 13 • issue 2 • 2023 3 them continuously. the second is emotion management, which revolves around the ability to handle one’s emotions, and in turn enhances one’s self-awareness. the third is self-motivated emotion organizing utilized to complete a goal, this element is critical to leveraging attention, mastering self-motivation, equates to mastering creativity as well as action. the fourth is the ability to identify the other person’s emotions. the capacity to be empathetic is rooted in emotional self-awareness. the fifth is the ability to be in a functional relationship and refers to the ability to manage the other person’s emotions. these five competences were later reduced to the four known skills: self-awareness, self-management, social awareness and social management (goleman, 2001). self-awareness is recognising one’s own preference, internal state, and intuition (easa, 2021; zakariasen and victoroff, 2012). this essentially points out to the possibility to use, feel, lean, recognize and handle emotions. self-awareness goes beyond knowledge of the feelings to processing such knowledge to more explore one’s own self (dirette, 2010). in a number of ei models, self-management alludes to “self-regulation”. as such it is the capability to adjust actions and emotions to enable correct behavior in different situations. (mcpheat, 2019) as cited in easa (2021) reported that self-management is the notion of taking ownership of our emotions and the way our behavior and decisions are affected. social awareness is linked to comprehending and handling the emotions of the members of the society (mcpheat, 2019). as such, being socially aware is one’s awareness of his/her surrounding; in addition to one’s ability to acicularly decipher the emotions of others. relationship management also known as social skills, are skills employees have or acquire while engaging with others. relationship management puts forward methods to communicate with others which leverages productivity, reneforces relationships, and adds to employee’s overall quality of life (easa, 2021). 2.2. attitudes, job satisfaction as for attitude it is known as “predisposition or a tendency of a person to evaluate some symbol, person, place or thing in a favorable or unfavorable manner. in essence an attitude is a state of mind in which the individual carries around in his head, through which he focuses on particular objects in his environment” (kelly, 1974) as cited by (saari and judge, 2004). contemporary literature is rich in research conducted by various scholars and researchers who have tackled the relationship between emotional intelligence and attitudes (e.g. fatima et al., 2010; nahid, 2012; brunetto et al., 2012; seyal and afzaal, 2013). it has been established that work personnel have different viewpoints with regards to different aspects of their work, their career path, and their employing organization. however, taking the research and practice perspective, job satisfaction is the work personnel most prominent attitude (saari and judge, 2004). as such, job satisfaction is, in the scope of this study, often referred to as employee attitudes. job satisfaction is the employee’s attitude founded on the individual’s overall experience while working for an organization. the feelings of positivity or negativity associated to one’s job, the perception that work dose not force a specific emotional response pertaining a task and, conditions of physical and social tasks are associated to job satisfaction. persons build a specific attitude towards their jobs and the work environment based on their perception of the existence or non-existence characteristics within the work that meet their particular needs (fatima et al., 2010). an examination of the prior relevant literature revealed that many studies emphasized on the role played by emotional intelligence on employee attitudes in terms of job satisfaction, organizational commitment, loyalty (alavi et al., 2013; hasanah and mujanah, 2020; pourkiani et al., 2016) especially in the nursing and healthcare sector. a study conducted on teachers in iran found that there is a clear relation between ie and job satisfaction (nahid, 2012). within the relationship between attitude and emotional intelligence, a study conducted by khani and lalardi, demonstrated that the absence of ei amongst employees is considered to be a predicament for the organization; thus, being an extensive overhead (khani and lalardi, 2012). other studies have revealed the strong relationship between emotional intelligence, organization commitment and job satisfaction (brunetto et al., 2012). guleryuz et al. (2008) emphasized the impact of emotional intelligence and its facets on work satisfaction and nurses’ organizational commitment and revealed that emotional intelligence was directly linked to both organizational commitment and job satisfaction in different sectors. moreover, a different study conducted on a group of educators found a negative relationship linking attitudes to emotional intelligence (meridalopez and extremera, 2017). there is a strong association between emotional intelligence and both work satisfaction, and organizational commitment as well as also between job satisfaction and organizational commitment in different sectors amongst employees of all age groups (anari, 2012; sembiring et al., 2020). the association between emotional intelligence and work satisfaction was explored by various researchers such as ashraf et al., 2014; samanvitha and jawahar, 2012. in their studies they offered little evidence as to why and how emotional intelligence will affect attitudes, confirming a favorable association between emotional intelligence and work satisfaction (wen et al., 2019). managers can utilize self-awareness to identify their positioning within the company and consequently increase productivity. moreover, a correlation between occupational stress, emotional intelligence, and organizational commitment found that the higher an individual’s ei level, the more he or she will possess a positive team spirit. this in turn will eventually lead to being able to effectively deal with challenges within the organization and be able to appropriately cope with difficulties and changes within the organization (nikolaou and tsaousis, 2002; dulewicz et al., 2003). a similar study found that the relationship between components of self-awareness and self-management and attitudes were also of significance (yamani et al., 2014). whereas jung and yoon (2016) found that self-awareness has no significant effect on job satisfaction. as for the self-management a skill that excel in the adaptation mechanism to the organizational conditions and employees are more committed and satisfied in their organization (rozell et al., 2002). alavi et al. (2013) that proved the positive impact of emotional intelligence as a whole and the selfmanagement more specifically has on the employee commitment toward their job. jung and yoon (2016) found that the social awareness does not affect the person’s level of job satisfaction. al kadi, et al.: nurses’ emotional intelligence, satisfaction in lebanon: the mediating role of job stress international review of management and marketing | vol 13 • issue 2 • 20234 whereas, (lopes et al. (2006); rozell et al. (2002) proved that social awareness as a subscale of emotional intelligence affect positively the employee attitudes. the relationship management or social skills affect positively the employee’s commitment and satisfaction, alavi et al. (2013) found that the interrelationship has a significant influence on the emotional versatility among the employees. hence, we hypothesize the following: h1: self-awareness is positively related to nurses’ satisfaction in lebanon h2: self-management is positively related to nurses’ satisfaction in lebanon h3: social awareness is positively related to nurses’ satisfaction in lebanon h4: social skills is positively related to nurses’ satisfaction in lebanon 2.3. mediating of job stress work stress is rooted in the increasing complexity of the nature of jobs, and the ever-changing work environment within organizations. despite the conflicting findings pertaining to the effects of job stress on employee attitudes and behaviors, it has been found that stress is a major factor in fostering the inaugural’s inclinations in relation to a job, as such staff performance is affected (hrefish and hadrawi, 2020). when the situations or conditions surpass the endurance capability of an individual, he or she reaches the state of what is called stress. job stress occurs when the balance between the work environment’s demand and the abilities of the individual is not fulfilled. thus, within the work environment, stress may be a result of an awareness warped with ambiguity and conflict topped with an overload from accumulating workload within the organization as well as the individual’s personality characteristics (gharib et al., 2016). people are naturally inclined to peruse and nurture positive emotions and distance themselves from negative ones. when individuals exhibit emotional intelligence through their behavior, they encourage positive effects on the emotions and as such avoid becoming under the influence of negative thoughts and feelings which results in an adequate way to deal with stress (parrott, 1993). in addition, another side of emotional intelligence, which is deemed as a vital indicator of success, is the individual’s capability to survey, handle, and control stress. this feature of emotional intelligence is known to be an important predictor of success. with that said, an inverse relationship among the aforementioned, elements, emotional intelligence and stress could be inferred (parrott, 1993). the ability to manage one’s emotions results in leveraging the ability to cope with stress, avoiding becoming overwhelmed with negative thoughts and emotions. furthermore, the ability to interpret and understand human feelings will lead to the ability to recognize and capture signals which trigger behavior of self-regulation. as such, emotional intelligence can be a tool to influence behaviors in the workplace (mayer and salovey, 1997; abraham, 2000). several studies have attempted to demonstrate a connection between stress and attitudes, and it was found that a number of stressors affect stress itself. bokti and abu talib (2009) looked at the relationship between stress and work satisfaction and showed that workplace stress was adversely correlated with the eight-work satisfaction. as an individual’s performance in any organization type is affected by the stress and this also applies to air force military pilots. khodabakhsh and alireza, (2007); mansoor et al. (2011) stipulates that work stress decreases job satisfaction. yahaya et al. (2010) also revealed the negative impact of occupational stress on workplace satisfaction. generally, it was considered that job stress is a precursor to job satisfaction, and both constructs have been considered as connected but separate (stanton et al., 2002). thus, a connection between job satisfaction with work stress has been established. in addition, the workload and working conditions are organizational factors that are adversely linked to employee satisfaction (vinokurkaplan, 1991). little satisfaction within the workplace can also lead to stress whereas high satisfaction could alleviate stress. this leads to the conclusion that both work stress and job satisfaction are closely related (mansoor et al., 2011). job stress was shown to be a strong indicator of two of the three aspects of burnout. correctional workers who indicated elevated levels of work stress encountered higher levels of emotional fatigue and detachment (griffin et al., 2010). another more recent study conducted in the ghanaian banking sector context was able to confirm the negative effect occupational stress has on job satisfaction (darteybaah et al., 2020). the mediating impact of job stress was not tackled in the literature; and because the above literature showed the contradictory direct of emotional intelligence skills on job satisfaction. thus, this study aims to test the below hypotheses: h5: job stress mediates the relationship between self-awareness and satisfaction h6: job stress mediates the relationship between self-management and satisfaction h7: job stress mediates the relationship between social-awareness and satisfaction h8: job stress mediates the relationship between social-skills and satisfaction. 2.4. research framework the literature on job stress, emotional intelligence, and job satisfaction guided us to develop the research framework which is outlined in figure 1. 2.5. research methods to test the proposed hypotheses, data were collected randomly online via google form, and in persons from all the lebanese governates. the participants are the registered nurses currently working in the lebanese hospitals occupying different positions in the hospital and the sample unit is the registered nurse who fills the questionnaire and assesses his own emotional intelligence and the work attributes and stress related to it based on his/her own subjective perceptions. in total 365 useable questionnaires were returned. demographically, 33 % of the respondents were male and 67 % female. 98 % of them were between 20 and 50 of age. as for experience, 73 % had more than 5 years of experience within the field and 27% had less than 5 years of experience in the nursing sector. al kadi, et al.: nurses’ emotional intelligence, satisfaction in lebanon: the mediating role of job stress international review of management and marketing | vol 13 • issue 2 • 2023 5 emotional intelligence self-awareness self-management social awareness social skills job stress satisfaction h4 h5 h6 h7 h8 h1 h3 h2 figure 1: hypothesized research model of emotional intelligence the survey contained three dimensions. the dimensions such as job stress, emotional intelligence, work satisfaction. participants were asked to respond to the questions by rating each on a 5-pont likert scale from 1 (strongly disagree) to 5 (strongly agree). emotional intelligence is measured through the four sub-components of ei: self-awareness, self-management, social awareness, and social skills; moreover, this study adopts the 33-item assessing emotions scale (schutte et al., 2009). job stress is measured by the nursing stress scale (nss) to pinpoint comprehensive stressors of nursing. this has already been tested and validated in a similar study (lee et al., 2007). the nss consisted of thirty-three questions that contained seven subscales. to measure satisfaction, the jss scale will be adopted which includes thirty-six items such as pay, promotion, coworkers, work and communication, here the responses will be scored on a 6-point likert scale (spector, 1985). the reliability and the validity of the construct are found in a similar study (andersen and andersen, 2012). 3. results and data analysis 3.1. preliminary analysis the study scale has an overall reliability of 0.902 which is an acceptable reliability as it is above 0.7 (sekaran and bougie, 2016). for testing the multicollinearity, the correlations among the variables were tested (table 1). all the coefficients were below 0.9. thus, there is no redundancy among variables. moreover, a calculation of the variance inflation factor (vif) showed that all coefficients are below 3, indicating the absence of multicollinearity. 3.2. descriptive statistics correlation results matched the expected direction, therefore providing support for the study hypotheses (table 1). for instance, self-awareness was positively related to satisfaction r = 0.463, p < 0.001). self-management was positively related to satisfaction (r = 0.416, p < 0.001). social awareness was positively related to satisfaction (r = 0.402, p < 0.001). as for the job stress, was negatively related to self-awareness (r = –0.870, p < 0.001), selfmanagement (r = –0.835, p < 0.001), social awareness (r = –0.705, p < 0.001) and relationship-management (r = –0.789, p < 0.001). it was also negatively related to satisfaction (r = –0.446, p < 0.001). table 1 reports the results of the means, standard deviations and correlations between variables. 3.3. regression results hypotheses of the study were tested by simple and multiple regression analyses. spearman correlations indicated that all the hypothesized relationships between emotional intelligence and satisfaction were supported. self-awareness was positively related to satisfaction ß = 0.346, (p < 0.01). providing support to h1. self-management was positively related to satisfaction respectively ß = 0.341, (p < 0.01). providing support to h2. social awareness was positively related to satisfaction ß = 0.357, (p < 0.01). providing support to h3. relationship management was positively related to satisfaction respectively ß = 0.479, (p < 0.01). this provides support to h4. 3.4. testing mediation 3.4.1. hypothesis h5 the same three steps were followed to test this hypothesis (table 2). in the first step, the linear regression indicated that selfawareness predict nurse’ satisfaction with ß = 0.346, (p < 0.01). the second step showed that self-awareness is a predictor of job stress with ß = -0.791, (p < 0.01). therefore, stress fully mediates the relationship between selfawareness and satisfaction. 3.4.2. hypothesis h6 the same three steps were followed to test this hypothesis (table 3). in the first step, the linear regression indicated that selfmanagement predict nurse’ satisfaction with ß = 0.341, (p < 0.01). the second step showed that self-management is a predictor of job stress with ß = –0.805, (p < 0.01). since the standardized coefficient of self-management in the univariate is greater than the standardized coefficient in the multivariate approach (0.341 > 0.132), it is concluded that stress partially mediates the relationship between self-management and satisfaction and h6 is partially supported. 3.4.3. hypothesis h7 the same three steps were followed to test this hypothesis (table 4). in the first step, the linear regression indicated that social awareness predict nurse’ satisfaction with ß = 0.357, (p < 0.01). the second step showed that social awareness is a predictor of job stress with ß = –0.601, (p < 0.01). therefore, stress fully mediates the relationship between socialawareness and satisfaction and h7 is fully supported. al kadi, et al.: nurses’ emotional intelligence, satisfaction in lebanon: the mediating role of job stress international review of management and marketing | vol 13 • issue 2 • 20236 table 2: the mediating effect of job stress on the relationship between self-awareness and satisfaction variables ß1 ß2 ß3 sat sa 0.346 (0.000) −0.791 (0.000) 0.124 (0.124) stress −0.444 (0.000) sa: self-awareness, sat: satisfaction table 3: the mediating effect of job stress on the relationship between self-management and satisfaction variables ß1 ß2 ß3 sat sm 0.341 (0.000) −0.805 (0.000) 0.132 (0.112) stress −0.447 (0.000) sm: self-management, sat: satisfaction table 1: descriptive statistics and correlations of variables variable 1 2 3 4 5 6 7 self-awareness 0.867** 0.686** 0.803** −0.870** 0.629** 0.463** self-management 0.867** 0.723** 0.774** −0.835** 0.639** 0.416** social awareness 0.686** 0.723** 0.674** −0.705** 0.556** 0.402** relationship management 0.803** 0.774** 0.674** −0.789** 0.595** 0.438** stress −0.870** −0.835** −0.705** −0.789** −0.620** −0.446** satisfaction 0.463** 0.416** 0.402** 0.438** −0.446** 0.445** mean 3.44 3.82 2.69 3.92 1.67 1.99 1.74 sd 0.71 0.65 0.79 0.68 0.92 1.04 1.16 sd: standard deviation table 4: the mediating effect of job stress on the relationship between social awareness and satisfaction variables ß1 ß2 ß3 sat soa 0.357 (0.000) −0.601 (0.000) 0.020 (0.741) soa: social awareness, sat: satisfaction 3.4.4. hypothesis h8 the same three steps were followed to test this hypothesis (table 5). in the first step, the linear regression indicated that relationship management predict nurse’ satisfaction with ß = 0.479, (p < 0.01). the second step showed that relationship management is a predictor of job stress with ß = -0,757, (p < 0.01). therefore, stress fully mediates the relationship between relationship management and satisfaction and h8 is fully supported. 4. discussion this study examined the direct effect of emotional intelligence (self-awareness, self-management, social-awareness and relationship-management) on nurses’ attitudinal factor (satisfaction) as well as their indirect effect through job stress as a mediator. correlation results showed that nurse’ self-awareness is positively related to satisfaction a result that is congruent with prior research (alavi et al., 2013, hasanah and mujanah, 2020, pourkiani et al., 2016). this suggest that the more nurses possess high ability in self-awareness, the more they show higher commitment and satisfaction toward their job, they are more likely to overcome their job stress. also, there is positively related to satisfaction, a result that is congruent with prior research mayer table 5: the mediating effect of job stress on the relationship between social skills and satisfaction variables ß1 ß2 ß3 sat ss 0.479 (0.000) −0.757 (0.000) 0.008 (0.914) stress −0.290 (0.000) ss: social skill and salovey (1995). the results also show that there is a full negative mediation between self-awareness, satisfaction, thus implying that job stress decreasing the positive effect of selfawareness on satisfaction. these results are similar to the past results, because it shows that job stress has a negative impact on nurses’ satisfaction (mansoor et al., 2011; dartey-baah et al., 2020) the results show a positive effect of self-management on both nurses’ satisfaction, this suggest that the nurses with high selfmanagement skill who can control their emotions can also favorably accept positive emotion and perceive the support from the organization, resulting in high job satisfaction. in addition, they excel in the adaptation mechanism to the organizational conditions and are more committed to their organization. these results are consistent with (rozell et al., 2002; alavi et al., 2013; jung and yoon, 2016). as for the social awareness ability, the results show that it is positively related to both satisfaction and commitment. this indicates that employees with high social awareness skill possess a great ability to accurately pick up on emotions of other people and understand what is going on with them this result was contradictory with (jung and yoon, 2016) where they found that the social awareness does not affect his level of job satisfaction. whereas, (lopes et al., 2006) asserted that social awareness as a subscale of emotional intelligence affect positively the employee attitudes. the social awareness is concerned with understandings others, willingness to serve the others, awareness of other’s feelings, needs, and concerns. people who have this attribute enjoy their participation and membership in the organization and will be faithful to it, these results are consistent with (alavi et al. (2013); rozell et al. (2002). finally, the relationship management or social skills is positively related to satisfaction, this suggest that employees with high relationship management skill possess a great ability to accurately manage their emotional relationship with other people. and the interrelationship has a significant influence on the emotional versatility among the employees. thus, these results are consistent al kadi, et al.: nurses’ emotional intelligence, satisfaction in lebanon: the mediating role of job stress international review of management and marketing | vol 13 • issue 2 • 2023 7 with prior research alavi et al. (2013) jung and yoon, (2016). since that stress negatively fully mediates the relationship between relationship management, satisfaction. thus, this assumes that job stress would negatively affect the impact of emotional intelligence on the nurses’ satisfaction. 4.1. theoretical implications the current study makes some contributions to the organizational behavior literature. first of all, it verifies the ability model of mayor and salvoy (1997). it highlights the positive effect of the four skills of emotional intelligence on satisfaction in the lebanese nursing workplace. it also, showed the negative mediating role of job stress on increasing the positive effect of emotional intelligence skills on nurses’ satisfaction. 4.2. managerial implications this research provides hospitals and nurses with practical insights and suggestions that allow them to identify the emotional intelligence skill that help them the best in to tolerate the job stress that they are experiencing it daily which in turn would affect their attitude at work. for the lebanese nursing sector, the results indicated that ei influences attitude through its four skills. self-awareness, selfmanagement, has the influence followed by social awareness and relationship management. therefore; the hospitals management would consider coaching the nurses by emphasizing the emotional intelligence skills, building strategies to help nurses to maximize their self-management, social awareness and relationship management. further, customized training for the staff on the emotional intelligence skills, how to use and implement in their own life as well as their working life. this will allow the nurses to accept and tolerate the stress and focus on their job and avoiding the bad attitude. it is also suggested that topics related to the concept of emotional intelligence, such as emotion management, social consciousness, self-awareness, etc., should be included in the academic curriculum of nursing students, and from the beginning, nursing students should be familiar with the concept of emotional intelligence and its dimensions. 4.3. limitations and future research this study focused on the emotional intelligence model that incorporate the four skills. future research can enlarge to include skills or pillar of the ei such as motivation and empathy, as well as to investigate the overall direct and indirect effect of ei on other attitudinal facets. moreover, the aim of this research was to investigate the role of ei and js among the nurse without considering the differences between the supervisor and registered nurses’ responses. therefore, a comparative study can be used to provide a better understanding of the effect of ei and js on the nurses at their different level or positions. moreover, this study studied the mediating role of job stress. it is suggested that future studies incorporate other potential mediator and moderator such as work experience that could influence these relationships. references abbasi, s., rakhshani, t., rezaie, m., ebrahimi, m.r., taravatmanesh, s. 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(2012), leaders and emotional intelligence: a view from those who follow. healthcare management forum, 25(2), 86-90. . international review of management and marketing | vol 6 • special issue (s2) • 2016 149 special issue for "management of education: problems and perspectives" international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2016, 6(s2) 149-154. the essence and content of state regulation of services development in conditions of increasing autonomy of federal state entities vasily g. ivanov1, svetlana v. barabanova2*, rozalina v. shagieva3, natalia m. chikisheva4, alexander n. lunev5, natalya v. volkova6, karina r. nabiullina7, elena v. spirina8 1kazan national research technological university, kazan, russia, 2kazan national research technological university, kazan, russia, 3financial university under the government of the russian federation, moscow, russia, 4tyumen state university, tyumen, russia, 5kazan national research technical university named after a. n. tupolev kai, kazan, russia, 6kazan (volga region) federal university, kazan, russia, 7kazan state university of architecture and engineering, kazan, russia, 8ulyanovsk state agricultural academy named after p. a. stolypin, ulyanovsk, russia. *email: sveba@inbox.ru abstract the relevance of the study is reasoned by the development of services, as a component of balanced socio-economic development of territories in a federal state. the purpose of the article is to determine the essence and content of state regulation of services’ development in conditions of increasing autonomy of federal state’s entities. a leading approach is the institutional one that considers state regulation of service sector’s development in the federal state as a purposeful system of measures of state control that contributes to maximizing of the assets’ value of the service sector in the process of socio-economic activities and is aimed at ensuring of a balanced socio-economic development of regions. the service sector is one of the most dynamic and growing segments of regional markets, as well as one of the characteristics of effective socio-economic policy in the region. the yield growth from the service sector’s assets while risk diversification will ensure the development of regional services markets, meeting the needs of the population for public goods and improving of the quality of life. the article identifies and scientifically justifies objects, actors, principles, methods and tools of state regulation of services’ development in a federal state. the paper submissions can be useful for specialists of federal and regional authorities, local governments, line ministries, scientists interested in issues of regional economy and services’ management. keywords: socio-economic development, inter-territorial differentiation, content of state regulation, management of service sphere jel classifications: h53, h83, o35 1. introduction the service sector is one of the most dynamic and growing segments of regional markets, as well as one of the characteristics of effective socio-economic policy in the region. the growth of yield from the service sector’s assets while risk diversification will ensure the development of regional services’ markets, meeting the needs of the population for public goods and improving of the quality of life (vasilyeva, 2011). it is established that the service sector is considered as one of the targets of the balanced socio-economic development of entities of a federal state, aimed at reducing of interregional differentiation’s level in the quality of life (lunev et al., 2013). it is found that a balanced territorial development of the federal state is considered the focus on creating of conditions that allow each entity to have necessary and sufficient resources to ensure decent living conditions of citizens, complex development and competitiveness’s increasing of the regional economy (kolomiychenko and rohchin 2003). this leads, firstly, to the improvement of the comprehensiveness and balance of socio-economic development of entities in federation (kuznetsova, 2009), and secondly, to the integration of the commitments of the federal, regional and municipal authorities and their financial possibilities for environment and industrial development in order to reducing the level of interregional ivanov, et al.: the essence and content of state regulation of services development in conditions of increasing autonomy of federal state entities international review of management and marketing | vol 6 • special issue (s2) • 2016150 differentiation in the quality of life (satarov, 2004). the purpose of the paper is to determine the essence and content of state regulation in the sphere of services’ development in conditions of autonomy’s increasing of the entities of a federal state. 2. materials and methods 2.1. methodological approaches to the study a leading approach is the institutional one that considers the state regulation of service sector’s development in the federal state as a purposeful system of measures of state control that contributes to maximizing of service sector’ asserts value in the process of socioeconomic activities and is aimed at the ensuring of a balanced socio-economic development of regions. 2.2. methods of study during research the following methods were used: analysis of normative documents, content analysis, foresight, facet method, classification and synthesis of facts and concepts, modeling, expert evaluation method. 2.3. approbation of the results of the study approbation of the study results was conducted in the process of the concept development of long term socio-economic development of the republic of tatarstan of russia until 2020. the identified methods and tools of state regulation of services sphere development were embedded in the programs for the development of enterprises and institutions of tourist, educational and consumer services’ sectors. 2.4. stages of the study the study was conducted in three stages: • the first stage is devoted to the analysis of current state of the researched problem in economic theory and practice; • the second stage determines the essence and content of state regulation of development of services sphere in conditions of autonomy’s increasing of the entities of a federal state; approves methods and instruments of state regulation of services sphere’s development; • the third stage involves the systematization, interpretation and synthesis of the results of the study; refines theoretical conclusions; processes and presents the obtained results. 3. results the main result of the study is to determine the essence and content of state regulation of services sphere’s development in conditions of autonomy’s increasing of the entities of a federal state. 3.1. the essence of state regulation of services sphere’s development in conditions of autonomy’s increasing of entities of a federal state it is found that the essence of state regulation of services sphere’s development in conditions of autonomy’s increasing of entities of a federal state is a goal-oriented system of government managerial measures aimed at reducing in the level of differentiation and in the level of quality of life in the state and providing a high standard of personal security; the transition to the individualized continuing education available to all citizens; the availability of health services of the required quality; access to cultural goods; access to the modern standards of housing conditions; the creation of an effective pension system based on insurance and savings; the establishment of the minimum wage at the level of reconstructive consumer budget. 3.2. the content of state regulation of services sphere’s development in conditions of autonomy’s increasing of entities of a federal state it is found that structure-forming components of state regulation of services sphere’s development in conditions of autonomy’s increasing of entities of a federal state are objects, entities, principles, methods and tools. 3.2.1. the objects of state regulation of services sphere’s development it is found that the objects of state regulation of services sphere’s development in conditions of autonomy’s increasing of entities of a federal state are numerous and qualitatively different. the objects of state regulation of services sphere’s development are sectors, processes and conditions of services’ production, where difficulties arose or may arise, which cannot be resolved automatically or can be resolved in the distant future. classification of objects of state regulation is carried out based on the facet method. 3.2.1.1. the essence of the facet method the facet method involves parallel separation of the objects’ plurality on independent classification groups. the set of objects is described by a set of independent facets (lists), not having a fixed relationship with each other that can be used separately for solving different tasks. the main advantage of classification using the facet method is the structure flexibility of its construction and the possibility of objects’ aggregation. changes in any of the facets do not have a significant impact on all the others. greater flexibility leads to good adaptability of the classification to the changing nature of tasks to be solved for which it is created. 3.2.1.2. classifications of objects of state regulation of services sphere’s development based on the faceted classification method, the following objects of state regulation of services sphere’s development in conditions of autonomy’s increasing of entities of a federal state are identified: • resources tangible and intangible assets, which are the basis for regional services’ development; • social infrastructure the totality of industries and institutions, maintaining production and services’ consumption in the overall regional process of reproduction; • employment socially useful activities of citizens connected with satisfaction of personal and public needs, not contradicting the law and bringing them earnings, earned income; • monetary circulation the movement of money in domestic circulation in cash and cashless forms in the process of services’ providing and various payments’ making; • social welfare system of material support and social services for elderly and disabled citizens, and families with children; ivanov, et al.: the essence and content of state regulation of services development in conditions of increasing autonomy of federal state entities international review of management and marketing | vol 6 • special issue (s2) • 2016 151 • the system of staff training and retraining to meet the demand of the service sector in a competitive, competent personnel, able to innovate; • environment the aggregate of natural, anthropogenic, social and cultural objects with which the person is in direct or indirect relationship in the process of life; • human potential is one of the main types of aggregate economic potential, and characterized by specific quality characteristics, the development index of which allows to take into account not only economic but also social efficiency of regions, the quality of life of the population, and is calculated as arithmetic mean value of three equal components: income defined by the indicator of gross regional product at purchasing power parity in usd per capita; education, measured by literacy and enrolment rates among children and youth aged 6-23 years; longevity, defined in terms of life expectancy at birth (lifespan); • human capital services’ products, materialized in the knowledge, the competences of citizens; • services market the sphere of exchange, of interaction between producers and consumers of services, ensuring the needs of the population and the statutory minimum standard of living. 3.2.2. the state regulation actors of the services sphere’s development it is found that the state regulation actors of the services sphere’s development in conditions of the autonomy’s increasing of the federal state’s entities are: 1. the bodies of state power and local self-government; 2. stakeholders the business community, scientific organizations, participating in the development and implementation of programs and projects for the development of services; 3. population expressing its position through the bodies of territorial public self-government, public organizations, as well as through participation in elections and referendums. 3.2.3. the principles of state regulation of the services sphere’s development it is determined that state regulation of the services sphere’s development in the conditions of the autonomy’s increasing of the federal state’s entities is based on the principles of strategizing, participative, fiscal federalism. 3.2.3.1. the principle of strategizing the principle of strategic planning involves determining of goals, directions and actions to ensure sustainable development of services in the regions for the long term. in practice, the implementation of this principle involves the following algorithm: (1) diagnostics of a services sphere’s condition in order to identify trends of its development and the factors, preventing the realization of the regions’ potential opportunities to improve the level and quality of life of the population; (2) definition of strategic goals and directions of services sphere’s development in the regions; (3) coordination of regional, sector and corporate strategic goals and directions to develop the sphere of services through meaningful study and interaction; (4) preparation of a strategic action plan to achieve strategic objectives and to eliminate preventing factors; (5) determination of mechanisms for the implementation of the strategic actions; (6) the formation of complex programs to develop the sphere of services with the purpose to achieve the complementarity effect and mutual support of different strategic actions; (7) organization of monitoring system of integrated programs’ implementation and changes’ operational management. 3.2.3.2. the participative principle the participative principle mediates the development of publicprivate partnership to reduce disparities in the level and quality of life of the population in the regions. 3.2.3.2.1. the essence of public-private partnership public-private partnership is an innovative institution of a mixed economy, financially and organizationally providing for the implementation of socially important projects for the development of services. it is established that developing public-private partnership, unlike traditional administrative relations creates its basic funding models of funding, property relations and management techniques. at the same time the set of issues is very important associated with the redistribution of property powers which inevitably arise mainly in the process of escalating of administrative-imperious relations between the state and business into partnerships fixed by respective agreements of the parties. 3.2.3.2.2. forms of public-private partnership depending on the nature of the tasks solved in the framework of public-private partnership, it is possible to allocate the following basic forms of public-private partnership: concession; commercial leasing; rental; project finance; provision of state guarantees for attraction by business entities of borrowed funds from third parties; transfer on the business structures’ balance of the service sphere’s objects; subsidies from the budget of services’ production costs. it is found that some forms of public-private partnerships, such as concessions, often are regarded as a kind of indirect privatization or its complete alternative that is interpreted as intrusion into the system of property relations. in the strict sense the institutional partnerships really transform the spheres of activities traditionally administered by the state, but do not remove them entirely beyond it. 3.2.3.2.3. the direction of public-private partnership it is established that the state in modern conditions organizes its regulatory activities in the field of partnership with the private sector in three main areas. firstly, it elaborates the strategy and the principles that govern the relationship of business with society and with public authorities. secondly, it forms the institutional environment for the development and implementation of partnership projects. third, directly it is involved in the organization and management of public-private partnership, develops its specific forms, methods, mechanisms. 3.2.3.2.4. the separation of ownership powers between the public and private sectors in partnership the separation of ownership powers between the public and private sectors in the partnership generally concerns not to the whole complex of powers, into which dissolves the sovereign right of the title owner in economic circulation, but only some of them. ivanov, et al.: the essence and content of state regulation of services development in conditions of increasing autonomy of federal state entities international review of management and marketing | vol 6 • special issue (s2) • 2016152 we are talking about such core powers as the right to control the use of assets, right on income, right to manage and right to change the capital cost of the agreements’ facilities and the right to assign those or other proprietary powers to other persons. however, in the service sector (particularly in infrastructure industries) there is large-scale experience of redistribution of ownership powers between government and private business. there is a historically and traditionally arranged state order to delegate several core powers to the private sector. the state has a responsibility to society for the uninterrupted provision of public goods hence the tendency to the conservation of a number of sectors and industries in public ownership can be explained. at the same time, private enterprise is characterized by mobility, high efficiency of resource use, the propensity to innovate. to take advantage of both types of property without profound social changes and upheaval is possible in the framework of public-private partnership. accumulated to date the arsenal of forms and methods of public-private partnership allows with the conservation of their vital national facilities in public ownership to transfer some of its proprietary rights to the private sector. we mean the functions such as construction, operation and maintenance of social infrastructure’s objects and their management. 3.2.3.3. the principle of fiscal federalism the principle of fiscal federalism is aimed at regulating of financial relations between federal, regional and municipal authorities regarding the accumulation, redistribution, and using of financial resources in services sphere and contributing to the multi-level budget system. 3.2.3.3.1. the feature of financial relations between federal, regional, municipal authorities and management federalism fixes the relationships between central, regional, municipal authorities and governance, built on the basis of powers separation and the existence of a right to self-government for different groups and/or territories in the framework of a united political system. however, it should be noted that each branch of government is elected by separate elections by direct vote. due to this it is responsible only to the citizens and is not subordinate to other branches, that is, by definition: the federal government cannot order the authorities of entities of federation, because it didn’t generate them, and the authorities of entities by the same reasons can’t order the municipal authorities. in addition, each branch has its own specific powers: one protects the country and prints money, the other one builds roads and hospitals, the third provides everyday needs of citizens. but each branch has the right to collect from citizens the funds for its activities and therefore has an independent budget. thus, the concept “vertical of power” is conditional. in summary, it can be noted that the feature of financial relations between federal, regional and municipal authorities and management is that, on the one hand, all three branches of government are not subordinated to one another, because they have different instructions and different “money” on their performance. but on the other hand, the power vertical structure has constitutional legitimacy. 3.2.3.3.2. fiscal federalism as a characteristic of the multilevel budgetary system an important part of federalism is fiscal federalism. however, the federations of the world are very different in their content. for example, according the flexibility on taxes when a rate that can be changed by the authorities of entities of federation. it is found that in almost all federations of the world the state level of government collects more funds than it needs for the performance of its powers and sub-national authorities (i.e., authorities of federation’s entities and municipalities), on the contrary, less their needs. in some countries (canada, usa) these flows in sub-federal governments are represented mainly as the so-called conditional transfers; in other words, these funds are transferred to subnational authorities on strictly prescribed objectives and thus can be considered a form of specific interaction between levels of government, and not a simple redistribution of government revenues between the branches of government. the most important thing is that in such countries, sub-national authorities rely mostly on their own revenues, which make up 70-80% of their treasury, and the separation of powers achieves its fullness and completeness. it is believed that this structure of budgeting is more effective, because the independent authorities of the same level compete with each other and one which is better to lead its budget is able to implement more services and therefore attracts new citizens and new businesses. thus, optimization of the budgetary process in the country takes place. left to themselves the municipalities and the regions learn to live within their means, be responsible for their actions and for their residents this federalism becomes a real school of civic education. 3.2.3.3.3. financial flows between the budgets of regions, municipalities as a characteristic of the multilevel budgetary system another feature of the multilevel budgetary system is leveling of the budget supply of the state’s parts with the help of financial flows between the budgets of regions, municipalities. on the one hand, this leads to the development of active interaction of levels of government. but on the other hand, there is a reduced efficiency of the budget process and the growth of dependent moods of the authorities with weak budgets. for example, in russia the tax system is organized in such a way that the vast majority of municipalities and a large proportion of the russian federation’s entities are constantly “subsidized.” because of this government has to send a lot of money on leveling of the budget supply. directly for this purpose about 15% of the federal budget is taken, which is addressed particularly to scarce budgets of federation’s entities and municipalities. due to this, the federal government possesses numerous and effective mechanisms to control over the budgets of other levels of government. these are tax and budget codes, the annual federal budget law, hundreds of federal departmental regulations and standards. 3.2.4. methods of state regulation of services sphere’s development it is established that depending on the methods of influence on the object of regulation the following methods of state regulation of services sphere’s development can be distinguished: ivanov, et al.: the essence and content of state regulation of services development in conditions of increasing autonomy of federal state entities international review of management and marketing | vol 6 • special issue (s2) • 2016 153 1. administrative legal, defining administrative-legal norms and relations in the process of managing of the development in regions’ services (legal acts, standards, legislative tasks, centralized distribution of resources, contests, etc.) 2. financial economic providing financial assistance and support to the process of management of development of services sphere: (а) subsidies (budgetary funds given to the budget of other level of budgetary system of the russian federation on gratuitous and irrevocable bases for covering of running costs); (b) subventions (budgetary funds given to the budget of other level of budgetary system of the russian federation or to legal person on a gratuitous and irrevocable basis for implementation of certain trust expenses); (c) subsidies (budgetary funds given to the budget of other level of budgetary system of the russian federation, the person or entity on terms of shared financing of target expenditures); (d) transfers (transferred in budgets of subordinate territorial level from the fund of financial support of regions, in which the proportion of each entity requiring financial assistance is determined by calculation); 3. program-targeted directed towards goals’ setting to manage the development of services and concentration of resources, coordination and systematization of activities of entities to achieve them (target programs, program-target planning of the budget); 4. informational communicational stipulating the provision of information, “feedback” between entities and objects of management in development of service sector in the regions (e-government; foresight). 3.2.5. tools of state regulation of services sphere’s development it is found that the instruments of state regulation of services sphere’s development include: (1) the allocation of the regional component in the development of national forecasts and programs; (2) the harmonization of fiscal, monetary, structural, regional and social policy; (3) differentiation of subjects of conducting and powers between the federation and its entities, allowing the latter in the specific historical conditions effectively to solve tasks on ensuring of overall development and competitiveness of regional economies, as well as statutory minimum level of life of citizens; (4) the development of a system of standardization of services’ quality; (5) program-targeted management of public finances; (6) the establishment of an effective property tax system as one of the most important sources of revenue for regional and local budgets; (7) public-private partnerships; (8) the electoral impact of the state on the establishment of regional conditions for independence strengthening of the territories to ensure the quality of the social environment; increasing of the competitiveness of human capital and ensuring its social sectors of the economy; (9) improving of the balance of obligations in regional and municipal authorities and their financial resources; (10) the formation of services markets; (11) reforming of budgetaryinsurance model of social policy. 4. discussions important theoretical and practical significance for research has the works on the theory and practice of state regulation of the territorial development by baklanov (2007), kuznetsova (2009),. leksina and shvetsov, (2004). great interest belongs to the publications in the field of strategic planning of development of regions kolomiychenko and rohchin (2003). the relationship between public investments and public-private partnership is established in the works of akitoby et al. (2007). methods of assessing of the enterprises’ competitiveness in the sphere of services are developed by vasilyeva (2011). very interesting are the studies on mechanisms of regional policy of shtulberg and vvedensky (2000), satarov (2004), polynov (2010), lunev et al. (2013, 2014). however, the analysis of scientific works shows that the problem of state regulation in the development of services’ sphere in the conditions of the autonomy’s increasing of federal state’s entities has discussion character. in the literature the issue about objects, actors, principles, methods, instruments of state regulation of services sphere’s development in a federal state is not resolved. 5. conclusion it is established that the essence of state regulation of services sphere’s development in the conditions of autonomy’s increasing of federal state’s entities is to increase the competitiveness of the regional economy in the conditions of integration into the global market and the growth of people prosperity of the region on this basis. the content of state regulation of services sphere’s development includes: (1) the development of economic specialization of the entity, the competitive advantages that let in the open market conditions and the advantages of geographical position to occupy its own place in national and global division of labor; (2) accelerated growth through investments in technological modernization, the start of modern production of material services; (3) diversification of the economy due to the complication of production and of services’ export (tourism, educational, medical, others); (4) the creation of innovative capacity for growth of new service sectors and new activities. the paper submissions will be useful for specialists of federal and regional authorities, local governments, line ministries, scientists interested in issues of regional economy and services’ management. taking into account the obtained results of the study a number of research challenges and promising directions that require further consideration can be allocated: sector and cluster analysis of services sphere’s development; setting of services’ development; evaluation of management systems’ quality of services’ development. 6. recommendations the effectiveness of state regulation of services sphere’s development in the conditions of autonomy’s increasing of federal state’s entities will rise, with the program-target management of public finance in the service sector, as the regulatory process how to use the given cash resources by taxpayers to public entities for ivanov, et al.: the essence and content of state regulation of services development in conditions of increasing autonomy of federal state entities international review of management and marketing | vol 6 • special issue (s2) • 2016154 transparent, sustainable and accountable implementation within the budgetary process of their expenditure commitments providing the achievement of goals and maximum results of activities of state and municipal authorities. optimization of state regulation of services sphere’s development in the conditions of the autonomy’s increasing of federal state’s entities will be successful in case of state and public control over their implementation. references akitoby, b., hemming, r., schwartz, g. (2007), public investments and public-private partnerships. economic issues, 40, 21-41. baklanov, p.y. (2007), the territorial structures of the economy in the regional administration. moscow: nauka. p239. kolomiychenko, o.v., rohchin, v.e. (2003), strategic planning of development of russian regions: methodology, organization. st. petersburg: science. p235. kuznetsova, o.v. (2009), economic development of regions: theoretical and practical aspects of state regulation. moscow: komkniga. p304. leksin, v.n., shvetsov, v.n. (2004), the state and regions: theory and practice of state regulation of territorial development. moscow: urss. p368. lunev, a.n., pugacheva, n.b., stukolova, l.z. (2013), the essential characteristic of the regional services market. concept, 12, 96-100. lunev, a.n., pugacheva, n.b., stukolova, l.z. (2014), forms of integration of regional market entities of professional education services. concept, 1, 61-65. polynov, a.o. (2010), competitive opportunities of the regions. research methodology and ways to improve. moscow: krasand. p208. satarov, g.a. (2004), regional policy of russia: adaptation to diversity: analyt. report. moscow: indem foundation. p190. shtulberg, b.m., vvedensky, v.g. (2000), regional policy in russia: theoretical foundations, objectives and methods of implementation. moscow: helios arv. p208. vasilyeva, e.a. (2011), methods of the competitiveness assessing of the services’ enterprises. bulletin of khmelnitsky national university, 2, 212-227. . international review of management and marketing | vol 6 • special issue (s2) • 2016190 special issue for "management of education: problems and perspectives" international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2016, 6(s2) 190-197. elaboration of a frame model for intensification and managing requirements to learning outcomes in regional systems of continuing professional education iraida g. ovchinnikova1*, lubov v. kurzaeva2, tamara b. solomatina3, galina n. chusavitina4, vladimir e. petelyak5, natalya n. zerkina6, yekaterina a. lomakina7, maria v. musiychuk8 1institute of business, psychology and management, moscow region, khimki, russia, 2nosov magnitogorsk state technical university, magnitogorsk, russia, 3institute of business, psychology and management, moscow region, khimki, russia, 4nosov magnitogorsk state technical university, magnitogorsk, russia, 5nosov magnitogorsk state technical university, magnitogorsk, russia, 6nosov magnitogorsk state technical university, magnitogorsk, russia, 7nosov magnitogorsk state technical university, magnitogorsk, russia, 8nosov magnitogorsk state technical university, magnitogorsk, russia. *email: igo55@mail.ru abstract the relevance of the declared in the article problem is caused by both universal integration processes and necessity of elaboration of effective management mechanisms for requirements to learning outcomes. first of all the qualifications frameworks of any level is created for formation of the interaction basis between the labor market and the system of education through establishment of compliance to qualification requirements of knowledge, abilities and competences regardless of a form of their acquisition (formal, informal, non-formal). the aim of the research is a qualifications framework elaboration of regional system of continuing professional education as a model of identification and adaptive management of requirements to personality’s educational outcomes. the article focuses on elaboration of the qualifications framework for system of continuing professional education in chelyabinsk region. the research is based on methods of the system analysis and the competence-based approach is applied. the work presents the elaborated regional qualifications framework for system of continuing professional education, on the example of the ural region: requirements to the contents, structure and structure concerning system of descriptors, qualification levels; the scheme of coordination of the developed qualifications framework with the project of the national qualifications framework of the russian federation; the ways of achieving qualification levels according to respondents’ opinions who are representatives of educational community and labor market. the results of the research can be the basis for creating an adaptive control system of requirements to the results of training in a regional education system and also they can be used for elaboration of adequate requirements for labor market, educational community, systems of certification of graduates of professional education establishment and certification of employees of the enterprises. keywords: qualifications framework, competence-based approach, formal training, informal training, non-formal training, adaptive management of education jel classifications: a23, i23, i26 1. introduction 1.1. relevance of the research the problem of elaboration and studying of system of qualifications on the basis of competence-based approach is essential and important both for russia and european countries. the objective reasons for studying the matter are several ones such as isolation of development of an education system and labor market from each other; processes of globalization and integration within which special attention is paid to quality of labour force and degree of professional standard compliance to the international requirements. ovchinnikova, et al.: elaboration of a frame model for intensification and managing requirements to learning outcomes in regional systems of continuing professional education international review of management and marketing | vol 6 • special issue (s2) • 2016 191 it is confirmed by initiation and active elaboration of national systems of qualifications by the european countries and also by development and acceptation of the european qualifications framework for the higher education and training during all life at the international level (oleynikova and muraveva, 2009; kalimullin and masalimova, 2016; sabirov et al., 2015). all elaborations of national frame structures are focused on integration with the international qualifications framework on the basis of competence-based approach. in the context of fast technological changes and dynamic development of all branches of economy the education system of the russian federation faces the problem of providing each person with an opportunity to increase their professional level constantly in accordance with social and economic changes and manufacturing environment. in general it is the universal tendency which is issued in the form of the concept “lifelong learning” or building the society on knowledge (the training society). implementation of the concept “lifelong learning” assumes consideration of continuing professional education as a multilevel system in which all knowledge, skills and competences are results of training and taxonomic by nature. in 2008 the federal institute of education development of the ministry of education and science of the russian federation and national agency of qualifications development of the russian union of industrialists and entrepreneurs developed a national qualifications framework (further nqf) of the russian federation which is intended to harmonize the requirements of the labor market and the system of education at the different qualification levels (batrova, 2008). nqf is permissive rather than mandatory and according to the developers’ opinion, in addition, it allows to define the general requirements to qualification in professional and federal state educational standards. the qualifications framework of any level (international, national, regional, branch) is a backbone element of implementation of the concept of training during all life which allows to provide transparency and clearness of certain qualifications levels on the basis of the coordinated requirements of labor market and the education system. the requirements to the results of training which are specified in the qualifications framework may form the basis for elaboration of the certification system according to the results of receiving formal and also certifications according to the results of informal and non-formal training (ovchinnikova and kurzaeva, 2012). in this work the most interesting results are presented, from this point of view, the results of two successive projects connected with the elaboration and use of the regional qualifications framework tempus 144853-tempus-2008-fr-jphes “construction of the qualifications framework for higher education of the ural region” (2008-2010) (ovchinnikova et al., 2010), and also russian humanitarian science foundation project no. 12-06-00067 “adaptive quality management of the professional education on the basis of competence-based approach (based on the it sphere)” (2012-2013) (kurzaeva et al., 2013a). thus, it should be noted that within the projects the research captured all levels of professional education, and, in fact, the qualifications framework for system of continuing education of chelyabinsk region was obtained (further qualifications framework). 2. methodological framework 2.1. methodology and stages of the research methodological basis of the qualifications framework elaboration is the competence-based approach. for research purposes the following methods were used: analysis of normative documents and products of activity, content analysis, systematization and generalization of the facts and concepts, modeling, method of expert evaluations, interviewing and poll, methods of descriptive statistics. there are three stages of the research. at the first stage there is the study of the works which are devoted to the description of training results at different levels of system of continuing professional education in russia and abroad. the principles and methods of building the regional qualifications framework are defined (ovchinnikova et al., 2010). the second stage is the main one. at the stage there is elaboration of the qualifications framework. during approbation of the tools of the research the following feature was revealed. the approach to the description of the requirements to the results of training which is used in education is close to the methodology that is accepted in the european practice and which is focused on competences. the approach was taken into account for elaboration of federal state educational standards of the third generation. at the same time employers while forming requirements to work do not take into account the approaches which are accepted in pedagogical methodology but from the existing qualification reference books and professional standards which were gaining strength because competences and functions are synonymous in them. in this regard the decision of initial independent elaboration of two documents is made: educational and professional nets of qualifications, and then their integration into the uniform regional frame of qualifications. it allows to find the “common language” of requirements description to results of training which is understood unambiguously by both representatives of the labor market, and educational community (kurzaeva et al., 2013). the third stage is the final one. there is systematization, judgment and generalization of research results. theoretical conclusions were specified; processing and registration of the received results of research were carried out. ovchinnikova, et al.: elaboration of a frame model for intensification and managing requirements to learning outcomes in regional systems of continuing professional education international review of management and marketing | vol 6 • special issue (s2) • 2016192 2.2. base of the research 149 professional educational institutions of chelyabinsk region and also 33 enterprises of various types formed the base of the research. 2.3. requirements to results of the research the following requirements to elaboration were defined to ensure efficiency of the elaboration process: concerning descriptors: • brevity of the description and clearness of formulations of descriptors for both the education system and labor market; • the maximum transference of descriptors of initial nets (professional and educational) into the united frame; • definition of each descriptor criteria which provide differentiability of results of training at the different levels; concerning qualification levels: • taking into account existing national system of professional education features concerning results of training: • clearness and unambiguity of understanding of formulations both from the point of view of representatives of the educational environment and representatives of employers; • training results continuity of initial nets (professional and educational). it was caused by the developers’ requirement to gain independent and complete impression which includes regional features concerning requirements to results of training. elaboration of the descriptors system was conducted with the support on the results of the international tuning project, federal state educational standards and normative documents which establish requirements to activity of workers at the federal (national), branch and corporate level (level of the separate enterprises and organizations). 3. results 3.1. structure and content of the qualifications framework descriptors in the qualifications framework characterize the results of training through knowledge, skills and qualities of the personality (ovchinnikova et al., 2014). the continuity of levels is defined by an increment of practical experience, training and self-education. these results are shown by table 1. 3.2. consistency with the national qualifications framework the resulting study is a regional qualifications framework which is consistent with the levels of the national qualifications framework and reveals the requirements to the results of training in much greater detail (ovchinnikova et al., 2014) (figure 1). 3.3. the main ways of achieving qualification levels in the various types of training in the present study, the initial goal was to elaborate a frame of qualifications, based on formal training. however interviews carried out in chelyabinsk region which covered on the one hand all educational institutions and on the other the majority of organizations of different types, allowed to take into account within the qualifications framework the transition from one level to another in terms of both formal and informal and nonformal training. according to the glossary of the project under consideration, informal training is a program of additional professional training and non-formal training is supposed to be an independent study\training or work experience (in the workplace) (ovchinnikova et al., 2010). moving from one qualification level to another depends on the type of training and can be done through obtaining some higher level programs of professional education, additional professional training, and what is important for the evaluation system of achieving the qualification standards and the recognition of qualifications through self-study or gaining experience in the workplace (kurzaeva et al., 2013a). table 2 presents the ways to achieve qualification levels through formal, informal and non-formal training. 4. discussions in russia the previous researches, which were made by oleynikova et al. (2006), baydenko (2006), are devoted to historical and structural aspects of qualifications frameworks development, and using. the works of zimnyaya (2003), kurzaeva (2010) are devoted to elaboration and diagnostics of the basic key competences and their psychology and pedagogical content. latitude powers and responsibilities (general competence) regional qualifications framework nqf basic knowledge in different aeries professional knowledge total skills autonomy сommunicativeness responsibility adaptability motivation,abilitytodevelop research intensity activities (nature of knowledge) complexity of activities (nature of skills) figure 1: correlation of the national qualifications framework structure and the qualifications framework of continuing professional education of the chelyabinsk region ovchinnikova, et al.: elaboration of a frame model for intensification and managing requirements to learning outcomes in regional systems of continuing professional education international review of management and marketing | vol 6 • special issue (s2) • 2016 193 ta bl e 1: d es cr ip to rs o f t he le ve ls o f t he q ua lifi ca ti on s fr am e of th e co nt in ui ng tr ai ni ng in c he ly ab in sk r eg io n k no w le dg e sk ill s c om pe te nc e b as ic k no w le dg e in d iff er en t a er ie s p ro fe ss io na l kn ow le dg e to ta l s ki lls a ut on om y c om m un ic at iv en es s r es po ns ib ili ty a da pt ab ili ty m ot iv at io n, a bi lit y to d ev el op t he 1 st le ve l o f qu al ifi ca tio n sc at te re d fa ct s w hi ch b ui ld th e w or ld vi ew a t t he le ve l r ec og ni zi ng an d re pr od uc in g su bj ec t f ac tu al k no w le dg e at p ar tic ul ar jo b le ve l ac co rd in g to re ad ym ad e in st ru ct io ns b as ic s ki lls w hi ch ar e ne ce ss ar y fo r pe rf or m in g si m pl e an d re pe tit iv e ta sk s o ne p er fo rm s w or k in a ca de m ic o r pr of es si on al fi el d in a cc or da nc e w ith in st ru ct io ns a nd /o r un de r t he g ui da nc e o ne c ar ri es o ut o ra l co m m un ic at io n at th e sp ee ch le ve l i n th e sa te la ng ua ge in th e fr am ew or k of e du ca tio na l a nd pr of es si on al a ct iv iti es o ne is re sp on si bl e fo r th e re su lts o f t he w or k an d is a bl e to g iv e an or al re po rt o ne s ho w s lim ite d ad ap tiv e ab ili tie s as pa rt o f t he w or k o ne re al iz es th e im po rt an ce o f t he ch os en p ro fe ss io n, th e ro le a nd p er so na l co nt ri bu tio n to th e re su lts o f t he en te rp ri se a ct iv ity t he 2 nd le ve l o f qu al ifi ca tio n g en er al iz ed fa ct s w hi ch b ui ld a si m pl ifi ed un de rs ta nd in g of th e w or ld v ie w sp ec ifi c kn ow le dg e an d ex pe rt is e of re gu la to ry a nd te ch ni ca l do cu m en ta tio n w ith in th e st an da rd a pp lic at io ns , th e in iti al m an ag em en t ex pe rt is e\ sk ill s w hi ch ar e ne ce ss ar y to o rg an iz e on e’ s ow n w or k b as ic s ki lls n ee de d to s ol ve a li m ite d se t o f c om m on ta sk s on th e ba si s of in de pe nd en t se ar ch a nd s el ec tio n m et ho ds a nd so lu tio ns fr om a nu m be r o f t he k no w n an d te st ed o ne s o ne p er fo rm s th e w or k in a ca de m ic or p ro fe ss io na l fi el d in a cc or da nc e w ith th e in st ru ct io ns a nd / or u nd er p ar tia l gu id an ce o ne c ar ri es o ut o ra l co m m un ic at io n at th e sp ee ch le ve l i n th e sa te la ng ua ge in th e fr am ew or k of e du ca tio na l a nd pr of es si on al a ct iv iti es , ex pr es se s an d de fe nd s on e’ s pe rs on al p oi nt of v ie w o ne is re sp on si bl e fo r th e re su lts o f t he w or k an d is a bl e to g iv e an or al a nd w ri tin g re po rt o ne s ho w s th e ad ap tiv e ab ili tie s at m in or c ha ng es w ith in th e co nd iti on s of s oc ia l an d pr of es si on al en vi ro nm en t o ne u nd er st an ds on e’ s ow n ro le in th e te am , a ct s as a m em be r o f a g ro up an d is in te re st ed in th e pr of es si on al gr ow th t he 3 rd le ve l o f qu al ifi ca tio n g en er al iz ed fa ct s w hi ch c on tr ib ut e to un de rs ta nd in g th e ho lis tic w or ld vi ew t he g en er al iz ed p ra ct ic al kn ow le dg e an d th e kn ow le dg e of th e st an da rd do cu m en ta tio n w ith in te ch no lo gi ca l p ro ce ss , th e in iti al a dm in is tr at iv e kn ow le dg e w hi ch a re ne ce ss ar y fo r o rg an iz in g bo th o ne ’s o w n w or k an d pa rt ic ip at io n in g ro up w or k a n um be r o f s ill s w hi ch is d em an de d fo r s ol vi ng s ta nd ar d ta sk s w ith th e us e of co m pl ex e qu ip m en t on th e ba si s of in de pe nd en t s ea rc h an d se le ct io n of m et ho ds a nd w ay s of th ei r c ar ry in g ou t f ro m a n um be r of k no w n an d ap pr ov ed o ne s o ne p er fo rm s an d es tim at es th e w or k in e du ca tio na l o r pr of es si on al a re a in a cc or da nc e w ith in st ru ct io ns a nd st an da rd s an d le ga l do cu m en ta tio n o ne c an c le ar ly , re as on ab ly a nd co m pe te nt ly b ui ld s or al an d w ri tte n sp ee ch in a st at e la ng ua ge a nd ca n st at e an d ar gu e th e po in t o f v ie w o ne is re sp on si bl e fo r hi s/ he r w or k an d is a bl e to g iv e a fu ll ac co un t in cl ud in g an al ys is el em en ts o ne s ho w s ad ap tiv e ab ili tie s w he n th e so ci al or p ro fe ss io na l en vi ro nm en t co nd iti on s ch an ge o ne e st im at es h is /h er ro le a nd c on tr ib ut io n to e nt er pr is e ac tiv ity ; on e in de pe nd en tly de fin es p ro bl em s of p ro fe ss io na l an d pe rs on al de ve lo pm en t, on e is e ng ag ed in s el fed uc at io n an d co ns ci ou sl y pl an s pr of es si on al de ve lo pm en t c on td ... ovchinnikova, et al.: elaboration of a frame model for intensification and managing requirements to learning outcomes in regional systems of continuing professional education international review of management and marketing | vol 6 • special issue (s2) • 2016194 t he 4 th le ve l o f qu al ifi ca tio n sy st em at ic ev id en ce \f ac ts w hi ch to c on tr ib ut e to a h ol is tic un de rs ta nd in g of th e sc ie nt ifi c w or ld vi ew g en er al iz ed th eo re tic al an d pr ac tic al k no w le dg e as w el l a s kn ow le dg e of th e re gu la to ry re fe re nc e an d gu id an ce d oc um en ts , ad m in is tr at iv e kn ow le dg e w hi ch is n ec es sa ry fo r un de rs ta nd in g th e es se nc e of th e or ga ni za tio n an d op er at io na l c on tr ol o f its o w n ed uc at io na l a nd pr of es si on al a ct iv iti es a nd th e st aff a ct iv ity a s et o f k no w le dg e w hi ch is re qu ir ed fo r f or m ul at in g an d so lv in g co m pl ex pr ob le m s on th e ba si s of s el fse ar ch , se le ct io n an d ev al ua tio n of th e ne ce ss ar y in fo rm at io n o ne c on sc io us ly us es in st ru ct io ns an d re gu la to ry le ga l d oc um en ts , is a bl e to o rg an iz e th e w or ki ng p la ce , ta ke s pa rt in te am w or k o ne u se s or al a nd w ri tte n sp ee ch in th e st at e la ng ua ge a s a m ea ns o f b us in es s co m m un ic at io n an d pr es en ta tio n of th e ed uc at io na l an d pr of es si on al ac tiv ity re su lts , h as so m e in iti al tr ai ni ng fo r i nt er cu ltu ra l co m m un ic at io n o ne is re sp on si bl e fo r ac tiv iti es , w hi ch a re de fin ed b y re gu la to ry an d le ga l d oc um en ts ; is a bl e to g iv e a fu ll w ri tte n re po rt , i nc lu di ng el em en ts o f t he a na ly si s in b ot h on e’ s ow n w or k an d in g ro up w or k o ne c ar ri es o ut pr of es si on al ac tiv iti es in te rm s of it s co nt en t up da te s o ne e va lu at es on e’ s ow n ro le a nd co nt ri bu te s ac tiv el y to th e or ga ni za tio n’ s ac tiv iti es , s el ec ts th e pr om is in g ar ea s of p er so na l an d pr of es si on al de ve lo pm en t b as ed on o ne ’s o w n vi si on a nd n ee ds , is e ng ag ed in se lf -e du ca tio n t he 5 th le ve l o f qu al ifi ca tio n k no w le dg e of th e sc ie nt ifi c w or ld vi ew a t th e le ve l o f t he ir ed uc at io na l a nd pr of es si on al ac tiv ity a pp lic at io n t he s ys te m at iz ed th eo re tic al a nd p ra ct ic al kn ow le dg e, th e kn ow le dg e of d ir ec tiv e an d ad m in is tr at iv e do cu m en ta tio n, m et ho di ca l a nd st an da rd m at er ia ls , t he ad m in is tr at iv e kn ow le dg e w hi ch a re re qu ir ed fo r pr oc es se s pr oj ec t m ak in g an d fo r o rg an iz at io n an d co nt ro l o f o w n ed uc at io na l p ro fe ss io na l ac tiv ity a nd a ct iv ity o f t he pe rs on al a n um be r o f ab ili tie s w hi ch is ne ce ss ar y fo r t he so lu tio n of c om pl ex an d no nst an da rd ta sk s, s el ec tio n of m et ho ds o f t he ir so lv in g on th e ba si s of in de pe nd en t ge ne ra liz at io n; an al ys is a nd sy nt he si s of in fo rm at io n th at is n ec es sa ry fo r st at in g an d so lv in g th e pr ob le m a nd es tim at io n of ed uc at io na l a nd pr of es si on al a ct iv ity o ne c on sc io us ly us es in st ru ct io ns , st an da rd a nd le ga l do cu m en ts fo r or ga ni zi ng h is /h er pe rs on al w or k an d w or k of th e st aff o ne u se s or al a nd w ri tte n sp ee ch in a st at e la ng ua ge a s m ea ns o f b us in es s co m m un ic at io n an d re pr es en ta tio n of re su lts o f e du ca tio na l an d pr of es si on al ac tiv iti es ; h as ba si c ba ck gr ou nd fo r c ro ss -c ul tu ra l co m m un ic at io n o ne is re sp on si bl e fo r hi s/ he r a ct iv ity w hi ch is de te rm in ed b y st an da rd an d le ga l d oc um en ts ; i s ab le to g iv e th e ac co un t on p ro fe ss io na l a nd ad m in is tr at iv e ac tiv ity o ne ta ke s be ar in gs in th e co nd iti on s of u pd at ed a im s an d ch an ge s in th e co nt en t o f ed uc at io na l a nd pr of es si on al ac tiv ity o ne e st im at es h is /h er ro le a nd th e ro le o f th e gr ou p, m ak es a n ac tiv e co nt ri bu tio n to a ct iv ity o f t he en te rp ri se , c ho os es th e pe rs pe ct iv e di re ct io ns o f p er so na l an d pr of es si on al gr ow th , i s en ga ge d in se lf -e du ca tio n t he 6 th le ve l o f qu al ifi ca tio n ta bl e 1: (c on td ... ) k no w le dg e sk ill s c om pe te nc e b as ic k no w le dg e in d iff er en t a er ie s p ro fe ss io na l kn ow le dg e to ta l s ki lls a ut on om y c om m un ic at iv en es s r es po ns ib ili ty a da pt ab ili ty m ot iv at io n, a bi lit y to d ev el op c on td ... ovchinnikova, et al.: elaboration of a frame model for intensification and managing requirements to learning outcomes in regional systems of continuing professional education international review of management and marketing | vol 6 • special issue (s2) • 2016 195 k no w le dg e of th e sc ie nt ifi c w or ld vi ew a t t he le ve l of it s us e to s ol ve th e pr ob le m s of th e re se ar ch sc ie nt ifi c kn ow le dg e, kn ow le dg e of re gu la to ry an d ad m in is tr at iv e do cu m en ta tio n, m et ho do lo gi ca l a nd re gu la to ry m at er ia ls , m an ag er ia l e xp er tis e w hi ch is n ec es sa ry to ev al ua te a nd o pt im iz e th e pr oc es se s, to in tr ud e in no va tio ns a nd m an ag e su bo rd in at es in un pr ed ic ta bl e si tu at io ns w ith in th e pr of es si on al ac tiv ity a s et o f s ki lls ne ce ss ar y fo r so lv in g co m pl ex no nst an da rd cr ea tiv e an d or ga ni za tio na l an d m an ag em en t ta sk s on th e ba si s of in de pe nd en t ge ne ra liz at io n, an al ys is a nd sy nt he si s of in fo rm at io n o ne o rg an iz es o ne ’s ow n ac tiv iti es a nd / or g ro up w or k on a sc ie nt ifi c ba si s, to s ol ve d iffi cu lt no nst an da rd ta sk s; in de pe nd en tly ca rr ie s ou t s ci en tifi c re se ar ch in th e fie ld of p ro fe ss io na l ac tiv iti es u nd er th e gu id an ce , e va lu at es th e re su lts o ne s ta te s cl ea rl y an d pr ec is el y on e’ s ow n po in t o f v ie w o n th e pr ob le m o f t he re se ar ch , p ar tic ip at es in p ub lic s pe ak in g, ha s a ba si c tr ai ni ng in in te rc ul tu ra l co m m un ic at io n in th e fr am ew or k of pr of es si on al a ct iv ity o ne ta ke s re sp on si bi lit y w hi ch is d efi ne d by re gu la to ry a nd le ga l do cu m en ts , f or to ne ’s ow n ac tiv iti es a nd th e ac tiv iti es o f t he g ro up ; m ak es d ec is io ns in si tu at io ns o f h ig h ri sk an d co m pl ex ity a nd is pe rs on al ly re sp on si bl e fo r t he m ; i s ab le to g iv e an a na ly tic al re po rt o ne p at te rn s on e’ s ow n be ha vi or on th e ch an gi ng ob je ct iv es an d co nt en t o f pr of es si on al a nd /o r ac ad em ic a ct iv iti es , as w el l a s un de r co nd iti on s of un ce rt ai nt y o ne re al iz es on e’ s ow n ro le in ac hi ev in g th e go al s of th e te am a nd th e or ga ni za tio n, is ai m ed a t p ro fe ss io na l re co gn iti on an d cr ea tiv e se lf -r ea liz at io n t he 7 th le ve l o f qu al ifi ca tio n t he k no w le dg e of th e sc ie nt ifi c w or ld vi ew a t t he le ve l o f c ri tic al co nc ep tu al iz at io n of p ro bl em s w ith in th e pr of es si on al ac tiv ity sc ie nt ifi c kn ow le dg e at th e le ve l o f c re at io n of in no va tiv e w or ks in th e fie ld o f p ro fe ss io na l o r sc ie nt ifi c ac tiv ity , c ar ry in g ou t t he ir a ss es sm en t b y pr ac tic al c on si de ra tio n ac co rd in g to d ir ec tiv e an d st an da rd d oc um en ta tio n; ad m in is tr at iv e kn ow le dg e w hi ch a re n ec es sa ry fo r ta ct ic al m an ag em en t a n um be r o f t he ab ili tie s w hi ch is re qu ir ed fo r th e so lu tio n of ad m in is tr at iv e an d or ga ni za tio na l t as ks , co nt ro lli ng o f t he ir pe rf or m an ce a t t he le ve l o f a d iv is io n, in cl ud in g on th e sc ie nt ifi c ba si s o ne c ar ri es o ut st at em en t o f t ac tic al ta rg et s, p la nn in g an d or ga ni zi ng th e ac tiv ity o f th e di vi si on , in cl ud in g ca rr yi ng ou t s ci en tifi c re se ar ch es o n th e ch os en s pe ci al ty un de r t he s ci en tifi c m an ag em en t o ne s ta te s ac cu ra te ly an d cl ea rl y th e po in t of v ie w o n pr ob le m s of p ro fe ss io na l/ sc ie nt ifi c ac tiv ity , h as ex pe ri en ce o f p ub lic sp ee ch , h as b as ic tr ai ni ng fo r w or k in th e in te rn at io na l s ci en tifi c an d pr of es si on al en vi ro nm en t o ne m ak es ad m in is tr at iv e de ci si on s un de r t he c on di tio ns of u nc er ta in ty , b ea rs a pe rs on al re sp on si bi lit y fo r t he a ct iv ity a nd re su lts o f t he w or k of hi s/ he r s ub or di na te s, on e is c ap ab le to g iv e th e an al yt ic al a cc ou nt o ne ta ke s be ar in gs in de pe nd en tly in th e co nd iti on s of c ha ng in g pr of es si on al ta ct ic al a im s an d de fin es w ay s of th ei r e ff ec tiv e ac hi ev em en t o ne u nd er st an ds th e co rp or at e st ra te gy , hi s/ he r r ol e an d th e ro le o f t he d iv is io n in it s re al iz at io n, it is in te re st ed in c re at iv e se lf -r ea liz at io n t he 8 th le ve l o f qu al ifi ca tio n k no w le dg e on th e le ve l o f t he w ho le sc ie nt ifi c w or ld vi ew , w hi ch is u se d fo r t he e va lu at io n of th e pr of es si on al pr ob le m s an d al lo w s th e fo rm ul at io n an d so lu tio n of st ra te gi c ta sk s sc ie nt ifi c kn ow le dg e w hi ch a llo w s to d es ig n a st ra te gy (c on ce pt ) of d ev el op m en t; ad m in is tr at iv e kn ow le dg e w hi ch is n ec es sa ry fo r st ra te gi c m an ag em en t o f th e re se ar ch p ro je ct s or de pa rt m en ts /o rg an iz at io ns in a cc or da nc e w ith la w s an d re gu la tio ns a s et o f s ki lls w hi ch a re n ec es sa ry fo r s tr at eg ic m an ag em en t o f t he or ga ni za tio n/ a un it on a s ci en tifi c ba si s o ne in de pe nd en tly se ts s tr at eg ic g oa ls , pl an s an d or ga ni ze s th e m an ag em en t o f th e or ga ni za tio n/ en te rp ri se a nd /o r sc ie nt ifi c sc ho ol o ne s ta te s cl ea rl y on e’ s ow n vi ew s on pr of es si on al s ci en tifi c/ ac tiv iti es ; e va lu at es th e pr of es si on al ac hi ev em en ts o f ot he r c ou nt ri es , pa rt ic ip at es in v ar io us fo rm s of in te rc ul tu ra l co m m un ic at io n o ne c on tr ol s sc ie nt ifi c or p ro fe ss io na l t ea m w or k, is re sp on si bl e fo r t he re su lts o f o ne ’s ow n re se ar ch a ct iv iti es an d th e on es c ar ri ed ou t b y th e te am u nd er on e’ s gu id an ce , a s w el l a s re sp on si bi lit y fo r t he p ro fe ss io na l de ve lo pm en t o f t he s ta ff o ne is s el fgu id ed in a c ha ng in g st ra te gi c ob je ct iv es an d de te rm in es ho w to a ch ie ve th em e ff ec tiv el y in th e ch an gi ng so ci oec on om ic co nd iti on s o ne is in te re st ed in th e de ve lo pm en t an d im pl em en ta tio n of e ff ec tiv e co rp or at e st ra te gy , ai m ed to c re at iv e se lf -r ea liz at io n, pr of es si on al a nd pu bl ic re co gn iti on ta bl e 1: (c on td ... ) k no w le dg e sk ill s c om pe te nc e b as ic k no w le dg e in d iff er en t a er ie s p ro fe ss io na l kn ow le dg e to ta l s ki lls a ut on om y c om m un ic at iv en es s r es po ns ib ili ty a da pt ab ili ty m ot iv at io n, a bi lit y to d ev el op ovchinnikova, et al.: elaboration of a frame model for intensification and managing requirements to learning outcomes in regional systems of continuing professional education international review of management and marketing | vol 6 • special issue (s2) • 2016196 table 2: the main ways to achieve qualification levels qualification level ways to achieve a relevant\corresponding qualification level 1 formal training: • according to the curriculum of primary professional education on the basis of comprehensive general education or secondary (complete) general education informal training: • professional training (courses on the basis of an educational institution upon the training programs of professional training) at the level of education not lower than the secondary (complete) general education non-formal training • workplace learning, corporate training if there is no lower than the secondary (complete) general education 2 formal training: • according to the curriculum of secondary professional education of the basic level on the basis of comprehensive general education or secondary (complete) general education or primary professional education informal training: • according to the programs of additional professional education (advanced training, professional retraining, professional training, additional qualification, internship) non-formal training: • workplace learning, corporate training on the base of the secondary (complete) general education or primary professional education 3 formal training: • according to the curriculum of secondary professional education of the higher level on the basis of secondary (complete) general education or primary or secondary professional education of basic level informal training: • professional retraining, advanced training if there is secondary professional education of basic level non-formal training: • workplace learning, corporate training on the base of the secondary professional education of the basic level 4 formal training: • according to the curriculum of high professional education on the basis of the curriculum of not lower than secondary (complete) general education informal training: • professional retraining, advanced training on the base of not lower than secondary professional education non-formal training: • workplace learning, corporate training on the base of the secondary professional education 5 formal training: • according to the curriculum of high professional education on the basis of the curriculum of not lower than secondary (complete) general education informal training: • professional retraining, if there is high professional education non-formal training: • workplace learning, corporate training on the base of the secondary or high professional education 6 formal training; • according to the curriculum of high professional education (magistracy) on the basis of bachelor or specialty curriculum non-formal training: • workplace learning, corporate training on the base of high professional education; practical experience in practice-oriented research 7 formal training: • according to the curriculum of post graduate education leading to a candidate degree on the basis of bachelor or magistracy curriculum non-formal training: • professional experience, practical experience in scientific research 8 formal training: • according to the curriculum of post graduate education leading to phd degree on the basis of a candidate degree non-formal training: • professional experience, professional and/or social recognition however, the analysis of scientific works showed that there is a lack of works which are devoted to a problem of requirements management of all-professional results of training at the regional level. the existing works are not coordinated with national requirements to the level of qualifications. ovchinnikova, et al.: elaboration of a frame model for intensification and managing requirements to learning outcomes in regional systems of continuing professional education international review of management and marketing | vol 6 • special issue (s2) • 2016 197 5. conclusion during the research the requirements to elaboration of components of qualifications framework are defined: descriptors, qualification levels, results of training; the system of descriptors and qualification levels is created; the current state of requirements to results of training of the personality in the system of continuing education is studied, the ways of achieving the qualification levels from positions of formal, informal and non-formal education are specified. it is established that the elaborated regional qualifications framework allows to identify accurately requirements to results of training and allows to create the necessary management influence for improving the system of continuing education on the basis of the harmonized requirements of employers and educational community to the results of different levels training. the established united requirements to the results of training will allow to carry out training of highly qualified and competitive specialists who are capable to adapt quickly to any socioeconomic transformations. it gives possibilities of elaboration of the corresponding diagnostic tools (kurzaeva, et al., 2013b). another successful example of region qualifications framework using are studies on formation of requirements in the field of information security of the personality (chusavitin et al., 2013; chusavitina and zerkina, 2015a,b) 6. recommendations research is focused on been used in two ways: firstly, to apply its results and secondly to apply the experience of their receiving in the projects devoted to elaboration of the system of qualifications. particularly it may be used in researches that are connected with labor market and educational community requirements to the system of graduates’ certification of professional educational institutions and enterprises employees’ certification. references batrova, o.f. (2008), national qualifications framework of the russian federation: recommendations. moscow: federal institute for educational development. p14. baydenko, v.i. (2006), the bologna process: the search of generality within european education systems (project tuning). moscow: research centre of training quality problems. p211. chusavitin, m.o., chusavitina, g.n., kurzaeva, l.v. (2013), elaboration of the competence model for future teachers of informatics and ict in the field of ensuring information security. basic research, 10, 2991-2995. chusavitina, g.n., zerkina, n.n. (2015a), cyber extremism preventive measures in training of future teachers. 2nd international multidisciplinary scientific conference on social sciences and arts sgem2015. education and educational research, 1(2), 275-280. chusavitina, g.n., zerkina, n.n. (2015b), informational ethics teaching for future information technology specialists. 2nd international multidisciplinary scientific conference on social sciences and arts sgem2015, education and educational research, 1(2), 515-522. kalimullin, a.m., masalimova, a.r. (2016), editorial: actual issues of national education: theory and practice. mathematics education, 11(1), 1-2. kurzaeva, l.v. (2010), the competitiveness of the future information technology specialists: phenomena, model and method development in the course of professional training in high school. magnitogorsk: magnitogorsk state university. p160. kurzaeva, l.v., ovchinnikova, i.g., slepuhina, g.v. (2013b), psychoeducational\pedagogical evaluation and diagnosis tools of learning results for the individual within training areas of it field. magnitogorsk: magnitogorsk state university. p40. kurzaeva, l.v., ovchinnikovа, i.g., slepuhina, g.v. (2013a), adaptive management of vocational education quality on the basis of competence approach (for example, the it industry): methodological bases, models and basic tools on installation of requirements for learning results. magnitogorsk: magnitogorsk state university. p138. oleynikova, o.n., muraveva, a.a., koulz, m. (2006), principles and procedures for developing a national framework of qualifications. moscow: centre for the study of professional education. p160. oleynikova, o.n., muraveva, a.a. (2009), the system of qualifications in the european union. available from: http://www.cvets.ru/nqf/ nqf-ec.pdf. ovchinnikova, i.g., kurzaeva, l.v., kurchatov, b.v. (2010), regional qualification framework: the role and place in the system of continuing professional education and development experience. magnitogorsk: magnitogorsk state university. p143. ovchinnikova, i.g., kurzaeva, l.v. (2012), study on formation levels of learning results in vocational education institution of the chelyabinsk region. supply and demand in the labour market and the market of educational services in the regions of russia, 3, 228-237. ovchinnikova, i.g., kurzaeva, l.v., chichilanova, s.a. (2014), the problem of development of the qualification framework and professional standards in the integrative environment (by the example of computer science and education). in the world of scientific discoveries, 9(57), 81-94. sabirov, i.t., ponkratova, l.a., gracheva, n.a., kiselev, s.v., fatikhova, l.e., chudnovskiy, a.d. (2015), the formation and development trends of the consulting market in russia. mediterranean journal of social sciences, 6(2s3), 188-195. zimnyaya, i.a. (2003), key competencies the result of a new education paradigm. high education today, 5, 34-42. tx_1~at/tx_2~at international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2023, 13(1), 1-10. international review of management and marketing | vol 13 • issue 1 • 2023 1 the impact of esg on strategic success in jordanian islamic banks khaled khalaf alafi* department of management, the world islamic sciences and education university, amman, jordan. *email: khaled.allafe@wise.edu.jo received: 04 september 2022 accepted: 10 december 2022 doi: https://doi.org/10.32479/irmm.13775 abstract the study aimed to identify the criteria of esg with its dimensions (environmental, social, and governance) in strategic success with its combined dimensions (specific strategy, specific implementation, motivational culture, and continuous innovation). the random sample consists of managers that working in jordanian islamic banks with a total of (108) individuals. the study adopted the questionnaire as the study tool and was distributed to the respondents. the questionnaire was developed based on previous studies, and the answers were analyzed using the statistical analysis program (spss). the study concluded that there is a high level of implementation of governance pillars and strategic success in jordanian islamic banks, and that there is a statistically significant impact of all governance pillars represented by (environmental, social, and governance) on strategic success. the study recommended that jordanian islamic banks must continue to implement governance pillars (esg) and do more work toward achieving strategic success. keywords: governance pillars, strategic success, corporate governance, islamic banks, jordan jel classifications: m14, g34 1. introduction the global economic and financial crisis has had a big negative effect on international markets, especially in the last 20 years. this has been a big blow to these markets and has led to the rise of many economic issues that need a quick response from the major players in the modern business world on the one hand and the organizers on the other. this is because of its social, environmental, and economic impacts (babin and nicholson, 2011). accordingly, global crises, especially those that happen quickly, have become one of the most dangerous reasons why organizations don’t succeed and one of the hardest things they have to deal with. moral and financial worries are growing in organizations because of things like the fear that they won’t have quite enough money to pay for their investments and the difficulty of attracting investments, especially external ones, and strategic partnerships. this has made organizations more interested in how to achieve and keep long-term strategic success (galbreath, 2013). as a result, regulatory and legislative authorities in the countries as a whole have called for the commitment of organizations in their various forms to prepare periodic reports in which they disclose the results of their activities and operations that enhance the reliability of the information provided so that the reporting process remains one of the top priorities of the organizations that must be met due to the integrity and reliability of these communications-so increasing their investment opportunities (alqallaf and alareeni, 2018). in the same way, the disclosure of reports is beneficial to the economy since it gives information and data of interest to all stakeholders and aids in making the correct choice and avoiding any issues that the organization may face. it also helps to preserve shareholder trust and attract funds and investments (alareeni and hamdan, 2020). disclosure of reports also plays an important role in showing organizations’ strategies regarding their strategic growth and assists them in achieving their strategic success by swiftly responding to the requirements of legislators and governments and the demands of stakeholders, based on this journal is licensed under a creative commons attribution 4.0 international license alafi: the impact of esg on strategic success in jordanian islamic banks international review of management and marketing | vol 13 • issue 1 • 20232 what these body systems are doing in establishing regulations covering social and environmental aspects to ensure that the organizations provide the bodies responsible for their practices and the extent of their impacts with the information they need (sahut and pasquini, 2015). in contrast, the disclosure of incorrect reports raises the likelihood of unethical behavior and market integrity issues, exposing organizations to additional costs that have a negative impact on national economies. 1.1. the study problem through this study, the researcher aims to determine the impact of applying the pillars of environmental, social, and governance practices that control the improper management of its strategies on its strategic success, as the improper use of these pillars calls into question the organization’s credibility, reputation, and image, thereby affecting its growth, stability, and sustainability. consequently, the study problem may be expressed as the following primary question: what is the impact of esg (environmental, social, and governance) in strategic success in jordanian islamic banks? the following questions arise from it: 1. what is the relative importance of esg in jordanian islamic banks? 2. what is the relative importance of strategic success with its dimensions (specific strategy, specific implementation, motivational culture, continuous innovation) on jordanian islamic banks? 3. what is the impact of environmental governance on achieving strategic success in jordanian islamic banks? 4. what is the impact of social governance on achieving strategic success in jordanian islamic banks? 5. what is the impact of corporate governance on achieving strategic success in jordanian islamic banks? 1.2. the study importance there is a number of factors that rise the study’s importance, including the researcher’s interest in the current study’s variables because of their significance and impact on organizations, especially in a rapidly changing, dynamic environment surrounded by many environmental, economic, and political variables from different parts of the world, as well as its scientific importance, which is reflected by inviting a large number of researchers and those interested in conducting further research. in addition to what the researcher expected, it is anticipated that the findings and suggestions of this study will serve as a guide for jordanian islamic banks in managing their governance and that the intended advantages would be extended to all organizations in comparable sectors. 1.3. the study objectives the researcher aimed to address the issue of the study from a theoretical scientific point of view, represented by clarifying the basic concepts of the study variables (esg, and strategic success), as well as the dimensions of each of them, as well as their importance and practices. the researcher also aimed to address the problem from an applied practical point of view by identifying the extent to which jordanian islamic banks apply esg in their presented reports and the extent of disclosing it and reaching the results and recommendations in this regard. 1.4. research framework and hypotheses the study aims to examine the impact of esg pillars on strategic success, for that the reserarcher developed the following hypotheses: • h01: there is no statistically significant impact at level (α ≤ 0.05) of esg with its dimensions (environmental governance, social governance, and corporate governance) on strategic success. • three sub-hypotheses are derived from the main hypothesis as follows: • h01-1: there is no statistically significant impact at level (α ≤ 0.05) of environmental governance on strategic success • h01-2: there is no statistically significant impact at level (α ≤ 0.05) of social governance on strategic success • h01-3: there is no statistically significant impact at level (α ≤ 0.05) of corporate governance on strategic success. based on what was specified in the study’s objectives and variables and on the previous relevant studies the researcher built the study framework as shown in figure 1. 2. theoretical background 2.1. esg the pillars of esg (environmental, social, and governance) are defined as practices reported by organizations that address how they deal with challenges and events impacting them in several key aspects represented by the environment, internal operations, and social development from a comprehensive view (kengkathran, 2018; przychodzen et al., 2016). dependent variable strategic success independent variable esg h01 environmental governance social governance corporate governance continuous innovation motivational culture specific implementation specific strategy h01-1 h01-2 h01-3 source: prepared by the researcher based on previous studies figure 1: proposed research framework and hypotheses alafi: the impact of esg on strategic success in jordanian islamic banks international review of management and marketing | vol 13 • issue 1 • 2023 3 it is also described as those principles and standards of a guiding nature that involve the tactics and procedures adopted by organizations in order to acquire the confidence of their stakeholders and the parties most closely associated with them. these pillars are also viewed as everything that organizations do in terms of information and full disclosure relating their practices respect to environmental, social, and corporate governance through the reports they issue on sustainability, which are viewed as proactive issues and topics that public shareholding organizations implement and combine into their long-term strategies (drempetic et al., 2020). the approved standards for environmental, social, and corporate governance are manifested by adding many features to organizations that are typically not indicated by the financial and accounting statements published by the organizations, as these data fail to show the value of goodwill, commercial property rights, the organization’s internal culture, and its societal effects, as well as the quality of services provided to clients and future strategies. thus, by utilizing esg, organizations can present non-financial data to various stakeholders in a comprehensive and clear manner, allowing them to determine the extent to which the organization’s management supports and adheres to its standards in order to achieve strategic success in its industry (ahmad et al., 2022). esg also helps to give a comprehensive vision of the organization’s management estimates and provide the necessary information that enables them to respond to the wishes of customers, in addition to the fact that the esg improves the image of the organization in the minds of its dealers and build a good reputation among all parties about it. in addition, organizations that adhere to esg standards have extensive knowledge of long-term strategic issues, achieve their desired goals, and are able to make the most appropriate decisions to ensure sustainability and a positive public image, which represents a significant competitive advantage over organizations that do not adhere to governance standards (zumente and bistrova, 2021). the findings about esg performance on companies were differed in researches according to their environments, variables chosen in the study, and different considerations. cek and eyupoglu (2020) found a considerable impact of esg on economic performance. in their results it was evident that social and governance performance had a strong impact on economic performance, and environmental performance had a minimal impact. also, economic performance has been shown to be well predicted by social performance, and corporate governance performance surpasses both social and environmental performance. the results confirm that companies from various regions have various choices, policies, and goals, therefore various results should be predicted. naeem and sankaya (2022) explained by their research results that esg performance considerably improves roe, which measures a company’s total profitability. 2.2. esg dimensions 2.2.1. environmental governance as a result of the growing environmental challenges and their impact on international security, environmental concerns are now seen as a priority for the public policies of nations throughout the globe. while international environmental policies are among the strategies used to execute and promote environmental governance (guerras and demdoum, 2022). environmental governance refers to the set of institutions, political systems, financial methods, rules, procedures, and standards that control environmental protection efforts. environmental governance’s primary purpose is to improve and preserve the condition of the environment and achieve sustainable development (benfatima, 2021). environmental governance is defined as a set of organizational procedures and mechanisms to rationalize human interaction with his environment in all uses and various activities (benzerrouk et al., 2020). according to chougrani (2014), the components of environmental governance are determined by three main elements: first, integrating all environmental issues and subjecting them to environmental decision-making activities and processes; second, recognizing that all sectors, with their differences, have a direct or indirect impact on the environment; and third, the existence of an impact on activities and practices of individuals, governments, and international corporations degrade the global environmental system. several studies show that obtaining returns on investment, profit growth, and revenue growth is strongly correlated with the disclosure of environmental practices, which considerably increases strategic success. among these studies, mohammad and wasiuzzaman (2021) found that the increase in sales volume and achievement of the organization’s strategic goals increase with the rise in excellence in environmental performance and support for activities related to the environment and that the status and reputation of organizations improve with the disclosure of annual environmental reports. 2.2.2. social governance it should be noted at the beginning that there is still ambiguity in defining the precise meaning of the concept of social governance, as some view social governance as voluntary charitable work. however, social governance has a broader and deeper meaning in achieving economic and social development than charitable work (frynas and yamahaki, 2016). social governance has many different definitions in organizations, including that it encompasses all actions and procedures that represent societies in a transparent manner and adhere to international standards for social integration (smith and alexander, 2013; verboven, 2011). girerd-potin et al. (2013) define it as the administrative practice and activity that includes several implicit special considerations, such as respecting employees, contributing to the promotion of human rights, and preserving the environment, in addition to effective partnership between organizations and society to achieve the growth and prosperity of these organizations and society as a whole. alafi: the impact of esg on strategic success in jordanian islamic banks international review of management and marketing | vol 13 • issue 1 • 20234 social governance plays a crucial role in helping organizations in identifying the needs and requirements of society and the preferences of its individuals, which organizations attempt to fulfill and secure via the implementation of programs and activities that are in line with the demands of society (golob et al., 2019), it also helps achieve societal progress by improving services provided to customers, attracting more employees, increasing economic value and activating the economic wheel in the region (susilo, et al., 2019). various studies indicated a positive impact of the social responsibility and social performance strategies disclosed in the organization’s annual reports on its financial performance, as these strategies have a significant impact on gaining customer satisfaction and increasing their loyalty, thereby increasing the organization’s market value and strategic success (landi and sciarelli, 2018; gillan et al., 2021). regarding the impact of social responsibility on markets specifically, it improves the organization’s competitiveness in all markets in general, and emerging markets in particular, since it raises its capacity to handle the risks to which it is exposed and constitute a danger to its existence (hiep et al., 2021; amel-zadeh and serafeim, 2018). some researchers believe that adopting social responsibility and its modern practice increases the confidence of stakeholders, enhances the organization’s image, and improves the reliability of the data and reports it discloses, resulting in increased investments and enhanced capabilities to face threats and challenges (alazzani et al., 2021). 2.2.3. corporate governance the 2008 global financial crisis affected the majority of major organizations in a variety of industries and forced a number of them to exit the market, which was a result of the failure of many of them to implement the rules of corporate governance. corporate governance has become an integral part of the director’s responsibilities, through which it strives for complete and accurate disclosure of its procedures and activities (gennaro and nietlispach, 2021). from this point of view, corporate governance is seen as the main factor in improving the organizational performance of all parties and all stakeholders, including shareholders, managers, clients and others (grabinska et al., 2021). corporate governance has a significant impact on reducing agency costs and ensuring the organization’s continuity and strategic success (alazzani et al., 2021). corporate governance is defined by khatib and nour (2021) as the organizational and administrative methods, procedures, and methodologies that allow for a balance between each stakeholder, including shareholders and investors, and the organization as an economic entity in a way that achieves the interest and ensures the proper implementation of strategies and achievement of goals to reach the desired success that results in profitability and stability. corporate governance practices of a strategic nature are defined as all the actions and steps taken by organizations with the aim of coordinating their activities in a way that enhances their business and supports responsibilities towards shareholders in the long future, taking into account all parties involved with them (kengkathran, 2018). according to musah and adutwumwaa (2021), and ellili (2022), the organization’s disclosure of its institutional performance and its commitment to corporate governance contribute significantly to providing accurate financial and non-financial data and work to improve and develop the organization’s overall internal and external operations as predetermined. 2.3. strategic success almawadyeh and albashabsheh (2022) defined organizational strategic success as the ability and determination of organizations to achieve a set of future goals agreed upon in their statement, mission, and goals, and in a manner that translates their previously formulated vision through their administrative functions of planning, implementation, coordination, control, and accompanying processes, as well as proper evaluation and development. in light of the foregoing, in order for organizations to achieve strategic success, they must establish measurable goals that enable employees to track and evaluate them, be realistic and applicable in accordance with the organization’s available resources, and achieve customer satisfaction through the development of human capital and intellectual capital, and place them in the order of priority (eisenberg et al., 2015). regarding the importance of strategic success, many studies have shown its desired and hoped-for outcomes, such as the study of almawadyeh and albashabsheh (2022), which demonstrated that achieving strategic success greatly helps organizations in remaining competitive, supports the organization in achieving various successes at various levels and improves the organization’s market position. also organizational agility is one of the most significant aspects of strategic success. companies are able to gather strategic success components that shape thier long-term competitive position, to be converted from market-relevant capabilities into competitive advantages to achieve success. which therefore changes the company’s management and improves strategic success (orlov et al., 2020) the formulation, implementation, and success of a strategy are all influenced by a variety of factors. the maturity of policies, capabilities, values, competences, cultures, and business relationships should be embraced by organizations since these factors occasionally affect nearly every aspect of strategy and culture. nevertheless, a variety of factors affect how well a strategy is implemented, and these factors vary by region. for instance, religion, weather, and cultural values are important variables in middle eastern nations (alharthy et al., 2017). 2.4. strategic success dimensions 2.4.1. specific strategy the organization’s planned strategy is regarded as the most important and influential factor in the conduct of its business and alafi: the impact of esg on strategic success in jordanian islamic banks international review of management and marketing | vol 13 • issue 1 • 2023 5 its pursuit of excellence and success. the strategic direction and the plans and objectives that emerge from the strategy are crucial to achieving strategic success, and strategies must be characterized by high flexibility and responsiveness to the internal and external environmental elements surrounding the organization, which, in instances of ambiguity, contribute to providing desired outcomes (alzoubi et al., 2021). 2.4.2. specific implementation the transition from the drawn strategy to the actual application and its realistic translation, correctly and effectively, is one of the most difficult and delicate processes, as the failure to implement part of the strategy reflects on the entire strategy, and what was planned in advance in the strategy becomes meaningless and ineffective if the organization is unable to translate it into realistic and effective implementation outcomes (alzoubi et al., 2021). 2.4.3. motivational culture influencing and motivating employees to complete their tasks and work, as well as considering their requirements and meeting their needs, is the basis for establishing a motivational culture, and its significance stems from recognizing the significance of the satisfaction of working staffs and human resources in the organization in order to achieve organizational success. organizations must put huge effort to follow up with and motivate personnel. encouraging them to work hard and with distinction, addressing any performance flaws or weaknesses, and attempting to satisfy their wants will ensure their commitment to the business and their drive for its success (alzoubi et al., 2021). 2.4.4. continuous innovation developing services and enhancing products is an urgent and periodic necessity that organizations cannot minimize, especially in light of the rapid changes that the world is experiencing today, not only to achieve uniqueness and a significant competitive advantage, but also to maintain its market position and avoid disappearance. therefore, businesses must take the initiative and compete to deliver the most differentiated services in proportion to the nature of the environment in which they operate, which demonstrates their adaptability and flexibility in execution (baniyassin and alrababa’, 2021). 3. study tool and data collection the researcher based on two types of data collection sources: secondary sources, which were represented in the previous literature and peer-reviewed scientific research in journals related to study variables, and primary sources, which were represented by a questionnaire developed by the researcher and adopted as a tool for the study in order to collect information from the sample respondents. the researcher based on the descriptive analytical method in order to achieve the study objectives and test its hypotheses, where the study population consisted of three jordanian islamic banks, as shown in the table 1. the study sample consisted of (108) respondents working at the top administrative levels in these banks, while the sampling unit consisted of respondents in the following administrative positions (general manager, department manager, and department head) who were selected using a simple random sampling method. the characteristics of the study sample are shown in table 2. due to the nature of administrative positions in banks, which rely more on men than women, the percentage of males is greater than the percentage of females, as shown in table 2. the data also reveals that the category of employees (46 or more) had the largest proportion of representative workers (52.8%), while the age group (<31) had the lowest percentage of representative workers (6.5%). this suggests that administrative positions demand expertise in the area, resulting in an older workforce. regarding educational level, the group of employees with a bachelor’s degree is the most representative of the sample, with a proportion of (71.3%), followed by those with a (diploma or less) at a rate of (7.4%). in addition to the educated nature of jordanian society, this finding demonstrates that the majority of employees in management positions in commercial banks hold bachlor’s and master’s degrees (90.7%). table 2 reveals also that the majority of sampled respondents are department heads (80.4%), which may be explained by the organizational and functional structures of banks, which may consist of one manager with several department heads. the table reveals that (41.7%) of the study sample had (11–<16) years of table 2: demographic characteristics characteristic values frequency percentage gender male 87 80.60 female 21 19.40 total 108 100.00 age <31 7 6.50 31–<36 12 11.10 36–<41 11 10.20 41–<46 21 19.40 46 or more 57 52.80 total 108 100.00 educational level diploma or less 8 7.40 bechalor 77 71.30 master 21 19.40 doctorate 2 1.90 total 108 100.00 job description general manager 3 2.80 business unit manager 18 16.70 department head 87 80.60 total 108 100.00 years of experience <6 5 4.60 6–<11 23 21.30 11–<16 45 41.70 16 or more 35 32.40 total 108 100.00 table 1: study sample (jordanian islamic banks) no. bank establishment year 1 jordanian islamic bank 1978 2 islamic international arab bank 1997 3 safwa islamic bankk 2009 alafi: the impact of esg on strategic success in jordanian islamic banks international review of management and marketing | vol 13 • issue 1 • 20236 experience, followed by (32.4%) of those with (16 or more) years of experience. 4. measures 4.1. validity of the study tool measuring the link between each item and the dimension to which it belongs and discarding items with a weak correlation coefficient, we determined the validity of the questionnaire items as shown in tables 3-6 respectively. 4.1.1. validity of independent variable (esg) according to table 3, the correlation coefficients for the dimensions of the independent variable varied from (0.428) to (0.743) and were statistically significant at the level of (0.01), indicating that there is internal consistency between the dimensions of this variable. 4.1.2. validity of dependent variable (strategic success) as shown in table 4, the correlation coefficients for the items of the dependent variable (strategic success) varied from (0.238) to (0.665) and were statistically significant at the level of (0.01), indicating internal consistency between the items that evaluated this variable. 4.2. reliability of the study tool 4.2.1. reliability of independent variable (esg) by using the (cronbach’s alpha) coefficient, the researcher calculated the level of consistency of the independent variable dimensions. according to (sekaran, 2010, p.43), items are deemed internally consistent if the value of cronbach’s alpha coefficient is at least 70%. table 5 displays the findings. table 5 reveals that cronbach’s alpha coefficient for all dimensions of the independent variable was (0.933), and cronbach’s alpha coefficient for each dimension independently was high, with all values over (70%), indicating the dimensions’ consistency. 4.2.2. reliability of dependent variable (strategic success) the consistency of the dependent variable (strategic success) with its all dimensions was measured, and then the consistency for each dimension was measured separately using cronbach’s alpha, the results shown in table 6. the results of table 6 indicate that the cronbach’s alpha coefficient for all dimensions of dependent variable was (0.913), and the cronbach’s alpha coefficients for each dimension separately was high, and all values were greater than (70%), and this indicates the consistency of the dimensions. 4.3. arithmetic mean and relative importance to determine the respondents’ estimations of the research variables and their dimensions, the arithmetic mean and relative importance of their responses were computed, and the findings are depicted in table 7. table 4: correlation coefficients of the dependent variable item correlation coefficient p-value item correlation coefficient p-value 1 0.572 0.00** 11 0.431 0.00** 2 0.629 0.00** 12 0.609 0.00** 3 0.481 0.00** 13 0.238 0.00** 4 0.404 0.00** 14 0.607 0.00** 5 0.453 0.00** 15 0.544 0.00** 6 0.36 0.00** 16 0.415 0.00** 7 0.507 0.00** 17 0.571 0.00** 8 0.379 0.00** 18 0.561 0.00** 9 0.665 0.00** 19 0.676 0.00** 10 0.651 0.00** 20 0.571 0.00** **statistically significant at the level (0.01) table 7: the arithmetic mean and relative importance of study variables no. dimension arithmetic mean relative importance rank 1 environmental governance 3.98 high 2 2 social governance 4.01 high 1 3 corporate governance 3.88 high 3 total 3.96 high 1 specific strategy 4.11 high 1 2 specific implementation 3.99 high 3 3 motivational culture 3.89 high 4 4 continuous innovation 4.02 high 2 total 4.00 high table 5: cronbach’s alpha of the independent variable (n=108) dimension cronbach alpha no. of items environmental governance 0.91 7 social governance 0.892 7 corporate governance 0.901 6 total 0.933 20 table 6: cronbach’s alpha of the dependent variable (n=108) dimension cronbach alpha no. of items specific strategy 0.887 5 specific implementation 0.892 5 motivational culture 0.854 5 continuous innovation 0.875 5 total 0.913 20 table 3: correlation coefficients of the independent variable item correlation coefficient p-value item correlation coefficient p-value 1 0.476 0.00** 11 0.469 0.00** 2 0.591 0.00** 12 0.571 0.00** 3 0.664 0.00** 13 0.434 0.00** 4 0.444 0.00** 14 0.579 0.00** 5 0.464 0.00** 15 0.625 0.00** 6 0.492 0.00** 16 0.482 0.00** 7 0.458 0.00** 17 0.507 0.00** 8 0.521 0.00** 18 0.59 0.00** 9 0.432 0.00** 19 0.743 0.00** 10 0.428 0.00** 20 0.54 0.00** **statistically significant at the level (0.01) alafi: the impact of esg on strategic success in jordanian islamic banks international review of management and marketing | vol 13 • issue 1 • 2023 7 the data in table 7 indicate that the arithmetic mean of the respondents’ responses regarding the relative importance of applying esg ranged from (3.88 to 4.01), with social governance dimension ranking first with the highest arithmetic mean of (4.01) and a high relative importance, followed by environmental governance dimension with arithmetic mean of (3.98), and high relative importance, followed by corporate governance dimension with arithmetic mean of (3.88), and high relative importance. moreover, the arithmetic mean of all esg dimensions as a whole was (3.96) and had a high relative relevance, indicating that jordanian islamic banks use esg at a high level. similarly, the arithmetic mean of strategic success ranged from (3.89 to 4.11), with specific strategy dimension ranking first with the highest arithmetic mean of (4.11) and a high relative importance, followed by continuous innovation dimension with arithmetic mean of (4.02) and high relative importance, followed by specific implementation dimension with arithmetic mean of (3.99), and high relative importance. and finally, motivational culture dimension with arithmetic mean of (3.89) and high relative importance. furthermore, the arithmetic mean of all strategic success dimensions as a whole was (4.00) and had a high relative relevance, indicating that jordanian islamic banks have strategic success. 4.4. normal distribution test the researcher utilized the kolmogorov-smirnov (k-s) test to confirm that the data utilized for statistical analysis and testing of hypotheses follow a normal distribution. at the level of statistical significance (0.05), there are no statistically significant differences between the values of the variables’ distribution and the values of the normal distribution as shown in table 8. 4.5. pearson correlation matrix the pearson correlation coefficients matrix was calculated to find out the relationship between study variables, with the aim of revealing a linear correlation between them. table 9 shows the results of the correlation coefficients between the variables. table 9 shows that the correlation values between the dimensions were <(0.90) and statistically significant at (0.05). and this means that there is no a complete correlation between the independent variable’s dimensions. 4.6. multicollinearity problem test using the variance inflation factor (vif) and tolerance test, the researcher determined that there is no multicollinearity between the independent variable’s dimensions, as shown in table 10. where it was determined that the variance inflation factor (vif) values are <(5) and the tolerance test results are >(0.1). 5. hypotheses discussion based on earlier measurement findings, it is stressed that the data is fit for analysis and may be utilized to evaluate the research hypotheses. the researcher analyzed the collected data using spss software. the main hypothesis h01: the researcher used multiple linear regression analysis to determine the impact of esg dimensions (environmental governance, social governance, and corporate governance) on strategic success in jordanian islamic banks, as shown in table 11. the results of table 11 show that the correlation coefficient (r = 0.824) shows a positive and strong relationship between the independent variable and the dependent variable, and that the impact of the dimensions of the independent variable on the dependent variable (strategic success) is a statistically significant, where the calculated f value is (155.44) with a significance level of (sig = 0.00), which is <(0.05). also it appeared that the value of (r2 = 0.679), and that indicates that (67.9%) of the variance in (strategic success) can be explained by the variance in esg. the coefficients results revealed that the value of (β) at (social governance) reached (0.488), and that its t-value is (6.78), with a level of significance (sig = 0.00), indicating that its impact is significant, whereas the value of (β) at (environmental governance) has reached (0.351), and its t-value is (4.33), with a level of significance (sig = 0.00), indicating that its impact is significant. (0.420) is the value of (β) at (corporate governance), and its t-value is (6.27). and with a significance level (sig = 0.00) that suggests its impact is statistically significant. according to the values of (β), social governance had the greatest impact on the strategic success. based on previous, the main null hypothesis cannot be accepted and accept the alternative hypothesis that says: there is a table 8: normal disribution of variables’ dimensions dimension test value p-value environmental governance 0.117 0.216 social governance 0.114 0.187 corporate governance 0.091 0.169 specific strategy 0.118 0.203 specific implementation 0.166 0.31 motivational culture 0.109 0.273 continuous innovation 0.143 0.261 table 9: pearson correlation matrix dimensions environmental governance social governance corporate governance environmental governance 1 social governance 0.675** 1 corporate governance 0.763** 8.60e-01 1 **statistically significant at the level (0.01). table 10: multicollinearity statistics of independent variable’s dimensions dimensions tolerance vif environmental governance 0.441 2.268 social governance 0.429 2.331 corporate governance 0.619 1.616 alafi: the impact of esg on strategic success in jordanian islamic banks international review of management and marketing | vol 13 • issue 1 • 20238 statistically significant impact at level (α ≤ 0.05) of esg with its dimensions (environmental governance, social governance, and corporate governance) on strategic success. from this first main hypothesis, three sub-hypotheses emerged and analysied by simple linear regression. the results are shown in table 12. the results of table 12 show that the correlation coefficient of h01-1 (r = 0.669) shows a positive and strong relationship between environmental governance and strategic success with a percentage of (66.9%), where the calculated f value is (125.93) with a significance level of (sig = 0.00), which is <(0.05). also it appeared that the value of (r2 = 0.448), and that indicates that (44.8%) of the variance in (strategic success) can be explained by the variance in environmental governance. the coefficients results revealed that the value of (β) at (environmental governance) reached (0.669), and that its t-value is (17.15), with a level of significance (sig = 0.00). as a result, the impact of environmental governance on the dependent variable (strategic success) is statistically significant. based on previous, the first null sub-hypothesis cannot be accepted and accept the alternative sub-hypothesis that says: there is a statistically significant impact at level (α ≤ 0.05) of environmental governance on strategic success. also, the results show that the correlation coefficient of h01-2 (r = 0.869) shows a positive and strong relationship between social governance and strategic success with a percentage of (86.9%), where the calculated f value is (188.55) with a significance level of (sig = 0.00), which is <(0.05). also it appeared that the value of (r2 = 0.755), and that indicates that (75.5%) of the variance in (strategic success) can be explained by the variance in social governance. the coefficients results revealed that the value of (β) at (social governance) reached (0.869), and that its t-value is (21.19), with a level of significance (sig = 0.00). as a result, the impact of social governance on the dependent variable (strategic success) is statistically significant. based on previous, the second null sub-hypothesis cannot be accepted and accept the alternative sub-hypothesis that says: there is a statistically significant impact at level (α ≤ 0.05) of social governance on strategic success. in addition, the results show that the correlation coefficient of h01-3 (r = 0.745) shows a positive and strong relationship between corporate governance and strategic success with a percentage of (74.5%), where the calculated f value is (145.61) with a significance level of (sig = 0.00), which is <(0.05). also it appeared that the value of (r2 = 0.555), and that indicates that (55.5%) of the variance in (strategic success) can be explained by the variance in corporate governance. the coefficients results revealed that the value of (β) at (corporate governance) reached (0.745), and that its t-value is (18.63), with a level of significance (sig = 0.00). as a result, the impact of corporate governance on the dependent variable (strategic success) is statistically significant. based on previous, the third null sub-hypothesis cannot be accepted and accept the alternative sub-hypothesis that says: there is a statistically significant impact at level (α ≤ 0.05) of corporate governance on strategic success. 6. conclusions the findings of the study showed that the relative importance of esg dimensions was generally high, indicating that jordanian islamic banks had a high degree of esg implementation. these pillars can lead to adjustments that are commensurate with business plans and strategies that ensure the success of organizations through their ability to identify their surrounding environment, allowing them to respond proactively to any emergency changes in it, and boosting their plans with strategic character. additionally, the findings of the study showed that the relative importance of strategic success dimensions was generally high, indicating that jordanian islamic banks prooved to have strategic success. this demonstrates that jordanian islamic banks are acutely aware of the importance of strategic success and its effective role, which is reflected in increasing the performance levels of employees and the optimal investment in their skills, which enables them to develop and advance, in addition to its table 12: simple linear regression analysis of each esg dimension on strategic success hypothesis dependent variable model summery anova coeffecients r2 r p-value df f sig f* calculated t β dimension h01-1 strategic success 0.448 0.669 0.000 1 125.93 0.000 17.15 0.669 environmental h01-2 0.755 0.869 0.000 1 188.55 0.000 21.19 0.869 social h01-3 0.555 0.745 0.000 1 145.61 0.000 18.63 0.745 corporate *statistically significant at the level (0.05) table 11: multiple linear regression analysis of esg dimensions on strategic success dependent variable model summery anova coeffecients r2 r p-value df f sig f* calculated t β dimension strategic success 0.679 0.824 0.000 3 155.44 0.000 4.33 0.351 environmental 0.000 6.78 0.488 social 0.000 6.27 0.42 corporate *statistically significant at the level (0.05) alafi: the impact of esg on strategic success in jordanian islamic banks international review of management and marketing | vol 13 • issue 1 • 2023 9 significant role in evaluating programs, policies, and procedures comprehensively and managing employees and resources. this in general, helps companies and different organizations set standard and reliable performance rates that help them in measuring and evaluating the organization development. regarding the results of the hypotheses, the results indicated that there is a statistically significant effect for all dimensions of esg on strategic success in jordanian islamic banks, and the regression values are high for all dimensions, indicating that jordanian islamic banks implement strategies that enable them to improve esg. the researcher relates this conclusion to the existence of a substantial role for governance in the ability of companies to achieve success by confronting the inherent risks of some sectors, such as the banking sector. based on the findings, the researcher provided the following recommendations: invite jordanian islamic banks to continue in improving their implementation of esg by recognizing their significance in order to maximize efficiency and achieve strategic success. pay more attention by jordanian islamic banks to stay with global improvements in the implementation of esg. furethurmore, the administrations of jordanian islamic banks’ ongoing commitment to achieving strategic 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(2021), do baltic investors care about environmental, social and governance (esg)? entrepreneurship and sustainability issues, 8(4), 349-362. . international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2018, 8(6), 62-66. international review of management and marketing | vol 8 • issue 6 • 201862 influence of products, premium pricing, and service processes on customer satisfaction of pt asuransi jiwa taspen 2014-2018 period kharis kurnianto*, setyo aji nugroho, jati tri priyambodo faculty of economics and business, universitas persada indonesia yai, jakarta, indonesia. *email: khariskurnianto@gmail.com received: 01 september 2018 accepted: 25 october 2018 doi: https://doi.org/10.32479/irmm.7136 abstract this study discusses the extent of the influence of 3 variables, namely: products, determination of premium prices and service processes on customer satisfaction pt taspen life insurance period 2014 2018. of these 3 variables the researcher made a research framework, namely: (a) to what extent products affect customer satisfaction, (b) determination of premium prices affect customer satisfaction, (c) service process affects customer satisfaction, and (d) the extent to which products, determination of premium prices and service processes together influence customer satisfaction. questionnaire method is the choice of researchers in collecting data that will be processed using quantitative methods, multiple linear regression, while testing the hypothesis used hypothesis test t, test the hypothesis f with a significant level of 5%. classical assumption tests used in this study include linearity test, normality test, homogeneity test, autocorrelation test, multicollinearity test and reliability test. keywords: insurance, products, prices, premiums, service processes, customer satisfaction jel classifications: m31, i13, g22 1. introduction service companies have different characteristics from non-service companies (haverila and fehr, 2016). insurance is a financial institution engaged in services and is a non-bank financial institution. the definition of non-bank financial institutions are all agencies that carry out activities in the financial sector, which directly or indirectly raise funds mainly by issuing valuable paper and channelling it in the community, especially to finance company investment. an insurance company is an insurance company as described in the paragraph 246 of the commercial law, as follows: “insurance or coverage is an agreement between two parties, namely the insurer will compensate the insured if a particular event occurs, otherwise the insured party will pay an amount called the premium to the insurer.” along with the widespread use of insurance, business use is also increasing, which is one of them to create a sense of security and comfort. the need for insurance services is now increasingly felt, both by individuals and businesses in indonesia. insurance is a financial means in the management of household life, both in dealing with fundamental risks such as the risk of death, or in dealing with the risks of possessions. likewise, the business world in carrying out its activities faces various risks that might interfere with the sustainability of its business (ukil, 2016). indonesian public interest in insurance awareness began to increase, this can be seen through the statement stated by ukil (2016), the life insurance industry recorded positive growth compared to q1. 2016 ago. the indonesian life insurance association (aaji) informed that the revenue growth reached 16.4% or idr 56.96 trillion. furthermore, the total premium income was idr 43.17 trillion, up 25.5%. in q1 2016, premium income was at 34.40 trillion, total claims and benefits increased. the figure in q1 2017 was idr 24.05 trillion. this figure rose this journal is licensed under a creative commons attribution 4.0 international license kurnianto, et al.: influence of products, premium pricing, and service processes on customer satisfaction of pt asuransi jiwa taspen 2014-2018 period international review of management and marketing | vol 8 • issue 6 • 2018 63 11.6% from the position in q1 2016 with a figure of idr 21.55 trillion. in the total insured post, there was an increase in growth of 7.0% to 59.21 million people. in 2016, the total number of insured reached 55.34 million people (may et al., 2004). the demand for insurance coverage continues to grow following the level of complexity of the risks that arise and threaten the private world and the business world. meanwhile for the insurance industry the risk of uncertainty is something that is measurable and generally has statistics that support the risk taking over. the purpose of making insurance laws is the most fundamental is the existence of agreement and business law that creates order in the insurance business based on the balance of interests for the parties who bind themselves and guarantees the ability of the insurer to provide insurance benefits when due. consumer satisfaction is a very important factor in a business or business engaged in services, especially insurance. if product performance is far lower than consumer expectations, then consumers are not satisfied. and vice versa, if the performance is appropriate or far higher than expectations, consumers will feel satisfied. consumer expectations are generally consumer forecasts or beliefs about what they will receive or consume a product (goods and services). in order to create customer satisfaction for taspen life customers, the products offered must be of high quality. the term quality itself contains various interpretations. simply put, quality can be interpreted as a defect-free product. however, this manufacturingbased definition is less relevant for the service sector. therefore, understanding of quality is then extended to “fitness for use” and conformance to requirements. “quality reflects all dimensions of the supply of products that produce benefits for customers.” the term value is often used to refer to the relative quality of a product associated with the price of the product in question. taspen life always makes a product based on the rules set by ojk as the regulator of financial services companies in indonesia and in accordance with the demand of prospective participants with the taylor made method. in its journey, pt asuransi jiwa taspen has 9 superior products consisting of: collected life insurance products: taspen endowment group, taspen group whole life, term life taspen group, taspen group personal accident, taspen save, taspen annuity group, and taspen credit life (dady et al., 2017). taspen life in december 2015 recorded a company asset of idr 2.7 trillion, an increase of 528% over the previous year. in terms of profit, taspen life recorded a profit growth of 244% or valued at idr 42.7 billion compared to 2014 valued at idr 12.4 billion. based on the audit results as of december 31, 2015, taspen life was recorded to have a risk base capital or capital adequacy level of 194% or had fulfilled the provisions of the financial services authority (ojk) regarding the solvency level of at least 120%. in terms of assets, taspen life has also been ranked as a middle-class insurance company, from 54 life insurance companies in indonesia currently taspen life is ranked 21st (afrizal et al., 2014). this research was conducted to determine the effect of product quality mix, premium pricing, and service process in measuring customer satisfaction for a life insurance company at pt asuransi jiwa taspen for the period 2014-2018. 2. literature review 2.1 customer satisfaction the definition of customer satisfaction formulated by la and choi (2012) is: satisfaction is the customer’s response to the fulfilment of their needs. this means an assessment that a form of privilege of an item or service or goods/service itself, provides a level of comfort associated with fulfilling a need, including meeting the needs under expectations or fulfilling the needs of customers. according to homburg et al. (2014) there are several reasons that are the foundation of the company in maintaining relationships with customers, including: a. if customers like, they will remain loyal to our products or services. b. if customers are disappointed, sooner or later they will leave our product or service. c. customers always make their own choices. d. customers always know what they want. e. if the company can help customers make their choices and know the things they want, in a meaningful and memorable way, then they will like the company. f. if the company fails to help them, then they will like our company and will not continue the relationship because they know there are other companies that are ready to help them. 2.2. product in developing a program to reach the desired market a company must start with products or services designed to satisfy consumer desires. therefore the company must try to take the hearts of consumers to expedite the course of production. consumers usually want their products to satisfy consumers’ hearts and have quality products (wagner, 2013). the most important thing in the product is that consumers not only buy the physical product but also buy the benefits and value of the product called ‘the offer’ or offers, especially on products that are not known to cause ownership changes from product storage to consumers (bodur et al., 2014). 2.3. determination of premium price according (renneboog and spaenjers, 2013) prices can be defined narrowly as the amount of money billed for a product or service. or it can be broadly defined as the amount of value exchanged by consumers for the profit of owning and using a product or service that allows a company to obtain a reasonable profit by being paid for the value of the customer it creates. product pricing is an important matter in selling insurance products. of course, one of the important factors in selling a product is the suitability between the benefits obtained by the buyer and the amount of premium they pay. therefore the pricing in the sale of insurance products must be observed carefully. insurance companies in setting prices are guided by several basic premium characteristics, namely (munnukka, 2008). kurnianto, et al.: influence of products, premium pricing, and service processes on customer satisfaction of pt asuransi jiwa taspen 2014-2018 period international review of management and marketing | vol 8 • issue 6 • 201864 2.3.1. adequate the premium rate must be sufficient to cover the risks that may occur, all acquisition costs, administrative costs, taxes, profits and so forth. in addition, premiums must also be able to provide margins for unexpected things (adverse occurrence). if the premium is insufficient to cover all of these things, then it is likely that the insurer or life insurance company will face insolvency, and the difficulty of fulfilling the obligation to pay the claim. 2.3.2. reasonable (fairness) premium rate must not be excessive in relation to the promised benefits/sale. for example, premium rates are extraordinarily cheap while the benefits offered are very broad, or vice versa. the premium is extraordinarily expensive but the benefits offered are so limited. of course the insurer must pay attention to the fairness between these two things, because if not, it will backfire for the insurer in terms of marketing the product. 2.3.3. equitable logically, premiums must be fair between different insured classes. that is, for the insured class that has the same level of risk, the premium must also be the same. and if the insured class is indeed different, then the premium charged must be proportional to the level of risk at each level of the risk class proportionally. 2.4. service process hilton et al. (2012) states that the process is all actual producers, mechanisms, and flow of activities used to deliver services. in addition decisions in operations management are very important for successful marketing services. every product and service marketing activity cannot be separated from the service process. a series of product and service activities require a process. brakus et al. (2014) states that marketing products and services is a series of processes to serve customers. brakus et al. (2014) stated that marketing of products and services is the result of this view of placing processes as important in the marketing of products and services. 3. methodology this study uses quantitative research methods using numerical data and emphasizes the research process on objective outcome measurements using statistical analysis. the focus of the quantitative method is to collect data sets and make generalizations to explain specific phenomena experienced by the population. the purpose of quantitative research is to determine the relationship between variables in a population. the population is 546, 840 customer, and the number of samples taken was 156 respondents. quantitative research designs have two types, namely descriptive and experimental. descriptive quantitative studies take measurements only once. this means that the relationship between the variables investigated only lasts once. while the experimental study measured the variables between before and after to see the phenomenal causal relationships studied. 4. results and discussion 4.1. research descriptive analysis the results of data processing on the independent variables (products, determination of premium prices and service poses) and the dependent variable in this study are customer satisfaction resulting in cumulative perceptions as follows: 4.1.1. respondent research on product variables based on the results of data processing shows that the respondent’s perception of the product variable (x1) seen from 3 dimensions shows that the dimension of perceived quality is the dominant dimension that is equal to 624.3 means that the benefits of the product perceived by the participants are in accordance with their expectations. assessment of respondents on variable determination of premium prices. based on the results of data processing shows that the respondent’s perception of the variable premium pricing (x2) seen from 4 dimensions shows that the dimension of price adequacy is the dominant dimension of 608.3 means the premium rate set by taspen life is in accordance with the benefits received by participants at the end of insurance. 4.1.2. assessment of respondents on service process variables based on the results of data processing shows that respondents’ perceptions of service process variables (x3) viewed from 5 dimensions shows that the dimensions of reliability are the dominant dimensions of 628.5, meaning that taspen life has human resources capable of providing good service for participants. 4.1.3. assessment of respondents on variable customer satisfaction based on the results of data processing shows that the respondent’s perception of the variable customer satisfaction (y) seen from 3 dimensions shows that the brand image dimension is the dominant dimension of 625.5 meaning that the big name of the parent company pt taspen (persero) is one of the effective marketing strategies in order to market taspen life products. 4.2. multiple regression analysis the results of multiple regression tests can be made as follows: y = 1.870 + 0.248 x1 + 0.261 x2 + 0,099 x3 + e the results of the regression equation can be interpreted as follows: a (constant) = 1.870 indicates that if the product, determination of premium price, and service process do not exist or have a value of 0, then customer satisfaction will have a value of 1.870. x1 = 0.248 indicates that if there is an increase in the product variable by one unit then customer satisfaction will increase by 0.248. x2 = 0.261 indicates that if there is an increase in the premium price determination variable of one unit then customer satisfaction will increase by 0.261. x3 = 0.099 indicates that if there is an increase in service process variables by one unit then customer satisfaction will increase by 0.099. kurnianto, et al.: influence of products, premium pricing, and service processes on customer satisfaction of pt asuransi jiwa taspen 2014-2018 period international review of management and marketing | vol 8 • issue 6 • 2018 65 4.2.1. hypothesis testing 4.2.1.1. partial hypothesis (t test) t test is done to find out or test the significance of how the influence of a variable x (product, premium pricing and service process) is partial to y (customer satisfaction). it can be explained that the product variable produces a value of t count of 4.529 and a significant value of 0.000. the significant value obtained is smaller than apha 5% (0.000 <0.05) so ho1 is rejected and ha1 is accepted. thus it can be concluded that the products proved to have a significant effect on customer satisfaction (haverila and fehr, 2016; jiang and rosenbloom, 2005; suryati and krisna, 2015). the premium price determination variable produces a t count value of 4.526 and a significant value of 0.000. the significant value obtained is smaller than apha 5% (0.000 <0.05) so ho2 is rejected and ha2 is accepted. thus it can be concluded that premium price determination is proven to have a significant effect on customer satisfaction (campo and yagüe, 2007; hanif, 2010; munnukka, 2008). in the service process variable produces a t value of 3.077 and a significant value of 0.002. significant value obtained is smaller than apha 5% (0.002 <0.05) so ho3 is rejected and ha3 is accepted. thus it can be concluded that the service process is proven to have a significant effect on customer satisfaction (sussman, 2012; thrun, 2014; vega-vazquez et al., 2013). 4.2.1.2. simultaneous hypothesis (test f) f test is conducted to find out whether all independent variables simultaneously (together) affect the dependent variable. simultaneous test results can be explained that the f test produces a statistical f value of 138,530 with a significant 0.000. significant value obtained is smaller than alpha 5% (0.000 <0.05) so ho4 is rejected and ha4 is accepted. these results indicate that simultaneously proven that the product, pricing and service process together affect customer satisfaction (park et al., 2012). 4.2.2. determination coefficient the results of the determination coefficient obtain r2 value of 0.732 (73.2%). this result informs that all independent variables (product, premium pricing, and service process) provide the results of all information needed to predict customer satisfaction. in other words, products, premium pricing, and service processes have a simultaneous influence of 73.2% on customer satisfaction, and the remaining 26.8% is influenced by other variables outside this research. 5. conclusion for further research that other factors outside variables (independent products, premium pricing, and service processes), there are other factors that influence customer satisfaction in terms of promotion, distribution, places and so forth to further improve this research to be better. to further enhance taspen life customer satisfaction, it is necessary to consider several elements of the product. like product variations, where some respondents want a collection of life insurance products to be packaged in individual life insurance products whose membership is not tied to the company where the participant works. to further enhance taspen life customer satisfaction, it is necessary to consider several elements of premium price determination. like price equality one of them, where participants compare in terms of the relatively high premium rates of taspen life with other competitor companies and the benefits received by participants. to further enhance taspen life customer satisfaction, it is necessary to consider several elements of the service process. such a guarantee is one of them, where participants complain about the process of the claim submitted sometimes the required documents incriminate participants. in terms of participants’ perceptions of the overall quality or excellence of products and services in relation to participants’ expectations. taspen life has provided maximum service to participants considering taspen life’s age is 4 years. references afrizal, p.r., musadieq, m., al ruhana, i., administrasi, f.i., brawijaya, u. 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(2013), software product quality control. berlin heidelberg: springer. . international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2017, 7(2), 326-333. international review of management and marketing | vol 7 • issue 2 • 2017326 exploring shopper insights of social media use in saudi arabia mohammad zulfeequar alam* department of marketing, college of business administration, university of business & technology, dahban campus, p.o. box 110200, jeddah, 21361, kingdom of saudi arabia. *email: zulfeqarm@ubt.edu.sa abstract social media inspired millions of users from all over the world. this media has made the connection more familiar to ones that are more intelligent. this new medium of communication wins the trust of consumers by connecting with them at a deeper level. global and local companies have recognized social media marketing as a potential marketing platform and have utilized with innovations to power their advertising campaign their marketing approach through social media. one cannot afford to not having any presence on the social network channel now a day when their counterparts are having waves of products and services in the market. despite, the spread of social media and the broad adoption of these various communication tools, there is a lack of studies in saudi region that conceptualized the goals of objectives of the study. a convenience sample survey has been collected from 226 respondents through using the online survey via google forms and monkey survey during 3 months from october to december 2015. the closeended questionnaire was used, and particular care has been taken to reduce the non-response rate and the error arising out of it. after collecting the data, it was manually edited, coded and then recorded on excel sheet. for descriptive analysis statistics (frequency distribution), chi-square goodness of fitness test at p = 0.05 was applied, and result findings were interpreted accordingly in the study. keywords: social media, user perceptions, marketing communication, consumer attitude, consumer behavior, shopper insight, saudi arabia jel classifications: m300, m310, m370 1. introduction social media refers to the use of internet technology, and mobile communication technology has changed in interactive dialogue and exchange. social media includes magazines, microblogs, wikis, podcasts, pictures, photos, videos and assessments such as social bookmarking in various shapes (barlett-bragg, 2006). besides, social networking has become a global phenomenon, as well as a variety of age, culture, attracting numerous people from around the world, such as the level of education. social networking sites (snss), once a day at least, check the files (joinson, 2008; lenhart, 2009). in recent years, facebook, whatsapp, and other sns such as linkedin become the world more visited sites. facebook is much higher than the menu, snss in reality facilitate the sharing of images, video with friends sharing multimedia elements in a range that are open to others and they were able to build their communication through the internet use (mcloughlin and lee, 2007). in the field of marketing, now, especially in the social media consumption activities of digital interaction is growing interested (stewart and pavlou, 2002). the ever-changing consumer behaviors are developing online quickly, both consumer and content consumption are involved and participate in discussions to promote the share of consumer activity with other customers in various activities such as knowledge and awareness, etc. this positive consumer behavior, as they infringed the company’s marketing has changed the landscape of media and marketing as indicated by berthon et al. (2008), mejias (2005), ajjan and hartshorne (2008). according to the arab social media report (2012), it is experimental that the growth of social media in the region change the environment of social media usage. all of which has been indicated that “usage of facebook, youtube, and twitter in the movements of the so-called arab spring” (arab social media report). also, the arab social media report sequence is part of a larger research initiative by the governance, and innovation program focuses on the promising of social networking applications for growing partnership, information allocation, and improvement, and among government entities, society, and the private sector. furthermore, the arab social media report series, alam: exploring shopper insights of social media use in saudi arabia international review of management and marketing | vol 7 • issue 2 • 2017 327 social media habit trends have been explored and analyzed, stated that there is an exponential growth in the number of social media users in the province, and a noticeable move away from the distinctive public and amusement use of the social media. in a recent study on the activities and user-generated content among the consumer and social media examine the motives of whether the user wants to use or practicing social means (e.g., park et al., 2009; baker and white, 2010; shao, 2009). it has been anticipated that consumers are either active as posters or contributors or passive as lurkers or consumers of content (schlosser, 2005; shang et al., 2006; shao, 2009). however, from the information gathered and reviewed it can be concluded that there is a need for research related to the user impact and insight on social media. therefore, this study is focusing on the different levels of activities consumers engage in on social media and the motives that drive these social media activities in the region. this study contributes to research and practice in consumer marketing in general and in social media and online communities in particular by describing different user activities associated with user-generated media. 2. objectives of the study i. to know the preferences in using social network types among the respondents ii. to identify preferable social network sites among the respondents iii. to find out topics to be involved on social media among the respondents iv. to investigate the preferred time to be involved on social network sites among those interviewed v. to reveal about the brands following on social media among the respondents vi. identify the types of communication tools respondents interested in social media. 3. literature review classification of social media currently listed under the generalized term to the more specific categories like blogs, communities, content, snss, virtual worlds and virtual worlds and social games (kaplan and heinlein, 2010). also, the platforms and social media including blogs, microblogging, e-mail and snss (mangold and faulds, 2009). this method is an important way to deliver marketing messages and create a dialogue with consumers. a variety of platforms, which are composed and exchange of information by individuals on the internet (mangold and faulds, 2009). in current years, one can notice a significant impact on the business on the internet. moreover, snss provide an opening for companies to participate and intermingle with potential consumers, and to promote greater convergence with customers and establish significant associations with potential consumers feeling (mersey et al., 2010; frank, 2009). social media offers many advantages for consumers and marketers. also, social media allows for proper targeting of the primary users of the brand, which enabled the integrated marketing communications to be possible with the time with very much less effort than traditional media (kim and ko, 2012). the fast development in the practice of social interacting in all countries indicates that companies can use to develop the product or service of interest to consumers. similarly, the sellers are using today various social media platforms to improve their image and branding companies (mathur et al., 2012). in one study, social media positively contributes to the performance of the brand, retail performance, loyalty and individual consumers (adam et al., 2013). according to the association of american marketing in 2014, the furthermost common social network sites; facebook has more than 1.15 billion users, and marketers are often dealing with consumers to provide great depth of information in a facebook “fan” pages of a brand or a company (weinberg and pehlivan, 2011). associated with traditional media, direct marketing/ social media marketing, can be vendors and media make strategic changes in front of these observations. also, it revealed that sellers could practice social media tools to convey info about the products, brand image; consumers can review products and questions that may relate to the product (obal et al., 2011). in organizational terms, social networks are extremely helpful in forming and maintaining relationships with consumers, and it should integrate into the marketing mix. the community is pretentious increasingly by the social media and social change in the control of media consumption; brand managers understand how to use social media effectively in dialogue with consumers. moreover, social media is an essential element of the marketing mix, which affects the relationship between consumers and brands (gensler et al., 2013). social networks play progressively significant sources of information for explorers. analysis of results showed that the social media is a big part of the search results, pointing out that the search engines are likely directly to social media sites. this study confirms the growing importance of social media in the field of tourism on the internet. it also provides evidence of the challenges that the traditional travel-related information faced by providers. besides, discusses the implications for marketers of travel regarding online marketing strategies (ulrike and xiang, 2010). socialization has become a natural to consumers through communication through social media and the use of social media in marketing growing popularity of these days. consumer socialize through online with peers networking, it also affects the purchasing decisions in two ways: straight (by peers) and indirectly by enhancing the participation of the product. also, the consumer need for the uniqueness of his moderating influence on product selection attitudes communication between peer effects (xia et al., 2012). de vries et al. (2012), in his research showed that social media platforms allow consumers to hit the mark and other online consumers through brand communities, and to increase the exchange of information. it is essential that the brand remain transparent in its communication to build trust with consumers and brand loyalty. these days, customers are the tangle in a diversity of deeds ranging from content consumption to participate in discussions, exchange knowledge with other consumers, and add activities of other users. considerable interest in snss like youtube, facebook, wikipedia, and users contribute actively in content marketing (kristina, 2011). a sns provides a platform for social networking on the internet to build social or social relations among people (for example, interest or activity that has appeared). the rapid growth of online shopping, some retailers that sell goods and services online and alam: exploring shopper insights of social media use in saudi arabia international review of management and marketing | vol 7 • issue 2 • 2017328 it became the primary channel to expand the market locally and internationally (alam and elaasi, 2016). besides, the study suggests that the last electronic word-of-mouth products that focus on the health insurance system are a unique phenomenon with important social implications (shu-chuan and yoojung, 2011). this media can bring social benefits of the “identification of customers and the commitment” to drive business performance. on the other hand, the management of social relationships with clients can provide insight, which will help to pay for real innovation and customer-centric. finally, the knowledge gained in customer behavior and attitudes help on the benefits of unity across the value chain. affecting providers (such as demand forecasting) and brokers (for example, the formation of promotions in the shop (woodcock et al., 2011). in addition to ads on social networks, significantly affect consumer behavior, ad clicks act turn positively affect their shopping online (mir, 2012). social networks have developed a profound change in the communications background (edwards, 2011), and most prominently, the mindset of consumers have changed (mir and zaheer, 2012). communication through social media has a radical influence on the condition of human behavior (eltantawy and wiest, 2011; marzouki et al., 2012). due to the severe impact of this media it has become hotbeds of marketing and communications in the upper part of the decision-makers in the field of today business agenda. that permits companies to interact directly with their customers promptly and at a lower cost (kaplan and haenlein, 2010). the role of the media as a common platform for people all over the world interact with each other information and experiences, exchange and related products, events and issues (edwards, 2011; heinrichs et al., 2011). it differs from traditional media as created by users who have greater control over the use and content generation (dickey and lewis, 2011). experimental evidence has supported in the context of online advertising and social networks on the internet. a result found that the marketers should focus on maintaining a social presence through social channels with new and frequent content to attract the participation of consumers; the study highlights the importance of frequent changes and incentives for participants (christy and tracy, 2014). since 2011, more than half of consumers follow brands on facebook (de vries et al., 2012). brand communities on the way to satisfy consumers’ desire to create a sense of acceptance and social identity through brands with they interact (fournier and avery, 2011). brand loyalty leads to a firm intention to buy, and lovers of the brand facilitate consumers’ brand relationship (gensler et al., 2013). similarly, he found that twitter and facebook were the ideal channels for brands information with customers. they suggest that companies should provide compelling content relevant and exciting to users and respond to the content presented to consumers. it was also found that consumers feel more committed to organizations when they can send comments, and provide a means for these observations (mangold and faulds, 2009). now, customers are engaged in a variety of activities ranging from content consumption to participate in discussions and exchange knowledge with other consumers and contribute to the activities of other users. a keen interest in snss like youtube, myspace, facebook, and wikipedia, it is assumed that consumers were actively marketing content (kristina, 2011). moreover, with the increasing prevalence of integrated marketing communications and the use of social networks as the primary channel of communication, research revealed that media and messaging software has a significant influence and participation of consumers (de vries et al., 2012). social networks increase consumer involvement with the brand of open source and collaboration with the brand and other consumers to create and share content described. additionally, consumers can find the social media house and build relationships with the brand and looks like the people who also love that name (fournier and avery, 2011). through the studies, we found that customer satisfaction and customer insight are the important factors to achieve business objectives. marketers, in recent time, are trying to develop a new and efficient strategy to meet the needs of the consumers through the use of technology. although, much research has been undertaken to determine the success and strength of consumers’ perception and its evolving factors to measure the customer insight these days. despite the implementation of many of research inside the region, as well as around the world towards the consumer use perception of social media there is still a call for to identify and measure the attitudes of the consumers and its success factors to achieve the goals of business because of consumer behavior for the area always changeable. in fact, there is always a need for research on attitudes’ analysis of users, their preferences and using habits of snss in the literature, as it does not cover in depth. therefore, the current study is an attempt in this direction. furthermore, this paper focuses on customer insight and their using pattern to the social media and its related issues. 4. hypothesis the following hypothesis null (h0) had been assumed for the analysis. i. there is no significant difference in preferences using social network types among the respondents ii. there is no significant difference in most preferred social network types among the respondents iii. there is no significant difference in the topics to be involved on social media among the respondents iv. there is no significance difference in opinion in the timing of involvement in social media among the respondents v. there is no significance difference in opinion about the brands following on social media among the respondents. 5. research methodology the purpose at the back of this research was to know the interviewees’ thoughts, preferences, perception, and insight of saudi customers’ towards snss. a convenience sample survey has been gathered from 226 respondents through using the online survey via google forms and monkey survey during 3 months from october to december 2015. to ensure that the perceptions of social media are based on a diverse population of users, this alam: exploring shopper insights of social media use in saudi arabia international review of management and marketing | vol 7 • issue 2 • 2017 329 study employed a national consumer panel with online access for its web-based survey. as internet connection is a necessary condition for the use of social media, an online survey is an appropriate data collection method. with the popularity of the internet, online surveys have been adopted to collect data in social sciences for years (wimmer and dominick, 2006). the close-ended questions were used, and distinctive care has been taken to reduce the non-response rate and the error arising out of it. after collecting the data, it was manually edited, coded and then recorded on excel sheet. for descriptive analysis statistics (frequency distribution), chi-square goodness of fitness test at 95% of a certain level (p = 0.05) was applied, and result findings were drawn accordingly. 6. findings and discussion respondents’ classification on the basis demographic factors such as gender, age, city, educational level, job status and their monthly income can be seen in table 1. the majority of respondents of the study belongs to male 151 (67%) and female 75 (33%). most of the respondents reported they belong to in the range of 20-39 (75%) age group and the rest of them were followed by <29 (12%), 40-49 (7%) and above 40 (6%) of the sample of the study. moreover, from the table it can also be seen that most of the participants belong to the different 22 cities of ksa (51%), capital city riyadh (26%) and the rest were from jeddah industrial city that is 23% of the sample surveyed. each of the city, compared with other cities in the region, have a good representation on the business side. educational level of respondents was most of them graduate 31% followed by undergraduate 27%, the high school passed 21%, above graduate 16% and very few had below high school qualification that was only 5%. regarding the job status of the interviewees it can also be seen in the table that majority 40% were student followed by private/self-employed 23%, the government employed 20%, and the rest were unemployed 17% of the respondents. furthermore, the table shows that the income levels of the participants; more than 60% of the participants belongs to the monthly family income range of <14,000/sr group. less than 40% of the respondents belong to the monthly sar 14,000 or more of their monthly family income. this result indicates that the majority of the population belongs to the middle-income class of the society. figure 1 provides the information regarding the preferences in using social media types. it reveals that majority of respondents preferring to use whatsapp (85%) as social media for communication followed by twitter (75%), instagram (61.95%), snapshot (51%), facebook (42%), linkedin (21%) and others (7.52%). among the respondents, it is resolved that whatsapp are easy to use and there are not any interferences in our private life. it was believed in h1 that there is no significant difference in preferences in using social media types among the respondents, the chi-square goodness of fit calculated value is 42.798. the p = < 0.001 at 95% confidant level (table 2). therefore, the result is significant at p≤0.05, and it can be inferred that there is a great difference in preferences in the use of snss among the respondents, so the null hypothesis is rejected. from the figure 2 it can be seen that the majority of the persons (47.79%) do agree on that whatsapp is the most preferred among the given media site followed by twitter (17.7%), facebook (14%), snapshot (7.52%) and linkedin (5.75%) respectively. this result also proves the previous result that whatsapp was the highest excellent media site among the respondents of saudi arabia. h2; was assumed that there is no significant difference in most preferred social network types among the respondents, the chi-square goodness of fit calculated value is 141.095 (table 3). the p < 0.001 at 95% confident level. the p < 0.001. the result is significant at p ≤ 0.05. therefore, the null hypothesis is rejected. table 1: demographic status of respondents demographic factors variables frequency (%) gender male 151 (67) female 75 (33) total 226 (100) age (years) <19 27 (12) 20-29 118 (52) 30-39 51 (23) 40-49 16 (7) 50 above 14 (6) total 226 (100) city jeddah 51 (23) riyadh 59 (26) others 116 (51) total 226 (100) educational level below high school 11 (5) high school 48 (21) undergraduate 61 (27) graduate 70 (31) above graduate 36 (16) total 226 (100) job status student 91 (40) government employed 46 (20) private/self employed 51 (23) unemployed 38 (17) total 226 (100) family income (monthly in sr) <5000 30 (13.24) 6000-8000 49 (21.68) 9000-11,000 53 (23.46) 12,000-14,000 40 (17.70) 15,000-17,000 27 (11.96) 18,000-20,000 15 (6.64) >20,000 12 (5.32) total 226 (100) figure 1: preferences in using social media types alam: exploring shopper insights of social media use in saudi arabia international review of management and marketing | vol 7 • issue 2 • 2017330 after the test result, it can be stated that there is a significant difference in most preferred snss among the respondents. figure 3 provides the information regarding the preference of topic on which respondents like to be involved on social media. it was revealed the majority of the respondents like the social media for the news updates (149) followed by educational purpose (130), health-related information (113), foods and beverages (77), arts and cultural (56) and music (47) respectively. from the result, it can be concluded that news provider having a great age and impact on social media as well as the educational institute and others can utilize social network sites for the promotion of their organization that is cheaper than another alternative medium of the communicant. for h3; there is no significance difference in opinion in the timing of involvement in social media among the respondents, calculated value of the chi-square goodness of fit test is 55.333, and the p < 0.001 (table 4). therefore, the result is significant at p ≤ 0.05, and hence null hypothesis is rejected, and alternative hypothesis will be accepted. when respondents were asked regarding the specific timing to be involved on social media. the majority of them agreed afternoon (28.35%) are the preferable for them, evening time (25.37%), not specified or fixed (27%), before sleeping (13.5%) (figure 4). moreover, an insignificant percent of respondents stated that the prefer morning (4.78%) that is very insignificance among the other timing slot of using social media. this result is evident that saudi arabia is having the rest time afternoon for hours and then company reopen again and close until less or more midnight time. therefore, it can be proposed that the marketer promotes their product or services afternoon timing to the midnight time and that will have more chances to reach the consumer properly. h4; calculated value of the chi-square goodness of fit test is 47.850, and the p < 0.001 (table 5). therefore, the result is significant at p ≤ 0.05. thus, the null hypothesis is rejected and alternative hypothesis; there is the impact of inconsistency in the scheduling of involvement in social media among the respondents will be accepted. also, brand following on social media majority (63.7%) acknowledged that they do follow the brand on social media networking sites and 36% respondents agreed on that they do not follow any brand in the networking sites (figure 5). from the result, it can recommend that company owner can approach to the customer through the snss that can give the lead among the competitors to them who prefer to use this medium along with the table 2: preferences in using social media types social media observed expected difference difference square difference square/exponential fraction facebook 97 143.4 −46.40 2152.96 15.01 twitter 171 143.4 27.60 761.76 5.31 instagram 140 143.4 −3.40 11.56 0.08 snapchat 116 143.4 −27.40 750.76 5.24 whatsapp 193 143.4 49.60 2460.16 17.16 the chi-square value=42.798 table 3: most preferable social media sites social media observed expected difference difference square difference square/exponential fraction facebook 32 42 −10.00 100.00 2.38 twitter 40 42 −2.00 4.00 0.10 instagram 17 42 −25.00 625.00 14.88 snapchat 108 42 66.00 4356.00 14.88 whatsapp 13 42 −29.00 841.00 20.02 the chi-square value=141.095 figure 4: preferred time to be involved in social media figure 3: the topic on which respondents like to be involved in social media figure 2: most preferable social media sites alam: exploring shopper insights of social media use in saudi arabia international review of management and marketing | vol 7 • issue 2 • 2017 331 other promotional tools as the majority are involved in following the brands on networking sites. the chi-square goodness of fit test is 18.124 for h5. the p < 0.001. consequently, the result is significant at p ≤ 0.05, and this hypothesis is discarded, and null hypothesis may accept (table 6). on the other hand, while respondents were asked what the types of communication tools they interested in social media are. the answer was in this order; all media were the most important medium followed by, text, videos, and others respectively 60%, 15.9%, 13.6, 9.1% and 1.45. therefore, from the result it is suggested that marketers must utilize all types of medium of communication to approach consumers especially text messages, videos and photo will be the highly acceptable among the medium of communication (figure 6). 7. conclusion a rigorous analysis of the data mentioned above brings the knowledge of the reality that social media has indeed done a commendable job of bridging the communication gap among people. the different social media tools help the people to interact with one another within the shortest possible time. whatsapp networking sites are the top excellent networking site followed by twitter, instagram, and facebook. these media having a high image in the consumer mind and utilizing of these three locations by the marketer will give them a strong image in the market. as per the result the networking company having different pictures in the minds of the consumer so the marketer should provide careful analysis when selecting any networking sites for the campaign. moreover, it can be concluded that information related to news, educational, health, foods and beverages, is the most preferable to see through the social media. it is advised to the company like news provider, education institute owner, health care institute and foods and related services provider can take advantage of these very acceptable channels of communication to promote their product and services in the region. the excellent time to approach customer are afternoon, evening and before sleeping time means it is better to the marketer that they should give and send their message and any commercial of the company starting from afternoon up to sleeping hours. choosing the proper time for business communication will reduce the chance of cluttering for their ads and messages. besides, it is suggested that marketer can utilize to be in consumer mind from side to side putting their brand advertisement in the dominated network table 4: topics on which respondents like to be involved in social media topics observed expected difference difference square difference square/exponential fraction news 149 105 44.00 1936.00 18.44 educational 130 105 25.00 625.00 5.95 food and beverages 113 105 8.00 64.00 0.61 music 77 105 −28.00 784.00 7.47 arts and culture 56 105 −49.00 2401.00 22.87 the chi-square value=55.333 table 5: preferred time to be involved in social media preferred time observed expected difference difference square difference square/exponential fraction morning 11 45.2 −34.20 1169.64 25.88 afternoon 64 45.2 18.80 353.44 7.82 evening 60 45.2 14.80 219.04 4.85 before sleep 31 45.2 −14.20 201.64 4.46 not specified 60 45.2 14.80 219.04 4.85 the chi-square value=47.850 figure 5: brand follow preferences on social media among the respondents figure 6: the types of communication tools respondents interested in social media alam: exploring shopper insights of social media use in saudi arabia international review of management and marketing | vol 7 • issue 2 • 2017332 sites as mentioned above will lead to achieving their marketing goals as well as organizational goals. moreover, respondents answered regarding communication tools types; all media is the most important medium have been selected, followed by, text, videos, and others respectively, therefore, it is suggested that marketers must utilize all types of communication encoding mediums like text messaging, video, photo, etc. marketers are recommended to integrate these all the types of encoding platform to be successful a leader among their counterparts’. references adam, r., beitelspacher, l.s., grewal, d., hughes, d.e. 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(2012), social media peer communication and impacts on purchase intentions: a consumer socialization framework. journal of interactive marketing, 26(4), 198-208. . international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2016, 6(2), 298-306. international review of management and marketing | vol 6 • issue 2 • 2016298 what drives employee’s involvement and turnover intentions: empirical investigation of factors influencing employee involvement and turnover intentions? marwan ahmad alshammari1,2*, bader ayed al qaied3, hamzah al-mawali4, mohammad matalqa5 1the university of texas, arlington, usa, 2department of management, college of business, the hashemite university, jordan, 3ajloun national university, jordan, 4american university of ras al khaimah, uae, 5jadara university, jordan. *email: marwan.al-shammari@mavs.uta.edu abstract research findings on job involvement and turnover intentions have been somewhat mixed. scholars have often studied job involvement as an antecedent of some employee and organization outcomes, including job satisfaction and turnover. the present study examines the antecedents of job involvement and factors influencing it. namely, organizational attractiveness, pay satisfaction, and organizational support. i also examine the effects of job satisfaction, job involvement, person-organization fit, and organizational support on turnover intentions and whether mediation mechanisms exist underlying the relationships between these constructs and turnover intentions. the analysis yielded mixed results for both constructs, involvement and turnover; suggesting further studies might be necessary, and that incorporating more intervening variables might help improve our understanding of the interrelationships between these constructs. results are discussed and future research directions are suggested. keywords: job satisfaction, pay satisfaction, turnover intention, structural equation modeling jel classification: j28 1. introduction organizations are often highly interested in valuable and talented employees, they are so because of the value that those employees bring into the organization (podsakoff et al., 2007a; singh and loncar, 2010). the process through which organizations try to keep those employees is called retention. researchers in different disciplines including psychology, ob, and hr have extensively studied the variables that are often associated with retention. however, it has been argued that job satisfaction, job involvement, organizational attractiveness, organizational support, and person organization fit, as well as several other variables are of great influence on the extent to which organizations can actually retain their talented employees. intentions to stay or to quit are highly correlated with the aforementioned constructs as well documented in the literature (podsakoff et al., 2007a). several scholars have asserted that there are many variables that influence employees’ decisions to quit their jobs (benson et al., 2004; spector et al., 2007) where scholars have attributed satisfaction and dissatisfaction to both internal and external variables. internal variables include issues such as pay satisfaction, perceived organizational support, supervisor support, organizational attractiveness; whereas external variables include for instance family-work balance, job market and macro-level factors that would influence the ease of movement between jobs and the demand for the skills associated with one’s specialization. many scholars have called for more focus on the personal characteristics in relation to job satisfaction (podsakoff et al., 2007a; saari and judge, 2004). there appears to be inconclusiveness of the findings regarding the extent to which internal variables at the organizational level outweigh external variables outside the control of organization. organizations have long been concerned with the overall satisfaction of their employees. the job satisfaction also has been of great importance to scholars in several fields including psychology, organizational behavior, hr, and strategic hr. it has been argued that satisfaction leads to lower turnover intentions. alshammari, et al.: what drives employee’s involvement and turnover intentions: empirical investigation of factors influencing employee involvement and turnover intentions? international review of management and marketing | vol 6 • issue 2 • 2016 299 organizations seek to hire talented employees as to benefit from their skills and talents, so they can contribute to the overall performance by adding a rare, inimitable value which contributes to the competitive advantage of the firm. however, firms are also interested in retaining such talented employees to gain competitive advantage through the combination of their rare skills and inimitable talents (barney, 1991). in order to do so, they need to better understand their employees and how they think, act, interact, and react inside the organizations. however, job involvement has been recently emphasized as an important construct in developing loyalty and attachment, which leads to lower turnover intentions. there are several factors that have been argued to affect the job involvement. for instance, pay satisfaction is one of the most important factors that scholars have focused on in studying the job involvement and also job satisfaction (jayasingam and yong, 2013). people need to feel that their work is being rewarded and that they are satisfied with the designated reward. it’s been argued that money is one crucial factor in feeling rewarded and appreciated. thus, the pay satisfaction is said to have crucial effect on the job involvement as it works as a motive (currall et al., 2005). nonetheless, scholars in psychology and hr have also argued that money and financial incentives are not the only factors that would affect the employees’ attitudes towards their jobs. they argue that job involvement is dependent upon other factors as well. for instance, scholars argue that organizational attractiveness also play significant role. attractiveness of an organization is seen as a factor that talented employees highly consider in their career decisions. people would prefer working for an organization that has good reputation, has great atmosphere, and has the potential grow so individuals’ passion and self-esteem can be met at such organization (helm, 2013). also, attractiveness has to do with feeling proud to work for such organization. thus, it is said that attractiveness of an organization will contribute to the overall job satisfaction. some scholars have argued that turnover is not always negative. scholars have argued that in many cases, employees who are performing well and have higher performance self-evaluated, and also those who perceive the attractiveness of the organization to which they belong high are less likely to leave their job. thus, turnover in such cases is said to be positive as those better performers are more likely to stay in the job and those who are lower performers are more likely to leave their job. in other words, the attractiveness of an organization is said to have a positive effect in the sense that it enhances the job involvement of employees of whom the organization is heavily interested and would want to retain. the fit between the individuals and the organization has been argued as one of the important factors that is also related to the overall job involvement. it has been argued that people differ in their personality traits, and that such difference lead to different personal preferences regarding the organizational culture that they would fit in. therefore, person-organization fit has been argued as one of the factors that are also related to job satisfaction (yurchisin and park, 2010). in this paper, i study some of the most influential variables on job involvement. namely, i want to test whether organizational attractiveness for employees, their pay satisfaction, and their perceived organizational support have positive association with job involvement. moreover, in this paper, i study the influence of pay satisfaction, job involvement, and person-organization fit on turnover intention. i also test a possible mediation effect for organizational support on job satisfaction through job involvement. 2. literature review and hypotheses 2.1. factors influencing job involvement 2.1.1. organizational attractiveness saari and judge (2004) argued that job involvement is one of the most influential and impacting attitudes that influence the employee decisions, productivity, and their job-related decisions. the authors argue that such employee attitude influence the organizational performance. scholars have argued that some personal traits such as psychological constructs influence the job involvement, including the dispositions (erez, 1994). the author believes that researchers have begun to explore the interrelationships between personal traits and organizational factors. moreover, scholars have been interested in how these relationships influence individuals’ decisions that are related to their career. organizational attractiveness is said to impact organizations’ ability to attract and keep highly talented individuals, which in turn leads to value-added by such unique human resource and create a competitive advantage for organizations (barney, 1991; lado and wilson, 1994; villeneuve, 1997; wright et al., 1995). however, firms need to consider that such talented employees are competed for, they are likely to have intentions to stay if the organization is attractive, well-known, and competitive, and also have a good reputation that make them proud of being members of such organizations (turban and greening, 1997). the person’s perception of the organization as being attractive and reputable is very important. it is critical that employees view their organizations as good companies to work for, appealing to their personal characteristics, contributing to their self-esteem, and also to their personal feeling of pride and achievement. however, this may be mixed with the person-organization fit. the person organization fit is another related construct of interest in the personnel psychology filed, as well as the human resource field. for instance, goodman and svyantek (1999) argued that such construct have a huge impact on the contextual performance, as well as the job satisfaction. that is, it may be the case that this fit would influence the employee performance through job involvement. therefore, it is reasonable to suppose that individuals who view their organizations as being attractive will most likely have developed passion towards their jobs in these organizations, and thus will be more involved in their jobs. thus: h1: organizational attractiveness will be positively related to job involvement. alshammari, et al.: what drives employee’s involvement and turnover intentions: empirical investigation of factors influencing employee involvement and turnover intentions? international review of management and marketing | vol 6 • issue 2 • 2016300 2.1.2. pay satisfaction the extant literature also shows that pay satisfaction and salaries increases are of great influence with regard to the job involvement. for instance, currall et al., (2005) found that pay satisfaction is positively related to involvement and performance and negatively related to the turnover intentions. however, singh and loncar (2010) finds that in some jobs, employees may be more motivated by their jobs than they are by their pay level, such as in nursing profession where they find that nurses are more motivated by their jobs than they are by the pay level. this means that in such jobs, even if the pay is either high or low, employees would still feel motivated and involved. though, there is a decent body of literature suggests that salaries and financial incentives among the top motivators and they positively affect job satisfaction, and thus, negatively affect turnover intentions. while there is a decent body of literature suggests that pay satisfaction positively affect employees’ involvement and thus organizational outcomes such as performance, and negatively influences turnover intentions (e.g., currall et al., 2005; jayasingam and yong, 2013; vandenberghe and tremblay, 2008). there is another stream of research suggests that it may not always be the case and that in some social and occupational jobs such as nursing and social work-related jobs; the job in itself may be more important. part of the job involvement is arguably attributed to other organizational variables such as perceived support and justice (till and karren, 2011). schumacher et al., (2013) tested employee-involvement. although their results were mixed with respect to the moderation effects, a direct relationship was found between pay satisfaction and involvement. in fact, some scholars have argued that employees can develop positive participation and feel more involved with their jobs when they feel satisfied (mohr and zoghi, 2008). the reasoning is that when employees feel that they are being rewarded by their organizations, they feel satisfied and put more efforts. in other words, satisfaction in all means, including financial incentives lead to improved attitudes towards work and thus employees feel more involved. fulmer et al., (2003) found that in firms where employees have positive attitudes, they worked even harder and positively contributed into their organizations’ competitive advantage because they have been satisfied with their pay, treatment, and the organizational support they received. the employee satisfaction with reward would increase their engagement in their jobs (de gieter and hofmans, 2015). further, o’driscoll and randall (1999) found that perceived organizational support and satisfaction with intrinsic rewards will were positively related to job involvement and affective commitment. the core argument is that when employees feel that their efforts are being appreciated by the organizations, and also rewarded as an expression of that appreciation in monetary terms, they will more likely develop positive feelings and attitudes that would enhance their work involvement. based upon the previous discussion and the evidence provided in the literature, i expect a positive relationship between pay satisfaction and job involvement. h2: pay satisfaction will be positively related to job involvement. 2.1.3. organizational support brown and leigh, (1996) studied the relationships between organizational climate and job involvement. the authors found that there is a strong relationship between organizational variables such as support and job involvement and performance. the perceptions of employees towards organizational climate are important in influencing their involvement, and performance (kraimer et al., 2011; 2010). o’driscoll and randall (1999) also found that when employees perceived their organizations as supportive, they are likely to increase their involvement at work. it is argued that job involvement in and off itself is an influential construct when it comes to job satisfaction and turnover. stoner and gallagher, (2010) found that job involvement is negatively related to turnover intention. furthermore, job involvement could be influenced by other variables at the organizational level such as the organization’s orientation towards achievement, differentiation, diversity; and support as suggested by hirschfeld (2002). the perceived organizational support has been a construct of interest for scholars in the organizational behavior, psychology, and hr arenas. rhoades et al. (2001) for instance found that organizational support is negatively related to voluntary turnover, and that this relationship is mediated partly by affective commitment. rhoades and eisenberger (2002) in their review paper on perceived organizational support found that perceived organizational support is related to favorable outcomes by the employees such as job involvement and satisfaction and negatively related to withdrawal behavior. eisenberger et al. (2002) studied the relationships between perceived supervisor support, perceived organizational support, and turnover. the authors find, among other findings, that perceived organizational support mediated the relationship between perceived supervisor support and turnover, suggesting that pos is a mechanism through which the effect of supervisor support on the turnover intentions occurs. the authors however, did not test a direct relationship between perceived organizational support and job involvement. hochwarter et al. (2006) found that the perceived organizational support moderates the relationship between social skills and supervisor rating of job performance, such that social skill is more strongly related to performance for employees who report low levels of organizational support. this suggests that employees, who received less support, used their social skills to influence their ratings since they did not actually perform well because of the low levels of their perceived organizational support. kraimer et al. (2010) also found that organizational support is positively related to job performance and satisfaction when the organization offers development and career advancement opportunities. however, the relationship between organizational support and job involvement is rarely tested directly. it is reasonable that when employees perceive their organizations as being supportive, they would likely be more involved, and performs better. support for this notion is found in (shoss et al., 2013), where the authors find reduced perceived organizational support negatively affect employee’s productivity. productivity of an employee is a function of several factors, and job involvement is among the important ones. overall, there is adequate evidence in the extant literature suggests that organizational support should alshammari, et al.: what drives employee’s involvement and turnover intentions: empirical investigation of factors influencing employee involvement and turnover intentions? international review of management and marketing | vol 6 • issue 2 • 2016 301 be positively associated with job involvement. it is also sensible to argue that such. therefore, h3: organizational support will be positively related to job involvement. 2.2. factors influencing turnover intentions 2.2.1. job satisfaction job satisfaction is believed to lead to reduced turnover intentions in organizational research (helm, 2013; michaels and spector, 1982; saari and judge, 2004). wright and bonett (2007) found that job satisfaction is negatively related to turnover intentions when the well-being of the employee is at low levels. rothausen et al. (2015) argued that when employees make their decisions to stay or leave their jobs, they often consider their overall well-being and identity across life domains. the argument presented by rothausen et al., is that employees who have been satisfied in their jobs will have developed such satisfaction because the job has offered what they expected with regard to their identity, values, expected pay which all result in an overall satisfaction or the opposite if their expectations were not met and their identity and values were threatened. this feelings will likely lead to preference to stay and reduced turnover intentions. job satisfaction is in fact a function of several variables at both organizational and individual levels (e.g., person-organization fit, perceived support, pay satisfaction). the literature on job satisfaction has emphasized that in many cases, when employees are satisfied with their current jobs, they develop a strong loyalty towards the workplace, and the longer they stay, the less likely they are to quit their jobs. podsakoff et al. (2007b) in their meta-analytic posited that hindrance stressors negatively affect job satisfaction and positive association with turnover, implying that satisfaction would eventually lead retention whereas dissatisfaction would probably lead turnover intention. azanza et al. (2015) found that authentic leadership positively contribute towards positive employees’ perception and overall satisfaction, which in turn leads to reduced turnover intentions. hongvichit (2015) argued that turnover intention is employee turnover behavior of the most direct antecedents. further, hongvichit argued that most research has shown that when employees have positive perceptions and have developed overall satisfaction in their jobs, they are likely to stay. since satisfaction is the ultimate goal of an employee, it is reasonable to suggest that job satisfaction will have negative effect on turnover intentions. although decent body of literature suggests that job satisfaction leads to lower turnover intentions, some scholars have argued that employees possess different psychological traits and personalities. these differences may lead to varying effects of job satisfaction on other employee and organizational outcomes, including turnover intentions (de gieter and hofmans, 2015). in support of this notion, wang et al. (2012) found that although they have low levels of satisfaction; employees in public sectors in taiwan have also lower turnover intentions than their counterparts in the private organizations. the evidence is somewhat mixed on the relationship between job satisfaction and turnover intentions. in sum, i expect that job satisfaction will be negatively related to turnover intentions. 2.2.2. job involvement o’driscoll and randall (1999) argued that employee commitment to the job (also known as job involvement) can be an antecedent to other employee outcomes such as satisfaction, performance, and also turnover intentions. they also stated that most organizations are interested in increasing employee turnover due to its potential negative effects on organizations. to do so, organizations are increasingly paying more attention to employees’ overall satisfaction through different mechanisms such as rewards and support (o’driscoll and randall, 1999). job involvement is typically defined as “the individual’s level of psychological identification with the specific job in which he or she is engaged” (kanungo, 1982). o’driscoll and randall (1999) argued that in many studies, job involvement was found strongly associated with crucial employee outcomes such as performance and satisfaction. thus, it is expected that when an employee has developed stronger involvement and attachment to the job, that would mean a strong indicator of less likelihood that the employee will develop a withdrawal behavior and therefore turnover intentions. pfeffer (1995) discussed the case of south west as an example of how employees’ positive involvement in their jobs can develop and sustain a competitive advantage for the firm. organizations are aware that in today’s global business, employees have many options to choose from, and therefore they would seek to positively influence their employees’ involvement to enhance their performance, satisfaction, and thus reduce their turnover intentions which have been shown costly to organizations. when employees feel that their organizations encourage their involvement and support them, they actually feel respect. as a result, employees develop stronger commitment and their performance is likely to increase along with their overall satisfaction, which negatively influence their turnover intentions (derakhshide and kazemi, 2014). involvement is viewed by some scholars as a mean to enhance employee citizenship behaviors, among which are the commitment to the organization (zhang, 2014). furthermore, many scholars have suggested that organizations need to pay more attention to job involvement as an important antecedent of critical employee and organizational outcomes, including turnover intentions (jayawardana et al., 2013). however, some scholars have suggested that not in all cases job involvement would mean commitment (hallberg and schaufeli, 2006). overall, i expect that job involvement will be negatively related to turnover intentions. job involvement can be a channel through which the organization increases the employee’s satisfaction. employees, who perceived the organization as supportive, will feel more engaged, involved, and therefore their job satisfaction is possibly enhanced. 2.2.3. person-organization fit the person-organization fit construct is a key in studying important organizational outcomes such as commitment, job satisfaction, and turnover intentions (andrews et al., 2011). while an employee may be attracted to an organization because of its reputation, it may not fit to the employee’s overall personality and work values. several scholars have suggested that there has been a shift in the ways that organizations prioritize their preferences with regard to hiring. the shift basically switched attention from being primarily based on knowledge, skills and abilities to hiring for organizational fit as marked through a fit between an individual’s personality, alshammari, et al.: what drives employee’s involvement and turnover intentions: empirical investigation of factors influencing employee involvement and turnover intentions? international review of management and marketing | vol 6 • issue 2 • 2016302 beliefs and values and the organization’s culture, norms and values (morley, 2007; schneider, 2001). in doing so, organizations mainly attempt to reduce the voluntary turnover which has been shown costly for organizations (michaels and spector, 1982). theory of work adjustment (dawis and lofquist, 1984) suggests that success at work is an outcome of adjustment and fit between the individual and the environment in which he/she functions. therefore, the fit between the individual and the organization has been linked to better job satisfaction and reduced turnover intentions in several studies (e.g., bretz et al., 1994). the values of an employee and their preferences might play significant role in determining the extent to which an employee would be attached and committed to the job and the organization too (andrews et al., 2011; de gieter and hofmans, 2015). when employees find an organization fit with their values, personalities, and preferences; they will likely stop searching for new jobs and their turnover intentions will be limited. this notion is even stronger when perceived job mobility and uncertainty about available substitutes exist (feldman and ng, 2007; rosenfeld, 1992). overall, i expect that person organization fit will be negatively related to turnover intentions. h4, 5, 6, and 7: job satisfaction, job involvement, personorganization fit, and organizational support will be negatively related to turnover. h8: there is a positive relationship between organizational support and job satisfaction, this relationship is, mediated by job involvement. h9: the relationship between organizational support and turnover will be mediated by job involvement. 2.3. conceptual model orgatr paysat orgsup jsat jobinvo pofit turnover 3. method 3.1. participants and procedures the data utilized in this study was created through simulation technique. the data was created by the professor for teaching purposes and permission from the professor was granted to use it for the purpose of this research, similar to a monte carlo data. the hypothetical number of participants is 371. i first tested whether the relative items of the constructs were reliable. reliability results for all the factors were above 0.78, and thus considered as acceptable level of reliability. 3.2. measures perceived organizational support was measured using 7 items. participants were hypothetically asked several questions to assess their perception of the organizational support on a scale of 1-5. cronbach’s alpha was 0.88. the questions asked as follows: (this organization cares about my opinions pos1, this organization really cares about my well-being pos2, this organization strongly consider my goals and values pos3, help would be available from this organization when i had a problem pos4, this organization would forgive an honest mistake on my part pos5, if given the opportunity, this organization would take advantage of me pos6r, this organization would show very little concern for me pos7r). it should be noted that for analysis purposes, the reverse coded items were re-coded in a way that would serve the analytical purpose of this paper. organizational attractiveness was measured using 4 items. participants were asked about their perception of how attractive the organization they work for is. the items were scaled on a scale of 1-5. cronbach’s alpha was 0.895. items included (this organization is a good company to work for attr1, i want more companies like these in my community attr2, this is an appealing company attr3, this is a very attractive company attr4). turnover was measured using three items. participants were asked about whether they have plans or think of quitting their jobs on a scale of 1-5. cronbach’s alpha was 0.806. items included (i plan to look for another job in the next few months turn1, i am currently looking for another job turn2, i will leave my company in the next 6 months turn3). job satisfaction was measured using 5 items that asked participants about their satisfaction levels with their job on a scale of 1-5. cronbach’s alpha was 0.809. items included (i am satisfied with my job js1, considering everything, i am happy with my job js2, i am content with my job js3, i enjoy the tasks that are part of my job js4, i would recommend a job like mine to a friend js5). job involvement was measured using three items on a scale of 1-5. cronbach’s alpha was 0.772. items included (i would not perform my job if i did not have to jobinv3r, my job is an important part of who i am jobinv4, i am very involved in my work jobinv5). pay satisfaction was measured using 5 items asked about employees’ satisfaction with their pay. cronbach’s alpha was 0.77. items included (my pay is below market for my position and experience paysat1r, i am unhappy with how much i am paid paysat2r, i am satisfied with the amount that i am paid paysat3, i am dissatisfied with my salary paysat4r, i am underpaid compared to others with my skills paysat5r). perceived supervisor support was measured using 5 items on a scale of 1-5. cronbach’s alpha was 0.75. items included (my supervisor cares about what i think pss1, my supervisor treats me with respect pss2, my supervisor would help me if he/she could pss3, my supervisor is supportive of what i need as an employee pss4, my supervisor genuinely cares about my well-being pss5). person-organization fit was measured using 3 items on a scale of 1-5. cronbach’s alpha was .80. items included (my personality meshes well with other employees at this company pofit3, the culture of this company emphasizes things that are important to me pofit4, i feel i can be myself working at this company. pofit5). alshammari, et al.: what drives employee’s involvement and turnover intentions: empirical investigation of factors influencing employee involvement and turnover intentions? international review of management and marketing | vol 6 • issue 2 • 2016 303 as shown above, all the reliability scales were above the generally recommended level of 0.70. therefore, it is suggested that each of the items that loaded on their respective factors actually a valid and reliable measure of the construct that we are interested in capturing using these items. 3.3. measurement model since i have two latent variables that are related to the perceived support; one represents the perceived organizational support and the other one represents the perceived supervisor support, it was more appropriate to run two different models to test the dimensionality of the factor that represents the perceived support. i wanted to test whether having each represented by one independent factor would be more appropriate than having them both combined in one factor. the results for the measurement model are reported in table 1. model one that includes two different factors for supervisor support and organizational support has a chi-square value of 1006.948/532. comparative fit index was 0.91 and tuckerlewis-index was 0.902 both are greater than the cut off criterial recommended by hu and bentler (1999). further, root mean square error of approximation value was 0.049, and standardized root mean square residual was 0.054, all meet the recommended criterion. additionally, all estimates were statistically significant for the items loadings and within acceptable range of values as recommended by (lance and vandenberg, 2002). lastly, no heywood cases were found. thus, this model fits well to the data. model 2 where i put the two factors representing the perceived support from supervisor and organization in one factor did not yield good fit indices as shown in table 1. moreover, the significant chi-square difference test indicated that the two models are significantly different and that a model with lower degrees of freedom fits the data better. in conclusion, model one is selected as the measurement model which represents good fit to the data. 4. analysis and results i used structural equation modeling to test the hypothesized relationships. the results are reported in table 2. hypotheses 1, 2 and 3 which stated that organizational attractiveness, pay satisfaction and organizational support will be positively related to the employee job involvement. none of the hypotheses was supported. results of analysis shown in table 2 indicated positive coefficients for each of the predictor variables. organizational attractiveness had a coefficient value (b = 0.04, p = 0.7 > 0.05) which indicates it is not statistically significant predictor of job involvement. pay satisfaction had a beta coefficient (b = 0.1, p = 0.13 > 0.05) not statistically significant predictor of job involvement. lastly, organizational support had also a very weak coefficient (b = 0.012, p = 0.9 > 0.05) not statistically significant. none of these variables seemed to have a significant predictive ability for job involvement. for hypothesis 4: contrary to the hypothesized relationship, job satisfaction was positively related to turnover intention (b = 0.2, p = 0.02 < 0.05). thus hypothesis 5 was not supported and the opposite found true and statistically significant. hypothesis 5 and 6 that stated a negative relationship between job involvement, person-organization fit and the turnover intention both hypotheses were supported (b = −0.22, −0.192, p = 0.001, p = 0.006). h7 was not supported, there is a negative relationship between perceived organizational support and turnover intentions but this relationship is not statistically significant (b = −0.03, p = 0.66). for the mediation effect: for hypothesis 8 which stated that the relationship between organizational support and job satisfaction will be mediated by job involvement. i did not find support for this hypothesis. the direct relationship between organizational support and job satisfaction was statistically not significant with (b = −0.08, p = 0.2). the results of bootstrap corrected bias model showed that these relationships are not statistically significant. the 95% confidence interval (ci) of the indirect effect of organizational support on job satisfaction through job involvement was (−0.502, 0.437), which contained 0 with (b = −0.033, p = 0.857). also, the indirect effect of person-organization fit on job satisfaction through job involvement did not exist. hypothesis 9 was not supported. the results showed that there is no mediation effect for job involvement between the organizational support and turnover intentions (b = 0.019, p = 0.6). also, the 95% ci contained 0 (−0.06, 0.142) (table 3). 5. discussion and conclusions in this paper, i was interested in studying the possible relationships between organizational attractiveness, pay satisfaction, organizational support and the employee’s job involvement. i expected that these three variables would be positively associated with employee job involvement. an employee who has been passionate about an organization and table 1: measurement model model chi-square/ df cfi tli rmsea srmr m1 1006.948/532 0.912 0.902 0.049 0.054 525/7* (7>2.167)m2 1531.104/539 0.817 0.798 0.070 0.095 m3 (structural) 725.8/389 0.93 0.92 0.05 0.05 cfi: comparative fit index, tli: tucker-lewis-index, rmsea: root mean square error of approximation, srmr: standardized root mean square residual table 2: regression results predictors estimate se p value predictors of job involvement organizational attractiveness 0.039 0.105 0.7 pay satisfaction 0.094 0.063 0.13 organizational support 0.012 0.096 0.9 predictors of turnover job satisfaction 0.206 0.079 0.009 job involvement −0.244 0.076 0.001 person-organization fit −0.213 0.087 0.014 organizational support −0.03 0.06 0.6 predictor of job satisfaction organizational support −0.07 0.64 0.3 se: standard error alshammari, et al.: what drives employee’s involvement and turnover intentions: empirical investigation of factors influencing employee involvement and turnover intentions? international review of management and marketing | vol 6 • issue 2 • 2016304 perceived it as being attractive would typically be more involved in his/her job. however, an employee may actually have been attracted to such organization because of the perceptions he/she has developed about the organization, and after having worked for the organization they may have not found it interesting, they may have developed different feelings towards the workplace atmosphere, and thus negative feelings have contributed towards less involvement in the job. it should also be noted that the data was randomly created, and does not actually reflect true opinions of employees; it is rather a h ypothetical situation as if in a monte carlo study. pay satisfaction also may not actually contribute to better job involvement as i expected. one possible interpretation is that not all employees are motivated by money. in fact, mitchel and meckel (1999) as well as gupta et al., (2002) among others found that financial incentives are not always good motivators for employees and may not contribute to better involvement and improved performance in terms of quality, but it may improve the performance quantity. thus, an employee may just be doing what is he required to do quantitatively to get paid, and doesn’t really have a passion or strong feelings towards the job that would make them be more involved in their jobs. organizational support may be a norm in any organization. it may have been emptied by other organizational attitudes such as supervisor-subordinates relationships; general atmosphere, bad career opportunities and advancement, and poor training; which all can make the effect of organizational support on job involvement vanish. in fact, this indicates a need perhaps for other intervening variables at the organizational level, which was beyond the aim of this study. for the relationship between job satisfaction and turnover intention, i expected a negative relationship. however, the analysis yielded an interesting positive and statistically significant relationship between these two constructs. it could be the case that when an employee is greatly satisfied, that indicates a potential talented and highly skilled employee. such talented employees are greatly desired in the labor market, they may be receiving better pay offers from other employers, which would explain the positive relationship. as i expected, job involvement and person-organization fit were negatively associated with employees’ turnover intentions. this should come as no surprise as employees develop stronger passion towards their jobs over time, they become more involved in their jobs, and they start to settle in these jobs. also, employees strive to find organizations that would fit their values and personalities, once they have found that fit, they are likely to stay in these organizations. i expected also that the effect of organizational support on job satisfaction would be at least partly mediated by job involvement. the argument is that when employees feel the organizational support, they would develop positive attitudes towards their organization, and more specifically towards their job. thus, they will start acting in a manner that would make them feel deeper involvement and stronger passion towards the job, which in turns would positively influence their job satisfaction. nonetheless, the results show no support for this hypothesis. 6. limitations as any other study, this paper has several limitations. first, the data used for the purpose of this study was randomly created and doesn’t reflect real data. second, the study did not address any interrelationships between organizational attractiveness, job involvement, and other related construct and the job satisfaction. third, although i did run possible moderation effects for several included variables as a supplementary analysis and found no support, there could be other possible moderators such as personorganization fit as a moderator of the relationship between job involvement and turnover. in other words, there are different scenarios for the interrelationships among the constructs under consideration in this study that could have been studied, which was beyond the aim of this paper. 7. future research future research could shed lights on the interrelationships among these constructs. future studies might consider possible moderators of the relationships between attractiveness, involvement, pay satisfaction and job satisfaction as well as direct relationships between these constructs. future research could also focus on the relationship between job satisfaction and turnover and search for possible mediators and moderators for such relationship as it appears to be a promising area for research due to the mixed findings. furthermore, future research can study mediation mechanisms through which the effect of perceived organizational support on job satisfaction occurs, taking into account more possible variables and also possible moderators of this relationship. more focus on obtaining true data that would reflect employees’ real opinions. in this paper, i did not want to be data driven or do any data mining. i would like to acknowledge that i did test for possible moderation effects, however, i did not hypothesize any moderation relationships and i was doing that as a supplementary analysis. references andrews, m.c., baker, t., hunt, t.g. 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(2014), impact of job involvement on organizational citizenship behaviors in china. journal of business ethics, 120(2), 165-174. . international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2019, 9(3), 112-116. international review of management and marketing | vol 9 • issue 3 • 2019112 the effect of work environment on flexible working hours, employee engagement and employee motivation aris setiyani*, djumarno, setyo riyanto, lenny ch. nawangsari doctoral management, mercu buana university, jakarta, indonesia.*email: setiyani.aris@gmail.com received: 10 march 2019 accepted: 08 may 2019 doi: https://doi.org/10.32479/irmm.8114 abstract employee engagement is one of the concentrations of the human resources department. many programs are run to increase employee engagement value from year to year. this study aims to analyze the influence of work environment and flexible working hours on employee engagement with employee motivation as an intervening variable. the respondents of this study focus on millenials supervisor up from manufacture and service company in java island, indonesia. the type of research used is quantitative with survey method. research respondents were 110 people and the data were analyzed using structural equation model analysis of moment structures. the results show that there is an influence of work life balance and flexible working hours on employee engagement. we also used sobel test to see that employee motivation have a function as a mediating or not in this study. according to the results, employee motivation has the effect of mediating between work environment and flexible working hours on employee engagement. keywords: work environment, flexible working hours, employee engagement, employee motivation, manufacture jel classifications: j5, j81 1. introduction work environment determines social, psychological, and physical life in the company (hertati, 2015), the work environment is very influential on the level of comfort of workers (soehari et al. 2019). then in carrying out the tasks in an organization the influence of the environment determines the value of the job (syafarudin 2016). as human life goes along, it is inseparable from various problems in the environment (hertati, 2016). around, human beings are environmentally, there is a very close relationship (hertati, 2015). the work environment is a condition that exists around workers (hertati, 2015). then the environment greatly influences a person in carrying out tasks that are charged (hertati, 2015). furthermore, according to hertati (2016) the work environment is a whole ranging from human resources to tools and materials faced, the surrounding environment where a person works, methods of work, and work arrangements both as individuals and as groups (hertati and sumantri, 2016). based on the book “millennial archipelago” written by hasanudin ali and lilik purwandi it was stated that >35% of indonesia’s population is a young population between 15 and 34 years. there are people who were born around 1980-2000, which we often call millenials. it is this young group that has brought about major changes in the organizations that employ them. because it means the current conditions there are 3 generations working in the organization, the millennial y generation that almost dominates the workers, generation x who has occupied strategic positions and the baby boomer generation who are almost at retirement age. with this composition, all companies must of course have their own tricks on how to deal with millenials to engage with companies, moreover the different generations certainly have far different behaviors as well, with the rapidly developing technology, this journal is licensed under a creative commons attribution 4.0 international license setiyani, et al.: the effect of work environment on flexible working hours, employee engagement and employee motivation international review of management and marketing | vol 9 • issue 3 • 2019 113 inevitably organizations have to think hard about getting candidates best and maintain high-performing workers so that organizational productivity increases rapidly. this productivity increase will increase the competitiveness of companies in the increasingly competitive of business. furthermore hertati (2016) states that flexible work is considered to provide many benefits for employees. but actually there are also losses that will be felt by employees with flexible working hours (syafarudin 2016). hertati 2015 (defining employee work involvement about internalizing the values of work goodness or the importance of work for one’s worth. furthermore, work involvement as the extent to which work performance greatly influences his self-esteem and the degree to which a person participates in the psychological work or the importance of work in his total self-image, hertati and sumantri (2016) states that individuals who have high involvement more identify themselves in their work and consider work as a very important thing in their lives that they do in life. hertati and sumantri (2016) says that job involvement (job involvement) refers to the degree to which a person psychologically sits with his organization and the importance of work for his image. he emphasized that someone who has a high work involvement can be stimulated by his work and immersed in his work. syafarudin (2016) added that employees who have a high level of involvement are very impartial and truly care about the field of work they do. someone who has a high job involvement will merge into the work he is doing. the high level of work involvement is related to organizational citizenship behavior and work performance. in addition, a high level of work involvement can reduce the number of employee absences (soehari et al. 2019). 2. literature review 2.1. millenials generations based on the book “millennial nusantara” written by hasanudin ali and lilik purwandi it was stated that >35% of indonesia’s population is a young population between 15 and 34 years. there are people who were born around 1980-2000, which we often call millenails. it is this young group that has brought about major changes, including the organizations that employ them. because it means that the current condition is that there are 3 generations working in the organization, the millennial y generation that almost dominates the workers, generation x who has occupied strategic positions and the baby boomer generation who are almost at retirement age. generation of y millenials prefers to work for organizations where they can work with technology, email communication and social media (zarim and zaki, 2015). 2.2. employee engagement according to (muthike, 2016), employee engagement can be defined as the willingness of employees to work extra, trust the organization and what they stand for in an effort to help the success of the organization. companies globally cannot find a match between profit, productivity, and employee involvement in the office jain and swami (2014), therefore some global company leaders try to align organizational strategies with talent strategies in organizations. according to employee engagement is indeed something that can be measured (trivellas et al., 2013). this is a blend of pride, satisfaction, advocacy, and retention. employee involvement has been a topic that has been widely discussed in recent years. however, there is still ambiguity, because there are differences of opinion about the variables that are positively and negatively related to employee engagement. time, place and objects that are examined can influence the results of research. hewitt (2015) states that a good company has 1 factor that can be seen, namely having a high level of employee engagement index (high employee engagement), which is characterized by several employee behaviors, among others, they talk positively about the organization where they work, they are committed to staying in the organization and they feel motivated to exert extra effort to achieve organizational goals. the results of the survey conducted by hewitt, (2015) obtained an engagement index of 60% for the average in all countries. 2.3. employee motivation there are motivational theories put forward by several experts pinder (2014). these theories emphasize the importance of understanding the factors contained in the individual that cause individuals to behave in a certain way. one of the most referenced theories of motivation is the hierarchy of needs theory proposed by abraham maslow. maslow views human needs based on a hierarchy of needs from the lowest needs to the highest needs. the basic human needs identified by maslow in order of importance are as follows: physiological needs (basic needs), security needs, affiliate needs or acceptances (social needs), award needs (esteem needs), and selfactualization. there is a positive relationship between employee motivation and performance. the higher employee motivation will add to the employee’s performance (trivellas, 2013). mikkelsen et al., 2017 said that researchers and academicians have viewed motivation as the force to behave in a specific way. 2.4. work environment a comfortable workplace can increase productivity, because employees can work well, as well as it should, a work environment that is not conducive will reduce productivity and can even cause workers not to feel at home and move to other companies that have a more conducive working atmosphere. a comfortable and conducive work environment is not only from the factors of work facilities that are fulfilled, but from the convenience of communicating and working with fellow team members. convenient facilities include, enough space to work, interior aesthetics of the workspace, lighting effects, comfort with adequate ventilation and air circulation, unobtrusive noise levels, ergonomic visual and anthropometric disturbances. according to debbie et al. (2014), companies need to improve and provide offices that are conducive to motivating and inspiring employees to work appropriately and in a productive environment. pitaloka and sofia (2014) also found that a conducive work environment has a positive effect on job satisfaction and organizational commitment. consequently, if job satisfaction and organizational commitment can be achieved then it becomes a positive source that encourages the spirit of employee involvement to work harder to achieve organizational goals (cai, 2014). setiyani, et al.: the effect of work environment on flexible working hours, employee engagement and employee motivation international review of management and marketing | vol 9 • issue 3 • 2019114 2.5. flexible working hours in a study conducted by abid and barech (2017), stating that flexible working hours can be carried out with mutually beneficial agreements between employees and management, this is intended to increase employee productivity and higher organizational profitability. hashim, (2017), also conducted research on time flexibility to provide opportunities for employees to dilute work life and family life conflicts. compared to today, organizations are under constant pressure to produce goods and services, the right quality at the right price, and when customers want it. that means that new ways of working must be found to make the best use of staff and other resources. flexible forms of work can help organizations to improve customer service by satisfied employees. 3. hypothesis by referring to the conceptual framework above, the author formulates the hypothesis as follow: h1: there is an influence of work environment on employee motivation h2: there is an influence of work environment on employee engagement h3: there is an effect of flexible working hours on employee motivation h4: there is an effect of flexible working hours on employee engagement h5: there is an influence of work environment on employee engagement through employee motivation h6: there is an effect of flexible working hours on employee engagement through employee motivation h7: there is an influence of employee motivation on employee engagement. 4. research methods this research uses quantitative approach with survey method conducted on y milenials generations of supervisor up in java, indonesia, with total sample of 110 people. all variables in the study were measured using a likert scale of 1-5. 5. results and discussion 5.1. statistical analysis statistical analysis in this research using structural equation model analysis of moment structures (sem amos). 5.2. goodness of fit model goodness of fit testing is a hypothesis testing to determine whether a set of expected frequencies is equal to the frequency obtained from a distribution. complete structure of the variables to be analyzed. can also be said as a test of compatibility or commensurate goodness between the results of observations (frequency of observations) with certain frequencies obtained based on their expectations or theoretical frequencies. after analyzing the data, we obtain a structure that has a goodness of fit model the sem amos prerequisites is as follows: service industry, sem, amos, sobel test based on the figure 1, after modifying the model, the model has a probability >0.05 (probability = 0.163), chi-square is 162.697, rmsea is 0.02 (specifications: 0.02 0.08) thus, the model has been used to test the hypothesis in this study. 5.3. significance test significance test aims to test whether there is a significant effect of endogenous variables on endogenous variables. the hypotheses built in this test are as follows: ho: there is no significant effect of exogenous variables on endogenous variables ha: there is a significant effect of exogenous variables on endogenous variables. with a significant level of 0.05, ho will be rejected if the significant value (p)<0.05 and cr>1.96, whereas if the value is significant (p)>0.05 and cr <1.96 then ho is accepted. the following are the results of the model significance test (table 1). 5.4. sobel test employee motivations work as a intervening variable. to see what the employee motivations has an effect to mediating work environment and flexible working hours on employee engagement, we used sobel test to analysis. sobel test can be done by simple way, enough to enter its value to online software http://quantpsy. org/sobel/sobel.htm the hypotheses used in the sobel test are as follows: ho: em can mediate the effect of exogenous variables on ee variables ha: em cannot mediate the effect of exogenous variables on ee variables. with a significance level of 0.05, ho is rejected if the p value of the sobel test results is <0.05 or t value >1.96 whereas if the p value is >0.05 and t value is <1.96 then ho is not rejected. (be accepted) (table 2). 6. the results of hypothesis testing and disscusions based on the results of sem analysis in the table above, some results are obtained as follows: h1: there are influences of work environment on employee motivation => accepted the p value of the work environment variable on employee motivation is very significant (p =***) with c.r marked positive at 6.282. because the p value obtained is <0.05 and cr is positive and >1.96, h1 is accepted and it is concluded that the work environment variable has a positive and significant effect on the employee motivation variable, the higher the work environment variable so will the higher the employee motivation variable, vice versa. h2: there is an influence of work environment on employee engagement => accepted setiyani, et al.: the effect of work environment on flexible working hours, employee engagement and employee motivation international review of management and marketing | vol 9 • issue 3 • 2019 115 the p value of the work environment variable on employee engagement is significant (p = ***) with c.r marked positive at 3.956. because the value of p value obtained >0.05 and c.r is positive and <1.96, h2 is accepted and it is concluded that the work environment variable has a significantly influence the employee engagement variable, h3: there is an effect of flexible working hours on employee motivation => accepted the p value of the flexible working hours variable on employee motivation is very significant (p = ***) with c.r marked positive at 9.354. because the p value obtained is <0.05 and cr is positive and >1.96, h3 is accepted and it is concluded that the flexible working hours variable has a positive and significant effect on the employee motivation. h4: there is an effect of flexible working hour on employee engagement => accepted the p value of the flexible working hours variable on the employee engagement is significant (0.008) with c.r marked positive at 2.673. because the p value obtained <0.05 and c.r is positive and cr >1.96, h4 is accepted and it is concluded that the flexible working hours variable has an significantly influence the employee engagement. h5: there is an influence of work environment on employee engagement through employee motivation => accepted from the sobel test result, we can see that the p value to correlation of compensations on employee engagement through employee motivation is 0.00000008. the value <0.05, its mean that, employee motivation has an effect as mediator of work environment on employee engagement. h6: there is an effect of flexible working hours on employee engagement through employee motivation => accepted from the sobel test result; we can see that the p value to correlation of work life balance on employee engagement through employee motivation is 0. the value >0.05, its mean that, employee motivation has an effect as mediator of flexible working hours on employee engagement. h7: there is an influence of employee motivation on employee engagement => accepted value of p value the influence of the employee motivation variable on employee engagement is very significant (p = ***) with c.r marked positive at 14,908. because the p value obtained is <0.05 and cr is positive and >1.96, h7 is accepted and it is concluded that the employee motivation variable has a positive and significant effect on the employee engagement variable. 7. conclusion the results of this study can be summarized as follows: 1. work environment have an influence on employee motivation and employee engagement. this means that good work environment can improve employee motivation and employee engagement for y millenials generations. 2. employee motivation have the effect of mediating the relationship between work environment on employee engagement. 3. flexible working hours have an influence on employee motivation and employee engagement. this means that if figure 1: result of goodness fit model table 2: result of sobel test variable correlance p‑value t‑statistics result work environment we-em-ee 0.00000008 5.36027245 has an effect mediating flexible working hours fwh-em-ee 0 7.83526201 has an effect mediating source: data processed tabel 1: result of significance test regression weights: (group number 1 ‑ default model) variable correlance estimate s.e. c.r. p label empl_motiv <--work_envi 0.369 0.059 6.282 *** par_15 empl_motiv <--fwh 0.522 0.056 9.354 *** par_17 empl_engage <--work_envi 0.167 0.042 3.956 *** par_16 empl_engage <--fwh 0.115 0.043 2.673 0.008 par_18 emp_engage <--empl_motiv 0.744 0.050 14.908 *** par_19 source: data processed setiyani, et al.: the effect of work environment on flexible working hours, employee engagement and employee motivation international review of management and marketing | vol 9 • issue 3 • 2019116 the company applies flexible working hours, can improve employee motivation and employee engagement for y millenials generations. 4. employee motivations has an effect of mediating the relationship between flexible working hours on employee engagement. references abid, s., barech, d.k. 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(2015), creating a sense of belonging for gen y at the workplace. international journal for innovation education and research, 3(5), 39-45. . international review of management and marketing | vol 6 • special issue (s4) • 2016108 international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2016, 6(s4) 108-113. special issue for “asia international conference (aic 2015), 5-6 december 2015, universiti teknologi malaysia, kuala lumpur, malaysia” psychosocial stressors in relation to unsafe acts muhammad umair javaid1*, ahmad shahrul nizam isha2, zulkipli ghazali3, naseebullah langove4 1department of management & humanities, universiti teknologi petronas, bandar seri iskandar, 32610 tronoh, perak, malaysia, 2department of management & humanities, universiti teknologi petronas, bandar seri iskandar, 32610 tronoh, perak, malaysia, 3department of management & humanities, universiti teknologi petronas, bandar seri iskandar, 32610 tronoh, perak, malaysia, 4department of management & humanities, universiti teknologi petronas, bandar seri iskandar, 32610 tronoh, perak, malaysia. *email: umairjav@yahoo.com abstract the psychosocial stressor has become a prevailing phenomenon around the globe and is the major factor contributing towards the poor health and unsafe acts (leads to accidents) of the workers. these stressors at plant turnaround maintenance process are the most neglected context in petrochemical industries of malaysia. the use of biomarkers in this study will be helpful to look into the actual health status of the workers due to psychosocial and work-related risks. the result of previous studies are contradicting and does not give a clear picture, therefore this study will particularly look into the relationship of demographic characteristics and working hours on psychosocial stress and their impact on unsafe acts. there are so many reasons that lead to accidents, but understanding the underlying reasons of these unsafe acts from the psychosocial perspective is very crucial. keywords: accidents, psychosocial stressors, petrochemical industry, unsafe act jel classification: m3 1. introduction around the globe occupational accident is considered as one of the most important problem in the workplace environment influenced by job stress and unsafe acts having significant impact on workers’ health and life (fam et al., 2010). the numbers of these occupational accidents at the workplace jumped to 120 million with 210,000 (annually) are fatal accidents that include over 500 workers who do not come home daily because they were killed due to such accidents as reported by international labour office. only in europion countries around 5,500 people lose their life each day with nearly 75,000 disability cases of the workers (who no longer able to work) are reported by european agency of safety and health at work (eu-osha). psychosocial risks and work-related stress factors are being increasingly acknowledged as major public health and safety concerns in industrialized countries (leka and cox, 2008). however, due to the technological advancement and the era of globalization these risks are not restricted to such countries. due to such advancements the physical and chemical hazards in the working environment have been controlled to some extent, but still, there is an out spurt psychosocial stressors which has not so far been seriously taken care of (rishi, 2002). there has been alarming distress related to causes of safety, health and its consequences because of psychosocial risks mainly in industrialized countries and recently the trend has shifted towards developing countries (kortum, 2007). the working conditions over the past decade has been rapidly changed with the growth and development of industrial sector, it has become more significant to bring to light the psychosocial stressors together with the physical aspects of work (hockertin, 2006). a poor work climate would lower employees’ compliance to safety rules and procedures as well their participation in organizational safety activities, resulting in higher rates of workplace accidents (tay, 2014). in a study conducted by mirza and bashir (2015) over eight different industrial sectors found that if there are no safety policies in an organization then the accidents at large scale cannot be easily controlled javaid, et al.: psychosocial stressors in relation to unsafe acts international review of management and marketing | vol 6 • special issue (s4) • 2016 109 and prevented. in general, academics have empirically shown that unsafe employee behaviors, unsafe work conditions and hazardous practices are positively related to occupational problems and illnesses at the workplace (christian et al., 2009). it has been found that physical conditions of the workplace with ergonomics and pace of the work are the most important stress factors which causes the unsafe act of the workers (fam et al., 2010). besides these occupational risks, there is a lack of awareness of psychosocial risks coupled with limited resources to deal with them that mainly arise due to the imbalances of job demands and control faced by the workers. hence, the literature exhibits that human factors in particular psychosocial risks have a significant impact in relation to unsafe acts (leads to accidents) at workplace which are still largely neglected and misunderstood in the scenario of developing countries (who, 2007a). work related stress is a burning issue in the asia pacific and psychosocial stressors at work need to be study in relation to both the psychological and physical health of the workers (dollard et al., 2014). a deprived work climate would lower employees’ acquiescence to safety rules and procedures as well their participation in organizational safety activities that results in workplace accidents (tay, 2014). research on psychosocial stressors, work stress and safety climate in eastern countries such as malaysia in general and specifically to the manufacturing industries of malaysia is lacking (azma et al., 2013). moreover to the best of authors’ knowledge there is no study on the effect of psychosocial risk factors which causes the unsafe acts on plant turnaround maintenance workers in the petrochemical industries. organizations in developed countries like america are more focused on safety production in comparison to the developing countries like malaysia, china and india where the production and profitability is the main concern (azma et al., 2013). in recent years, social security organization (socso) malaysia has been paying progressively more amounts of financial compensation to individual sufferers and the families of workplace fatalities. in 2003, it paid out a total sum of rm305 million, followed by a sum of rm889 million in 2006 and a far-fetched rm1.55 billion in 2011. the problem malaysia is facing that the number of industrial accidents are keep on increasing. in 2009 total number of cases reported 55,186 which jumped to 63,557 in 2013 as shown in the graph 1. of these, 56.48% were industrial accidents with an increase of 1.71% from 35,296 cases in 2012 to 35,898 cases in 2013 (socso, 2013). the lack of awareness towards plant turnaround maintenance is highly notable in comparison to its nourishment in the manufacturing sectors of the fast-expanding malaysian economy over the past three decades which results the potential man power loses. during the plant turnaround maintenance, on one hand large number of working force is required to carry out the maintenance activities in a short period of time and on the other hand maintenance man hours are also required as per the availability of opportunities and the amount of work required to complete the task. the plant turnaround maintenance process consists of diverse yet interconnected activities at different levels of the plant. due to different complexities the physical environment and ergonomics increase the chances of unsafe acts, potential accidents with conflicts, errors, disturbance and confusion that are greater compared to normal maintenance working environment. furthermore, the increase in societial demands to meet the target in the process of executing the turnaround maintenance activities such as conflicting goals and objectives have been placed between different facets (ghazali et al., 2014). thus, this paper proposes to investigate the impact of the antecedents of psychosocial stressors on unsafe act (leads to accidents) in the petrochemical industries of malaysia with an aim to fill the research gap in literature as understanding the root cause of any problem is the first step towards prevention. 1.1. research objectives 1. to investigate the relationship between working hours (exceed than the normal limit) of workers with the psychosocial stress and unsafe acts in the plant turnaround maintenance of petrochemical industries of malaysia. 2. to investigate the relationship between demographic characteristics (age and experience) of workers with the psychosocial stress and unsafe acts in the plant turnaround maintenance of petrochemical industries of malaysia. 2. literature review the proposed framework draws heavily on one theory; job demand control model (dcm) which has been widely studied in the job stress field. dcm pays attention to human factors in work place environment and conceptualizes the work place environment as purely one of human erection (karasek, 1998). specifically, in relation to the proposed framework where the antecedents’ of psychosocial stress in terms of high job demands like long working hours and demographic characteristics (in 55,186 57,639 59,897 61,552 63,557 50,000 55,000 60,000 65,000 2009 2010 2011 2012 2013 graph 1: number of accidents reported during 2009-2013 javaid, et al.: psychosocial stressors in relation to unsafe acts international review of management and marketing | vol 6 • special issue (s4) • 2016110 terms of age and experience) bounds exceeds over the workers low control like in terms of social support and rewards. this is the worst context of workers in terms of health and the unsafe acts which causes the accidents over the work place (jonge et al., 2000). 2.1. work hours (day/night) during 1990, many changes have taken place in the international legislation related to working hours. the objective was to limit working hours as long and mismanage working hours are hazardous to health (harrington, 2001). currently there are no working hour standards issued by osha (lerman and eskin, 2012). there are various reasons for which the demand of shift works is still on its peak. the first reason is the society’s needs for emergency services, secondly the technical need for maintain the continuous processes and finally the economic need (harrington, 2001). long working hours and shift works are the work stressors that vary significantly both in quality and quantity. long working hours means less sleep which is one of the causes of errors and accidents in workplace. long hours also create a problem of work-life balance which becomes a potential source of stress and ultimately the cause of accidents (wagstaff and lie, 2011). fatigue is related with the extended working hours, night and rotating shifts which leads to workplace accidents (lerman and eskin, 2012). the recent review exhibited that during afternoon shifts the risk of occupational injury increased by 18.3% and in night by 30.4% in comparison to morning shifts (folkard and tucker, 2003). according to the national longitudinal survey of youth compared to day shifts, employees of evening and night shifts had a high risk of injury at 43% and 30% respectively (wagstaff and lie, 2011). the study revealed that (i) it was not only the night shifts where the accidents take place (ii) increase in number of accidents were not due to long working hours on shift (kantermann et al., 2013). study revealed that both long hours and shift work affect the accidents while night shifts carries a more risk of accidents (wagstaff and lie, 2011). hence, due to the inconclusive findings the authors hypothesized the relationship between working hours with psychosocial stress and workers unsafe act in relation to the dcm: h1: psychosocial demand stressor working hours (long/shift work) have positive relationship with psychosocial stress and unsafe act. 2.2. demographic characteristics (age and experience) the assessed studies give no clear indications of age effects on work times scheduling on accident risk (wagstaff and lie, 2011) as contradicting reasoning is found in different research. one claims that older workers have higher rates of accidents because of their age and other says that they have fewer rates because of the experience. same contradicting findings revealed that young workers have higher risks of accidents because of their attitudes whereas few authors found that because of their less experience they have not exposed to hazardous work (root, 1981). one of the study has found an insignificant relationship of age and experience with unsafe acts (monazzam and soltanzadeh, 2009). another study found that there was a significant relationship between age and workplace accidents (malakouti et al., 2013). in a study the authors found a strong inverse relationship between job tenure and claim rates beyond any possible perplexing due to gender, age, industry and occupation (breslin and smith, 2006). risk of accidents are associated with the attribute of experience (chau et al., 2002). hence, due to the inconclusive findings this paper proposes further hypothesized the relationship of working hours with psychosocial stress and workers unsafe act in relation to the dcm: h2: psychosocial demand stressor age and experience have positive relationship with psychosocial stress and unsafe act. 2.3. psychosocial stress according to australian psychological society stress is defined as a feeling of being overloaded, tense and worried and it is the individual’s demand and pressure to take on the ability to cope out with it (blaug, kenyon, 2007). psychosocial stress arises when there are certain perceived risks which needs resources that are either unavailable or in the depleting stage. work related stress and psychosocial risks both are being experienced and witnessed by employees simultaneously (leka and jain, 2010) with a negative effect on employee health and safety along with business outcomes in a large number of european workplaces (eu-osha, 2014). according to health, safety and environment uk, work-related stress is defined as a unsafe reaction that people have because of excessive pressures and demands put on them at work (hse, 2013). in addition, stressful working conditions can significantly contribute in workplace injuries and illnesses because of employee’s ability to work safely (who, 2007b). study in the developing countries shows that the physical and psychosocial risks have an impact on the low back symptoms of the workers with permanent and night shift workers increased the odds (widanarko et al., 2014) which forced workers to concentrate on work for longer period of time. another study in the multicountry interheart-52 countries shows that psychosocial stressors are associated with increased risk of acute myocardial infarction (rosengren et al., 2004). the idea of using biomarkers is to detect diseases at a very early stage (reuters, 2010) within the workers who have to perform plant turnaround maintenance process. a biomarker as “any substance, structure, or process that can be measured in the body or its products and influence or predict the incidence of outcome or disease” (who, 2001). a study conducted in us which shows that psychological stress can contribute to health disparities in population with recurring stress of everyday life. in developing countries, there is a growing concern about job stress and risks associated with them in terms of organizational problems such as absenteeism, turnover below the average job performances, accidents, unsafe acts and drug abuse. taap manshor et al. (2003) found that different working conditions help to generate stress among workers and such conditions ultimately are the leading causes of accidents and errors at the workplace. in recent past, another study conducted on accidents at port sites in malaysia where authors have studied upon individual and job related factors as the two common dimensions of unsafe acts (leads to accidents). the authors found that amongst many factors, psychosocial stress and fatigue are the important factors javaid, et al.: psychosocial stressors in relation to unsafe acts international review of management and marketing | vol 6 • special issue (s4) • 2016 111 that contribute to accidents (mansor et al., 2011). hence, findings show that psychosocial risks/stress has a relation with health outcomes therefore `authors have hypothesized the relationship between psychosocial stress and workers unsafe act in relation to the dcm: h3: psychosocial stress has positive relationship with unsafe act. 3. unsafe acts in general, accidents through inherent nature are unforeseen events that may cause physical and emotional damage and industrial accident in particular is an unintended and unpredicted event that causes injury (figure 1). broadly speaking, industrial accidents can be distributed in to two groups’ i.e., unsafe conditions and unsafe behavior. it is in actual the second condition which shows that despite of good physical working conditions human factors are important factors in work accidents (issever et al., 2008). unsafe conditions include the physical and ergonomics of the workplace. for instance atmospheric temperature, poor lightning, unbearable noise, lack of machine protection, inappropriate working distances (harrell, 1995). unsafe acts may result from not having a proper training, limited know how about personal and machine protection, not much experienced, having sickness that leads to accidents, lack in concentration, lumbering and uncomfortable, having drug dependence and smoking (greiner et al., 1998). above all it’s the psychosocial stressors that are the main cause of unsafe acts of the workers. heinrich’s (1931) domino theory is the widely discussed accident causation model so far. heinrich emphasized that any injury (5th domino) is certainly triggered by an accident (4th domino) and that the accident in turn is triggered by unsafe acts and/or unsafe conditions (3rd domino) that are headed by fault of person (2nd domino) and ancestry and social environment (1st domino). psychosocial stressors mainly resides in the social environment and from here these factors start effecting the highs and lows of human behaviors and attitudes which causes the unsafe acts and ultimately ended up on the workers injury. even if the unsafe conditions i.e. the physical factors are removed from the workplace still the psychosocial stressors are there. it is not possible to limit the industrial accidents unless psychosocial stressors have been controlled properly (issever et al., 2008). several unsafe acts have been identified by researchers which has been highlighted and break down into 19 unsafe acts by (aksorn and hadikusumo, 2007) (table 1). thus, on the basis of literature review the researcher will going to investigate the proposed conceptual framework (figure 2). 4. methodology mixed methods techniques will be used for the data collection. interviews will be conducted from workers who work during the plant turnaround maintenance process which includes but not limited to production and operation, health and safety, shift supervisors, health doctor/nurses or any medical officer available on the site in order to obtain their comments and suggestions related to 19 unsafe acts as mentioned above. finally, the selected unsafe acts will be added in the final questionnaire which will be selfadministrated by the authors. during the self-administration process of questionnaire each respondent will be individually interviewed in order to determine the frequency at which worker committed the earlier mentioned unsafe acts. whereas psychosocial stress will be measured in terms of biomarkers, anxiety and burnout scales. blood pressure will be used as a biomarker for measuring the systolic and diastolic pressure for both the arms as per the protocols mentioned my american heart association (pickering et al., 2005). in quantitative method, the survey questionnaire will be distributed by using simple random sampling technique on the workers. g*power 3.1 software will be used to estimate the sample size by conducting a priori analysis by using 80% power. the effects of demographic characteristics, working hours and biomarkers will be explored through structural equation model by using smartpls 3.0 as the research objectives are predictive rather than confirmation of structural relationships (hair et al., 2011). 1 s oc ial e nv iro nm en t 2f aul t of a p ers on 3u nsa fe a cts/c ond ition s 4accide nts 5injury psychosocial risks figure 1: heinrich’s domino: the process of accident unsafe acts demographic characteristics work hours psychosocial stress [biomarkers] figure 2: proposed conceptual framework table 1: unsafe acts that cause accidents 1 working without any rights on the job 2 failure to intimate at first to secure members from danger 3 work pace is too high that crosses the speed limit as defined 4 improper handling of objects 5 object and materials are not placed at safe place 6 tools and machinery are not properly used 7 use equipment’s that are not in proper shape, design and working condition 8 inappropriate behaviors at the workplace 9 show resistance to wear ppe 10 keeping away safety equipment’s from the workplace 11 do smoking where hazardous equipment’s are placed 12 mishandling of nails and a like materials at workplace 13 dropping objects without taking care of the surroundings 14 working under the effect of drugs 15 tasks are not well defined that creates ambiguity 16 poor body language and postures while performing different tasks 17 maintaining and cleaning equipment which is under operation 18 lack of concentration while performing tasks 19 working in a physical environment which is substandard ppe: personal protective equipment javaid, et al.: psychosocial stressors in relation to unsafe acts international review of management and marketing | vol 6 • special issue (s4) • 2016112 5. discussion and conclusion we are living in the era of globalization and technological advancements where the world has captivated itself with modern equipment. all these developments have increased the efficiency and effectiveness of the plants around the world but all have failed to control the rates of accidents that are growing at substantial rates. in fact the lack of training, improper management, long working hours and many other factors have significantly affecting the mental health of workers which is the area of major concerned. recently, in one of the proposed study on psychosocial risks in relation to health and well-being the authors have predicted that higher job demands (quantitative demands, emotional demands and long working hours) in relation to limited job resources (quality of leadership, social support from colleagues and supervisors) have a very significant effect on the workers’ health and wellbeing in malaysian petrochemical industries (javaid et al., 2015). in a study conducted by parker et al. (1992) distinguishes between violation and error producing factors. according to him violation producing factors are influenced by attitudes, beliefs and group norms whereas error producing factors are due to high workload, inadequate knowledge, ability or experience, poor interface design, inadequate supervision, change stressful environment and mental state (fatigue, preoccupation, distraction, anxiety, etc.). the proposed study will look into the root causes of psychosocial stressor that causes unsafe acts (leading to accidents). organizations with a low psychosocial problem or inappropriate behavior may be prevalent because employees infer that psychological well-being is not a priority in the organization. employees develop expectancies regarding consequences for unsafe acts via observations of the other employee’s including senior management behaviors (isha, 2012). the proposed study will provide an empirical insight into inclusive relationship of psychosocial stressor with unsafe acts (leading to accidents). the study will be helpful to fill the knowledge gap in the existing literature in terms of psychosocial risks and work related stress particularly in developing countries. the results of the study have the lasting effects and will help the government, regulators, policy makers, board of directors in devising a proper human resource management system specifically during the plant turnaround maintenance time in petrochemical industries of malaysia. this will work as mechanism to reduce the stressor with effective policies and proper working hour’s schedule. references aksorn, t., hadikusumo, b.h.w. 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(2007b), the global occupational health network. geneva: world health organization. p1-32. widanarko, b., legg, s., devereux, j., stevenson, m. (2014), interaction between physical and psychosocial work risk factors for low back symptoms and its consequences amongst indonesian coal mining workers. applied ergonomics, 46pa, 158-167. 03_sadovnikova.indd international review of management and marketing | vol 5 • special issue • 201518 special issue for "media as the tool: management of social processes" international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2015, 5(special issue) 18-29. basic trends of information society development in russia compared to world’s leading countries natalia alekseevna sadovnikova1*, elena nikolaevna klochkova2,3, elena igorevna dobrolyubova4,5, oleg vladimirovich alexandrov6 1plekhanov russian university of economics, stremyanny per., 36, 117997, moscow, russia, 2plekhanov russian university of economics stremyanny per., 36, 117997, moscow, russia, 3russian presidential academy of national economy and public administration prospect vernadskogo, 82, 119571, moscow, russian federation, 4russian presidential academy of national economy and public administration, prospect vernadskogo, 82, 119571, moscow, russian federation, 5center for economic and financial consulting, sadovaya-kudrinskaya 11, 1, of. 412, 123242, moscow, russia, 6center for economic and financial consulting, sadovaya-kudrinskaya 11, 1, of. 412, 123242, moscow, russia. *email: nataliaalekseevnasadovnikova@mail.ru abstract the market of information technologies (hereinafter referred to as it) is one of the most dynamically developing markets in the global economy and public relations. the information society indicators are dynamically changing not only in the russian federation but in most foreign countries; competitive struggle for the presence on the international market of companies from some or other countries is strengthening. in that connection, regular assessment of effi ciency and performance of governmental programs and strategies implementation in the information society is an important factor creating the conditions for keeping and improving russia’s competitive advantages in the global it market. in connection with the above, the objective of this article is to study the basic trends of the global information society development, fi nding russia’s place in the global ratings by the basic indicators of the sector and fi nding key problems and ways to solve them. keywords: information and communication technologies, media environment, information technologies sector, information security, e-government jel classifi cations: d83, f21, h11, o32, o33, o24, o38, o43, r58 1. introduction dynamic development of information and communication technologies (ict) greatly affects the quality of life and economic development; information revolution of the late xx early xxi century drastically changed doing business and everyday life of the overwhelming majority of people. no wonder that the information society development is the priority for most countries of the world. in 2003, at the world summit on the information society in geneva, the declaration of principles and the plan of actions aimed at the development of the information society were adopted as a tool for the implementation of the universal declaration of human rights. the plan of actions covers on target indicators of connection and access using ict to be reached by 2015: a. ensure ict connection of villages and create collective access points; b. ensure ict connection of universities, colleges, high and prep schools; c. ensure ict connection of r and d centers; d. ensure ict connection of public libraries, cultural centers, museums, post offi ces and archives; e. ensure ict connection of health care institutions and hospitals; f. ensure connection of all local and central governmental bodies and ensure that they have web pages and e-mails; g. change the programs of all prep and high schools to include the tasks put by the information society accounting for national specifi cs; sadovnikova, et al.: basic trends of information society development in russia compared to world’s leading countries international review of management and marketing | vol 5 • special issue • 2015 19 h. provide access to tv and radio broadcasting to all the population; i. encourage the content development and create the engineering conditions which could contribute to the availability and use in internet of all world’s languages; j. ensure ict connection within reach for over half of the planet’s population (itu, 2003). one of the directions of the implementation of the declaration of principles is the development of national strategies on ict. according to the data of international telecommunications union, as on april 2010, in 162 countries the national strategies were approved for the implementation of ict and in 14 more countries such strategic documents were being developed (itu, 2011). the strategic documents aimed at the development of the information society are greatly in line with the structure of the plan of actions covering the following main components: • information and communications infrastructure; • access to information and knowledge; • growing potential; • improvement of confi dence and security in the use of ict; • favorable environment; • ict-based applications (e-government, e-commerce, e-learning, e-healthcare, e-employment, e-ecology, e-agriculture, e-science); • cultural diversity and cultural identity, language variety and local content; • mass media; • ethic aspects of the information society; • international and regional cooperation (itu, 2003). accounting to the dynamic development of ict, in many countries the strategic documents have been developed and are being implemented now, aimed not only at the achievement of the basic/global target indicators but also at further development of the information society. 2. methodology (review of strategic documents) 2.1. the european union the basic strategic document in the development of the information society is the digital agenda for europe approved by the european commission in 2010 (digital agenda for europe, 2010). that document is one of the seven priority initiatives provided for by strategy europe 2020 and is aimed at the maximization of social and economic potential of ict, especially internet, a vitally important means of economic and social activity for business, work, play, communication and self-actualization. successful implementation of the digital agenda for europe will contribute to growing innovations, economic growth and everyday life quality improvement for both individuals and business. the implementation of the digital agenda is aimed at the solution of the following key problems: • fragmentation of european digital markets; • insuffi cient opportunities of cooperation in ict; • growing cybercrime and risks of low confi dence to network resources; • insuffi cient investments in infrastructure; • insuffi cient efforts in research and innovations; • insuffi cient level of digital knowledge and skills; • missed opportunities in connection with public changes. taking those issues into account within the digital agenda, the following key fi elds of the implementation of measures are recommended for all eu member countries. • creation of strong uniform digital market (development of electronic content, support of electronic [including international] cooperation of entities, protection of rights of individuals and entities in electronic cooperation, development of single telecommunications market). within that fi eld, the introduction of the uniform european licensing system in audio and visual content is considered, as well as development of access to the information on governmental authorities/ bodies in internet, development of electronic payment systems and ensuring security in the use of it. an important unit of that fi eld’s measures is the expanding access to radio frequencies. upon the results of that fi eld, by 2015 the telecommunications prices for roaming in the eu should be equal to the national tariffs. • ensuring opportunities of technical connectivity [including m2m0 and standardization]. within that fi eld, improvement and harmonization of the technical standards and promotion of technological development ensuring connectivity opportunities is considered. • confi dence and security. within that fi eld, the measures are implemented aimed at the prevention of cybercrime, protection of personal data, ensuring security of information systems, including special measures to protect children from any harmful information, based on self-regulation. • high-speed internet access. that fi eld will be implemented being considered as ensuring europe’s competitiveness in the future economy network economy, knowledge-based. to solve that task, universal access to internet throughout europe is guaranteed with growing speed at competitive price. • research and innovations. in 2009, the value added created using ict made up a great part of the industrial production (25% in vehicle sector, 41% in consumer goods, 33% in medical sector). in that connection, lack of research in ict is a threat to industrial production development and service sector in general. the implementation of that direction suggests great growth of investments in research and innovations in ict both budget-funded and private (annual budget funding of r and d in ict from 5.5-11 billion eur by 2020 and growth of private funding from 35 to 70 billion eur). • improvement of digital knowledge, skills and ensuring inclusiveness, here it is suggested to implement the measures aimed at the popularization of ict-related professions, improvement of training programs and ensuring access to ict for physically challenged people. • ict-based advantages for public in the eu, here, measures on the use of ict are considered for increasing energy effi ciency, healthcare development, cultural development support and making creative content, e-government services (including international), traffi c control systems development. sadovnikova, et al.: basic trends of information society development in russia compared to world’s leading countries international review of management and marketing | vol 5 • special issue • 201520 the implementation of the digital agenda will ensure the achievement of ambitious targets including those in connection with ensuring access of all europeans to high-speed internet and expansion of ict advantages for socio-economic development purposes. regular monitoring of the implementation of the digital agenda shows that great progress has been made in the achievement of the targets determined. upon the results of 2012, the share of people having access to broadband internet at the speed of 30 mbit/sec at least was 53.7% (with target value of 100% by 2020) (eu 2012). in some member countries of the eu, own strategic documents were adopted on the information society development including its separate spheres. for instance, in austria the national strategy on broadband internet access till 2020 is being implemented (breitb and strategie 2020). under that strategy, broadband internet access at the speed over 25 mbit/s is provided for by 2013 and high-speed internet access for 70% of households by 2018 and 99% of households by 2020. similar plans are being implemented in other countries including germany, france, sweden (planning for progress 2013). one of the latest strategies developed was the british information society strategy (connectivity, content and consumers. britain’s digital platform for growth 2013). within that document, there are 4 basic fi elds of the uk’s digital economy making up 8% of country’s gdp: • world class communications. development of new technologies like cloud computing and interactive tv causes the broadband services demand and the connection speed requirements to grow. that fi eld’s implementation requires world’s level of digital infrastructure. as per the results of that fi eld’s implementation, the connectivity level of high-speed broadband internet should be 99% by 2018. great progress (including via the allocation of radio frequencies) will be made by 4g and 5g telecommunication services. in general, private operators will receive at least 500 mhz of radio frequencies by 2020. great efforts will be made to ensure digital inclusiveness and development of digital knowledge of the people. • world class digital content. here, further support of governmental tv and radio mass media will be provided. in particular, easy search of state channels regardless from the type of devices used will be ensured, digital content support measures will be implemented (for instance, tax exemption of videogames), intellectual property protection and digital radio development support. • consumer security. here, ict use security standards are implemented including internet (including child security and rights protection) as well as personal data protection and spam fi ghting. • cost of life. here, digital economy’s products availability is ensured including on the basis of information asymmetry elimination. here, provider change issues are considered including in the course of buying service packages, internet traffi c control, strengthening requirements to disclosure of the cost-related information, development of competition. 2.2. usa the strategic document in the usa is connecting america: national broadband plan, developed by federal commission on communications till 2020 (connecting america: national broadband plan 2010). the plan’s implementation is aimed at the achievement of the following targets: 1. at least 100 million of households in the usa should have high-speed internet access (at least 100 mbit/s) by 2020 (by 2015, at least 100 million of households in the usa should have high-speed internet access at 50 mbit/s); 2. usa should become the leading country of the world in mobile innovations having the fastest and the most developed wireless network in the world (achievement of that target requires allocation of 500 hz of radio frequencies for broadband development); 3. each american should have broadband access at a reasonable price and the means and skills for its use. the achievement of that target should cut broadband access discrimination for various social groups. 4. each community in the usa should have at least 1 gbit/sec broadband access at a reasonable price to ensure connection of social institutions including schools, hospitals, authorities. 5. to ensure the national security, each offi cial should have access to the national wireless security network. 6. to keep the us leadership in the use of pure energy sources, each american will be able to use broadband for monitoring and controlling energy consumption online. plan implementation tools are as follows: • development of policy aimed at ensuring competition in the markets and as a result ensuring the advantages for consumers, development of innovations and investments; • ensuring effi cient distribution and management of assets controlled by government, namely radio frequencies, rights to network development and competitive access to the market; • restructuring of the current tools for providing universal telecommunication services to support broadband and voice communications in the areas requiring material costs from providers; ensuring price availability of broadband access for low income americans; supporting efforts on connecting and use of ict; • improvement of regulations, standards and motivations for maximization of broadband advantages in the sectors affected by the government, for example, in education, healthcare and state management. 2.3. australia in 2011, australia approved the national digital economy strategy; in 2013, it was supplemented by advancing australia as a digital economy. the national digital economy strategy fi xed 8 goals the achievement of which will make australia one of the leading digital economies of the world by 2020: • governmental services: by 2020, four out of fi ve australians will choose to engage with the government through the internet or other type of online service; sadovnikova, et al.: basic trends of information society development in russia compared to world’s leading countries international review of management and marketing | vol 5 • special issue • 2015 21 • households: by 2020, australia will rank in the top fi ve oecd countries in the portion of households that connect to broadband at home; • businesses and not-for-profit organizations: by 2020, australia will rank in the top fi ve oecd countries in the portion of businesses and not-for-profi t organizations using online opportunities to drive productivity improvements and expand their customer base; • improved health and aged care: by 2015, 495,000 telehealth consultations will have been delivered providing remote access to specialists for patients in rural, remote and outer metropolitan areas, and by 2020, 25% of all specialists will be participating in delivering telehealth consultations to remote patients. by 2020, 90% of high priority consumers such as older australians, mothers and babies and those with a chronic disease, or their careers, can access individual electronic health records. • education: by 2020, australian schools, tafes, universities and higher education institutions will have the connectivity to develop and collaborate on innovative and fl exible educational services and resources to extend online learning resources to the home and workplace; • teleworking: by 2020, australia will have at least doubled its level of teleworking so that at least 12% of australian employees report having a teleworking arrangement with their employer; • environment and infrastructure: by 2020, the majority of australian households, businesses and other organizations will have access to smart technology to better manage their energy use; • regional australia: by 2020, the gap between households and businesses in capital cities and those in regional areas will have narrowed signifi cantly. in accordance with the amendments brought in 2013, by the end of 2017 all priority governmental services of australia should be fully available in electronic form (including the results of governmental services); by that time, all individuals will be able to use the same authentication method for access to all priority governmental services. the national digital economy strategy also covered 35 projects (initiatives) to increase labor productivity using the digital economy’s potential. their implementation spheres are different from digital knowledge improvement of the aged to telehealth (diabetes, oncology, eye diseases, palliative medicine), education, job searching, etc. ict development strategy adopted in 2010 in japan is aimed at the improvement of everyday life and cutting production costs via the development of ict infrastructure. prospective market of ict sector in japan is assessed at 10 trillion yen. the basic directions of strategy’s implementation are as follows: • open government principle support; • improvement of data use and integration in various spheres via ict; • tele healthcare and it services support; • use of ict for catastrophes prevention; • regulatory and infrastructure restructuring including radio frequencies sale auctions. strategy’s implementation is sought to support the transition from providing ict-based services to individuals to the establishment of the new society governed by sovereign citizens. 3. results the above review of strategic documents of various countries on the development of the information society allows fi xing the commonality of problems and restrictions, which are to be eliminated by those strategic documents on the development of the information society in russia and abroad. those restrictions are both infrastructure-related (telecommunications development level, fi rst of all, broadband connectivity and availability of radio frequencies for wireless communications development) and public readiness-related, availability of qualifi ed staff (insuffi cient level of digital knowledge, need to improve attractiveness of ict professions). digital imbalance, both geographical and social is considered as an important issue (including price availability of new technologies for low income people, gender imbalance in the use of ict, issues related to the access to the advantages granted by new technologies for aboriginal population, etc.). among signifi cant issues of the development of the information society, support of competition on the ict market and information security (including child-related) are studied. to a great extent, those issues are urgent in the russian context as well. it is important to note that the commonality of the information society development issues greatly determines the common approaches to their solution. surely, on the level of measures some solutions may differ (e.g., information security issues may be subject to governmental regulation in some countries while in others they may be self-regulated in respective economic sectors), but the core efforts (elimination of infrastructure-related restrictions, support of ict development on the level of r and d, realization of projects in the governmental sector, e-commerce development, ensuring information security, etc.) are rather common in all the countries studied. the commonality of the issues sought to be solved by the strategic documents in the information society sphere makes common the goals and tasks fi xed in the above strategic documents. in the analysis of foreign strategic documents it is important to note that in many of them there are components/directions underworked in the russian practice. for example, both in the eu, the usa and australia one of the priorities for the information society development is resource-effi ciency implementation (power, water, etc.). today, these countries plan telecontrol over the consumption of resources in households ensuring more rational use of resources (e.g., in the eu it is expected to save 20% of power for lighting). one of the priorities paid more attention in the oecd countries is ensuring availability of ict for low protected social groups, fi rst of all, for low income households and physically challenged people. the implementation of that priority suggests the access subsidies (like in the usa) and regulatory steps sought to ensure more information for users on the cost of paid content (mobile sadovnikova, et al.: basic trends of information society development in russia compared to world’s leading countries international review of management and marketing | vol 5 • special issue • 201522 services, internet applications), prevention of shocking billing by providers/operators (such measures are provided for in the uk). in the eu the offi cial goal is put forward to eliminate extra roaming charge for mobile communications (compared to the national tariffs). in russia the solution of that task is more fragmented: regulatory steps are made in connection with keeping the number in the event of mobile operator’s change, steps are made to cut the cost of national and international roaming, but there is no separate goal in connection with telecommunications availability, realization of the information society advantages for everyone, including for low income people and physically challenged persons within the governmental program. 4. discussion (current situation analysis and development prospects) it is important to note that foreign strategic documents highly assess both the current contribution of the ict sector in the economic development and further growth potential. not only the performance of it producers is assessed but also the effect of ict use in various production and service sectors. as assessed by the eu, ict accounts for 5% of the eu countries’ gdp but the portion of the ict sector in labor productivity is rather higher (20% directly from the development of the ict sector and 30% more from the investments in ict). in some eu countries, the share of ict in gdp is yet higher (e.g., in the uk it is 8% of gdp). according to eurostat, in 2010 the portion of the ict sector’s value added in the total gdp of 27 member countries of the eu accounted for 4.38% (eurostat, 2010). the share of ict products in the eu’s foreign trade with third countries in 2011 was 2.43% of the total export, while for some countries it was rather higher (in ireland ict products accounted for 19.35% of export to the countries not being the eu members, in finland 6.57%). according to the oecd, in 2011 the profi t of the telecommunications sector was usd 1.4 trillion or 2.95% of the total gdp of the oecd member countries (oecd 2013). in the russian federation the exact assessment of the portion of the ict sector in country’s gdp is complicated due to the absence in the all-russian classifi er of kinds of economic activities of the respective activity, causing incomplete records of the it sector’s portion in the economic results in particular. however, the telecommunication sector’s 2.4%, the portion of the it sector’s employees was 2.1% of the total employment in the economy (state program “information society (2011-2020),” 2014). in 2014, the russian federation took the 42nd place in the world by the index of development of information and telecommunication technologies with 6.7 points (the leader having 8.86). by that index, russia is greatly ahead of brics (in 2014, brazil was the 65th, china the 86th, the sar – 90th, india – the 129th out of 166 countries) (itu, 2014). but that rather high position is supported greatly by the factors not related to it. the index covers the infrastructure related to communications/telecommunications, internet access and its use, education of users. by those subindexes, the russian federation in 2008 took respectively the 45th, the 59th and the 26th places (in 2014, the 42nd, the 44th and the 18th). great difference by subindexes positions characterizes the delay in engineering matters of the information society establishment and development from the readiness of people to use the information society opportunities and thus determines the potential for the implementation of the state program of the russian federation “information society (2011-2020)” (program). second, high growth rates of the sector were ensured mainly by the emerging markets, new products/services (mobile communications, computer equipment, consulting, etc.) on the background of low level of the basic infrastructure in russia in general. table 1 lists comparative analysis of the basic indicators used for the calculation of the development of information and telecommunication technologies in russia and some foreign countries in 2014 (itu, 2014). as seen from table 1, russia is greatly ahead of developed countries regarding ict access by the number of mobile subscribers per 100 citizens and is in general on the level of the western countries by international internet traffi c capacity. however, the achievements in the latter index directly depend on the portion of internet users by which russia is greatly behind all the countries considered. russia’s falling behind by ict access subindex is mainly determined by low technical facilities of the russian households (in 2013, only 60.6% households had a computer at home and 51.2% had internet access). in 2014, those indexes well improved in russia. according to the federal statistical research on the use of it and ict networks by people, computer-owning households grew till 69.7% and those with internet access grew till 67.2% (information society development monitoring in the russian federation 2015). great falling behind of russia from western countries (1.5-2 times) by the pstn subscribers per 100 citizens was also found. meantime, data for 2012-2013 shows that in most developed countries and in a number of countries with transition economies gradual decline of that index is seen due to wider use of mobile telecommunications. meantime, to achieve the target goals of the state program “information society (2011-2020)” by russia’s place in the ict development rating it is required to ensure further growth of computer-owning and internet access by households (sadovnikova et al., 2014). in the calculation of ict use sub index, three indicators are used, and by two of them russia greatly falls behind the leading countries. by the portion of internet users russia in 2014 was over 1.5 times behind all the considered countries. according to the federal statistical research done in 2013 on the use of it and ict networks by people, that index in russia grew till 64% (including 61.4% active internet users), but to reach the top 20 level of the rating’s countries further growth is required. great russia’s delay from the leading countries was found in the number of broadband internet subscribers. meantime, the amended statistics of rosstat in 2013 on the number of mobile broadband internet users per 100 people are higher than those used by international telecommunications union for rating (according to rosstat sadovnikova, et al.: basic trends of information society development in russia compared to world’s leading countries international review of management and marketing | vol 5 • special issue • 2015 23 70.9%, according to itu 60.2%), which allows to expect further growth of the general value of that sub index in russia in 2014. the most inert sub index inside the index of development of it and ict is ict skills sub index which relates to lack of reliable statistics for all countries of the world in computer skills and bound use of the general parameters of competence and skills level (not ict-related). in that connection, separate use of ict skills sub index is not recommended in the russian strategic documents including in state program “information society (2011-2020).” currently, that sub index is used in the russian strategy for the development of information technologies (it) sector in the russian federation for 2014-2020 and till 2025 approved by the resolution of the government of the russian federation no. 2036-r of november 1, 2013 (strategy for the development of it sector in the russian federation for 2014-2020 and till 2025-2013) and its roadmap (plan of actions (roadmap) of the it sector development, approved by the resolution of the government of the russian federation 2013). in that connection, to assess the ict-related skills of people, special indexes are more suitable. such comparisons show that while in russia (according to 2013 research) only 1.6% of citizens had software writing skills using programming languages, in the eu that portion was 9.44% (2012 data) (monitoring of implementation of digital agenda in the eu 2012). as a result, only 3.1% of the eu enterprises (10 and more employees) experienced diffi culties with employing ict-skilled persons (for reference, in russia the lack of qualifi ed staff is traditionally one of the core business problems). the analysis of the current situation in the core directions of ict implementation was done using the international comparisons of the following sectors: ict infrastructure, iт sector, media environment, information security, information state, post. dynamic development of technologies and growing public need for telecommunication services (both regarding the volume of services and their quality) ensures growing requirements to universal telecommunication services. according to the federal act no. 9-fz of february 3, 2014 “on the amendments to the federal act ‘on telecommunications’” (federal act no. 9-fz 2014) in the russian federation universal telecommunication services are guaranteed, including: in communities with population over 500 persons at least one collective equipment for data transfer and internet access without subscriber’s equipment; in communities from 250 to 500 persons with collective telephone station at least one access point should be installed; access point should be connected via fi ber-optic communication line and ensure data transfer to subscriber’s equipment at least at 10 mbit/s. the implementation of those provisions ensures the creation of fi ber-optic lines for over 6.7 thousand communities with population over 500 persons and orbital satellite development to provide communications in the communities where fi ber-optic lines are economically unfeasible and/or technically impossible. communication and broadcasting satellites of the previous generation launched in 1999-2001, by 2007 have actually worked out their resources. their replacement and development of satellite communication group are required for ensuring stable operation of mobile communications, internet access in remote areas, digital tv and radio development. broadband internet is a core area of information and telecommunication infrastructure development. in 2014, 56.5% households had broadband internet access (in 2011, only 31%). however, russia is still far from the developed countries by that parameter (for reference, according to international telecommunications union, broadband internet is in 77.3% of usa households, 82.6% canadian, 87.7% french, 86.2% german and 86.2% japanese). russia falls behind many oecd countries by the number of fi xed broadband internet per 100 people (in russia 16.5, while in germany 34, in france 37.8, in the usa 28). it sector development may be held back by low economic growth rate in general and in the regional aspect which is seen in digital imbalance of it use in regional households. in 2009, in the rating of russian regions readiness to the information society, leading region’s index was over 22 times higher than that of the outsider region. in 2014, the level of the differentiation of russian regions by integrated parameters of it development dropped and was 2.3 times which also refl ects great interregional differences in it use by households and entities. table 1: basic parameters used for calculating index of information and telecommunication technologies development in 2014 parameter russia korea canada usa australia germany uk france japan ict access sub index pstn subscribers per 100 people 28.5 61.6 49.7 42.2 44.3 58.9 52.9 60.8 50.4 mobile subscribers per 100 people 152.8 111.0 78.4 95.5 106.8 119 123.8 98.5 115.2 international internet traffi c capacity per 1 user 41,246 30,306 115,948 64,089 67,099 112,369 352,583 141,511 39,211 portion of households with a computer 69.7 80.6 83.6 80.0 83.5 88.9 88.2 81.6 76.2 portion of households with internet access 67.2 98.1 82.6 77.3 83 88.7 88.4 87.7 86.2 ict use sub index portion of internet users 61.4 84.8 85.8 84.2 83.0 84.0 89.8 81.9 86.3 fixed broadband internet users per 100 people 16.6 38.0 33.3 28.5 25.0 34.6 35.7 38.8 28.8 wireless broadband internet users per 100 people 60.2 105.3 57.9 93.6 111.1 44.8 87.2 55.9 120.5 ict skills sub index literacy of adults 99.7 99 99 99 99 99 95.2 99 99 high education 95.3 97.2 103.4 93.7 135.5 101.3 95.4 109.7 101.8 higher education 76.1 98.4 66.6 94.3 86.3 61.7 61.9 58.3 61.5 source: international telecommunication union, ict: information and communication technologies sadovnikova, et al.: basic trends of information society development in russia compared to world’s leading countries international review of management and marketing | vol 5 • special issue • 201524 other infrastructure-related restrictions are kept so far. limited radio frequencies resource holds back widespread of prospective technologies in russia including 4g mobile networks, subscriber access, wireless broadband access (wimax services), digital land and satellite tv and radio broadcasting. the main problems of radio frequencies control instrument are related to approvals by ministry of defense of the russian federation on the use of frequency bands in most part of the available range, unreasonably long permission procedures due to regulatory fi xed sequence (stages) of those procedures. in 2013, the portion of radio frequencies available for use by civil radio electronic devices was 12%. a crucial factor of it sector development is the investments in r and d in ict. in 2012, the eu countries annually invested some 6.9 billion eur of budget funds for r and d in that sphere; the volume of private investments exceeds public a few times (as assessed, some 35 billion eur annually). the usa investments in that sector are 40% higher than in the eu. in russia, the portion of the domestic costs on ict r and d are 2.9% of the total volume of domestic costs on corporate r and d making up 6.1 billion usd which is insuffi cient to ensure russia’s information security. the governmental system of free terrestrial tv and radio for a few decades has been the information basis for country’s population due to geographical, social and economic reasons. for most population, the only source of tv and radio access is the terrestrial tv and radio. today, at least one tv channel is available for virtually all the population. 70% of people are able to hear radio broadcasting of the required quality, and to ensure each citizen’s access to all-russian public tv and radio channels, according to order of the president of the russian federation no. 715 of june 24, 2009 “on all-russian guaranteed public tv channels and radio channels” (order of the president of the russian federation 2009), it is required to switch from analog terrestrial broadcasting to digital. besides, it should be noted that one-third of the population uses cable or satellite tv with many digital quality channels (including hd). thus, it may be said in general that currently over 60% of russian families are able to see 20 and more tv channels. meantime, one-third of population is able to install hd tv (federal target program for the development of tv and radio broadcasting in the russian federation for 2009-2015). the content of information broadcast by mass media is not always compliant with the national interests (healthcare, socially responsible behavior, educational and professional concern, traditional cultural, moral and family values) and public expectations. in that connection, a high priority is the harmonization of mass media’s social functions for the purposes of gradual social development. in 2013, the portion of child and educational programs in the total broadcasting of all-russian federal channels was 14%; further growth of social and training function of mass media is required. an important social and educative function of mass media is the digitalization of archives. in 2014, the portion of digitalized original archives was 25.1% of the total materials. internet broadcasting growth trend requires (besides broadband development all over the country) the amendments to the regulations on observance of mass media laws and intellectual property protection in internet. a high priority is protection of children from any internet information potentially harmful to their health and/or development. the following directions are implemented: • warning trackers for parents for child-negative web pages; • blocking dangerous content; • creating white and safe zone in internet; • teaching children to work in internet individually, improvement of media skills of russian citizen (federal act no. 436-fz, 2010; federal act no. 139-fz 2012). as on 2013, media skills of the russian population were only 15% of the total population. 64% of russians are using internet, including 61.4% of active users. by that parameter, russia is on the level of central and eastern europe but falls behind the western europe (in germany 84% of people are internet users, in france 83%, in the uk 87%), in the usa (81%) and in japan (79.1%). as internet is used more widely, the safety of electronic content is getting more crucial. since the beginning of work of single automated information system (register) on november 1, 2012 “on single automated information system unifi ed register of domain names, web pages references in information and telecommunication network internet and network addresses allowing to identify web pages in information and telecommunication network internet containing the information prohibited for distribution in the russian federation” (resolution of the government of the russian federation no. 1101 of october 26, 2012), as on january 14, 2014 some 81,776 searches were processed (out of them: 34,581 drugs, 31,643 child porno, 15,552 suicide). most of the dangerous information was deleted at the stage of advising web page owners. the register contains 2,689 records, out of them 1,718 are waiting to be blocked/ deleted. out of the current records, 971 were included in register by ip after non-deletion of prohibited information (out of them: 855 drugs, 103 child porno, 13 suicide). under register, cooperation tools are provided for russian internet resources and large foreign resources like google, youtube, twitter and livejournal. 2013 was a breakthrough in piracy fi ghting in internet. in 2013, the number of legal content buyers grew: according to russian association of electronic communications they accounted for 8 million persons. thus, the number of payers for electronic content grew by 30%. to maintain and develop the national information resources and promote the russian information products in the foreign markets, the government supports a number of russian mass media (information agencies, tv and radio broadcasters, printed media). on the other hand, the membership of the russian federation in international organizations (including european broadcasting union and european audiovisual observatory) ensure information exchange with foreign countries and access to the fl ows of legal, economic, cultural and sports information. sadovnikova, et al.: basic trends of information society development in russia compared to world’s leading countries international review of management and marketing | vol 5 • special issue • 2015 25 printed media and book publishing are still important. for instance, one-fi fth of russians gets news from the press, as evidenced by sociological polls. but the production of printed information compliant with governmental and public development priorities, reliable information about higher governmental authorities, its distribution in all regions, training mass regular serious reading habit, promotion of the russian literature in the global markets require special actions. an important priority here is keeping the newspaper/magazine retail networks. in that connection, in 2013 recommendations were developed and approved together with media industry and distributors, setting forth the desirable standards for such objects (order of the ministry of communications and mass media of russia no. 197 of july 31, 2013). the ministry introduced them on the regional and large cities’ level and arranged monitoring of their implementation. the monitoring results show some interregional difference in that sphere which may affect the availability of printed media. the development of communications and mass media market, growing information openness of the government, public and individuals require their legal protection and safety, fair competition and economic interests balance of business entities. federal service for supervision in the sphere of communications, it and mass communications arranges over 20 thousand of annual inspections in exercising state control/supervision of all kinds, over half of them are fi nished by making orders on elimination of the breaches found. along with the development of it and their use in all kinds of activities, extra threats emerge including many cases of intrusions upon privacy of the russian federation citizens which violate their constitutional rights to privacy, personal and family secrets. the national level of goods and services production in it remains rather low. the russian federation falls behind the global leaders including electronic components base (global electronic market share is 0.5%). to overcome that situation, the following measures should be taken: ensuring lower rates of state non-budget funds; state support of it companies with local producer’s status. creating technoparks in high-tech and driving them to the rated output as growth points for innovational activity in the russian federation’s regions. pilot zone of russian grid network infrastructure was built including control and monitoring center, network traffi c hubs, 4 access points, 3 centers for development and adaptation of applied software packages. however, pilot zone’s results have not seen wide application. in business, electronic forms of cooperation have not gained the momentum, also due to lack of assuredness in their safety and protection of information, lack of trust in electronic payments. the infrastructure ensuring information security of electronic cooperation between governmental authorities and with people and organizations has not been created in full, including available tools of digital confi dence, open standards of information systems interaction. it distribution caused objective growth of cybercrime. however, rapid growth of acquisitive crimes is seen, while material damage increases. also, the number of cybercrimes committed by groups including transborder cybercrimes has increased. it are becoming a tool for committing traditional (non-cyber) crimes (stealing, blackmail, fraud, terrorism). in the national segment of internet, protection from negative information (drugs propaganda, porno, violence and cruelty) is not fully provided. state and public security is threatened by violent, extremist or other illegal nature web pages and the use of internet and mobile for secret communications and terrorism propaganda. those threats are of global nature. for instance, australia uses the following assessment scale for potential level of cyber terrorist attacks (table 2). information security matters affect the corporate business as well. each company in the uk receives 20 viruses annually and scans/checks their web pages many times a year. large enterprises receive a virus each week, average a virus each month. two-third of the british companies suffered deliberate harmful attacks. one-fourth of the british companies suffered material problems system’s failure or damage of system and its elements. viruses cause the highest damage and the reasons were mainly misuse of system by staff. average cost of cyberattack incident in the uk was 10,000 pounds, in large companies 120,000. one-third of the british companies experience serious problems with spam. to protect information, companies realize own information security policies (in the uk, one-third of all companies and twothird of large companies do so). information protection is a priority for russian companies as well. recently, in russia the portion of entities utilizing information protection means for the information transferred via global networks has grown up in the total number of entities studied (in 2013, 86.7% of entities compared to 70.7% in 2010). electronic signature instruments are growing (in 2013, e-signature was used by 77.2% of entities, while in 2010 66.8%), which related to the growing electronic cooperation with credit organizations and governmental services in electronic form. upon the results of 2014, the un published e-government development rating in which russia moved up to the 27th place from the 59th and came close to the developed countries. among the countries with population over 100 million, russia took the third place after the usa and japan. among the eastern europe’s countries and the commonwealth of independent states russia was the fi rst. this is the best result achieved by our country since 2003. (un e-government survey, 2014). such a signifi cant result was contributed by the measures taken by ministry of communications and mass media, including: introduction of e-government services, creating web pages of federal executive sadovnikova, et al.: basic trends of information society development in russia compared to world’s leading countries international review of management and marketing | vol 5 • special issue • 201526 authorities, harmonization of statistical monitoring in ict in compliance with the international recommendations. one of the key results in information state development was the opening of single portal of state and municipal services (spss) (single portal of state and municipal services 2015). in 2013, chairman of the government dmitry medvedev became the head of governmental commission for the use of it for improvement of life quality and business conditions (created by the resolution of the government no. 1578-r of september 3, 2013, as amended on january 29, 2014 no. 87-r). the commission developed and approved the concept of development of tools for providing state and municipal services in electronic form, approved by the resolution of the government of the russian federation no. 2516-r of december 25, 2013 (resolution of the government of the russian federation no. 2516-r of december 25 2013) which provides for further development of single portal of state and municipal services. the concepts fi xes the most wanted services applied for every day (15 federal and 20 regional and municipal services): enrollment to kindergartens and schools, civil registration, transactions with real estate and vehicles, receipt of passports, pension and other social payments which need to be improved so that people would not have to come to state authorities to receive them. it will ensure continuous saving of time in dozens of million hours each year. to decrease the cultural barrier for access to information and related new technologies, infomat’s interface was oriented for senior age people; spss hotline is working. it is important to note that a similar assessment of e-government services availability is used in the eu. it is assessed based on 12 basic services availability (declaration of income tax, job search, social preferences, personal id documents, registration of vehicles, construction permissions, admission to higher schools, applying to police, access to public libraries, receipt of certifi cates, submitting address change notifi cations, healthcare services). in average, as per 2010 data, the level of availability of those services in electronic form was 80.9%. similarly, the level of state services availability for business is assessed, using 8 basic services fully provided in electronic form: declaring social fees, corporate profi t taxes, vat, registration of companies, submitting statistical data, customs declaration, receipt of permissions in connection with ecological regulations, state procurement. the level of those e-government services in the eu in 2010 was 89% (digital agenda for europe 2015). as on the end of 2014, about 4.3% of russian citizens are registered at spss (in 2010 0.15%, in 2012 1.8%), where the information on 627 federal services and over 100,000 regional and municipal services is provided. in general, the number of citizens registered in the single id and authentication system exceeded 6 million. in general, in 2014 about 150 extra electronic services were realized at spss which contributed to the growing number of people receiving e-government and e-municipality services. the quality of those services is assessed by people higher than those provided directly by state authorities and municipalities and in multi-purpose centers. in general, the federal statistical research on the use of it and ict by people made by rosstat in 2013, 30.8% citizens of the russian federation applying for governmental and municipal services did it via internet. most often, internet was used for state services in healthcare (11.2% of state/municipal services recipients), housing and public utilities (11.1%), passports and registration at the place of residence (10.9%). shift to e-services in interaction with individuals and entities is an important priority of the information society development in the oecd countries as well (relevant task or direction were fi xed in virtually all strategic documents of foreign countries studied). according to 2013 data, 41.3% of people were communicating with state/municipal authorities in electronic form (the highest level of e-communication is in denmark, netherlands and sweden – over 75%, the lowest – in croatia, poland, bulgaria, italy and romania – under 25%). e-communication with state/municipal authorities is exercised by 87.8% of the eu entities including table 2: scale for assessment of potential cyber terrorist attacks in australia indicators meaning scale political motivation for organizing a cyber terrorist attack against australia, terrorist (s) should have rather high level (e.g., 5 out of 5 by assessment scale) of anti-australian attitude from political point of view. being motivated to fi ght against the state, terrorists are able to spread their ideology via attacks, inspire fear via attacks of state and via ict 1-5 terrorist group leaders should have advanced ict skills that potential attack level indicator requires terrorist leaders to have advanced knowledge in ict, including: tcp/ip, advanced cryptography, bot networks, biometry and other related security technologies 1-5 advanced hacking tools requires education in ict and making software like hacking utilities and hardware 1-5 access to new ict implies access of terrorist groups to the newest ict developments (biometry, advanced cryptography) 1-5 terrorist insider in an organization potential object of a terrorist attack function of a certain person in it department or other corporate departments 1-5 financing refl ects terrorist group’s resource facilities: equipment, people. financial opportunities assist in better planning, controlling, staff training 1-5 total level of potential/probability of terrorist groups for attacks 6-30 source: http://ro.ecu.edu.au/cgi/viewcontent.cgi?article=1004&context=isw, ict: information and communication technologies, tcp/ip: transmission control protocol/internet protocol sadovnikova, et al.: basic trends of information society development in russia compared to world’s leading countries international review of management and marketing | vol 5 • special issue • 2015 27 74.2% entities submitting data (fi lled in forms/applications) to state authorities in electronic form (oecd 2013). according to the results of the sociological research ordered by ministry of economic development of russia in 2013, the level of people’s satisfaction with state/municipal e-services quality was 81.4% against 77.6% regarding receipt of state/municipal services directly in state/municipal authorities (yuzhakov et al., 2014). full operation of e-government is impossible without well-tuned tools of inter-authority e-communication. in case of common communication with the authorities, state service recipients, individuals and entities, had to personally collect all the required documents going through numerous offi ces, while e-government should eliminate any problems of that kind and ideally make a state service providing not more complicated than that of a utility service (water, power, etc.). to do so, it is required that authorities and their information systems would communicate with each other exchanging all the information automatically. for the implementation of that task, inter-authority information system (iais) was created to ensure the electronic exchange of information for the purpose of state services providing. in compliance with the federal act of the russian federation no. 210-fz of july 27, 2010 “on arrangement of providing governmental and municipal services” (federal act of the russian federation no. 210-fz “on arrangement of providing governmental and municipal services” 2010), since july 1, 2012 state and municipal authorities are not entitled to ask from individuals applying for state/municipal services any documents which are available in state/municipal authorities. as of the end of 2012, 81 state authorities and 73 regions of the russian federation got connected to iais; 261 electronic services of inter-authority communication were registered; iais transfers over 2 million transactions per day; since october 1, 2011 57 million requests have been transferred via iais. by 2014, under the execution of the rf government’s resolution no. 1123-r of june 29, 2012 (resolution of the government of the rf no. 1123-r 2012), in 18 regions the information is 99% ready for submission of information to iais, but there are some regions falling behind. in february 2014 alone, over 3 million requests for regional information were sent via iais. the total number of requests from russia’s regions to federal executive authorities registered in the system reached over 252.6 million. the most active users of that information are jewish autonomous oblast, tyva republic, kalmyk republic and kemerovo oblast. as on the end of 2014, 11,000 users were registered in the system with 1 billion of real requests annually (400% annual growth). since january 1, 2012 electronic document managing system (edms) was introduced for federal executive authorities (resolution of the government of the rf no. 890 “on measures on improvement of electronic turnover in state authorities” 2012). edms has been growing at high rates in russia: in 2011-2013, annual market growth is assessed at 20-35%. the governmental sector is the core edms user in russia accounting for 40% of the market. upon the results of the research on edms implementation in the federal authorities done by ministry of communications and mass media in may, 2013, edms is used by 74 authorities, and in four of them (ministry of culture, ministry of transport, federal tax service and federal bailiff service) more than one edms were put into service. in total, in the authorities questioned, 57 edms products of 19 types are used. e-signature is available in 50 operating edms, but in 6 cases that function is not used. e-signature is not provided for and is not used in 27 edms. in 25 authorities, using edms, mobile applications are available as well. electronic document exchange was a success in pilot projects. ministry of communications and mass media developed the procedure on e-documents exchange in communications between federal executive authorities. that procedure was approved by expert council under the government of the russian federation. digital dispatch and receipt of documents with e-signature are being tested in pilot mode by a few authorities ministry of communications and mass media, central office of the government. ministry of finance and ministry of economic development which are in general ready for paperless exchange. in connection with the transfer of communications between individuals and state authorities and between authorities from paper to e-form, e-signature development mechanism became rather crucial. by the end of 2011, 134 attesting centers were included in the uniform space of confi dence and issued some 10,000 certificate of keys to e-signatures to individuals. e-signature may be used for signing applications in e-form while receiving governmental services. certifi cates and keys checking service is working in providing state services and inter-authority communication. according to rosstat data, in 2013, 77.2% of entities used e-signature to protect information transferred via global networks. postal service is the basic element of each modern state’s infrastructure. despite that its signifi cance is dropping due to decreasing written correspondence exchange as e-mail and social networks are developing, it is still an important communication instrument between the government and people (federal act no. 176-fz of july 17, 1999 “on postal service” 1999). the current situation with postal service in russia in many aspects is related to the position of the national post operator federal state unitary enterprise russian post. today, even accounting for small correspondence volume fsup russian post in unable to provide due quality services. at the same time, low salaries and qualifi cation of staff, high volume of manual work, physically and morally old facilities and a number of other internal problems do not allow to arrange good quality service in post offi ces causing queues, loss of mail and other negative results. the mounted problems of fsup russian post cause a number of consequences for the state and people, namely: bad satisfaction of people with postal services quality, online trade barriers, closing offi ces due to lack of staff, competitiveness deterioration and as sadovnikova, et al.: basic trends of information society development in russia compared to world’s leading countries international review of management and marketing | vol 5 • special issue • 201528 a result, loss of company’s fi nancial stability, growing losses and demand for governmental support of fsup russian post. all that causes social strain. meantime, the development of e-commerce and advertising market create prerequisites and bring new requirements to postal services good quality postal services are required for the promotion of e-commerce on a national basis, providing a unique opportunity for mass direct mail advertising. as shown by the foreign practice, the countries with high level of welfare have high demand on postal services. the number of mail items per one household annually including letters and parcels in germany is 525 which is 28 times higher than in russia 919 items/year), in the usa 1,755 items/year, 92 times higher than in russia. the main factor of such growth is the growing number of b2c mail. 5. conclusion the progress in the implementation of measures and steps of legal regulations provided for by the governmental program allowed russia to advance greatly in most of the international ratings assessing the readiness to the information society and the level of its development. as per the data of international telecommunications union, in 2014 russia was in the 42nd place by it development index. by some indicators of information and communication technologies development, russia is among the leading countries. it is specifi cally important that one of the above indicators is the price availability of it allowing to cut the digital imbalance between various social strata. as at the end of 2013, russia was among the top 24 countries with the highest speed of internet access which is especially impressive taking into account the geographical dimensions of our country. on the background of the high dynamics of services quality development and improvement on the broadband internet market, russia, as per the world banks’s data, keeps one of the lowest price levels for internet access. for instance, the cost of unlimited internet access in russia at 5 mbit/s does not exceed 5% of monthly income for 90% households. over 35% of russian citizens use electronic governmental and municipal services, which exerts positive impact on the satisfaction of citizens with the quality of services provided. over 12 million persons are registered users of the single portal for governmental and municipal services. since the implementation of the governmental program, russia saw dynamic development of the information and communication infrastructure, e-government tools were created and improved, the opportunity to receive state and municipal services in electronic form was obtained. elimination of unnecessary administrative barriers in the implementation of state program with the supporting measures in the it sector (including those for small it companies) contributed to the development of telecommunications infrastructure and dynamic growth of individuals’ access to good quality it services. high level of income in it sector and its rapid development compared to other economic sectors allowed to bring highly qualifi ed staff in ict. recently, some restructuring has been implemented in the information society sphere aimed to eliminate administrative barriers and ensure favorable conditions for the development of ict, improvement of services quality in ict. meantime, accounting for high international competition in ict, further steps implementation on improvement of regulations in telecommunications and mass communications. in general, russia’s goals declared in the strategic documents on the information society sphere are rather ambitious. by 2020, the russian federation is planned to enter top ten countries in the international rating of it development, expansion of radio frequencies for civil use till 18%, ensuring almost 100% of 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/untaggedcmykhandling /leaveuntagged /untaggedrgbhandling /leaveuntagged /usedocumentbleed false >> ] >> setdistillerparams << /hwresolution [2400 2400] /pagesize [612.000 792.000] >> setpagedevice . international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2020, 10(1), 79-83. international review of management and marketing | vol 10 • issue 1 • 2020 79 the model of perceived organizational support, employee engagement, organizational citizenship behavior in the environment directorate general of sea transportation ali afendi*, ari wibowo, euis happy wangloan universitas persada indonesia y.a.i. jakarta, indonesia. *email: arsyaafendi@gmail.com received: 25 october 2019 accepted: 03 january 2020 doi: https://doi.org/10.32479/irmm.9145 abstract the role of transportation is very important in supporting the development process to support public economic activities both in rural and urban areas in indonesia. adequate transportation facilities are expected to eliminate the isolation and create a stimulant in each region to be more advanced and developed evenly in all sectors of life, trade, industry, education, health, and other sectors. so it will always be needed repair and upgrading of public transport services both in terms of facilities, security systems, procedures, and human resources support. moreover, if faced with a high number of transport accidents in indonesia, the results showed that perceived organizational support and employee engagement simultaneously have a positive and significant effect on organizational citizenship behavior with a contribution of 61%. the employee engagement partially has more dominant influence on organizational citizenship behavior compared to perceived organizational support. the managerial implication of the results of this study was that to reach higher organizational citizenship behavior in environment directorate general of sea transportation, leaders must emphasize in employee engagement with removing silos as the main dimension to focus on. keywords: perceived organizational support, employee engagement, organizational citizenship behavior jel classifications: o32, m54, n75 1. introduction sea transport has a strategic role for the republic of indonesia (republic of indonesia) which has been recognized as an archipelagic country with unclos 1982. as mandated general explanation of law no. 17 year 2008 on the voyage that sea transport which have characteristics of national haulage and reach the entire region through the waters of the potential need to be developed and enhanced its role as a link between the regions, both nationally and internationally, including cross-border, because it is used as a means to support, encourage and mobilize national development to improve the welfare of the people and becomes adhesive homeland. this is evidenced by the data that from 2005 to 2013 growth in the number of sea transport companies nationwide to about 7.7% per year, growth in the provision of a national fleet of about 10% per year, and by 2013 the share of ocean freight cargo in a country ruled by national ship has reached 99.7%. in the future, national marine transportation challenges will be even greater. the demand to provide efficient national connectivity in the context of national logistics cost reduction will become a national agenda. to realize the marine highway as backbone connectivity and maritime making indonesia the world’s axis, requires major changes in the organization of sea transportation patterns over the years, both in terms of the provision of the port infrastructure, network setup. one important thing about transportation with the development of the area is accessibility. accessibility is a concept that links land use regulation systems geographically with the transportation network system that interconnects that can be accessed by outsiders who either directly or indirectly. the economic development of an this journal is licensed under a creative commons attribution 4.0 international license afendi, et al.: the model of perceived organizational support, employee engagement, organizational citizenship behavior in the environment directorate general of sea transportation international review of management and marketing | vol 10 • issue 1 • 202080 area to be slow and hampered just because of a lack of facilities and transport infrastructure. with the infrastructure, adequate transportation can open avenues of communication between regions to become the flow of people, goods, and services as the main capital of a region to grow and progress. transportation became a facilitator for an area to grow and progress as transport can improve the accessibility of an area. the role of transportation is very important in supporting the development process to support public economic activities both in rural and urban areas in indonesia. transportation benefit in question is to assist the mobility of people, goods, and other resources. also, transportation opens up opportunities inter-regional trade activities to encourage economic growth and development in each region. 2. literature review 2.1. organizational citizenship behavior the organ in luthans (2011. p. 149) defines the behavior of organizational citizenship behavior as a discretionary behavior, not directly or explicitly recognized by the normal requirements of the job, but in the aggregate can raise higher the effective functioning of the organization. george and gareth (2010) also argue that the behavior of organizational citizenship behavior refers to the behavior of individuals who make a positive contribution to the organization overall. the behavior of organizational citizenship behavior illustrates how an individual has a high initiative and is very sensitive to the state of the organization. this makes the organization highly value employees who behave organizational citizenship behavior because the behavior of organizational citizenship behavior shows how the seriousness of an employee in the service of the organization. the key to success lies in the organization of members of the organization, how the members contribute to the planning and implementation of tasks in achieving organizational goals. according to luthans (2011. p. 149) suggests five dimensions contribute to the behavior of organizational citizenship behavior, namely: 1. altruism 2. civic virtue 3. sportsmanship 4. conscientiousness 5. courtesy. 2.2. perceived organizational support perceived organizational support according to gibson et al. (2012) is also considered as a guarantee that assistance will be provided by the company when employees need to support employee performance and matters relating to a difficult situation. there is support for the organization to make a worker feel satisfaction in his work. the description is concluded from the above that the factors that influence perceived organizational support include procedural fairness, superior support, rewards, and working conditions, reliable and trustworthy organization, as well as the opportunity, got training. colcuitt et al. (2013) filed a statement based on the results of researchers analyzed that the dimensions of perceived organizational support include: 1. fair organizational procedures 2. supervisor support 3. favorable rewards and job conditions that include: recognition, pay and promotions, job security, job autonomy, and work procedures, job-related stressors, work overload, training. 2.3. justice organization district in schermerhorn et al. (2010) introduced seven dimensions of organizational fairness/justice, namely: (1) payroll regulations (pay rules), (2) payroll administration (pay administration); (3) work (workplace); (4) the level of salary (pay level); (5) the administration of the rules (rule administration); (6) the division of labor (distribution of jobs); and (7) the space for freedom level (latitude). while andre (2008) states that a justice organization has three forms. first, distributive justice (distributive justice), which is “perceived fairness of the actual decision made in an organization.” it means that distributive justice is the perceived fairness of the actual decisions made by an organization. second, procedural justice (procedural justice), which is “perceived fairness of the method used to arrive at the decision.” it means that procedural justice is the perceived fairness on the method used to arrive at a decision. third, interactional justice (interactional justice), the “perceived fairness of the interpersonal receive treatment.” this means that interactional justice is perceived justice on interpersonal treatment received. from the description of the above organization, justice can be synthesized that perceptions of organizational justice are one’s judgment about how far he was treated fairly by the organization as measured by the dimension of distributive justice, procedural justice, and interactional justice. 2.4. career development career development programs must generate a profit, both for individuals and organizations. kinicki and williams (2011) put forward three elements that must be considered in the preparation of the career development program, namely: (1) career needs assessments; (2) career opportunities; and (3) need opportunities alignment. assess the needs of career (career needs assessment) should be made by the organization in assisting each employee to make the right decisions about the development of his career. furthermore, the organization must provide information on available career opportunities (career opportunities), so employees can know the various possible positions that can be occupied. at the end of adjustment between them (need-opportunities alignment). in the implementation, the adjustment can be done with the help of a mutation or training programs and employee development. by paying attention to these three elements in career development programs, and then drafted a plan of career path (career path plan). based on the above can be synthesized that career development is a formal effort that performed continuously by the organization to focus on the development and enrichment of human resources afendi, et al.: the model of perceived organizational support, employee engagement, organizational citizenship behavior in the environment directorate general of sea transportation international review of management and marketing | vol 10 • issue 1 • 2020 81 organization to meet the needs of workers and organizations, with indicators: justice in the setting of the career, the attention to supervision, awareness career opportunities, compliance with interest and satisfaction in a career. 2.5. employee engagement employee engagement according to mcshane and von glinow (2010) is often understood as a psychological state or affective (commitment, attachment, etc.), which establish performance (role performance, business, organizational behavior), or attitude. employee engagement was first defined by quick and nelson (2011) is an effort of the members of the organization to bind themselves with their role in the work. under these conditions, people will engage and express themselves physically, cognitively and emotionally as long as he is playing the works. robbins and judge (2017) argues that employees can be divided into three types associated with their attachment level, namely: 1. engaged 2. not engaged 3. actively disengaged. according to wagner and hollenbeck (2010) states that employee engagement can be measured in the following dimensions: 1. vigor 2. dedication 3. absorption. according to quick and nelson (2011), one of the effective ways to retain employees who are engaged is to show them that they are appreciated. various forms of appreciation, one of them with career development. career development is very important for the employees in a company. the good management of career development at the company will make employees mentally and emotionally in the work feel satisfaction. 3. methodology the research method used is descriptive method of survey and explanatory survey. the type of investigation in this study is causality, which is the type of investigation which states the relationship between the perceived organizational support variables and the employee engagement variables partially or simultaneously on organizational citizenship behavior. the object of research which is the independent variable in this research is the perceived organizational support and the employee engagement. while the dependent variable is organizational citizenship behavior. the nature of this research is descriptive and verification. population is an object that is in an area and meets certain conditions related to research problems. the type of population used in this research is a limited population, which is a population that has a quantitatively clear data source that can be counted. in this research the analysis unit was is a banker in transport industry in indonesia, amounting to 113 transport industry. related to the rule of thumb in sem, hair et al. (2010) states that in determining sample size, there is a minimum ratio of 5 respondents for each parameter in the study, or 10 respondents for each parameter, or 15 respondents for each parameter. based on the rule of thumb in the sem, the comparison of 5:1 is used in this study. this study has 63 parameters (indicators), so the minimum sample size is 315 respondents. thus, the minimum size of samples taken in this study was 315 respondents. furthermore, the sampling technique used in this study was a saturated sampling technique (census). saturated sampling/census technique is a sampling technique if all members of the population are used as samples. so that the sample used in this study is the whole of the amount of income that is all transport industry in indonesia. 4. results and discussion based on table 1, all model conformity indices have a measure of the suitability of the measurement model with a good match category, which exceeds the minimum suitability of the model. full model of sem equation by using lisrel 8.80 program obtained two models, namely standardized model and t-values model, each model as shown in the following figure 1. base on figures 1 and 2, sem model measurement analysis based on the two models above in each variable shows that all indicators in the formation of exogenous latent variables transformation organizational culture and digital transformation digital; and endogenous latent variables organizational citizenship behavior have good validity, this is indicated by all indicators having standardized loading factor ≥0.5 and t count ≥1.96 (at α=5%). measurement of reliability of exogenous and endogenous latent variables has good model reliability, it is indicated by all variables having construct reliability values >0.70 (cr >0.70) and extract variance values >0.50 (ve >0,50). structural equations dm 22 tc 6 dg errorvar 39 r 61 2= + = =0 0 0 0 0 0 051 0 0 . * . * , . . . ( . ) ( . 554 0 033 0 001 4 39 11 09 11 95 468 38 ) ( . ) ( . ) ( . ) ( . ) ( . ) ( . ) (1) correlation matrix of independent variables tc dg tc 1.00 1.00 dg 0.75 (0.02) 33.09 base on equation (1) above, the path coefficient value of the perceived organizational support variable on organizational table 1: model suitability index indicator gof expected size result conclusion ukuran absolute fit gfi gfi >0,90 0,97 good fit rmsea rmsea <0,08 0,067 good fit ukuran incremental fit nnfi nnfi >0,90 0,99 good fit nfi nfi >0,90 0,99 good fit agfi agfi >0,90 0,94 good fit rfi rfi >0,90 0,98 good fit ifi ifi >0,90 0,99 good fit cfi cfi >0,90 0,99 good fit afendi, et al.: the model of perceived organizational support, employee engagement, organizational citizenship behavior in the environment directorate general of sea transportation international review of management and marketing | vol 10 • issue 1 • 202082 citizenship behavior is 0.22 with a t-value of 4.39 >1.96, so that it can be said to be significant. the path coefficient value shows that the magnitude of the effect of the perceived organizational support on organizational citizenship behavior is 0.22 with a coefficient of determination of 0.0484. based on the testing of these hypotheses, the perceived organizational support proved to have a positive and significant effect on digital maturity. based on equation 1, the path coefficient value of the employee engagement variable on organizational citizenship behavior is 0.60 with a t-value of 11.09 >1.96, so that it can be said to be significant. the path coefficient value shows that the magnitude of the effect of the employee engagement on organizational citizenship behavior is 0.60 with a coefficient of determination of 0.3600. based on the testing of these hypotheses, the perceived organizational support proved to have a positive and significant effect on digital maturity. based on equation 1, the coefficient of determination (r2) perceived organizational support and employee engagement simultaneously towards organizational citizenship behavior is 0.61, so that it can said to be significant. the magnitude of the coefficient of determination (r2) shows that the magnitude of the contribution of the influence of perceived organizational support and employee engagement simultaneously to 61% of digital maturity, while 39% is a large influence outside the variable perceived organizational support and employee engagement. the most dominant variable influencing organizational citizenship behavior is the variable employee engagement. the results of our research showed that employee engagement variable influences organizational citizenship behavior more than perceived organizational support variable with a quite high coefficient difference (0.60 vs. 0.22). it means that a leader will get higher effectiveness when he move the company’s priority to employee engagement. this doesn’t mean that perceived organizational support is not important, however the results of our research showed that by doing employee engagement the company might influence the culture transformation (correlation coefficient between the two variables is 0.75), and together they made the determinant coefficient as much as 0.61, meaning contributes to 61% of factors needed to achieve organizational citizenship behavior as defined in this research. the employee engagement variable in this research consists of dimensions: (a) setting up key performance indicators (kpi) that aligns with the digital transformation direction and goals, (b) removing silos between departments so that they work together in digital way, and (c) assuring reward structures aligned with the digital transformation direction and goals. these are the fundamentals that every leaders should do to make digital transformation happens as measured as organizational citizenship behavior index. it also implies that culture transformation will be easier to be done when the rules of the game reflected by kpi, rewards, and work structures, are set up. it is like when you want a group of people to move themselves from one place to another, it is more effective when you have already made the clear and visible signs for the track they should take. from the three dimensions of employee engagement, removing silos has the highest loading factor, it means leaders should take serious and bold actions to change the formal structures of the work process, which conventionally build departmental walls. the new ways of working in digital setting is agile and dynamic interpunctions teams, which often referred as “scrum process.” kpi and reward structures then should follow this way of working design. 5. conclusion as a conclusion, we have a big insight from this study, that can give a strong impact of perceived organizational support in managing transportation directorate, that is; to reach organizational citizenship behavior as the measure of the employee engagement, leaders should set up the employee engagement first, which will lend a strong power for perceived organizational support. this may help especially for leaders who often clueless on fighting the problem of changing the culture of their people, and don’t know where to start. the three dimensions of employee engagement, which are setting kpi, removing silos, and assuring reward structures, are also intertwin to each other. this research also showed where to start, that is to remove silos first, by creating a new way of working that is agile and interpunction working teams. the kpi set should be based on that new way of working with its goals, and then the reward structures tied to it. references andre, r. (2008), organization behavior, an introduction to your live in organizational. united states: pearson prentice hall. colcuitt, a.j., lipe, j.a., wesson, m.j. (2013), organizational behavior: figure 1: standardized model figure 2: t-value model afendi, et al.: the model of perceived organizational support, employee engagement, organizational citizenship behavior in the environment directorate general of sea transportation international review of management and marketing | vol 10 • issue 1 • 2020 83 improving performance and commitment in the workplace. new york: mcgraw-hill. george, m.j., gareth, r.j. (2010), interstanding and managing organizational behavior. london: pearson. gibson, j.l., ivancevich, j.m., donnelly, j.h., konopaske, r. (2012), organizations behavior, structure, processes. new york: mcgrawhill. p104. hair, j.f. jr., black, w.c., babin, b.j., anderson, r.e. (2010), multivariate data analysis: a global perspective. 7th ed. london, united kingdom: pearson education. kinicki, a., williams, b. (2011), management a practical introduction. new york: mcgraw-hill. luthans, f. (2011), organizational behavior, an evidence-based approach. 12th ed. united states: mcgraw-hill. mcshane, l.s., von glinow, m.a. (2010), organization behavior. 5th ed. united states: mcgraw-hill. quick, j.c., nelson, d.l. (2011), principles of organization behavior. 7th ed. new york: mcgraw-hill. robbins, s.p., judge, t.a. (2017), organizational behavior. 7th ed. harlow: pearson education limites. schermerhorn, j.r., hunt, j.g., osborn, r.n., uhl-bien, m. (2010), organizational behavior. 11th ed. united states: john willey and son. wagner, j.a. 3rd, hollenbeck, j.r. (2010), organizational behavior. new york: routledge. . international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2019, 9(6), 179-184. international review of management and marketing | vol 9 • issue 6 • 2019 179 planning and implementation enterprise resource planning module distribution management using the methods of distribution requirement planning in msmes ud adhi teknik mulyanto nugroho1, mario sariski dwi ellianto2, yusuf eko nurcahyo2* 1department of accounting, university of 17 august 1945 surabaya, indonesia, 2department of manufacturing engineering, university of 17 august 1945 surabaya, indonesia. *email: yusufekonurcahyo@gmail.com received: 30 april 2019 accepted: 10 september 2019 doi: https://doi.org/10.32479/irmm.8092 abstract the integration of computerization in the company allows the groove and access to information in the company can quickly and accurately are reinforced on all fronts. the integration of computerized currently used large companies to compete and develop is enterprise resource planning (erp). erp is the integration of all the process of information data on the organization into a system of software and hardware to achieve integration. distribution requirement planning (drp) is an operating system (production, procurement, atonia material, product distribution) occurs only as a response to the scheduling planning for every operation without taking into account the status of the real-time from the corresponding operation. msmes of skewer making machine have the name of ud. adhi teknik of standing since the year 2008 is moving in the field of making the machine as satay. msmes is located in terung kulon, sidoarjo, east java. this company does not have a distribution management system so that the process of distribution of these companies are still experiencing delays and good in the process of production and distribution process company products to customers who cause the swelling production cost, the cost of distribution and becomes dissatisfied by the customer. the method of calculation drp produce cost savings compared to the method used by the company. besides that the interval is also more than the previous one. with erp information system technology also accelerate the flow of information between the department and also the sale and purchase of. keywords: information system, enterprise resource planning adempiere, distribution requirement planning, msmes ud adhi teknik jel classifications: p4, p42 1. introduction the support of the government in the form of policies that benefit the msmes in the land cause msmes continues to experience growth that very quickly. msmes is also the pillar of the economy of people that contribute to the level of manpower absorption around 80% and contribution to the gross domestic (mulyanto, 2015). model of this great directly cause competition has great, when not ready in the face of this competition and within the time will wind mats (bankruptcy). to face this struggle msmes must immediately rearrange with modern toward from all sides especially in the side in which the integration of distribution management and computerization to business partners and consumers. the integration of computerization in the company allows the groove and access to information in the company can quickly and accurately are reinforced on all fronts noviana et al., (2016). the integration of computerized currently used large companies to compete and develop is enterprise resource planning (erp). erp is the integration of all the process of information data on the organization into a system of software and hardware to achieve integration (eko, 2012). this journal is licensed under a creative commons attribution 4.0 international license nugroho, et al.: planning and implementation enterprise resource planning module distribution management using the methods of distribution requirement planning in msmes ud adhi teknik international review of management and marketing | vol 9 • issue 6 • 2019180 the industry has a good distribution management and reactive course can control the market. the management of the distribution of a company must be able to provide product quality cheap, until the right time and varied (pamungkas, 2009). distribution requirement planning (drp) is an operating system (production, procurement, atonia material, product distribution) occurs only as a response to the scheduling planning for every operation without taking into account the status of the real-time from the corresponding operation (nofriandi, 2015). drp provide the required information distribution and manufacturing management to increase the effectiveness of the allocation of the preparation and production capacity so that service consumers can be improved and investment preparation (storage cost preparation) can be reduced suryalena (2013). msmes ud adhi teknik is small and medium business unit in the making of spare part factory machinery and production expeditious machine. the company stands in the year 2008 and is located in terung kulon, sidoarjo, east java. this company does not have a distribution management system so that the process of distribution of these companies are still experiencing delays and in the process of production company wear make model to stock and often happens chaos interaction between lini where demand exceeds the production capacity and vice versa because still there is the integration of each line that cause swelling costs and dissatisfaction by the customer. to resolve the problem then the company requires a distribution management system and at computerized erp module distributions management that can be applied and implemented from the material purchased, stock material that is the military are stealing happen often the accumulation and the lack of material as material needed so that the total cost of high supplies that will have an impact on the benefits that will be produced by the company. to address the problems in the ud. adhi teknik of us from the team researchers to do the design and implementation of system production forecasts, scheduling production and implement the system at computerized erp adempiere manufacturing module barlin (2016). by doing research that will produce a master schedule, production company business system that is integrated and computerized system would have a great impact on production and corporate earnings. 2. generation of the data prior to the implementation of the first erp system is to make the calculation using drp method and then is the implementation of the erp (sugianto, 2013). drp is an application from a number of logic material requirement planning (mrp). preparation of bill of materials (bom) on mrp replaced with bill of distribution on drp using logic time phased on point to require the procurement on the network (gaspersz, 2008). drp based on demand forecasts at the lowest level in the network that will determine the needs of the preparation on a higher level. the basic logic drp is as follows (kurniawan, 2012). 1. from the results of the local distribution forecasts, count time phased net requirement. net requirement is identified when supply level (schedule receipt+projected on hand the previous period) met by gross requirement for a period: n e t r e q u i r e m e n t = ( g r o s s r e q u i r e m e n t + s a f e t y stock) (schedule’s +projected on hand previously). the value of net requirement that were numbered (recorded) is the value of the positive value. 2. after that produced a planned order a number of net requirement the size of aspecific lot) in the period. 3. determined the day where should proceed (planned order release) to reduce the planned terjadwalnya’s orders with lead time. 4. calculated projected on hand in the period. projected on hand (projected on hand the previous period+schedule receipt+planned order’s) (gross requirement). 5. the amount planned order release become gross requirement in the same period to the next level of the distribution network. erp implementation is the implementation of company management system with the model of the concept of erp. building and designing the system erp adempiere. in this stage is done the steps of design as follows (santoso 2010): 1. planning table 1: requirements of cutting machine in pacitan project on hand: 1 lead time: 1 lot size: fpr command period good past 2017 substantially jan feb mar apr may jun jul aug sep oct nov dec the number of gross requirements 0 0 0 1 1 2 0 2 0 2 0 1 9 scheduled’s projected on-hand 1 0 0 0 1 1 1 2 1 1 1 1 0 net requirements 0 0 2 0 planned orders 0 1 3 2 2 1 planned order releases 0 0 1 3 3 2 source : the results of the analysis nugroho, et al.: planning and implementation enterprise resource planning module distribution management using the methods of distribution requirement planning in msmes ud adhi teknik international review of management and marketing | vol 9 • issue 6 • 2019 181 table 2: requirements of cutting machine in sidoarjo project on hand: 2 lead time: 1 lot size: fpr command period good past 2017 substantially jan feb mar apr may jun jul aug sep oct nov dec the number of gross requirements 1 2 1 1 2 0 1 1 1 1 0 0 11 scheduled’s projected on-hand 2 1 1 1 1 0 1 1 1 1 1 0 0 net requirements 1 1 1 0 planned orders 2 1 0 1 1 1 planned order releases 1 3 3 2 2 0 source : the results of the analysis table 3: requirements of cutting machine in kediri project on hand: 1 lead time: 1 lot size: fpr command period good past 2017 substantially jan feb mar apr may jun jul aug sep oct nov dec the number of gross requirements 0 0 2 0 0 0 1 0 2 0 2 1 8 scheduled’s projected on-hand 1 0 1 2 0 1 2 1 2 1 2 2 0 net requirements 0 0 1 0 planned order’s 0 2 0 1 1 1 1 1 1 planned order releases 2 1 2 2 1 source : the results of the analysis table 4: requirements of cutting machine in tulungagung project on hand: 1 lead time: 1 lot size: fpr command period good past 2017 substantially jan feb mar apr may jun jul aug sep oct nov dec the number of gross requirements 1 2 0 1 2 1 0 1 0 2 1 0 11 scheduled’s projected on-hand 1 2 1 2 2 1 1 2 2 2 1 0 0 net requirements 0 0 0 planned order’s 2 1 1 1 1 1 1 0 1 0 planned order releases 1 2 1 2 1 1 2 2 1 0 source : the results of the analysis table 5: requirements of cutting machine in surabaya project on hand: 1 lead time: 1 lot size: fpr command period good past 2017 substantially jan feb mar apr may jun jul aug sep oct nov dec the number of gross requirements 1 2 0 1 2 1 0 1 0 2 1 0 11 scheduled’s projected on-hand 1 2 1 2 2 1 1 2 2 2 1 0 0 net requirements 0 0 0 planned order’s 2 1 1 1 1 1 1 0 1 0 planned order releases 1 2 1 2 1 1 2 2 1 0 source : the results of the analysis nugroho, et al.: planning and implementation enterprise resource planning module distribution management using the methods of distribution requirement planning in msmes ud adhi teknik international review of management and marketing | vol 9 • issue 6 • 2019182 source: principle inventory and material management, richard j. tersine, 1998 figure 1: distribution requirement planning ta bl e 6: c os t w it h d r p t he e ng in e p ac it an si do ar jo k ed ir i tu lu ng ag un g su ra ba ya b an yu w an gi n ga nj uk l am on ga n je m be r g re si k jo m ba ng p an da an c ut r p. 4 .1 16 .0 00 r p. 1 .6 71 .0 00 r p. 2 .6 56 .0 00 r p. 3 .7 61 .0 00 r p. 1 .9 32 .0 00 r p. 6 .3 96 .0 00 r p. 3. 51 6. 00 0 r p. 2 .7 06 .0 00 r p. 5 .9 16 .0 00 r p. 2 .1 86 .0 00 r p. 2 .4 06 .0 00 r p. 2 .1 51 .0 00 pr in t r p. 9 .5 16 .0 00 r p. 1 .9 26 .0 00 r p. 5 .3 36 .0 00 r p. 6 .7 61 .0 00 r p. 2 .5 18 .0 00 r p. 1 1. 01 6. 00 0 r p. 4 .5 66 .0 00 r p. 4 .8 26 .0 00 r p. 7 .7 16 .0 00 r p. 2 .2 26 .0 00 r p. 3 .2 16 .0 00 r p. 3 .0 91 .0 00 po lis hi ng r p. 1 2. 21 6. 00 0 r p. 2 .1 66 .0 00 r p. 6 .4 36 .0 00 r p. 9 .1 06 .0 00 r p. 2 .9 64 .0 00 r p. 2 0. 99 6. 00 0 r p. 5 .6 16 .0 00 r p. 4 .7 36 .0 00 r p. 8 .9 16 .0 00 r p. 3 .6 86 .0 00 r p. 4 .1 46 .0 00 r p. 4 .5 96 .0 00 pe ru nc in g r p. 5 .6 16 .0 00 r p. 1 .8 36 .0 00 r p. 3 .6 16 .0 00 r p. 3 .7 61 .0 00 r p. 1 .8 98 .0 00 r p. 6 .7 56 .0 00 r p. 3 .1 86 .0 00 r p. 2 .7 06 .0 00 r p. 5. 01 6. 00 0 r p. 2 .9 16 .0 00 r p. 2 .3 46 .0 00 r p. 2 .1 51 .0 00 t he to ta l r p. 3 1. 46 4. 00 0 r p. 7 .5 99 .0 00 r p. 1 8. 04 4. 00 0 r p. 2 3. 38 9. 00 0 r p. 9 .3 12 .0 00 r p. 4 5. 16 4. 00 0 r p. 1 6. 88 4. 00 0 r p. 1 4. 97 4. 00 0 r p. 2 7. 56 4. 00 0 r p. 1 1. 01 4. 00 0 r p. 1 2. 11 4. 00 0 r p. 1 1. 98 9. 00 0 planning any module from the system information enterprise to suit will be used in solving the problems in the company. 2. analysis analyze the election of the module erp to adjusted with the system information erp which used to be implemented in overseas. 3. design d e s i g n i n g b u s i n e s s p r o c e s s e s a n d a d j u s t s y s t e m module information enterprise which will be used in solving the problem. 4. implementation in the implementation phase is to integrate the module that is used in the open source erp system to the real problem in the company. 5. testing after the stage was done, then the test is done program that aims to evaluate the program that has been created with a test usage. if there is still an error, and it will be done with debugging until the program can be used. 3. the results and discussion 3.1. the calculation using drp method the planning and scheduling of distribution is done on this research aims to be able to plan and control the distribution system from the company to the warehouse akbar and perdamaian (2015). so will anticipate stock out and over stock on inventory and optimize the distribution system product. recapitulation comparison product distribution 2017 presented in the table 7. 3.2. erp system design 3.2.1. the installation of software adempiere adempiere erp software installation is quite complicated because in the installation of adempiere there are 3 software in order to adempiere it can walk namely java and posgre sql. 1. prepare the installation file for the java jdk latest version 2. prepare the instalasi postgre sql files for the latest version 3. prepare the installation file a dempiere 3.2.2. module planning on the use of modules, implementation software adempiere be synergized and have the nexus between one module and the next module (integrated) azhari (2015). to clarify the relationship nugroho, et al.: planning and implementation enterprise resource planning module distribution management using the methods of distribution requirement planning in msmes ud adhi teknik international review of management and marketing | vol 9 • issue 6 • 2019 183 table 7: comparison of product distribution in 2017 the criteria the company method drp method the difference shipping (times) 576 192 384 delivery interval less regularly more regularly distribution costs rp. 365.447.000 rp. 229.511.000 rp. 135.936.000 table 8: relationship of enterprise resource planning adempiere at msmes adhi teknik number msmes adhi teknik software adempiere 1 the raw material messages purchasing 2 the production process product and pricing system 3 marketing sales 4 warehousing warehouse management 5 the data supplier, customer, workers business partners 6 material flow material management 7 production management, engine management and ppic manufacturing management table 9: analysis of difference between the company and the proposed adempiere system the process the system of the company the system of the proposed adempiere purchasing no yes sales order no yes sales account no yes manufacturing orders no yes component check (material requirement planning) no yes crp no yes boms costing no yes cost collector manufacturing no yes the acceptance of production orders to the warehouse no yes the proposal purchase (requisition) no yes material receipt no yes crp: capacity requirement planning, boms: the bill of materials table 10: proposed process system of raw material handling and distribution number the initial system company the system proposed by adempiere 1 there is no planning planning needs to take into account the structured clean, lead time and boms from the structure of the product 2 purchase request is done every time there is a demand for raw materials that could not be completed because the lack of supplies the process of minimization of purchase request is done only on every early period based on production schedule 3 a long time for the process purchase request raw material which can lead to delays in the production process delays in the production process can be avoided by the existence of planning of the coming of the raw materials in planning needs of raw materials 4 distribution lists are not regularly and many interval the distribution of the more regularly and more efficient interval 5 the cost of raw materials and large distribution the cost of raw materials and distribution more efficient source: the results of the analysis. boms: bill of materials, marsetiya, u. (2011) model adempiere module can be described in the table 8 ridho and liansari (2015). on the implementation of each module does not stand alone, some module is integrated to each other. where the data is processed into information or data output as the input data for the next process. 4. discussion analysis of the difference business process of handling of purchase, sales, manufacturing (goods and raw materials before the company does not have then the proposed system of impermanent adjusted with adempiere is can be seen the following table 9. in the table above seen that the difference between the company and the system differences with adempiere proposal. from the manufacturing system design and planning needs of the ingredients and the production capacity of the module manufacturing management started making production order and then done a check the availability of material and production capacity on each work center, where planning must consider the availability of raw materials and the capacity of the company. while the proposed system for the handling of raw materials with a focus on controlling raw materials described in the following table nur, (2010). the planning needs of the ingredients arranged requires inputs in the form of production schedule, amalgamation of products and bom, as well as the report preparation. using the planning needs nugroho, et al.: planning and implementation enterprise resource planning module distribution management using the methods of distribution requirement planning in msmes ud adhi teknik international review of management and marketing | vol 9 • issue 6 • 2019184 of the expected would happen performance improvements can be obtained due to the improvement in the purchase plan which was based on the lead time from each item can be known the greatness of material needs at each level of the ingredients in the structure of the products, preparation state automatically in database will continue to be monitored, because in drawing up plans to buy always see on the amount of preparation that owned, so that can reduce the possibility of lack of preparation and counting usage of raw material is more accurate, because it can be known dirty needs and the needs of the clean, not only on the end item, but also on each component or item on the low level. on the install process software adempiere needs some order that must be running, if passed none will also not walk properly suhendi (2016). the implementation of the module that is expected to facilitate the performance of a business. on the implementation of this module data entered in a state of complete until the output can be easily read and can become the input for the process of daily transaction enlistment next. besides that if the data to be instruction is not included then the next process will also hampered. 5. conclusion and suggestions in the final report of this we can conclude that the research has ended and produce results of the priorities as follows: 1. has been implemented and impermanent production forecasts and production scheduling with multiple regression method and linier linier method programming in msmes ud adhi engineering. 2. distribution system planning with drp method produce distribution cost savings some rp. 135.936.000, from earlier with the method used by the company of rp. 365.447.000 and after processing by the method of drp obtained the cost some rp. 229.511 1,540,000 and distribution flow more regularly. 3. has the distribution planning impermanent down there in the company. 4. has impermanent computerisasi system erp adempiere module distribution management in msmes ud adi engineering. for further research should be applied also other module erp system to msmes of skewer making machine can be developed and have a good system such as the system on a large companies that use sap erp. references akbar, r., perdamaian, r. (2015), implementasi enterprise resources planning (erp) untuk sistem informasi pembelian, penjualan dan persediaan. jurnal teknoif, 3(2), 29-40. azhari, r. (2015), implementasi enterprise resource planning (erp) pengadaan bahan baku dan pengelolaan produksi pada perusahaan furniture menggunakan adempiere (studi kasus: cv roland kencana), diploma thesis. andalas: universitas andalas. barlin, y. (2016), penerapan enterprise resources planning (erp) odoo pada sistem informasi pembelian, inventory, manufaktur, penjualan dan perizinan karyawan di usaha fajar kerupuk bawang. 1 september 2016, diploma thesis. andalas: universitas andalas. eko, n.y. (2012), penerapan enterprise resource planning (erp) adempiere pada perusahaan pt global agrotek nusantara (gan). indonesia: tesis pascasarjana teknik mesin universitas brawijaya. gaspersz, v. (2008), production planning and inventory control berdasarkan pendekatan sistem terintegrasi mrp ii dan jit menuju manufakturing 21. pt. gramedia pustaka utama. jakarta: vincent foundation. kurniawan, i.w. (2012), enterprise resource planning. yogyakarta: graha ilmu. marsetiya, u. (2011), implementasi sistem enteprise resource planning (erp) berbasis opensource pada usaha kecil menengah (ukm) (studi kasus pada perusahaan “x”). indonesia: tesis pascasarjana teknik mesin universitas brawijaya. mulyanto, n. (2015), the influence of internal system, external system and ethic to the satisfaction of user system and financial information quality along with the performance of financial accounting infromation system at private polytechnic in east java. journal of theoritical and applied information tecnology, 78(2), 181-194. nofriandi, a., kamil, h. (2015), penerapan enterprise resource planning (erp) pada sistem pembelian, penjualan dan inventory barang di mini market 7 putra. jurnal teknosi, 1(1), 29-35. noviana, b.f., rispianda, l., gita, p. (2016), rancangan implementasi enterprise resource planning berbasis open source menggunakan software odoo pada lini bisnis modul surya di perusahaan elektronika. jurnal online institute teknologi nasional, 4(1), 158-169. nur, s. (2010), analisis dan implementasi modul voucher financial management pada openerp. jurnal informatika gunadarma, 5(6), 47-58. pamungkas, b. (2009), adempiere 3.4 erp solution. birmingham: pckt publishing. ridho, a., liansari, g.p. (2015), implementasi sistem material requirement planning (mrp) enterprise resource planning (erp) di pt. xyz menggunakan software odoo. jurnal online institute teknologi nasional bandung, 3(3), 1-14. santoso, a. (2010), implementsai erp langkah demi langkah dengan adempiere. batam: alpha media. suhendi, h. (2016), perbandingan modul payroll open erp (odoo) dengan modul payroll adempiere. jurnal sains, jurusan sistem informasi, sekolah tinggi teknologi terpadu nurul fikri, 13(2), 136-145. sugianto, y., rudi, l., hendro, s.t. (2013), implementasi aplikasi adempiere pada proses bisnis jasa angkutan barang pada pt sinar aji cepat bhayangkara pekalongan, fakultasi teknologi informasi. salatiga: universitas kristen satya wacana. suryalena, s. (2013), enterprise resource planning (erp) sebagai tulang punggung bisnis masa kini. jurnal aplikasi bisnis, 2013, 145-154. tersine, r.j. (1998), principle inventory and material management. north-holland: elsevler science publishing co., jnc. tx_1~at/tx_2~at international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2023, 13(2), 36-44. international review of management and marketing | vol 13 • issue 2 • 202336 understanding marketing communications strategies during and post covid 19: a south african perspective marlini moodley, dipolelo fungile, farai nyika*, winiswa mavutha management college of southern africa (mancosa), durban, south africa. *email: farai.nyika@mancosa.co.za received: 25 december 2022 accepted: 05 march 2023 doi: https://doi.org/10.32479/irmm.13946 abstract the impact of the covid-19 pandemic resulted in a shift in consumer behaviour, as there was an increase of 1st-time e and m-commerce shoppers. this resulted in south african marketers adjusting to digitisation by creating clear communication and marketing strategies. the research objectives of this study were to understand how south african brand and marketing managers adapted to the covid pandemic and to comprehend how marketing communication strategies in general have changed since. a qualitative methodology of structured interviews was conducted. a convenience sampling method was used to select the participants. the research findings indicate that the eight managers interviewed relied on face-to-face interaction with the customer through in store promotions and events before covid-19. several interviewees stated that communication on product benefits and features relied heavily on in-store activations. however, during the covid-19 pandemic, all marketers who participated in the study revealed that they invested in digital communications. as more brands and businesses used digital platforms and social media to drive their products, marketers had to work on communicating to convert into sales, but they also increased customer engagement. the study highlights how innovative marketing communication strategies in the post covid environment leads to an agile enterprise having a competitive advantage. the study also highlights the importance of understanding income and demographics of the south african customer in different regions of the country, as that influences the marketing strategies used. keywords: consumer behaviour, marketing communication strategies, digitisation, covid-19. jel classifications: m31; d1; o31 1. introduction the hard lockdown imposed on south africa (s.a) in response to the outbreak of the covid-19 virus in 2020 posed a vast challenge in terms of the way marketing communications were conducted by businesses. during the pandemic, marketers were unable to utilise traditional marketing communications methods to reach their customers, such as television commercials, face-toface campaigns, product sampling or in store advertisements as many establishments were mothballed (sheth and kellstadt, 2020). traditional marketing tries to persuade potential customers by highlighting the qualities and advantages of a product or service (kapoor and kapoor, 2021). however, communication is frequently uni-directional, as the marketer must rely on potential clients to read, hear, or see what you have to say. even though some marketers had gradually started changing their marketing communication strategies to best suit digital transformation through the internet long before the covid-19 pandemic, there were still many traditional marketing communication strategies in practice (de pelsmacker et al., 2018; vieira et al., 2019). south african marketers had to find a way of communicating with customers during the lockdown, being mindful of their tone and message as well as the current environment. increased entry of 1st-time online/e-commerce users in s.a. contributed to a shift in marketing communication strategies and a focus towards digitalisation, which is “transforming business processes by leveraging digital technologies, ultimately resulting in opportunities for efficiencies and increased revenue”. according to kalbarczyk-guzek (2022), the covid-19 pandemic has presented marketers with an additional this journal is licensed under a creative commons attribution 4.0 international license moodley, et al.: understanding marketing communications strategies during and post covid 19: a south african perspective international review of management and marketing | vol 13 • issue 2 • 2023 37 challenge, showing that the future is unpredictable and businesses and agencies that have prepared for success in the future are more likely to withstand any changes that may come their way. marketers are to adjust to these changes by creating clear strategies and keeping a constant state of readiness to deal with the fourth industrial revolution (4ir). the 4ir is “a new chapter in human development, enabled by extraordinary technology advances…that are merging the physical, digital and biological worlds in ways that create both huge promise and potential peril” (wef, 2022). adversity forces innovation and the post covid marketing landscape is vastly different to what was the norm before 2020 (fenitra et al., 2022). some of the major changes that have been adopted by marketers include interactive marketing – where customers’ actions and preferences serve as the catalysts for interactive marketing campaigns (mcdonald, 2022). this moves the focus away from campaign centric marketing that has traditionally been a mainstay in the industry (wang, 2021). marketers’ efforts to provide customer friendly and customised experiences are aided by the expanding use of virtual and augmented reality technologies (rauschnabel et al., 2022; zanger et al., 2022). according to van den bergh and behrer (2011), marketers that continue to promote the benefits of their brands through traditional means are no longer successful. campaign-based marketing still has a crucial place in the marketers’ toolbox, but the use of technology and artificial intelligence to support smarter, less expensive, and more sustainable marketing practices are now common (kopalle et al., 2022). this technology forces the post covid marketer to compete with entities that have very little, if any, fixed costs; and customers can now filter information about products in a way that cuts out suppliers (mcdonald, 2022). 1.1. research problem the research problem relates to the changing nature of what a post covid customer is, and what that means for marketers. as customers’ demands changed, brands could no longer segment their customers as they were accustomed to before the pandemic. according to sridhar (2021), 71% of consumers will use social media daily, more than ever before. covid-19 had a significant impact on the increase. because of social isolation and the rise of remote employment, consumers primarily used social media for communication, engagement, and transaction. in addition, consumers use social media as a tool to learn about brands, it is almost as prevalent as radio or tv advertisements and wordof-mouth. in the future, one in three consumers said they would prefer to learn about brands in this manner. however, consumers are increasingly turning to social media to find brands and make purchases from them. social media is a very important influencer of purchasing decisions and more than half (51%) of buyers research a product or service before buying, by reading reviews on forums or social media. customers use platforms like instagram, tiktok, twitter and review websites like hello peter to praise, defend, and criticise various goods and services. the unfiltered opinions of peers who have used a product or interacted with a company are more likely to be trusted by customers. these meant customers were no longer dependent on brands for product knowledge and buying behaviours. to accommodate these changes, brands had to become more customer centric in their strategies. customer centricity involves understanding customers’ lifestyles, perceptions, and expectations. brand loyalty became outdated as customers opted for the most convenient and affordable brand at any given point in time. barysevich (2020) concurs, stating, that not only is the consumer journey getting shorter, but it is also getting more difficult. users now have easier access to product research because of social media. for instance, if a customer sees a product on instagram, they can instantly look up the hashtag to read other reviews and determine whether to purchase the item. customers spend more time researching and visiting more review sites as a result. the second element of the research problem is that many south africans still do not have easy access to technology. this resulted in several brands losing sales during this time, as they were not able to communicate with their customer base holistically. customers in underdeveloped communities did not have access to magazines, newspapers, or catalogues and no face-to-face communication could take place. these customers were disadvantaged during the pandemic. on the contrary, customers in suburban areas quickly adapted to the new norm as more and more businesses shifted to online marketing, which included various social media networks. some businesses began offering same-day delivery services to their urban customers. this resulted in customer behaviours and preferences changing drastically. therefore, customer retention had to become a huge focus for brands. as customers started living through their mobile phones, they were exposed to a completely different experience. however, considering that, south africa is an underdeveloped or developing country, brands cannot only focus on digitisation. as mentioned above, a large proportion of the population does not have access to electricity, and the majority of south africans have not adopted technological advancements. this means that brands still need to focus on traditional marketing to accommodate this customer base. with these being ‘back to normal’, to create a competitive advantage, brands need to incorporate both traditional and digital marketing communication strategies for their customers and segment them accordingly. our research objectives are twofold: to understand how south african brand managers adapted to the pandemic and to comprehend how marketing communication strategies in general have changed since the pandemic. 1.2. significance of this study the significance of this study is that it highlights how innovative marketing communication strategies in the post covid environment leads to an agile enterprise having a competitive advantage (ibm, 2022). understanding these strategies is essential for marketing success in the 4ir. the study also highlights the importance of understanding the income and demographics of the south african customer in different regions of the country as that influences the marketing strategies that are used. 2. literature review 2.1. marketing communications contemporary marketing requires more than the business producing a good product, pricing it appealingly, and ensuring that moodley, et al.: understanding marketing communications strategies during and post covid 19: a south african perspective international review of management and marketing | vol 13 • issue 2 • 202338 it is available to the targeted customer groups. businesses also need to communicate with their existing as well as prospective customers as well as with the public. the marketing communication mix comprises of nine key methods of communication: “advertising, online communication and social media, mobile communication, direct marketing, events and experiences, word of mouth, publicity and public relations, personal selling, and packaging” (chernev, 2019). the communication process consists of nine elements: “sender, receiver, message, media, encoding, decoding, response, feedback, and noise” (kotler et al., 2019; hemonnet-goujot et al., 2020). to communicate their message, marketers must consider the way the targeted audiences generally decode messages. they also need to transfer their message via effective media that reach their targeted audience and cultivate feedback channels to track reactions to the message (kartajaya et al., 2021). developing effective communication requires eight steps: “(1) identify the target audience, (2) choose the communication objectives, (3) design the communication, (4) select the communication channels, (5) set the total communication budget, (6) choose the communication mix, (7) measure the communication results, and (8) manage the integrated marketing communication process” (kotler et al., 2019). in terms of segmenting the target audience, the marketer will need to close gaps that exist between the existing perceived value of the product and its positioning in the market. communication objectives ideally assist in terms of creating a need for the category, increasing brand awareness, improving attitudes towards brands, or boosting sales (blakeman, 2018). creating memorable communication entails making three vital decisions: what to say (message strategy), how to say it (creative strategy), and who should say it (message source) (krizanova et al., 2019). additionally, communication networks can be personal (supporters, adept, and using social channels) or nonpersonal (mass media, events). in selecting the marketing communication mix, marketers need to scrutinise the distinctive gains and costs of each communication tool as well as the business’s positioning (eagle, et al., 2020). they must also reflect on the type of target market in which they are retailing, how prepared customers are to purchase, and at what stage the product is, in the product life cycle (kotler et al., 2019). gauging the success of the marketing communication mix campaigns requires obtaining feedback from the target audience as to whether they identify or remember the communication, how many times they viewed it, what aspects they recollect, their feelings towards the communication, what their preceding attitudes toward the brand, and product were, and what those attitudes are currently (pepels, 2021). to attain strategic marketing goals, holistic marketers must create communication campaigns that can break through the clutter or “noise” and reach customers on a personal level (chernev, 2022). 2.1.1. the role of marketing communications marketing communications are the “means by which firms attempt to inform, persuade, and remind customers—directly or indirectly—about the products and brands” they sell. they signify the opinion of the business as well as its products; they are a means by which the business can create a channel of communication and form associations with customers because they can reinforce customer-loyalty. marketing communications is also effective in terms of showing customers “how and why a product is used, by whom, where, and when” (moodley, 2019). hence, customers learn who manufactures the product as well as what the business and brand represent, and thus they can be enticed to use or consume it (pahwa, 2021). marketing communications allow businesses to associate their brands to other people. in this way they contribute to brand equity by establishing the brand in memory and creating a brand image—as well as driving sales and even affecting shareholder value” (eagle et al., 2020). marketing communications is quickly moving to the online space using search engine optimisation (seo) and search engine marketing (sem) to connect with buyers (kotler et al., 2022). scholars have maintained that it is imperative to create strong brand equity (be) through synergies derived from a combination of several synchronised marketing messages, which would lead to long-term competitive advantages and overall business growth (chernev, 2020; kotler et al., 2019; and anabila, 2020). 2.1.2. marketing communications during the covid-19 pandemic during the covid-19 pandemic, businesses have been forced to seek new ways to communicate with customers and meet their demands (eagle et al., 2020; kotler, 2020; and gunawan and sari, 2021; alhassan et al., 2021; sun et al., 2022). more than half of the world’s population uses social networks currently (nesterenko and rosokhata, 2021). business managers have also started to recognise the significance of digital marketing communications. thus, there is a substantial reduction in the use of traditional exhibitions and direct marketing and an increase in virtual exhibitions. websites, branding, and mailing were the primary marketing communications tools used by businesses to promote their products or communicate with strategic partners during the isolation restrictions (kuvaieva et al., 2021). various “digital habits” that evolved during the pandemic have continued despite the quarantine. furthermore, in 2021, the audience of social networks increased by 10% and by the beginning of july 2020, amounted to 3.96 billion users (nesterenko and rosokhata, 2021). a study conducted by vanko et al. (2021) pertaining to the use of social media showed that 63.7% of respondents said that they had been more active on youtube, followed by 62.3% for facebook and 43.1% for instagram. facebook has been found to be a vital tool for digital marketing communication, and because of the coronavirus pandemic, it has started to play an essential role in the online space (jacobson et al., 2020; and vanko et al., 2021). 2.1.3. increased role and application of technology to assist marketers there has been a clear shift toward marketing communications strategies that are based on data, with companies seeking to use new technologies to enhance productivity, profitability, and the customer experience with the firm (hwang and kim, 2022; vandycke and viegas, 2022). these new technologies have the potential to bring together data from different sources and harvest it using advanced techniques to get powerful insights that produce competitive advantages (shah and murthi, 2021; nyagadza et al., 2022; bani-melhem et al., 2022). however, lee and lee (2021) are sceptical that we are experiencing a 4ir, arguing, “4ir moodley, et al.: understanding marketing communications strategies during and post covid 19: a south african perspective international review of management and marketing | vol 13 • issue 2 • 2023 39 technologies have an impact on subsequent innovations in less broad fields than 3ir technologies, and thus, 4ir technologies may not be powerful enough to bring another boom in the capitalist economy.” their optimism about the prospects of these technologies, however, has not dimmed, as evidenced by increased research into them. in this section, we briefly describe what they are and how they assist marketing efforts in the post covid world. hoffman et al., (2022) define new marketing technologies as “scientific knowledge and/or its application in the early adoption cycle for firms and/or customers with the potential to influence the activity, institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.” according to hoffman et al., (2022), modern technologies are altering marketing strategies in four distinct but interrelated ways that are listed below: • they facilitate novel modes of interaction between customers and businesses. • they provide new kinds of data that allow for new ways to analyse them (we’ll talk more about this in the next section); • they produce innovative approaches to marketing; e.g., crolic et al. (2022), who report that chatbots that act like people (anthropomorphism) hurt customer satisfaction and perceptions about the firm when customers are angry. • the modern technologies demand new frameworks for strategic marketing (e.g., de luca et al., 2021; buhalisa and volchek 2021). kumar et al., (2021) and rosario et al. (2021) find that big data, artificial intelligence (ai), and machine learning (ml), have the most potential to transform marketing. we briefly describe how these will assist marketing decisions in the future. 2.2. big data the term “customer data” describes all the different types of information (personal, behavioural, psychographic, and demographic) that businesses store about their customers (spiceworks, 2021). big data (bd) refers to the computational and systematic analysis of data sets that are too large or complicated to be handled by traditional methods of data analysis (sharma et al., 2022). data science has been applied in marketing to get a competitive advantage. thus, bd is inextricably intertwined with the study of marketing, since the latter is a sector, whose activities are crucially dependent on the capacity to handle the increasingly varied forms of structured and unstructured data pertaining to and generated by both businesses and customers (grover and kar, 2017). examples of innovative big data analyses include those by filieri and mariani (2021) who show that online reviewers with cultural values of high individualism, masculinity, uncertainty avoidance (the extent to which people are at ease with being uncertain about something), and indulgence have a greater probability of producing helpful reviews of a business. this highlights the importance of understanding cross-cultural psychology, as it is useful for increasing the chances of a marketing campaign succeeding in different communities. due to sheer scale of data available, the challenges involved in identifying patterns, drawing insights, and curating it require partnering the marketing function with “computer science, behavioural sciences, and quantitative sciences” (sheth and kellstadt, 2021). 2.2.1. artificial intelligence used in marketing a growing number of businesses are enhancing their marketing communications by adopting ai-based platforms, and examples include google assistant, amazon lex, and microsoft cognitive services (wu and maslov, 2022; dung le et al., 2022). google assistant is a virtual assistant that is powered by artificial intelligence. google has collaborated with vehicle makers that include ford and nissan so that google assistant can be used, from switching on the air conditioning to opening the boot (simms, 2021). brands vie for customers based on the quality of their customer service, and major brands are partnering with ai. hence, we will see marketers work with these platforms because customers now expect it (simms, 2021). marketers can integrate their digital product sales and services into these ai platforms, where customers can pay using the platforms’ virtual payment systems without retrieving physical credit or going to a physical shop. examples include samsung (pay and wallet) and apple (pay and wallet). marketers can work with brands as the tech platforms offer virtual wallets that store digital keys, boarding passes, identification documents, and credit cards. ferasso et al., (2020), have identified opportunities for the integration of ai and robotics into business processes as a driving force in the evolution of business-to-business (b2b) marketing. marketing teams that seek competitive advantages can identify opportunities by using customer relationship management (crm) software that is compatible with all types of ai (castelo-branco et al., 2019). ai-based crms “automate processes, conduct digital ecosystem analysis, and assist in terms of prediction and forecasting, as well as the client’s behaviour study using data analysis and customer experience algorithms” (saura et al., 2021). 2.2.2. machine learning (ml) usage in marketing machine learning refers to how computer systems apply statistical models and algorithms to analyse and draw conclusions about data patterns without being explicitly instructed in terms of what to do (ibm, 2022). ml can be used in data analysis as a tool that may help marketers acquire new insights into customer behaviour and boost the efficiency of their marketing communications. for example, nagarajan et al. (2021) elaborate on the use of ml to determine the relative importance of core and augmented service features and emotions in various service scenarios to understand the factors that reveal and predict customer happiness. schlegelmilch et al. (2022) use ml to understand customer sentiment and emotions from two million tweets in multiple languages to demonstrate how ml can be used to assist forms with an international footprint. 2.2.3. virtual reality usage in marketing “virtual reality” (vr) refers to a technology that uses modelling and simulation to place a user in a simulated 3d environment (britannica, 2022). its usage in marketing has been investigated in multiple studies. virtual reality (vr) creates immersive and engaging user experiences and offers great opportunities for marketers to display their offerings in an artificial environment that is designed to imitate the physical world. for example, a customer can wear goggles that place them (the user) in a virtual environment as an avatar, experiencing sensory stimulation and simulation such as “sounds, touch, smell, or heat” (bardi, 2019). however, there is a lack of direction in the literature regarding the moodley, et al.: understanding marketing communications strategies during and post covid 19: a south african perspective international review of management and marketing | vol 13 • issue 2 • 202340 strategic design of virtual reality (vr) experiences to influence the beliefs, opinions, and actions of customers in a positive way (de regt et al., 2021). there was an increased use of vr in tourism, and it was positively received by customers during the pandemic (itani and hollebeek, 2021; yang et al., 2021). however, as talwar et al. (2022) demonstrate, the post-pandemic use of vr in tourism has declined. the authors find that customers are more willing to return to in-situ tourism after vaccination. 2.2.4. augmented reality usage in marketing augmented reality is “an enhanced, interactive version of a realworld environment achieved through digital visual elements, sounds, and other sensory stimuli via holographic technology. ar incorporates three features: “a combination of digital and physical worlds, interactions made in real time; and accurate 3d identification of virtual and real objects” (microsoft, 2022). ar can be used to enhance the standard internet presentation formats of images, videos, and textual descriptions (zanger et al., 2022). ar usage in marketing inspires customers and increases the likelihood of closing a sale (gatter et al., 2021). ar has been shown to enhance brand equity through a personalised customer experience (holmqvist et al., 2020; jarvonik, 2021). assimilating virtual information into real-world settings and experiences is at the heart of an augmented reality experience (rauschnabel et al., 2022). traditional marketing, in most cases, cannot target material that is specific to the user or the environment. for example, a customer can virtually apply makeup to their own face using their phone’s front camera, whereas traditional marketing would only show how makeup looks on a model, in a magazine, or video (rauschnabel et al., 2022). mercedes-benz has been an early adopter of ar and has used it to overlay moving 3d arrows into a navigation system. 3. methodology structured interviews were used in this qualitative study. an interview schedule with pre-determined questions was used for each participant. data from the qualitative study was analysed using thematic analysis, which involved selecting, coding, and categorising the data, and conclusions were drawn based on patterns in the reduced set of data. examples of coding units used in the data analysis included words, sentences, paragraphs, and themes, for example: “marketing communications before covid-19,”; “marketing communications during covid-19,” “digital marketing,”; “promotions methods.” structured interviews were conducted with eight marketing or brand managers via the online zoom platform at a time convenient to them, and all zoom sessions were recorded. the target sample consisted of eight marketing and brand managers from the fast-moving consumer goods (fmcg) sector, financial services, and technology industries. a convenience sampling method was used to select the participants. inclusion criteria: brand managers and senior marketing managers from the private sector, with over 5 years of experience in terms of implementing marketing strategies were included in the sample. exclusion criteria: junior assistants and marketers with little to no experience in marketing communications campaigns were excluded as were micro and small entities. sample: the sample consisted of the following: • chief marketing officer-electronics manufacturer. • marketing manager, spaghetti manufacturer. • brand manager – maize meal producer. • brand manager detergent manufacturer. • marketing manager financial services provider. • head of marketing hair care producer. • brand manager, – hair care producer. • brand manager – rice brand. participation in this study was voluntary and respondents were informed that they could withdraw from the study at any time. no form of coercion was used to pressure the respondents into participating. written informed consent was obtained from all participants. no names or personal contact information of the participants are divulged in this paper. 4. discussion of the findings the following responses were volunteered by the participants in response to the marketing communication methods used in their businesses before and during the pandemic. these have been grouped into themes to aid interpretation. 4.1. pre-covid dominant use of traditional marketing methods before the covid-19 pandemic, all the marketers interviewed relied on face-to-face interaction with the customer through in store promotions and events. several marketers stated that communication on product benefits and features relied heavily on in-store activations. two marketers advised, “they relied on sponsors’ partnerships for brand awareness to communicate offerings to potential customers.” digital communications were used, but not as the main touch points for customers. one marketer responded as follows: “the communication was centred on events and provided opportunities for customers to experience the brand through these touch points.” three of the marketers informed me “that their brands were previously not even active online, though they had social media pages, they were not putting any spend behind it to amplify reach and engagement.” 4.2. increased use of digital marketing technology advancements have dramatically altered the nature of communications and methods of reaching target markets. this is particularly true of younger customers, which many social marketing programmes seek to target. during the covid-19 pandemic, all marketers invested in digital communications as well as the use of social media influencers for marketing. one marketer said: “we went big on social media and partnered with influencers that have a high following on social media to increase our reach and engagement.” half of the marketers interviewed advised that increased communication on digital platforms was not the plan prior to covid, but most of the marketing investment that was meant to go on to do activations was redirected to digital. the other half advised that they were looking at increasing digital marketing communications in the space, but it was at a slower pace; so covid-19 pandemic fast tracked that move. moodley, et al.: understanding marketing communications strategies during and post covid 19: a south african perspective international review of management and marketing | vol 13 • issue 2 • 2023 41 4.3. importance of television and radio for marketing marketers and brand managers that participated in the study generally agreed that south african television and radio still had the highest reach and impact in terms of awareness. according to one, “in future television investment planning, they will increase while decreasing spends on retail activation. promotions will also be done on radio.” three of the marketers informed the researcher that for mass reach, television and radio will still be key. one participant stated that “digital channels still have limitations to access due to high data costs, and their products are targeted at low earning customers.” 4.4. factors influencing the choice of marketing platforms all the marketers who took part in the study agreed that digital platforms have an advantage because they allow for a more targeted reach based on factors such as customer location and age. one participant responded, “communication on digital platforms is not as expensive as television and radio. a single flight of a television advertisement can cost between r75, 000 and r100, 000, whereas the same amount can be used to create content for a month on social media.” another stated that, “marketers understand that they will still need to maintain that crucial balance between good communication and over-communication as digital fatigue is a reality and customers are bombarded with adverts online.” according to marketers, “the use of the internet as a complementary channel to television and other media is being adopted in sa, following global trends.” 4.5. digital marketing challenges marketers also started realising that “digital fatigue” is a reality as more and more brands and companies use digital platforms and social media to drive their products; so, they constantly had to work on not just communicating to convert to sales but to increase customer engagement. this is congruent with the findings of moodley and naidoo (2022). marketers used the digital platforms to share how they are supporting their customers during this uncertain time to increase brand loyalty and brand love. as it became clear that social distancing was here to stay and “back to normal” was far away, and with the death toll rising, businesses had to prove that they would persevere despite the adverse circumstances. the tone of the communication switched from sombre to determined, and the content focused on the measures taken by companies to adapt their businesses. another challenge that marketers in the study noted was that although most south african customers have smart phones, access to the internet is still a challenge for lower income earners due to high data costs. moodley (2019) agrees with this finding that some customers that have “been left out,” as some marketers did not have a budget for television and radio. one marketer also had trouble in creating a digital marketing communications plan, as “not everyone in their teams were skilled on the digital landscape so there was high reliance on external agencies to assist with the digital communication strategies.” 5. conclusion 5.1. conclusions based on the findings from the literature review the following were the major conclusions drawn from the literature review: 5.1.1. marketing communications during the pandemic marketing communications have quickly pivoted to the online space, using seo, and sem. creating strong brand equity hinges on synergies, derived from a combination of several synchronised marketing messages, which is critical for long-term competitive advantages and overall business growth. the shock of the covid-19 pandemic forced marketers to seek new ways to communicate with customers and meet customer demands. more than half of the world’s population, including a large portion of south africans, use social networks currently, and businesses are acutely aware of this. therefore, businesses have begun to channel their marketing efforts in this direction to capitalise on this global space. thus, there is a substantial reduction in the use of traditional exhibitions and direct marketing and an increase in virtual exhibitions. websites, branding, and direct mail were the primary marketing communications tools used by businesses to promote their products or connect with strategic partners during the isolation restrictions. various “digital habits” that evolved during the pandemic have continued despite the quarantine. studies show that people are more active on youtube, followed by facebook and instagram. facebook has been found to be a vital tool for digital marketing communication. there has been a clear shift toward marketing communications strategies that are based on data, and businesses are mindful of this, with companies seeking to use new technologies to enhance productivity, profitability, and the customer experience with the business entity. big data, ai, and ml, artificial and augmented reality, have the most potential to transform marketing. 5.2. conclusions based on the findings from the qualitative study 5.2.1. pre-covid dominant use of traditional marketing methods before the covid-19 pandemic, all the marketers interviewed relied on face-to-face interaction with the customer through in store promotions and events. communication on product benefits and features relied heavily on in-store activations. partnerships and synergies were created to enhance brand awareness. some participants who had not previously used online platforms were putting plans in place to quickly transition to digital platforms. 5.2.2. during the covid-19 pandemicincreased use of digital platforms the marketers interviewed have commented that while working on their annual communication strategies, they were looking at more ways to reach their customers through a mixture of channels like digital platforms and regional radio, while spending less by having the communication more targeted to their customers. it was difficult to communicate with customers during these uncertain times when people were losing loved ones, losing jobs, and being stuck at home. marketers found that in their communication with customers, they had to be mindful of the current state. as the pandemic was still prevalent and people were dying. hence, communication with empathy was crucial. during the pandemic, there was an increase in marketing spend in terms of digital communications as well as social media influencers, which increased their customer reach compared to before the pandemic. many marketers were contemplating moving to online platforms moodley, et al.: understanding marketing communications strategies during and post covid 19: a south african perspective international review of management and marketing | vol 13 • issue 2 • 202342 before the pandemic. however, covid-19 fast tracked that move and increased digital marketing communications, despite the high costs of data in s.a. promotions via radio and television are also expensive, but they were still a key consideration because they were complemented using social media. increasing customer engagement was a priority. providing support to their customers was critical, and the businesses were forced to adapt their marketing communications methods to stay connected with customers. however, in south africa, thousands of customers were not reachable due to the lack of devices and data, especially in deep rural areas. there was a high reliance on external agencies to assist with the digital communication strategies, as staff were not equipped to handle digital communication campaigns. 5.3. recommendations as the country moves across different levels of future restrictions, marketers must remain flexible in their planning. marketing communications activities must be syncopated with corporate objectives, which lead to tangible results. a flexible and proactive approach is necessary going forward. marketers should monitor the environment closely, as they will need to rapidly change tactics should their customers’ needs and environmental demands change. this is consistent with the views of gorlevskaya (2016), who posits that “public behaviour, media consumption, level of involvement, and customer expectations influence the transformation of applied communication tools.” marketers should monitor and evaluate their marketing activity and effectiveness in meeting business goals monthly. quarterly reporting should become mandatory to allow marketers to monitor their performance and adapt their approach where necessary. this will allow for long-term, albeit flexible, planning; nothing should be set in stone for annual planning. crisis communication plans should also be in place for several potential scenarios. the internet space is seen as growing globally, and south african marketers must ensure that they invest in it while also taking advantage of the opportunity to connect and engage more with customers. with all the tools and analytics available through digital communications platforms, marketers must consider how to take a more targeted approach to see a higher return on investment on their digital communications by targeting the right customers and potential customers. bearing in mind that south africa is still a third world country, where possible, television and radio must always remain key for mass awareness and reach in s.a., especially while internet access is not accessible to everyone. radio campaigns can be regionally targeted to specific audiences. marketers must also continue to encourage the use of online platforms by collaborating with suppliers on tactical trade promotions. hence, customers will benefit from group deals and discounts if they shop online. this will assist in making sure that, should we go back to harder lockdown restrictions, customers know that their preferred products and services are easily accessible online, compared to competitors. as marketers move toward using more digital technology, they must not be oblivious to the fact that not every customer or potential customer is online. as a result, the communication mix should be tailored so that it can reach customers via other channels such as print media, such as pamphlets. marketers should constantly be looking at opportunities to engage with customers, not just to sell to them but also to get feedback on what their customers would like to see or hear from them, so they can improve on their product or service offerings. marketers should also take advantage of customer engagement opportunities to understand customer behaviours and trends so that they can always offer the best and most relevant products or services. marketers should include in their communications strategy what they are doing during the covid-19 pandemic to take some financial strain off their customers. marketers should continue to upskill themselves on new technologies such as tiktok, instagram, and twitter. this 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(2022), beyond the gimmick: how affective responses drive brand attitudes and intentions in augmented reality marketing. psychology and marketing, 39(7), 1285-1301. https://doi.org/10.1108/imr-06-2021-0194 tx_1~at/tx_2~at international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2022, 12(1), 19-31. international review of management and marketing | vol 12 • issue 1 • 2022 19 analysis of smart home systems in the context of the internet of things in terms of consumer experience serap turkyilmaz*, erkut altindağ beykent university, istanbul, turkey. *email: serap_turkyilmaz@hotmail.com received: 13 octomber 2021 accepted: 27 december 2021 doi: https://doi.org/10.32479/irmm.12709 abstract smart homes, which are an important component of the internet of things (iot) provides an effective service for users by communicating with various digital devices based on iot. iot-based smart home technology has transformed the lives of humans by providing everyone with a connection independently from time and space. however, due to various challenges such as privacy, security, and price, problems are experienced by consumers in terms of accepting smart home technologies. in the study, it was aimed to develop a model for accepting smart home technologies, and based on the results obtained, it was attempted to determine what factors affect the consumers’ intention to buy smart home systems. in this context, with the help of technology acceptance model (tam), a research model was designed for the purchaser of a home as a product. in the research model, it was investigated what kind of effects perceived psychological factors (perceived ease of use, perceived intelligence, perceived suitability, perceived price, and perceived risk of privacy) have on the purpose and behavior of using iot systems through perceived benefit. in addition, the relationship between sensory and emotional experiences of consumers, psychological perception factors and perceived usefulness was tested. data was collected by conducting an online survey questionnaire completed by 430 respondents. partial least squares (plss) was explored to test the theoretical model. the research results show that perceived psychological factors (perceived ease of use, perceived connectivity, perceived intelligence, perceived convenience, and perceived privacy risk) have significant effect on the intention and behavior of iot systems usage through perceived benefit. in terms of sensory and emotional experience, it only softens the relationship between the perceived privacy risk of emotional experience and the perceived benefit. keywords: consumer survey, internet of things, technology acceptance, information and communication technology, consumer experience jel classifications: m15, m31, o33 1. introduction the internet came in view with arpanet (advanced research projects agency network), which emerged in 1969, enabled very few devices to communicate, constituted the foundation of the internet, and provided communication between a limited number of devices (naughton, 2016). nearly two billion people worldwide use the internet to communicate, browse the web, access content and multimedia services, play games, interact on social networks and many other applications (santos and sales, 2018). despite the slow progress of the internet in its early days, the development, communication capacity, and speed of the internet, which is expressed as the network of networks, has reached extraordinary levels (gündüz and daş, 2018). with the development of network infrastructure and the high-speed internet becoming more and more widespread, the internet has evolved into a global platform for people, machines and objects to interact autonomously. internet-based applications not only increase the efficiency of trade, production and education but also provide various services in people’s work and life. at this point where we are today, the internet offers a new technological position called internet of things (santos and sales, 2018; liang et al., 2019) by being used to connect devices, machines, and other objects via wired and wireless networks. the developments in information and communication technology have transformed people’s lifestyles in society and their interpersonal interactions, thus their interactions with information, this journal is licensed under a creative commons attribution 4.0 international license turkyilmaz and altindağ: analysis of smart home systems in the context of the internet of things in terms of consumer experience international review of management and marketing | vol 12 • issue 1 • 202220 devices, and services. one of the most significant impact areas is the internet of things (iot). iot, which is a paradigm change in it technology, is a broad concept that refers to connecting various devices from virtual networks to physically connected devices in the real world (siddiqa et al., 2018; makadam et al., 2015). although gubbi et al. defined the internet of things as “synonymous with the fully interconnected world” in 2013, there is not a definite description of what iot really means, what fundamental ideas are behind it, and what the social, economic, and technical implications of iot are. the difficulty in understanding the concept is caused by the words “internet” and “object” that make up the concept. differences in definitions are due to the fact that commercial organizations, shareholders, research and standards-setting institutions have made the definition according to their own commercial activities and interests (atzori et al., 2010). (kranenburg, 2008) defines iot as “dynamic global network infrastructure with self-configuration capabilities based on communication protocols,” (dorsemaine et al., 2015) as the “infrastructure group that connects objects and allows data to be accessed, managed and data mining,” (perera et al., 2015) as “a concept that allows people and objects to be connected with anything and everyone anytime, anywhere using any road/ network and any service,” (madakam et al., 2015) as a “network of smart objects capable of auto-organizing that act and react to situations and changes in the environment, in addition to sharing information and data resources” and (govinda and saravanaguru, 2016) as “human-to-object or object-to-object communication using standard internet protocols in embedded networks.” in today’s world, where we are experiencing the internet age and its reflections very rapidly, the internet of things (iot) applications that are incessantly developing and increasing in number make our lives easier (taştan, 2019). thanks to perfect sensing, identifying, remote control, and other technologies, the internet of things has become the guide for the development of science and technology, has been applied to many physical sectors, and has brought great economic benefits (choi et al., 2020). in fact, these developments experienced in the internet of things (iot) technologies have also encouraged the transformation of traditional homes into smartlyconnected homes (arif et al., 2020). the internet of things is called the backbone of the home automation system (yao et al., 2020). through multiple sensors such as photoelectric sensors, radio frequency identification, etc., information exchange and communication take place between the home environment and the smart system (gnotthivongsa et al., 2020). a smart home, which refers to a private house that sends and receives data in real-time, provides automated and intelligent services through various home devices such as tv, lighting, and refrigerators (lee et al., 2020). some of the leading home iot platforms to emerge in recent years are samsung’s smartthings, apple’s homekit, and google’s android things. these platforms are energy-efficient, connect heterogeneous devices and protocols, facilitate remote control and operation, and support third-party application development (khoa et al., 2020). smart homes are defined by (lutolf, 1992 and aldrich, 2003) as economical, safe, fun, and comfortable houses equipped with information technology, by (gross, 1998; ricquebourg et al., 2007; by ricquebourg et al., 2007; sripan et al., 2012; balta-özkan et al., 2014; hargreaves and wilson, 2017; georgiev and schlögl, 2018; javed et al., 2018; marikyan et al., 2019; hall et al., 2020; asaithambi et al., 2021; yang and han, 2021; qashlan et al., 2021;) as homes that connect sensors, household appliances, and devices that can be monitored, accessed or controlled remotely, equipped with a communication network that can be used and provides services that meet the needs of their residents, by (robles and kim, 2010; kadam et al., 2015) as an integration of technology and services through the home network for a better quality of life and by (dewsbury et al., 2001) as “a house in which the scope of a standard house goes beyond brick and mortar and is equipped with technological devices.” looking at the recent studies on smart home adoption, (kim et al., 2017) developed a new model that combines vam (value-based adoption model) and tam (technical acceptance model), and based on the unified theory of acceptance and use of technology and elaboration likelihood model, they concluded that, through a set of variables, perceived value was affected by both perceived usefulness and perceived sacrifice, especially perceived usefulness had a strong positive effect on perceived value, whereas privacy risk and innovation resistance limit perceived value. (gu et al., 2019) observed with 488 chinese respondents that the service quality and perceived usefulness of smart home systems affected the degree of satisfaction of the users positively, and a higher degree of satisfaction contributed to the habit formation of the users. (hubert et al., 2019) measured in his research the acceptance of smart home systems with 409 random people in germany by combining the innovation diffusion and risk theories and stated that the usefulness and compatibility factors were the most important determinant of the intention to use, and the perceived risk factor was the most important inhibitor of the intention to use through the perceived benefit. (marikyan and papagiannidis, 2021) proposed in their study a model investigating the values of individuals, technology performance perceptions, and attitude beliefs of users regarding user behavior and satisfaction while using smart technologies at home, and using a sample of 422 participants in the usa, concluded that hedonic and utilitarian beliefs were critical for the perception of task fit, while privacy and financial factors were not important, the fit between tasks and technology played an important role in predicting perceived usefulness, perceived ease of use, user behavior and satisfaction, and lastly, usage behavior was positively correlated with the satisfaction. according to the research conducted by statista, the number of smart homes in the smart home market in turkey is expected to be 5.0 million by 2025. in addition, the revenue in the smart home market in turkey is expected to reach us $ 538 million in 2021 (statista, 2020). since the concept of “internet of things” appeared in turkey, although businesses have invested heavily in it, the iot industry has only had small-scale activities in the field of consumption. however, when we look at developed countries, iot systems are applied in areas such as public services, transportation, personal users, retailing, manufacturing, business/ service, agriculture, construction, and finance. in the research turkyilmaz and altindağ: analysis of smart home systems in the context of the internet of things in terms of consumer experience international review of management and marketing | vol 12 • issue 1 • 2022 21 conducted by (dong et al., 2017), personal use comprises the most important area of iot applications. the most used services in this field are location/navigation, security, mobile payment, measurement detection, automation/remote management, and remote medical. in the research conducted by statista in august 2021, the rate of use of smart home devices in turkey is approximately 21%. the mckinsey and company (2018) report highlights that consumers still do not understand the connected device value propositions, and early adopters face significant issues that have yet to be addressed. to better understand the admission process, academics regularly use various theories in their studies, especially the technology acceptance model (tam; davis, 1989). in this research, tam and experience theory were combined to explore the antecedents of consumers’ iot use, and a model was developed to explain the acceptance of smart home systems, and it was investigated which factors affect the consumer’s intention to buy smart home systems. the purpose of the study is to respond to the following questions: “why do consumers use iot systems in turkey?” and “do consumers’ sensory and emotional experiences soften the relationship between psychological perception factors and perceived utility?” these factors to be determined within the scope of the study will constitute an important parameter for the design of smart homes, which are not yet very popular. 2. literature review 2.1. historical development of the internet of things with the development of technology, humans’ needs and their perspective of technology have changed, the internet has become an indispensable communication tool, and it has rapidly evolved into a platform on which billions of smart objects/devices can now be controlled (erdal and erguzen, 2020). the idea of the existence of smart objects first emerged in carnegie mellon university in the early 1980s with the setting up of a slot machine that could record in its register the number of beverages left and whether the beverages were cold enough (anita and abhinav, 2017). the automation of daily objects was first tried by a few industries in the 1990s with small-sized packages by transmitting data from one node to another. the concept of device-to-device communication was first introduced by bill joy at the world economic forum in 1999. in the same year, ashton proposed the term “the internet of things,” and actually it gained momentum after this proposal (tewari and gupta, 2020). the joining of the physical and digital world over the traditional internet has paved the way for the internet of things (iot) in the future. iot is considered as a network model that will fill the gap between the cyber and physical world (nauman et al., 2020). in 1999, kevin ashton described the internet of things as an epoch in which humans and objects would connect to each other over the internet. the most important feature of iot is that it provides multidimensional and context-sensitive smart environments for all aspects of our lives (fortino et al., 2020). 2.2. the concept of the internet of things in the period we are living in, countries are experiencing a rapid digital transformation. individuals, institutions, business fields, and even objects are moving fast towards digitalization. along with this digital transformation, the individuals’ daily lives, working styles, habits and value judgements have started to change, and radical changes have occurred in almost every area of daily life (göçoğlu, 2020). the first wave of the digitalization, the fourth wave of which we are currently experiencing, started with the introduction of computers into many areas of the society in the 1980s. the widespread use of the internet, access to information, and ease of sharing in the 1990s is defined as the second wave. the third wave was experienced in the period when mobile internet was introduced. the fourth wave of digitalization represents the period when individuals started to use the internet which they used for accessing and sharing information in different types of entities such as tools, applications, and machines (davidsson et al., 2016). the developments in information and communication technology have changed the individuals’ life styles in society and their inter-personal interactions, or their interactions with information, devices, and services. one of the most significant impact areas is the internet of things (iot). iot, which is a paradigm change in the field of ic technology, is a broad concept that refers to connecting various devices from virtual networks to physically connected devices in the real world (siddiqa et al., 2018; makadam et al., 2015). iot is a vast ecosystem in which data, processes, humans, objects, and the internet are associated with one another (aman et al., 2020; gubbi et al., 2013). iot, as a system that can be defined as unique and being composed of connected components that have virtual representation and virtual accessibility; has led to a construct similar to the internet for distance locating, perceiving, and/or operating through the real-time flow of information of the components (ingemarsdotter et al., 2019). besides, the universe composed of actuators, sensors, mobile phones, radio frequency identification (rfid) tags, and other devices has led to the creation of the internet of things (alturjman et al., 2020). from a conceptual point of view, we can define the internet of things (iot) with three features (miorandi et al., 2012): • smart objects/devices must be “identifiable,” • smart objects/devices must have the property of “establishing communication” among themselves, • objects/devices must have “interaction” among themselves. the internet of things provides not only the virtual world but also the physical world integration. with this new concept, individuals experience many conveniences both in their working lives and daily routines. considering today, iot applications have been widespread in many areas and sectors. with the iot property, the devices that provide continuous tracking, real-time information sharing, and connection between things have been appealing for both individual users and the business world (doyduk and bayarçelik, 2019). so much so that, many research companies offer perspectives and trends for the future of iot and recommend the internet of things of the future. the total worldwide internet of things (iot) market is expected to be approximately us$389 billion in 2020 and more than us$1 trillion in 2030 (statista, 2021c). moreover, it is estimated that internet nodes would be available in all objects, and that therefore, the number of devices connected to the internet would increase. in a report published by turkyilmaz and altindağ: analysis of smart home systems in the context of the internet of things in terms of consumer experience international review of management and marketing | vol 12 • issue 1 • 202222 cisco, it was emphasized that the number of devices connected to the internet would reach 27 billion by 2022 and 500 billion by 2030 (shafique et al., 2020; bouzidi et al., 2020). some statistics on iot are as follows: • cisco estimates that there will be 3.5 connected devices per person by 2020 (tewari and gupta, 2020). • about 80% of the consumer services will be used by iot by 2020 (tewari and gupta, 2020). • it is estimated that the number of iot devices all over the world will almost be tripled by 2030, increasing from 8.74 billion in 2020 to more than 25.4 billion in 2030. as of 2020, the highest number of iot devices is in china with 3.17 billion devices (statista, 2020). • in the visual network of cisco, it is expected that the internet will connect 3.9 billion devices by the end of 2022 with a 32% increase (asmat et al., 2020). • it is stated that the internet protocol (ip) traffic had a threshold level of 1.54 zettabyte (zb) (1 zb = 1000 exabyte) in 2018 and 2.54 zb in 2020, and it is estimated that this number will reach to 3.9 zb in 2022 (naeem et al., 2018; statista, 2021a). 2.3. application areas of the internet of things iot is considered as an innovative technology that is rapidly growing with various applications, functions and services in daily life, in a variety of markets and industries. although the recent developments in information and communication available everywhere and the potentials offered by iot make it possible to develop numerous applications, there are only a few of them for the time being. iot applications aim to increase the quality of life for the end-user community and support the infrastructure and general-purpose operations (lampropoulos et al., 2019; rueda and portocarrero, 2021). iot devices, which have unlimited application areas, can be seen in many areas such as tracking wild life in nature, evaluating the performances of machines in the industry, monitoring the density of traffic in the city, determining the safety of structures, detecting earthquakes, ensuring border security in terms of military, etc. (taş and kiani, 2021). 2.4. smart home systems in today’s world, where we are experiencing the internet age and its reflections very rapidly, the internet of things (iot) applications that are incessantly developing and increasing make our lives easier (taştan, 2019). thanks to perfect sensing, identifying, remote control, and other technologies, the internet of things has become the guide for the development of science and technology, has been applied to many physical sectors, and has brought great economic benefits (choi et al., 2020). in fact, these developments experienced in the internet of things (iot) technologies have also encouraged the transformation of traditional homes into smartly-connected homes. according to the report published by statista in march 2021 titled “smart home devices worldwide from 2020 to 2025,” the total number of smart home devices worldwide reached 349 million, and it is expected to display a strong increase in the next few years and reach 1.77 billion by 2025 (arif et al., 2020; statista, 2021b). the internet of things is named as the backbone of home automation systems that aim to improve the welfare of humans (marikyan et al., 2019). through multiple sensors such as photoelectric sensors, radio frequency identification, etc., information exchange and communication take place between home environment and the smart system. the basic logic here is to realize real-time connections between objects and objects, objects and humans, all components and networks, and to facilitate identification, management, and control (gnotthivongsa et al., 2020; lee et al., 2020). information and communication technology (ict) has moved the scope of a standard home by expanding it to beyond the “bricks and mortar.” now, the technology is not limited only to the traditional products such as lighting, washing machines or refrigerators, but now the user can monitor and control the door to the home, stove, refrigerator, and water in the garden without human intervention even from remote distances (dewsbury et al., 2001; al-ali and al-rousan, 2004). therefore, we can define a smart home as “a residence that can be remotely monitored, accessed, managed or controlled, that provides residents with developed services, that connects sensors and home appliances, and that is equipped with a high-technology network” (nikou, 2018). 2.5. customer experience 2.5.1. the concept of experience we can define experience as “testing” on one’s own (carù and cova, 2003). alvin toffler first explained the term “experience” in his prestigious work “future shock” and divided the experience in different environments into two as “experience in real environment” and “experience in virtual environment.” hirschman and holbrook (1982) defined experience as a phenomenon related with the important factors of consumption, which are imagination, emotion, and entertainment (luo, 2020) (cham et al., 2020; cham et al. 2020a), while it was described as feelings and memories developing as a response to physiological reactions (meng and sidin, 2020), and arnould and price (1993) identified it extraordinary events that individuals can easily remember even after many years but have difficulty in describing due to their affective content. 2.5.2. customer experience the roots of customer experience can be traced back to the 1960s when theories shedding light on marketing and consumer behavior, and especially to the studies of philip kotler (1967) and john howard and jagdish sheth (1969) (lemon and verhoef, 2016). later, customer experience was discussed by hirschman and holbrook (1982) in the mid-1980s as the concepts of consumer experience and hedonic consumption, and it was made popular by pine and gilmore (1998) and carbone and haeckel (1994) in the marketing literature. gentile et al. (2007) argued that customer experience stemmed from a series of interactions between the customer and a part of the product or the organization, and that this led to a reaction. 2.5.3. the dimensions of customer experience in the model he developed for the businesses to meet the needs of consumers, schmitt (1999b) categorized the dimensions of customer experience as “sensory, affective, intellectual, behavioral, and relational,” while haeckel et al. (2003) and berry et al. (2006) classified the dimensions leading to customer experience in three as “functional, mechanical, and human.” while verhoef et al. turkyilmaz and altindağ: analysis of smart home systems in the context of the internet of things in terms of consumer experience international review of management and marketing | vol 12 • issue 1 • 2022 23 (2009) stated that customer experience had cognitive, social, affective, and physical aspects, lemke et al. (2011) proposed three dimensions as communication encounter, service encounter, usage encounter (belabbes and oubrich, 2020). while meng and sidin (2020) examined how the cognitive, affective, sensory, and hedonic dimensions of customer experience could be formed in the consumption journey of a company’s offers, piotrowicz and cuthberston (2014) suggested that the experience should include the technological dimension in order for the customers to be in full interaction with the company and for the company to offer convenience to the customer. dub’e et al. classified the experience dimension as “pleasure experiences” of the customers, while gentile et al. (2007) analyzed the experiential components in six dimensions as sensory, affective, cognitive, pragmatic, life style, and relational. 3. methodolgy and results as a result of the detailed analyses performed in the literature within the scope of the study, it was observed that many studies were conducted in the literature on the internet of things, smart home systems, technology acceptance model, and customer experience. hence, scales that were thought to be valid for the study topic and yield the best results were sought and included in the study, and a questionnaire form was created. the questionnaire form created in order to develop a technology acceptance model for smart home systems consisted of 11 items related to user information in the first part, 53 items in the second part which also included the scales of the model, with a total of 64 items. through a pilot study of the questionnaire created for the research model, firstly field data were collected from 102 potential users. the field research was conducted face-to-face and through online surveys. factor analysis, and validity and reliability analyses of the data obtained as a result of the questionnaire administered to potential users were performed, and the final questionnaire items were created. following the field research and creation of finalized questionnaire items, the finalized questionnaire was administered to 430 potential users. 3.1. hypotheses the research hypotheses are: h1. intention to use has a positive effect on usage behavior. h2. perceived benefit has a positive effect on intention to use. in the study conducted in order to explain the relationship between smart home systems and customer experience within the context of the internet of things, integrated technology acceptance model and customer experience scale were employed. the variables of integrated technology acceptance model and the variables in the customer experience scale were adapted to the study. 3.2. research data collection questionnaire method, which is very common in social sciences, was used in the study as data collection method. the questionnaire were uploaded in google forms web site, and they were sent to various e-mail groups by announcing over the social media. the study was carried out with the participation of individuals who were over the age of 18 and had a certain income all over turkey. 3.3. basic statistics the demographic data of the participants are important in terms of obtaining a qualitative profile of the participants. 11 demographic items were added to the questionnaire used in the study, and the results were interpreted in detail. when the data collected were examined and evaluated in general, it was seen that the ratio between the male and female participants was almost 50%. when the age distribution of the participants were examined, it was seen that it was youth weighted, similar to the age distribution of turkey. the fact that the questionnaire respondents were working people with a profession was important in terms of being able to own smart home systems. also, a great majority of the participants had undergraduate and graduate education levels. the majority of the questionnaire respondents lived in 2-4 person homes as nuclear families in their own standard homes. the detailed numerical distribution of the items added to the questionnaire in order to determine demographic properties of the participants are presented in the table 1 below: 3.4. analysis in order to simultaneously measure the compatibility of the statements to the constructs, construct validity and hypothesis tests in the model proposed for the acceptance of smart home systems within the scope of the study, “partial least squares (pls) method-based structural equation modelling” was used. it is advantageous to use pls-sem when the sample size is small, there are data which do not show normal distribution, or when complicated models that have relationships with many elements are estimated (guhr et al., 2020). in the field study conducted, it was seen that the study sample was not suitable for normal distribution both on the basis of statements and on a multiple scale (multiple normality). therefore, when table 1: demographic properties frequency analysis of the demographic variables demographic variable option number (frequency) percentage (%) gender female 186 43.3 male 244 56.7 age under the age of 30 104 24.18 between 36-45 years 218 50.7 between 51-70 years 108 25.11 education primary school and below 26 6 high school 98 22.8 undergraduate degree 214 49.8 master’s degree 62 14.4 phd degree 30 7 marital status married 283 65.8 single 147 34.2 residence owner 267 62.1 tenant 163 37.9 is the home smart? smart home 25 5.8 standard home 425 94.2 turkyilmaz and altindağ: analysis of smart home systems in the context of the internet of things in terms of consumer experience international review of management and marketing | vol 12 • issue 1 • 202224 it is considered that pls yields more valid and reliable results regarding the validity and reliability analyses of constructs in a data set that does not show normal distribution, it was decided to use this method in order to obtain correct results in the study. in the study, pls-sem 3.3.3 software was employed in order to verify study constructs and test the hypotheses. in the study, pls-sem path model with a path weighting scheme was applied for internal approach, and in order to obtain the standard errors of estimations, it was analyzed with non-parametric bootstrapping approach with 1,000 re-sampling. in the evaluation of the validity of the proposed model, the reliability of each item was evaluated by the loading of latent variable that matches each item. in order to test the internal validity, combined reliability (cr) and cronbach’s alpha values were examined, and it was seen that cr and cronbach’s alpha values in table 2 were higher than the criteria of 0.8 and 0.7, respectively. also, in order to test convergent validity, average variance extracted (ave) was analyzed, and as shown in table 2, ave values were observed to be greater than the criteria of 0.5 proposed by bagozzi and yi (1988). thus, these results show that the reliability, internal consistency and convergence validity of our model were ensured. in order to test discriminant validity, the square root of aves is compared with the correlations between the variables (hong et al., 2017). as shown in table 3, the diagonal values which are the square root of aves are respectively greater for each construct, and our measurement model attained discriminant validity (fornell and larcker, 1981). 3.5. path coefficients and hypothesis tests pls method was also used in order to verify the hypothetical relationships between the constructs in the model. the importance of the paths included in the proposed model was tested by using a bootstrapping resampling procedure. while evaluating pls model, firstly, squared multiple correlations (r²) for each internal latent variable were examined, and the importance of structural paths was evaluated (alshibly, 2015). table 2: the evaluations of the proposed structural model: convergent validity latent variable indicator factor loads cronbach’s α cr ave perceived ease of use peu1 0.937 0.0911 0.939 0.794 peu2 0.946 peu3 0.933 peu4 0.732 perceived connectivity pc1 0.951 0.935 0.958 0.885 pc2 0.948 pc3 0.923 perceived intelligence pi3 0.959 0.908 0.956 0.916 pi4 0.954 perceived suitability psu1 0.928 0.830 0.922 0.855 psu2 0.921 perceived risk pr1 0.815 0.914 0.933 0.700 pr2 0.845 pr3 0.861 pr4 0.866 pr5 0.843 pr6 0.788 perceived benefit pb1 0.898 0.929 0.949 0.824 pb2 0.893 pb3 0.917 pb4 0.922 sensory experience se1 0.957 0.907 0.956 0.915 se2 0.956 affective experience ae1 0.931 0.852 0.931 0.871 ae2 0.935 intention to use iu1 0.963 0.922 0.962 0.927 iu2 0.963 perceived price pp1 0.944 0.934 0.958 0.883 pp2 0.930 pp3 0.944 realized usage ru1 0.884 0.700 0.869 0.769 ru2 0.870 turkyilmaz and altindağ: analysis of smart home systems in the context of the internet of things in terms of consumer experience international review of management and marketing | vol 12 • issue 1 • 2022 25 ta bl e 3: f or ne lll ar ck er c ri te ri on m at ri x of th e m od el p er ce iv ed sm ar tn es s p er ce iv ed c on ne ct iv ity p er ce iv ed b en efi t p er ce iv ed r is k o f p ri va cy p er ce iv ed e as y o f u se p er ce iv ed su ita bi lit y se p e u to p b se -p r to p b a e p e u to p b a e p r to p b a ff ec ti ve e xp er ie nc e se ns or y e xp er ie nc e p ri ce r ea liz ed u sa ge in te nt io n to u se pe rc ei ve d sm ar tn es s 0, 95 5 pe rc ei ve d c on ne ct iv ity 0, 94 8 0, 94 9 pe rc ei ve d b en efi t 0, 88 0 0, 89 3 0, 92 0 pe rc ei ve d r is k o f p ri va cy 0, 64 5 0, 62 1 0, 60 6 0, 78 1 pe rc ei ve d e as y o f u se 0, 86 3 0, 87 8 0, 85 4 0, 61 6 0, 81 1 pe rc ei ve d su ita bi lit y 0, 86 8 0, 87 7 0, 86 1 0, 56 4 0, 85 9 0, 92 6 se -p e u to p b -0 ,6 92 -0 ,6 82 -0 ,6 44 -0 ,5 60 -0 ,6 71 -0 ,6 52 1, 00 0 se -p r to p b -0 ,6 04 -0 ,5 95 -0 ,5 51 -0 ,3 57 -0 ,5 68 -0 ,5 57 0, 76 6 1, 00 0 a e -p e u to p b 0, 64 3 -0 ,6 42 -0 ,6 15 -0 ,4 83 -0 ,6 21 -0 ,5 96 0, 86 5 0, 71 9 1, 00 0 a e -p r to p b -0 ,5 07 -0 ,5 06 -0 ,4 54 -0 ,2 40 -0 ,4 81 -0 ,4 53 0, 65 7 0, 82 7 0, 72 1 1, 00 0 a ff ec tiv e e xp er ie nc e 0, 58 2 0, 56 0 0, 64 8 0, 56 0 0, 55 3 0, 57 8 -0 ,4 07 -0 ,3 33 -0 ,2 91 -0 ,2 00 0, 82 6 se ns or y e xp er ie nc e 0, 71 4 0, 73 2 0, 80 7 0, 58 0 0, 70 7 0, 70 1 -0 ,4 37 -0 ,3 85 -0 ,4 36 -0 ,3 51 0, 74 8 0, 81 1 pr ic e 0, 72 7 0, 73 3 0, 70 6 0, 71 7 0, 66 6 0, 65 6 -0 ,5 71 -0 ,4 65 -0 ,5 16 -0 ,3 76 0, 56 2 0, 64 2 0, 94 0 r ea liz ed u sa ge 0, 35 7 0, 34 9 0, 40 7 0, 41 8 0, 37 0 0, 35 8 -0 ,2 69 -0 ,1 89 -0 ,2 23 -0 ,0 59 0, 51 2 0, 46 0 0, 41 9 0, 87 7 in te nt io n to u se 0, 70 7 0, 70 4 0, 80 9 0, 46 0 0, 70 8 0, 73 1 -0 ,4 87 -0 ,4 29 -0 ,4 50 -0 ,3 19 0, 67 1 0, 69 6 0, 53 8 0, 54 7 0, 96 1 turkyilmaz and altindağ: analysis of smart home systems in the context of the internet of things in terms of consumer experience international review of management and marketing | vol 12 • issue 1 • 202226 figure 1: the estimated number of devices connected over the internet (2015-2025) source: erdal and erguzen, 2020. the internet of things (iot), international engineering research and development journal umagd, 12 (3):29 perceived benefit, intention to use, and realized usage are internal latent variables in the technology acceptance model of smart home systems. r² coefficients of the relevant variables are given in table 4. two criteria were used in order to evaluate the structural model: the statistical significance (t-tests) of the estimated path coefficients (β) and the model’s capability to explain the variance in dependent variables, identifying coefficient (r²). r² is a goodness of fit criterion for linear regression models. this statistic shows the percentage of the variance in the dependent variable which the independent variables explain as a whole (dufour, 2011). in the analysis of the model, bootstrapping was used to estimate t values. t, p, and f ² values for evaluating statistical significance are presented in table 5. for a significant effect at 95% confidence interval, t value must be 1.96 or above. (kwong and wong, 2013). on the other hand, f² value gives information about the impact size of the relationship. as f² value increases, impact size will also increase. in the literature, f² values between 0.02 and 0.15 show a small impact size, those between 0.15 and 0.35 indicate medium impact size, and those above 0.35 show a large impact size. in the structural model consisting of 14 hypotheses tested within the scope of the study, 9 hypotheses were supported, while 5 were not supported. structural model was used to test the hypotheses in the research. figure 3 shows the results of path coefficients and corresponding significance levels. the results showed that intention to use (β = 0.553, p ˂ 0.001) was a significant predictor of the consumers’ physical usage behaviors and that it constituted 31% of the variance explained (r² = 0.310). as it was hypothesized in the study that intention to use (h1) would positively affect realized usage, h1 was supported. the results also showed that perceived benefit (β = 0.758, p ˂ 0.001), perceived ease of use (β = 0,123, p ˂ 0.05), and perceived risk (β = −0.099, p ˂ 0.05) were significant predictors of intention to use, and that they constituted 68% of the variance explained (r² = 0.680). as it was hypothesized in the study that perceived benefit (h2) and perceived ease of use (h3) would have a considerably positive effect on intention to use, perceived risk (h9) would have a considerably negative effect on intention to use, and h2, h3, and h9 were also supported. besides, ease of use (β = 0.123, p ˂ 0.05), perceived intelligence (β = 0.143, p ˂ 0.05), perceived connectivity (β = −0.132, p ˂ 0.05), and perceived suitability (β = 0.178, p ˂ 0.01) were significant predictors of perceived benefit, which corresponds to 84% of the variance explained (r² = 0.840). as it was hypothesized in the study that perceived ease of use (h4), perceived connectivity (h5), perceived intelligence (h6), and table 5: statistical values for the hypotheses, results, and impacts hypothesis t statistic p value f² result impact h1 14.012 0.000 0.410 supported large h2 12.977 0.000 0.485 supported large h3 1.987 0.047 0.013 supported small h4 3.084 0.002 0.036 supported small h5 1.982 0.048 0.014 supported small h6 2.344 0.019 0.019 supported small h7 3.240 0.001 0.041 supported small h8 0.354 0.723 0.001 not supported _ h9 2.200 0.028 0.013 supported small h10 0.389 0.698 0.001 not supported _ h11 1.212 0.226 0.009 not supported _ h12 1.715 0.087 0.011 not supported _ h13 2.084 0.037 0.023 supported small h14 0.566 0.571 0.001 not supported _ table 4: r² values of the model r² adjusted r² perceived benefit 0.840 0.836 intention to use 0.680 0.676 realized usage 0.310 0.301 turkyilmaz and altindağ: analysis of smart home systems in the context of the internet of things in terms of consumer experience international review of management and marketing | vol 12 • issue 1 • 2022 27 perceived suitability (h7) would have a considerably significant effect on perceived benefit, h4, h5, h6, and h7 were supported, and h8 was not supported as no significant effect of perceived risk (h8) on perceived benefit was found. in addition, it was observed in the model that perceived price (h14) had no significant effect on intention to use, and h4 was not supported. in the analysis of the regulatory effects, regarding the empowering effects of sensory experience in the relationship between perceived ease of use and perceived benefit, and perceived risk and perceived benefit, it was seen that h10 and h11 were not significant. as it was hypothesized that h13 would have a significant effect regarding the significant relationship between perceived risk and perceived benefit (β = 0.104, p = 0.05), and the empowering effects of affective experience in this relationship, h13 was supported. regarding the empowering effects of affective experience in the relationship between perceived ease of use and perceived benefit, it was seen that h12 was not significant. as for the control variables, it was found that monthly income significantly affected real usage (β = −0.124, p ˂ 0.05), and that gender, age, and education level had no significant effects on real usage. 4. conclusion the findings of the study showed that the five psychological perception factors of consumers about iot (perceived ease of use, perceived connectivity, perceived intelligence, perceived suitability, and perceived risk of privacy) were effective on figure 2: research model figure 3: pls analysis of research model source: n, neutral, *p ˂ 0.05; **p ˂ 0.01;***p ˂ 0.001 turkyilmaz and altindağ: analysis of smart home systems in the context of the internet of things in terms of consumer experience international review of management and marketing | vol 12 • issue 1 • 202228 those who use iot systems experience two types of experience: sensory and affective experience. in the model, sensory experience did not have a significant effect on perceived benefit. to be more specific, it was found that sensory experience did not have a regulatory role in the relationship between perceived ease of use and perceived benefit, and the relationship between perceived risk of privacy and perceived benefit. similarly, it was determined that affective experience did not have a regulatory role in the relationship between perceived ease of use and perceived benefit. in other words, benefit perception of ease of use of smart home systems is not affected by any external factors. 4.1. contributions and impacts the results obtained from the current study present some suggestions for future research. first of all, as a basic model, tam was used in order to investigate the consumers’ use of iot systems. in addition, perceived benefit, perceived ease of use, and perceived risk of privacy are the three main determinants of intention to use, and perceived benefit is affected by external psychological factors. our study provides evidence for the fact that tam should be considered in the real smart home usage context. secondly, the psychological factors affecting the consumers’ use of iot systems have not been investigated in previous studies. the five external factors examined in the study are perceived ease of use, perceived connectivity, perceived intelligence, perceived suitability, and perceived risk of privacy. a high reliability and validity was ensured to be a reference for future studies about psychological factors in the context of iot systems. thirdly, the present study showed that external factors except perceived risk of privacy created a significant and positive effect on perceived benefit. in the model, the effect of perceived risk of privacy on perceived benefit was found to be insignificant. this situation may have resulted from the fact that the users did not believe smart home systems were safe enough. in the studies conducted in foreign countries (especially in south korea where technology use is widespread), a significant and negative effect of perceived risk of privacy was found on perceived benefit and intention to use, and worries were dissipated by getting the users to experience the technology. however, in countries such as turkey where smart home systems are not widely used, consumers have a tendency not to use these systems as they have worries about the leakage of personal data, these devices easily breaking down and affecting other devices in the system. for this reason, these users don’t care whether smart home systems are beneficial or not. yet, if businesses can establish an affective bond with the brand by preventing the worries that form in the minds of users, they can enable them to see the benefit of the system. therefore, smart home systems producing companies should develop various tactics and policies in order to reduce the concerns of users and to make them feel safer in terms of accepting the technology. in addition, although some studies on information technology/information systems used or emphasized the importance of perceived ease of use, perceived suitability, or perceived connectivity, it is needed to investigate more the common effects of these on perceived benefit. intention to use and real usage through perceived benefit, and that in terms of sensory and affective experience, only affective experience softened the relationship between perceived risk of privacy and perceived benefit. the main findings were summarized in table 5 and discussed below. perceived benefit and perceived ease of use have a significant and positive effect on intention to use iot systems. perceived ease of use has an indirect effect on intention to use iot systems through perceived benefit. therefore, the findings of the present study showed that it was not sufficient to increase the effectiveness and performance of iot systems in order to get consumers to use iot systems, and that making the use of iot systems easier was more important. only when consumers believe that it is easy to use and remember how to use iot systems, they will perceive it as beneficial. perceived ease of use will significantly increase behavior intention. another important issue that users worry about in using iot systems is leaking of their information. users send their daily usage activities information to a terminal. however, if this information is leaked and their privacy is violated, it will significantly affect individuals’ intention to use. perceived risk of privacy will significantly undermine behavior intention. in the study, it was determined that the risk of privacy in smart home technology negatively affected the users’ behavioral adoption intentions. in this case, trust in service providers plays a significant role. smart home technology service providers can ensure transparency by assuring the users about their policies regarding the prevention of personal data leakage. in addition to perceived ease of use, perceived intelligence and perceived suitability significantly increase perceived benefit. in the study, it was seen that users prefer smart home technology in such a way to help them in their daily lives, that is, to perform daily routines fast and efficiently. for this reason, while system developers are developing a smart technology for home, they should design the interface as convenient as possible to provide usefulness for the user. this study also revealed that users did not want to make more efforts in order to learn something new, and that they did not want to accept technologies which are not compatible with current technologies. therefore, service providers should produce smart home systems that are compatible with the existing home appliances of potential users and very easy to use. however, no significant relationship was found between perceived risk of privacy and perceived benefit. while it was determined in the model that perceived risk of privacy had a greater effect on intention to use, when its indirect effect was examined, it was seen that perceived risk was not understood. a probable reason for this is that leaking of personal data, easy breaking down of the devices, and worry about this malfunctioning affecting other devices and causing them to fall out of the system outweighed the benefit of technology in the users’ behavior of accepting smart home systems. no significant relationship was found between price and intention to use. a possible reason for this is that the users’ intentions to accept smart home systems were not in near future, and therefore, they did not prioritize cost. turkyilmaz and altindağ: analysis of smart home systems in the context of the internet of things in terms of consumer experience international review of management and marketing | vol 12 • issue 1 • 2022 29 fourthly, consumers’ experiences of iot systems include sensory and affective experiences that both are expected to have a significant effect on perceived benefit. however, in the model, affective experience has a medium level effect on only the relationship between perceived risk of privacy and perceived benefit. besides, the findings obtained from the study provides inferences for practitioners. it was revealed that perceived benefit had a significant and positive effect on intention to use iot systems. therefore, in order to make consumers use iot systems more, companies should consider consumers’ perceived factors, especially by introducing the practicality of iot systems to their target consumers. companies can also take suitable precautions in line with the psychological factors in order to improve perceived benefit. perceived ease of use has a significant and positive effect on perceived benefit. producers have to develop a system that is easy to use in order to increase consumers’ perceived benefit regarding iot systems. perceived intelligence has a significant and positive effect on perceived benefit. high intelligence must be task-oriented by automatically arranging the best alternative for system users. producers have to develop a smart iot system that has the ability to learn by itself in order to increase consumers’ perceived benefit of the system. perceived suitability also has a significant and positive effect on perceived benefit. by benefiting from the properties of mobile technology, producers can design an iot system for users that can work anytime and anywhere, this will make the users feel that they are saving time, and thus, their perception of the practicality of the system is strengthened. 4.2. limitations and future research although significant results and inferences were obtained in the study, there are various limitations that should be addressed in future research. first of all, in the present study, mainly the precursors of consumers’ usage behaviors of iot systems were tested, but the consequences of using the information system were not investigated. future research can examine the consequences by using expectation-approval theory (i.e., satisfaction, 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(2021), integrated management strategy with feasible smartness over heterogeneous iot environments. electronics, 10(2), 149-161. . international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2019, 9(3), 100-105. international review of management and marketing | vol 9 • issue 3 • 2019 100 competitive strategies and organizational performance: determining the influential factor conquer over the rivals in the food industry of bangladesh md. shakib hossain*, sara bintey kabir, nafiza mahbub department of business administration, east west university, dhaka, bangladesh. *email: shakibbhossain@gmail.com received: 08 march 2019 accepted: 03 may 2019 doi: https://doi.org/10.32479/irmm.8109 abstract an organization always faces the multifarious challenges like technological evolution, volatile and rigorous demand transformation, economic shifting, and strategic dilemma from its counterpart. competitive advantages over its counterpart require a massive and propitious strategic direction that surely accomplishing the ultimate desire objectives of an individual organization. this study is mainly incorporated with the different competitive strategies and recognizes how these strategies influence over the organizational performances especial concentration on the food industry in bangladesh. for identifying the substantial and commensurate circumstance in the food industry a simple random sampling method was used with a sample size of 1025 from the 15 different food manufacturing company. with the concentration of this rigorous work it was observed that competitive strategy has strengthened the organizational performance in the food industry and also noted that cost leadership strategy comparatively propound strategy that helps the firm to consolidate its market share and accelerate its market superiority. keywords: competitive advantages, cost leadership, differentiation strategy, focus strategy, corporate growth strategy, simple random sampling jel classifications: l16, l 22, m 30 1. introduction due to the intensifying global competition the profitability and the market share of the large firms is under precarious situation. firms need to assess the environment in a contemplative way and also it is an inevitable fact to consolidate the proactive action and formulation of strategy helps the firm to proliferate its market competitiveness. competitive strategy helps the firms to accelerate its performance and market share. competitive strategy comprises of all those moves that a firm has and is taking to attract buyers, withstand competitive pressure and improve its market position (thompson and strickland, 2007). within the manufacturing industry, there is no doubt that the importance of organizational performance has increased. in bangladesh the manufacturing industry especially the food industry is increasing very rapidly. all the firms have the propensity to enhance its market competitiveness. due to the fierce competition the firms are adopting the different competitive strategies to enhance its performance. in this competitive world the business organization should endeavor to develop strategies to compete successfully in the market place for it to enhance its chances of growth and therefore perform far above industry average (bisungo et al., 2014). competitive strategy helps the firms to gain the competitive advantages over the rivals; it can be cost leadership strategy, differentiation strategy, focus strategy or the corporate growth strategy. the paper is mainly comprised with the understanding of the influence of different competitive strategy over the organizational this journal is licensed under a creative commons attribution 4.0 international license hossain, et al.: competitive strategies and organizational performance: determining the influential factor conquer over the rivals in the food industry of bangladesh international review of management and marketing | vol 9 • issue 3 • 2019101 performance in the food industry in bangladesh. various researchers (wanjere, 2014, kombo, 2007; muturi, 2000; thiga, 2000) have studied the effects of competitive strategies on organization performance. 985). owiye (2009) argued that competitive strategies will be vital to a firm while developing its fundamental approach to attaining competitive advantage (low price, differentiation, niche), the size or market position it plans to achieve, and its focus and method for growth (sales or profit margins, internally or by acquisition) and the organization performance that can be assessed by an organization’s efficiency and effectiveness of goal achievement (robbins and coulter, 2002). 2. literature review in the dynamic environment of the business world, it’s a must for a firm to constantly focus on improving its competitive strategy. competitive strategy points out to the way a firm can gain advantage over rivals in a similar market. rivalry brings improvement and innovation. the core idea behind the theory of competitive advantage is that the firms that manipulate the various resources over which it has direct control over and those resources have the ability to generate competitive advantages to achieve superior performance. competitive strategies in general and, competitive tactics in particular, exercise a great influence on firm performance (spanos et al., 2004). competitive tactics” refers to the actions that are developed by a firm to establish its strategy (barney, 2002. p. 13). these tactics therefore reflect its strategic orientation and form the basis of competition (covin et al., 2000). renowned economic researcher, michael porter studied the strategies companies use to maintain long-term competitive advantages which are able to create a defensible position in an industry to outmaneuver the competitors. porter, 1980 wrote that competitive strategy target either cost leadership, differentiation or focus by which organizations can build competitive advantages and outwit competitors by ensuring high performance in the industry. porter claimed that a company must only choose one of the three or risk that the business would waste precious resources. an empirical study by dess and davis, 1984 inspirit the porters theory that organizations should focus on one of the generic strategies and consecrated to utilize the specific one. conversely, many authors like wright et al., 1990, have disputed porter by recommending intermixing of the strategies in order to fabricate competitive advantage which in turn results in effective performance. however, other researchers feel a combination of these strategies may offer a company the best chance to achieve a competitive advantage (hill, 2001). whichever strategy a firm chooses to adopt must be aligned with its goals and objectives in order to gain a competitive advantage (parker and helms, 1992). according to another empirical study by shahid yamin those organizations that utilize both cost leadership and differentiation strategies such as value chain, unique technologies, product image etc. effectively are more likely to enhance their financial performance and financial management compared with any other organization. 2.1. cost leadership in cost leadership strategy, a firm targets to become the low cost producer in the industry in order to gain competitive advantage (davidson, 2008). a firm is considered to be a low-cost producer if it sells its products at average industry prices but earns a profit higher than its competitors, or may sell at a price below average to gain significant market share (porter, 2008). the sources of cost advantage rest on the structure of the industry. these can be achieved economies of scale, advanced technology, preferential access to raw materials among others. in order to achieve a lowcost advantage, an organization must have a low-cost leadership strategy, low cost manufacturing, and the core competencies (malburg, 2007). firms that succeed in cost leadership often have internal strength which include; access to the capital required to make significant investment in production assets which represent a barrier to entry. skills in designing product for efficient manufacturing, high level of expertise in manufacturing process engineering and efficient distribution channels. if a firm can achieve and sustain overall cost leadership, then it will be an above average performer in its industry, provided it can command prices at near the industry average (hyatt, 2008) thus ensure the performance. 2.2. differentiation strategy differentiation strategy requires the development of goods or unique services from unmatched by relying on customer loyalty to the brand. a company can be offered higher quality, performance or unique features that each of them can justify the higher prices. the value added by the uniqueness of the product may allow the firm to charge a premium price for it (kiechel, 2010). firms that succeed in differentiation strategy often have internal strength that include; access to leading scientific research, highly skilled and creative product development team, strong sales team and corporate reputation for quality and innovation (kiechel, 2010). miller (1987) argued that product differentiation firms tend to invest heavily in research and development activities in order to increase their innovative capability and enhance their ability to keep up with their competitors’ innovations (jermias, 2008). innovation which can be a differential tool like adoption of any new product, process and administrative innovation helps the company to deal with the turbulence of external environment and, therefore, is one of the key drivers of long term success in business, particularly in dynamic markets (baker and sinkula, 2002). a study by philips found positive relationship between differentiation and market share as differentiation boost up the performance. increased market share enables organization grab economies of scale, so this study also suggests that differentiation may be a way of establishing an overall low-cost position. additionally, white (1986) concluded that successful combination of both low cost and differentiations bring the highest return on investment ensuring the performance. 2.3. focus strategy the focuser’s basis for competitive advantage is either lower costs than competitors serving that market segment or an ability to offer niche members something different from competitors. hossain, et al.: competitive strategies and organizational performance: determining the influential factor conquer over the rivals in the food industry of bangladesh international review of management and marketing | vol 9 • issue 3 • 2019 102 focusing is based on selecting a market niche where buyers have distinctive preferences. the niche is defined by geographical uniqueness, specialized requirements in using the product or by special attributes that appeal to members, (stone, 1995). a firm using a focus strategy often enjoys a high degree of customer loyalty, and this entrenched loyalty discourages other firms from competing directly. because of their narrow market focus, firms pursuing a focus strategy have lower volumes and therefore less bargaining power with their suppliers. however, firms pursuing a differentiation-focus strategy may be able to pass higher costs on to customers since close substitute products do not exist. firms that succeed in a focus strategy are able to tailor abroad range of product development strength to relatively narrow market segment that they know very well (grant, 2012). the study finding of odunayo, 2018 corroborates with the views that a firm is able to serve its narrow strategic target more effectively or efficiently than competitors who are competing more broadly. as a result the firm achieves either differentiation from better meeting the needs of the particular target market or lower costs in serving this market or even both (porter, 1998). 2.4. corporate growth strategy ansoff matrix developed by ansoff (2012) is a strategic planning tool that guides the organization in forming strategies for future growth by emphasizing on firm’s present and potential products and markets. he described four growth alternatives in his paper. market penetrationhere the organization tries to grow using its existing offerings in existing markets via increasing its market share. this can achieved by price decrease, increase in promotion and distribution support, acquisition of a rival in the same market, modest product refinements. market developmenta firm tries to expand into new markets using its existing offerings and also, with minimal product/services development. this can be accomplished by different customer segments, new areas or regions of the country, foreign markets. product developmenta company tries to create new products and services targeted at its existing markets to achieve growth. diversificationan organization tries to grow its market share by introducing new offerings in new markets (porter, 1980). it is the most risky strategy because both product and market development is required. 2.5. competitive advantage and organizational performance the resource based view (rbv) a basis for the competitive advantage theorizes the importance of resources and capabilities to gain competitive advantages as an end to a greater performance (barney, 1991; peteraf, 1993). the rbv holds that competitive advantage comes from the firm’s own resources and capabilities. rbv focuses on identifying and determining the value of firm resources and capabilities (teng and cummings, 2002) and how firms can acquire, maintain, deploy, and develop resources and capabilities in a manner that establishes and sustains their competitive advantage resulting in higher performance(berman et al., 2002; knott, 2003; zott, 2003; ahuja and katila, 2004). thus, barney (1991. p. 102) asserts, “a firm is said to have a competitive advantage when it is implementing a value-creating strategy not simultaneously being implemented by any current or potential competitors.” this competitive advantage is sustainable if “the advantage resists erosion by competitor behavior” (bharadwaj et al., 1993. p. 84). many researchers who have established that business that select differentiation as competitive advantage produce better performance than rivals (allen and helms, 2006; teeratansirikool, 2013). the literature on management emphasizes the key role that innovation (baker and sinkula, 2002) plays in enhancing a firm’s competitive advantage thus effecting it’s performance. 3. research methodology a descriptive research design has adopted for conducting the work, it is a scientific method that involves observing and describing the behavior of a subject without influencing it in any way. the target population of this study was the 15 different food manufacturing company in bangladesh. from the target population of 1025 employees who worked in the management position more than 12 years has used as a sample. random sampling method was used in the sample selection method. the study was based on primary data that was collected by using a questionnaire. the questionnaire used both open and closed ended questions. for the closed ended questions, the study adopted a five point liker scale where the target respondents indicated the extent of their agreement/disagreement with each statement. in analyzing the quantitative data, the study used descriptive statistics. the multiple regression analysis has used to determine the significance of each independent variable in affecting the performance of the food industry. the multiple regression analysis model specification was as follows: y=β0+β1x1+ β2x2+β3x3+β4x4+ε here, y= organizational performance x1= cost leadership strategy x2= differentiation strategy x3= focus strategy x4= corporate growth strategy ε= error terms. in this study the dependent variable was the organizational performance and on the other hand the independent variables were the cost leadership strategy, differentiation strategy, focus strategy and corporate growth strategy. 4. analyses and findings the cronbach’s alpha (α) value for cost leadership strategy (0.915), followed by corporate growth strategy (0.908), organizational performance (0.902), differentiation strategy (0.892) and focus strategy (0.886). overall all the items in each factor in the research instrument have a good reliability (table 1). the respondents were asked the extent to which they agreed on the statements below on cost strategy adopted by their organizations. from the table it has shown that in the competitive market organization always looking for economic scale that helps the hossain, et al.: competitive strategies and organizational performance: determining the influential factor conquer over the rivals in the food industry of bangladesh international review of management and marketing | vol 9 • issue 3 • 2019103 firm to remain competitive in terms of cost as indicates by the means 5.9537 is the highest mean score with a standard deviation 0.882, it means that economic scale helps the firm offering low cost from its competitors in the manufacturing industry (table 2). after that when the question of enhancing the market share the company may absorbed the low cost strategy where the mean value of 5.9463 with a standard deviation of 0.815. that followed by low cost strategy helps the organization gain a competitive advantage by reducing its operating costs below its competitors where the mean value 5.9241 with a standard deviation of 0.882. low scores were recorded on accumulation of knowledge assists the firm to reduce its cost at a mean of 5.2171 and standard deviation of 0.890, it shows that accumulation of knowledge assists the firm to reduce its cost had influenced the cost leadership strategy to a moderate extent. from the table it has shown that when the firms are focusing on the value added service, differentiation strategy is being profitable one; here the mean value is 4.6725 with the standard deviation of 0.7511 (table 3). on the other hand differentiation strategy is also consistent when the firms are setting the price they should focus on the segmentation, here the mean value is 4.6011 with the standard deviation of 0.7793. in the competitive market when the question of introducing the unique product the firms adopting the differentiation strategy with the mean value is 4.5614 with the standard deviation of 0.8516. low scores were recorded on focusing on the continuous improvement at a mean of 3.9203 and standard deviation o f 0 . 7 9 1 7 , i t s h o w s t h a t f o c u s i n g o n t h e c o n t i n u o u s improvement had influenced the differentiation strategy to a moderate extent. in the focus strategy the company needs to focus on differentiating its products from those of its competitors to remain competitive which has the highest mean value with score 4.2104 and standard deviation of 0.7511 whereas competitive pricing is another major factor in the focus strategy with the mean value of 4.1147 and standard deviation of 0.7816. in the focus market another major factor that the company needs to be innovative to remain competitive with the mean value of 4.0142 and standard deviation of 0.7017, these factors had great influence on the focus strategy (table 4). low scores were recorded on focusing of specific market segments enable the company to deliver high quality products at a mean of 3.9691 and standard deviation of 0.6917, it shows that focusing of specific market segments enable the company to deliver high quality products had influenced the focus strategy to a moderate extent. in the case of corporate growth strategy, high score of mean was on the transforming customer needs, which is 4.1591 with the standard deviation of 0.7533 that indicates that the transforming customer needs to a large extent influence on corporate growth strategy. that followed by the rigorous industry regulation with the mean value of 4.1533 and with the standard deviation of 0.7731 indicates that rigorous industry regulation to a large extent influence on corporate growth strategy (table 5). table 1: reliability statistics for the constructs of the study construct/variable cronbach’s alpha (α) number of items cost leadership strategy 0.915 8 differentiation strategy 0.892 8 focus strategy 0.886 5 corporate growth strategy 0.908 4 organizational performance 0.902 5 table 2: cost leadership strategy cost strategy mean value ± standard deviation organization frequently uses low prices for its products to be remaining competitive in the market 5.4890±0.862 company enhances its market share by charging lower price 5.9463±0.815 accumulation of knowledge assists the firm to reduce its production cost 5.2171±0.890 cost leadership strategy protects the organization from its competitors 5.8292±0.783 lower cost strategy helps our organization gain a competitive advantage by reducing its operating costs below its competitors 5.9241±0.882 cost leadership strategy at our organization offers services in a broad market at the lowest prices 5.9103±0.836 in the competitive market organization always looking for economic scale that helps the firm to remain competitive in terms of cost 5.9537±0.882 organization always looking for reducing operating costs that helps the firms to adopt cost leadership strategy 5.9152±0.824 table 3: differentiation strategy differentiation strategy mean value ± standard deviation introducing unique products 4.5614±0.8516 maintaining high innovation adoption 4.0152±0.8101 focusing on continuous improvement 3.9203±0.7917 engaging highly skilled staff 3.9832±0.8003 ensuring the customer satisfaction 4.2181±0.7109 focusing on value added services 4.6725±0.7511 setting up the prices based on the segmentation of the customer 4.6011±0.7793 high retention through the continuation of service quality 4.3927±0.6914 table 4: focus strategy focus strategy mean value ± standard deviation company has chosen specific market segments for some of its products 3.9810±0.7125 focusing of specific market segments enable the company to deliver high quality products 3.9691±0.6917 company focuses on differentiating its products from those of its competitors 4.2104±0.7511 company focuses on competitive pricing to remain competitive 4.1147±0.7816 company focuses on innovations to remain competitive 4.0142±0.7017 hossain, et al.: competitive strategies and organizational performance: determining the influential factor conquer over the rivals in the food industry of bangladesh international review of management and marketing | vol 9 • issue 3 • 2019 104 low scores were recorded on essential financial requirements at a mean of 4.0192 and standard deviation of 0.6918, it shows that essential financial requirements had influenced the corporate growth strategy to a moderate extent. high score of mean was on improve customer satisfaction, the mean was 3.9261 with a standard deviation of 0.8913 indicates that customer satisfaction to a large extent had an influence on organization performance (table 6). this followed by improve customer loyalty with a mean value 3.8810 with a standard deviation of 0.8102 explain that customer loyalty to a large extent had an influence on organization performance. in terms of the organizational performance that also accelerated through the market share, increased market share with a mean of 3.8102 with a standard deviation of 0.7913 showing that market share to a very large extent influence the organization performance. low scores were recorded on customer retention at a mean of 3.810 and standard deviation of 0.7913, it shows that customer loyalty had influenced the organization performance to a moderate extent. from table 7 it was observed that there is a positive correlation between performance and competitive strategies (cost leadership strategy, differentiation strategy, focus strategy and corporate growth strategy) of magnitude 0.259** with cost leadership strategy, 0.366* with differentiation strategy, 0.381** with focus strategy and a magnitude of 0.341** with corporate growth strategy respectively. 4.1. regression analysis a regression analysis was conducted to determine how the cost leadership strategy, differentiation strategy, focus strategy and corporate growth strategy are related to organization performance. table 8 shows a model summary of regression analysis between four independent variables cost leadership strategy, differentiation strategy and focuses strategy, corporate growth strategy and dependent variable organization performance. the value of r was 0.815; the value of r square was 0.703 and the value of adjusted r square was 0.691. the positivity and significance of all values of r shows that model summary is significant and therefore gives a logical support to the study model. from the table 9 observed that the significance value is 0.038 which is <0.05 thus the model is statistically significant in predicting how cost leadership strategies, market focus strategies, differentiation strategies and corporate growth strategies influence the performance of the manufacturing companies in bangladesh. the f critical at 5% level of significance was 3.23. from the findings of the regression analysis if all factors (cost leadership strategy, differentiation strategy and focus strategy) were held constant, organization performance of the firms would be at 2.156 (table 10). an increase in cost leadership strategy would lead to an increase in the organization performance by 0.317. an increase in the differentiation strategy would lead to an increase in the organization performance by 0.283. an increase in the focus strategy would leads to an increase in the brand performance by 0.211. an increase in the corporate growth strategy would leads to an increase in the brand performance by 0.185.all the variables were significant as the p-values were <0.05 which is an indication that all the factors were statistically significant. 5. conclusion from the analysis it has been observed that competitive strategies have influence on the organizational performance in the food industry of bangladesh. from this research work it was also seen that cost leadership strategy is the lucrative option for enhancing the market share. due to the accelerating the competition firms are not really one single strategy. through this work it was also observed that combination of differentiation strategy and cost leadership strategy is the most suited strategy in the long run. differentiation strategy and cost leadership strategy have used in the large extent compare to the focus strategy. table 5: corporate growth strategy corporate growth strategy mean value±standard deviation transforming customer needs 4.1591±0.7533 essential financial requirements 4.0192±0.6918 intensifying the demands from its suppliers 4.1181±0.7181 rigorous industry regulations 4.1533±0.7731 table 6: organizational performance organizational performance measure mean value±standard deviation improved customer satisfaction 3.9261±0.8913 improved customer loyalty 3.8810±0.8102 improved customer retention 3.7918±0.8814 increased market share 3.8102±0.7913 improved profitability 3.8544±0.8015 table 7: correction matrix organizational performance low cost strategy differentiation strategy focus strategy corporate growth strategy organizational performance 1 low cost strategy 0.259** 1 differentiation strategy 0.366* 0.412* 1 focus strategy 0.381** 0.537** 0.331** 1 corporate growth strategy 0.341** 0.211** 0.176** 0.238** 1 **correlation is significant at the 0.01 level (2-tailed). *correlation is significant at the 0.05 level (2-tailed) hossain, et al.: competitive strategies and 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(2003), dynamic capabilities and the emergence of intra industry differential firm performance insights from a simulation study. strategic management journal, 24(2), 97-125. table 8: model summary model r r2 adjusted r2 standard error of the estimate 1 0.815 0.703 0.691 0.153 table 9: anova model sum of squares df mean square f sig. regression 0.354 4 0.256 2.138 0.038 residual 0.239 3 0.089 table 10: multiple regression analysis unstandardized coefficients standardized coefficients t sig. b standard error beta 5.119 0.004 (constant) 2.156 0.241 4.203 0.000 low cost strategy 0.317 0.152 0.314 3.938 0.001 differentiation strategy 0.283 0.135 0.262 3.752 0.003 focus strategy 0.211 0.114 0.195 3.184 0.000 corporate growth strategy 0.185 0.107 0.150 2.907 0.002 . international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2018, 8(5), 9-17. international review of management and marketing | vol 8 • issue 5 • 2018 9 the main role of locus of control and professional ethics on lecturer’s performance (indonesian lecturer empirical study) aditya halim perdana kusuma1*, rina2, andi hendra syam3 1stim lasharan jaya makassar, indonesia,2stim lpi makassar, indonesia. *email: adityatrojhan@gmail.com abstract as the professional staff of higher education institution, a lecturer is not only required to have competence but also to have proficiency in socialization in surrounding environment. besides considered to be able to teach, a lecturer is literally required to learn and keep his professional ethics both inside and outside the campus. in order to fulfill them, the control of locus of control and professional ethics play the role. this research aims at analyzing the relationship of locus of control and professional ethics with lecturer’s performance. the object of this research is 42 management department lecturers of private campuses with religious ideology in makassar and this research employs a multiple linear regression as its analysis method. the results of this research state that internal locus of control has significant influence (0.018), external locus of control has no significant influence (0.584) and professional ethics has significant influence (<0.01) on lecturer’s performance. the r2 value is 0.783 or 78.3%. keywords: locus of control, professional ethics, lecturer’s performance jel classification: o15 1. introduction a discussion of lecturer’s professionalism principle as a skilled and competent teaching staff cannot be separated from the rule of standards that bind them, which are code of conduct and professional ethics. a professional lecturer does not only serve to be a teaching staff and a researcher, but also serves to be a balancer in the dynamics of the community through community service activities in order to practice his knowledge for the sake of the community. this means that the essence of professionalism has two forms of uniqueness, which are special knowledge and obligation to serve the community through his profession background (christopher et al., 2003), or in other words, professional means able to place something proportionally (evans, 2008). in the academic world, campus serves to be a sacred institution that plays the role in invention or innovation activities, conceptualization of ideas, dissemination of science and dissemination of truth pursuant to empirical data and facts (kusuma, 2017). such statement is similar to what is proposed by (julius and ifedha, 2013) that an unethical behavior will create legal issues in the future. for doing daily activities, pay attention to ethical norms is important because ethical norms contain all the rules that govern appropriate actions (babalola et al., 2017). ethics are useful to create good credibility in the environment. unethical behavior and does not follow the rules will certainly have an impact and legal issues and indeed lead to formal and social sanctions (araujo, 2009). un-ethical behavior will eliminate trust of internal part such us colleagues or external part in surrounding environment. in the future for restore the credibility and good trust of course require more time and great sacrifice. therefore, a lecturer’s professional ethics do not only bind such individual in the campus, but the inherent title “lecturer” should also be brought into social environment. one of the news pages in 2016 contains news about a lecturer at one of the private campuses in east java sumenep regency who was fired disrespectfully as a result of not obeying the lecturer ethics codes. the dismissal at july 2016 fired lecturer was given sanctions because conjecture data manipulate (www. cendananews.com, 2016). still, in 2016, there is also a case of lecturers who end up dealing with the law because of drugs (www.news.detik.com, 2016) (www.liputan6.com, 2016). in 2018 there is also a legal case involved lecturer related hate speech in social media and spread the “hoax” (www.jabar.tribunnews. kusuma et al.: the main role of locus of control and professional ethics on lecturer’s performance (indonesian lecturer empirical study) international review of management and marketing | vol 8 • issue 5 • 201810 com, 2018). the examples of cases were presented are lessons for other lecturers to be professional and able to position themselves neutrally, mature, and wise in various situations especially in the era involving information technology. the lecturer is an important profession to support the continuity of learning and teaching activity for higher education with an important role to deliver and present course materials to students (frans, 2018). according to (law no.14 year 2005) regarding teacher and lecturer, the lecturer is a professional educator and scientist with the main duty to transform, develop, and disseminate science, technology, and arts through education, research and community services (three principles of higher education). in article 60 law no. 14 year 2005, the lecturer is obligated to respect legislation, laws, code of conduct, as well as religious and ethical values. in support of professional performance in order to universally realize organization’s objectives, personal attitude and ability in maintaining a social relationship with colleagues and leader are required. in addition, high spirit at work, patience, thoughtfulness and positive action are also required by the profession and constitute a unity a professional worker must have (siska, 2015), considering that human resources quality constitutes an organization’s intangible assets (www.kompas. com, 2012). in order to realize quality human resources, self-motivation ability, personal attitude and personal characteristics are the first step as well as the key to success to be a reliable professional human resource (www.hradvisors.com, 2015), including a lecturer as a professional staff. self-motivation ability and personal attitude are called locus of control in the concept of psychology. the locus of control concept (self-control center) is first proposed by julian rotter in 1975, in which locus of control is an individual’s level of confidence in seeing causality relationship between conduct, mindset which is then interpreted based on events in his life in seeing a success (ridwan, 2013), (sundari, 2014), (angelova, 2016), (menezes, 2008)., locus of control is divided into 2 (two) categories: external locus of control, which is an individual’s tendency to see that a success is influenced by factors beyond himself (menezes, 2008), (ridwan, 2013), (adi et al., 2012); and internal locus of control, which is an individual’s tendency to see that any success results from his own effort and competence. point of view plays an important role in determining initial step and final process of a success to be achieved, even if there are many factors that influence an individual’s performance in addition to professionalism, such as organization’s culture, internal competitive condition and compatibility of job description with worker’s ability (hermawan and kaban, 2014). interestingly, when withdrawn into academician domain, that many factors influence the performance is certainly interesting for us to correlate, especially lecturer that is the human resource of higher education. as all of us exactly know, lecturer’s main duty and function are the three principles of higher education which contain obligations in education, teaching, service and other important supporting aspects in the scope of academic domain, which are then bound by law no. 14 year 2015, in which lecturer is obligated to respect legislation, laws, code of conduct, as well as religious value and moral ethics, so that lecturer as a professional staff in a higher education institution is demanded not only to be strongly competent but also proficient in socialization in surrounding environment. lecturer’s literal role requires them, besides considered to be able to teach almost simultaneously, to learn and to be able to maintain their professional ethics as professional staff in a higher education environment in indonesia. 2. literature review 2.1. social learning theory (slt) slt developed by albert bandura which states that where a person behaves to follow the pattern of behavior of many people who originally did not know to know (bandura, 1971) means no interaction no learning. slt emphasizes the components of human cognitive, understanding, meaning and evaluation. social learning itself is the development of the theory of behaviorism (behaviorism). slt states that social factors play an important role in social learning in addition to behavioral and personal factors and the environment in which it resides. slt itself is the root of locus of control developed by jullian rotter. in relation between slt and locus of control specifically describe potential behavior is generated through expectations and reinforcement values (rotter, 1954). behavior potential is the likelihood that a certain behavior will be performed (rotter, 1954). expectancy is the likelihood that a certain behavior will be reinforced (wabba and house, 1974) (evans et al., 1982) (ramli and jusoh, 2015). reinforcement value is the extent to which an individual values the expected reinforcement of an action (rotter, 1954), (rotter, 1975), (lefcourt, 2014). in psychological concept behavior is a result of an interaction between the environment and internal factors. behavior in the organization is a character that distinguishes between other organizations, as well as a vision and mission that later developed into an organizational culture. good behavior and professional will then form a good and professional organizational culture as well (chiu et al., 2014). 2.2. locus of control the locus of control concept is first introduced by julian rotter in 1966. rotter explains that people have the ability to see causality relationship between their own conduct and emerging amplifying factors. according to rotter, locus of control refers to personality dimension which helps explain individual’s behavior. this refers to what extent an individual is convinced and confident to control any events influencing him. locus of control is basically divided into internal and external locus of control. according to gardner and warner in 1978, locus of control is related to individual acceptance and responsibility as the result of his own conduct (nerguz and oguz, 2010). one of the factors which influence the development of locus of control is physical and social environments (sundari, 2014). lamm et al. in 1976 finds the fact that an individual with well-established socio-economic background sees future more optimistically than an individual with poor-established socioeconomic background (woodward, 1982), (adi et al., 2012). locus of control divide in 2 categories such as locus of control internal and locus of control external. individual characteristics with locus of control internal characters believe that all forms of success has achieved is the result of his hard work and ability. individuals who kusuma et al.: the main role of locus of control and professional ethics on lecturer’s performance (indonesian lecturer empirical study) international review of management and marketing | vol 8 • issue 5 • 2018 11 believe that success is the result of hard work certainly have an unyielding attitude towards challenges. the attitude is forging the individuals becomes more mature in his behaving (woodward, 1982) and (smith et al., 1995). while individuals with locus of control external characters assume the success earned by luck so he also believes in good and bad hunch before or in the process of his action. this attitude certainly leads the individuals with locus of control external character assessing based on material value so in his action always expect for help (woodward, 1982). certainly in daily activities, someone is confronted with two opposite options which makes person become optimistic or pragmatic. in uncertain situation the individuals must be careful to determine the strategy to face the challenges in various situations especially in the competition era. many studies have been conducted previously to explain the interrelationship between locus of control and performance and that locus of control has a significant influence on performance, such as that proposed by (angelova, 2016). meanwhile, performance is a series of results obtained by an individual who has worked for a specific period (jaksic and jasksic, 2013), (wuryaningsih and kuswati, 2013), (adi et al., 2012), (eka, 2010). another opinion proposes that a person with an internal locus of control has higher performance than a person with external locus of control (menezes, 2008). 2.3. professional ethics performance is the result of an assessment of the quality and quantity of a person in completing each job (teman, 2005) and more than that performance also includes how the outcome of a work process (kusuma, 2017). the result of work is a factor that affects the performance of the organization (sukirno and siengthai, 2011). in the higher education systems, lecturer’s performance has a strategic role and is the main factor determining student performance and hence university performance. to produce a good performance and optimal role of personal factors, internal and external conditions is a factor that contributes to the person performance. ethics is a complex process with which we will be able to behave in a balanced way in various situations and conditions. ethics is a branch of philosophy since it is related to critical meaning of anything which involves moral and moral experience (julius and ifedha, 2013). in its relation, professional ethics is divided into two aspects, moral aspect and normative ethics, to counter egoism and fulfillment of personal desire (suryaningnum et al., 2013). professional ethics is also the branch of business ethics and moral ethics in which attitude of professional ethics becomes the basis to assess whether or not an individual is professional. professional ethics is the key to differentiate a human from one another (mohsen, 2014). in indonesia, lecturer’s professional ethics is regulated in law no. 14 year 2005 regarding teacher and lecturer. the lecturer is regulated with ethical principles, ethical rules and ethical interpretations (hilmi, 2013). in relation to teaching and learning process in campus, the results of researches conducted by dolinger in 2000 and noel in 1987 state that locus of control has a positive influence on student’s learning success (manichander, 2014). in performing activities, a lecturer is bound by rules and code of conduct which are the guidance to perform his duties as a professional educating staff, such as: he should become a model both orally and in action, insightful and experienced, open in disseminating and absorbing science as well as open to criticism and diversity, active in community service, and objectively asses students (wahyu, 2013). this professional ethics describes idealistic and practical behavioral standard in achieving objectives (oktaviani, 2014). thorne in 2000 states that professional ethics consists of ethical perception and ethical consideration (wibowo, 2014). ethical perception is an individual’s ability to discover an ethical issue existing in his environment and ethical consideration is regarding an assessment of which action may be morally justified. several types of research state that ethics positively and significantly influences performance (cahyani et al., 2015), (hilmi, 2013), (afta, 2013), (setya and gea, 2014), (wibowo, 2014) and (oktaviani, 2014). 2.4. indonesian lecturer’s performance indonesian lecturer’s performance is specifically mandated in law no. 14 year 2005 regarding teacher and lecturer and government regulation of the republic of indonesia no. 37 year 2009 regarding lecturer, that lecturer is a professional educating staff and a scientist with the main duty to transform, develop, and disseminate science, technology and arts through education, research and community services. lecturer’s main duty may be viewed from his lecturer’s workload (beban kerja dosen bkd) with minimum workload of 12 (twelve) university credit units and maximum workload of 16 (sixteen) university credit units each semester which is adjusted to his academic qualification. lecturer’s performance may be considered good if he fulfills the number of scheduled meetings so that course materials may be delivered pursuant to teaching plan and if he actively gives advice and counseling to students in arranging their final project. lecturer’s performance may develop to a higher level in line with his desire to collaborate and collectively build a network to be a means of exchanging ideas and experiences. this is obtained when a lecturer is active in publication, participating in seminar/workshop/training as well as active in the professional organization. a good and wide network will certainly provide lecturer big opportunities with regard to dissemination of information which is useful for him to work more actively as well as realize better performance (direktorat jenderal pendidikan tinggi, 2008). 3. methodology this research employs a multiple linear regression analysis and collects the data using questionnaires from 47 respondents. the object of this research is management department lecturers of 4 (four) campuses with religious ideology in makassar. the main outline purpose of the question in this questionnaire is (i) measure and analyze respondent’s perceptions of internal locus of control attitude in their activities as lecturer’s, (ii) measure and analyze respondent’s perceptions of external locus of control in their activities as lecturer’s, (iii) measure and analyze respondent’s perception of lecturer’s performance in indonesia trough lecturer’s workload (beban kerja dosen – bkd). kusuma et al.: the main role of locus of control and professional ethics on lecturer’s performance (indonesian lecturer empirical study) international review of management and marketing | vol 8 • issue 5 • 201812 the test phase of this study is through various steps such as: 1. validity test is aimed to determine whether item or indicators declared valid to build the variable (cronbach, 1988). the validity value is seen from the significant value which is expected (p < 0.05) and the correlation value has positive. 2. reliability test is aimed to determine the relationship and causality of each item or indicator to the variable (cronbach, 1988) and (field et al., 2013). reliability value seen from cronbach alpha (α) value which requires α < 0.6. 3. f-test as a simultaneous test which requires f table > f count or hypothesis statistical test to find out if the hypothesis is accepted or rejected (h0 = accepted, ha = rejected) or (h0 = rejected, ha = accepted). the f value is seen from the significant value which requires (p < 0.05) (field et al., 2013). 4. t-test or partial test is aimed at the influence of independent variables on the dependent variable. t-test value is seen from the significant value which requires p < 0.05. 5. r2 test or r2 test is aimed to find out the overall influence of the independent variable on the dependent variable in percentage, a difference of calculation the r2 value – 100% is the result that states that there are other independent variables that influence the dependent variable other than the variable being studied (field et al., 2013). 6. normality test to know whether the data is normally distributed (parametric) or abnormal distributed (non-parametric). the normality test is an absolute requirement for multiple regression analysis and person correlation. (field, 2009). to find out whether the data has normally distributed is viewed from kolmogorov-smirnov test by asymp sig value > 0.5. 7. multicollinearity test is aimed to find out presence or absences the deviation classical assumption test. the require of multicollinearity test is vif value <10 and tolerance value >0.1 8. regression analysis is aimed to find out the relationship/ causality influence between independent variable to dependent variable. to know the regression coefficient can be seen through coefficient β, t-value and significant value which requires p < 0.05 (field et al., 2013). the samples are obtained using stratified quota sampling. the data are measured using liker scale of 1-5 (strongly agree – strongly disagree) (sugiyono, 2012). the analysis tool use spss ver. 24 with multiple regression analysis approach. data collection also comes with demographic data the includes: gender (male and female), age (start from 18 years to 50 years and up) and education level (master’s degree and doctoral degree). the number of samples is determined as follows in table 1. in order to answer this research, a relationship approach is conducted based on empirical data which is developed through a conceptual framework (figure 1). based on the results of previous researchers, this research addresses some points of hypothesis: h1: internal locus of control positively and significantly influences lecturer’s performance h2: external locus of control influences lecturer’s performance h3: professional ethics influences lecturer’s performance. operational definition: internal locus of control (x1) is measured with: the ability of individual who believes that a success and failure is highly influenced by his ability, highly interested in control of behavior and action, persistence and trying to control his behavior to the highest extent possible external locus of control (x2) is measured with: believe in good and bad intuition, consider that a success and failure is fate and nothing can be made to change something that has occurred, consider anyone as having luck and believe in luck, table 1: number of samples no name of educational institution number of permanent lecturer (%) number of ideal samples per stratum (person) 1 universitas muslim indonesia 34 (38.7) 19 2 universitas kristen indonesia paulus 17 (19.3) 9 3 universitas muhammadiyah makassar 25 (28.4) 13 4 universitas atma jaya makassar 12 (13.6) 6 total 88 (100) 47 figure 1: research framework kusuma et al.: the main role of locus of control and professional ethics on lecturer’s performance (indonesian lecturer empirical study) international review of management and marketing | vol 8 • issue 5 • 2018 13 have materialistic character and assess people based on their level of welfare, highly expect other’s help and consider that his behavior is influenced by an individual with higher power (patten, 2005) and (woodward, 1982). professional ethics (x3) is measured with ethical behavior and ethical consideration (wibowo, 2014). lecturer’s performance (y) is measured with activeness in teaching/counseling and supervision, activeness in participating in training/workshop and seminar, utilization of media and technology, preparing complete teaching material, activeness in fulfilling bkd, activeness in following profession organization, activeness in publication/conference and community services (three principles of higher education) (direktorat jenderal pendidikan tinggi, 2008). 4. results based on the result of distribution questionnaire with the question is 16 items most of it stated gradation of respondent’s answers are in the category agree – highly agree except for items external loc.1, external loc.3 and external loc 4 stated gradation of respondent’s answers are in the category disagree – highly disagree (table 2). internal loc. 1 = a professional and competent lecturer believes that a success is highly based on his competence as a lecturer. valid frequency (%) agree 17 (39.5) highly agree 25 (60.5) total 42 (100.0) internal loc. 2 = to be a professional lecturer, someone must be able to control himself, his behavior and action valid frequency (%) agree 19 (44.2) highly agree 23 (55.8) total 42 (100.0) internal loc. 3 = to be a professional lecturer, persistence despite of any condition is the key to success in the future valid frequency (%) disagree 4 (9.3) neutral 15 (34.9) agree 23 (55.8) total 42 (100.0) external loc. 1 = as a lecturer, i consider that luck is a real thing. in my opinion, no success will be gained without effort and pray valid frequency (%) highly disagree 5 (11.6) disagree 17 (41.9) neutral 5 (11.6) agree 11 (25.6) highly agree 4 (9.3) total 42 (100.0) external loc. 2 = as a lecturer, i consider that luck is a real thing, that sometimes mere hard effort is not enough for something attempted without luck valid frequency (%) disagree 2 (4.7) agree 22 (51.2) highly agree 18 (44.2) total 42 (100.0) external loc. 3 = as a lecturer, sometimes i think a lecturer of a state university should be more financially prosperous than that of a private university valid frequency (%) highly disagree 10 (23.3) disagree 20 (46.5) neutral 7 (18.6) agree 4 (9.3) highly agree 1 (2.3) total 42 (100.0) external loc. 4 = as a lecturer, i think it is quite difficult to develop without support of colleagues and superior valid frequency (%) highly disagree 10 23.3 disagree 20 46.5 neutral 7 18.6 agree 4 9.3 highly agree 1 2.3 total 42 100.0 professional ethics.1 = as a professional lecturer, when facing a situation which conflicts with lecturer’s professional ethics, i should be able to control myself and not get in or participate in any activity which breaks lecturer’s professionalism norms. valid frequency (%) disagree 1 (2.3) agree 23 (53.5) highly agree 18 (44.2) total 42 (100.0) table 2: respondent’s demographic data valid frequency (%) sex male 19 (40.5) female 28 (59.5) total 47 (100.0) age (years) 18–25 7 (14.8) 26–33 17 (36.1) 34–41 7 (14.8) 42–49 7 (14.8) 50 years and up 9 (19.1) total 47 (100) education level master’s degree 35 (74.4) doctoral degree 12 (25.5) total 47 (100) kusuma et al.: the main role of locus of control and professional ethics on lecturer’s performance (indonesian lecturer empirical study) international review of management and marketing | vol 8 • issue 5 • 201814 professional ethics.2 = becoming a lecturer requires someone to be consistent between what is talked and what is conducted and to keep good name and profession image clean and dignified. valid frequency (%) agree 26 (62.8) highly agree 16 (37.2) total 42 (100.0) performance.1 = a lecturer should fulfill the number of meetings as scheduled, be active in giving consultation and advice as an academic advisor/supervisor of student’s final project valid frequency (%) agree 27 (65.1) highly agree 15 (34.9) total 42 (100.0) performance.2 = to improve the performance, a lecturer must actively participate in training and seminars valid frequency (%) agree 16 (37.2) highly agree 26 (62.8) total 42 (100.0) performance.3 = a lecturer is required to utilize media and technology in teaching and learning activity valid frequency (%) neutral 1 (2.3) agree 18 (41.9) highly agree 23 (55.8) total 42 (100.0) performance.4 = for each course, a lecturer must completely prepare the module, teaching material, report on teaching results and course progress for each meeting valid frequency (%) agree 25 (58.1) highly agree 17 (41.9) total 42 (100.0) performance.5 = lecturer’s performance may be viewed from his activeness in fulfilling lecturer’s workload at least once in a semester valid frequency (%) agree 27 (62.8) highly agree 15 (37.2) total 42 (100.0) performance.6 = a professional lecturer may be identified from his activeness in participating in profession organization since this will give him opportunity to establish cooperation in improving teaching and learning quality valid frequency (%) neutral 1 (2.3) agree 26 (60.5) highly agree 15 (37.2) total 42 (100.0) performance.7 = a professional lecturer should be active in publication, conference, research and community service. these distinguish between productive and non-productive lecturer valid frequency (%) agree 26 (60.5) highly agree 16 (39.5) total 42 (100.0) based on data fit and proper test (table 3) results of distribution of questionnaire stated validity test most of the items has a positive correlation with significant value <0.01. this show that items or indicators variable stated valid and has a strong relationship. reliability test stated the cronbach alpha value (α) or item reliably on the variable is strongly high (α > 0.6). cronbach alpha value of internal locus of control (0.844 > 0.6), external locus of control (0.845 > 0.6), professional ethics (0.824 > 0.6), lecturer’s performance (0.824 > 0.6). the f-test or partial test/hypothesis statistical test stated internal of locus of control has a simultaneous influence on lecturer’s performance variable, professional ethics variable has a simultaneous influence on lecturer’s performance variable and external locus of control has no simultaneous influence on lecturer’s performance. the statistical hypothesis test stated: 1. h1: internal locus of control positively and significantly influences lecturer’s performance. hypothesis (h1) stated accepted (h0 = accepted, ha = rejected). result based table 3 stated f-test value for hypothesis h1 is 50.801 with significant value (0.000 < 0.01). 2. h2: external locus of control influences lecturer’s performance. hypothesis (h2) stated rejected (h0 = rejected, ha = accepted). result based table 3 stated f-test value for hypothesis h2 is 764 with significant value (0.387 > 0.05). 3. h3: professional ethics influences lecturer’s performance. hypothesis (h3) stated accepted (h0 = accepted, ha = rejected). result based table 3 stated f-test value for hypothesis h1 is 382.775 with significant value (0.000 < 0.01). the t-test of statistical hypothesis based table 3 stated: 1. professional ethics has partial influence on lecturer’s performance (partial = 17.431) and significant value (0.000 < 0.01) 2. external locus of control has no partial influence on lecturer’s performance (partial = -0.549) and has no significant value (0.584 > 0.05) 3. internal locus of control has partial influence on lecturer’s performance (partial = 2.372) and significant value (0.018 < 0.05). r2 test stated value 0.783 or can be interpreted internal of locus of control, external locus of control and professional ethics has to influence on lecturer’s performance as much 78,3% and the kusuma et al.: the main role of locus of control and professional ethics on lecturer’s performance (indonesian lecturer empirical study) international review of management and marketing | vol 8 • issue 5 • 2018 15 difference as much 21.7% lecturer’s performance are influenced by various other variables. normality test by kolmogorov-smirnov test stated value (0.195 > 0.5) stated the data has normally distributed. the multicollinearity test stated: 1. tolerance value of professional ethics stated (0.871 > 0.1) and vif value stated (1.148 < 10). 2. tolerance value of external locus of control stated (0.945 > 0.1) and vif value stated (1.058 < 10). 3. tolerance value of internal locus of control stated (0.839 > 0.1) and vif value stated (1.058 < 10). overall variables can be concluded that the tolerance value and vif value on each independent variable is qualified and there is no deviation from the classical assumption test. multiple regression analysis stated 1. professional ethics has significant influence on lecturer’s performance. the coefficient of regression is (β = 0.596), standard error value (se = 0.034), the influence value (t = 17.431) and significant influence value (0.000 <0.01). 2. external locus of control has no significant influence on lecturer’s performance. the coefficient of regression is (β = −0.020), standard error value (se = 0.039), the influence value (t = −0.549) and has no significant influence (0.584 > 0.05). 3. internal locus of control has significant influence on lecturer’s performance. the coefficient of regression is (β = 0.093), standard error value (se = 0.039), the influence value (t = 2.372) and significant influence (0.018 < 0.05). the result of regression analysis stated overall of standard error value is very low (se <1), and coefficient of regression (β) stated positively. so it can be concluded that internal locus of control and professional ethics has significant and directly influence except external locus of control. multiple regression results stated the professional ethics is the most dominant variable affecting on lecturer’s performance. table 3: data fit and proper test validity test correlation significance internal loc 1 0.643 0.00<0.01 internal loc 2 0.567 0.00<0.01 internal loc 3 0.566 0.00<0.01 external loc 1 0.640 0.00<0.01 external loc 2 0.241 0.00<0.01 external loc 3 0.527 0.00<0.01 external loc 4 0.307 0.00<0.01 professional ethics. 1 0.886 0.00<0.01 professional ethics. 2 0.745 0.00<0.01 performance. 1 0.833 0.00<0.01 performance. 2 0.726 0.00<0.01 performance. 3 0.707 0.00<0.01 performance. 4 0.738 0.00<0.01 performance. 5 0.735 0.00<0.01 performance. 6 0.884 0.00<0.01 performance. 7 0.780 0.00<0.01 reliability test α internal locus 0.844 external locus 0.845 professional ethics 0.824 performance 0.824 f test internal locus of control (f = 50.801) sig = 0.000 < 0.01 external locus of control (f = 764) sig = 0.387 > 0.05 professional ethics (f = 382.775) sig = 0.000 < 0.01 t-test partial sig professional ethics 17.431 0.000<0.01 external locus of control -0.549 0.584>0.05 internal locus of control 2.372 0.018<0.05 determination coefficient test (r2)=0.783 normality test. asymp. sig.=0.195 > 0.05 (normal) multicollinearity tesssst tolerance vif professional ethics 0.871 1.148 external locus of control 0.945 1.058 internal locus of control 0.839 1.192 regression test b standard error t sig constant 1.410 0.232 6.064 0.000 professional ethics 0.596 0.034 17.431 0.000 external locus of control −0.020 0.036 -0.549 0.584 internal locus of control 0.093 0.039 2.372 0.018 kusuma et al.: the main role of locus of control and professional ethics on lecturer’s performance (indonesian lecturer empirical study) international review of management and marketing | vol 8 • issue 5 • 201816 as for the regression equation is: lecturer’s performance (y) = 1.410 + (0.596 professional ethics) + (−0.020 external locus of control) + (0.093 internal locus of control) 5. discussion and conclusion the result of this study stated the hypothesis h1, h3 is accepted and hypothesis h3 is rejected. some results of distributed questionnaires show that many of respondent’s answer is agreehighly agree. considering that the research object is academicians who are laden with scientific meanings and rationality, thus competence constitutes the main requirement to achieve a better performance target as well as in support of career in the professional academic world. lecturer’s career is supported by certified and acknowledged competence. in the community, the lecturer is expected to be the agent of control and agent of society change towards better and dignified life. therefore, the lecturer is required to control themselves from any behavior which may break ethical norms, religious norms, and social norms. this is certainly a pride as well as a burden since they are required to be broadminded, wise, smart and able to provide a solution for any problems in the community. in the journey to meet performance target, a lecturer is required to be active in teaching and fulfill the number of scheduled meetings, be active in providing guidance and counseling to final level students who are their mentoring participants, participate in training/seminar and workshop, which may correct and improve lecturer’s performance. in addition, in order to maximize their performance, they should master and be proficient in utilizing technology-based teaching media which is the main requirement, prepare teaching material completely and routinely as well as update the teaching material, and be active in fulfilling lecturer’s workload (bkd) at least once a semester. activeness in the professional organization should also be met in order to improve their performance through networking and collaboration, which is a means to exchange information and experience. in addition, lecturer’s main obligation is to be active in the trusted publication of both international and national scales, conference and community services, which are the key to be a professional lecturer. external locus of control has no significant influence on lecturer’s performance. the insignificant result may be assumed that the educational role a lecturer has played makes his behavior and habit more critical and rationalistic, thus his thinking perspective and paradigm have become more analytical and logical. in support of professional lecturer’s performance, a lecturer is required to be highly committed to his profession, including respecting the ethical norms both in the academic environment, such as being honest in disclosing research data and facts and avoiding research and publication plagiarism, and in socialization as reflected from neutrality in the diversity of cultures in the community. internal locus of control has a positive and significant influence on lecturer’s performance. external locus of control has no significant influence on lecturer’s performance. personal ethics has positive and significant influence, which is the most dominant variable to influence the performance of management department lecturers of campuses with religious ideology. references adi, k., saputra, k, ganesha, u.p. 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(2016), dosen di makassar diamankan saat pesta sabu di hotel bersama 2 wanita. . international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2018, 8(6), 24-31. international review of management and marketing | vol 8 • issue 6 • 201824 model of leadership style to achieve success of high private education information system muhammad tajuddin anwar* college of informatics management and computer (stmik) bumi gora, mataram of indonesia, indonesia. *email: tajuddin@stmikbumigora.ac.id received: 23 august 2018 accepted: 22 october 2018 doi: https://doi.org/10.32479/irmm.7053 abstract the purpose of this research is to explain about the influence of employee maturity to situational leadership and also of the success of information systems of private universities private college coordinator of area vii and viii (kopertis) of region vii and viii located in east java and west nusa tenggara (ntb) provinces. sampling was done by purposive sampling, with a sample of 5 high schools. respondent is the leader who handles sipts at lower management level, so that it amounts to 30 leaders in three sub-fields of si-pts, namely academic sub-division, financial sub-sector and library sub-sector. the results showed that of the four most significant leadership style is the task maturity and psychological maturity and behavior participation with determination r = 0.62774 on the success of si-pts compared with others. while the influence of task maturity and psychological maturity to the success of si-pts showed a significant level with a determination r = 36.44%. the influence of task maturity and psychological maturity to the same success that is with the same value of the variable ability and the willingness variable that is equal to 0.313757. keywords: situational leadership, systems, information, private higher education jel classifications: d83, i23 1. introduction globalization marked by the absence of boundary-less boundaries provides both opportunities and challenges for all countries (ilomäki et al., 2016). one of the opportunities that can be utilized is the amount of information that can be absorbed by the community in line with the development of supporting technologies (sá et al., 2016). meanwhile, there are various organizational challenges to realize better performance, which is not only demanded for the private sector, but the public sector is demanding the same thing (muñoz et al., 2017). this global era, then a country’s competitive advantage over other countries is a decisive factor in order to survive, play, and compete (kaplan and haenlein, 2016). to perpetuate its existence, the actor’s competitive advantage must also be sustainable because essentially the actors want to perpetuate their existence (mader et al., 2013). continuous competitive advantage is the corporate/ organizational actors to achieve the ultimate goal, which is high profit (al-mamary et al., 2014) performance. so also with the rapid development of technology in the current era. the development of information and communication technology (ict) causes the absence of distance and boundaries between one person and another, group one with other groups, and between one country to another (tajuddin, 2015a). communication between countries takes place very quickly and easily (tajuddin et al., 2012). so also the development of information across the world can be easily accessed through information technology such as through the internet. money transfer and capital investment by foreign businessmen can be done in seconds. conditions of information technology and industrial progress that took place very quickly and tightly in the era of globalization, demanding every country to improve itself in the face of such competition (priyogi et al., 2017). the rapid development of information technology, this journal is licensed under a creative commons attribution 4.0 international license anwar: model of leadership style to achieve success of high private education information system international review of management and marketing | vol 8 • issue 6 • 2018 25 for example, is one of the main features of global development in the 21st century (alreemy et al., 2016). ready or not ready it is a reality that must be faced with the quality of human resources with superior competitiveness in managing the ict. ict is one of the increasingly needed factors are the increasing need for information that is very diverse (tajuddin et al., 2013). presentation of effective and appropriate information will make the performance of an institution/company or organization more qualified (xu et al., 2013). to produce this information then needed an information system that supports in data processing. the process of recording the complaints data from students and other academic, financial and other processes that are still manuals causes the services to students to be less than optimal (romerorodríguez et al., 2016). to record and organize the process, an information system is needed to support more effective and efficient productivity (mtebe, 2015). the world of universities should also pay attention to the progress of ict. higher education institution, is a place of collaboration of three aspects of education, in the form of teaching, research and community service (kretek et al., 2013). institutions must be able to build various supporting facilities, both real and non-real in order to achieve the success of the above three aspects. as future challenges develop, institutions must also realign each process and system implemented in order to build a superior learning movement (kaplan and haenlein, 2016). currently. as an educational organization, leadership at universities is different from other forms of organizational leaders (tajuddin et al., 2012). leading a different business company with leading college. so also leading an area such as a sub-district head, bupati or governor would also be different from leading a high school or university (tajuddin, 2015a). a rector, chairman or director of a polytechnic/ academy has a different style from a sub-district administrator or a business enterprise director. leaders have a major role in making decisions (williams, 2006). mistakes in making decisions will lead to college failures to achieve goals optimally (trottier et al., 2008). therefore, it is necessary for a leader’s ability to make quick and precise decisions. speed and precision in making decisions are influenced by sufficient data and information about decisions taken (gladstone and pepion, 2017). universities should have a reliable information system for decision-making by the leadership can be done well (kretek et al., 2013). in a college of course, there are rules of command both written and unwritten. the larger the college the more complex the rules within that organization are. universities as open-ended organizations are likely to influence and be influenced by systems from outside universities (tajuddin et al., 2013). the rules of command in universities are simply called bureaucracy (branson et al., 2016). each college has different bureaucratic characteristics. state and private universities have a much different bureaucracy. universities in each section have data that has been processed into information, where the information is related to one part with other parts (zaied, 2012). the effect if the data that has been informed a part has not been completed then the other part will be late in the next process (fehrenbacher, 2016). the importance of handling this information applies also to private universities (pts), where pts is the participation of the community in order to participate to eradicate the life of the nation (tajuddin, 2015b). where the leader who handles this pts must really carry out their duties. leadership is very important role in the framework of pts management to promote education in this country, then in every decision will affect the subordinates he leads (tajuddin et al., 2013). whether it is upper level leadership, middle level and lower level, especially lower level managers who handle the pts operations as well as in the information system management higher education (si-pts) is very big role (tajuddin, 2015a). increasingly competitive competition in private universities managed by the public requires the managers to design a college information system in helping business activities to achieve the goals of private universities and as a service for stakeholders (daradkeh and al-dwairi, 2017). the use of this information technology and systems should be aligned and in accordance with the direction of the strategy, many cases of system and information technology utilization fail in achieving organizational objectives because they are not based on a strategic plan of utilizing information technology (ghosh et al., 2014). information technology offers ease, especially on the application of the information system of private higher education (si-pts) at private higher education (pts) (tajuddin et al., 2012), expected to be able to play as sub system from higher education in giving data and relevant information, accurate and timely to improve the effectiveness and efficiency in the management of private universities in supporting the national education system in the face of this information age (tajuddin et al., 2014). si-pts is to succeed, then determined also by the leadership style that is done against the user (member organization) that handles the system. the style of leadership that is meant here is situational leadership style, which is about the style of leadership that is task-oriented and relationship-oriented to existing users, which is divided into four leadership behaviors of delegation behavior, participation, consultation and instruction. the four leadership behaviors are determined by the level of employee maturity, so that a leader must know the level of maturity of employees individually or in groups. moreover, the lowest level of leadership that handles management operations is so important to the tasks assigned to subordinates, so the success of si-pts used can be achieved. the success of si-pts are also determined by the level of system quality, information quality, ease of information, user satisfaction, individual influence and conflict resolution by the lower level management. 2. literature review 2.1. situational leadership the situational leadership model (slm) initiated by hersey and blanchard seeks to integrate a three dimensional leader’s effecting approach model with a leadership style based on the specific demands of an specific environmental situation, suggesting that a leader’s style corresponding to a particular situation is effective anwar: model of leadership style to achieve success of high private education information system international review of management and marketing | vol 8 • issue 6 • 201826 (meier, 2016) which does not fit a particular situation is called ineffective (silverthorne and wang, 2001). situational leadership style places, situations in which the maturity of subordinates, both individuals and groups has an influence on a particular style (hill and bartol, 2016). hersey and blanchard that focus on leadership behavior in relation to followers (chairmen and members). while external factors such as boss, peer, organization, type of work and time including the situation do not become an emphasis in this study. it further argues that situational leadership can be applied in every type of organization, whether government organizations, business and industry, military and family. slm gives more emphasis to followers and their level of maturity. leaders should be able to assess appropriately or assess intuitively the level of employee maturity and use a leadership style that matches that level of maturity (silverthorne and wang, 2001). readiness here is defined as the ability and willingness of a trafficker to take responsibility for their behavior. employee maturity is of two important types: work maturity and psychological maturity. a person with high job maturity has the knowledge and ability to do their job without the direction of the manager. a person with a high level of psychological maturity has a level of self-motivation and a desire to do high-quality work. this person also does not need supervision. the right leadership style will depend on the person or group being led. the situational leadership theory identifies four levels of employee m1 to m4 maturity (lynch, 2015) (silverthorne and wang, 2001): 1. m1 is an employee who does not have the specific skills required for the job, is unable and unwilling to perform or take responsibility for the work or duties. 2. m2 it is the subordinate who cannot take responsibility for the task performed, but they are willing to work on the task. they are beginners, but have enthusiasm and motivation. 3. m3 is an experienced and capable employee, but has no belief or willingness to take responsibility. 4. m4 they are experienced in the task, and comfortable with their own ability to do well. they are capable and willing to not only do the task, but to take responsibility for the task. while situational leadership styles are divided into four parts, namely (lynch, 2015) (silverthorne and wang, 2001): 1. g1 high-directed and low-support leader behavior is referred to as instruction because this style is characterized by one-way communication. leadership behaviors limit the role of followers and tell what, how, when, and where to perform various tasks. 2. g2 high-level leader’s behavior and high support are referred to as consultation, because in using this style, the leader still gives a lot of direction. in increasing the number of two-way communication and supportive behavior by trying to hear the feelings of followers about the decisions made, as well as their ideas and suggestions ideas. despite enhanced support, control (control) over decision-making on leaders. 3. g3 highly supportive and low-leader behavior is referred to as participation, because the control position on problem solving and decision-making is held interchangeably. with the use of these three styles, leaders and followers exchange ideas on problem solving and decision-making. 4. g4 low leader’s behavior of support and direction is referred to as delegation, because leaders discuss issues together with subordinates so that mutual agreement is reached. decisionmaking processes are delegated entirely to subordinates. 2.2. situational leadership and employee maturity the situational leadership with the leader style corresponding to employee maturity is linked to the task orientation and relationship orientation that the leadership style can be divided into four (4) styles consisting of (meier, 2016) (schroeder, 2016) (lynch, 2015): (1). instruction style; (2). consultation style; (3). participation style; (4). delegate style (figure 1). 2.3. the information systems of higher education (si-pts) a system that handles data recording, processing and submission of results based on these procedures is called administrative and in relation to information all under the information system of universities (si-pts) which is a system consisting of 9 sub systems (tajuddin et al., 2013) (tajuddin, 2015b) (muhammad et al., 2016): 1. academic field subsystem; 2. library subsystem; 3. subsystem of finance; 4. sub-field personnel; 5. sub-field of research; 6. infrastructure subsystem; 7. cooperation subsystem; 8. subsystems of community service; 9. subsystems of student and alumni affairs. 2.4. successful si-pts the conceptual definition of success of si-pts is the result achieved by the employee in a certain period of time based on the standards set by the institution or organization. the success variables of a si-pts can be measured as follows (delone and mclean, 1992) (delone and mclean, 2002) (tajuddin, 2015a) (delone and mclean, 2004): a. system quality includes: system flexibility, fixed error, data security and model. figure 1: the four leadership styles anwar: model of leadership style to achieve success of high private education information system international review of management and marketing | vol 8 • issue 6 • 2018 27 b. quality information includes: accuracy of output, timeliness, relevant. c. the ease of information includes: volume of output. d. user satisfaction includes: payment method of service, trust user to systems. e. individual influences include: computer support to user needs, usability (perceived utility). f. service quality includes: competent technical knowledge from staff of computer based information systems (cbis), cbis staff capability, user understanding of the system. g. conflict solvers include: relationship between the user and cbis staff, position of organization in cbis unit, communication between user and cbis staff. 2.5. framework departing from the three concepts above situational leadership, employee maturity and success of si-pts, it can be made a research model as follow (figure 2): for more details the framework that can be made from the picture above is as follows (figure 3): information: x1: task maturity; x2: psychology maturity; x3: instruction behaviors; x4: consultation behaviors; x5: participation behaviors; x6: delegation behaviors; x7=y: information success (si-pts). 2.6. hypothesis 1. there is influence between work maturity and psychological maturity with instruction behavior toward the success of sipts. 2. there is influence between job maturity and psychological maturity with consultation behavior to the success of si-pts. 3. there is influence between the maturity of work and psychological maturity with the behavior of participation in success si-pts. 4. there is influence between employee maturity and psychological maturity with delegation behavior toward success si-pts. 5. there is influence between job maturity and psychological maturity on the success of si-pts. 6. there is an influence between employee maturity to situational leadership style and also to the success of si-pts. 3. research methodology 3.1. method of collecting data the technique used in data collection is descriptive research, which is a research method that provides an objective picture of an existing problem. methods of data collection conducted in this study are as follows (tajuddin et al., 2012) (muhammad et al., 2016): a. interview. this method is done by collecting data in a personal form conducted by the interviewer in this case is a researcher to the stakeholder associated with the process of publication or delivery of information announcement in one of the studies program at higher education x. b. literature studies, how to do to collect data in this research that is by collecting data or sources related to the topic under study. literature study in this research is obtained from various sources, journals, documentation books, internet and other library materials. this process is done to search and collect all the information needed for the development of information system announcement program in higher education x. c. observation is the whole activity of observation of an object or others. this process is done to seek information from observation and then drawing conclusions about the cause and effect. when this research stage is done, the researcher made direct observation to the research place in the study program at higher education x. 3.2. types of research the type of research used is survey research, is research by taking samples from the population and using questionnaires as a suitable data gathering tool (tajuddin et al., 2012). 3.3. research sites the research location is private higher education (pts) in the form of high school in east java and ntb. 3.4. population and sample the population is the lower level leadership in five private universities in the form of high school which has implemented the higher education management information system (si-pts) at least in three sub-fields, namely academic sub-division, field of libraries at each research site (tajuddin, 2015b) (muhammad et al., 2016). figure 2: research model figure 3: hypothesis model anwar: model of leadership style to achieve success of high private education information system international review of management and marketing | vol 8 • issue 6 • 201828 because the population is the lower management of the five high schools there are 50 people, in sampling using purposive sampling as many as 30 lower-level leadership as sample. with some considerations, among others, the lower level leadership of the five existing high schools has handled the si-pts and operationals, so it is expected to be able to provide an overview of what is expected from this study. 3.5. unit of analysis the unit of analysis in this study is individual lower level leadership who handles the field of si-pts in each pts. 3.6. validity test data is important, this is because the data describes the variables studied and serves as a hypothesis proof tool. therefore, whether or not a data really determines the quality of the data. it really depends on both the bad data collectors. while good instrument must fulfill two important requirement that is valid and reliable, testing to validity and reliability of data is done with the aid of product moment correlation, with following formula (muhammad et al., 2016): ( )( ) ( ){ } ( ){ }2 22 2 n xy x y r n x x n y y σ − ∑ ∑ = ∑ − ∑ ∑ − ∑ 3.7. test of reliability reliability is an index indicating the extent to which a measuring instrument can be trusted or reliable. to know the measuring instrument is reliable or not, tested by using the split method, which consists of even and even halves, then the results of both hemispheres are correlated. if the correlation results show a larger number of r table and the value is close to 1, then the measuring instrument used is declared reliable or reliable. to find reliability for the whole item is to correct the correlation numbers obtained by entering into the inner formula (tajuddin, 2015b): ( )2 r.tt r tot 1 r.tt+ information: r.tot: the overall reliability coefficient of the item, r.tt: coefficient of even and odd-number correlation. 3.8. analysis method analysis method used is path analysis method (path analysis). the causal relationship model is the development of correlation analysis, partial analysis and multiple regression analysis. the path analysis model is suitable for data that meets the assumptions that apply to the regression analysis (tajuddin et al., 2012) (tajuddin, 2015a) (tajuddin, 2015b). 4. results and discussion 4.1. general leadership overview lower (lower management) the data collected as 30 responders were done by data processing with the result based on education level that is: high school 3.33%, diploma three (d3) 23.33%, bachelor 56.67% and s2 degree as much 16.67%. based on the working period, namely: 1–3 years, 10%, 4–6 years working period of 26.67%, 9–9 years working period of 23.33% and more than 9 years working period of 40%. based on sex are: men as much as 60% and women as much as 40%. 4.2. description of research variables 4.2.1. employee maturity based on the level of maturity of work that most owned by employees at the maturity level of work with code five is at the level of “very capable” with frequency of 30% and the smallest at the level of job maturity in code one “very less able” a frequency of 3.33%. while based on the level of psychological maturity of employees is the most owned by employees at the level of psychological maturity ranks third is the level of “willpower” with the frequency of 50% and the smallest in the level of maturity ability of employees “very large willingness” with a frequency of 6.67%. 4.2.2. situational leadership situational leadership consisting of the most instructive, consulting, participation and delegation behavior of employees at the level of “consultation behavior” with code two that is with the frequency of 33.33% and the smallest on the “participation behavior” with the code three with a frequency of 16.67%. 4.2.3. successful si-pts successful si-pts success with three codes, with frequency of 36.67% and smaller at “very successful” level with code five with frequency equal to 6.66%. 4.2.4. hypothesis testing hypothesis testing as has been proposed above, which uses a statistic analysis tool that is path analysis which shows the following results: hypothesis 1: there is an influence between job maturity and psychological maturity with the behavior of instruction to successful si-pts. r2: 0.3089; f: 8.9416; p: 0.0477. the results of the above analysis shows that f arithmetic is 8.9416 >f table of 6.94. likewise, the p = 0.0477 is smaller than the error rate () of 0.05. this indicates a significant level at the 5% error level, meaning that the model’s ability to explain the diversity of success of si-pts (x7) on the instruction behavior is 30.89%. the amount of beta on work maturity variable (x1) is 0,551194 and psychological maturity (x2) variable is 0,070133. while the level of significance of work maturity variable (x1) is shown with significant t = 0.0368 and 0.0299 for x2. this shows that at 5% level of employee maturity has a significant effect on the behavior of instruction (x3), bigger influence from employee maturity to instruction, behavior on job maturity (ability) with percentage 55.12% compared with psychological maturity (willingness) by 7% (table 1). anwar: model of leadership style to achieve success of high private education information system international review of management and marketing | vol 8 • issue 6 • 2018 29 hypothesis 2: there is an influence between job maturity and psychological maturity with consultation behavior on successful si-pts. r2: 0.31070; f: 5.17763; p: 0.0271. the error rate of 5%, where the value of f arithmetic of 5.17763 is greater than f table of 4.74, this means that the variables x1, x2 and x4 significantly influence x7. likewise, the p value of 0.0271 means less than the error rate of 0.05. this means that the model’s ability to explain the diversity of success of si-pts is 31.07%. thus the hypothesis which states there is influence between job maturity and psychological maturity and consultation behavior towards the success of si-pts accepted. for more details can be seen on the table 2. the amount of beta on employee maturity variable consisting of task maturity (x1) of 0.310184 and psychological maturity (x2) of 0.29316 to consultation behavior. while the level of significance of work maturity variable (x1) is indicated by significant t of 0.0175 and 0.0299 for x2. this shows that at 5% level of employee maturity have significant influence on consultation behavior (x4), bigger influence from employee maturity to consultation behavior on job maturity with percentage 31.01% compared with psychological maturity equal to 29.32%. hypothesis 3: there is an influence between job maturity and psychological maturity with participatory behavior on successful si-pts. r2: 0.62774; f: 9.68633; p: 0.0372. the error rate of 5%, the variables x1, x2 and x5 significantly influence on x7, namely the success of si-pts with p = 0.0372 which means smaller than alpha 0.05 and also the value of f arithmetic of 19.68633 means morelarge from the f table value of 19.0. this shows that model’s ability in explaining the diversity of success of si-pts (x7) is 62.77%. hypothesis that states there is influence between job maturity, psychological maturity and participatory behavior towards the success of si-pts accepted. for more details can be seen on the table 3. the amount of beta on employee maturity variable consisting of job maturity (x1) of 0.511421, psychological maturity (x2) of 0.152754 to the participation behavior. while the level of significance of work maturity variable (x1) is indicated by significant t = 0.0464 and 0.0330 for x2. this shows that at 5% level of maturity variable has a significant effect on the participant behavior (x5), the most influence from employee maturity to the behavior of participants on job maturity with percentage 51.14% compared with psychological maturity equal to 15.28%. hypothesis 4: there is an influence between job maturity and psychological maturity with delegate behavior on successful si-pts. r2: 0.39406; f: 6.12583; p: 0.0285 the error rate of 5%, the variable of job maturity, psychological maturity and delegation behavior significantly influence the success of si-pts (x7) with p = 0.0285 smaller than the error rate of 0.05 and f count of 6.12583 more large from f table of 5.79. this shows that the model’s ability to explain the diversity of success of si-pts (x7) is 60.64%. hypothesis which states there is influence between job maturity, psychological maturity and delegation behavior towards the success of si-pts accepted. for more details can be seen on the table 4. the amount of beta on employee maturity variable consisting of job maturity (x1) of 0.656882 and psychological maturity (x2) of 0.200112 to the behavior of the delegation. while the level of significance of work maturity variable (x1) is shown with significant t = 0.0312 and 0.0466 for x2. this shows that at 5% level of employee maturity has significant effect on the behavior of delegate (x6), bigger influence from employee maturity to instruction behavior on job maturity with percentage 65.69% compared with psychological maturity equal to 20.01%. hypothesis 5: there is an influence between maturity of work and psychological maturity to successful si-pts. r2: 0,36443; f: 7.90634; p: 0.0022 the above data shows that the variables of ability (x1) and will (x2) have a significant effect on the success of si-pts with f count of 7.9063 which shows the value is greater than f table of 3.34 and also at the error rate of 0.05 where the value p = 0.0022 is smaller. this shows both variables are x1 and x2 affect the success of si-pts. hypothesis which states there is influence between employee maturity to success of si-pts acceptable. to know in details the influence of each variable can be seen through each regression coefficient. while to know the level of significance is used t-test, that is comparing the probability value at the error rate of 5%. for more details the value of each is like the table 5. with respect to the above table where the value (β) is the same for the ability and volitional variables of the will. this means that ability and willingness have the same effect on the success of si-pts. hypothesis 6: there is an influence between employee maturity to situational leadership and also si-pts success. r2: 0.40072; f: 3.20955; p: 0.0233. employee maturity and situational leadership style significantly influence the success of si-pts with p = 0.0233 means smaller than alpha 0.05 and f count 3.20955 bigger than f table 2.67. this means that employee maturity variable and situational leadership style significantly influence the success of si-pts. anwar: model of leadership style to achieve success of high private education information system international review of management and marketing | vol 8 • issue 6 • 201830 hypothesis that states there is influence between employee maturity to situational leadership style and also to the success of si-pts acceptable. for details table 6. results of employee maturity variable analysis and leadership style on the success of si-pts are presented in table 6. the value of beta for variable x1 is greater than beta in x2 variable that is 21.54% for x1 and 19.75% for x2, it means greater ability influence than will. 4.3. discussion test results against the hypothesis that has been proposed above, it can be discussed in detail is as follows: 1. influence of work maturity and psychological maturity to behavior instruction, behavior of consultation, behavior of participation and behavior of delegation to success of si-pts. based on the results of tests conducted on research variables based on the analysis of the paths that have been stated above, either jointly or partially, that the maturity of employees significantly influence the leadership situational consisting of the behavior of instruction, consultation, participation and delegation and also against success of si-pts, where the greatest influence is shown in situational leadership on participation behavior with determinant r equal to = 62.77%, because by seeing the value of r2 is bigger compared to other behavior. 2. the influence of work maturity and psychological maturity on the success of si-pts. based on the results of tests conducted on research variables based on path analysis that has been stated above, either together or partially that the maturity of employees consisting of job maturity and psychological maturity significantly influence the success of si-pts. where the influence is equal to the success of si-pts on job maturity with a value of 0.313757 which means the ability and willingness to give the same contribution in the model of 31.38%. 5. conclusions the result of this research from four situational leadership style that is instruction behavior, consultation behavior, behavior of participation and behavior of delegation that is most suitable to be applied for success of si-pts can be achieved optimally that is leadership style with participation behavior, because participation behavior with determination r most large, that is equal to 62.77% compared with other leaders behavior. so also with the maturity of employees consisting of job maturity and psychological maturity have the same effect on the success of si-pts, value of β with the same of 31.38%. the leaders of private universities in this case leaders at the level of lower management that handles directly 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(2012), an integrated success model for evaluating information system in public sectors. journal of emerging trends in computing and information sciences, 3(6), 814-825. . international review of management and marketing | vol 6 • special issue (s1) • 2016322 special issue for "socio-economic and humanity-philosophical problems of modern sciences" international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2016, 6(s1) 322-326. development of a methodology of the product line matrix formation of the enterprise fabricating clothes violetta k. shkuropatskaya1*, inna l. klochko2, lyudmila y. falko3 1vladivostok state university of economics and service, vladivostok, russia, 2vladivostok state university of economics and service, vladivostok, russia, 3vladivostok state university of economics and service, vladivostok, russia. *email: shkuropatskaya@list.ru abstract the paper has considered the questions connected with formation of the rational range of the enterprises for production of clothes. it has also analysed the factors influencing the range formation subject to the principles of the rational wardrobe design (a capsular approach and a colour type of a man’s appearance). the paper has developed the algorithm of the range formation of the enterprises fabricating clothes in a mass-market segment on the basis of a brand standard subject to the principle of rational wardrobe. it has created the mathematical model of a rational a product line matrix of the sewing enterprise in a mass-market segment. keywords: product line policy, product line matrix, rational wardrobe, capsular approach jel classifications: l53, l67, m11 1. introduction any modern enterprise aims to maximize its profit most often reaching it by the increasing volume of sales and minimizing the cost price. and if the prime cost reduction has its limits, than volumes of the realization are limited only to the existing resources of a company and market capacity of consumption. in this regard the majority of the companies daily face a problem of the search of customers having recourse to the search of new markets with the use of various tools: advertising, price competition, etc. the use of already known tools will not give a desirable result if they do not become an integral component of a certain strategy. this paper considers a product line policy of the enterprise of small and medium business on production of clothes. for the policy realization the research of the development process of a rational product line matrix is topical. technological processes transformation in production of products of the light industry has affected all segments of the industry and had the essential impact on the formation of consumer preferences. the task of producers and sellers of clothes at this stage consists in the development of common integrated algorithms of the organization and realization of a product line matrix at the heart of which the principle of the rational system is underlain. in particular, the use by a consumer of the principle of rationality at the creation of his own clothes, and the reconsideration of a place and role of each element of clothes both when determining an individual capsule and in “person is clothes” system in general, where there are new forms of the rational interaction, are of great interest. on the other hand, the small and medium-sized enterprises fabricating clothes, which range is chaotically formed, are actively developing under the influence of random factors, and, often, have no common m algorithm of the formation of a range. despite considerable researches devoted to a problem of the formation of a range now there is no common methodological approach. methodical tools of the formation of a range of the enterprises of the sewing industry, which, on one hand, would be economic for the industrial enterprises and, on the other hand, would satisfy consumers’ preferences, are insufficiently developed. shkuropatskaya, et al.: development of a methodology of the product line matrix formation of the enterprise fabricating clothes international review of management and marketing | vol 6 • special issue (s1) • 2016 323 the existence of a formulated problem has caused the relevance of scientific researches directed on the improvement of the formation process of a rational commodity range of the enterprises fabricating clothes. 2. research methodology the paper has used a system analysis which allowed considering structural and elementary connections in the integrated interaction a producer a seller a consumer at the stage of predesign researches of new models of clothes from positions of the relevance and competitiveness. the data obtained on the basis of the application of methods of group questioning and an expert assessment have allocated additional factors of the influence on the definition of the structure of a range, namely, the need for the specification of consumer groups on a color type of appearance. also the method of the typization and the structurally functional method are used. 3. literature review halyavina, 2012; abalikhina, 2004; aboyudu, 2009; nemkov, 2003 and kotsur, 2009 have made a considerable contribution to the research of approaches to “a product line policy of the enterprise” conception. the works of these authors have considered a problem of the formation of a rational range of the industrial enterprises. popova and balakireva, 2010; chuvakova, 2012; sysoev and buzukova, 2012 works have considered methodological approaches to the formation of a product line matrix. zueva, 2000; kharkova, 2007; sirotina, 1999; koblyakova, 1995 and klochko, 2012 works have described approaches to the purposeful formation of a range of products of the light industry. 4. research a product line policy of the enterprise fabricating clothes at the present stage has to consider the factors connected with specific features of a consumer. appearance of a person defines dimensional characteristics of clothes, a form (silhouette) and color appearance. features of the identity of a consumer are shown in his lifestyle and connected with him style preferences in clothes, a choice of these or those composite and product line decisions. the practice of the formation of clothes of a modern person is connected with a tendency to the rational capsular wardrobe creation. such approach allows in the course of the design of an industrial collection, on one hand, to consider features of production, and on the other hand, to create prerequisites for real customization. thus, a problem of the formation of a product line policy is closely connected with a problem of the study of the enterprise target audience. an analysis of the target audience gives a chance to define the basic data for the formation of a product line matrix of the enterprise. a product line matrix is a document, which is a tabular form, in which according to the hierarchical principle (from a category to a unit of a commodity stock account) a company range is reflected and there is the information with certain characteristics of a range during a concrete period of time (popova and balakireva, 2010). the present research has offered to consider the following major factors when forming a rational product line matrix of the enterprises fabricating clothes: • a consumer’s lifestyle, a degree of his addiction to fashion; • the segmentation of consumers on style figurative groups to style preferences; • a degree of satisfaction with the individual wardrobe in a consumer group; • the capsular structure of the client wardrobe and, as a result, the capsule essence of a product line of the enterprise and its continuity in relation to the previous collections; • the existence in the wardrobe of a consumer of universal products which are coherent between the main capsules; • a color type of a person’s appearance as one of the criteria of the definition of a collection number coloristic palette of the enterprise product line matrix. such approach demands the existence of stable communicative relations between a consumer and a producer. a lifestyle and a consumer’s individualization are the elements of an individual image and form consumer preferences in a concrete target group. in turn, the segmentation of target groups from positions of socioeconomic factors which influence a choice and decision-making on purchase by a consumer, allows connecting the audience’s choice to a certain price segment. from this point of view it is expedient to consider preferences of the target audience through a prism of the known brands standards. as a result of the research conducted by the authors it is possible to point out the main stages of the formation of a product line matrix of the enterprise: 1. an analysis of analogs (brands-standards): • the definition of the target audience. • the formation of check-sheets (№ 1 selection criteria of a suitable analog, № 2 criteria of an analysis of a collection of a brand standard). • standard brand choice. • the testing/research/analysis of a collection of a brand standard on commodity groups. 2. an analysis of commodity groups on the basis of the results over the last seasons and the enterprise work on trend watching. 3. the definition of a percentage ratio of commodity categories: • the definition of a percentage ratio of commodity categories depending on the results of sales over the last season. • the definition of a percentage ratio of commodity categories depending on a color type of consumers’ appearance. • a comparison of the available data with data of a brandstandard. 4. the formation of a product line matrix. shkuropatskaya, et al.: development of a methodology of the product line matrix formation of the enterprise fabricating clothes international review of management and marketing | vol 6 • special issue (s1) • 2016324 an analysis of characteristics of a brand-standard corresponds to an analysis stage of analogs in general practice of the design and allows minimizing costs of the enterprise of small and medium business of market researches. an analysis of the sources has showed that at a choice of a brand-standard it is possible to refer to the main criteria of an assessment: price segment; consumer’s satisfaction/dissatisfaction; loyalty to a brand; the perceived quality; leadership/popularity; the perceived value; the memorable attributes; associations with the organization; awareness on a brand; representation of a brand in the distributive network. at the same time it is important for enterprise to consider the results of its own work over the last seasons in which features of its target audience are reflected and which allow to plan, for example, the replenishment of a consumer’s wardrobe subject to prophetic/ commodity categories acquired by him from the last collections. each commodity category has its silhouette decisions. an analysis of silhouette decisions helps to trace the actual trends of fashion and to define the strategy of the enterprise in solutions of a model range. in the offered approach the accounting of a factor “a color type of a consumer’s appearance” is new to the formation of a product line matrix in comparison with the existing approaches. the earlier obtained data testify that, for example, in primorsky krai of the russian federation 54% of all products of an industrial collection have to be designed for a “summer” color type, 28% for “a winter” color type, 13% for “a spring” color type, and 5% for “a autumn” color type (shkuropatskaya, 2014). it should be noted that the received results are actual for a certain target audience during a concrete period of time for territories of the concrete geographical region. at the final stage the enterprise independently solves what data to use. however, anyway the carried-out work increases reliability of made decisions. on the basis of the above stated facts the distribution of percentage ratios between commodity categories concerning all collection number of the enterprise presented in a season is possible. in turn, the introduction of coefficients defining a dominating color type of person’s appearance and the leading silhouette solutions of a brand-standard allows to receive a product line matrix defining the quantitative indices commodity categories, silhouette decisions and a coloristic decision of a range of the enterprise over the actual period. from the mathematical point of view, the considered set of characteristics is defined by variables (a commodity group and silhouette decisions), and a group of constant values (a color type of person’s appearance) which can be presented in the form of 4 matrixes: a constant matrix у (constant values, the length is constant). a matrix is a vector “color type,” consisting of 4 elements: winter, summer, autumn, spring. for russia a value of elements of a matrix are constant and do not depend on a collection. the values of elements are expressed in percentage. a matrix of the variable length x (values change, length changes). a matrix is a vector “silhouette” of the variable length. the length of a vector depends on a commodity group, and the values of elements depend on a collection. the values of elements are expressed in percentage. a matrix of the constant length w (the values change, the length does not change). a matrix is a vector “commodity group” of the constant length. a vector consists of 8 elements: blouses, trousers and jeans, outerwear, dresses, sweaters and cardigans, t-shirts and tops, shorts and bridges, skirts which values depend on a collection. the values of elements are expressed in percentage. a matrix of the variable length z (the values change, the length changes). the quantity of elements of a matrix depends on a commodity group and is a product of elements’ quantity of matrixes x, y, w. the values of elements of a matrix reflect the quantity of products of a certain color type and a certain silhouette in a commodity group concerning the total number of products of this commodity group in a collection expressed in percentage. a value of a matrix element z is calculated by the formula: zij = ⋅ xiy wj k 100 100% % , (1) where: j∈[ ] ∈[ ] ∈[ ]1 4 1 8 1; ; ; .k i n i a k value depends on a commodity group and is appointed by an expert-estimator. in our research we will accept the following k values: k k trousersand jeans k outerwear k dresses = − = − = − = − 1 2 3 4 blouses; ; ; ;; ; ; k sweatersandcardigans k t shirtsandtops k shortsa = − = − − = − 5 6 7 nndbridges k skirts ; .= −              8 a choice of k value at the calculation of an element of a matrix z is conducted by an expert, depending on what goods are now calculated. n a number of possible silhouettes for this commodity group. n if k k k n if k k k n if k = = = = = = = = = =      4 1 3 5 3 2 7 8 2 6 , , , ; , , , ; , . shkuropatskaya, et al.: development of a methodology of the product line matrix formation of the enterprise fabricating clothes international review of management and marketing | vol 6 • special issue (s1) • 2016 325 let’s conduct the calculations for a commodity group “blouses” for an autumn-winter collection. y y y y y 1 2 3 4 = , (2) where у1 = 28%, у2 = 54%, у3 = 5%, у4 = 13%. x x x x x 1 2 3 4 = , (3) where х1 = 69,7%, х2 = 30,3%, х3 = 0%, х4 = 0%. w w w w w w w w w 1 2 3 4 5 6 7 8 = , (4) where w1 = 8.895%, w2 = 20.25%, w3 = 20.79%, w4 = 17.205%, w5 = 11.48%, w6 = 9.455%, w7 = 2.36%, w8 = 9.565%. as in this example the calculation of a range for a commodity group “blouses” is calculated, the calculations have used a w1 = 8,895% coefficient. z z z z z z z z z z z z z z z z z 11 12 13 14 21 22 23 24 31 32 33 34 41 42 43 44 = , (5) where z11 a range of blouses of a direct silhouette for “winter” color type; z12 a range of blouses of a direct silhouette for “summer” color type; z13 a range of blouses of a direct silhouette for “spring” color type; z14 a range of blouses of a direct silhouette for “autumn” color type; z21 a range of blouses of a semi-adjacent silhouette for “winter” color type; z22 a range of blouses of a semi-adjacent silhouette for “summer” color type; z23 a range of blouses of a semi-adjacent silhouette for “spring” color type; z24 a range of blouses of a semi-adjacent silhouette for “autumn” color type; z31 a range of blouses of the fitted silhouette for “winter” color type; z3 2 a range of blouses of the fitted silhouette for “summer” color type; z3 3 a range of blouses of the fitted silhouette for “spring” color type; z34 a range of blouses of the fitted silhouette for “autumn” color type; z41 a range of blouses of a trapezoid silhouette for “winter” color type; z42 a range of blouses of a trapezoid silhouette for “summer” color type; z43 a range of blouses of a trapezoid silhouette for “spring” color type; z44 a range of blouses of a trapezoid silhouette for “autumn” color type. z11 = ⋅ = ⋅ ⋅ ⋅ = x yw1 1 1 100 100 69 7 28 8 895 100 100 1 74 % % , % % , % % % , % thus, the received formula is the tool for the calculation of a range of the enterprise. it can be used for the calculations manually, or to use for special programs, for example, excel. 5. conclusions a problem of the effective planning of a range is solved by the formation of an effective product line policy of the enterprise. the conducted researches on the formation of the rational structure of a range of the sewing enterprise allowed solving the following problems: 1. the factors influencing the formation of a rational range of the enterprises fabricating clothes on the basis of individual consumer preferences are studied. 2. the mathematical model of the formation of the rational structure of a matrix of a range of the enterprises fabricating clothes is developed. references abalikhina, i.v. 2004. improvement of tools of the strategic and operational 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(2010), product line matrix the basis for the formation of a product line policy. in: popov, e.v., balakirev, s.v., editors. the ural state economic university news. vol. 4. ekaterinburg: ural state economic university; 101-110. shkuropatskaya, v.k. (2014), ways to improve a range of the small and medium-sized enterprises fabricating clothes. in: shkuropatskaya, v.k., klochko, i.l., falco, l.y., editors. modern problems of science and education. 2014. №3. available from: http://www.science-education.ru/117-13663. sirotina l.k., editor. (1999), improvement of the system of management by a product range of the sewing enterprise: theses... candidate of technical sciences: 08.88.28. st. petersburg. p230. sysoev, s.v., buzukova, e.a., editors. (2012), product line management in retail. category management. ‎saint petersburg: peter. p288. zueva, t.v. (2000), development of methodological principles of the design-programming of a range of industrial clothes: theses... candidate of technical sciences: 05.19.04. st. petersburg: zueva tatyana. p208. . international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2019, 9(5), 133-140. international review of management and marketing | vol 9 • issue 5 • 2019 133 the influence of organizational culture, compensation and interpersonal communication in employee performance through work motivation as mediation elvie maria* sekolah tinggi ilmu ekonomi ibbi, medan, indonesia. *email: evinila31@yahoo.com received: 15 july 2019 accepted: 02 september 2019 doi: https://doi.org/10.32479/irmm.8615 abstract the purpose of this rese arch is to know influence of organizational culture, compensation, interpersonal communication on employee’s performance, through work motivations. sample in this research totaled 92 employee’s. sampling techniques using census method with saturated sampling technique, so the whole population is used as a sample. variable this research consisting organizational culture, compensation, interpersonal communication, work motivation, employee’s performance. data collection methods used were questionnaires. analysis of the data used is multiple linear regression analysis and path analysis using spss 24. the results showed direct influence on employee’s performance indicates organizational culture, compensation are supported, but for interpersonal communication is not supported. the results of research indirect effect on employee’s performance through work motivation showed organizational culture, compensation are not supported, but interpersonal communication supported. this research is expected to be beneficial for badan pengelola malibu to improve employee performance. keywords: organizational culture, compensation, interpersonal communication, work motivation, employee’s performance jel classifications: m12, m54, n75 1. intoduction the existence of human resources plays a very important role in the company. employees as motivated human resources will do an activity or task as well as possible so that it can provide maximum work results. companies and employees are two things that need each other. if the employees work well and successfully bring progress to the company, the benefits obtained will be picked by both parties. for employees to continue working to meet their needs, while the company can maintain its existence and growth. taman malibu indah housing management or housing manager is badan pengelola malibu management agency (bpm), a business entity responsible for environmental cleanliness, safety, comfort, beauty of the park, and community center facilities such as club houses and sports clubs, cafes, feasibility utilities such as public street striker (pju) in a residential area. the history of bpm itself is inseparable from the construction of the taman malibu indah (tmi) medan housing estate in 1988 and began living in 1992. the tmi housing complex is a luxury housing complex that is inhabited by more than 400 households, in terms of environmental management or estate management in originally managed directly by the developer. over time, since 2012 it has been managed by a business entity, bpm. by paying a relatively large environmental management fee (ipl), residents and owners expect good service quality, but in fact almost every day there are complaints from residents that are directed to bpm for the low quality of service due to negligence and work errors of employees who should carry out the duties and responsibilities that have been determined to provide good service to environmental cleanliness, safety, comfort, beauty of the park, and community center facilities and public street lighting. as an outlet for dissatisfaction with the low quality this journal is licensed under a creative commons attribution 4.0 international license maria: the influence of organizational culture, compensation and interpersonal communication in employee performance through work motivation as mediation international review of management and marketing | vol 9 • issue 5 • 2019134 of services provided, many of the residents postpone the scheduled payment of environmental management fees, which is certainly very disruptive to the company’s cash flow. as stated by (homburg et al., 2014) that organizational performance is determined by the performance of employees in the organization itself, for that every organization will try to improve the performance of employees who are human resources in achieving organizational goals that have been set. in improving performance, employees must be motivated to work first. work motivation is the strength or encouragement that exists in employees to act or behave in certain ways. the strength is in the form of an individual’s willingness to do something or according to their individual abilities (agarwala, 2008). (grant, 2012), states that work motivation is defined as a condition that influences generating, directing, and maintaining behavior related to the work environment. the low work motivation of bpm employees, is indicated by the low level of work productivity due to laziness, work delays and high absenteeism, due to the absence of deduction of compensation or sanctions for each absence so that every chance not to work, is used to get a higher income. organizational culture is an informal way of observing life and membership in organizations that are binding members together and influence what they think about themselves and their work. even though they are not formal, what they think together about their work or about themselves can be interpreted and bind them together in the organization (cycyota et al., 2016). for an organization, organizational culture can be likened to a doubleedged sword. it can be a key success factor and can also be a major factor in organizational failure (neves and eisenberger, 2014). initially bpm employees were tmi development company employees who were transferred to bpm employees, and the existing organizational culture was an organizational culture originating from the development company. existing organizational culture shapes employees to be undisciplined in their presence at work. this can be seen that there is no action for any work mistakes or disciplinary problems that make employees behave as they wish. compensation is important, which is the main motivation or motivation of an employee to work. this means that employees use knowledge, skills, energy and time not solely to prove or devote themselves to the company, but there are other objectives, expect a reward or reward for the results that have been given. according to (crane et al., 2016) that compensation is all income in the form of money, direct or indirect goods received by employees in return for services provided to the company. compensation has an influence in improving employee performance, by providing fair compensation by the company (gula, 2008). the purpose of giving compensation according to (saluy et al., 2018), among others, is to bond cooperation between companies and employees. in addition to salaries, all employees are included in the bpjs health and employment program, while other compensation provided by bpm to employees consists of; transport allowances, food allowances, communication allowances in the form of credit, official clothing, craft allowances and overtime payments for excess work hours. even with this compensation, there are still employees who are often absent and absenteeism is used to get additional income. within an organization or company communication activities are among the very important activities. communication that exists between individuals in an organization is interpersonal communication. interpersonal communication as the most basic form of communication in an organization, if maintained its intensity, will have a positive effect on the organization, especially superiors and subordinates. effective interpersonal communication will succeed if it creates good effects, such as understanding, changing attitudes, better relationships will foster trust and openness, and can foster enthusiasm in employees so as to foster high work motivation (grant, 2012). at bpm, interpersonal communication greatly influences the course of activities that take place every day, instructions from superiors to subordinates, giving dispositions, administrative work to the implementation of activities. in the bpm environment, there are still obstacles in interpersonal communication between colleagues, between leaders and employees, and some indicators of interpersonal communication are still not good, there is still mutual distrust among fellow employees, lack of mutual assistance between fellow employees. 2. literature review organizational culture is a variety of interactions of the characteristics of habits that affect groups of people in their environment (gartner, 2004). sekaran (2014) defines organizational culture as “a field of study devoted to understanding, explaining, and ultimately improving the attitudes and behaviors of individuals and groups in organizations.” organizational culture is discussed, explained, and in a manner broadly develop attitudes and behaviors of individuals and groups in organizations. the primacy of organizational culture is the controller and direction in shaping human attitudes and behaviors that involve themselves in an organization’s activities. al mehrzi and singh (2016) concluded that organizational culture was found to be a very important determinant for increasing motivation levels among employees. according to (reissner and pagan, 2013) organizational culture has full strength, influences the individual and his performance even to the work environment. compensation is important, which is the main motivation or motivation of an employee to work. employees use knowledge, skills, energy and time not solely to prove or devote themselves to the company, but there is another purpose, which is to expect compensation or reward for the results that have been given. in addition, the compensation given to employees affects the employee’s working conditions. (hirshleifer and teoh, 2003) defines compensation as “compensation as all forms of payments or rewards given to employees who arise from their employment.” compensation is any form of payment or compensation given to employees arising from their work. so compensation is one of maria: the influence of organizational culture, compensation and interpersonal communication in employee performance through work motivation as mediation international review of management and marketing | vol 9 • issue 5 • 2019 135 the basic reasons for employees to find work. therefore giving compensation to employees needs special attention from the organization so that the motivation of employees will continue to increase. in an organization or company, communication activities is one form of activity that is very important and plays a role in determining how far people can work together effectively to achieve the goals that have been determined (wang, 2009). one type of communication that is high enough frequency is interpersonal communication or interpersonal communication. interpersonal communication between leaders and subordinates, communication between employees is an important factor in creating an effective organization. as stated by (anggraeni, 2014) that one of the most tangible characteristics of organizational communication is the concept of relationship. according to (shokri et al., 2011) this type of communication is considered the most effective in efforts to change a person’s attitudes, opinions or behavior, because of his dialogical nature in the form of conversation. (ali and ndubisi, 2011) argue that the quality of interpersonal communication in an organization is very important. work motivation is a psychological force that determines the direction of one’s level of effort and perseverance and is also central to management, because it explains how people behave and how they do work within the organization (gertner, 2010). in general, work motivation is related to all efforts to achieve goals, while organizational goals can reflect a single interest related to work-related behavior (cycyota et al., 2016). meanwhile (dyer et al., 2008) defines motivation “as a stimulant of the desires and driving force of one’s willingness to work.” this opinion is supported by kinlaw’s statement in (lecturer, 2018), that an employee who has high work motivation is someone who constantly tries to do the best thing and is willing to spend extra time and effort to do his work. employees become motivated when they perceive their work related to something that is important to them. the same thing was stated by (halbesleben and wheeler, 2008) that motivation is a mental impulse that moves and directs human behavior which has three main components namely needs, encouragement, and goals. according to singh and jain (2013) “performance can be defined as the achievement of specified tasks measured against predetermined or identified standards of accuracy, completeness, cost and speed.” “the employee’s performance is measured against the performance standards set by the organization. good performance means how well employees performed on the assigned tasks.” performance can be defined as the achievement of certain tasks measured against predetermined or identified standards of accuracy, completeness, cost and speed. employee performance is the work that can be achieved by someone in carrying out the tasks assigned to him both in quality and quantity based on skills, which are based on work results and processes in carrying out work (homburg et al., 2014). performance according to (chang, 2013), is the output produced by the functions or indicators of a job or a profession within a certain time. in general the dimensions of performance can be grouped into three types, namely: work results, work behavior, and personal characteristics related to work. (afrizal et al., 2014) states that “employee performance has been associated with the ability of the individual employees realizing their respective work goals, fulfilling expectations as well as attaining job targets and/ or accomplishing a standard that is set by their organizations.” employee performance is linked to the ability of individual employees to realize their work goals, meet expectations and achieve work targets and/or achieve the standards set by their organizations. whereas (kamisah, 2012) state that employee performance is how much they contribute to organizations which include: work quantity, work quality, time utilization and cooperation. 3. methodology the sample in this study amounted to 92 employees of the malibu management agency medan (bpm). the selection of samples from the population is to use total sampling, namely sampling by taking the population as a sample (arikunto, 2019). the type of data used is primary data obtained from questionnaire answers filled in by employees which will explain the variables to be studied, namely organizational culture, compensation, interpersonal communication, work motivation and employee performance. the answers given by employees in this study were scored with reference to the likert scale. the method of analysis and testing of hypotheses in this study, in accordance with the objectives of the study, is to measure the influence of the independent variables (organizational culture, compensation and interpersonal communication) on the dependent variable (employee performance), involving mediating variables (work motivation). the data technique used is linear regression analysis and multiple path analysis using spss 24. 4. results and discussion 4.1. regression estimation results 1 (linear model 1) 4.1.1. coefficient of determination researchers using the spss 24 program, present the results of data processing for the coefficient of determination in the table 1. 4.1.2. simultaneous or simultaneous test (test f) simultaneous or simultaneous test or ftest aims to test the first hypothesis which is to find out the effect or not significantly of the independent variables together (simultaneously) on the dependent variable. below are the results of the ftest using spss 24. based on the data in table 2 it can be seen that fcount = 39.707 with a significance level of 0.000b. when compared with ftable at a 5% table 1: coefficient of determination test results model summaryb model r r square adjusted r square std. error of the estimate 1 0.758a 0.575 0.561 2.445 apredictors: (constant), ki, bo, ks bdependent variable: mk maria: the influence of organizational culture, compensation and interpersonal communication in employee performance through work motivation as mediation international review of management and marketing | vol 9 • issue 5 • 2019136 confidence level (α = 0.05) of only 4.012, the fcount value is greater than the ftable value {fcount (39,707)> ftable (4,012)} so that it can be said that organizational culture (x1), compensation (x1) (x2) and interpersonal communication (x3) simultaneously are significant explanatory variables for the work motivation (z) of bpm employees. 4.1.3. partial test (t-test) partial test or t-test has the aim to test the second hypothesis, which is to find out the influence or not significantly of the independent variables individually (partial) on the dependent variable. below are the results of t-test using spss 24 in table 3. to determine whether ho or h1 is rejected or accepted, then the value of t-count compares with the value of ttable at a significance level of 5% (α = 0.05), where the value of ttable at a significance level of 5% (α = 0.05) is 1,662, the following conclusions can be drawn: 1. organizational culture variable, is positive not significant effect on work motivation of bpm employees. this can be seen in the tcount which reached 0.867 below the ttable value of 1.662. 2. compensation variable, positive and significant effect on employee work motivation bpm. this can be seen in the value of tcount which reaches 6,374 above the ttable value that is equal to 1.662. 3. interpersonal communication variable, is positive not significant effect on motivation bpm employee work. this can be seen in the value of tcount which reaches 1.034 below the ttable value which is equal to 1.662. 4.1.4. regression model (linear model) based on the estimation or regression results, the regression equation can be formulated as follows: z = 4.338 + 0.071 x1 + 0.586 x2 + 0.067 x3  (1) from the above equation can be interpreted that is a constant value of 4.338 meaning that if the organizational culture variable, compensation, interpersonal communication, motivation to work with 0, it will be followed by employee performance of 4.338. 1. the regression coefficient shows the positive direction meaning there is a direct (positive) relationship between organizational culture and work motivation. if organizational culture has changed or increased, work motivation will also increase and vice versa if organizational culture has decreased, work motivation will also decrease. regression coefficient of 0.071 means that if there is a change or an increase in organizational culture of 1 (one) unit then work motivation will increase by 0.071 unit. 2. the regression coefficient shows the positive direction meaning there is a direct (positive) relationship between compensation and work motivation. if compensation has changed or increased, work motivation will also increase and vice versa if compensation has decreased, work motivation will also decrease. regression coefficient of 0.586 means that if there is a change or increase in compensation of 1 (one) unit then work motivation will increase by 0.586 units. 3. the regression coefficient shows the positive direction giving meaning there is a direct (positive) relationship between interpersonal communication and work motivation. if interpersonal communication changes or increases so motivation will increase and vice versa if interpersonal communication has decreased then motivation work also declined. regression coefficient of 0.067 gives the meaning that if there is a change or increase in 1 (one) unit interpersonal communication, motivation work will increase by 0.067 units. y = a + b1 x1 + b2 x2 + b3 x3 + z (2) 4.1.5. classical assumption test 4.1.5.1. normality test normality test aims to test whether in the regression model, confounding or residual variables have a normal distribution (ghozali, 2005). as it is known that the ftest and t-test assume that the residual value follows the normal distribution. this test can be done with the histogram approach. the results of the normality test use the histogram approach. in the histogram graph figure 1 shows that the variables are normally distributed. 4.1.6. multicollinearity test the multicollinearity test results of the independent variables namely organizational culture, compensation, interpersonal communication and work motivation, according to table 4 as follows: based on table 4, it can be seen that the tolerance value is still below the number 1 or above 0.1. this shows the correlation table 2: simultaneous or simultaneous test results (test f) anovaa model sum of squares df mean square f sig. 1 712.259 3 237.420 39.707 0.000b regression residual 526.175 88 5.979 total 1238.435 91 adependent variable: mk bpredictors: (constant), ki, bo, ks table 3: partial test results (t‑test) coefficientsa model unstandardized coefficients standardized coefficients t sig. collinearity statistics b std. error beta tolerance vif 1 4.338 1.991 2.179 0.032 (constant) bo 0.071 0.082 0.084 0.867 0.389 0.509 1.964 ks 0.586 0.092 0.655 6.374 0.000 0.457 2.188 ki 0.067 0.065 0.081 1.034 0.304 0.779 1.284 adependent variable: mk maria: the influence of organizational culture, compensation and interpersonal communication in employee performance through work motivation as mediation international review of management and marketing | vol 9 • issue 5 • 2019 137 coefficient between the independent variables does not occur multicollinearity, also if seen from the value of the variance inflaction factor (vif) is also still below 5, then it means no multicollinearity occurs on the independent variables. 4.1.7. heteroscedasticity test this test is carried out in a regression model whether in a regression model there is an inequality of variance from residuals from one observation to another. if the variance of the residuals from one observation to another is fixed, then it is called homokedacity. conversely, if the variance is different, it is called heteroscedasticity. the good regression model is a regression model that does not occur heteroscedasticity. from the graph presented in the image below, visible points spread randomly and do not form certain patterns and clearly in figure 2. 4.2. regression estimation results (linear model 2) 4.2.1. coefficient of determination researchers using the spss 24 program, present the results of data processing for the coefficient of determination in the table 5 below: 4.2.2. simultaneous or simultaneous test (test f) simultaneous or simultaneous test or ftest aims to test the first hypothesis which is to find out the effect or not significantly of the independent variables together (simultaneously) on the dependent variable. below are the results of the ftest using spss 24. based on the data in table 6 it can be seen that fcount = 76.049 with a significance level of 0.000b. when compared with ftable at a 5% confidence level (α = 0.05) which is only 2.32, the fcount value is greater than the ftable value {fcount (76.049) <ftable (2.32) so that it can be said that organizational culture, compensation, interpersonal communication and simultaneous motivation is a significant explanatory variable for the employee performance of the malibu management agency. 4.2.3. partial test (t-test) partial test or t-test has the aim to test the second hypothesis, which is to find out the influence or not significantly of the independent variables individually (partial) on the dependent variable. the following are the results of the t-test using spss 24 in table 7: to determine whether h0 or h1 is rejected or accepted, then the value of tcount compares with the value of ttable at a significance level of 5% (α = 0.05), where the value of ttable at a significance level of 5% (α = 0.05) is 1,662, as seen in table 8, it can be the following conclusions are drawn: organizational culture variable (x1) has a significance value of 0.004 <á = 0.05 with a regression coefficient of 2.958. based on these results, then h1 is accepted which means there is an influence of organizational culture on performance. organizational culture variable (x2) has a significance value of 0.000 <á = 0.05 with a regression coefficient of 4.976. based on figure 1: histogram graph figure 2: scatterplot graph table 4: tolarence value and vif no variabel tolerance vif 1 budaya organisasi (x1) 0.505 1.981 2 kompensasi (x2) 0.313 3.198 3 komunikasi interpersonal (x3) 0.769 1.300 4 motivasi (z) 0.425 2.354 vif: variance inflaction factor table 5: coefficient of determination test results model summaryb model r r square adjusted r square std. error of the estimate 1 0.882a 0.778 0.767 2.773 apredictors: (constant), mk, ki, bo, ks bdependent variable: kk table 6: simultaneous or simultaneous test results (test f) anovaa model sum of squares df mean square f sig. 1 2338.320 4 584.580 76.049 0.000b regression residual 668.756 87 7.687 total 3007.076 91 adependent variable: kk bpredictors: (constant), mk, ki, bo, ks maria: the influence of organizational culture, compensation and interpersonal communication in employee performance through work motivation as mediation international review of management and marketing | vol 9 • issue 5 • 2019138 these results, then h1 is accepted which means there is a positive effect of compensation on performance. interpersonal communication variable (x3) has a significance value of 0.352 >á = 0.05 with a regression coefficient of −0.936. based on these results, then h3 is rejected, which means there is no positive effect of interpersonal communication on employee performance. work motivation variable (z) has a significance value of 0,000 <á = 0.05 with a regression coefficient of 4.500. based on these results, h4 is accepted which means there is a positive influence of work motivation on employee performance. 4.2.4. regression model (linear model) based on the estimation or regression results, the regression equation can be formulated as follows: y = −2.011 + 0.278 x1 + 0.627 x2 − 0.069 x3 + 0.544 z (3) from the above equation can be interpreted that is a constant value of −2.011 means that if the organizational culture variable, compensation, interpersonal communication, motivation to work together with 0, it will be followed by employee performance of −2.011. organizational culture variable (x1) of 0.278 means that if there is an increase in organizational culture every one unit, it will be followed by an increase in employee performance by 0.278. the compensation variable (x2) of 0.627 means that if there is an increase in compensation every one unit, it will be followed by an increase in affective commitment of 0.627. table 7: partial test results (t‑test) coefficientsa model unstandardized coefficients standardized coefficients t sig. collinearity statistics b std. error beta tolerance vif 1 (constant) −2.011 2.318 −0.868 0.388 bo 0.278 0.094 0.210 2.958 0.004 0.505 1.981 ks 0.627 0.126 0.450 4.976 0.000 0.313 3.198 ki −0.069 0.074 −0.054 −0.936 0.352 0.769 1.300 mk 0.544 0.121 0.349 4.500 0.000 0.425 2.354 adependent variable: kk table 8: direct effects results coefficientsa model unstandardized coefficients standardized coefficients t sig. collinearity statistics b std. error beta tolerance vif 1 (constant) 0.348 2.492 0.140 0.889 bo 0.317 0.103 0.240 3.067 0.003 0.509 1.964 ks 0.946 0.115 0.679 8.219 0.000 0.457 2.188 ki −0.033 0.081 −0.026 −0.403 0.688 0.779 1.284 adependent variable: kk table 9: path i test results model unstandardized coefficients standardized coefficients t sig. b std. error beta 1 4.338 1.991 2.179 0.032 (constant) bo 0.071 0.082 0.084 0.867 0.389 ks 0.586 0.092 0.655 6.374 0.000 ki 0.067 0.065 0.081 1.034 0.304 adependent variable: mk table 10: path ii test results model unstandardized coefficients standardized coefficients t sig. b std. error beta 1 (constant) −2.011 2.318 −0.868 0.388 bo 0.278 0.094 0.210 2.958 0.004 ks 0.627 0.126 0.450 4.976 0.000 ki −0.069 0.074 −0.054 −0.936 0.352 mk 0.544 0.121 0.349 4.500 0.000 adependent variable: kk maria: the influence of organizational culture, compensation and interpersonal communication in employee performance through work motivation as mediation international review of management and marketing | vol 9 • issue 5 • 2019 139 interpersonal communication variable (x3) of −0.069 means that if every interpersonal communication increases every one unit, it will be followed by a decrease in employee performance by 0.069. work motivation variable (z) of 0.544 means that if every work motivation occurs in one unit, it will be followed by an increase in employee performance by 0.544. 4.2.5. path test (path analysis) path test is used to test the effect of intervening variables. path analysis is an extension of multiple linear regression analysis, (ghozali, 2011. p. 249). path analysis is the use of regression analysis to estimate causality relationships between variables (causal models) that have been predetermined based on theory. based on the three tables 8-10 above, the path test results can be interpreted that the results of direct influence (0.240) are greater than indirect effects (0.029) so it can be concluded that there is no influence of organizational culture on employee performance through work motivation as mediation and h5 is rejected. the results of direct influence (0.679) are greater than indirect effects (0.229) so it can be concluded that there is no positive effect of compensation on employee performance through work motivation as mediation and h6 is rejected. the results of direct influence (−0.026) are smaller than indirect effects (0.028) so it can be concluded that there is an influence of interpersonal communication on employee performance through work motivation as mediation and h7 is accepted. 5. conclusion based on the test results, the results of the analysis and discussion that have been described in the previous chapter, it can be concluded that the results of the study indicate that the first found positive and significant influence of organizational culture on employee performance. this means that a high organizational culture will increase employee performance. both results show that there is a positive and significant effect of compensation on employee performance, meaning 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(2009), trust and relationship commitment between direct selling distributors and customers. african journal of business management, 3(12), 862-870. . international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2019, 9(4), 47-53. international review of management and marketing | vol 9 • issue 4 • 2019 47 huawei and the gulf region: market opportunities despite the ongoing us-china trade war fadye saud alfayad* department of business administration, jubail university college, saudi arabia. *email: fayad_s@hotmail.com received: 02 may 2019 accepted: 01 june 2019 doi: https://doi.org/10.32479/irmm.8206 abstract this document discusses the chinese telecommunications firm huawei and its market opportunities in the gulf cooperation council (gcc) are discussed in comparison to the recent sanctions taken against the firm by the us government and the ongoing us-china trade war. the analysis first offers some background information of the us-china trade war that has been rattling the global financial markets for months. this is followed by the examination of the sanctions taken against huawei by the us government and the reasons for them. into this milieu, potential market opportunities for huawei are explored within the gcc and especially its leading member-state markets such as saudi arabia. the observation is made that despite the us sanctions, huawei is certainly the leading telecommunications equipment provider internationally. these attributes of the firm’s business case provide it with the commercial heft necessary in order to convince the gcc and its member-states that it is a safe harbor investment for their 5g network build-out. the recommendation is made that huawei make price concessions to the gcc and its member states in order to convince them to offer exclusive 5g vendor contracts. this exclusivity in the market would stabilize huawei’s revenues over the long-term. keywords: gulf cooperation council market, us-china trade war, 5g technologies jel classifications: m3, o3 1. introduction this paper discusses in some degree of depth the issue of huawei and its market opportunities in the gulf region. specifically at issue is what market opportunities huawei has in the gulf region where the gulf region is characterized primarily by the gulf cooperation council (gcc) market. the gcc comprised of six member states led by saudi arabia. combined, these six member states constitute the largest and most advanced markets in the middle east. furthermore, they have taken a proactive approach to adopting 5g network technologies through offering market-based incentives, state supported grants and so on. additionally, the gcc as a body and some of its individual member states such as saudi arabia have also entered into major investment and development initiatives with china. china is huawei’s home market and while both the company and the government continue to deny any formal relationship. the issue discussed regarding huawei’s expansion into these markets within the gcc is done so in light of its recent difficulties with the us government. the us government has implemented numerous sanctions against huawei under the pretense that its executive leadership lacks the autonomy to operate independently of the chinese government. this lack of perceived autonomy is largely due to its founder’s close relationship with the chinese military. yet, despite these difficulties, this report delves into the unique features that make huawei such a dominant competitor in the 5g industry and in the telecommunications industry in general. 2. the us-china trade war talks of a trade war between the us and china began in earnest as early as 2016 during the start of the us presidential election cycle. in 2016 as trump was competing with the other republican this journal is licensed under a creative commons attribution 4.0 international license alfayad: huawei and the gulf region: market opportunities despite the ongoing us-china trade war international review of management and marketing | vol 9 • issue 4 • 201948 candidates for the presidential nomination, one of his favorite issues was the imbalance in trade between the us and china where he viewed this imbalance as entirely being in china’s favor. in trump’s view, china has long relied on its argument that it is a developing nation and thus merits various trade advantages both at home and abroad in order to gain economic parity. following trump’s election to the us presidency, he ordered the us secretary of commerce to begin an investigation into china’s trade practices in which he and certain of his officials believe china has long been a currency manipulator as a means to bolster its export market. in addition to currency manipulation, many entities in the west believe china’s government shields its valuable industries from foreign competition as well. ultimately trump instituted three rounds of tariffs on chinese goods imported into the us that combined were worth more than $250 billion which amounted to a 25% tariff (quick, 2019). of course, china instituted its own round of tariffs on the us in retaliation. these chinese tariffs are those covering approximately $110 billion in us goods and services being imported into china. a brief snapshot of the character of the trade war and the way in which it has been limited to tariffs thus far can be seen below: as the figure 1 reveals, the established and threatened tariffs by the us essentially would cover virtually all goods imported into the us from china. such an outcome only leaves a few options to the us side should the worst case scenario actually play out internationally which is a complete breakdown of formal trade relations with china. subsequently, trade talks were said to have been making progress as recently as december, 2018 and into the start of the new year. however, the trade talks that had seemed to be moving forward suddenly collapsed. the us side accused china of submitting trade proposals that reneged on previously agreed upon points and trump order the us side to leave the negotiating table and implemented another $200 billion in tariffs on chinese made goods and has started the process of placing tariffs on another $300 billion of chinese products in 2019 (quick, 2019). china is in the process of developing its own counter measures to these recent actions on the part of the us. such counter measures are those up to and including potentially halting shipments of rare earth minerals to the us or to us companies which would significantly harm the us’ major technology producing firms. into this environment of harsh trade activities, chinese firms have become the focus of the us government. following the imposition of trade tariffs, the us began targeting chinese firms with economic sanctions. these are firms that it views as violating certain us laws aimed at preventing countries designated by the us as terrorist states from obtaining certain technologies. in 2018, canada detained ms. meng wanzhou, who is huawei’s chief financial officer and the daughter of its founder and ceo ren zhengfei, on a warrant issued by the us claiming that huawei had violated sanctions placed by the us against iran (bilefsky, 2019). the detention of ms. meng by canada on behalf of the us legal system has proven corrosive china’s foreign relationships with the west. the main damage that has been inflicted is that between the canadian-chinese relationship and the us-china relationship. the us and china were already experiencing some abrasion prior to ms. meng’s arrest in canada so her detention only exacerbated an already difficult situation. on the other hand, for the chinese, their view is that ms. meng’s detention as nothing more than an illegal extension of trump’s trade war with china. furthermore, president trump has already escalated the targeting of huawei even more. recently president trump issued an executive order that allows the us executive branch to issue edicts that protect the nation’s telecommunications industry from foreign interference. as such, it has placed huawei on what is referred to as an “entity list” which prevents any us firms from engaging in any form of commerce with those listed firms (paletta et al., 2019). consequently, the us can now also target other chinese firms as well which opens up an entirely new front in the ongoing trade war with china. it is difficult to envision an outcome to the trade war that is satisfactory to both sides albeit any negotiated outcome is almost certainly going to benefit the us side more than the chinese side. china has begun the process of exploring all of its potential options in this escalating trade war with the us. for its part, china views the us as negotiating in bad faith since it is simultaneously implementing tariffs while trying to negotiate a trade deal and is pursuing criminal charges against one of its leading technology firms, huawei, and personally attempting to prosecute one of its top executives, ms. meng. china has several significant options in its arsenal of potential counters to the us tariffs. specifically, china produces an estimated 70% of the global supply of rare earth minerals which consists of 17 rare minerals that are utilized in a wide range of technology products such as computers, smartphones, chips and so forth (the guardian, 2019). any imposition of limits placed on these rare earths being shipped to us companies or even a complete ban of them being sold to thee west would significantly damage us technology companies. figure 1: framework of the us-china trade war (a quick review, 2019) alfayad: huawei and the gulf region: market opportunities despite the ongoing us-china trade war international review of management and marketing | vol 9 • issue 4 • 2019 49 these technology companies depend on these rare earth minerals for their technology products. finally, china holds an enormous amount of us debt in the form of us treasuries, some $1.12 trillion by most accounts, and it has sold more of these treasury notes recently than it has in the last 2 and ½ years (mackenzie, 2019). while many analysts believe china will avoid dumping these treasury holdings en masse, other believe that if it is pushed too far, china really has nothing to lose. 3. the gcc and the smartphone segment in terms of huawei, it seems that the firm is largely a scapegoat for much of the us’ aggression towards china’s trade activities. as such, the firm has been focusing on establishing new markets or expanding existing ones in order to counter the loss of market share it is experiencing due to us sanctions. still, irrespective of the ongoing trade disputes between the us and china, huawei has enormous opportunities for sustainable growth in the middle east. this is especially true in certain middle eastern markets such as the gcc. the gcc has a total of six-member states which are saudi arabia, the united arab emirates, bahrain, qatar, kuwait, and oman with an estimated combined gross domestic product of $1,459 trillion (nasir et al., 2019). these are some of wealthiest countries in the world on a per capita basis irrespective of their regional economic positions. consequently, since huawei has established itself as a major global competitor, it has significant upside throughout the middle east but most especially in the gcc. the smartphone market specifically is certainly a growth area in the gcc market for telecommunications companies like huawei. because the gcc does have such a high per capita gdp rate, its consumers can afford high-end smartphones while even the laborers that are primarily imported into the region from less developed markets such as southeast asia generate incomes that allow them to purchase mid to high-end smartphones. the data indicates that for the 1st quarter of 2019, smartphone shipments in the gcc surpassed 6 million units with individual member states such as saudi arabia exhibiting as much as a 3.6% increase in smartphone sales overall (cherrayil, 2019). furthermore, all of these smartphones are invariably utilized to access a host of internet and web-based applications that thrive in the 5g technology environment. this type of continued growth in demand throughout the gcc but certainly in individual member state markets like saudi arabia provides sustainability to huawei. more importantly, this regional demand in the gcc also provides stability as it seeks to stimulate demand in other markets outside of north america as a means to offset market losses due to the us sanctions. the fact is, that even during a downturn in the regional handset marketplace during 2018 when demand fell by double digits, huawei was virtually the only success story. during this era, huawei was the only major smartphone producer that grew its overall market share during this period (bridge, 2019). consequently, huawei is deeply entrenched throughout the gcc as a viable and even fashionable alternative to major smartphone brands and their products. the brands in reference include those produced by apple and samsung along with the range of premium products that they sell and market. while the firm’s handsets do not rival the premium cachet that brands such as apple or samsung along with the products that they carry, huawei does have certain other advantages. these include those such as its price-points combined with its quality products make its consumer products attractive and its enterprise products commercially viable. furthermore, huawei has developed strong relationships with both saudi arabia and the uae in the gcc. these two member-states are the two single largest markets in the gcc. these two individual countries within the gcc are so large that the company could even experience declines in the other member state markets but as long as these two markets remain strong, huawei can absorb such declines. saudi arabia’s individual gdp is $683 billion while the uae’s is $328 billion and combined these two markets account for an estimated 74% of the total smartphone sales in the gcc market and both markets expanded during the 1st quarter of 2019 (idc, 2019). these types of sales in the gcc marketplace tend to offset some of the declines of huawei’s smartphone sales in other markets that are affected by the trade war between the us and china. furthermore, huawei’s lower on average price-points for its handsets also ensures that the firm’s products remain a viable alternative for consumers. thus, from a cost perspective, even consumers in western markets that are subject to us trade and finance laws and regulations might consider huawei products. 4. huawei and its businesses while many in the west have not heard of or are only marginally aware of huawei, it is actually one of the world’s largest telecommunications firms. huawei has several core lines of business that allow it to compete in different segments of the telecommunications industry. the company reported revenues of more than $108 billion for 2018, maintains more than 188 thousand employees globally and it is currently the 2nd largest smartphone manufacturing firm globally (huawei, 2018). this global footprint provides huawei with the heft necessary to convince foreign markets that it can withstand us sanctions globally. while huawei still trails samsung internationally, its presence and dominance in the 5g network hardware market is uncontested. the company’s founder and current ceo, ren zhengfei, recognized early on the importance of getting out in front of the newest network communications infrastructure technology. consequently, huawei invested heavily in research and development (r&d) as a means to ensure it stays ahead of the technology curve. therefore, it has established just over 20 r&d centers globally along with some $13 billion in order to develop cutting edge 5g network technologies which has allowed it to be the primary supplier of 5g hardware to more than 1500 unique networks around the world (huawei, 2018). of course, it is huawei’s leading position in 5g technology and network infrastructure that has brought it to the attention of the us administration. huawei has so much opportunity in the middle east and in regional markets such as the gcc alfayad: huawei and the gulf region: market opportunities despite the ongoing us-china trade war international review of management and marketing | vol 9 • issue 4 • 201950 because of the multiplicity of its lines of business. presently, the company maintains three core businesses: (1) telecommunications equipment and networks, (2) enterprise business products and services and (3) consumer electronics including smartphones and laptops (huawei, 2018). combined, the company is well prepared to enter new markets but to also expand existing ones through its diversified brand portfolio. 5. 5g technologies and hardware the 5g technologies and hardware division within huawei is its most lucrative and largest business. it is also the division that is receiving the brunt of the criticism from the us regarding the potential for backdoors into its networks. to be exact, this line of business is referred to as the carrier network business group and it consists of permanent networks, telecommunications carrier software services, networking energy management software and hardware and up until 2012 or so this division experienced 70% compound annual growth rates (xia, 2017). in fact, huawei’s first 5g network was established in 2014 in the isle of man and it has since become the largest 5g technology vendor in the world. additionally, since then its 5g technologies have become a cost-effective solution for many developing countries as well. in terms of actual network characteristics, 5g makes reference to the most recent wireless technology platform. as such, 5g as a network platform is still in its relative infancy. basically, 5g networks are wireless technology platforms characterized by faster data movement, lower latency parameters which make it more responsive and a higher capacity for connected devices at each node (ford et al., 2017). furthermore, due to the shift in air interface technology, 5g is not backwards compatible with prior wireless network technology platforms such as 4g. this lack of backwards compatibility is part of what makes 5g networks so reliable, fast and efficient. they do not have to engineer compatibility with legacy systems into the platform which would almost certainly slow it down. at the heart of the 5g technology platform is technology that consists of both traditional networking devices as well as newly emergent technologies. in general, 5g networks are described as having much faster data rates, lower latency in milliseconds, greater bandwidth on a per unit basis, increased connectivity handling many times more connected devices that 4g networks, an always on platform with near 100% uptime, energy efficiency and longer battery life for battery dependent hardware attached with the network (5g, 2016). a full description of each of these points is presented in table 1 which offers more detailed description of each of these points. the list of 5g networking equipment that huawei sales and markets as part of its networking division includes more traditional switches and routers as well. these switches and routers are used to connect multiple devices together within the context of a single network in the case of the former and to connect multiple networks together in the case of the latter (ford et al., 2017). additionally, 5g technologies include newly developed modems, signal processors and cellular technologies as well. the typical network design and architecture for 5g resembles the diagram displayed in the following graphic: as the figure 2 above indicates, 5g networks are typically more granular than traditional cellular networks. this granularity in the network architecture for 5g relates to the bandwidth that 5g occupies. 5g’s core bandwidth are involves millimeter wave bandwidth (24 ghz–100 ghz) which consists of much shorter wavelengths that can transmit data much faster than lower bandwidths but can only do so for shorter distances. the result is that while 5g is certainly cutting edge, it requires a greater number of towers and signal boosters to cover a network area. the complexity of 5g network technologies is what is contributing to the us government’s fear that huawei executives can order a backdoor into its systems on behalf of the chinese government. their point is that these backdoors can be so easily hidden that us security analysts could never locate them. 6. 5g in the gcc many of the leading markets within the middle east have taken a very proactive approach to 5g adoption. this is particularly true of table 1: key features of 5g technology data rates the average data rates for 5g are between 1 and 10 gbps compared to 4g’s typical 2-100 or so mbps low latency rate reduced latency is one of the key features of 5g wherein latency for 5g is 1 ms for an end-to-end transmission while for 4g networks it is around 10 ms bandwidth per unit 5g networks produce at least 1000 times more bandwidth on a case-by-case basis connectivity 5g networks support from 10 to 100 times the number of overall connected devices per network always on 5g networks are expected to have a 100% coverage rate based on 99.99% uptime technically achievable in 4g but practically not accomplished energy conservation 5g networks are much more energy efficient by as much as 90% over previous technology standards battery life technology infrastructure that relies on battery support/backup can last as long as 10 years in 5g applications (5g, 2016) figure 2: 5g network architecture (nekovee, 2018) alfayad: huawei and the gulf region: market opportunities despite the ongoing us-china trade war international review of management and marketing | vol 9 • issue 4 • 2019 51 the gcc as a regional market and certainly true for saudi arabia as the region’s most progressive country vis-à-vis technology adoption and rollout. by some estimates, it is believed that 5g network connectivity will account for as much as 16% of all mobile connections in the gcc by 2025 alone which, considering there are as many as 381 million unique subscribers throughout the region, this would account for some 60.1 million 5g subscribers (mobile, 2018). it is clear that this is such a promising growth market that, for companies such as huawei that specialize in 5g technologies, the middle east should be the focus of their business strategy. indeed, the growth evident in the middle east is so sustainable that firms such as huawei are willing to make price concessions up-front in order to gain entry into the market. more to the point, the gcc and major area markets such as saudi arabia offer viable alternatives to the us market. many western markets, led by the us and canada, are closed off to huawei but its executives refuse to concede to the us government. since huawei is actively being shut out of north america, it has been attempting to reassure global investors that its core business strategy is sound. furthermore, because china, huawei’s home market, has established very strong economic and investment relationships with both the gcc and saudi arabia in particular, it becomes more difficult for the us to force these regional entities into blacklisting the company. by most estimates, the cellular industry alone contributed some $165 billion to the gcc’s overall economy and this figure is expected to surpass $200 billion by 2022 while in 2017, it accounted for more than 1 million unique jobs and contributed as much as $17 billion to domestic infrastructure projects (mobile, 2018). while not all of this financial activity is completely attributable to huawei, it is certain that a sizable percentage of it is. the figure 3 displayed below graphically illustrates just how widespread 5g networks are expected to be throughout the gcc and surrounding areas: if, as this chart indicates, 5g network adoption surpasses 29% by 2025 alone, by projection then, it is likely to surpass 70% or more by 2030. this is because the speed of adoption increases exponentially as network infrastructure is put in place. furthermore, in reference to huawei, any negative actions on the part of the gcc or individual countries like saudi arabia against huawei would act to depress further investment in the industry. additionally, it would also almost certainly slow the adoption 5g across the region which no-one wants to be responsible for. 7. weathering us imposed restrictions huawei has already experienced some significant setbacks due to the us government’s restrictions on its business. these setbacks interfere with its ability to service both consumer and enterprise segments of its customer base within the gcc. for instance, google recently announced that huawei would no longer receive scheduled updates to its android operating system for smartphones while microsoft has stopped marketing huawei laptops as well as ceased its own updating of huawei branded devices (newcomb, 2019). it is effects such as these that make huawei products and services a difficult proposition for global customers. it is critical for enterprise customers to ensure that they receive all of the most recent security updates and revisions for their technology platforms. likewise, consumers demand up-to-date operating systems and all of the most recent apps which they will no longer have access to due to huawei’s inclusion on the banned company list by the us government. in terms of specific market strategies within the gcc region, huawei has already benefited from some of its previously established relationships. saudi arabia in particular has expressed little reservation in regards to utilizing huawei 5g technology solutions. and, in fact, has embraced the firm’s 5g technology platforms as its primary 5g network infrastructure within the country. the use of huawei’s 5g technologies is part of a larger joint investment policy initiative undertaken between saudi arabia and china as described below: saudi arabia’s main energy producer, also announced plans for a $10 billion refining joint venture in northeast china’s liaoning province. memorandums of understanding were signed for $3 billion of projects involving smart cities, renewable energy, infrastructure technology, among other areas (caixin, 2019). as this passage notes, china has ensured that middle eastern regional markets like the gcc would have more difficulty in refusing to do business with huawei. it should also be noted that the gcc and countries such as saudi arabia do not fully accept the us’ assertion regarding the potential security threat of a backdoor in huawei’s 5g hardware and software. however, what remains unclear in this context is how the us’ placement of huawei on its blacklist of companies will impact huawei. the us companies that have done business with huawei cannot do business with the firm once it is on the list. there is not a single scenario where huawei is able to emerge from this current trade battle with the us unharmed. many us companies currently operate in one capacity or another within the gcc and saudi arabia, in particular, given the us’ close relationship with the kingdom. also, the us’ placement of hauwei on this blacklist also restricts countries that have treaties with the us or that participate in economic and trade related pacts may not engage in certain activities with the firm either. a representative example would be the position that south korea is currently in due to the us’ targeting of huawei for sanctions. figure 3: 5g network distribution in the gcc (radcliffe, 2018) alfayad: huawei and the gulf region: market opportunities despite the ongoing us-china trade war international review of management and marketing | vol 9 • issue 4 • 201952 china is south korea’s largest trading partner, accounting for 26.8% of the country’s exports in 2018, compared with 12% for the united states. huawei alone bought $10.7 billion worth of south korean products accounting for 17% of the country’s electronics parts exports to china (arab news, 2019). this type of geopolitical position is a problematic one for south korea. it seems evident that huawei is intent on exploiting the critical trade and investment relationships that china has established with the gcc and saudi arabia individually as a means to compensate for market losses due to the us’ sanctions against the firm. likewise, huawei has another key advantage in its strategic arsenal that it can use to leverage its position in the 5g industry. this is the 5g industry within the gcc and other regional markets that surround it. the very term 5g merely refers to a set of technology standards that meet specific criteria as developed and defined by the third generation partnership project (3gpp) which is a global group of telecommunications providers of which huawei is a central member (de la oliva et al., 2015). whether huawei’s business profile is severely impacted by us sanctions or not, its position on the 3gpp panel is not under threat. this fact combined with the knowledge that because huawei is the world’s largest telecommunications equipment provider and a global leader in 5g technology development, means that it will continue to influence 5g standards of which it owns about 30% of the most critical 5g technology patents globally (jaipragas, 2019). consequently, whether huawei loses market share globally or not, it is not destined to lose influence in the 5g field. this capacity to steer the direction for 5g industry standards is also providing it leverage in the gcc as well. 8. conclusions and recommendations the importance of 5g network technologies cannot be understated. this applies to virtually all markets and not just for the gcc and other middle east markets. 5g technologies are vital considering the centrality that internet and web-based technologies have become to contemporary life and commercial applications. the sheer number of mobile devices within the gcc comprised of both smartphones and tablets as well as continued use of laptops as well as traditional desktop terminals has meant that the demand for fast, accurate and reliable networks has increased exponentially. this demand is, in part, due to the wide proliferation of web-based applications such as social networks like facebook, instagram and wechat among many others, video on demand and streaming video applications, voice-over-ip (voip) applications, livestreaming of television programming, and, of course, the vast array of connected devices found within the internet of things (iot) (zhang, 2017). this incredibly large number of connected devices that are operating, increasingly, in an always on modality necessitates the adoption of 5g technology platforms. viewed from this perspective then, huawei’s market leading position as a telecommunications hardware and software provider along with its global leadership in 5g technologies is indispensable to the global adoption of the 5g standard. huawei has a multitude of different market opportunities within the gcc and particularly within saudi arabia. the company has an established global presence within the telecommunications industry and especially within the emerging 5g industry. it can leverage its position as the largest telecommunications firm as a means to demonstrate to the gcc and its member states that its size merits contracts despite the ongoing sanctions placed upon it by the us. the rationale is such that it can make the case that its size warrants investment because it has the scale to not only build out member state 5g networks but then to also link these regional 5g networks with established 5g networks in other markets (park, 2019). furthermore, the established economic and financial initiatives that china has established with saudi arabia and other gcc member states means that huawei has the direct support of the chinese government. the chinese government is intent on ensuring that the us cannot put huawei out of business as this would undermine, in its view, its national sovereignty. another element in huawei’s business case that it can leverage in the gcc and surrounding region is its position as a 5g standards developer and technology patent holder. because huawei is so influential in the 5g standards arena, having it manage and setup a market’s 5g network infrastructure is beneficial on several fronts. firstly, no other firm would be as familiar with 5g standards. secondly, huawei both sells and services its 5g network hardware and software making it a full-service vendor that can scale with the growth of a regional 5g network. it is these inherent competencies that make huawei an attractive 5g vendor for the gcc and its member-states like saudi arabia. therefore, moving forward, as a means to offset market losses due to the us sanctions but also as a way to monetize its market leadership in the industry, huawei should push individual member-states in the gcc for provisional exclusivity while offering price concessions. initial price concessions by huawei might undermine its revenue growth but would bolster its market share. the data indicates that regionally and globally huawei can anticipate a seven-fold increase in data traffic along with exponential growth in the number of connected devices which will allow it to recoup some of the price concessions it will give up initially (fifth-generation, 2019). yet, over the longterm, such a strategy in the gcc preserves huawei’s position as a global leader in 5g technologies. references a quick guide to the us-china trade war. 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(2017), network function virtualization: concepts and applicability in 5g networks. john wiley and sons, hoboken, nj. . international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2019, 9(6), 98-104. international review of management and marketing | vol 9 • issue 6 • 201998 the effect of competency and motivation of work satisfaction and its implementation of lecturer commitments in the private vocational school of lldikti area iv in banten angrian permana*, m. havidz aima, eny ariyanto, afriapollo syafarudin universitas mercu buana, jakarta, indonesia. *email: mr.angrianpermana@gmail.com received: 14 august 2019 accepted: 09 ocober 2019 doi: https://doi.org/10.32479/irmm.8833 abstract this study aims to determine the effect of competence on lecturer job satisfaction, motivation on lecturer job satisfaction, competence on lecturer work commitments, motivation on lecturer work commitments, and job satisfaction on lecturer work commitments at private universities in banten province. this research uses quantitative methods with a total sample of 330 people. samples were taken from a lecturer population spread across several private universities in banten, namely, serang city, south tangerang city, tangerang city, tangerang regency, pandeglang regency, lebak regency, and cilegon city. the analytical tool used in this study uses sem with the smart pls tool. the results of this study are competence influences lecturer job satisfaction, motivation influences lecturer job satisfaction, competence influences lecturer work commitment, motivation does not affect lecturer work commitment, and satisfaction influences lecturer work commitment. keywords: competence, motivation, job satisfaction, work commitment jel classification: j28 1. introduction the development of information technology that is increasingly rapid in the current era of globalization can not be avoided anymore influence on the world of education expressed by (hertati 2019). then hertati (2016) said that global demands demanded the world of education to always and constantly adjust technological developments to efforts in improving the quality of education, especially adjusting the use of information and communication technology for education especially in the learning process. education is a very important domain for the development and economic progress of a nation. as a country that is quite large and dynamic, indonesia has considerable potential to become a better country at this time. this can be realized by improving the quality of education. former minister of education and culture prof. dr. daoed joesoef said, the resilience and strength of a nation lies in the field of education. he also added that if if the state wanted to be strong and advance in the eyes of the international, then indonesia must make education as a superior field. in accordance with law no. 20 of 2003 which explains that with education will bring the ability and shape the character of the nation’s civilization in order to educate the life of the nation. some countries with the best economies such as japan, south korea, finland and singapore have very good quality education. education in indonesia has been regulated in law no. 12 of 2012. some of the contents of the act include: (1) prepare students to become members of the community who have academic and/or professional abilities that can apply, develop and/or enrich the treasury of science, technology and/or art, (2). develop and disseminate science, technology and/or arts and strive for their use to improve the lives of the people and enrich national culture. furthermore hertati (2015) states that tertiary institutions are one of the platforms for producing great humans who are the successors this journal is licensed under a creative commons attribution 4.0 international license permana, et al.: the effect of competency and motivation of work satisfaction and its implementation of lecturer commitments in the private vocational school of lldikti area iv in banten international review of management and marketing | vol 9 • issue 6 • 2019 99 to the indonesian nation. with a quality university is expected to create graduates who have superior quality. to create good quality education in tertiary institutions, teachers are needed who have a good work ethic. lecturers must have a high commitment to the profession they carry, have a good level of competence, strong motivation in carrying out duties and functions, high job satisfaction, and have a high commitment to the profession they carry. higher education in indonesia has various characteristics and various types. higher education ranking, one of them is qs world university ranking, where we know that qs world university ranking is one of the references of the ministry of research, technology and higher education (kemenristekdikti) in measuring the quality of higher education institutions in indonesia towards world class university. the quality of tertiary institutions apart from the ranking size can be seen based on the level of campus accreditation. campus accreditation is ranked based on campus criteria with ipt a, b, c, and some even do not have accreditation. education in indonesia has xiv kopertis area, which is spread in several regions. banten province is included in the kopertis iv region which is still joined by west java. based on data taken from higher education statistics, the number of lecturer positions in banten province is still the lowest among other provinces in java. the number of functional lecturers is presented in figure 1. based on figure 2 it is clear that banten province has the lowest number of lecturer positions among the provinces in java. the number of positions as teaching staff still dominates from other functional positions, namely as many as 2,257 lecturers, followed by 1,422 expert assistant positions, then 546 lectors, 93 chief lectors, and 24 professors. when we compare it with dki jakarta province, still far behind who have 327 professors. lecturers at universities in indonesia, especially in the province of banten have not been able to devote all their attention to one hundred percent focus on their work. because many lecturers work from one place to another with very little time and a lot of workload (setiawati, 2017). high commitment is needed so that lecturers can become professional lecturers and make lecturer satisfaction levels increase (tranggono and kartika, 2008). in addition to job satisfaction, the lecturer will be useful if he has a good work commitment. 2. research theory 2.1. competence competence is interpreted as knowledge, skills, and basic values that are reflected in the habits of thinking, and acting (nur, 2014). then hertati (2019) states that competency is the work ability of every individual which includes aspects of knowledge, skills and work attitudes that are in accordance with expertise and understanding. furthermore, hertati’s research results (2019) state that competence is a set of knowledge, skills, and behaviors that must be possessed, internalized, and mastered by teachers or lecturers in carrying out professional tasks in their field of expertise. hertati research results (2015) states that competence is the authority and ability or ability of a person to carry out tasks or jobs in accordance with the position that forms his expertise. furthermore, hertati (2015) said that competence cited by dessler (2010) in aima et al. (2017) states that competency is a characteristic that can be demonstrated, including knowledge, skills and attitudes that produce performance achievements. according to azmy (2015), there are five characteristics in competence, namely: (1) motives are things that someone constantly thinks about desires and what causes actions. motives can be done directly or choose behavior towards certain actions or goals and away from others. (2) traits are physical characteristics and consistent responses to situations or information. (3) self-concept is an attitude toward values or self-image. (4) knowledge is information of a person in a particular field. (5) skill is the ability to perform certain physical or mental tasks. this study takes indicators based on research conducted by alqiawi and ezzeldin (2015), namely academic, professional, and personal. 2.2. motivation mcshane and mary (2010), motivation as a strength in people that influence the direction (direction), intensity (intensity), and persistence (persistence) voluntary behavior. motivated workers want to use a certain level of effort (intensity), for a certain amount of time (persistence), towards a certain goal (direction). motivation is one of the four important drivers of individual behavior and performance. according to mothins and jackson in astuti and iskandar (2015) motivation is a desire in someone that causes that person to take an action. research journals conducted by badjuri (2013), darmawan et al. (2015), and ma’mun et al. (2017) explain that motivation is a collection of behaviors that provide an employee foundation for working hard. newstrom (2011) and syafarudin (2019) state that work motivation is the result of a collection of internal and external forces that cause workers to choose the right path of action and use certain behaviors. according to mathis and jackson (2006), motivation is the desire in a person that causes the person to act. source: higher education statistics, 2018 figure 1: number of functional lecturers presented figure 2: path diagram for sem permana, et al.: the effect of competency and motivation of work satisfaction and its implementation of lecturer commitments in the private vocational school of lldikti area iv in banten international review of management and marketing | vol 9 • issue 6 • 2019100 usually people act for a reason to reach a goal. motivation is also defined as a set of energetic forces that begin both inside and outside the worker, starting from work related to work, and considering the direction, intensity and perseverance (colquitt et al., 2011). then syafarudin (2018) states that motivation is a critical consideration because effective performance often requires both high levels of ability and motivation. intrinsic motivation is motivation that drives a person to excel, which comes from within the individual, which is better known as motivational factors. according to herzberg cited in hasibuan (2007), which are classified as motivational factors include: responsibility, appreciation, work itself, and development and progress. syafarudin (2019) stated that besides the intrinsic motivation dimension, there is another dimension, namely the extrinsic dimension. in contrast to the intrinsic dimension, where if the intrinsic dimension comes from within each individual, the extrinsic dimension comes from outside the individual itself. the dimensions of extrinsic motivation are measured by indicators according to robbins and judge (2015), namely: supervision or supervision, salary, status, working conditions. in addition to extrinsic and intrinsic motivation, which refers to worldly success, it requires sincere work in order to bring blessings. saleh (2009) explains, work done sincerely; unconditional, full of awareness, passionate and sincere because they feel valued by the creator. these attitudes must be fostered and further developed in the daily work of conscientious workers (spiritual workers). this study refers to three dimensions conducted according to saleh (2009), namely intrinsic, extrinsic, and spiritual. 2.3. satisfaction job satisfaction is related to variables such as turnover, absenteeism, age, level of work, and company organization size. this is in accordance with the opinion (mangkunegara, 2013) which states that job satisfaction consists of several aspects, including employee turnover, attendance, age, occupation, size of the organization where he works. job satisfaction plays an important role in the direction of organizational success. according to robbins and judge (2015), aspects of job satisfaction include wages, working conditions, job security, coworkers, types of work and employee opportunities to advance. companies need to pay attention to these aspects so that employees feel their needs are met and in the end they will feel satisfied. hughes et al. (2015) explain job satisfaction does not mean how hard or how well someone works, but rather how far people like the job. the assessment can be done on one of the important values in the work. satisfied employees prefer work situations rather than dislike them so that it can be stated that job satisfaction is the result of fulfilling some desires and needs through work activities (murti and srimulyati, 2013). the term employee satisfaction is used to define satisfied and happy employees. satisfaction is used by workers as a condition of their desire to remain in the workplace (khan et al., 2015). employee satisfaction is considered a measurement criterion until employees like their work (spector, 1997). indicators of job satisfaction in this study are drawn from three dimensions according to blum in sinambela (2017), including individual factors, social factors, and major factors in work. 2.4. work commitment syafarudin (2016) states that commitment is a belief in employees themselves to remain part of the organization. work commitment is a condition of an employee who sides with a particular organization, as well as his goals and desires to maintain his membership in the organization (syafarudin and mulyana, 2019). hertati (2019) revealed that work commitment is the identification and involvement of someone who is relatively strong towards the organization. then hertati (2015) states that work commitments have two important components, namely attitudes and desires to behave in a case. attitudes related to identification, involvement and loyalty, while the will depends on the circumstances to behave in a willingness to show effort (syafarudin and sudiarditha, 2018). work commitment is a personal characteristic that is reliable and trustworthy. hertati (2015) defines work commitment as a force that binds individuals to take action towards one or several organizational goals. according to robbins and judge (2015) commitment is the degree to which an employee sides with an organization and its goals and desires to maintain its membership in the organization. according to research conducted by franco and lyapina (2017) quoted from steers (1997) commitment has the relative strength of identifying individuals with involvement in a particular organization. supported by sutanto and gunawan journals (2013), mangkunegara and octarend (2015), wulandary et al. (2017) who explained that commitment is needed by employees to maintain their existence in an organization. organizational commitment becomes something that is very important for the survival of the organization itself. commitment shows the desire of employees of an organization to stay, work, and serve the organization (amilin and dewi, 2008). in addition, triyaningsih (2014) provides a statement that work commitment is defined as an individual’s dedication to a particular organization to remain loyal and survive, and spend the rest of his career. between organizations and staff employees make it interrelated and work together as partners, as explained by ismail et al. (2017) that commitment is a belief that someone believes to make partners and believes that the relationship between partners is very important and maximum efforts are needed to maintain it. 3. research methodology the location of this study was conducted in several private universities in banten with accreditation of b and c campuses included in the lldikti iv area. the population of private tertiary institutions in banten consists of 42 pts spread across regencies and cities. from 42 pts taken randomly as many as 20 pts, and there are six pts that do not respond, so that pts is taken as many as 14 pts. of the 14 private universities, the number of lecturers is taken proportionally according to the criteria of researchers, namely permanent lecturers with a minimum position of expert assistant. researchers took the total population from the dikti forlap data, which was then added proportionally based on the number of populations. the population of this study was 1,298 lecturers. because the population is too large and very large, it can be simplified. according to sugiyono (2014), if the subject is too large, then it can be taken 10% -15% depending on the permana, et al.: the effect of competency and motivation of work satisfaction and its implementation of lecturer commitments in the private vocational school of lldikti area iv in banten international review of management and marketing | vol 9 • issue 6 • 2019 101 ability of researchers in terms of time, energy, funds, the breadth of observation, and the size of the risk borne by researchers. the questionnaire distributed to respondents was 400 questionnaires, and the number of questionnaires returned and could be processed was 330 questionnaires. the method used in this study uses quantitative methods, with sem analysis tools, and assistive devices in the form of smart pls. data collection techniques by distributing questionnaires or questionnaires that contain a list of questions to obtain data from respondents. the scale used in this study uses a 5-point likert scale. furthermore, data processing is performed using smart pls 3.0. validity testing is done using convergent validity and discriminant validity. the validity test results can be seen with the results of the loading factor value. the loading factor value must be >0.7. the average variance extracted value can also be used as a measure of validity with a value >0.5. discriminat validity can be seen with the cross loading value for each variable must be >0.7 (table 1). the structural equation for the model to be tested is as follows: y1 = γ1x1 + γ2x2 + ζ1 (1) y2 = γ3 x1 + γ4x2 + β1y1 + ζ2 (2) information γ (gamma): coefficient of influence of exogenous variables on endogenous variables β (beta): coefficient of influence of endogenous variables on endogenous variables ζ (zeta): model error. measurement model equation: 1. for competence (x1) x1.1 = λ1x1 + δ1 x1.2 =λ2x1 + δ2 x1.3 = λ3x1 + δ3 x1.4 = λ4x1 + δ4 x1.5 = λ5x1 + δ5 x1.6 = λ6x1 + δ6 x1.7 = λ7x1 + δ7 x1.8 = λ8x1 + δ8 x1.9 = λ9x1 + δ9 x1.10= λ10x1 + δ10 x1.11= λ11x1 + δ11 x1.12= λ12x1 + δ12 x1.13= λ13x1 + δ13 2. for motivation (x2) x2.1 = λ14x1 + δ14 x2.2 =λ15x1 + δ15 x2.3 = λ16x1 + δ16 x2.4 = λ17x1 + δ17 x2.5 = λ18x1 + δ18 x2.6 = λ19x1 + δ19 x2.7 = λ20x1 + δ20 x2.8 = λ21x1 + δ21 x2.9 = λ22x1 + δ22 x2.10= λ23x1 + δ23 x2.11= λ24x1 + δ24 x2.12= λ25x1 + δ25 x2.13= λ26x1 + δ26 3. for job satisfaction y1.1 = λ27y1 + €1 y1.2 =λ28y1 + €2 y1.3 = λ29y1 + €3 y1.4 = λ30y1 + €4 y1.5 = λ31y1 +€5 y1.6 = λ32y1 + €6 y1.7 = λ33y1 + €7 table 1: variables and indicators indicator variable competen a. english mastery b. proficiency in courses based on curriculum c. achievement of complete courses d. novelty in the delivery of subjects e. application of scientific research skills f. application of community service g. learning planning h. implementation of lessons and class management i. use of modern evaluation methods j. attractive k. application of social and religious values l. has psychological characteristics m. communication skills motivation a. responsible b. appreciation c. work itself d. development and progress e. salery f. policy g. work relationship h. environment i. supervision j. closeness of the soul to god k. goodwill l. taqwa at work m. sincere at work job satisfaction a. age b. health c. character d. hope e. family relation f. community’s view g. creative opportunities h. worker union activitie i. political freedom j. social relations k. salary l. supervision m. work peace n. working conditions o. opportunity to advance work commitment a. personal characteristics b. emotional closeness c. support organizational policies d. good relationship e. job compatibility f. job performance g. the desire to stay source: journals and books permana, et al.: the effect of competency and motivation of work satisfaction and its implementation of lecturer commitments in the private vocational school of lldikti area iv in banten international review of management and marketing | vol 9 • issue 6 • 2019102 y1.8 = λ34y1 + €8 y1.9 = λ35y1 +€9 y1.10= λ36y1 +€10 y1.11= λ37y1 + €11 y1.12= λ38y1 + €12 y1.13= λ39y1 + €13 y1.14= λ40y1 + €14 y1.15= λ41y1 +€15 4. for work commitments y2.1 = λ27y2 + €16 y2.2 =λ28y2+ €17 y2.3 = λ29y2 + €18 y2.4 = λ30y1 + €19 y2.5 = λ31y1 +€20 y2.6 = λ32y1 + €21 y2.7 = λ33y1 + €22 formation λ (lamda): loading factor δ (delta): error measurement manifest variable for exogenous variables ɛ (epsilon): error measurement manifest variable for endogenous variables. 4. results and discussion this research shows some of the results that have been tested by smart pls and spss tools. spss is used to test the instrument table 2: validity test results variabele indikator value r significance information competence x1 0.876** 0.000 valid x2 0.855** 0.000 valid x3 0.747** 0.000 valid x4 0.865** 0.000 valid x5 0.869** 0.000 valid x6 0.735** 0.000 valid x7 0.857** 0.000 valid x8 0.713** 0.000 valid x9 0.850** 0.000 valid x10 0.872** 0.000 valid x11 0.891** 0.000 valid x12 0.858** 0.000 valid x13 0.715** 0.000 valid moivation x14 0.777** 0.000 valid x15 0.823** 0.000 valid x16 0.729** 0.000 valid x17 0.693** 0.000 valid x18 0.862** 0.000 valid x19 0.839** 0.000 valid x20 0.853** 0.000 valid x21 0.705** 0.000 valid x22 0.797** 0.000 valid x23 0.854** 0.000 valid x24 0.854** 0.000 valid x25 0.705** 0.000 valid x26 0.692** 0.000 valid job satisfaction x27 0.800** 0.000 valid x28 0.718** 0.000 valid x29 0.774** 0.000 valid x30 0.837** 0.000 valid x31 0.804** 0.000 valid x32 0.820** 0.000 valid x33 0.825** 0.000 valid x34 0.850** 0.000 valid x35 0.853** 0.000 valid x36 0.820** 0.000 valid x37 0.721** 0.000 valid x38 0.783** 0.000 valid x39 0.814** 0.000 valid x40 0.807** 0.000 valid x41 0.705** 0.000 valid work commitment x42 0.852** 0.000 valid x43 0.850** 0.000 valid x44 0.708** 0.000 valid x45 0.780** 0.000 valid x46 0.865** 0.000 valid x47 0.757** 0.000 valid x48 0.867** 0.000 valid source: primary data processed (2019) table 3: reliability test results latent variable cronbach’s alpha information competence 0.961 reliabel motivation 0.947 reliabel job satisfaction 0.958 reliabel work commitment 0.914 reliabel source: primary data processed (2019) table 4: value loading indicator indicators variabel laten job satisfaction commitment competence motivation com1 0.883 com2 0.882 com4 0.750 com5 0.888 com6 0.709 com7 0.895 k1 0.895 k10 0.887 k11 0.905 k12 0.870 k2 0.860 k4 0.883 k5 0.900 k7 0.891 k9 0.868 kk1 0.809 kk10 0.845 kk12 0.798 kk13 0.811 kk14 0.790 kk3 0.784 kk4 0.854 kk5 0.826 kk6 0.835 kk7 0.845 kk8 0.866 kk9 0.866 m1 0.854 m10 0.907 m11 0.909 m2 0.879 m5 0.922 m6 0.904 m7 0.912 m9 0.901 source: primary data processed (2019) permana, et al.: the effect of competency and motivation of work satisfaction and its implementation of lecturer commitments in the private vocational school of lldikti area iv in banten international review of management and marketing | vol 9 • issue 6 • 2019 103 for both validity and reliability. statistically, the validity of a questionnaire is measured from the required correlation value. to test the research instrument at the alpha level of 5%, a pearson correlation cut-off (r value) of 0.2265 is obtained so that the questionnaire items are said to be valid if r count >0.2265 or with a significance value of the correlation test must be <0.05 to be said to be valid. the results of the validity test of the study using spss tools can be seen in table 2. in addition to testing the validity, reliability testing of each variable is also carried out. reliability can be calculated using cronbach’s alpha value with a minimum cut-off value of alpha cronbach’s of 0.70 so the questionnaire items can be said to be reliable. the reliability test results can be seen in table 3. evaluation of the measurement model is carried out to see whether the observation variable appropriately measures its construct. validity testing is done by looking at the value of the loading factor and the value of t statistic. researchers need to test 4 times to get the value of loading factor >0.7 on each indicator. the results of testing the overall loading factor value >0.7, the value can be seen in table 4. the inner model in this study shows the values that can find out the answers of the hypothesis. the inner model results can be seen in table 5. bootstrapping results illustrate that there are four accepted hypotheses and one rejected hypothesis. the hypothesis that is rejected is that motivation influences the work commitment of lecturers having a t value of statistics <1.96. while for the other hypotheses are considered to be fit, because it has a t value of statistics >1.96. then from each influence between variables have the values listed in table 6. 5. conclusions and suggestion competence is quite important for job satisfaction of a lecturer. having the ability in accordance with the soul and personal character is something that needs attention. pts institutions and the government should spur the competence of lecturers so they can compete in a healthy manner. competencies should be prepared according to the personal character of the lecturer himself. motivation is an impulse that arises in a person, not spared for a lecturer. such motivation can be triggered through various dimensions such as intrinsic, extrinsic, and spiritual. these three dimensions must be present in a lecturer. giving responsibility, appreciation, and sound policies are things that should be accepted by lecturers. in addition, as a lecturer it is also necessary to have a high spiritual spirit so that activities in carrying out their duties have their own blessings. it is certain that when working with a high level of satisfaction, it will have an impact on the high level of commitment to an organization. this also applies to lecturers in pts banten province. therefore, pts and the government must continue to pay attention to any factors that make the lecturers more satisfied. having a high commitment is not only caused by one or two factors, but there are still many factors that influence it. like the conclusions obtained in this study which explains that motivation does not affect the work commitment of lecturers. it does not mean ignoring the level of motivation to maintain the commitment of lecturers, but this motivation needs to be increased in order to increase other variables that have not been examined in this study. references aima, h., ali, h. 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(2015), a suggested model for developing table 5: hasil mean, stdev, t-values dan p-values variabel laten original sample (o) sample mean (m) standard deviation (stdev) t statistics (|o/stdev|) p values job satisfaction -> commitment 0.636 0.636 0.069 9.267 0.000 competence -> job satisfaction 0.231 0.233 0.050 4.585 0.000 competence -> commitment 0.132 0.130 0.053 2.473 0.014 motivation -> job satisfaction 0.221 0.218 0.050 4.473 0.000 motivation -> commitment 0.076 0.075 0.044 1.705 0.089 source: primary data processed (2019) table 6: summary of research hypothesis testing results hypothesis coefficient t-statistics p value conclusion h1 competence has an effect on job satisfaction of lecturers in the pts province banten environment 0.231 4.585 0.000 be accepted h2 motivation influences job satisfaction of lecturers in the pts province banten environment 0.221 4.473 0.000 be accepted h3 competence influences the work commitment of lecturers in the pts province banten environment 0.132 2.473 0.014 be accepted h4 motivation affects the work commitment of lecturers in the pts province banten environment 0.076 1.705 0.089 rejected h5 satisfaction influences the work commitment of lecturers in the pts province banten environment 0.636 9,267 0,000 be accepted source: primary data processed (2019) permana, et al.: the effect of competency and motivation of work satisfaction and its implementation of lecturer commitments in the private vocational school of lldikti area iv in banten international review of management and marketing | vol 9 • issue 6 • 2019104 and assessing competence of prospective teachers in faculties of education. world journal of education, 5(6), 65-73. amilin, a., dewi, r. 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(2017), the effect of organizational culture adaptability and motivation on employee commitments in the organization of pt krakatau steel tbk. journal of business and management applications, 3(2), 196-205. . international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2017, 7(1), 499-504. international review of management and marketing | vol 7 • issue 1 • 2017 499 examining community of inquiry model in influencing e-learning usage among female students alaa ibrahim mahmood al-nuaimi* directorate of education in nineveh, mousl, iraq. *email: alaaibmah@yahoo.com abstract this study explores the relationship between online social games and the e-learning usage by investigating the impact of social and cognitive presence on e-learning usage among female students through playing online social games. the use of online social games tools is noticed to be high among female students. meanwhile, an e-learning environment that has the features of social network tools such as games has great potential to innovate and stimulate the continual usage of e-learning among students, by fostering social interaction and knowledge sharing among the students, especially among female students to be able to facilitate social interaction, since female students are more comfortable sharing ideas among their peers. the findings of this study revealed that, cognitive presence has positive significant impact on e-learning usage. meanwhile, social presence does not have a significant impact on e-learning usage. keywords: social presence, cognitive presence, online social games jel classification: d83 1. introduction e-learning is an important online tool that can be used to achieve quality of learning and teaching among students in higher education (jovanovic, 2013). it is capable of providing platform that can change the learning and teaching system from traditional to a new pedagogy structure (josephine and jennifer, 2013; hicks, 2011). it is being designed to promote efficient communication among teachers and students through sharing of courseware as well as discussions related to academics and class activities but not social interactions and problem solving (rodrigues et al., 2011; essam and al-ammary, 2013; mahmood et al., 2013a). these factors contribute to the lack of the ability of e-learning to stimulate students’ attention towards continual usage and as such it is inefficient in most academic environments (rodrigues et al., 2011; mahmood et al., 2013b). researchers’ findings in information system, such as arunachalam (2014); rodrigues et al. (2011), concluded that the impact of e-learning especially among female students of higher education is insignificant. the studies found that this is due to the lack of social presence and cognitive ability that affect the rate of use of e-learning among students, especially the female ones because it is seen as teachers-centered (hoic-bozic et al., 2009; rodrigues et al., 2011; mahmood et al., 2013a). studies have referred to this lack of social interaction and cognitive ability as the main cause of the low level of usage of e-learning among students, especially the female ones (arunachalam, 2014; mihaela et al., 2011; rodrigues et al., 2011). meanwhile, in contrary, some studies reiterated that female students play more of online social games nowadays because, it provide them with the opportunity to interact in online community by cognitively implementing ideas that can be useful in problem solving (cunha et al., 2008; garrison, 2011). these features make online social games attractive to female students, by giving them the opportunity to share ideas and knowledge when engaged in games in the online community. in the same light, charles et al. (2009) affirmed that students’ involvement is paramount to the success of e-learning, although the level of students’ usage of e-learning is often insignificant. the reasons for the insignificant level of students usage of e-learning are said to be lack of enticing learning materials and environment, al-nuaimi: examining community of inquiry model in influencing e-learning usage among female students international review of management and marketing | vol 7 • issue 1 • 2017500 hence, lack of social presence. the study argued that little studies have delved into enhancing the usage of e-learning applications among female students by considering the attributes of digital games. therefore, this study proposes to examine the determining roles of social presence and cognitive presence in the usage of online social game for e-learning among female students. thus, to establish how the use of online social game can have positive influence on e-learning usage of female students to continuing using e-learning for both academics and social benefits. to this end, the study intend to consider the assumptions of community of inquiry model which highlights two important constructs that provide theoretical details for consideration in this study. meanwhile, it is worthy of note that community of inquiry model is yet to be applied in the context of online social games for e-learning usage (anderson, 2008; garrison, 2011; roither, 2012). this study also explored this opportunity to implement community of inquiry model as the theory and provided deeper understanding of the implication of possible relationship between online social games and e-learning. 2. literature review 2.1. benefits in the adopting of e-learning electronic learning systems were initiated to enhance interaction between learners and educators and the entire educational systems (jovanovic, 2013). fundamentally, e-learning is a tool for enhancing connection and interaction between learners and educators regardless of geographical locations especially students that are from rural areas with little or no access of learning materials and facilities (kaplan and haenlein, 2010). it is a fundamental fact that, dwellers of rural areas have limited access to learning facilities and learning materials. the challenges of students living in rural area include lack or limited availability of teachers and educators. conceptually, e-learning is entailed with myriad of applications such as; web-based learning, virtual classroom, computer-based learning, and digital collaboration that assists in the transfer of skill and knowledge (lena and marlene, 2013). content is delivered through internet, audio or video tape, intranet/extranet, cd-rom and satellite tv. moreover, e-learning involves the assessment and evaluation of students and their activities in a real time unlike the traditional learning style. this shows that learning in an online environment assists in achieving the educational objectives by the students. meanwhile, researchers have argued that one of the main limitations to e-learning is the lack of ability to stimulate its continual usage, especially among students (rodrigues et al., 2011). this is part of the reason why most today’s forms of e-learning focused only on enhancing collaboration and communication between students and teachers alone (hoic-bozic et al., 2009). thus, the significance evolution of internets and information technology provide means to enhance information sharing among students (bauerova and sein-echaluce, 2007). this development could be used to aid e-learning process in stimulating the attention of the students towards achieving better academic process. one of such technology nowadays is the emergence of various types of online social games that can be used in different location (mahama, 2012). online social games are mostly used by students to create social interactions. the use is mostly significant among females student that use them to enhance interaction among their peers (hoic-bozic et al., 2009). hence, if this technology is used in the platform of e-learning, may cater for the limitation identified and as such the use of e-learning might significantly improve, especially among female participants in the academic sphere. 2.2. playing online social games traditional games are now becoming online social games (ahmad et al., 2011). this is due to the difficulties usually encountered through the face to face games and which has affected the objectives of creating the traditional games. therefore, games like bridge, chess, and go are now played online by millions of gamers. other online social games, such as farmville and cafe world, are already exploiting the characteristics of the social network to improve and grow online communities. this invariably affects the learning skills of the participants (bader and zotter, 2012). furthermore, one of the popular social game that have a long history allowing families and friends to spend time with each other is board games and conventional card (ben et al., 2010; dumitrica, 2011). although, digital games have been viewed as an isolated and anti-social activities (hicks, 2011; mihaela et al., 2011), but recently this view has changed due to that, the social aspects of digital games is gaining more emphasis. researchers have stressed that there is now change of focus in the academic research as well as games industry (mihaela et al., 2011). this is evident from the increase popularity of the massive multiplayer online games such as world of warcraft, games played in social network media such as facebook and party games like singstar. in addition, farmville game could routinely gives high-level (expert) players new items while at the same time broadcasting game play achievements through the social links (powell et al., 2010). user behavior, online social network and play style analysis are not new research subjects, but the study of social gaming communities provides a new environment of application with the potential to influence millions of lives (szell and thurner, 2010). furthermore, a good understanding of online social networks, which are large-scale internet-based applications, may shape the way individual maneuver the large-scale socio technical systems (wei et al., 2010). as opposed to many other social networks which are based on friendship and cooperation among participants, gaming social networks may grow because an adversarial context (xu et al., 2011). based on this, gamers may be motivated to be active longer than they would in a traditional social network. researchers have shown that the adversarial context present in games always leads to two additional pro-social emotions; happy social embarrassment (being happy for getting embarrassed in front of friends) and vicarious pride (being happy for the success of your students). al-nuaimi: examining community of inquiry model in influencing e-learning usage among female students international review of management and marketing | vol 7 • issue 1 • 2017 501 this complements the pro-social emotions found in traditional social networks, such as admiration, compassion, and devotion (susan and bradley, 2010). however, studying online social gaming may lead from complementary results to many of the classic social network studies. 2.3. social presence and e-learning usage social presence is learners’ ability to project themselves as real persons in an online community (garrison et al., 2000). social presence concerns how learners use their full personality to communicate with others in a sociable and emotional manner over the electronic medium. there have been numerous findings from previous studies (such as; picciano, 2002; lee and faulkner, 2010; iahad et al., 2004; oliver and omari, 2001) on the relationship between social presence and usage and experiences of learners on e-learning applications. picciano (2002) reported that the social presence in an online course stipulated learners’ performance during their course assignments and examinations. the study asserted that, social presence is positively and significantly impactful on students’ performance in written assignments. social presence was strong because students had to participate in the weekly online discussions, which encouraged students to identify with and learn from other students. by contrast, social presence did not relate to the examination. essam and al-ammary (2013), the study sample is comprised of postgraduate students enrolled in the arab open university, kingdom of bahrain. one hundred and fifty surveys were distributed both in person and as a web survey. results show that motivation is the main factor that has the most significant impact on using e-learning. meanwhile, among other motivating factors, social interactions were found to be a strong significant factor in influencing the usage of e-learning among postgraduate students. another study conducted by richardson and swan (2003) affirmed that learners’ perceived social presence is significantly related to perceived learning experience and satisfaction from using e-learning packages. lee and faulkner (2010) illustrated in another study where the community of enquiry model was adopted and expanded to study the experience of postgraduate students in using e-learning application. their study affirmed that, social presence especially in terms of process and structure has significant effect on e-learning usage experience. rovai (2002) added that, the social presence is such a determining factor to the extent that learners can abandon e-learning for the main purpose of lack of social presence. hence, this implies that, in order to enhance impressive usage of e-learning among student, a strong sense of community must be created in the e-learning environment. the presence of social presence in other words is believed to stimulate satisfaction, increase usage and ensure continues usage of e-learning among students (lee and faulkner, 2010). 2.4. cognitive presence and e-learning usage according to garrison et al. (2000), cognitive presence explains learners meaning and learning acquisitions in a social learning environment. understanding and learning in a social milieu does not happen in a vacuum, rather it happens through process which involves initially understanding the problem, followed by communicating the problem to others, then meaning are constructed from the communications and finally problem can be solved in consensus. there have been quite a number of previous studies that examine the impact of cognitive presence on e-learning usage and experience. lee and faulkner (2010) reported that, cognitive presence is a significant factor to e-learning experience. also, oriogun (2003) affirms that learning in a social platform happens through social nexus and connections. in other words, learners acquire knowledge and meaning by interacting and exchanging ideas within networks. support for the influence of cognitive presence on e-learning experience also come from a focus group that suggests effective e-learning takes place when students collaborative via online projects. the findings of kanuka and garrison (2004) affirmed that effective learning takes place in an e-learning environment because of the collaborative and interactive nature of the platform. such collaborative projects encourage students to critique each others’ solutions and think creatively when building a consensus-based solution, thereby leading to higher-order learning. 3. community of inquiry model the model emphasized that learners interact in a community and should not be denied the responsibility to learn on their own. in a manner to provide a philosophical view of fundamental elements that can impact the usage of any online educational tool, garrison et al. (2000) identified three basic elements which analyze the features that must be present in any online social service. the first is the social presence which was referred to as the ability for participants using online educational tool to project themselves socially and interact as real individuals of a particular learning community through the medium of communication being used. the second is the cognitive presence which states the extent to which learners should be able to construct and confirm meaning through sustained interaction, reflection and discourse in a critical community. the third is teaching presence that relates to how the design and organization of online educational tool should facilitate discourse and direction of cognitive and social processes mainly for the purpose of realizing personally meaningful and educationally worthwhile learning outcomes (garrison, 2011). therefore, since the challenge is to understand how the emerging educational tools can create learning environments that can facilitate development of social interactions and higher-order cognitive abilities in which teaching and learning process can be adequately enhanced. the use of these concepts to explain the impact of online social game on e-learning platform may enhance our understanding of what online social game is intended al-nuaimi: examining community of inquiry model in influencing e-learning usage among female students international review of management and marketing | vol 7 • issue 1 • 2017502 to achieve in e-learning environment towards enhancing its usage especially among female students. garrison and anderson (2003) asserted that the community of inquiry model provides significant insights and methodological solutions for studying e-learning experiences of using online platforms (figure 1). 4. research framework the conceptual framework proposed in this study is an indication of the study hypothesized relationship between the variables understudied in this study. hence, the impact of online social game on e-learning usage using the constructs of community of inquiry mode. the effect of gamifying the learning process has been explicitly indicated. hence, since, little attention was paid to the specific implication of online social game in improving the usage of e-learning especially on female students. this study explores the relationship between online social game and the e-learning usage by investigating the impact of social presence and cognitive presence on e-learning usage. thus, figure 2 depicts the conceptual framework proposed in this study. the hypotheses based on the research framework, is as presented below. h1: social presence in online social games has positive impact on the usage of e-learning among female students. h2: cognitive presence in online social games has positive impact on the usage of e-learning among female students. 5. methodology this study intends to engage 80 female students from school of computing, universiti utara malaysia (uum), who were randomly selected to participate in the controlled laboratory experiment due to their familiarity to the use of online social game and e-learning. the selection of sampling was done through convenience method. considering the fact that this study employs an experimental research design, the respondents were met in their classrooms. the lecturers were consented. both the lecturer and the student were informed about the research objective. the participants were first given an ample time to play farmville2 in the laboratory and subsequently a survey questionnaire was distributed for their response based on their experience. 6. findings the result of the multiple regression analysis in this study as shown in table 1 shows that r2 for this model is fit (r2=0.490), therefore, 49% of the variance in e-learning usage is explained by the independent variables (social presence and cognitive presence), 51% explain by other factors. furthermore, the result of the analysis as shown in table 2 revealed a statistical significant relationship between social presence, cognitive presence and e-learning usage. the equation of the multiple regression analysis (f (2, 77)=24.320, p<0.05), which indicates that the model is statistically significant as suggested by hair et al., (2010). from the coefficients part of table 3, it is revealed that, the social presence has insignificant impact on the usage e-learning among female students, this is because the significance value of p=0.429. however, the beta value (b=0.082) indicates that the direction of this impact is positive. such result means that for each unit increase in the social, there is an expected increase of 0.082 in the e-learning usage (t=0.795). thus, this hypothesis is not supported. in addition, from the coefficients part of table 3, the beta value (b=0.369) and significance value of p=0.003, it is revealed that, the cognitive presence has a significantly positive impact on the e-learning usage among female students. this means that for each unit increase in the cognitive presence, there is an expected increase of 0.369 in e-learning usage (t=3.113). accordingly, this hypothesis is supported. 7. discussion and conclusion the findings of this study revealed that the social presence attributes of online social games have no influential impact on the usage of e-learning usage among female students. this is because the social games are for playing, enjoyment and entertainment while in other hand, e-learning are for learning and teaching. in addition, students have limited time to engage in gamification or social interactions in the course of using e-learning for learning purposes. the inconsistency in the invitation and acceptance of friendship and interaction in online social games. for example, there instances whereby, gamers could not make effective interactions with other friends on social game platforms. this finding of this study is contrary to previous studies such as; lee and faulkner (2010), picciano (2002); rovai (2002). these studies unanimously posited that, social presence is an important factor in motivating student participation, engagement and usage of figure 2: conceptual framework figure 1: community of inquiry model framework source: swan et al. (2008) al-nuaimi: examining community of inquiry model in influencing e-learning usage among female students international review of management and marketing | vol 7 • issue 1 • 2017 503 e-learning application. the finding of this study is discerning, in the sense that it affirms that the social presence in online social games is not a motivating factor to learning. in addition, according to the findings presented, cognitive presence attributes on online social games have positive and significant impact on e-learning usage among female students. the implication of this finding is that cognitive presence is an important motivating factor to the usage of e-learning among female students. garrison et al. (2000), oriogun (2003), lee and faulkner (2010), kanuka and garrison (2004) consistently induced that cognitive features are impactful to usage of e-learning. in the case of online social games, cognitive attributes entails solving problems, facing challenges and overcoming obstacles. these sort of cognitively inclined activities should be incorporated in e-learning environments, as it has be proven to be among the significant factors that motivate, attract and influence the use of e-learning among female students. the significance of cognitive presence of online social games on e-learning usage can be justified with the fact that the cognitive activities of online social games are academically inclined. playing games has to do with challenges and solving problems, these kinds of activities are similar to that of cognitive activates of doing tests, examinations and online task. hence, if more of the activities are incorporated into e-learning applications, female students will be more motivated to use and adopt e-learning. 8. limitations and future research this study has limitations. invariably, time and resources are the two major constraints of this study. due to the fact that, this study is an experimental study, and data collection in an experimental research is often considered as one of the most expensive and time costly research design. finally, the researcher could not explore a probabilistic sampling technique for selecting larger sampling size from different sampling locations. the researcher delimit the place of data collection on uum and also only on female postgraduate and undergraduate students in uum. base on the limitations discussed in the above section, this study has recommendation for future researchers, firstly, researchers are implored to use a longitudinal data of time horizon at which data from this similar study will be collected over a long period of time, in order to discern the long-term impact of online social game attributes on the usage of e-learning. secondly, future researchers are recommended to consider expanding the scope of this study by selecting bigger and generalizable sample size. finally, researchers should also consider using other e-learning theories such collaborative learning theory to understanding the students’ motivation of e-learning usage. references ahmad, m.a., keegan, b., sullivan, s., williams, d., srivastava, j., contractor, n. 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(2011), sociable killers: understanding social relationships in an online first-person shooter game. in: cscw 11. p197-206. . international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2017, 7(1), 398-402. international review of management and marketing | vol 7 • issue 1 • 2017398 determinants of islamic banks acceptance in oman shariq mohammed1*, nadia sha2, mohammed ahmar uddin3 1department of accounting and finance, college of commerce and business administration, dhofar university, salalah, sultanate of oman, 2department of accounting and finance, college of commerce and business administration, dhofar university, salalah, sultanate of oman, 3department of accounting and finance, college of commerce and business administration, dhofar university, salalah, sultanate of oman. *email: shariqmohd2008@yahoo.com abstract this paper discusses about the inception of islamic banking in oman. this paper would discuss the islamic banking regulatory framework (ibrf) under which the islamic banking system is operating. the two full fledged banks which are working in oman are alizz islamic bank, bank nizwa and there are 6 islamic windows which are working in oman. the study would be related to the factors which influence the customers’ attraction towards islamic banking in oman. keywords: central bank of oman, royal decree 69/2012, islamic banking regulatory framework, fully-fledged islamic banks, window model of islamic banks jel classifications: e59, k20, g20, g21, g29 1. introduction in the present banking system the banks have a vital role to play in the economic development of the country. the monetary policy of a country plays an important role in the economic development of the country. with the help of the monetary policy the central bank of the country decides about the liquidity which is provided to the banks of the country. there are two types of banking system which exists all over the world. firstly there is a conventional system of banking which deals in interest (riba) and the second system is the islamic system which does not believe in interest. now days the islamic banking system is becoming a big challenge for the conventional banking system. there a large number countries which have shifted to the islamic system of banking namely malaysia, pakistan, sudan saudi arabia, uae, etc. three countries, namely iran, sudan and pakistan, have fully transformed their banking systems into islamic banking systems (bnm, 1999; p. 243). in the gcc countries, oman is the last country to start islamic banking system in the year 2012. it was started with a royal decree 69/2012 by his majesty sultan qaboos bin said, on 22nd muharram 1434 a.h. (6 december 2012 a.d.), there were some amendments in the provisions of banking law promulgated by royal decree 114/2000 (the “islamic banking decree”). there was a circular ib which was issued on 18th december 2012, whereby “islamic banking framework” was adopted with only minor amendments to the previously circulated draft. by virtue of royal decree 69/2012, published on december 6, 2012, amending the banking law of 2000, central bank of oman (cbo) issued islamic banking regulatory framework (ibrf). 1.1. types of islamic banks in oman the operations of islamic banks in oman can be of 2 types namely: • full-fledged islamic banks • window model. the first kind of operation is a full-fledged islamic banks which are two in number i.e., alizz bank and bank nizwa whereas under the window model there are six number of banks which are given below: mohammed, et al.: determinants of islamic banks acceptance in oman international review of management and marketing | vol 7 • issue 1 • 2017 399 islamic bank name window of commercial bank 1 meethaq bank muscat 2 sohar sohar bank 3 muzn national bank of oman 4 al yusr oman arab bank 5 maisarah bank dhofar 6 al hilal ahlibank islamic banking in oman is at a stage of embryo. it was started a few years back therefore it has a wide scope of study in various context. this present study will discuss about the inception of islamic banking in oman, the ibrf under which the islamic banking system is operating, the operations of islamic banks in oman. this study is based on the factors which influence the customer’s attraction towards islamic banking in oman. at the end of december 2013 there were total of 29 branches of islamic banks and windows operated in oman. the total financing activities by these banks were to the extent of ro 433.9 million and the total deposits held by them amounted to ro 171.9 million while capital and reserves stood at ro 328.1 million at the end of the year. by the end of december 2014 the islamic banks branches increased to 46. they had total of 43 on-site atms and 19 onsite cash deposit machines as at the end of 2014. the total assets of islamic banks and windows stood at ro 1,371 million at the end of december 2014, an increase of 68.2% over the previous year end. islamic banking entities provided financing to the extent of ro 1,049.5 million as at the end of 2014 compared to ro 434.3 million a year ago. total customer deposits held with islamic entities also registered a significant rise over the year to ro 688.9 million while their capital and reserves amounted to ro 350.6 million as at the end of december 2014. islamic banks and windows together reported a net loss of ro 4.4 million in 2014 compared to a net loss of ro 13.86 million during the previous year. 2. literature review there were vast literature available related to measuring customer satisfaction and customer loyalty for different services sectors but not much study has been done in context of islamic finance and banking in oman. han et al. (2008) studied chinese customers of airlines, banks, beauty salons, hospitals, hotels, and mobile telephone industries, and discovered that customer satisfaction, commitment, service impartiality, service quality, and trust are the key loyalty factors. akbar et al.’s (2010) study showed that service quality positively affects loyalty, as perceived by hotel customers. by contrast, the correlation between hotel service quality and loyalty is facilitated by value and satisfaction perceptions. hoq and amin’s (2010) research indicated that satisfaction is the most significant motivator to improve the loyalty of bank customers. omar and abu (2009) study on childcare center customers demonstrated that trust generates the highest influence on loyalty formation in childcare centers, but loyalty is not directly affected by satisfaction. razak et al. (2007) investigation proved that service quality and satisfaction as well as service quality and loyalty are correlated. ismail et al., (2006) research on external audit customers indicated that the correlation between service quality and loyalty is partially facilitated by satisfaction. achour et al., (2011) in their study of mobile phone users in university utara malaysia, they found service quality was one of the factors that has effect on customer loyalty. mohammed (2012a) in this study the aim was to identifying the factors affecting the customers demand for internet banking in india. the result indicates that the educated respondents use the service of internet banking. based on occupation it was concluded that the service class and the business class is the one who use internet banking service to nearly 2 times as other occupation. the high income respondents having more than 1 lack income prefer to use this service. the private sector bank account holders use this service as compared to public sector banks. the banking attributes, i.e., convenience and security do have very attentive influence on the use of internet banking. mohammed (2012b) in his study aimed to identifying the factors affecting the customers demand for atm services of banks in india. the results indicate that graduated and employed male customers who belong from higher income groups and having a bank account preferably in public sector bank are greatly emphasized to use of the banking services. significant positive influence of the characterized socio-economic attributes on the use of atm service was found. the service occupied customers significantly more emphasized to the use of atm services. noticeable, the banking attributes such as account type, convenience, number of services offered, and cost of banking services don’t have very attentive influence on the use of advanced it based banking services. riyas et al., 2015 in their paper investigated the potential effects of islamic banking by swot analysis. in addition, the islamic banks in oman cover larger investors and depositors base and are intended for both muslims and non-muslims and also contribute positively towards the country’s macroeconomic stability. 3. research methodology 3.1. research design the research design is exploratory in nature. this is a pilot study. the research has been conducted in the salalah, sultanate of oman. the primary research has been conducted by responses from a defined set a respondents, through a questionnaire. the secondary data pertaining to islamic banks has been sourced through various magazines/books on the subject, journals, research mohammed, et al.: determinants of islamic banks acceptance in oman international review of management and marketing | vol 7 • issue 1 • 2017400 papers, government publications and web-sites of cbo and islamic banks sites in oman. simple random sampling method has been adopted and an attempt has been made to include all the age groups, all the qualification and gender to study the factors which influence the customers’ attraction towards islamic banking in oman. 3.2. sample area this paper is to examine the factors which influence the customers’ attraction towards islamic banking in oman. the sample has been taken from 50 accounts holders of islamic banks as a pilot test of the questionnaire in salalah, oman. 3.3. sample unit customers of islamic banks. 3.4. sample size for this pilot testing 50 accounts holders of islamic banks had been approached in salalah. 3.5. sampling instrument structured questionnaire having close ended questions was used for seeking responses on various aspects of islamic banking. after completion of questionnaire, data was carefully coded in the microsoft excel sheets and then transferred to spss 16.0 (statistical package for social sciences). analysis and testing of relationship between various variables has been done with the help of spss 16.0. the factor analysis with rotated method was used to extract the important variables from a list 10 continuous variables and eigen value of more than one was used to extract the variables. most of questions were based on 5-point likert scale ranging from 5 (strongly agree) to l (strongly disagree) with an option of nk (not known). the schedule has 5 items of general information. 10 items were related to the reasons for opening bank accounts in islamic banks. 3.6. objectives • the objective of this paper is to discuss about the inception of islamic banking in oman • this paper discusses the ibrf under which the islamic banking system is operation in oman • to study the factors which influence the customers attraction towards islamic banking in oman • it would study the various e-banking services offered by these banks. 3.7. description of values assigned to the responses the numerical values have been assigned as below, to each response for the purpose of statistical analysis and applying nonparametric tests. response values assigned strongly agree 5 agree 4 don’t know 3 disagree 2 strongly disagree 1 4. analysis and results 4.1. data verification factor analysis requires strong correlation in the original variables, otherwise cannot synthesize a few public variables to reflect common characteristics. it is based on the variable correlation coefficient matrix, and the statistic test carried out the determinant of the correlation coefficient matrix. if the value is bigger, and its corresponding concomitant probability value is less than the significance level, then reject the null hypothesis. the data is suitable for factor analysis. in this paper, we are using principal component analysis method. 4.2. profile analysis of respondents table 1 presents socio-demographic of the respondents. the socio demographic profile of overall sample is shown in table 1. the sample comprises of 62% male and 38% female respondents. educational profile of the sample shows that about 52% respondents are graduate, 48% are having education of diploma level. the age is between 18 to 27 years represents 16% of the respondents, 12% are between 28 to 37 years 42% are between 38 to 47 years, 26% are between 48 to 57 years and above 58 years are 4%. there are nearly 44% of the respondents who are employed in the government sector and 56% who are in private sector. the income is between 300 to 500 or represents 34% of the respondents, between 501 to 750 or represents 24%, between 751 to 900 or represents 24%, and between 901 to 1200 or represents 12%, and above 1201 or represents 6%. 4.3. the empirical analysis of factor 4.3.1. the feasibility test results using spss statistical software and the results are as follows: table 1: sample demographic characteristics demographic characteristics n (%) gender male 31 (62) female 19 (38) age 18-27 8 (16) 28-37 6 (12) 38-47 21 (42) 48-57 13 (26) 58-67 2 (4) education diploma 24 (48) degree 18 (36) post graduate 7 (14) ph.d. 1 (2) occupation government 22 (44.0) private 28 (56.0) income 300-500 or 17 (34.0) 500-750 or 12 (24.0) 750-900 or 12 (24.0) 900-1200 or 6 (12.0) more than 1200 or 3 (6.0) mohammed, et al.: determinants of islamic banks acceptance in oman international review of management and marketing | vol 7 • issue 1 • 2017 401 the table 2 shows that the kmo value is 0.638, reaching the standard feasibility. and bartlett sphericity test value is 187.110, significance value of 0.00 is far less than the significance level of 0.05, therefore reject the null hypothesis, so the original data is fit for factor analysis. the data so collected was analyzed with the help of 16.0 versions of spss. factors analysis was used for the data reduction and purification, resulting into the deletion of some insignificant items with factor loading <0.5 and the eigen values <l. it is said that the first four factors include mainly information of all indicators. the factor analysis using principal component extraction method with varimax rotation has extracted 4 factors which explained 79.14% of the variance (table 3). the table of total variance explained shows that eigen values of the first four components are >1 and the cumulative contribution rate has reached 79.14%. the total variance explained by factor 1 is 34.606% it contains the variable of better returns, clear and transparent profit sharing ratios. the second variance explained the 19.41% which is shariah complied business, technological considerations. the third explained 13.61% the forth explained 11.509% of variance. the above table 4 shows that there are 2 variables on the first factor of the load which is high. these 2 variables were namely better returns, clear and transparent profit sharing ratios. there are 3 variables on the second factor of the load which is high namely shariah complied business, technological considerations, and investment not in haram products, the third component consisted of profit and loss sharing ratio and not interest based. 2 variables were namely better returns, clear and transparent profit sharing ratios. 5. conclusion the sample comprises of 62% male and 38% female respondents. educational profile of the sample shows that about 36% respondents are graduate 14% is post graduate and 48% are diploma level. the age is between 18 to 27 years represents 16% of the respondents, 12% are between 28 to 37 years 42% are between 38 to 47 years, 26% are between 48 to 57 years and above 58 years are 4%. the table of total variance explained shows that eigen values of the first five components are >1 and the cumulative contribution rate has reached 79.14 %. the total variance explained by factor 1 is 34.606% it contains the variable of better returns, clear and transparent profit sharing ratios. the second variance explained the 19.41% which is shariah complied business, technological considerations. the third explained 13.61% the forth explained 11.509 % of variance. 6. research constraints the attempt has been made with an aim to study the overall islamic banking sector but, there occurred certain limitation in table 2: kmo and bartlett’s test kaiser-meyer-olkin measure of sampling adequacy 0.638 bartlett’s test of sphericity approx. chi-square 187.110 df 36 sig. 0.000 table 3: total variance explained component initial eigenvalues extraction sums of squared loadings total % of variance cumulative % total % of variance cumulative % 1 3.115 34.606 34.606 3.115 34.606 34.606 2 1.747 19.414 54.020 1.747 19.414 54.020 3 1.225 13.614 67.633 1.225 13.614 67.633 4 1.036 11.509 79.143 1.036 11.509 79.143 5 0.761 8.461 87.603 6 0.490 5.448 93.051 7 0.310 3.444 96.495 8 0.228 2.535 99.030 9 0.087 0.970 100.000 extraction method: principal component analysis table 4: component matrixa component component 1 2 3 4 better returns 0.950 0.115 −0.091 −0.077 clear and transparent profit sharing ratios 0.892 −0.091 −0.063 0.209 bank do not transacts in riba (interest) −0.861 −0.174 −0.293 0.076 services are better 0.619 0.287 −0.501 0.341 shariah complied business −0.060 0.841 0.005 −0.135 technological considerations −0.034 0.673 0.450 0.057 investment not in haram products −0.291 0.639 −0.194 −0.195 profit and loss sharing ratio and not interest based 0.028 −0.027 0.735 0.499 quality of product and services 0.450 −0.210 0.309 −0.745 extraction method: principal component analysis a4 components extracted mohammed, et al.: determinants of islamic banks acceptance in oman international review of management and marketing | vol 7 • issue 1 • 2017402 attaining this goal to the extent of exploring the various aspects of banking reforms. the few important limitations are as follows: • the literature related to islamic banking is very limited and only after 2012 oman has started islamic banking. therefore this study mainly depended on questionnaire surveys. • the statistical data of islamic banking sector was not available; therefore this study may not reflect the overall picture of islamic banking sector. • the response rate has been the biggest challenge before the researcher; in general the response rate is very poor in the research survey specially when one aims to collect data for the customers of the bank. they also hide certain information. this limitation is beyond the control of the researcher. • ideally the responses should be taken from the customers of banks from a number of more cities but due to paucity of time and funds the responses were taken from only salalah, oman. this study can further be done with more cities of oman included for the future study. • since the sample size is limited, the findings can be taken only as indicative results. therefore it is worth mentioning that the findings have to be compared and confirmed with a study with bigger samples size to get better accuracy. • the inferences have been drawn in the present study through mean values after proper data purification. here we have used factor loading <0.5 and the eigen values more than l. the number of factors extracted is determined so that the cumulative percentage of variance extracted by the factors reaches a satisfactory level. the other techniques to measure variability in responses need to be applied in future research. the research methodology is a backbone of the research and a strong study definitely requires a strong methodology to take inference out of it. the methodology should also be simple and specific which should focus on research objectives and hypothesis. some other issue, which were considered insignificant in the present context of research have been ignored and therefore not mentioned. besides, in the contemporary fast changing social and economic global environment, the characteristics of respondents might also alter over a period of time. hence regular close and periodic monitoring of the changing perceptions of the general population is desired. references achour, m.e.g., said, n.p.m., boerhannoeddin, a. (2011), customer loyalty: the case of mobile phone users in universiti utara malaysia. international journal of management studies (ijms), 18(2), 43-66. akbar, s., som, a.p.m., wadood, f., alzaidiyeen, n.j. (2010), revitalization of service quality to gain customer satisfaction and loyalty. international journal of business and management, 5(6), 113-122. available from: http://www.cbo-oman.org/central bank of oman. available from: http://www.cbo-oman.org/news/ibrf.pdf. bank negara malaysia, islamic financial system. available from: http:// www.bnm.gov.my/fin_sys/islamic/index.htm. c b o a n n u a l r e p o r t 2 0 1 3 . w w w. c b o o m a n . o r g / a n n u a l / cboannualreporten2013.pdf. c b o a n n u a l r e p o r t 2 0 1 4 w w w. c b o o m a n . o r g / a n n u a l / cboannualreport2014eng.pdf. han, x., kwortnik, r.jr., wang, c. (2008), service loyalty: an integrative model and examination across service contexts. journal of service research, 11, 22-42. hoq, m.z., amin, m. (2009), the role of customer satisfaction to enhance customer loyalty. eurasian journal of business and economics, 2(4), 139-154. ismail, i., haron, h., ibrahim, d.n., isa, s.m. (2006), service quality, client satisfaction and loyalty towards audit firms: perceptions of malaysian public listed companies. managerial auditing journal, 21(7), 738-756. mohammed, s. (2012a), factors affecting atm usage in india: an empirical analysis. utms journal of economics, 3(1), 1-7. mohammed, s. (2012b), factors affecting e-banking usage in india: an empirical analysis. economic insights trends and challenges (formerly: petroleum-gas university of ploiesti bulletin, economic sciences series). romania: 9(5), 5-15. available from: http://www. journals.univ-danubius.ro/index.php/oeconomica/article/view/1866. omar, n., abu, o. (2009), parents’ perceived service quality, satisfaction and trust of a childcare centre: implication on loyalty. international review of business research papers, 5(5), 299-314. razak, m.r.a., chong, s.c., lin, b. (2007), service quality of a local malaysian bank: customers’ expectations, perceptions, satisfaction and loyalty. international journal of services and standards, 3(1), 18-38. riyas, k., ahmed, m.i., john, s. (2015), a study on the challenges and prospects of islamic banking in sultanate of oman. international journal of business and administration research review, 2(10), 279-282. . international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2020, 10(1), 84-90. international review of management and marketing | vol 10 • issue 1 • 202084 predictive power of situational factor and individual factor on misreporting behaviour ascaryan rafinda1,2*, agus suroso1, timea gal3 1faculty of economics and business, universitas jenderal soedirman, indonesia, 2university of debrecen, károly ihrig doctoral school of management and business, hungary, 3faculty of economics and business, institute of marketing and commerce, university of debrecen, hungary. *email: agus.suroso@unsoed.ac.id received: 13 november 2019 accepted: 07 january 2020 doi: https://doi.org/10.32479/irmm.8969 abstract the aim of this research is to compare the predictive power of situational factors and individual factors on misreporting behaviour. the experiments were done to 64 undergraduate students divided into four classes. each class got a different manipulation on situational factors such as superior’s authority and social conditions. both of them were manipulated to determine their effects on misreporting behaviour, while individual factors were measured by dit to classify moral reasoning level. participants attended two sessions of the experiment. the first session was conducted to measure the level of student moral reasoning. the second session measured student misreporting behaviour. the analysis was done by comparing error prediction on both factors and t-test independent sample was used. this research found that situational factors have smaller error prediction than individual factors. it means the situational factor is more powerful predictor than the individual factor. it’s imply that organization which wants to reduce misreporting behaviour should focusing deeper to the situational factor than individual factor. keywords: individual factor, misreporting behaviour, situational factor jel classifications: d23, c91 1. introduction in 2010, asset misappropriation was a 90% fraud scheme that occurs in the world, while fraudulent financial statements occur <5%. that fact looks different if we look at the median losses. the fraudulent financial statement has more than four million us$ loss, while asset misappropriation median lost only $ 135.000 (acfe, 2010). in 2012 cases of fraudulent financial statements increased by almost 8% and losses about one trillion us$ (acfe, 2012). the urgency to prevent fraudulent financial statement behaviour becomes a priority because of the potential losing out of money. the technique to reduce fraudulent financial reporting can be conducted by identifying factors that influence misreporting behaviour. if we successfully identify factors that can influence misreporting behaviour, it can help an individual or organization to reduce misreporting behaviour by focusing on the most influential factor that could reduce misreporting behaviour. the antecedent of misreporting behaviour classified into individual and situational factors. there are some researchers who found the influence of individual factors (moral reasoning) to ethical behaviour. liyanarachchi and newdick (2009) examine moral reasoning as the antecedent of propensity to become the whistle blower. abdolmohammadi and sultan (2002), ponemon and college (1992) discovering an individual that has a different level of moral reasoning, will behave differently when faced with a situation that raises an ethical dilemma. research on uddin and gillett (2002) and xu and ziegenfuss (2008) revealed that an individual with high moral reasoning will tend to behave ethically and vice versa. there are two researches that examine the influence of the external factor/situational factor against misreporting behavior. murphy and mayhew (2012) examine the influence of superior authority to commit unethical behaviour on misreporting behaviour. mayhew and murphy (2008) examine the influence of social conditions against misreporting behaviour. this journal is licensed under a creative commons attribution 4.0 international license rafinda, et al.: predictive power of situational factor and individual factor on misreporting behaviour international review of management and marketing | vol 10 • issue 1 • 2020 85 some researchers such as liyanarachchi and newdick (2009), abdolmohammadi and sultan (2002), uddin and gillett (2002), xu and ziegenfuss (2008) examine the influence of individual factor on unethical behaviour, meanwhile, mayhew and murphy (2008), murphy and mayhew (2012) examine situational factor on unethical behaviour. the previous studies examine misreporting behaviour with separate antecedent. this research used both factors (individual and situational) to compare their ability in influencing misreporting behaviour. this research aims to examine both of the factors and find out which one is more powerful to predict misreporting behaviour. it is critical because by identifying the factor that could influence on misreporting behaviour, an organization can focus on one of them to prevent misreporting behaviour. the contribution of this research is the following: first, this study considers two situational factors, the superior authority and social conditions simultaneously which in previous studies were examined separately (research mayhew and murphy, 2008; murphy and mayhew, 2012). the second contribution is that this study considers the individual factors (moral reasoning) as variables that can affect misreporting behaviour. moral reasoning is closely related to the individual decisions in situations that expose an ethical dilemma (ponemon and college, 1992; xu and ziegenfuss, 2008). third, the contribution of this research is to identify and measure the factors of individual and situational that can minimize misreporting behaviour. by identifying the individual and situational conditions that can reduce misreporting behaviour, organizations can minimize misreporting behaviour by combining these two factors. fourth, this research measures the actual misreporting behaviour, while other finished on the intention to misreporting (research carpenter and reimers, 2005; gillett and uddin, 2005; and uddin and gillett, 2002). this research identify to the final construct from theory of planned behaviour from ajzen (1991) with considering external factors that could influence people decision. 2. literature review and hypothesis development 2.1. interaction between authority and social condition situational factor as an antecedent of misreporting behaviour such as superior authority and social condition separately being examined and found influence misreporting behaviour (research mayhew and murphy, 2008; murphy and mayhew, 2012). the social conditions of public disclosure discovered can reduce misreporting behaviour (mayhew and murphy, 2008), while superior authority to misreporting could influence misreporting behaviour (murphy and mayhew, 2012). two situational factors which interact may become a powerful combination to commit misreporting behaviour or can reduce misreporting behaviour. considering both factors make this research contribute to simulate closer to real condition on an organization. two previous studies (research mayhew and murphy, 2008; murphy and mayhew, 2012) examine situational factor separately make the simulation further to the real condition. the interaction of situational factor could better explain about how superior authority and social conditions influence misreporting behaviour than prior studies that examine both of them separately. social condition in this research examine the accountability effect on unethical behaviour (beu and buckley, 2001). the fear of interpersonal loss of respect (tittle, 1977) is the reason behind public disclosure could be a better predictor of unethical behaviour. with considering both factors together, it could reduce the gap between simulation on an experiment with the real situation. moreover, it is because the process of an individual decision is a complex phenomenon that cannot be seen in a partial point of view. the first hypothesis based on that argument is: h1a: the highest misreporting behaviour found on the condition with superior authority to misreporting and private disclosure than other condition. h1b: the lowest misreporting behaviour found on the condition without superior authority to misreporting and public disclosure than other condition. 2.2. predictive power of situational factor and individual factor various researchers examined situational factors (research day et al., 2011; mayhew and murphy, 2008; mccabe et al., 2001; michaels and miethe, 1989; mitchell, 1997; murphy and mayhew, 2012) separately with individual factor (research allmon et al., 2000; bloodgood et al., 2008; buchan, 2005; kaplan et al., 1997; liyanarachchi and newdick, 2009; ponemon and college, 1992; uddin and gillett, 2002; xu and ziegenfuss, 2008) to predict ethical behaviour. some researchers tried to consider both of them as the antecedent of ethical behaviour (such as jones and kavanagh, 1996; kisamore et al., 2007) but they ended on intention level. some of the previous research using theory of planned behaviour and theory action of research to examine ethical behaviour that develop by kit and chang (1998). this research using contigenty model that evaluate ethical behaviour (cohen and bernie, 2006). this research also considers situational factor and individual factor by measuring actual behaviour (the fourth stage of jones and washington, 1991). the ability of individual factors and situational factors influence ethical behaviour examined by several researchers (mccabe et al., 2001; michaels and miethe, 1989; and michell, 1997). mccabe and trevino (1997) and mccabe et al. (2001) found that individual and situational factors could influence cheating behaviour, situational factors have a stronger influence on cheating behaviour. michaels and miethe (1989) revealed that situational factors are a better prediction against the cheating behaviour of students in school than individual factors. mitchell (1997) found that environmental factors can influence stronger than individual behaviour. mitchell (1997) found that participants that have individual factors of integrity and high ethical consciousness will not effectively influence their ethical decision when surrounding supports to behave unethical. individuals who follow an order from their superiors to commit fraud described by davis et al. (2006) as responsibility shifting act to their superior. responsibility to act fraud committed by individuals assigned to his superiors, because the fraud is a request from his superiors. rafinda, et al.: predictive power of situational factor and individual factor on misreporting behaviour international review of management and marketing | vol 10 • issue 1 • 202086 the hypothesis of this research was to verify the theory of moral reasoning. this research focuses on individuals who have high levels of moral reasoning. individuals who have high levels of moral reasoning based on kohlberg can behave using ethical principles which are a universal value. it is reinforced with several previous studies that verify the link between levels of moral reasoning and ethical behaviour (research kaplan et al., 1997; liyanarachchi and newdick, 2009; ponemon and college, 1992; uddin and gillett, 2002). relationship between low moral reasoning and ethical behaviour was verified when the individual is on the conditions that support to behave ethics (research xu and ziegenfuss, 2008). xu and ziegenfuss (2008) found that individuals with lower levels of moral reasoning can behave ethically when there are money incentives. this study aims to verify the relationship between individuals with high moral reasoning to ethical behaviour when they are in a condition that support them to misbehave. superior authority to commit fraud is a variable that is used to describe a situation that supports the construct of unethical behaviour. murphy and mayhew (2012) has found the superior authority to commit fraud is affect misreporting behaviour. this can be explained using a theory developed by milgram (1974). obedience theory states that individuals will act ordered by his superiors even though it is not by its principles. based on this study, it is assumed that individuals with higher levels of moral reasoning would still commit fraud while reporting on conditions that support to behave unethical. moral reasoning is the variable that constructs individual factor, while superior authority is the variable that constructs situational factor. based on that argument, we predict that: h2: situational factor is a better predictive factor than individual factor to predict misreporting behaviour. 2.3. interaction between individual factor and situational factor the impact of public disclosure is increasing accountability. people will know each other who do the misreporting with accountability. it leads to reduce the misreporting behaviour because of fear of losing trust from others if they are caught doing misreporting. this social exchange could influence people behaviour (hoffman et al., (1994). the superior suggestion to misreport can influence the staff to follow the instruction because of responsibility shifting and vice versa. the opposite argument found that people characteristics like machiavellianism play an important role to predict misreporting behaviour (murphy, 2012). this research using moral reasoning as one of the psycology characters. the individual who has higher moral reasoning tends not to do misreporting, because it violates their principles. based on the argument, the authors propose the following hypothesis: h3: the situation which is public disclosure, without authority and individual has high moral reasoning found the lowest misreporting behaviour compared to other situations. 3. research method data collection was done by a laboratory experiment with 2 × 2 between-subject design. we designed the experiment with minor modification from the mayhew and murphy (2008) and murphy and mayhew (2012) experiments to reduce the possibility of an auditor fail to detect misreporting behaviour. participants are accounting undergraduate students at the university of jenderal soedirman indonesia. the experiment was divided into two sessions; 118 participants attended the first session to measure the level of moral reasoning. sixty-four participants who were qualified for the reliability test on the first session attended the second session of the experiment. participants got a brief lecture; then, participants answered a quiz related to the lecture material. participants got a financial incentive based on the result of the quiz. participants were checked and reported their incentives on their own. participants got two manipulations, the authority to misreporting and public disclosure. experiments that do not require specific experience and knowledge to solve the experiment task can use the students as a surrogate from a businessman (nahartyo, 2012). the psychological literature showed that real-world decision-makers have the patterns and characteristics of processing the same information with students (nahartyo, 2012). this research collecting data from last year university students. last year university student become participant to reduce the difference gap between university student and new employee. the dependent variable in this study is misreporting behaviour. misreporting behaviour measured using nominal and ratio scales. ratio scales were done by calculating the difference between financial incentives reported by the participants with financial incentives that should have been gained by participants that, we used idr (indonesian rupiah) as the incentives. we named the difference between what participant earned and reported as misreporting score (ms). a nominal scale classifies participants who cheat as one, while honest participant as zero. the second measurement was performed to find out the number of participants who commit fraud; we named it as a number of misreporting behaviour (nmb). the further gap between reported and earned incentive showed the higher value of participant on misreporting score (ms). the width of the range indicates the level of participant dishonesty; the higher gap between the two showed how audacious participants were cheating in the experiment. the number of misreporting behaviour (nmb) is used to identify and measure the number of participants who are honest (0) and dishonest (1). the independent variables are social conditions and superior authority to misreporting. social conditions are manipulated by disclosing the names and the behaviour of the participants, while the authority manipulated by asking participants to misreport the incentive. participants will be measured the level of moral reasoning using dit based on post-conventional score (p-score). the form of a table 1: four cell descriptive statistics classification treatment public disclosure not public disclosure superior authority cell 1 n:16; mean: 19.343,75 sd: 6667,63 cell 2 n:18; mean: 11.138,89 sd: 6632,81 no authority cell 3 n:13; mean: 0 sd: 0 cell 4 n:17; mean: 205,88 sd: 848,87 rafinda, et al.: predictive power of situational factor and individual factor on misreporting behaviour international review of management and marketing | vol 10 • issue 1 • 2020 87 short form has a correlation by 0.93 with dit instrument, which uses six scenarios (rest, 1986). even rest develop the dit2 to revise moral judgement instrument (rest et al., 1999) and using neo-kohlbergian approach (rest et al., 1999), a lot of researcher still using the original instrument. it indicates the form of a short form having the property of being equal to the form of six scenarios (rest, 1986). participants classified in the category of low morale and high moral with the manner of using the rule of p-score obtained from rest (1986). this research using situational factor to identify the contingent factor model on ethical behaviour, one of the factors that could shift people behaviour is situational factors (cohen and bennie, 2006). 4. data analysis and results 4.1. statistical test analysis of variance (anova), especially contrast analysis (kerlinger and lee, 2000) was used to examine the hypothesis. compare the misreporting score (ms) between subject to analyse the hypothesis. tables 1 and 2 show the result of contrast analysis for hypothesis 1a and 1b. hypotheses 1a will be supported if misreporting score on cell 2 is the highest compared to other three cells and the score is significantly different than other cells. based on table 1, it is showed that it does not meet the first requirement. the mean score on cell two is not the highest compared to other cells. even though the different hypothesis 1a test finds significance, since it has a p = 0.011, but due to unfulfilled first qualify, then hypothesis 1a is rejected according to the data. hypothesis 1b was examined by comparing the misreporting score on cell three with cell one, two and four. table 1, which is based on descriptive statistics, showed that the mean of cell three is the smallest. further results of the anova contrast test can be seen in table 2. levene test found that the sample has a homogenous variance. the sample that has homogeneous variance can use anova, especially contrast analysis by looking at the p-value in the column does not assume equal variance. table 2 shows that the p-value score 0.000 on colom does not assume equal variance. it shows that the cell three had statistically significant differences compared to others. both terms mean the cell in the form of three lower than other cells and contrast anova test found significantly different, then the hypothesis 1b is verified by the data. hypothesis two was examined by comparing error predictions between individual factor and situational factor on misreporting behaviour. the more error prediction it means, the weaker the factor to predict misreporting behaviour. to examine the prediction power, this research doing two stages of examination for both variables. the first variable is situational factor. we examine situational factor as a powerful variable to predict misreporting behaviour by comparing how it should be happened and what actually happens. even there are four classes in this research, the first stage is we predict the misreporting score (ms) at cell 2 (condition have misreporting authority and private disclosure) is higher than cell 3 (without misreporting authority and public disclosure). second, we predict all participants in cell 2 commit misreport, while we predict all participants at cell 3 doesn’t commit misreporting. we named number of people who committed misreporting behaviour as number misreporting score (nmb). there are two stages to measure error predictions on situational factor. first, compare the misreporting score (ms) on cell two and cell three. second, compare the number of misreporting behaviours between cell two and cell three. there are two steps to compare mean of misreporting score on cell two and cell three. first of all, cell two must have a higher mean than cell three. secondly, the different misreporting score between cell two and cell three must be statistically significant. based on table 1, mean of misreporting score on cell 2 is 11.138.9 idr and mean cell three is 0 idr. then, the independent sample t-test results found that the sample variance is not homogeneous in the levene test, to examine the significance of a difference, this research using the p-value in the column where equal variance is not assumed. the p-value is the column of assumed equal variance found statistically significant with p = 0000. implying that we found different misreporting score between cell two and cell three. because both requirements are fulfilled, it means there is no error prediction on situational factor based on misreporting score (ms). next, we examine error prediction on situational factor with the number of misreporting behaviour (nmb), we predict that all participants in cell two will commit misreporting, while all participants in cell three will not commit misreporting. the result found that there are two participants in cell 2 who commit misreporting behaviour. further analyses were carried out by comparing error prediction on individual factor. moral reasoning as individual factor was divided into two levels: low moral reasoning and high moral reasoning. an individual with high moral reasoning was predicted to behave ethically and vice versa. a predictive test against individual factor was conducted by comparing theoretical logic with actual data. theoretical logic predicted that participant with high moral reasoning would not commit misreporting and vice versa. the mean of misreporting score at participants with high moral reasoning is 4.454.54 idr and participants with low moral reasoning is 7.575 idr. the results of independent sample t-test showed that the two groups have homogeny variance with p-score 0.515 on levene test. the result of the sample with homogeneity variance can be seen in the equal variance assume column. the results in equal variance columns showed no significant results table 2: anova contrast result statistic test classification of test p-value levene statistic h1a and h1b 0.000 anova h1a (between group) cell 2≠cell 1, cell 3 and cell 4 0.000 anova h1b (between group) cell 3≠cell 1, cell 2 and cell 4 0.000 contrast test h1a assume equal variance 0.001 doesn’t assume equal variance 0.011 contrast test h1b assume equal variance 0.000 does not assume equal variance 0.000 rafinda, et al.: predictive power of situational factor and individual factor on misreporting behaviour international review of management and marketing | vol 10 • issue 1 • 202088 with p = 0.275. it shows that though the mean of misreporting score for high moral reasoning is lower than low moral reasoning, the significance distinction showed that the two groups are statistically not different. it implies that participants with different moral reasoning are not different in misreporting behaviour. it implies that moral reasoning as a proxy of individual factor has an error to predict misreporting behaviour. error prediction on situational factors has been found on the number of misreporting behaviour (nmb), while the individual factors on misreporting score (ms). we examine the error prediction gradually through misreporting measuring score (ms) then the number of misreporting behaviour (nmb) with a specific purpose. the misreporting score (ms) is an indication of the individual misreporting by considering the willingness an individual to misreport. ratio scale was used for the identification of the strength of misreporting. the higher the misreporting score (ms) is, the stronger the commitment is to do misreporting and showed courage to misreport, while the number of misreporting behaviour (nmb) only categorizes participants who commit misreporting (1) and do not commit misreporting (0). nmb does not consider how high participants commit misreporting. we used the degree of error prediction to choose one factor which can predict misreporting behaviour more powerful. a factor which has error prediction on misreporting score (ms) was categorized as a factor that has higher error predictions than a factor which has error prediction in the number of misreporting. table 3 is a comparison summary of the results and analysis in order to identify and measure the prediction power of individual factor and situational factor. based on the table 3, it was found that individual factor fulfils the first requirement but does not fulfil the second requirement, while situational factor fulfilled the first and second requirement for the correctness predictions on misreporting behaviour based on its misreporting score (ms). furthermore, error predictions on the number of misreporting (nmb) were identified by comparing requirement and actual data in this research. based on table 4, we found 12 error predictions on individual factor, while two error table 3: comparison of error prediction on situational and individual factors classification mean of misreporting score independent sample t-test high moral resoning low moral reasoning the p-value actual data (individual factor) 4.454.54 idr 7.575 idr p=0275 (not significant) requirement mean ms hm<mean ms lm significantly different conclusion fulfilled not fulfilled classification cell 2 cell 3 the p-value actual data (situational factor) 11.138.9 idr 0 idr p=0000 (significant) requirement mean ms cell two>mean ms cell three significantly different conclusion fulfilled fulfilled table 4: conclusion for h2 classification ms (misreporting score) nmb (number of misreporting behaviour) predictive power individual factor mean fulfilled different test not fulfilled 12 error prediction weak situational factor mean fulfilled different test fulfilled 2 error prediction strong table 5: descriptive statistics misreporting score (ms) on eight cells treatment public private high moral low moral high moral low moral authority cell 1 cell 2 cell 3 cell 4 n: 5 n: 11 n: 4 n: 14 mean: 20.100 mean: 19000 mean: 12.250 mean: 10.821.4 sd: 8597.96 sd: 6058.05 sd: 4518.48 sd: 7.234.02 no authority cell 5 cell 6 cell 7 cell 8 n: 7 n: 6 n: 7 n: 10 mean: 0 mean: 0 mean: 0 mean: 350 sd: 0 sd: 0 sd: 0 sd: 1.106.8 table 6: anova contrast result statistic test classification of the test p-value levene statistic for h3 0.000 anova h3 (between group) cell 5≠cell 1, cell 2, cell 3, cell 4, cell 6, cell 7, cell 8 0.000 contrast test h3 assume equal variance 0.000 doesn’t assume equal variance 0.000 rafinda, et al.: predictive power of situational factor and individual factor on misreporting behaviour international review of management and marketing | vol 10 • issue 1 • 2020 89 predictions on situational factor. it shows that a situational factor found less error predictions than the individual factor, because the situational factor meets the requirements of misreporting score (ms) and have error predictions on the number of misreporting (nmb) smaller than the individual factor. the individual factor does not fulfil the first requirements on misreporting score (ms) and has error predictions on the number of misreporting (nmb) higher than situational factor. it showed that the data do not support the null hypothesis and showed that situational factors are better predictors than the individual factor. the hypothesis three predicts that individuals who have higher levels of moral reasoning in a situation that there is no authority to commit fraud, and public social conditions will get the lowest misreporting score (ms) than other conditions. two requirements that would support the hypothesis: (1) misreporting score (ms) in cell five had the lowest mean. (2) anova contrast test showed that misreporting score in cell five is significantly different than the other. table 5 shows the mean of misreporting score on cell five; six and seven are zero (0). based on table 6, levene’s test found that the sample has a variance that is not homogeneous. samples that have no homogeneous variance can use anova on column “does not assume equal variance.” based on table 6 it was found that the p-value on the contrast of the column test “does not assume equal variance” is 0.000. it shows that cell five had significant differences compared to other cells. the second requirement is cell five shold be the lowest than the other cells, and it’s not proven, but the contrast anova test found significant difference. hypothesis three was not supported by the data. 5. discussion, implication and conclusion the following are some implications of this research. first, this study confirmed the research of mayhew and murphy (2008), and murphy and mayhew (2012), which separately examine the situational factor consisting of an authority and social conditions. the situational factors in this research are limited to the superior authority to do misreporting behaviour and accountability. the difference of the results of this research with previous studies becomes essential, because it shows there is an x factor which is not yet identified when manipulation in the form of public disclosure applied in indonesia. the only difference between experiments in this research with previous research is the sample. differences in behaviour can be caused by the difference in value held or understood in the area. the difference between regional values which is embraced each other referred to as a national culture. national culture is the value of that which is embraced or conceived by the public at the national level. x factor which is not yet identified strongly assumed as cultural factor differences. previous studies that take samples in united states have different cultures with a sample of this research which was taken in indonesia. one cultural difference was categorized by hofstede, namely individualism and collectivism. as evidence that the different locations cause the different cultural values were identified by some researchers. hofstede and bond (1988) found a country in the united states, western europe and canada have individualistic, while africa, asia, and latin america have collectivist culture. the alleged participants in this research have collectivism, because the participants do colleague conformity just before committing misreporting. participants see and ask each other in the class a moment before committing misreporting. participants did it as a form of agreement and conformity to others. the collectivist culture that predicting occurring shame effects when a participant has known each other’s behaviour is not occurring as strong as the participant who had individualistic culture. it is because of the participant feeling to perform the same act and behave following his group. it implies reducing the effects of embarrassment that are expected to appear of the public disclosure policy. it shows that this research is successful to identify no factor x, which needs to be verified further to get empirical evidence on links between pub disclosure and misreporting behaviour. the implications of this research, namely prove that a factor of situational factor has a better prediction on misreporting behaviour than the individual factor. this really shows the results of this research that is different from previous studies. variety of studies revealed that moral reasoning could predict unethical behaviour. researchers such as liyanarachchi and newdick (2009); abdolmohammadi and sultan (2002); ponemon and college (1992); uddin and gillett (2002); xu and ziegenfuss (2008) found that individuals with high moral reasoning tending to behave ethically and vice versa. research does not consider the situational factor around the individual that can influence his behaviour. this study has been successfully identified that the level of moral reasoning cannot predict unethical behaviour. error predictions on individual factor appear, because we found some participants who have high moral reasoning still committing unethical behaviour and vice versa. it becomes a contribution of this research that the situational factor could be better to predict unethical behaviour. the situational factor that could better predict support previous research on cheating behaviour that indicate situational is a better predictor (bernardi, et al., 2004). the second implication of this research is practical for the organizations. for an organization which wants to reduce or prevent misreporting behaviour should be focused on situational. situational factor in the form of a superior becomes a critical factor in preventing misreporting behaviour. a superior who behaves ethically will lead inferiors to behave ethically and vice versa. the ability of an organization to minimize misreporting behaviour can focus on the evaluation of a superior as the head of department or organization, because of a superior can represent the whole department or organization. some conclusions from this research are: (1) situational factor can stronger predict misreporting behaviour than individual factor. 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(2008), reward systems, moral reasoning, and internal auditors’ reporting wrongdoing. journal of business and psychology, 22, 323-333. . international review of management and marketing | vol 6 • special issue (s2) • 2016 87 special issue for "management of education: problems and perspectives" international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2016, 6(s2) 87-91. training features to japanese experience constructive use in russia in traditional folk cultures pedagogical potential implementation irina v. korshunova1*, elena l. fedotova2, anastasia s. kosogova3, oleg l. podlinyaev4, aleksandr i. timoshenko5, inna a. makarova6, olga e. shafranova7, nataliya a. kora8, neile k. schepkina9 1gzhel state university, gzhel, moscow region, russia, 2irkutsk state university, irkutsk, russia, 3irkutsk state university, irkutsk, russia, 4irkutsk state university, irkutsk, russia, 5irkutsk state university, irkutsk, russia, 6amur state university, blagoveshchensk, russia, 7amur state university, blagoveshchensk, russia, 8amur state university, blagoveshchensk, russia, 9amur state university, blagoveshchensk, russia. *email: irkorshunova1@yandex.ru abstract the relevance of the study of this problem is reasoned by modern achievements of foreign countries (particularly japan) in the traditional folk culture’s pedagogical potential implementation and insufficient knowledge in russia of these achievements and possibilities application in modern russian socio-cultural environment. in this regard, this article is aimed at the development and experimental validation of a system of cultural, leisure and educational activities in personnel training to use the japanese experience of traditional folk culture’s pedagogical potential implementation in russia. the leading methods to study this problem are theoretical: the analysis of philosophical, pedagogical, artistic, cultural, ethnological literature on the research topic; instructional design; empirical: an analysis of the experience of socio-cultural and educational institutions in the implementation of traditional folk culture’s pedagogical potential; observation; survey; experimental work. the article theoretically and experimentally justifies a complete system of cultural, leisure and educational activities for staff training to use innovative foreign (japanese) experience of traditional folk culture’s pedagogical implementation in russia. the materials of this article can be used in the activity of culture and education state management authorities; centers of folk arts and crafts, ethnic and cultural centers, cultural and leisure centers and other sociocultural institutions and organizations; institutions of basic and professional education; societies of the russian-japanese friendship, other public organizations and associations. keywords: staff training, japanese experience, pedagogical potential, traditional folk culture jel classifications: a23, i23, i26 1. introduction pedagogical potential of traditional folk culture is defined by incarnated of spiritual and moral values in it, among which the most relevant are the value attitude to the motherland, nature, family, mothers and motherhood, teaching, labor, cultural heritage of their own and other peoples (kupriyanov et al., 2015). common for traditional cultures of different peoples the spiritual and moral values are manifested in distinctive, unique for each of these crops the tangible and intangible cultural heritage: the monuments of folk architecture, in the works of folk arts and crafts, folk music, dance, oral folklore, etc. in the decision of the state council of the russian federation (rf) “on state support of traditional folk culture” (2006), in “the concept of spiritual and moral development and upbringing of citizens of the rf” (2009), in “the strategy of state national policy of the rf” (2012), in the message of the rf president to the federal assembly (2012) the most important tasks of the state structures’ activities for the preservation and korshunova, et al.: training features to japanese experience constructive use in russia in traditional folk cultures pedagogical potential implementation international review of management and marketing | vol 6 • special issue (s2) • 201688 development of traditional cultures of russia’s people as a basis of patriotic, spiritual and moral education are formulated. modern practice of these state tasks’ solution is varied. it involves governments culture and education management authorities, folk and art centers, houses of nationalities, folklore and ethno-cultural centers, cultural and leisure centers and other socio-cultural institutions as well as institutions of basic and professional education, voluntary associations, charities, the friendship societies of different countries, etc. the best ethno-cultural creative projects of national importance are annually awarded by grants of president of rf. special attention is currently paid to the preservation and development of national art crafts of russia, including gzhel art craft. the history of gzhel art craft has about three centuries. at the end of the twentieth century thanks to the general director of cjsc “association gzhel” v. m. loginov all around the world got acquainted with this art craft. folk art of gzhel formed the basis of the created successive system’s content of artistic and aesthetic education (gzhel state art and industry institute. official site: url: http://www.art-gzhel.ru/). the needs of modern practice has led to increased attention to the formation of ethno-cultural competence of staff, which is reflected in the new federal state educational standards in the following directions of higher education, as “socio-cultural activity,” “folk art culture,” “decorative and applied arts and folk crafts,” “pedagogical education,” “social pedagogy,” “tourism” and others. however, foreign experience in the conservation, development, and implementation of the traditional folk culture’s pedagogical potential is still insufficiently reflected in the practice of sociocultural activities and its staffing. japan’s choice to study foreign experience in the conservation, development, and implementation of the traditional folk culture’s pedagogical potential was reasoned by the leading role of this country among the member states of unesco, participating in international ethno-cultural projects and programs. in japan, the state-organized and supported conservation activity “national cultural property” is successfully implemented. it is the foundation of the modern japanese state cultural and educational policy. japanese experts managed to introduce organically the ancient national cultural traditions into the modern socio-cultural environment and educational content. in the 70-ies of the twentieth century, japan actively cooperated with the soviet union on the issues of aesthetic education and training, including the issues of broad inclusion in these processes of national art culture. annually joint conferences were held, the works of russian scientists as zaporozhets and markov (1980), markov and zaporozhets (1980) and others were translated into japanese language. some of the traditions of japanese culture and art are reflected in the content of russian school and university textbooks on art (shpikalova, 1988; ershova, 2006; sokolnikov, 1997; etc.), world culture (baklanova, 2010; sokolnikov, 1997; rapatskaya, 2014 and others). however, japan’s experience in the preservation, development and implementation of the pedagogical potential of traditional folk culture is little known in russia and is almost never used in the socio-cultural sphere. 2. materials and methods 2.1. research objectives 1. to identify the basic values of traditional folk culture, contributing to its pedagogical potential using in modern sociocultural conditions 2. to characterize the features of the traditional culture of japan as the content’s basis of teaching socio-cultural and educational institutions’ activities of this country 3. to develop and validate a system of cultural, leisure and educational activities for staff training to use the best international (japanese) experience of traditional folk culture’s pedagogical potential implementation in russia 4. to determine experimentally the effectiveness of this system and to develop scientific and methodological recommendations for its implementation in practice. 2.2. research methods • theoretical: the analysis of philosophical, pedagogical, artistic, cultural, ethnological literature on the research topic; instructional design; • empirical: an analysis of the experience of socio-cultural and educational institutions in the implementation of traditional folk culture’s pedagogical potential; observation; survey; experimental work. 2.3. research stages stage 1 (2012-2013): summative stage. it consisted in the analysis of scientific literature and the practice of traditional folk culture’s pedagogical potential’s implementation in russia and japan. stage 2 (2013-2014): experimental stage. at this stage the development, implementation, and identifying of author’s system of gzhel state art and industry institute’s students’ cultural, leisure and educational activities for their preparation to implement the educational potential of traditional folk culture taking into account russian and foreign (japanese) experience was carried out. its effectiveness was checked out. stage 3 (2014-2015): generalizing stage. it included the analysis and generalization of the research results, formulation of conclusions and methodological recommendations making. 3. results and discussions 3.1. pedagogical potential of traditional japanese folk culture and its realization in contemporary socio-cultural conditions there are the centuries-old traditions of valuable relation to nature, family, children, ancestors, to the beautiful in art and life at the heart of modern japanese culture. ancient customs of admiring with mountain fuji, sakura flowers and plums, chrysanthemums, korshunova, et al.: training features to japanese experience constructive use in russia in traditional folk cultures pedagogical potential implementation international review of management and marketing | vol 6 • special issue (s2) • 2016 89 peonies, autumn maple leaves, snow are preserved in japan. the cherry blossom festival (hanami) and day of admiring with the full moon (tusu no magetsu) are japanese national holidays (korshunova, 2008b). some japanese national holidays are devoted to children: children’s day (kodomo no hi), which was a holiday only for boys earlier; the festival of dolls (holiday of little girls); holiday city-go-san (“seven-five-three”), which has 300 years history and which is the birthday of all japanese children, who are 3-, 5or 7-year-old (korshunova, 2008a). from ancient celebrations and rituals take their origin not only many japanese folk dances, songs and theatrical performances, but also performances by the famous japanese theaters no, kabuki and kyogen. traditional japanese decorative arts (ceramics, porcelain, bronzes items, lacquer miniatures, netsuke, national costume, the art of calligraphy, engravings, etc.) show aesthetic embodies of japanese attitude to nature, their national images of the world, national character, the traditional system of spiritual and moral values and ideals, refined artistic taste. the culture of modern japan, due to japanese cultural policy of the state, does not lose its original core values and thereby resists the impact of globalization on traditional spiritual and moral values and ideals of the japanese. therefore, such a policy, according to japanese experts, has become the third pillar of the foreign policy of this country, along with the economic expansion and the security of the state. in its implementation numerous institutions and organizations participate: the management of cultural affairs; museums of art; schools of calligraphy, tea ceremony, pottery, ikebana, playing on traditional musical instruments and others. the traditions of folk culture thoroughly are studied in japanese schools and universities. in the curricula of the schools of lessons admiring with the nature and the subject of “national culture” are included. the content of the educational process widely reflects traditional japanese music, fine and decorative art, poetry, dance, calligraphy, morality (korshunova, 2008c). in japan, societies for traditional arts protection, the society of japanese folklore, ceramic association, japanese ethnographic society and other community organizations were formed. their main purpose is to involve different groups of the population to traditional japanese culture. the pedagogical potential’s implementation of traditional folk culture in japan, carried out on the basis of system approach, actively contributes to improving the quality of human capital, which determines all aspects of the modern japanese state, including its politics and economics. 3.2. the use of the japanese experience in the implementation of traditional folk culture’s pedagogical potential in russia one of the most urgent problems is connected with the preservation and development in russia of folk arts and crafts not only to continue the traditions of folk art, but also for citizens’ educating of this country on the basis of embodied in the art of spiritual and moral values and character-ideals. to solve this problem in gzhel a system of artistic and aesthetic education based on the folk art of gzhel is directed. this system covers pre-schools, secondary schools, gzhel art-industrial college, gzhel state art and industry institute, as well as cjsc “association gzhel,” cultural leisure center “gzhelsky” and other institutions of culture and education. staff training in gzhel state art and industry institute has an ethnocultural focus. however, in the content of this activity the foreign experience of preservation, development, and implementation of traditional folk culture’s pedagogical potential valuable for russia was not reflected. 3.3. the course of the experiment the aim of the experimental work was to create the system of cultural, leisure and educational university activities, to identify its efficiency in students’ training to participate in the implementation of traditional folk culture’s pedagogical potential with regard to foreign (japanese) experience. the experimental work took place in gzhel state art and industry institute. 72 students enrolled in the field of “applied art and folk crafts” and “socio-cultural service and tourism,” including 36 students in the control group and 36 students in the experimental group took part in it. the control group consisted of students enrolled in 2006, including 20 students of “applied art and folk crafts” and 16 students of specialty “socio-cultural service and tourism.” the experimental group included the same number of students in same professions, but only of those who was enrolled in 2007. control group of students were taught traditionally, and the educational process in the experimental group was supplemented in 2007-2011 with the author’s system of cultural, leisure and educational activities (figure 1). students in the experimental group attended a cultural-information center of the embassy of japan, got acquainted with the collection of japanese prints stored in the state museum of fine arts after pushkin, participated in the international festivals “podium” and “provincial style,” and many other cultural and leisure activities. also the students of experimental group studied a number of basic disciplines on author’s curriculum, in which a few new topics were introduced. thus, the curriculum of the course “folklore and ethnography” included topics on traditional japanese arts and crafts, traditional japanese architecture and folk costume; in the author’s curriculum of the course “customs and traditions of the peoples of the world” were included topics about japanese traditional festive and ritual and domestic culture; in the course of “world culture and art” the artistic culture of japan, japanese decorative-applied and folk art were reflected; in the curriculum of the special course “history of gzhel art craft” an important attention was paid to spiritual and moral values embodied in the work of craftsmen of gzhel ceramics; the gzhel ceramics exhibitions held in japan in the 1990korshunova, et al.: training features to japanese experience constructive use in russia in traditional folk cultures pedagogical potential implementation international review of management and marketing | vol 6 • special issue (s2) • 201690 ies, and other important facts of cooperation of gzhel craftsmen and teachers with japanese specialists of decorative-applied and folk art. in all these above mentioned curricula, special attention was given to consideration on the japan’s example of the prospects of application in russia of innovative foreign experience in the preservation, development, and implementation of traditional folk culture’s pedagogical potential (korshunova, 2009a). to identify the effectiveness of the experimental work a questionnaire survey among the students of control and experimental groups on the first and fourth courses was carried out. the responses of students of different specialties were differentiated by subgroups: “decorative and applied arts and folk crafts” first subgroup, and “socio-cultural service and tourism” the second subgroup. 3.4. experiment’s results diagnostic criteria and results of participants in experimental and control groups are presented in table 1. it reflects the number of students (in percentage to total number of students in a particular subgroup) who correctly answered all the questions about the traditional cultures of russia and japan and highly appreciated the level of their professional readiness to the preservation and development of traditional folk culture with regard to foreign (japanese) experience. thus, the diagnostics results of students in control and experimental groups have proved the effectiveness of the experimental work for staff training to implement the traditional folk culture’s pedagogical potential with regard to foreign (japanese) experience. 4. conclusion pedagogical potential of traditional folk culture is defined by incarnated in it spiritual and moral values which are relevant for the education and development of citizens in modern sociocultural conditions. in studies of the scientific school “theory, history and methods of teaching of folk art and culture,” the founder of which was baklanova (2010), the following set of values is justified: homeland, nature, family, mother and motherhood, the experience of previous generations, health, learning, labor, creativity, beauty in art and life, the cultural heritage of native and other peoples, the culture of interethnic communication, etc. in this article, table 1: diagnostic criteria and results of participants in experimental and control groups efficiency criteria of experimental work the diagnostic results (in percentage of number of respondents) the control group, 1 course the control group, 4 year the experimental group, 1 course the experimental group, 4 year sub group 1 sub group 2 sub group 1 sub group 2 sub group 1 sub group 2 sub group 1 sub group 2 knowledge of russian traditional folk culture 60 37.5 85 75 55 43.7 90 93 knowledge of japanese traditional culture 0 0 45 31.2 0 0 90 86.7 knowledge of basic spiritual and moral values of traditional folk culture 10 13.5 85 62.5 10 6.2 95 81.2 the readiness to participate in traditional folk culture’s pedagogical potential implementation 30 12.5 90 86.7 25 6.2 100 93 a readiness to use foreign (japanese) experience of implementing of traditional folk culture’s pedagogical potential 0 0 10 18.7 0 0 85 86.7 figure 1: the system of cultural, leisure and educational activities for staff training with regard to foreign (japanese) experience of traditional folk culture’s pedagogical potential implementation korshunova, et al.: training features to japanese experience constructive use in russia in traditional folk cultures pedagogical potential implementation international review of management and marketing | vol 6 • special issue (s2) • 2016 91 the authors have identified features of an embodiment of such spiritual and moral values in traditional japanese festive and ritual, domestic and artistic cultures and came to the conclusion that to their translation into modern japanese society is directed integral system the activities of the japanese socio-cultural institutions, educational institutions, families, community organizations. for more efficient implementation of traditional folk culture’s pedagogical potential in russia it is necessary to explore and creatively apply the innovative japanese experience, namely: in state coordination and stimulation of activities’ system of various social institutions involved in the preservation and development of traditional folk culture; to increase public attention to the preservation and dissemination in the modern socio-cultural space of traditional spiritual and moral values embodied in national festive and ritual, family and culture; in support of contemporary japanese art of the native tradition of folk arts, such as painting sumi-e (ink painting), calligraphy, miniature netsuke sculpture and others; in a broad reflection of the traditions of folk culture in the contents of modern japanese general and vocational art training, as well as in the media, tourism campaigns, etc. in the process of the university personnel training to implement the pedagogical potential of traditional folk culture according to japanese and other innovative foreign experience it is necessary to be targeted to reflect this experience in the content of educational and cultural activities of students. 5. recommendations this article does not cover all aspects of the research problem. along with further study of the theory and practice of implementation in japan of traditional folk culture’s pedagogical potential, it is necessary to explore similar experience in other countries of the modern world and the possibilities of its application in russia. also peculiarities of implementation of the educational potential of various traditional cultures of russia’s peoples in the modern socio-cultural conditions require their further research. references about the state support of traditional folk culture. (2006). available from: http://www.mkrf.ruministerstvopassportculturalregions?ele ment_id=238853&t=sb. baklanova, t.i. (2010), pedagogical potential of russian traditional culture and its implementation in the educational space of the moscow region. belgorod: proceedings of the interregional scientific and practical conference spiritual universes of traditional culture of the russian people. p18-27. ershova, l.v. (2006), formation of ethno art continuous system of education in russia: theory and practice (doctoral dissertation). moscow. p473. gzhel state artistic-industrial institute. (2015), available from: http:// www.art-gzhel.ru. korshunova, i.v. (2008a), ethno-cultural traditions in modern school education in japan. bulletin of the moscow state university of culture and arts, 5, 166-168. korshunova, i.v. (2008b), the cult of nature in the area of education and culture in japan. vocational education, 10, 90-91. korshunova, i.v. (2008c), on the role of the state and society in the preservation of ethnic and cultural traditions in modern japan. vocational education, 11, 74-75. korshunova, i.v. (2009a), on the role of ethnic and cultural traditions in the content of art education in universities in japan. bulletin of the moscow state university of culture and arts, 2, 120-122. kupriyanov, r.v., zaripov, r.n., valeyeva, n.s., valeyeva, e.r., zaripova, i.r., nadeyeva, m.i. (2015), the main directions of international educational integration: potential benefits and risks of reforming professional education. review of european studies, 7(3), 305-312. markov, t.a., zaporozhets, a.v. (1980), foundations of preschool pedagogy. moscow: academia. p48. message of the president to the federal assembly of the russian federation. (2012). available from: http://www.kremlin. rueventspresidentnews17118. rapatskaya, l.a. (2014), world art. part 1. moscow: center for the humanities publish vlados. p301, 384. shpikalova, t.y. (1988), folk art in art education and aesthetic education in the secondary school: theoretical basis of training and education, ways of its realization (doctoral dissertation). moscow. p33. sokolnikov, n.m. (1997), development of art-creative activity of students in system of aesthetic education (doctoral dissertation). moscow. p472. strategy of the state national policy of the russian federation. (2012). available from: http://www.base.garant.ru70284810. the concept of spiritual and moral development and education of the citizens of the russian federation. (2009). moscow: education. p45. zaporozhets, a.v., markov, t.a. (1980), fundamentals of preschool pedagogy. moscow: research centre. p48. . international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2017, 7(2), 35-42. international review of management and marketing | vol 7 • issue 2 • 2017 35 governance improvement post e-government adoption: a case of jordanian public entities ahnaf ali al-smady* department of accounting, applied science private university, amman, jordan. *email: a_alsmady@asu.edu.jo abstract this study examines the efficacy of governance after the adoption of e-governance among jordanian governmental organisations. e-government refers to information and communication technology mechanisms which purportedly lead a better governance. internal end-user satisfaction is one measure of the efficacy of internal e-governance. end-user satisfaction comprises content, accuracy, format, ease of use and timeliness. different from existing academic research, the present study analyses the adoption of e-government among jordanian governmental organisations. this topic has not previously been examined. a survey of at eight jordanian governmental entities at the officers and directors level is employed as the data collection tool. t-test and non-parametric wilcoxon-test are used to examine a cross section of data from eight jordanian governmental entities to test the research hypotheses. the present study finds that there is a statistical difference of end-user satisfaction after e-government adoption in terms of content; accuracy; format; ease of use and timeliness. the paper makes a significant contribution by testing the improvements in governance after the adoption of e-government among jordanian governmental entities. furthermore, the paper enhances the understanding of jordan’s e-government program. keywords: e-government, governance, end-user satisfaction jel classifications: m1, o32, o14 1. introduction many government organisations around the world face several challenges including cost saving, limited task automation and massive societal needs which lead to budget deficiency (alsmady et al., 2014). this has led to increased attention by those organisations to adopt an efficient program to meet those challenges. saarenpaa (2004) argued that the government and society should collaborate to ensure they realize their shared goals. moreover, in a democratic system the society should know how their rights are being managed by the government (saarenpaa, 2004). a balance between the interests of stakeholders is required to achieve good governance and create a better future for the nation. this has led several governments beginning in the 1990s towards using information and communication technology (ict) as e-government systems. while saarenpaa (2004) argued that ict can help the governmental organisations to face a diversity of challenges, the concern is not in ict itself rather in using the ict for efficient processes and functions within the organisation to improve governance and to cope with challenges. e-government promotes transparency and accountability in the democratic system (madzova et al., 2013). al-kasswna (2012) argued that such restructuring of the operational system within the government will enhance its governance. good governance is achieved where there is an improvement in transparency and accountability as well as in the quality of services offered to the citizens in efficient and effective methods (madzova et al., 2013; basu, 2004). thus, to achieve better governance after adopting the e-government program should improve content, accuracy, format, ease of use and timeliness which collectively contribute to end-user computing satisfaction (eucs) (deng et al., 2008; mchaney et al., 2002; mchaney et al., 1999; mohamed et al., 2009). ultimately, using e-governance is needed in both the private sector and government organisations to improve governance. nevertheless, chircu and lee (2003) argued that the private sector is different from government organisations. private organisations focus more on the maximisation of profit. while, government organisations are primarily a political mission to save costs and improve resources allocation. thus, the adoption of e-government al-smady: governance improvement post e-government adoption: a case of jordanian public entities international review of management and marketing | vol 7 • issue 2 • 201736 needs to be examined carefully as to whether private or public sector application and the experience of developed and developing countries differ (basu, 2004). chen et al. (2006) argued that the implication of e-government in developed countries cannot be applied in developing countries because of many differences in culture, infrastructure, technology, staff and citizens. therefore, they suggested studies be conducted through collecting national data and statistics verifying the proposed framework. saarenpaa (2004) supported that e-government can be examined from different angles. thus, this study examines the proposed framework for jordanian governmental organisations as a case study which has not previously been examined. the remainder of the paper is organized as follows. section 2 describes the study background and e-government in jordan. section 3 presents the review of literature and hypotheses development. methodology and research design are explained in section 4. then, we report the findings in section 5. the conclusion and recommendations for the policy makers and future research are provided in section 6. 2. study background and e-government in jordan the e-government phenomenon is relatively new, and the concept still requires greater clarity (coursey and norris, 2008). there are many definitions of e-government which differ regarding the set implications and the progress that has been made towards national objectives. digitalgovernance.org (2003) defined e-government as “the use of information technology to free movement of information to overcome the physical bounds of traditional paper and physical based systems.” basu (2004) argued the e-government improve the governance in government organisation such as enhanced transparency which leads to better resources allocation. furthermore, basu argued that e-governance is achieved by using ict to interact and transaction between the government and citizen (g2c), government and other business organisations (g2b) and the inter-agency relationship (g2g) which improve end-user satisfaction for each of these agency relationships. the internal relation and satisfaction of internal governance and external relation and satisfaction with external governance are required of government organisations for the program to be successful. saarenpaa (2004) supported that e-government is using ict to improve governance in government organisations. also, basu (2004) argued the e-government is using ict tools to stimulate good governance towards improving the good governance of inter-agency relations. thus, to examine the improvement in governance after the adoption of e-government in jordan, we have to understand the set progress that has been made towards achieving national objectives. electronic government (eg) in jordan is devoted to presenting services to governmental entities, officers, and people regardless of their location, economic status, education as well as ict ability. jordanian e-government aims at developing jordan’s economy, becoming more competitive and improving governance using ict. the aims of e-government cannot be achieved without the participation of all stakeholders in local economic development. however, government resources should unite to accomplish the goals of e-government. in jordan, the government adopted a strategy to achieve the goals of the e-government program called the “e-transformation strategy.” the strategy divides its objectives into national objectives, e-government strategic objectives and identifies the strategic initiatives for e-transformation. the strategy makes use of transforming the traditional service delivery to more beneficiaries including all stakeholders such as citizens, residents, visitors, businesses, government entities and government employees, in more efficient and effective ways of delivering services. it tries to shift from a structurally fragmented government entity to a whole government that works in harmony. the e-transformation strategy tries to guarantee the public officers and citizens’ satisfaction with the government services. this comes through a cohesive work by different government sectors in a way that facilitates the information sharing between the government services and reducing the burden on citizens. this improved communication will lead to the kingdom’s economic and social development. the strategies of e-transformation are evolving around developing four levels of information service delivery (emerging, enhanced, transactional, and connected). jordan is currently in the late enhanced level of service and aims at achieving the transactional stage which needs to examine before moving forward on a higher level. therefore, internal and external end-user satisfaction improvement requires further attention by the government. while internal end-user satisfaction improvement led to a better external end-user satisfaction which the present study tries to examine before the external end-user satisfactions. to measure the internal effectiveness of e-governance improvement after e-government adoption, the eucs instrument for use in jordanian governmental entities is used as a measurement tool. therefore, the measure of e-government application and its successes directly using the system applications in jordanian public entities is a better approach to examining improvement in internal governance post e-government adoption. several studies have been conducted on e-government in jordan such as mofleh and wanouses’ (2008a), mofleh and wanous (2008b), al-jaghoub et al. (2010), al-mahamid et al. (2010), and al-omari et al. (2012). mofleh and wanouses’ (2008a) argued that jordanian public sectors have low levels of transparency due to a complicated hierarchy in the top management. furthermore, mofleh and wanous (2008b) argued that the government achieve the hope of their e-government program which is citizens sharing control with the government to create an effective interaction with the citizens. however, they argued that there is still a gap between the citizen and the implication of e-government in jordan. while al-jaghoub et al. (2010) assessed factors that could influence the awareness and use of e-government servicers in jordan. they found that the awareness of e-government did not reach the targeted level. on the other hand, al-omari et al. (2014) studied the factors that affect adoption of the citizens’ use of e-government in jordan. they found that trust in government, website design, beliefs, complexity and perceived usefulness al-smady: governance improvement post e-government adoption: a case of jordanian public entities international review of management and marketing | vol 7 • issue 2 • 2017 37 were significant factors affecting jordanian citizens’ intention to use e-government. however, al-mahamid et al. (2010) argued that there is a significant positive relationship among perceived usefulness, perceived ease of use and perceived information quality as well as the intention to use e-government for sharing information. in jordan, al-kasswna (2012) argued that the main objectives behind the e-government in jordan are providing better governance where internal and external end-user satisfaction will be met. also, the ministry of ict of jordan declared that the main objective of e-government in jordan is to have better governance (mict, 2014). however, there are no clear results that jordanian e-government program achieved its objective. this study examines the e-government in jordan and to the extent to which e-government promotes better governance. 3. literature review and hypotheses development 3.1. literature review several theoretical and practical studies discussed e-government, which includes a general view of e-government around the world and its achievements. for example al-jaghoub et al. (2010) evaluated the factors that affect the citizens’ awareness in using e-government services which examine accessibility to e-government, e-services, cost efficiency, and citizens’ position on the topic of privacy and information security. the study concluded that awareness of the concept of e-government did not reach the required level for both citizens and government. al-zoubi et al. (2011) investigated e-government adoption in jordanian market in terms of the level of adoption as well as the factors that drive e-government adoption among businesses in jordan. the result shows that e-government has not reached the required level. furthermore, the study found that there is a significant relationship between technological, organisational, and external factors and businesses e-government. al-omari (2006b) studied e-government in jordan in terms of planning and implementation and recommended that researchers need to test the success of the project after being launched. elsheikh and azzeh’s (2014) study sample is composed of students, academics and administrators in jordanian universities. the study finds that more involvement of citizens in the decisionmaking process is an important factor for helping e-government services delivery in jordan. furthermore, al-hujran et al. (2011) studied the role of national culture factors on citizen adoption of e-government in jordan as a case study. the result shows that power distance and uncertainty avoidance had significant impacts on citizens’ intention to adopt e-government, but individualism, masculinity, and long-term orientation dimensions have no impact. on the other hand, al-omari et al. (2010) examined the social factors that may influence citizens’ intention to use e-government in jordan. for example, trust in the security and privacy, trust in government, attitudes and beliefs, internet and computer skill confidence, and website design are tested. the result shows that trust in government website design is an identifiable concern of internet users in jordan. also, beliefs emerged as an identifiable component relevant to e-government adoption in jordan. also, the study recommended examining e-government websites easiness to be understood and used in e-government adoption. mofleh and wanous (2008a) reviewed the jordanian ict transformation and identified factors might be behind the country’s lack of progress. the study showed based on interviews that jordanians did not achieve the promised outcomes. the researcher argued that for the program to be successful, they have to know what they want behind the program such as determining whether jordanian government user satisfaction is a major objective of e-government adoption. therefore, the jordanian literature do not offer clear successful outcomes for the jordanian e-government program. mofleh and wanous (2008a) argued that weakness in jordanian public sectors exist in the hierarchy and top management. furthermore, mofleh and wanous (2008b) concluded that there is a gap between citizens and the implication of e-government in jordan. in the same study, they suggested the factors that may help the program to be successful include effective interaction with citizens. al-omari et al. (2012) supported that trust in government plays an important role for jordanian citizens’ to use e-government while al-jaghoub et al. (2010) concluded that awareness of e-government did not reach the targeted level. mofleh and wanous (2008b) argued the objective of e-government in developing countries is to enhance the accessibility of information services to their citizens based on what they need, but the problem is that they do not measure whether they are willing to use it or not. ottoum and suleiman’s (2011) study of the e-government experience in jordan found that the aim of e-government is to improve credibility and transparency. furthermore, they argued that information technology improve the existing governance mechanisms in different ways such as improving the existing mechanisms such as end-user satisfaction. they introduce a variety of problems facing e-government in jourdan such as lack of monitoring and testing. they suggested that to reach the goal of the project, they must test the existing open project. a. al-omari and al-omari (2006a) argued that one of the important factors in jordan that needs to be implemented in any e-governmental initiative is the governance in regards to internal user satisfaction which helps public officials to perform. thus, the e-government helps to improve the governance in public firms although its improvement is still vague. 3.2. hypotheses development susanto (2011) argued that the government need to evaluate whether the existing e-government system that achieved its objectives which give an indicator for them to improve the running management strategy and governance. also, the success of e-government is not easy to be achieved but needs further investigation and sustained effort (rocheleau and wu, 2005). thus, the need to examine the success of the program is important. in this regard, al-khateeb et al. (2015) and mofleh and wanous (2008b) suggested that end-user satisfaction is a good indicator of increasing demand on e-government which means achieving the objectives behind the program and success of improving governance. al-zoubi and altaany (2008) explored the extent of usage of e-government applications in jordan for which they found that most of the applications are mainly used on the parallel basis. al-smady: governance improvement post e-government adoption: a case of jordanian public entities international review of management and marketing | vol 7 • issue 2 • 201738 they recommended that further research is needed to examine the significant difference of governance improvement in terms of enduser satisfaction pre and post adoption of e-government. thus, the previous studies did not examine differences with regard to the end-user satisfaction instrument. hence, we hypothesise that: h1: there is a different change in end-user satisfaction pre and post adoption of e-government. ha: there is a different change in content pre and post adoption of e-government. hb: there is a different change in accuracy pre and post adoption of e-government. hc: there is a different change in format pre and post adoption of e-government. hd: there is a different change in ease of use pre and post adoption of e-government. he: there is a different change in timeliness pre and post adoption of e-government. 4. methodology and research design the study adopted eucs (figure 1) instrument model originally synthesised by ives et al. (1983). table 1 explains the questions used by the eucs, which were used to measure the end-user satisfaction improvement after the adoption of e-government in the jordanian public sector. the table has 12 questions that represent five instruments to measure end-user satisfaction. the eucs model was adopted due to its validity and has been used in many researches in developed and developing countries such in the united states, western europe, malaysia, taiwan and saudi arabia (deng et al., 2008; mchaney et al., 2002; mchaney et al., 1999; mohamed et al., 2009). eucs is used to measure the success of using a new computer application among people directly using the system applications (doll and torkzadeh, 1988). there are four statement measures in table 1: the content instrument and two statements for each, accuracy, format, ease of use and timeliness respectively. the study uses a seven-point likert scale for each statement where seven represents strongly agree and one represents strongly disagree. the change made refinement to the statement for measuring pre and post adoption of e-government (table 1). the statement was in the arabic language. the arabic language is the formal language used in jordan especially in government. seven senior academicians participated in a pre-test to validate the statements in which minor correction was made in some statements in terms of language. then, a pilot study comprising 30 questionnaires were distributed to directors and officers at four governmental entities. the result shows the validity of those statements loading for each instrument which was omitted from the study sample and no modification was made. the study uses a cross-sectional self-administrative survey research approach. the study population was the jordanian governmental entities that applied e-government. the sample was eight representative governmental entities and the target respondents for the sampling included executive staff who use information systems to support the interaction with the citizens and others such as higher, medium and lower managers as well as other users. a total of 150 questioners were distributed among eight representative governmental entities. the model instrument stated in figure 1 measures internal end-user satisfaction used by doll and torkzadeh (1988) and this study uses the same questions modified by mohamed et al. (2009) to measure each instrument (content, accuracy, format, ease of use and timeliness). the calculation model was adapted from megginson et al. (1994) and la porta and lopez-de-silane (1999) which calculated the mean and medium for each instrument as follows: apc=p -pi,t i,t 1 (1) where rpc is the absolute value of each instrument of enduser satisfaction, pi,t is the mean of each instrument in the post e-government adoption, and pi,t 1 is the mean of each instrument pre e-government adoption. however, omran (2004) argued that to avoid the problematic absolute measure; we calculate each instrument as follows: rpc=(p -p )/pi,t i,t 1 i,t 1  (2) where rpc is the relative instrument of end-user satisfaction change, pi,t is the mean of each instrument in the post e-government adoption, and pi,t 1 is the mean of each instrument pre e-government adoption. furthermore, the study uses a dummy variable to divide the sample into two groups by: 1=pre adoption instrument of end-user satisfaction dummy = 0=post adoption instrument of end-user satisfaction    furthermore, the study uses the official approval letter from applied science university to survey the officers and collect figure 1: end-user computing model (doll and torkzadeh, 1988) al-smady: governance improvement post e-government adoption: a case of jordanian public entities international review of management and marketing | vol 7 • issue 2 • 2017 39 the data from governmental entities. the questionnaire included the objective and the research model so that respondents clearly understand the instrument. the following section explains the results based on the explained operationalization. 5. results of the study analysis the study received 130 questionnaires out of 150, and 122 were usable for the analysis, which represents 81.33% which is a high rate of information system studies. the unusable data were due to several reasons such as some of the officers were not available at the office during the data collection process, some of them were not familiar with the system due to recent delays in the network with the system, and some of them were very busy so they could not complete the questionnaires. the study uses spss version 18 to validate the analysis for the statistical and generate the results for the sample under the study. a t-test was conducted to check non-respondent bias testing different results of two educational levels and gender. the result shows that there are no significant differences between the table 1: instrument comparison item code measures original instrument items (ives et al., 1983) (mohamed et al., 2009) this study items pre post a1 content does the system provide the precise information you need? the system provides the precise information i need the system provides the precise information i need the system provides the precise information i need a2 does the information meet your needs? the information content meets my needs the information content meets my needs the information content meets my needs a3 does the system provide reports that seem to be just about exactly what you need? the e-government systems provide reports that seem to be just about exactly what i need the e-government systems provide reports that seem to be just about exactly what i need the e-government systems provide reports that seem to be just about exactly what i need a4 does the system provide sufficient information? the e-government systems provide sufficient information the e-government systems provide sufficient information the e-government systems provide sufficient information b1 accuracy is the system accurate? the e-government system is accurate the e-government system is accurate the e-government system is accurate b2 are you satisfied with the accuracy of the system? i am satisfied with the accuracy of the system i am satisfied with the accuracy of the system i am satisfied with the accuracy of the system c1 format do you think the output is presented in a useful format? the output is presented in a useful format the output is presented in a useful format the output is presented in a useful format c2 is the output information clear? the information is clear the information is clear the information is clear d1 ease of use is the system user-friendly? the e-government system is user-friendly. the e-government system is user-friendly. the e-government system is user-friendly. d2 is the system easy to use? the e-government system is easy to use the e-government system is easy to use the e-government system is easy to use e1 timeliness do you get the information you need in time? i get the information i need in time i get the information i need in time i get the information i need in time e2 does the system provide up-to-date information? the e-government system provides up-to-date information the e-government system provides up-to-date information the e-government system provides up-to-date information five-point likert-type scale: 1. “almost never,” 2. “some of the time,” 3. “about half the time,” 4.” most of the time,” 5. “almost always” seven-point likert-type scale: 1. “strongly disagree,” 7. “strongly agree” seven-point likert-type scale: 1. “strongly disagree,” 7. “strongly agree” seven-point likert-type scale: 1. “strongly disagree,” 7. “strongly agree” scale: (ives et al., 1983) (mohamed et al., 2009) table 2: descriptive analysis variables mean median sd mini max a 4.16 4.13 1.9 1 7 b 4.21 4 2 1 7 c 4.28 4.5 1.98 1 7 d 4.4 4.5 2.01 1 7 e 4.2 4 2.19 1 7 population characteristics gm% gf% totle% agmore30 agless30 total 55.30 44.70 100 67.88 32.12 100% lessm% morm% totle% exmor10 exless10 totle 24.83 75.17 100 41.39 58.61 100 edd edb edm edphd edo totle 17.38 59.60 14.90 0.83 7.28 100 this table reports the descriptive analysis of the instrument under the study and the population characteristic. a refers to the content measurement, b refers to the accuracy measurement, c refers to the format measurements, d refers to the ease of use measurement, e refers to the timeliness measurement, gm refers to the gender male, gf refers to the gender female, lessm refers to less than manager, morm refers to more than manager, edd refers to diploma degree, edb refers to bachelor degree, edm refers to master degree, edphd refers to doctoral degree, edo refers to other educational level, agless30, refers to age<30, agmore30 refers to age more than 30, exmor10 refers to experience<10 years, exless10 refers to experience more than 10 years. % the percentage level, totle refers to 100% of the population which is number of the respondents under the study al-smady: governance improvement post e-government adoption: a case of jordanian public entities international review of management and marketing | vol 7 • issue 2 • 201740 groups. hence, the study conducted a descriptive analysis of the population’s characteristics and the instruments as shown in table 2. the descriptive analysis shows that the mean and the medium values for each item were all above 4.0 which indicates that internal end-users’ in e-government in jordanian governmental entities were favourably, and these results are consistent with mohamed et al. (2009). furthermore, population characteristic shows that the level of education of the respondents is: diploma degree; bachelor degree; master degree; doctoral degree and other educational levels were 17.38%, 59.60%, 14.90%, 0.83%, respectively. the majority of the respondents had a bachelor degree, and the minority has a doctorate. also, the sample contains 55.30% male and 44.70% female. the highest proportion were managers with 75.17%. finally, the sample was 67.88% <30 years old and 32.12% more than 30 which gives an indicator that young people are more familiar with the technology and 41.39% of the sample have 10 years’ experience and 58.61% <10 years’ experience which is normal. furthermore, the study conducted reliability analysis as shown in table 3. the consistency measure of cronbach’s alpha was carried out for 12-item and was 0.963 which is consistent and favourable with other study alphas such as 0.947 achieved by mohamed et al. (2009) and 0.92 achieved by doll and torkzadeh (1988). the inter-item correlation matrix shows that all factors are highly correlated ranging from a low 0.791 to a high of 0.884. for the hypothesis testing, the study conducted the normality test kolmogorov-smirnova and shapiro-wilk, which is the assumption of using t-test. the results show that the data of the study are not normally distributed for all instruments (table 4). since the data are not normally distributed, the nonparametric wilcoxon signedrank test is adopted to test the significant difference in change in end-user satisfaction and change in governance in jordanian public entities. gaur and gaure (2006) argued that when the sample size is relatively small, the results of t-test and nonparametric test will be closed. therefore, the study employs the t-test to compare the results as shown in table 5. also, the absolute method of calculation is used for the values to avoid the problematic measurement of significant change in governance in terms of end-user satisfaction that may be relative to the characteristic of the environment (omran, 2004). table 5 reports both z-statistic and t-statistic of the significant change of the governance after adopting the e-government in terms of internal end-user satisfaction. the results show a highly significant change in the end-user satisfaction in all instruments at 1% level of content; accuracy; format; ease of use and timeliness measure individually. the z-statistic and t-statistic show similar results. thus, the study accepted ha to he. also, the study averages all the measures in terms of mean and median of all instruments as one value of end-user satisfaction. it then calculates the absolute value using the absolute method calculation technique to test overall significant changes in governance in term of end-user satisfaction. the result shows that there is a significant change in jordanian public entities governance after adoption of the e-government program which is matched with several previous research (mohamed et al. [2009]; mohamed et al. [2009]; ottoum and suleiman [2011]; rocheleau and wu [2005]; yonazi et al. [2010]). 6. conclusion and future research the study tried to explore the new program adopted by the jordanian government. the government has pragmatic procedures and controls by political managers. thus, e-government was launched to improve the governance and mitigate the inherent agency problems in these entities. in this context, several jordanian studies explored e-government in jordan. al-omari (2006b) argued that researchers need to test the success of the program after being launched. also, mofleh and wanous (2008a) argued that for the program be successful; they have to know what they want behind the program. al-omari et al. (2010) showed that table 3: inter-item correlation matrix a b c d e a 1 b 0.823 1 c 0.82 0.791 d 0.847 0.818 0.884 1 e 0.836 0.839 0.86 0.884 1 c. alpha c. alpha number of items overall scale 0.963 0.963 5 this table reports the inter-item correlation matrix and overall 12-item cronbachs alphas. a refers to the content measurement, b refers to the accuracy measurement, c refers to the format measurements, d refers to the ease of use measurement, e refers to the timeliness measurement, overall scale refers to reliability for the overall 12-items table 5: different change in end-user satisfaction pre and post adoption of e-government hypotheses under the study mean median z-statistic for change in median (p-value) t-statistic for change in mean (p-value) a: ha 4.16 4.13 9.86 (0.00)*** 12.581 (0.00)*** b: hb 4.21 4 9.74 (0.00)*** 12.600 (0.00)*** c: hc 4.28 4.5 9.76 (0.00)*** 12.584 (0.00)*** d: hd 4.4 4.5 10.29 (0.00)*** 13.665 (0.00)*** e: he 4.2 4 11.12 (0.00)*** 16.191 (0.00)*** h1: end-user computing satisfaction overall: h1 value p-value z (median) 10.813 (0.00)*** t (mean) 15.452 (0.00)*** this table reports the employer’s techniques to test significant change in end-user satisfaction. the t-test and no-parametric wilcoxon signed-rank test used to test for significant change in mean and medium respectively. a refers to the content measurement, b refers to the accuracy measurement, c refers to the format measurements, d refers to the ease of use measurement, e refers to the timeliness measurement. *,**,*** denote a significant level of 10%, 5% and 1%, respectively table 4: tests of normality variables kolmogorov-smirnova shapiro-wilk statistic df significant statistic df significant a 0.086 235 0.000 0.941 235 0.000*** b 0.137 235 0.000 0.921 235 0.000*** c 0.123 235 0.000 0.924 235 0.000*** d 0.134 235 0.000 0.917 235 0.000*** e 0.132 235 0.000 0.894 235 0.000*** this table reports the normality test of the data distribution. a refers to the content measurement, b refers to the accuracy measurement, c refers to the format measurements, d refers to the ease of use measurement, e refers to the timeliness measurement; kolmogorov-smirnova and shapiro-wilk test for normality, *,**,***: denote a significant level of 10%, 5% and 1%, respectively al-smady: governance improvement post e-government adoption: a case of jordanian public entities international review of management and marketing | vol 7 • issue 2 • 2017 41 trust in government website design is an identifiable concern of internet users in jordan. the researchers concluded that e-government did not reach the required level for both citizens and government. while, al-hujran et al. (2011) argued that power distance and uncertainty avoidance have significant impacts on citizens’ intention to adopt e-government. elsheikh and azzeh (2014) searched for the factors the help the program succeed and found that greater involvement of citizens in the decision-making process plays an important factor that helps in the delivery of e-government services in jordan. however, the jordanian literature has not given a clear and successful outcome of the jordanian e-government program and its role in improving the governance of the government entities. therefore, the government needs to confirm that the implication of this program will continue. this program will help private and public sectors when its application significantly achieves its aims. the government introduced this program for the national economy in which the public sector plays an important role. thus, when the internal end-user satisfaction significantly improved, then the government can test the external end-user satisfaction of the program resulting in good governance such as accuracy, timeliness will mitigate the inherent agency problems and sharing control with the citizens. thus, this study gives a clear result of the role that the program plays to improve the governance in terms of internal user satisfaction. in terms of theoretical contribution, the study reviews the body of the literature, which supported the model improvement under the study. it used the eucs model to measure the significant change of internal end-users’ satisfaction pre and post e-government adoption. furthermore, the study explains the e-government program in more detail in jordan environment, which gives a greater understanding of using eg and its implications in terms of content, accuracy, format, ease of use and timeliness. in terms of practical contribution, the study hypothesised that the e-government would improve the governance in governmental entities in terms of internal end-users’ satisfaction and establish the accountability that will mitigate the agency problem. the study used a self-administration survey approach based on the previous research to measure user satisfaction and test the research hypotheses. the study confirms that e-government plays important a role in improving the governance in governmental entities in jordan. our findings show that there are significant changes in internal end-users satisfaction which improve the governance in jordanian public entities. particularly, the finding confirmed that all measurement of end-users satisfaction in terms of content, accuracy, format, ease of use and timeliness recorded significant improvements after adopting e-government. thus, the study provided empirical support for previous studies. finally, the study suggests that future research examines the improvement of the external governance after adopting the e-government program and to test the internal and external improvement in governance. acknowledgments the author is grateful to the applied science private university, amman, jordan, for the full financial support granted to this research project (grant no. drgs-2014-2015-44). references al-hujran, o., al-dalahmeh, m., aloudat, a. 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(2010), exploring issues underlying citizen adoption of e-government initiatives in developing countries: the case of tanzania. electronic journal of e-government, 8(2), 176-188. . international review of management and marketing | vol 6 • special issue (s8) • 2016 1 international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2016, 6(s8) 1-7. special issue for "international conference on applied science and technology (icast) 2016, malaysia" relationship between communication competence and psychological well-being of flood victims in malaysia che su mustaffa1*, najib ahmad marzuki2, nur haffiza rahaman3 1school of multimedia technology and communication, uum college of arts and sciences, universiti utara malaysia, 06010 sintok, kedah, malaysia, 2school of applied psychology, social work and policy, uum college of arts and sciences, universiti utara malaysia, 06010 sintok, kedah, malaysia, 3school of multimedia technology and communication, uum college of arts and sciences, universiti utara malaysia, 06010 sintok, kedah, malaysia. *email: chesu402@uum.edu.my abstract the purpose of this paper is to examine the relationship between psychological weel being and communication competence among flood reliefs workers as perceived by disaster victim underlying the recent interest on communication studies and disaster management, discusses the current issues and offers a future research perspective. it offers to understand communication competence of relief workers in the areas of communication studies in malaysian organizations and how does this concept relate to psychological well-being of flood victim. the cross-sectional data for this study were collected via a survey of 270 flood victims. the study highlights the important of flood relief workers’ communication competence from different aspect as perceived by the flood victim. the result indicate that there is a relationship between both variables. in sum, this study provides theoretical contributions to communication competence research and the literature on communication studies. the paper draws attention to the current issues of the disaster management on communication studies and highlights it for future directions. keywords: psychological well-being, communication competence, flood victim jel classifications: q54 1. introduction emergency management scholars have long recognized the roles of communication within disaster. scholars in communication studies have long viewed disasters as particularly rich contexts within which to study communication processes. despite this common interest, the two disciplines have had little do with each other in an integrated fashion. emergency and crisis incidents are characterized by numerous factors that may delay effective response for managing vexing problems faced in such a situation. first, during crisis emergency managers face situations that create uncertainty in roles and responsibilities. second, emergency managers are struggling for time and are required to respond and react quickly due to the severity of the emergency situation. the devastating consequences of disasters and crises such as casualties, damage to people and property, and so forth make it imperative to prepare for, respond to, and recover from disasters in the most effective and timely manner. finally, emergency situations require fast and frugal decision making by emergency managers (ryaff, 1989), which means that critical decisions are made under time pressure and uncertainty. floods in malaysia have caused a change in the lives of those affected. these changes sometimes provide pressure to the flood victims in their daily life. the relationship between experienced events and stress affect the victims indirectly. pressure can affect the flood victims’quality of life. despite this, sustained pressure varies with individuals. according to ralf and ute (2001), although the flood disaster can be predicted and detected several days before the incident, it still givesshock and pressure to the flood victims, and this is considered as a perception of control (perceived controllability). mustaffa, et al.: relationship between communication competence and psychological well-being of flood victims in malaysia international review of management and marketing | vol 6 • special issue (s8) • 20162 flood not only affects the victims physically, but also from the security perspective as well as places of residence and family safety. these feelings, in turn, affect the quality of life and well-being enjoyed by flood victims in malaysia. the quality of life degenerates if the victim is under pressure as a result of the incident. different acceptance of these floods will cause different levels of the quality of life enjoyed. thus the purpose of this study is trying to combine both areas of communication competence and psychological well-being among flood victim in malaysian contexts. 2. problem statement many reports, discuss management challenges, performance of response operations, and intergovernmental relations in the contexts of disaster management. two frequently stated problems are interoperability and performance management. problems in interoperability concern the need to create common languages, clarify expected outcomes, and lead by example. performance measurement is an approach to defining outcomes and measuring progress toward achieving outcomes. several reports discuss the need to establish national standards. regardless of whether these standards exist or whether local entities formulate their own, performance is an essential management tool to guarantee objectives are being met. thus, national-level plans exhibit and emphasize some important performance standards, abilities, skills, and competencies that are required for managing emergencies in a collaborative setting. the theories have also allowed the researchers to examine the impacts of various types of flood experience toward the psychological well-being of the flood victims. the more life changes individuals experience, regardless of the positive or negative aspects of change events, the more likely their coping or resistance resources will be faced with anxiety and depression. the crucial quality of life events in this formulation is believed to be undesirable; such events threaten the physical survival or emotional well-being of the malaysian flood victims. thus, the primary goal of this article is to address the concern related to communication competence among flood reliefs workers and psychological well-being of flood victim in malaysia. this issue is particularly important and critical when considering such a volatile and sensitive field as emergency management in a state where aid is necessary to show their skills in dealing with various issues related to disaster victims. competence’ implies having the capacity to function effectively as an individual and an organization within the context of the cultural beliefs, behaviors, and needs presented by consumers and their communities (gigerenzer and todd, 1999). in the malaysian context, culture plays a big role in communication. as a country which is comprised of three ethnic groups; the malays (52%), chinese (30%) and indians (8%), perceptions of communication competence can be varied. however, asma (1996) asserts that, “while we differ in many symbolic expressions, our common denominator lies in our deep-seated asian values” (p. xiii) (abdullah, 1996). looking at the communication style of one of these ethnic groups, the malays, lailawati (2006) contends that for the malaysian malays, their communication is partly shaped by the religion they embrace (salleh, 2006). 3. review of the relevant literature communication scholars have long grappled with the concept of communicative competence. in a seminal publication, chomsky (1965) articulated two concepts on competence: linguistic competence and performance. linguistic competence refers to the native speaker’s innate ability to produce grammatical sentences of a language, while linguistic performance refers to the actual use of language. his work is solely preoccupied with an ideal speakerlistener in a completely homogeneous speech community that knows its language perfectly and is unaff ected by such grammatically irrelevant conditions as memory limitations, distractions, shifts of attention and interest, and errors (clemens et al., 1999). throughout the literature, the uses and definition of the term “competency” are numerous, varied, and inconsistent. while competence refers to the capability to function in a given setting, competency refers to one’s actual performance in a specific role in a given situation (schroeder, 2008). according to eraut (1994) “competence…. is given a generic or holistic meaning and refers to a person’s overall capacity. initially, spitzberg (1988) defined communication competence as “the ability to interact well with others” (p. 68). he explains, “the term ‘well’ refers to accuracy, clarity, comprehensibility, coherence, expertise, effectiveness and appropriateness” (p. 68). a much more complete operationalization is provided by friedrich (1994) when he suggests that communication competence is best understood as “a situational ability to set realistic and appropriate goals and to maximize their achievement by using knowledge of self, other, context, and communication theory to generate adaptive communication performances.” this paper looks at communicative competence as a product of social experience, as it is highly dependent on the context in which the interaction takes place, and can have consequences on health risk behaviors among risky individuals, specifi cally children and adolescents. communication, is a transaction that occurs between the conversant and interactant. we adopt the definition that communicative competence is the ability of an individual to demonstrate knowledge of the appropriate communicative behavior in a given situation such as disaster. 3.1. psychological well-being well-being is a multifaceted concept. it is often thought of as one of the hallmarks of the liberal arts experience, resulting from educational encounters that both guide students in the search for meaning and direction in life and help them realize their true potential. the ryff is a straightforward and relatively short survey that assesses the psychological component of well-being. this review discusses the administration and cost of the ryff; the mustaffa, et al.: relationship between communication competence and psychological well-being of flood victims in malaysia international review of management and marketing | vol 6 • special issue (s8) • 2016 3 theoretical background, development, and psychometric properties of the instrument; and possible uses of this instrument in higher education assessment settings. well-being is a dynamic concept that includes subjective, social, and psychological dimensions as well as health-related behaviors. the ryff scales of psychological well-being is a theoretically grounded instrument that specifically focuses on measuring multiple facets of psychological well-being. these facets include the following: self-acceptance, the establishment of quality ties to other, a sense of autonomy in thought and action, the ability to manage complex environments to suit personal needs and values, the pursuit of meaningful goals and a sense of purpose in life and continued growth and development as a person (table 1). 4. theoretical framework a useful framework for understanding communication competence was designed by spitzberg and cupach (1984) and is known as the component model of competence because it is comprised of three specific dimensions: motivation (an individual’s approach or avoidance orientation in various social situations), knowledge (plans of action; knowledge of how to act; procedural knowledge), and skill (behaviors actually performed). the component model asserts that communication competence is mutually defined by the interdependency of the cognitive component (concerned with knowledge and understanding), the behavioral component (concerned with behavioral skills), and the affective component (concerned with attitudes and feelings about the knowledge and behaviors) by interactants in an interpersonal encounter within a specific context. rubin (1985) explains that communication competence is “an impression formed about the appropriateness of another’s communicative behavior” and that “one goal of the communication scholar is to understand how impressions about communication competence are formed, and to determine how knowledge, skill and motivation lead to perceptions of competence within various contexts” (p. 173). communicative competence is dependent on the context in which the interaction takes place. communication which is successful with one group in one situation, may not be perceived as competent with a different group in another situation. mccroskey (1982) attempts to clarify the importance of competence when he writes, “the domain of communicative competence includes learning what are the available means (available strategies), how they have been employed in various situations in the past, and being able to determine which ones have the highest probability of success in a given situation” (p. 5). 5. method the method employed was this study was quantitative design. the population for this research was flood victim at negeri table 1: definitions of theory‑guided dimensions of well‑being self-acceptance high scorer: possesses a positive attitude toward the self; acknowledges and accepts multiple aspects of self, including good and bad qualities; feels positive about past life. low scorer: feels dissatisfied with self; is disappointed with what has occurred with past life; is troubled about certain personal qualities; wishes to be different than what he or she is positive relations with others high scorer: has warm, satisfying, trusting relationships with others; is concerned about the welfare of others; capable of strong empathy, affection, and intimacy; understands give and take of human relationships low scorer: has few close, trusting relationships with others; finds it difficult to be warm, open, and concerned about others; is isolated and frustrated in interpersonal relationships; not willing to make compromises to sustain important ties with others autonomy high scorer: is self-determining and independent; able to resist social pressures to think and act in certain ways; regulates behavior from within; evaluates self by personal standards low scorer: is concerned about the expectations and evaluations of others; relies on judgments of others to make important decisions; conforms to social pressures to think and act in certain ways environmental mastery high scorer: has a sense of mastery and competence in managing the environment; controls complex array of external activities; makes effective use of surrounding opportunities; able to choose or create contexts suitable to personal needs and values. low scorer: has difficulty managing everyday affairs; feels unable to change or improve surrounding context; is unaware of surrounding opportunities; lacks sense of control over external world purpose in life high scorer: has goals in life and a sense of directedness; feels there is meaning to present and past life; holds beliefs that give life purpose; has aims and objectives for living low scorer: lacks a sense of meaning in life; has few goals or aims, lacks sense of direction; does not see purpose of past life; has no outlook or beliefs that give life meaning personal growth high scorer: has a feeling of continued development; sees self as growing and expanding; is open to new experiences; has sense of realizing his or her potential; sees improvement in self and behavior over time; is changing in ways that reflect more self-knowledge and effectiveness low scorer: has a sense of personal stagnation; lacks sense of improvement or expansion over time; feels bored and uninterested with life; feels unable to develop new attitudes or behaviors source: ryff and keyes (1995. p. 1072) mustaffa, et al.: relationship between communication competence and psychological well-being of flood victims in malaysia international review of management and marketing | vol 6 • special issue (s8) • 20164 terengganu during the flood 2014. the sampling technique that has been used in this research was purposive sampling. this method required the researcher to select the sample that are known to possess a particular characteristics under investigation. self-administered questionnaire was used as the research method. from the 300 set of questionnaires that are distributed by the researcher, only 270 set were returned. the questionnaire was classified into different parts. the first part of the questionnaire was about the socio-demographic characteristics of the respondents. the second part comprised the information about communication competence. likert scale was used in the questionnaire for analysis. communication skills were measured using scales by moreale, spitzberg and barge (2001) which measured communication competencebased on three components which were motivation, knowledge and skills. two items were dropped since it was not appropriate with the malaysian community culture. the items were discussing safe sex with someone you are considering sexual relation with (interpersonal communication) and making an elaborate toast to a large, formal wedding party (public speaking). likert type scoring (1-5) was employed for this instrument. high scores indicate high communications skills while low scores indicate low communications skills. psychological well-being was measured by ryff scales of psychological well-being. the ryff inventory consists of either 84 questions (long form) or 54 questions (medium form). there is also a short form, but it is statistically unreliable and therefore should not be used for assessment. both the long and medium forms consist of a series of statements reflecting the six areas of psychological well-being: autonomy, environmental mastery, personal growth, positive relations with others, purpose in life, and self-acceptance. respondents rate statements on a scale of 1-6, with 1 indicating strong disagreement and 6 indicating strong agreement. the data were analyzed statistically and computed using the spss for windows 20.0 statistical program. 6. results and discussion this section of study presents the results and findings of the quantitative analysis. the first section of the study comprised the demographic information where data collected on the gender, age, income and education levels. the above information was analyzed using the descriptive statistics where mean (m) ± standard deviation (sd), frequencies and percentage were calculated. majorities of the participants were male at 77.8% and female accounted for only 22.2% of therespondents. all the participants were aged below 40 years. most of the respondents (57.8%) income were less than rm1000 and self-employed as shown in table 2. 6.1. perception toward communication competence: motivation the discussion in this section is performed based on three dimensions to measure the communication competencies, motivation, knowledge and skills. the mean ± sd is used to determine the item with the highest and lowest perception. table 3 indicated that in term of motivation, the highest mean is for the items flood relief workers motivated to deliver easy and informative to the flood victims (4.54 ± 0.56). next item in the rank is flood relief workers are motivated when giving a persuasive speech to the victims (4.15 ± 0.98). flood relief workers are motivated when introducing the group leader to the flood victims (4.04 ± 1.01), whereas the lowest value is for the item flood relief workers are motivated to tell the flood victims not to interrupt and must wait for their turn to speak (2.53 ± 1.58), flood relief workers are motivated when debating what is right even he/she knows all the people in the group have different views (2.58 ± 1.42) and flood relief workers motivated to give a speech without preparation (2.6 ± 1.39). the results of this study show that the employee is percepived as able and motivated to help the victims and have communication skills that are relatively high. scores of low perceived to employee motivation in doing an impromptu speech, try to avoid open dabate with the victims and also has low motivation in telling the victim not to interrupt when they were speaking. this finding is consistent with the culture of the malay community who do not like to talk too direct and always emphasize on the value of courtesy eventhough in the disaster situation. for knowledge dimension, the item that yielded high values is flood relief workers are knowledgeable when delivering the easy and informative information to the flood victims (4.54 ± 0.58), followed by flood relief workers are knowledgeable when giving a persuasive speech to the flood victims (4.16 ± 0.99), and flood relief workers are knowledgeable to tell the victims that they can not cross the line (4.04 ± 1.18) (table 4). in turn, interpersonal communication skills in flood relief workers are knowledgeable to give a speech without preparation (2.70 ± 1.26); flood relief workers areknowledgeable to tell the victims that he was not enough ready for flood situation (2.83 ± 1.19) and flood relief workers are knowledgeable to make jokes spontaneously during serious discussions (3.16 ± 1.05). the results for this dimension indicate the same phenomenon. employees are perceived by the flood victims as more table 2: demographic data demography category frequency (%) gender male 210 (77.8) female 60 (22.2) age <20 years 19 (7.0) 21-30 years 71 (26.3) 31-40 years 85 (31.5) 41-50 years 68 (25.2) >50 years 27 (10.0) income <rm1000 156 (57.8) rm1001-rm2000 75 (27.8) rm2001-rm3000 34 (12.6) >rm3001 5 (1.9) occupation not working 99 (36.7) government 53 (19.6) non-government 56 (20.7) self-employed 57 (21.1) others 5 (1.9) mustaffa, et al.: relationship between communication competence and psychological well-being of flood victims in malaysia international review of management and marketing | vol 6 • special issue (s8) • 2016 5 knowledgeable in conveying information, ability to persuade and inform about the regulations to the victims is high as well as persuasive. however, their knowledge is low in terms of humor, delivering an impromptu speech and did nopt admit that they are not prepared to face disaster situations. as for skilled dimension, the item that yielded high values almost equal to other items in the other two dimensions, flood relief workers are skillfull when delivering the easy and informative information to the flood victims (4.14 ± 0.58). flood relief workers are skillfull when giving a persuasive speech to the victims (4.16 ± 0.99), and flood relief workers are skillfull to tell the flood victims that they cannot cross the line (4.04 ± 1.18). the lowerst item was for flood relief workers areskillfull to refused an invitation for an activity with someone of different gender (2.54 ± 1.11). flood relief workers are skkllfull to tell the victims not to interrupt while his talking and must wait for their turn to speak (2.59 ± 1.24), and flood relief workers are skillfull in debating what is right even he/she knows all members in the group have different views (2.65 ± 1.24) (table 5). the results of this study showed that workers have the skills that are perceived as high in terms of speech, persuade and inform about the rules to disaster victims but have low skills in terms of the debate, refused an invitation and also impromptu speech. 7. relationship between perception toward communication competence and psychological well-being to test the relationship between psychological well-being of flood victim and perception toward communication competence of flood relief worker, a pearson correlation was conducted. perception toward well-being is found to be negatively correlated with communication competence (r = −0.33, p < 0.00). as for the dimension of well-being, results indicate that there is also sinificant yet negative relationship between communication competence and self-acceptance (r = −0.23, p < 0.00), positive relationship (r = −0.15, p < 0.00), and autonomy (r = −0.41, p < 0.00). a negative correlation coefficient means that, for any two variables x and y, an increase in x is associated with a decrease in y. thus, the lower psychological well-being experience by the victims, the more they perceived communcation practice by the flood reliefs workers. these findings are consistent with the view that that aspect of communication competence is important table 3: mean±sd for items for communication competence: motivation item mean±sd flood relief workers are motivated to deliver easy and informative information to the flood victims 4.54±0.56 flood relief workers are motivated when giving a persuasive speech to the victims 4.15±0.98 flood relief workers are motivated when introducing the group leader to the flood victims 4.04±1.01 flood relief workers are motivated while giving technical report to the victims 3.99±1.22 flood relief workers are motivated to refused the invitation for an activity with someone of different gender 3.97±1.17 flood relief workers are motivated when asking someone of different gender to perform activities at the relief centers 3.88±1.17 flood relief workers are motivated to tell the victims that they can not cross the line/boundry 3.79±1.28 flood relief workers are motivated to tell the victims that he has made a mistake 3.71±1.03 flood relief workers are motivated when he was a leader of the group 3.34±1.01 flood relief workers were motivated when interviewed for a live television broadcast 3.21±1.39 flood relief workers were motivated to raise up the topics that he feels are important 3.19±1.38 flood relief workers are motivated to make spontaneously jokes during serious discussions 3.03±1.51 flood relief workers are motivated to correct minor errors during discussion with flood victim 2.88±1.39 flood relief are workers motivated to tell the victims that he is not ready for flood situation 2.81±1.43 flood relief workers are motivated to give a speech without preparation 2.66±1.394 flood relief workers are motivated when debating what is right even he/she knows all the people in the group have different views 2.58±1.424 flood relief workers are motivated to tell the flood victims not to interrupt and must wait for their turn to speak 2.53±1.379 sd: standard deviation table 4: mean±sd for items for communication competence: knowledge item mean±sd flood relief workers are knowledgeable when delivering the easy and informative information to the flood victims 4.54±0.58 flood relief workers are knowledgeable when giving a persuasive speech to the flood victims 4.16±0.99 flood relief workers are knowledgeable to tell the victims that they can not cross the line 4.04±1.18 flood relief workers are knowledgeable to tell the victims that he had made a mistake 3.96±1.39 flood relief workers are knowledgeable when he was a leader of the group 3.96±1.26 flood relief workers are knowledgeable when giving technical report to the victims 3.93±1.21 flood relief workers are knowledgeable when introducing the leader to the flood victims 3.90±1.19 flood relief workers are knowledgeable to ask someone of different gender to perform activities at the relief centers 3.81±1.02 flood relief workers are knowledgeable when interviewed for a live television broadcast 3.50±0.89 flood relief workers are knowledgeable to correct minor errors during group discussions 3.32±1.21 flood relief workers are knowledgeableto raise up the topics that he feels are important 3.21±1.22 flood relief workers are knowledgeable to make jokes spontaneously during serious discussions 3.06±1.55 flood relief workers areknowledgeable to tell the victims that he was not enough ready for flood situation 2.83±1.19 flood relief workers are knowledgeable to give a speech without preparation 2.70±1.26 sd: standard deviation mustaffa, et al.: relationship between communication competence and psychological well-being of flood victims in malaysia international review of management and marketing | vol 6 • special issue (s8) • 20166 in helping the flood victims. communcation competence in the form of the knowledge, skill and motivation can help boost the well-being of the flood victims. there is no significant relationship found between perception toward communcation competence and environmental mastery (r = −0.09, p > 0.00), and purpose in life (r = −0.00, p > 0.00). 8. suggestion for future research as the number of connected organizations are forced to cope with disaster issues, it is important to understand the challenges of their communication with each other so communication can be facilitated. communication should be examined not just for its role in preventing, responding to, and recovering from disaster. researchers should also study communication for its role in creating or being a source of disaster. one limitation of the ryff scales is that it relies on self-reported assessments of psychological well-being. as with all self-report instruments, students may respond in ways that are socially desirable rather than reveal their actual response to each statement. ryff suggests that in order to obtain a more complete understanding of a respondent’s psychological well-being, observational or survey data from others who are close to or important to the respondent is needed. a final limitation is that the validity of the instrument has been tested not on traditional-aged college students, but on adults age 25 or older. finally, we would recommend that more disaster-related studies privilege multiple voices, beyond those of researchers and disaster managers. qualitative techniques, such as longterm observation, or ethnography, interviewing, focus groups, and document and artifact analysis provide valuable means of data collection and capture subjects’ own words, perceptions, and experiences. disasters especially effect individuals and communities in unique ways and it is critical for research subjects to express their experience from their perspective. communication studies has benefited greatly in recent years by including qualitative research in its repertoire of methodological approaches and would recommend that communication scholars consider doing likewise. 9. acknowledgments the authors wish to thank the ministry of education, malaysia for funding this study under the long-term research grant scheme (lrgs/b-u/2012/uum/teknologi komunikasi dan infomasi). references abdullah, a. (1996), going glocal: cultural dimensions in malaysian management. kuala lumpur, malaysia: malaysian institute of management. asma, a. (1996), going glocal: cultural dimensions in malaysian management. kuala lumpur: malaysian institute of management. chomsky, n. (2014), aspects of the theory of syntax. vol. 11. cambridge: mit press. clemens, j.r., petra, m.j., hietla, r.a., robin, r., reese, d.j. (1999), risk of domestic violence after flood impact: effects of social support, age, and history of domestic violence. applied behavioral science review, 7(2), 199-206. eraut, m. (1994), developing professional knowledge and competence. london: psychology press. friedrich, g.w. (1994), you just don’t understand, men and women in the classroom, spotlight on teaching. university of oklahoma, 15(1), 1-2. gigerenzer, g., todd, p.m. (1999), fast and frugal heuristics: the adaptive toolbox. in: gigerenzer, g., todd, p.m., the abc research group, editors. simple heuristics that make us smart. new york: oxford university press. p3-34. lailawati, m.s. (2005), characteristics of high/low context communication: the malaysian malay culture. journal of intergroup relations, 32(4), 40-55. mccroskey, j.c. (1982), communication competence and performance: a research and pedagogical perspective. communication education, 31(1), 1-7. ralf, s., ute, s. (2001), the role of stressful life events. health psychology, 9, 1-32. rubin, r.b. (1985), the validity of the communication competency assessment instrument. communications monographs, 52(2), 173-185. table 5: mean±sd for items for communication competence: skills item mean±sd flood relief workers are skillfull when delivering the easy and informative information to the flood victims 4.54±0.58 flood relief workers are skillfullwhen giving a persuasive speech to the victims 4.16±0.99 flood relief workers are skillfull to tell the flood victims that they cannot cross the line 4.04±1.18 flood relief workers are skillfull to tell the victims that he had made a mistake 3.96±1.39 flood relief workers are skillfull when he was a leader of the group 3.96±1.26 flood relief workers are skillfull while giving technical report to the flood victims 3.93±1.21 flood relief workers are skillfull when introducing the leader to the flood victims 3.90±1.19 flood relief workers are skillfull when asking someone of different gender to perform activities at the relief centers 3.81±1.022 flood relief workers are skillfull when interviewed for a live television broadcast 3.50±0.895 flood relief workers are skillfull to correct minor errors during group discussions 3.32±1.218 flood relief workers are skillfull to raise up the topics that he feels are important 3.21±1.221 flood relief workers are skillfull to make spontaneously jokes during serious discussions being run 3.06±1.557 flood relief workers are skillfull to tell the victims that he was not enough ready for flood situation 2.83±1.196 flood relief workers are skillfull to give a speech without preparation 2.70±1.263 flood relief workers are skillfull in debating what is right even he/she knows all members in the group have different views 2.65±1.246 flood relief workers are skillfull to tell the victims not to interrupt while his talking and must wait for their turn to speak 2.59±1.246 flood relief workers are skillfull to refused an invitation for an activity with someone of different gender 2.54±1.113 sd: standard deviation mustaffa, et al.: relationship between communication competence and psychological well-being of flood victims in malaysia international review of management and marketing | vol 6 • special issue (s8) • 2016 7 ryaff, c. (1989), happiness is everything, or is it? explorations on the meaning of psychological well-being. journal of personality and social psychology, 57, 1069-1081. ryff, c.d., keyes, c.l.m. (1995), the structure of psychological wellbeing revisited. journal of personality and social psychology, 69(4), 719. salleh, l.m. (2006), characteristics of high/low context communication: the malaysian malay culture. journal of intergroup relations, 32(4), 40-55. schroeder, k. (2008), competence literature review. available from: http://www.cc-institute.org/docs_upload/competence_lit_review.pdf. [last accessed on 2009 dec 07]. spitzberg, b.h. (1988), communication competence: measures of perceived effectiveness. a handbook for the study of human communication: methods and instruments for observing, measuring, and assessing communication processes. norwood, nj: ablex. p67-105. spitzberg, b.h., cupach, w.r. (1984), interpersonal communication competence. vol. 4. park, ca: sage publications. microsoft word ok ling_3 taiwan_72-222-3-sm.doc international review of management and marketing vol. 1, no. 4, 2011, pp.86-92 issn: 2146-4405 www.econjournals.com taiwanese consumers’ internet decision-making styles: the role of perceptions of the internet hung-ming lin department of business administration minghsin university of science and technology no.1 xinxing rd., hsinchu 30401, taiwan tel: 886-3-5593142#1827, e-mail: hmlin@must.edu.tw abstarct: the purpose of this study is to explore the relationship between online consumers’ perceptions and decision-making styles regarding the internet. four perceptions and six decision-making styles were administered. data were gathered from 454 consumers with online shopping experience in taiwan. it was found that, of the four perceptions of tool, technology, toy and tour, consumers are more inclined to view the internet as a ‘tool’ or as ‘technology.’ the results indicate that consumers who hold the ‘tool’ perception of the internet are positively correlated to the perfectionism consciousness decision-making style, but negatively relate to brand consciousness, novel-fashion consciousness and brand-loyalty consciousness. consumers with ‘toy’ perceptions tend to show relatively less preference for the perfectionism consciousness style, but more for content, such as brand consciousness, novel-fashion consciousness, confused by overchoice, and brand-loyalty consciousness. no significant correlation was observed between the ‘technology’ and ‘tour’ perceptions and the six internet decision-making styles. keywords: internet perceptions; consumers’ decision-making styles; taiwan jel classifications: m31 1. intrudoction according to a survey report published by the taiwanese government indicated that 80.7% of households with internet access and 70.9% of population with internet access in taiwan in 2010 (research, development and evaluation commission, 2010). it also reveals that taiwan’s internet users above 12 years old have surpassed 14.46 million people and 63.93% of internet users have engaged in online shopping. and, the population and market value of online shopping in taiwan are expected to grow gradually over the next decade. the internet as a commercial medium is rapidly diffusing, with shopping becoming its fastest growing use (weeks et al., 2008; hoffman and novak, 1996). however, the shopping decision-making process of online consumers is a complex phenomenon. researchers are devoted to exploring factors that influence consumers’ internet shopping purchase behavior. prior studies have suggested that individuals’ perceptions of the internet may shape their attitudes regarding it, as well as their online taiwanese consumers’ internet decision-making styles: the role of perceptions of the internet 87 behaviors (peng et al., 2006; tsai, 2004, 2007). therefore, the purpose of this study is to explore the relationships between consumers’ internet perceptions and their internet decision-making. 2. the definition of internet perceptions and decision-making styles 2.1. internet perceptions consumers perceive the internet in different ways. tsai (2004) undertook interviews to investigate adolescent students’ perceptions of the internet and found 4-t categories (technology, tool, toy and tour) for describing their perceptions. according to tsai (2007), individuals in the ‘technology’ category are inclined to view the internet as a technical product that makes our life more advanced, while individuals in the ‘tool’ category tend to view it as a functional instrument that facilitates information acquisition, communication and trade. moreover, individuals in the ‘toy’ category are inclined to perceive it as supplying pleasure, especially for online games, whereas individuals in the ‘tour’ category tend to perceive it as providing a tour or as a form of navigation. 2.2. decision-making styles the issue of individuality in consumer behavior when choosing between alternative products is gradually coming to be seen as central to the consumer (lysonski et al., 1996; shim, 1998; smith and sivakumar, 2004; sporles and sproles, 2005). this line of research argues that all consumers seem to engage in shopping with certain fundamental decision-making modes or styles. this phenomenon is referred to as the ‘consumer decision-making style’. consumer decision-making style can be defined as “a mental orientation characterizing a consumer ’s approach to making choices” (sproles and kendall, 1986). sproles and kendall (1986) view this construct as “basic consumer personality”, analogous to the concept of personality in psychology. they developed a more parsimonious version of the earlier original instrument using 40 items, and then employed factor analysis with varimax rotation to identify eight mental characteristics of consumer decision making: (1) perfectionism or high-quality consciousness; (2) brand consciousness; (3) novelty-fashion consciousness; (4) recreational, hedonistic shopping consciousness; (5) price and “value for money” shopping consciousness; (6) impulsiveness; (7) confusion over choice of brands, stores and consumer information; and (8) habitual, brand loyal orientation towards consumption. on the basis of sproles and kendall’s study (1986), the consumer style inventory (csi) was further employed to measure online consumers’ decision-making styles, and was then modified. six styles were identified, including perfectionism consciousness, brand consciousness, novel-fashion consciousness, confused by overchoice, brand-loyalty consciousness and impulsiveness (yang and wu, 2007). internet shoppers with perfectionism consciousness desire to choose the best overall quality when they purchase the product, while internet shoppers with brand consciousness prefer to choose the best brand when they consider the alternatives. moreover, online consumers with novel-fashion consciousness tend to buy fashionable and novel goods, while consumers confused by overchoice are inclined to avoid too much information about products when buying. furthermore, internet shoppers with brand-loyal consciousness tend to choose their favorite brand, while shoppers with impulsiveness are inclined to ignore their buying plan before purchasing. international review of management and marketing, vol. 1, no.4, 2011, pp.86-92 88 3. method 3.1. participants the participants in this study were 454 consumers with different online shopping experiences. they came from various demographic areas of taiwan and consisted of 236 females and 218 males. their average age was 29.07 years, and their educational level was just above college. all participants were asked to complete two questionnaires; one explored their perceptions of the internet, while the other investigated their decision-making styles on the internet. 3.2. instruments this study employed the perceptions of the internet survey (pis), developed by peng et al. (2006). there are two parts to the pis. in the first part, the participants were required to express their agreement or disagreement with their perceptions of four possible roles that the internet plays on a six-point likert scale (1=strongly disagree, 6=strongly agree). the four roles were ‘internet as technology,’ ‘internet as tool,’ ‘internet as toy’ and ‘internet as tour’ (tsai, 2004). based on the four roles, four items were designed in this part, including (1) “for me, the internet is perceived as a technology.” (2) “for me, the internet is perceived as a tool.” (3) “for me, the internet is perceived as a toy.” (4) “for me, the internet is perceived as a tour.” in the second part of the pis, the participants were asked to fill out a number (between 1 and 100) that matched the perceived roles that the internet plays. they were required to allocate a total of 100 points to the four roles to illustrate their extent of agreement with each internet-themed role. for example, a subject might place the number 20 in internet as technology, 20 as tool, 30 as toy and 30 as tour, adding up to 100 to represent their perceptions of the internet. to investigate participants’ decision-making styles when using the internet, the internet consumer styles inventory (icsi), developed by yang and wu (2007), was administered. the icsi contains 30 items altogether, with 2-6 items in each of the six scales, including perfectionism consciousness, brand consciousness, novel-fashion, confused, brand-loyalty consciousness and impulsiveness. each item was presented with bipolar agree/disagree statements in a 5-point likert mode. the reliability of each scale was high and acceptable (with cronbach's alpha coefficients ranging from 0.83-0.92) (nunnally, 1978). 4. results 4.1. participants’ scores on the pis participants’ responses on the pis are summarized in table 1. in the first part of the pis, participants, on average, attained relatively higher scores on the two items: ‘internet as tool’ (5.53) and ‘internet as technology’ (5.34). these results indicate that online consumers are more orientated to perceive the internet as a tool and a form of technology. similarly, the participants allocated much higher values to ‘tool’ (38.78) and ‘technology’ (31.96) among the four categories in the second part of the pis. consequently, the results derived from the pis show that the online consumers perceive the internet as a ‘tool’ or ‘technology’. these findings are consistent with the findings of previous studies investigating high school students’ (tsai, 2007) and university students’ (peng et al. 2006) perceptions of the internet. taiwanese consumers’ internet decision-making styles: the role of perceptions of the internet 89 table 1. participants’ responses on the pis mean sd part one (6-point likert scale) technology 5.34 0.70 tool 5.53 0.63 toy 4.06 0.91 tour 4.28 0.81 part two (1-100 scale) technology 31.96 14.51 tool 38.78 13.65 toy 12.53 11.45 tour 16.73 9.23 table 2 illustrates the inter-correlation matrix among perception scores measured on the two parts of the pis. each role corresponding to its counterpart (e.g., technology-technology) between the two parts of the pis reached significant levels of 0.01; therefore it appears that these two scales are coherent in measuring participants’ perceptions of the internet. the results provide evidence of the internal consistency of the measurements. however, the 1-100 scale can comparatively distinguish between participants in a more detailed way than can the six-point likert scale. thus, participants’ responses on the second part of the pis were applied for further analysis of participants’ perceptions of the internet. table 2. correlations between responses on the two parts of the pis 1-100 scale 6-point likert scale technology tool toy tour technology 0.25** 0.04 -0.11** -0.18** tool -0.13* 0.29** -0.06 -0.14** toy -0.14** -0.15** 0.43** 0.05 tour -0.13* -0.17** -0.09* 0.32** *p＜0.05, **p＜0.01 4.2. relationship between perceptions and consumers’ internet decision-making styles table 3 represents correlation analyses between participants’ internet perceptions and their internet decision-making style. participants with stronger ‘tool’ perceptions tended to exhibit the perfectionism consciousness decision-making style. these participants, however, tended to display relatively less preference toward the decision-making styles of brand consciousness, novel-fashion consciousness and brand-loyalty consciousness. however, the participants with ‘toy’ perceptions international review of management and marketing, vol. 1, no.4, 2011, pp.86-92 90 tended to show relatively less preference for the ‘perfectionism consciousness’ style, but more for content, such as brand consciousness, novel-fashion consciousness, confused by overchoice, and brand-loyalty consciousness. finally, there were no significant relationships between the participants holding ‘technology’ and ‘tour’ perceptions and the six decision-making styles. table 3. correlations between perceptions of the internet and online shoppers’ decision-making style technology (1-100 scale) tool (1-100 scale) toy (1-100 scale) tour (1-100 scale) perfectionism consciousness 0.03 0.23** -0.14** -0.08 brand consciousness 0.04 -0.14** 0.13* 0.02 novel-fashion consciousness 0.06 -0.17** 0.14** 0.01 confused by overchoice -0.06 -0.10 0.21** -0.01 brand-loyalty consciousness -0.02 -0.13* 0.32** -0.04 impulsiveness -0.02 -0.02 0.05 0.01 *p＜0.05, **p＜0.01 5. discussion and conclusions previous studies have suggested that when using the internet, users may perceive it differently, and that these perceptions may in turn affect their online behavior (coffin and macintyre, 1999, tsai, 2004; tsai and lin, 2004). the results in this study show that the online consumers studied scored relatively highly for the ‘tool’ and ‘technology’ perceptions. these consumers regard the internet as a technological tool for searching for useful information. this finding is consistent with our general intuition. consumers are often likely to access the internet to search for purchasing information in the pre-purchase stage, such as product functions and price comparison. therefore, the above result merits greater attention from marketers. marketers should strive to provide more product information on the internet (e.g., on websites and blogs) that might increase the opportunity of being considered viable alternatives by consumers. in addition, the results also indicate that consumers’ ‘tool’ perception is positively related to the perfectionism consciousness decision-making style, while being negatively correlated to brand consciousness and brand-loyalty consciousness. internet shoppers who view the internet as a ‘tool’ tend to collect product information on the internet to allow them to buy the best overall quality, but they are not likely to focus on any special brand in particular. moreover, consumers’ ‘toy’ perception is highly correlated to brand-loyalty consciousness. consumers in the ‘toy’ category perceive the internet as a source of pleasure, especially for online games. online gamers, in general, usually pay fees to play online games according to game playing time. game providers provide much stimulation (e.g., creative game content, sales promotion) to increase the gamers’ duration of their game playing taiwanese consumers’ internet decision-making styles: the role of perceptions of the internet 91 time since the ‘time’ is the major source of profit for game firms. thus gamers show high loyalty to specific games. this tendency might transfer to online buying behavior. once they have favorite brands they will buy repeatedly and stick with them, in line with their attitude toward online games. the results of this study provide evidence that shoppers’ buying decision-making behavior on the internet is related to their internet perceptions. this can facilitate marketers and researchers to further clarify the antecedents of consumers’ internet buying behavior. however, the relationship between perceptions of the internet and internet consumers’ decision-making styles were investigated using a sample of taiwanese consumers in this study. previous studies related to consumer decision-making have suggested that differences in decision-making styles can be observed across various countries (hafstrom et al., 1992; lysonski et al., 1995). the cross-cultural issues of the relationship between pis and icsi should therefore be considered in the future research. acknowledgement funding of this research was provided by the national science council, taiwan, under grant nsc 100-2410-h-159-002. references coffin, r. j., macintyre, p. d. 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(2007), gender and internet consumers’ decision-making. cyberpsychology & behavior, 10(1), 86-91. . international review of management and marketing | vol 6 • special issue (s2) • 201676 special issue for "management of education: problems and perspectives" international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2016, 6(s2) 76-81. educational systems scenarios development in modern conditions elena y. levina1*, olga g. yevgrafova2, farida v. derdizova3, tatyana v. levchenkova4, vera v. murugova5, lyubov n. blinova6, olga v. anfilatova7, elena n. zagladina8 1the institute of pedagogic and psychology of professional education of russian academy of education, kazan, russia, 2kazan (volga region) federal university, kazan, russia, 3kazan (volga region) federal university, kazan, russia, 4russian state university of physical education, sport, youth and tourism (scolipe), moscow, russia, 5kazan cooperative institute (branch) of the russian university of cooperation, kazan, russia, 6pacific national university, khabarovsk, russia, 7vyatka state university, kirov, russia, 8kazan (volga region) federal university, kazan, russia. *email: frau.levina2010@yandex.ru abstract the educational system is a set of nonlinear subsystems subjected by waves of exogenous and endogenous impacts. due to the chaotic nature of the educational processes the management of the educational system’ development is significantly complicated. this article aims to develop aspects of the theory of scenario modeling in educational systems and processes. the authors highlight systemic patterns that determine the processes of development of educational systems and establish corridors of possible variability of processes, while maintaining a positive dynamics. the basic criteria for the development of alternative scenarios of educational systems, structures and processes allowing develop scenarios of educational systems’ development in an unstable external and internal environment are allocated. the types of scenarios for the development of educational systems and their possible categorical interaction are given. this article is intended for heads of educational institutions, senior managers, researchers involved in modeling and development of educational systems. keywords: educational systems, educational processes, management of development, scenarios jel classifications: h11, i21, i28 1. introduction 1.1. background presentation of the educational system as a complex dynamic system consisting of nonlinear subsystems (yzerman et al., 1994; avdeeva et al., 2007; pylkin et al., 2012; shaidullina et al., 2015), subjected by waves of endogenous and exogenous impacts is the most realistic model. this is due to the following provisions: • the potential of the educational system to a large extent depends on the type of interaction of its elements. • educational systems are characterized by a high degree of instability, where “cause” and “effect” can be interchanged. • the educational system can maintain stability by countering with external and internal conditions. • structural stability of the education system is determined by the stability of the weaker subsystem (khairullina et al., 2016; komelina et al., 2016; aleksandrov et al., 2015). • the cycle’s length of the system’s, subsystems’ and their entities’ development that include smaller elements have different periods, whereby these cycles in a complicated manner are synchronized with each other (gumerov et al., 2015; priymak et al., 2015). • the manifestation of instability or crisis of the educational system is observed in the external and internal environment. • the efficiency of the educational system and its structure is significantly below 100%. reforming of the education system requires a new approach to solve the complex of strategic and tactical goals related to ensuring of its levina, et al.: educational systems scenarios development in modern conditions international review of management and marketing | vol 6 • special issue (s2) • 2016 77 sustainable development, that calls for a detailed description of the object with all its internal and external communications, as well as parts of the lower hierarchical level, review of the final results of operations as the results of cooperation between all the progress’ and results’ parties of this work and all the factors influencing it. 1.2. status of a problem development of full and accurate mathematical models for this class of systems is not always possible due to the complexity and uncertainty of the objects’ behavior in the educational system (novikov and glotova, 2004; levina, 2013; ivanov et al., 2015; mishchenko et al., 2014). the main features of education systems are: • irreversible nature of development, i.e., the integral characteristics that define an “output” product of the system as a whole (result of education), as a rule, totally increase in development process (at the same time, individual elements of the system can evolve in different ways). • the high level of correlation dependence of the educational system from other systems (economic, social, etc.). • the difficulty of the system’s boundaries defining, ranging in the process of its development and significantly changing the scale of the system. • the complex nature of the system’s control, assuming the existence of a sustainable productive model and governance mechanisms. • the need for advanced development, which is defined by significant resources and time expenses to develop educational systems. • the extreme instability of the system defined by the significant impact of individual elements’ functioning and their interactions on the functioning of the educational system in general. • the system’s management subject are educational processes and human potential of all the system’s elements, combining into a single field of educational activities. • the control objects consist of large groups of people. 1.3. the research hypothesis we believe that the governance mechanisms and the development of educational systems must include analysis and modeling structures, allowing to generate and to analyze alternative development scenarios for rational strategic decisions’ determination. development and analysis of scenarios is one of the methods to predict the behavior of any system. here the forecast is a reasonable hypothesis (scientific, praxeological, logical, mathematical justification, etc.) on the likely state of the system and its objects and indicators characterizing this state. the prediction in its turn as a system of scientific assumptions about the directions of development of the object’s future state is a fundamental basis of managerial activity in any field when performing inherent functions is an important component in the feedback management process (muhametzyanova, 2005; shamova, 2005; novikov, 2009; levina and shcherbakov, 2014). with the development of educational systems with high complexity and dynamism the uncertainty of long-term scenario actions increases, consequently, there need to develop methodologies, technologies and tools to discover, explore and take into account the further emerging external and internal conditions, evaluate risks, and develop alternative future states appear. 2. materials and methods 2.1. the definition of scenarios of educational systems’ development the interpretation of the notion of scenario or scenario method is not finally formed (bourgeois, 1998). scenarios are understood as: “a coherent, rational description of the future” (porter, 1998; schoemaker, 1993); “ways of managing with uncertainty” (ringland, 2008); “harmonization of views on future actions” (schwartz, 1991). as the base a definition by kahn is taken (kahn and wiener, 1967), understanding the scenario as “a hypothetical sequence of possible events that is focused on causal relationships between events and decision points that can change the course and trajectory of movement in time throughout the system in whole or its separate subsystems.” the scenario of educational system’s development is assumed to consider a model describing the process of transformation of the system’s state caused by the emergence of social, economic, pedagogical, psychological, etc., phenomena or processes that influence the educational system, and defining basic parameters’ changings of the system’s functioning, i.e., the trajectory of the system’s development (changes of state and relations of the component) in a given time space (kononov et al., 2007; zarubin and nachkin, 2015). it is obvious that for the educational system there are alternative development scenarios, differing not only on targets, but also the criteria of productivity and risk (losses) of the system. on the basis of information predicting of this or that scenario it is necessary to build a formalized mathematical description and mathematically to carry out interpretation and evaluation of the effectiveness of a particular path of development, then, the received information to be used and to be translated as a control one (levina and gumerov, 2015). 2.2. the advantages and disadvantages of educational systems’ scenario modeling possible scenarios’ development formulation can significantly reduce the number of ambiguities in educational systems, structures and processes till a few the most likely alternative directions step by step approaching to the goal under conditions of high uncertainty of external and internal environment. scenario modeling provides the following advantage: the lowering of the complexity and uncertainty of scheduling, the reduction of variability in the external and internal conditions of educational systems’ development and processes till a managed acceptable condition with the possibility of adjustment in each iterative step (approximation to goals). scenario modeling has the following disadvantages: • the increasing complexity of the planning process: time and resource expenses caused by the need for careful thinking of levina, et al.: educational systems scenarios development in modern conditions international review of management and marketing | vol 6 • special issue (s2) • 201678 possible variants of the state and development of educational systems and structures. • numerous conclusions about the possible state of educational systems and structures in the alternatives of a scenario development. • the reliability of decision making to a greater extent depends on the probability of the external/internal conditions’ occurrence of educational systems’ or structures’ development. • a significant complication of managerial decision-making process, which consists in impossibility to give one answer to one question, the responses’ quantity is determined by the availability of several scenarios of educational systems’ or structures’ development. • mostly qualitative effectiveness criteria for the development of scenario variants (logical reasoning, “soft” responses, the intuitive). the estimation of probable alternatives of educational systems’ and structures’ development can help to create the actions’ strategy for functioning’s optimum parameters and the required level of resource potential at any state of the system or structure (under the influence of external/internal conditions), to adjust the actions at the point of decision making. all kinds of scenarios can be used as a basis for the formulation and selection of strategic issues of educational systems’ and structures’ development. 2.3. the criteria defining for educational systems’ controllability we identify the following key criteria for alternative scenario of educational systems,’ structures’ and processes’ development: 1. the availability of unequally possible alternatives’ wide variety that occur under the influence of the qualitative/ quantitative subjective/objective specific/latent factors. 2. the probability of occurrence and the realism of the scenario development in presented conditions and with the resources available. 3. consistency and interconnectedness of states and processes of the educational system for each of the scenario alternatives. 4. the process dynamic state’s taking into account, which is changed when there is an amplification of correlation factors’ connection (state) of educational systems or processes. 5. possibility of accurate planning of educational systems,’ structures’ or processes’ multi-factor condition in a particular scenario of events. the controlled conditions’ availability of the scenarios of educational systems,’ structures’ and processes’ development at each time control step. the need for scenario management is determined by the appearance of uncertainty when making strategic decisions on the operation or development of educational systems, structures or processes either in the implementation of pedagogical or management innovations. this arising “integration for the future,” i.e. the union of different trajectories’ movement to the future and continuous conditions’ planning leads to step by step adjustment of managerial actions (decisions) within the selected development scenarios. despite the rather complicated predictability of events for educational systems, implementation of the scenario method allows us to consider the factors influencing the system in a variety of interpretations and give new information for management decisions’ making. 3. results 3.1. identification of scenarios’ types for educational systems’ development thus, the scenario of educational systems’ development represents a description of conditions’ set (preconditions) that reduces the uncertainty in the system and its elements’ open connections, allowing maintain control. since there are only a finite number of scenarios adequately described in economics and they depend on the forces’ interaction, it is important to consider them in relation to the educational system. 3.1.1. the “time” category 3.1.1.1. type of scenario “evolution” for the educational system the implementation of this type of scenario is similar to any other transformation of the social system and entails significant gradual changes of the entire structure. as an example can serve information technology that have passed the path from object of study till the learning environment in the educational systems. 3.1.1.2. type of scenario “revolution” despite the fact that the educational system is very susceptible to the influence of various external and internal factors, from the point of view of revolutionary changes, this system maintains the highest sustainable form, and to a lesser extent is subjected to transformation by revolutionary changes. however, the results of the “revolution” (consequences) have the most long-term development in educational systems and possess a high inertia. for example, the results of the crisis in the educational system in the 90 of the last century greatly affect the capabilities of modern experts 25 years later. 3.1.1.3. type of scenario “cycles” cyclical nature of educational systems significantly differs from other socio-economic systems. the recession phase of the cycle can be caused as by external conditions dissatisfaction with the results of education consumers (educational agents: the state [low educational level of citizens]; business [mismatch of educational institutions’ graduates to the employers’ requirements and the current state of manufacture, technologies and equipment development]; personality [requirements to forms, methods, technologies or training variability], etc.), so by internal conditions, for example, the information technologies’ implementation in education has changed significantly the didactic requirements to the training. the peculiarity of the educational system is in a plurality of cycles (periods of study) that are reporting for the system: the system (pre-school, school, vocational and higher education); periodic (quarter, term, year of study); training (concept, subject, course, field of study). levina, et al.: educational systems scenarios development in modern conditions international review of management and marketing | vol 6 • special issue (s2) • 2016 79 3.1.2. the category “economic development” 3.1.2.1. type of scenario “raw materials future” such a scenario for an educational system requires the training of special categories specialists for processing industries, the level of training of whom must be sufficiently high, and their number should not be too much. the demand for technicians and workers engaged in the processing industries will be high even at high automation. 3.1.2.2. type of scenario “catching up modernization” there is a growing demand for specialists engaged in the organization, development and management of industrial potential (managers), specialists engaged in normative documentation and distribution of enterprises’ profits, evaluation and capital gains (lawyers, economists, financiers). there is a significant need for additional education for existing domestic experts engaged in the production, demand knowledge of a foreign language. there is a significant need for additional education for working domestic experts engaged in the manufacture and knowledge of a foreign language is in demand. 3.1.2.3. type of scenario “local leadership” for the educational system, this means the need in industrial clusters’ development, in the integration of education science and industry, in the training of specialists of all levels in accordance with the latest scientific developments, the employers’ requirements and deadlines. 3.1.2.4. type of scenario “the cognitive society” for education this scenario represents the transition from the service system into a management one predominantly, when the educational system is considered a priority sphere of the state, creating the life conditions for the population, determining knowledge and level of education of citizens as the most important national resource. 3.1.3. the category “reaction of the educational system” 3.1.3.1. type of scenario “limitless opportunities” it is poorly applicable to the educational system of any category, since their capabilities are significantly limited by social, political, economic and financial factors, as at the moment the education is a service system for other systems. considering the education system regarding students and teachers from the standpoint of personal growth it can be considered that conventionally there are unlimited possibilities for improvement. an example can be the programs to support young scientists, grants, individual learning possibilities, inclusive education, supported by all educational agents. 3.1.3.2. type of scenario “challenges and responses” any version of the scenario corresponding to the given type cannot be positively implemented in the educational system, except the global strategic objectives. for example, a state program of the russian federation “development of education” for the 2013-2020 period is the “response” of the educational system to the “challenges” of political and economic systems (the trends of globalization, internationalization, integration, etc.). however, if the duration of the scenario is reduced at any version of the system’s development, except the educational projects’ implementation affecting only a small number of the system components, but devoted to a specific tasks’ solving it is impossible to obtain system’s response with positive results. any changes in the education system require significant change in all its components, starting with personal motivation and ending with financial support for the implementation, adaptation and sustainable results performance of which requires time, thus the current result of the system’s activity would not meet the requirements of the system neither “old” nor “new” qualities. 3.1.4. the category “position of the agents of the system” 3.1.4.1. “winners and losers” indeed, considering the educational agents from a position of personal (business) interests of each, it can be defined the existence of several conflicts of interest: the individual and society (personal development, and capital gains); society and the state (the right to free education and the complexity of its material support from the state); individual and state (opportunities of employment according specialty and the lack of state regulation of employment) and so on. any of these conflicts affect the implementation of education policy at the current time. however, when considering the educational system in general, any version of the “victory” of the educational agent in the future can be assessed positively. for example, the rigid standardization of education (contrary to personal development, individualization of learning, etc.) makes it possible to implement the ideas of integration and globalization of business, opening up additional employment opportunities; the problems with the lack of free places in university ensure the inflow of students in the vocational education institutions graduates of which are in demand by employers and others. 3.1.4.2. “my generation” this type of scenario is essential for the educational system, which determines the foundations of cultural education of generations. accepted social and moral values are reflected in the educational process, technology of training. an example of this scenario at the strategic level could be the transition to state-public management of education enshrined in the act on education. 3.2. the scenarios’ interaction of educational systems’ development accurate boundaries of marked scenarios for educational systems are rather conventional and none of the scenarios exists in its “pure” form. however, the choice of the scenario categories and their typologies provide an understanding of the possibilities and development vector of educational systems (figure 1). for each scenario, there are state indicators that show the development start of this or that scenario. scenario modeling is a necessary link between the goal setting of the educational system and the development of its vision in the current environment and the formation of strategic development plans. analysis of the created scenarios enables to evaluate the effectiveness and consistency of the accepted managerial decisions, evaluate their levina, et al.: educational systems scenarios development in modern conditions international review of management and marketing | vol 6 • special issue (s2) • 201680 possible consequences within the boundaries of the system. scenarios of education systems’ development belong to the class of single-parent theme (information) models that can be formalized only with a certain error. the main application of these models is to determine the main quantitative characteristics of objects and subjects (entities) of the educational system. 3.3. the possibility of scenario modeling application to manage the development of educational systems the use of scenarios enables to apply the method of multi-level strategic simulation (designing of “bottom-up” and “top-down”), i.e., in forward and reverse directions. in direct prediction the agents’ hierarchy of the educational system, the considered focus, management entities, their goals and opportunities are determined and a lot of scenario alternatives are developed. when development planning (backward process) the elements of the system receive content filling: vision, mission, goals, objectives, conditions, actions, processes of implementation, monitoring processes, time points, evaluation mechanisms. cycle’s multiple passing in forward and reverse direction defines possibilities to improve the development scenarios, identify key performance indicators, and the information field, reducing the uncertainty of the system and defining the type and possibilities of control impacts. the possibility of probable alternatives’ estimation of educational systems’ and processes’ development allows form a strategy of actions, ensuring performance optimum parameters and the required level of resource potential at any state of the system or process (under the influence of external/internal conditions). scenarios’ evaluation and tactics’ choice can be supported by adaptive mechanisms operating on the development of the system and ensuring a positive effect of the management in case of step by step approach with the possibility of events’ adjusting. generated scenarios of the educational system’s development are determined by the main processes’ and factors’ interaction operating in the system and changing its state (as reflected in the indicators of the system), the processes’ interaction forms the network of the system with the cycles of direct and reverse linkages, and the cycles’ interaction action of the system (resonance). so, the scenario mechanism enables to forecast the development of the educational system or the trajectory of their movement on the basis of available information and expected state of external and internal factors. information obtained during the scenario simulation is necessary for the development of strategic plans for development of the system. this plan, in turn, can be active and can be adjusted as the system develops and changes its states. thus, especially important is the question of internal and external information obtaining for the scenario modeling, the scenarios’ formation, optimal trajectories’ choice and adequate management decisions’ making. scenario models’ building (information and mathematical) provide opportunities for the target values’ obtaining of the future based on the search of system’s reference points and the constructing of development’s various options, depending on the structural features and the possible results of its implementation. scenario modeling of educational systems’ development is caused by the need to find the most favorable conditions and steady-states of the system. 4. discussions the issues of scenario analysis of educational processes are poorly studied due to the significant number of variables and numerous factors affecting the state of the system, from the personal to the political. therefore, it is necessary to implement the mathematical description of processes and scenarios, to evaluate information models with the help of mathematical methods, since the experimentation on real objects is not possible. the proposed mechanism of the scenario management of educational systems’ development is a way of gradual reduction of uncertainty on the basis of information and a formalized description of the system, a method of study construction of the development’s scenarios and mathematical models. the steps of successive (integrative) approximations that define the stages of scenario modeling of the system allows to build forecasts of the system’s development under given or planned values of the parameters. the method is focused on the system’s development management which is determined by the control impact, which, in turn, is based on information obtained in the course of construction, assessment and scenario analysis. figure 1: categorical interaction scenarios’ types of educational systems’ development levina, et al.: educational systems scenarios development in modern conditions international review of management and marketing | vol 6 • special issue (s2) • 2016 81 5. conclusions scenario management enables the management of educational systems in conditions of high uncertainty, ensuring accurate implementation of the strategy and possible of its rapid adjustments by state’s monitoring in risk assessment of events or actions. the formation of development’s scenarios and implementation of change management in educational systems allows us to develop strategic, operational and 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(2015), manageability: the experience of designing a social phenomenon. kazan pedagogical journal, 4(1), 186-190. . international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2017, 7(4), 1-5. international review of management and marketing | vol 7 • issue 4 • 2017 1 the communication skill on the performance of internal auditors in thailand public limited company sutana narkchai1*, faudziah hanim binti fadzil2 1othman yeop abdullah graduate school of business, university utara malaysia, sintok, malaysia, 2othman yeop abdullah graduate school of business, university utara malaysia, sintok, malaysia. *email: sutana_sprite@hotmail.com abstract the issue of performance of internal auditors is important since thailand was also affected by the accounting scandals. the expanded scope in the definition of internal auditing and new regulatory requirements such as the sarbanes-oxley act 2002 has increased the demands on the internal auditing. this study was conducted to examine the factors that influence the communication skills on the performance of internal auditors in thailand public limited companies. to achieve this objective, the hypothesis was formulated based on previous studies and the agency theory. survey questionnaires were sent to the chief audit executives to determine their effectiveness on their performance based on the professional standards issued by the international professional practices framework (2017) indicators. a total of 520 questionnaires were distributed, but only 146 were usable. multiple regression was used to test the relationship between the variables. the existence of communication skills and performance of internal auditors is needed to strengthen the internal audit effectiveness between internal auditors and auditees. this study serves as an important catalyst for further research and discussion in this area. more importantly, there is lack of research in thailand concerning the relationship between internal audit functions with the performance of internal auditors. keywords: performance of internal auditors, communication skill, international professional practices framework, thailand public limited company, institute of internal audit jel classifications: l1, m42 1. introduction performance of internal auditors can be encountered with significant diversity and vagueness in their work. they need skills in examining activities and management practices. they can also faced with the need to become familiar with organisational contexts and subject matters. performance measurement has obtained rational attention in internal auditing because it establishes one of the most essential managerial functions (rupsys and boguslauskas, 2007). performance measurement also evaluates to what extent the efficiency of public resources are being used and to what extent the effectiveness of public service outcomes are being achieved (tudor, 2007). the sources to consider when recognising significant performance effectiveness measurements of the internal audit activities include international professional practices framework (ippf), the internal audit mission and charter, the institute of internal audit (iia), audit plans and strategies, the internal audit charter and mission, and applicable regulations and laws (iia, 2010). the main part of the ippf is a mandatory and a strongly recommended guidance. an indication of the internal audit department’s effectiveness is therefore compliance with ippf. in terms of the objectives of performance of internal auditors, authors are usually consent that the performance ought to examine the auditee’s records (lélis ‎2012). the performance of internal auditors expresses their opinions on how they think the management of the public or private sector entity has utilised resources to attain to the goals of the entity. likewise, the performance of internal auditor forms a view on the adequacy of the internal control procedures used to attain to the goals of the entity in terms of effectiveness. the common body of knowledge (cbok) (2010) studies were parts of a continuing world-wide research. in order for auditors narkchai and fadzil: the communication skill on the performance of internal auditors in thailand public limited company international review of management and marketing | vol 7 • issue 4 • 20172 to perform their profession with care and additional values to organizations, and how internal auditing is practices world-wide, the research identifies the significance of what internal auditors certainly need to know. as a result of this, the internal auditors need to constantly develop new skills and acquire whole new audit tools and innovations (cbok, 2010). the iia’s 2010 global internal audit survey findings help internal auditors in the public sector to assess their capability performance levels compared to other public sector internal audit activities. areas of strength and those in need of improvement can then be identified and used in strategic planning for the internal audit activity. bailey (2011) review of the core competencies of internal auditing (part of the 2010 cbok study) revealed the evolving nature of the iaf as practiced on a worldwide basis. the top five competencies identified in the study are problem identification and solution skills, communication skills, staying alongside with regulatory and industry changes and professional standards, understanding the business as a sound basis for identifying emerging risk and control issues, and enterprise risk management, both from an organizational viewpoint as well as performing risk-based audit planning. however, communication skills are highly rated. these skills indicate that many iafs are formulating skill sets that are broader, and perhaps, more value-added to their organization than assisting in the annual financial statement audit. the communication skills are important for internal auditors to possess because they are essential to their ability to affect positive change in the organization. as the latest global internal audit cbok (2015) study, administered through the iia research foundation (iiarf), explains “personal skills such as communication, persuasion and collaboration, and critical thinking are important for ensuring that the information, observations and recommendations identified based on technical expertise have the appropriate impact on the enterprise” (half, 2016). prior research were directed into the above mentioned viewpoints of communication utilised by internal auditors. moreover, the findings are summarised in the following discussion: internal auditor competence is an important key to the effectiveness of the internal audit activities (alzeban and gwilliam, 2014). the international standards for the professional practice of internal auditing (isppia) highlights the importance of internal audit team who possesses the knowledge, skills, and other competencies necessary to perform their responsibilities (isppia, standard 1210). indeed, internal auditors must collectively have the necessary education, professional qualifications, experience and training to be able to add value and improve the organization’s operations (mihret and woldeyohannis 2008; ali and owais 2013). additionally, internal auditors require good interpersonal skills in communication, persuasion, collaboration, and critical thinking to effectively fulfill their duties (smith, 2005; fanning and piercey, 2014). communication structures a significant part of the internal auditors’ competency prerequisites. internal auditing activities are almost certainly to be led by groups of internal auditors. each auditor will make a particular input to the team’s competencies. hence, internal auditors are required to communicate in effective manner in order to successfully complete their responsibilities. however, there exist certain constraints. these existing constraints are caused by different home languages and cultural backgrounds, conflicting approaches to resolution of conflict situations among others (smith, 2005; fanning and piercey, 2014). 1.1. problem statement for the past 10 years, studies have revealed that the auditing profession has had to manage lot of challenges such as new standards on the performance of internal auditors (mactosh et al., 2010; smith, 2005). mccafferty (2016) stated that internal auditors have several big challenges facing their internal audit departments and the internal audit profession as a whole. the difficulty in filling internal audit positions with talented candidates, for example, has led to increases in pay for many internal auditors. the need to do better job leveraging skills has the potential to free internal audit up to do more valuable and higher-level jobs, raising internal audit’s profile in the organisation. he also further stated that the critical skills and attributes needed in the internal audit department include among others analytical the abilities, business knowledge, ability to communicate well, integrity, courage and conflict management skills. internal auditors from different countries may be different in their characteristics for the standards and their compliance because they may have different educational and professional backgrounds. therefore, the internal auditors also need to effectively consider and manage these constraints. moreover, effective communication is crucial at every level of an organization. thus, the ability to communicate effectively does not come easily to many people and it is a skill that requires practice (agargal and garg, 2012). according to ifrs (2017), thailand has adopted all ifrs standards with a 1-year delay from the equipment ifrs standard’s effective date with the exception of the standards relating to financial instruments. the main reasons that adoption of ifrs standards is delayed by one year in thailand are the need to translate the standards into the thai language since the official language in thailand is thai. thus, accounting standards that are to be enforced as laws are required to be in thai language by the accounting professions act of b.e.2004, therefore, the ifrs standards in english cannot be directly endorsed in thailand (ifrs, 2017). in thailand, the problem of different languages is the main problem. hence, the translation of the ifrs standards into national languages for thailand is a necessary step before ifrs standards can be considered to be the national standards for accounting. instead, other asian countries like singapore, malaysia, and the philippines can apply the english version of ifrs standards without the need to translate, as they already use english as their second language or use english as an official language. other than the language problem, the other weaknesses of asian countries’ accounting and auditing professions are still considered as young narkchai and fadzil: the communication skill on the performance of internal auditors in thailand public limited company international review of management and marketing | vol 7 • issue 4 • 2017 3 and immature. this is due to the growth of the professions in accounting and auditing in asian countries which is considered very slow as opposed to western countries (leung and cooper, 2009). 1.2. objectives of the study these studies examine the relationship between the communication skills on the performance of internal auditors in thailand public limited companies. 1.3. significance of the study the significance of the study can be viewed through the theoretical and practical perspective. from the theoretical principals performed as auditors, which in many agencies; principals do not have the expertise and skills to check whether agents have completed their tasks. principals (more and more nowadays) need expert auditors when they encounter with the asymmetries of information. this study distributes empirical evidence as to the scope of the performance of internal auditors’ adherence to ippf (2017) of the iia became effective. the ippf is both the improvement of the professional practice framework (ppf) and the fundamental of the profession of internal auditing. it is the outcome of careful study, deliberation, and consultation about the basic principles of internal auditing. as in the literature reviews, there is a weak point in the study of internal audit. there are not many research studies on the subject of internal audit in asia pacific, but to the knowledge of the researcher, there is not much research done regarding thailand’s internal auditor. therefore, it is about time to earnestly study the problem of internal audit. hence, this study will concentrate on this subject. hopefully, this study will provide insights of the internal auditors’ measure the effectiveness should monitor and evaluate their performance. 2. literature review the present study had contributed to the agency theory in a way that the agency theory was able to provide a more meaningful research with regards to the communication skills of the internal auditors by the principal-agent relationship. as illustrated earlier, agency theory is significant in comprehending how the audit has been improved by the role and responsibilities assigned to internal auditors. furthermore, an internal auditor as agent also monitors a variety of the internal audit users, which also includes the board and audit committee. hence, the chief audit executives (caes) are likely to be powerful over the internal audit. furthermore, the internal audit function works are achieved under supervision of the caes who is the main responsible individual for putting the internal audit plan, reporting internal audit findings and followingup internal audit recommendations. 2.1. communication skills and performance of internal auditors internal auditors require some of competencies such as communication skills (cbok, 2010). in order to be successful in their work, internal auditors are required to write, speak and listen effectively (lewis and graham, 2003). lewis and graham (2003) regarded listening skills as the most important of the above three listed skills. internal auditors should apply listening skills in everything they do throughout the process of internal auditing. internal auditors are required by ippf (2017) practice advisory 1210 proficiency: internal auditors must possess the knowledge, skills, and other competencies needed to perform their individual responsibilities. the internal audit activity collectively must possess or obtain the knowledge, skills, and other competencies needed to perform its responsibilities. additionally, internal auditors are required to possess oral and written communication skills to communicate clearly and effectively. some researchers (smith, 2005; sawyer et al., 2003; loss, 2000) agreed to the opinion that internal auditors must have exceptional communication skills to succeed and advance in the international marketplace that is changing and complex. the practice advisory 2420: quality of communications of the isppia (standards) (2017) also recommends that “communications be concise, accurate, clear, objective, constructive, complete and timely” (ippf, 2017). in every situation, internal auditors must recognise and know how to effectively communicate at each different level of communication (sawyer et al., 2003). effective auditors must have substantial levels of communication with management. when high levels of communication are developed with management, auditors can acquire knowledge which will significantly support audit evaluations. fadzil et al. (2005) found that the audit work performance and scope greatly affect the communication and information perspectives of the internal control system. from the discussion above, hypothesis is as follows: hypothesis: there is a positive relationship between communication skills and the performance of internal auditors. 3. methodology the population and return rates of the questionnaires delivered to the caes or head of internal auditing department in thailand public limited companies. of the 520 questionnaires administered (total 520 companies), 475 subjects were contacted. however, only 146 responses were obtained originating a response rate of 30.74%. 45 surveys were undelivered because either the firms had relocated the corporate offices to other buildings or absence of inhouse internal audit functions since the firms had outsourced its internal auditing function to the accounting or external audit firms. 4. findings the hypothesis states that there is a positive relationship between the communication skills and the performance of internal auditors. to examine the hypothesized statement, multiple regressions was performed. narkchai and fadzil: the communication skill on the performance of internal auditors in thailand public limited company international review of management and marketing | vol 7 • issue 4 • 20174 as portrayed in table 1, the results indicated that the coefficient of communication skills is 0.177, which is also significant at 0.05 probability level (beta = 0.177, significance f = 0.33 that is p < 0.05). an increase in the independent variable that is the communication skills is expected a change of 0.177 in the dependent variable, which is the performance of internal auditors. the direction of this relationship is positive. an examination of the t-values (t = 2.158, p < 0.05) shows that the communication skills are stronger which contributes to the improvement of the performance of internal auditors. this also suggests that the communication skills is significant to the performance of internal auditors. thus, the hypothesis is accepted. 5. discussion the results of multiple regression shows that communication skills factor is statistically significant. a significant positive relationship is found in the relationship between communication skills and the performance of internal auditors. hence, internal auditors are required to communicate effectively to carry on their internal audit responsibilities effectively. communication abilities are significant in determining the performance of internal auditors. this result is also confirmed by sarens (2012) which indicates that such interpersonal communication abilities is significant in determining the performance of internal auditors. auditors need outstanding communication skills to do well in their profession. previous research were done into the above referred communication aspects used by internal auditors, and the summarised findings are stated in the following discussion that an internal auditor is supposed to apply the care and skill expected of a rationally careful and competent internal auditor (iiarf, 2012). this study is consistent with the previous research by agargal and garg (2012) and golen (2008). they confirm the importance of and the need for effective communication skills in all organisation functions. studies done by smith (2005), suggested some ways to improve these communication skills. this is also consistent with the previous research by bailey (2011). the existence of effective communication between internal a u d i t o r s t h e m s e l v e s , i n t e r n a l a u d i t o r s a n d a u d i t e e s , communication skills and performance of internal auditors is needed to strengthen the internal audit effectiveness. as being pointed out earlier, agency theory can explain and cover the importance of having an effective communication between organisation members and internal auditors as agents. however, the importance of effective communication in this study is able to explain the agency theory. 6. conclusion performance of internal auditors can be encountered with significant diversity and ambiguity in their work. this study indicates the effectiveness of communication skills on the performance of internal auditor’s measurement viewed by the internal audit activity. the effectiveness of internal auditor’s performance is based on professional standards issued by the ippf (2017). thus, performance standard is a standard that describes the nature and internal audit activities and a measure of the quality of audit work. the result of this study points out that the communication skills is an important determinant of performance of internal auditors. references agargal, s., garg, a. (2012), the importance of communication within organizations: a research on two hotels in uttarakhand. iosr journal of business and management, 3(2), 40-49. ali, o.a., owais, w.o. (2013), internal auditors’ intellectual (knowledge) dimension in creating value for companies empirical study of jordanian industrial public shareholding companies. international business research, 6(1), 118-129. alzeban, a., gwilliam, d. (2014), factors affecting the internal audit effectiveness: a survey of the saudi public sector. journal of international accounting, auditing and taxation, 23(2), 74-86. bailey, j.a. (2011), core competenes for today’s internal auditor, report ii. altamonte springs, fl: the institute of internal auditors. common body of knowledge in internal auditing (cbok). (2010), core competencies for today’s internal auditor. altamonte springs, fl: institute of internal auditors. common body of knowledge in internal auditing (cbok). (2015), internal auditor competencies. available from: https://www.global. theiia.org/news/press-releasespages/new-cbok-report-examinesinternal-auditor-competencies.aspx. fadzil, f.h., hasnah, h., muhamad, j. (2005), internal audit practices and internal control system. managerial auditing journal, 20, 844-866. fanning, k., piercey, d. (2014), internal auditors’ use of interpersonal likability, arguments, and accounting information in a corporate governance setting. accounting, organizations and society, 39, 575-589. golen, s. (2008), communication barriers between internal and external auditors. abea journal, 27(1), 35-36. half, r. (2016), internal auditors need outstanding soft skills here’s why. available from: https://www.roberthalf.com/managementresources/blog/internal-auditors-need-outstanding-soft-skills-hereswhy. institute of internal auditors (iia). (2010), measuring internal audit effectiveness and efficiency. ippf practice guide. altamonte springs, fl: the institute of internal auditors. the institute of internal auditors research foundation (iiarf). (2012), combined assurance case studies on a holistic approach to organizational governance, no. 247. maitland avenue altamonte table 1: regression coefficient coefficientsa model unstandardised coefficients standardised coefficients t significance b standard error beta constant 3.126 1.391 2.247 0.026 communication 0.167 0.077 0.177 2.158 0.033* adependent variable: performance of internal auditors. *at 0.05 significant level narkchai and fadzil: the communication skill on the performance of internal auditors in thailand public limited company international review of management and marketing | vol 7 • issue 4 • 2017 5 springs, florida: global headquarters. p32701-4201. international financial reporting standards (ifrs). (2017), ifrs application around the world jurisdictional profile: thailand. available from: http://www.ifrs.org/use-around-the world/ documents/jurisdiction-profiles/thailand-ifrs-profile.pdf. internal standards for the professional practice of internal auditing (standards). (2017). available from: https://www.na.theiia.org/ standards-guidance/public%20documents/ippf-standards-2017. pdf. leung, p., cooper, b. (2009), internal audit an asia-pacific profile and the level of compliance with internal auditing standards. managerial auditing journal, 24(9), 861-882. lélis, d.l.m. (‎2012), auditor and audited perceptions of internal auditing practices in a company in the energy sector. revista contabilidade and finanças, 23(60), 223-231. lewis, t.d., graham, g. (2003), 7 tips for effective listening. internal auditor, 60, 23-25. loss, j. (2000), the communication contract. the internal auditor, 57, 88. mccafferty, j. (2016), four big challenges facing internal audit. available from: http://www.misti.com/internal-audit-insights/fourbig-challenges-facing-internal-audit. mactosh, m.o., francis, w.m., ongocho, s. (2010), public trust on auditors and the auditing profession among cooperative societies in kisii-kenya. african journal of business management, 1, 274-281. mihret, d.g., woldeyohannis, g.z. (2008), value-added role of internal audit: an ethiopian case study. managerial auditing journal, 23(6), 567-595. rupsys, r., boguslauskas, v. (2007), measuring performance of internal auditing: empirical evidence. engineering economics, 5(55), 9-15. sarens, g. (2012), internal auditing research. international journal of auditing. available from: https://www.researchgate.net/ publication/235747315_combined_assurance_case_studies_on_a_ holistic_approach_to_organizational_governance. sawyer, l., dittenhofer, m., scheiner, j. (2003), sawyer’s internal auditing. 5th ed. altamonte springs, fl: the institute of internal auditor. smith, g. (2005), communication skills are critical for internal auditors. managerial auditing journal, 20(5), 513-519. the internal standards for the professional practice of internal auditing (standards). (2017). available from: https://www.na.theiia.org/ standards-guidance/public%20documents/ippf-standards-2017. pdf. tudor, t.a. (2007), performance audit in public sector entities a new challenge for eastern european countries. transylvanian review of administrative sciences, 19, 126-141. . international review of management and marketing | vol 6 • special issue (s2) • 2016 97 special issue for "management of education: problems and perspectives" international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2016, 6(s2) 97-103. the traditional and innovative technologies of vocational guidance work with pupils and students kadriya i. sibgatova1*, elena p. ilchinskaya2, elena m. bastrikova3, lyudmila l. kuramshina4, alexandr l. makarov5, natalya y. chernova6, elmira r. khairullina7, vera v. murugova8 1kazan national research technical university named after a. n. tupolev, kazan, russia, 2gzhel state university, moscow region, elektroizolyator, russia, 3kazan (volga region) federal university, kazan, russia, 4kazan (volga region) federal university, kazan, russia, 5ulyanovsk state agricultural academy named after p. a. stolypin, ulyanovsk, russia, 6nizhny novgorod state pedagogical university named after kozma minin, nizhny novgorod, russia, 7kazan national research technological university, kazan, russia, 8kazan cooperative institute (branch) of the russian university of cooperation, kazan, russia. *email: baina@techcol.kstu-kai.ru abstract today, considering the needs of the russian economy, the content and technology of training in career counseling from the point of view of practice is not sufficiently developed. thus, a search for new forms, methods and means of conducting career guidance with students is necessary. this article offers a broad range of technologies and their optimal combination in career guidance work with pupils in the integrated system “school – university – enterprise.” a leading approach to the study of this problem is an integrative approach that leads to the necessity to use both traditional and innovative technologies which contribute not only to effective assimilation of knowledge, but also early social adaptation of the prospective students to university conditions. presented in the study traditional and innovative technologies of career guidance work with students (project method, role play, portfolio, internet technologies, comprehensive and career-oriented excursions), as well as the possibility of using information and educational potential of professional education institutions and enterprises for pupils’ vocational guidance in the context of their successive socialization contribute to the formation of professional identity, consciousness in the choice of the future profession of secondary schools’ students, as well as the selection of their own individual educational trajectories and to their adaptive abilities’ disclosure for future professional activity. the article is valuable for teachers and faculty of educational and vocational institutions in organizing and conducting of career guidance with students, applicants and students. keywords: career guidance, innovative and traditional technologies, students, university jel classifications: a23, i23, i26 1. introduction vocational work is a natural extension of all pedagogical work with students and in some sense it is a logical conclusion. full assistance to the student in choosing a career not only helps him or her to organize training activities (when he or she consciously studies school subjects that may come in handy in the future professional activity), but also introduces an element of certainty in the attitude of the student towards their future (when optimistic life and professional perspective saves teenager from uncertainty and anxiety in relation to the future) (aleksandrov et al., 2015; khairullina et al., 2016; mishchenko et al., 2014). theory and practice of education show that the choice of the student is significantly influenced by: 1. the initial position of the senior — if it is positive, then it is the basis for further development of the optimal position of a student, if it is truncated, it makes evident resistance of the old stereotype; 2. the nature of the expectations, values in the 1st year. their active implementation in the first stage of training is the prerequisite for a teaching with passion, when acceptable for the student result is consistent to pedagogical aspirations. the student dissatisfaction leads him to conclusions that are not partially or completely relevant these aspirations; sibgatova, et al.: the traditional and innovative technologies of vocational guidance work with pupils and students international review of management and marketing | vol 6 • special issue (s2) • 201698 3. the students’ difficulties encountered when his complicity in the resolution of the basic contradiction of continuity between educational institutions of professional education and preliminary willingness to implement them. so, a consistent consideration of the development of the senior pupil, applicant, student at the junction of school and university can admit that in some typological characteristics of personality the object start prevails, in other – subjective one, in the third the features of the transition phase are manifested: such students are not yet sufficiently involved in the performance of a wide range of functions of the new social role. so in the analysis of the practice the ideas take place about sequential stages of education that lead to continuity management as a pedagogical process. it should be particularly noted and the problem of psychopedagogical compatibility of educational processes of school and university. because still now, many students admitted to universities, for a long time are experiencing some discomfort due to methodological differences in teaching courses in these educational institutions, which negatively affects their learning. here it becomes necessary to study the problems of using both traditional and innovative educational technologies that contribute not only to effective assimilation of new knowledge, but also their early social adaptation in the conditions of the university. 2. literature review career guidance offers a broad, going beyond only of pedagogy and psychology, a set of measures to assist in the choice of profession. according to ovcharov (2004), getting acquaintance with the world of professions is just one of the tasks of guidance and senior school student should be as an active researcher of the world of educational services, so communicator, able to find in dealing with people of different ages the answers to the questions of professional identity. information will not have effect until the client is ready to accept it. therefore, to the fore front activating career-oriented techniques come, among which pryazhnikov (2008) identifies the following: career-oriented games, game career-oriented exercises, blank games with the class, card blank games, card information-retrieval technologies, card pre-consultation games, table career-oriented games, activating career guidance questionnaires, schema analysis, self-analysis of situations of professional identity. career-oriented games allow consider the axiological aspects of professional choice, plan far and near prospects of professional development; visually represent the profession, consider the various external and internal obstacles to professional and life goals, simulate the process of occupational choice (pryazhnikov, 1997). ovcharov (2004) highlights three group of games: games to establish contact; games modeling professional activities that introduce with specific careers; games modeling the process of career choice itself. some games can be modified if students have difficulty in meeting certain requirements. so, pryazhnikov (2009) offers modification example of the game “guess the profession,” which is based directly on the framework for analysis of occupations on the basis of the “formula of the profession.” in the traditional version the generalized characteristics of professions are allocated (they allow in coded form to represent different professions and specializations: profession type, classes of professions, departments, groups). but sometimes in the analysis of some cases difficulties arise. option is a modification. first, students are encouraged to talk about any profession. quickly is discovered the fact that the students know something, but can’t speak specifically about the profession and need specific questions. and then a scheme for occupational analysis can be proposed, which contains the reference points for the story. the gaming micro-situations are very popular where the elements of professional communication are simulated, usually associated with the conflict relations. for the best efficiency the vocational exercises should be used in combination with other forms and methods, including nonvocational, for example, with exercises that simulate various aspects of communication behavior in conflict situations and even with exercises, which have purely entertainment or relaxation nature (pryazhnikov, 1997a; khmeleva, 2002; uskova, 2006). it is important to organize the work so that the emphasis could be done not on psychological circumstances of the communication, but to identify the challenges of professional and personal selfdetermination which may be more interesting and deeper than a traditional job. blank games with the class are organized so that the educational psychologist could have the opportunity to play with each pupil individually and with all of them at the same time. in the games some features of socio-economic relations are modeled. in card pre-consultation games the dispute between the pupils and answers’ results is organized. the interesting thing in the scheme the introspection also, the general logic of which involves a brief introduction to the scheme, the consideration of several typical problems, the use by a participant of the scheme to assess his or her own situation (pryazhnikov, 1997b). to the schemes of situations’ overall assessment of self-determination could be referred the octagon of key factors of career choice by klimov (2007), a scheme of levels of personal teaching preferences’ formation, the scheme of distinguishing between external and internal elections, the scheme of an alternative choice and constructed on its basis the methodology of refinement according the selected specialty of specific educational institutions. these sessions are aimed at professional education and perform the function of motivation for counseling. they can be divided into group and individual counseling. the studies carried out with the use of activating methods are a form of group professional consultation (altukhov et al., 2006). in professional consultation’s carrying out ovcharov (2004) distinguishes two stages – initial and in-depth. during the initial professional consultation the learning process of the rules of profession choice takes place. the result is the formation of professional plan of a client, to increase the degree of awareness sibgatova, et al.: the traditional and innovative technologies of vocational guidance work with pupils and students international review of management and marketing | vol 6 • special issue (s2) • 2016 99 and responsibility. in-depth individual consulting is based on in-depth comprehensive study of the personality. this takes into account the views of parents and teachers, the success of learning and characteristics of the reference group. a synthesis of these data gives the opportunity to influence students not only for motivating but for development of the whole person. rudestam (1993) notes that career planning, decision making, communication skills and training of self-confidence are taught in groups of training of life skills. the curriculum should be aimed at developing of adequate professional choice from the point of view of the development of professional maturity. therefore, in the course of its implementation it is necessary to develop those skills, insufficient development of which was diagnosed at earlier stages. to the existing curricula can be include such curricula as “your professional career” of chistyakova (1997), “the training curriculum on professional orientation” of chernyavskaya (2001) and others. the way to implement all requirements of career guidance of the teacher in the school is the construction of the curriculum of socio-psychological training. it is important to clearly formulate the problem, select the object to formulate the problem which is investigated. one of the most effective methods currently is believed to be the socio-psychological training. its essence granovskaya (1999) sees as a situation of interaction between informing and interpreting the participants’ behavior, the analysis of emerging feelings. the goal of social-psychological training is training, playing of various situations, building a behavioral prediction. the main task the author considers is the formation of the ability to control the style of one’s behavior at the expense of getting feedback and improving of the effectiveness of interpersonal communication. the idea of social-psychological training is based on a restructuring of the personality standpoints which identifies a subsequent change of attitude towards oneself and others. among developing qualities and skills resulting from the use of this form of work prutchenkov (2001) highlights: perception, sensitivity to the psychological state of others; personal growth; reducing of barriers psychological protection; overcoming the fear of being misunderstood; the attainment of inner freedom; empathy; the ability to manage one’s own behavior. all of these skills are directly related to the implementation of major tasks in vocational guidance. among the features of the training the importance of the feedback participants receive can be allocated (prutchenkov, 2001). the teacher contributes to the creation of conditions for realization of positive feedback and effective negative feedback. during the training, as special skills are developed, so the experience of the situations’ analysis of professional communication is deepened. socio-psychological training has several advantages over other forms of work of the teacher. first, the presence of a coach provides the trust and openness of the group, creates an example of the desired behavior (sincere expression of feelings, loyalty). secondly, there is no reference to the past experience of the participants outside the group. and finally, thirdly, it creates the ability to play different roles, behaviors’ variants. 3. results and discussions the task of the teachers of vocational guidance is to improve students’ motivation for independent professional selfdetermination. here can help information and communication technologies. developing computer technology and the internet are a real resource to update the forms and principles of vocational guidance. the use of information technology in extracurricular activities provides students free access to the information of interest, stimulates their interest, as to psychological practice so to computer technology: • orients students into active and independent activity; • helps to develop the willingness to self-analysis of basic interests and abilities; • allows approximately identify one’s personal and professional interests and abilities; • forms a picture of the profession, as the most important form of social activity of modern man, gets acquainted with the requirements of the profession to person; • helps to choose one’s life and valuable orientations. 3.1. career guidance websites a modern approach to the organization of vocational guidance with senior school students is connected with the necessity to develop means of productive learning in creative, research base, which are directly related to the need for active information providing of the educational process, enhancing the ict competence of students, as informational basis of their professional identity, taking advantage of internet search for creative scientific information and active using of information and communication technologies. using the internet one can perform various tasks on the organization of vocational guidance. in the world of wide web one can pass professional test, and to get recommendations on priority occupations, to study the sites of abilities and personal qualities. in addition, on websites various articles about the everyday life of professionals are published. particular importance belongs to sites that provide information about vocational colleges, entering and training peculiarities. on the internet there is a lot of information about the rankings of educational institutions, the demand for their graduates, the forums in which the unfolding debates about the quality of education there take place. currently the internet is becoming a powerful not only for informative, but also for educational resource. increasingly popularity it gains because of the possibility of distance education. on the internet there are several groups of sites, which serve as guidance and can be used not only by psychologists and educators sibgatova, et al.: the traditional and innovative technologies of vocational guidance work with pupils and students international review of management and marketing | vol 6 • special issue (s2) • 2016100 working in this field, but also students and their parents for independent collection of information: 1. sites devoted to career guidance; 2. educational portals that provide a variety of information for students and their parents on admission in various educational institutions; 3. sites of schools, colleges and universities, which presents detailed information for students and prospective students about the institution. it is worth to give a detailed consideration to each of these sites. 3.2. sites devoted to career guidance “career guidance: who am i to be?” www.ht.ru/prof center of testing and development of msu “humanitarian technologies,” where one can find a lot of useful information about professions, receive the latest news about the “open door days” and educational shows, to take a brief career guidance test, get recommendations of an expert on the forum. this site contains many thematic articles on the issues of career choice. one can read the stories of experienced psychologists-consultants about factors which influence the choice of profession, what common mistakes young people do. a large number of professions are described which are most in demand in today’s labor market. a separate section consists of descriptions of universities, specialized schools, training courses, and information about ways of entering the institution is provided. “profession” www.ucheba.ru/prof the section “ucheba.<ru>.” there are more than 600 descriptions of today’s most demanding professions, sorted by sections. in addition, this site is the largest portal dedicated to the training and education that contains information about the best universities, schools, high schools, kindergartens of moscow and other cities of russia, education abroad, ranking of institutions, proposed from tutors. “career guidance, education, employment” www.acareer.ru a site that contains a large bank of job descriptions, information about the universities and the peculiarities of entering them. one can participate in the forum on discussion of general issues of career counseling and admission. “my profession” www.myprof.ru – the website of the ministry of labor, employment and social protection of republic of tatarstan (rt) contains the list of professions in demand on the regional labor market, based on materials of the report of centers of qualification improving, training and retraining, and aims at problems’ solving related to the shortage of skilled workers in certain industries of rt. “the job portal of the labor market of rt” www.tatartrud.ru – this site presents vacant profession based on their relevance to the modern regional labor market. the website contains information about educational institutions and centers of retraining, in which one can get a particular in-demand specialty. 3.3. educational portals “all about higher education” www.examen.ru – database of universities of moscow with information about entrance exams, training courses, specialties, the availability of the military department and the deferment from the army, studied foreign languages and material and technical base, etc., information about the organizations involved in the study abroad, and publications, regulatory documents and news related to higher education. “the open university. the world of knowledge.” www.college. ru – online education portal, including education courses for students and professional education. the project also includes sites www.mathematics, www.physics.ru, www.chemistry.ru, www.biology.ru. “knowledge.<ru>: education in moscow and abroad” www. obrazovaniemoskve.ru – information retrieval system for education in moscow and abroad. search for schools by level of education, faculties, specialties, directions, training methods, etc. “allbest.ru” www.allbest.ru search system, online libraries, abstracts, educational tests, foreign languages. effective rating of training, research and informational projects. 3.4. sites of educational institutions today, the overwhelming majority of schools, colleges and universities have their own pages on the internet, and it is quite simple thing to find them, using a known search engines or databases on educational portals. it is on the personal website of educational institutions, one can learn the most detailed and reliable information about the rules of entering, examinations, orientation of classes in schools, availability of courses and specialties in colleges and universities, curricula, etc. in recent years the internet becomes more complete and sufficient for the use of information sources. however, it should be noted that this information tends to change quickly or be out of date and constantly needs to be clarified. a large amount of information on educational and career guidance can be a major help in the work of teachers, psychologists, and also to help high school students and their parents to optimally solve the issues related to schooling and preparation for entering the educational institutions of professional education in case of provision by the optimal combination of internet technologies’ data with other forms and methods of vocational guidance. for example, at vocational training in the educational process, one can use ready-made software products with various psychological tests such as: a map of interests (career guidance); the test of youichi (career guidance); the test of smishek (a test to determine the level of accentuation of character); the test of eysenck on temperament; test on professional preferences; test on communication and organizational skills, and many others. the advantages of this kind of vocational training organization involves the fact that not all adolescents, taking into account their psychological features, are easy to communicate to, and this fact complicates the process of communication between the learner and the psychologist. the test results are not always effective and accurate because the student during the conversation, is shy, inactive, not honest in the answers, so the combination of sibgatova, et al.: the traditional and innovative technologies of vocational guidance work with pupils and students international review of management and marketing | vol 6 • special issue (s2) • 2016 101 different tests with internet technology allows them to avoid the psychological barrier when one search for information on the interesting profession (pryazhnikov and pryazhnikova, 2004). 3.5. design technologies an important feature of modern educational technologies is humanism, and care and respect of the child’s personality, positive attitude, focused not only on training but also on the personal development of the student. one such technology is the project technology or project method. overall, the project method is based on the following points: • the development of cognitive and creative skills of students, skills of independent search for information, development of critical thinking; • independent activity of students: individual, pair, group, performed in a definite period of time; • solving of some significant problem for students, simulating the activity of specialists in some field; • the results’ presentation of completed projects in “tangible” form of “design product” (report, paper, newspaper, magazine, products, operating models, business plan, etc.), and in the form of concrete results, ready for use; • cooperation between students themselves and with the teacher (“pedagogy of cooperation”). work with the use of project method involves the formulation of a problem and its subsequent disclosure, the solution that includes the availability of a concept or hypothesis of the solution, a clear plan of actions, the distribution (if it is a group work) of roles, i.e., tasks for each participant under the condition of close cooperation, responsibility of project participants for their part of work, regular discussion of intermediate steps and results. the main pedagogical goal of any project is the development of key competences, which in modern pedagogy are understood as an integrated property of the individual, including interrelated knowledge, skills, ways of activity, valuable attitude, and the readiness to mobilize and implement them if necessary. drawing on the essence of design technology, vocational projects, in our opinion, can be focused on the search for answers to the following questions: • what types and groups of professions are there? how are they defined? • which professions are in demand in the labor market at present? • what career suits for someone: what are the methods of choice of the preferred professions? • how to choose a profession: what rules can be formulated? • how to present oneself on the labor market? (how to write a cv, how to present oneself to the employer), etc. career guidance projects, primarily are designed to give students the tools that can be applied to real-search and career choices. for example, they can answer the questions of the questionnaire available online, and to draw conclusions about the most preferred professions, dealing with sites for career counseling and to study groups of professions. interesting ones can be the projects that use business games. for example, the game “employment,” where one team of students represents the employers, and the second one – the applicants. the first team prepares the questions to the applicant, thinks tactics of conversation, and the second one fills in the summary and actually introduces itself to the employer. at the final stage of the project, one can prepare the video, to watch how the employers ask questions and how the candidates present themselves, and then analyze the behavior of the parties, to find mistakes and to pay attention to ways of overcoming them. 3.6. the project “all professions are important” the goals and objectives of the project: to create the history of one’s region, district on the site pages of the chronicle.<ru>, correctly and beautifully to submit one’s articles; to learn how to conduct and process the results of sociological surveys; to express one’s artistic abilities. the result of this project is the story about the heroes of labor, the professionals, the workers who created the region and district, professional and workers who selflessly worked in difficult post-war period, building a future in advanced 5-year plans, overcame the hardships of the post-soviet period, restructured themselves and learned to work in the new russia. the address of this project: http://letopisi.ru/index.php/priject_”all professions are important!” 3.7. the project “bridge of my choice” project goal: to help the ninth-graders to determine the choice of further learning profile (profession), to become successful and fulfill their potential in adult life. therefore, it is planned to conduct class affairs and master classes: “career fairs,” “role-playing game ‘prof’,” “defense of projects ‘bridge of my choice’;” to visit various enterprises in the city, to meet people who have attained success in their professional activities, to write plan of professional perspective, to create presentations about the profession of dream, to write essays thoughts, wiki articles, booklet for parents, to study by participants of their own characteristics, interests and abilities. project address in the network: http://wiki.pskovedu.ru/ index.php/study_project,bridge_of_my_choice, etc. (lebedeva and shilova, 2009). the use of the above mentioned design technologies is very important, since experience shows that not all pupils of 1011 grades can think about the matter of professional choice independently. therefore, the role of career guidance requires a new approach to its organization, which is largely connected with the increasing complexity of labor, the extension of the range of professions and the increasing of their knowledgeintensity. 3.8. portfolio technology the use of portfolio as a means of vocational guidance is necessary to assess the actual achievements of students in certain subject areas and abilities to further specialized and professional education. sibgatova, et al.: the traditional and innovative technologies of vocational guidance work with pupils and students international review of management and marketing | vol 6 • special issue (s2) • 2016102 in accordance with the purposes of pre-profile preparation of students in schools its two functions are considered: • portfolio as a technology of learning and stimulation, orienting students to achieve high academic results and the development of cognitive and creative abilities; • portfolio as a method of independent rating assessment of students’ achieved results in certain subject areas demonstrating their abilities for continuing of education in profiles for which these domains are the leading, that is, as one of the technologies of graduates’ certification after primary school, proposed by the concept of school education (in principle, it would be an effective tool for high school graduates too and, in general, for any certification of personnel). the portfolio technology will possess better opportunities to realize these conditions, if by the portfolio is to be understood a version, proposed by meyer (1987), according to which “a portfolio is a purposeful collection of students’ results that demonstrates their efforts, progress and achievements in one or more areas.” the student can create his or her portfolio as the studying the basic subjects, so studying the core and elective courses, and put in the folder best, from one’s point of view, written tests, essays, papers, notebooks with lecture notes, solutions to complex problems, reports of seminars and conferences, a report on the research work, publications in print, art illustrations, computer presentations, etc. the portfolio used by the student on one’s own initiative in basic education is to some extent performs the role of career guidance, since it is a reflection of his interest, personal significance, assessing the quality of work, and therefore the ability to certain types of activity. and if the teacher creates the conditions for receiving by the student of social approval of one’s achievements (demonstration of results on the lesson before the whole class, organizing of school exhibitions, etc.), it will greatly enhance the motivational function of the portfolio as relatively to the achievement of learning goals so self-development regarding the profile of self-determination. the application of the method of portfolio is unrealized without exploring the collected materials of pupils and students of the university by representatives of manufacture, that is employers, as for students it is very important to get objective feedback from employers in which direction they should develop their skills for future career choice, and for university students is to leave a favorable impression of themselves, their skills and competencies as the candidates for participation in the competitive selection for vacant jobs. for example, in kazan national research technical university named after tupolev round tables with representatives of manufacture are practiced, to which the students of secondary schools and students of this university are invited to present and discuss their portfolio. the work is interesting to all entities of the integrated system “school – university – enterprise.” 3.9. comprehensive and career-oriented excursions to develop students’ interest to professional activity, the teacher in his work widely uses the excursion as a form of learning. excursions can be comprehensive and career-oriented. comprehensive excursions get acquainted students with the work of some industrial enterprise or institution. the excursion starts with an introductory talk with the head of the studied object of production. he acquaints students with the purpose of the enterprise, organization of work, with the applied technical means of production. he tells in detail about the technology of production, the role of a particular profession in it. students then examine the enterprise; in the first part of the trip, they get acquainted with the activities of people in various professions, and then watch the process. when summing up the excursion, the teacher invites the students to answer the questions which were put before the excursion. career-orientation excursions to the workplace are excursions that introduce each profession separately, allowing oneself to follow the specialist’s work at his working place and get answers to all interested questions. these trips contribute to the validation of psychological compatibility of the student with the chosen profession. 4. conclusion thus, not only innovative but also traditional technologies of career guidance with students were considered, as their unification will contribute to harmonization and efficiency in the integrated system “school – university – enterprise.” the above mentioned technologies of career guidance activities (project method, role play, portfolio, internet technologies, comprehensive and careeroriented excursions), as well as the possibilities of information and educational potential using of professional education institutions and enterprises for vocational guidance of pupils in the context of their successful socialization allow us to draw some conclusions: • project method contributes to the formation of an integrated personality traits, value orientations and the ability to mobilize them for the design and implementation of future professional activity; • role-playing games allow oneself to understand one’s place and role in the world of professions, as well as contribute to the prevention of socio-psychological barriers and to overcome external and internal obstacles to professional and life goals; • internet technologies facilitate independent research and acquaint with the world of professions, develop the creative abilities of students, expand the opportunities to gain knowledge about future careers; • portfolio technology contributes to students’ self-regulation processes on the acquisition of future professional activity, as well as the socialization of the entity of this professional activity; • comprehensive and career-oriented excursions – as a form of organization of vocational guidance contribute to students’ best training for practical activities that help them to become acquainted with the profession they have chosen, reinforce their professional interests or force to reconsider intentions. the efficiency of these technologies of vocational activity depends on the integrity and continuity of their use and enhance the motivation of students in choosing their future careers. sibgatova, et al.: the traditional and innovative technologies of vocational guidance work with pupils and students international review of management and marketing | vol 6 • special issue (s2) • 2016 103 references aleksandrov, a.y., barabanova, s.v., vereshchak, s.b., ivanova, o.a., aleksandrova, z.a. 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(2006), career guidance with students in a school profiling. joint research magazine, 25, 30-34. . international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2017, 7(1), 90-94. international review of management and marketing | vol 7 • issue 1 • 201790 the effect of innovation culture and job satisfaction on relation between human resources management and employees’ ownership in shahr bank of tabriz soleiman iranzadeh* department of management. college of management, tabriz branch, islamic azad university, tabriz, iran. *email: iranzadeh@aiut.ac.ir abstract the aim of this study is to investigate the effect of innovation culture (ic) and job satisfaction (js) on the relation between human resource management (hrm) and employees’ ownership (eo) in shahr bank of tabriz. this research is applicable in terms of aim, descriptive and correlated in terms of data gathering and quantitative (i.e., using a questionnaire) in terms of the type of data gathering. statistical population of this study is shahr bank employees in tabriz. considering the fact that there are 100 employees working in seven branch offices and 11 office counters of shahr bank around tabriz, the research questionnaires were distributed over the whole population. visual-pls software was used to analyze data provided by the questionnaires through structural equation modeling. results from findings in this research show that the strategic hrm, ic and js have a positive effect on the eo. moreover, ic increases the js among employees. keywords: innovation culture, job satisfaction, strategic human resource management, employee ownership jel classifications: e37, e32, c53, c5 1. introduction putting factors like culture, organizational learning and meeting the organization needs in this regard into consideration, highlights the importance of employees in the organization. davoodi et al. (2012) stated in their studies that organizational culture and job motivation have a positive and meaningful effect on the employees’ job satisfaction (js). azarnoosh et al. (2013) also supported the claim that employees’ ownership (eo) keeps them and their js more stable and perseverant. uslu (2014) believes that culture in one hand increases the psychological ownership in the employees and in the other hand improves their commitment to the organization. innovation is very important to achieve successful performance results in the companies. even there is a common view about the effects of the environment to increase creativity; there are limited studies about the organizations how to use their strategic human resource management (shrm) for this purpose. shrm, as planned human resource (hr) practices to achieve organizational targets, have the power to direct employees’ attitudes and behaviors to create influences about the environment. so the studies about the influences on the employees’ creativity of the strategic or nonshrm should be done (uslu, 2015). the better the work environment organizations provide for the employees, the more the commitment they will have. this can result in an increase in the eo spirit as well as their js. in this regard the shahr bank is trying to take a positive and successful step forward by applying proper strategies. shahr bank is putting effort in being an active participant in both internal market (over the country) and international market and also in presenting distinct services through various financial, monetary activities and investing in different sectors of banking industry. presenting variety of distinct, innovative services is among characteristics of this bank which supports natural and legal persons in and out of the country by presenting bank business models. the aim of this is to achieve customer orientation in all banking systems and also to create agility and flexibility which lead to the organization development and occupational activities. all objectives of an iranzadeh: the effect of innovation culture and job satisfaction on relation between human resources management and employees’ ownership in shahr bank of tabriz international review of management and marketing | vol 7 • issue 1 • 2017 91 organization can be fulfilled when its employees have a positive attitude towards it. this study is trying to come to a realistic and applicable conclusion through investigating the important organizational variables such as innovation culture (ic) and shrm regarding the shahr bank eo and their js. it is trying to provide some answers for the following question. what is the effect of ic and the js on the relationship between hrs management and eo among personnel of different branches of shahr bank of tabriz? 2. literature review 2.1. shrm shrm refers to the planned pattern of hrs and activities related to hrm in order to achieve the organization objectives. in other words, shrm means that organization should manage their hrs by its long-term applications to achieve efficacy so that these resources can do required behavior and qualifications appropriate for internal and external environment of the organization. the basic aim of the strategic hrs is to create the strategic capacity through ensuring the idea that the organization has skilled, responsible and motivated employees who try to achieve the advantage of a stable competition (sánchez et al., 2015). shrm has five dimensions including providing hrs, instruction, performance assessment, reward for delivering services, employees’ engagement. providing hrs is related to goals and guidelines of the organization and recognizing opportunities and threats of the environment outside the organization and determining the merits and flaws and important capacities of available resources. instruction is related to increasing the employees’ technical capabilities and expertise in performing the assigned responsibilities and fulfilling some of their potential abilities in order to establish a learning and though-maker organization. performance assessment refers to systematic and regular evaluation of individuals’ performance according to the way they do their task and also determining their capability to make progress and improvement. reward for delivering services means planning all the financial and other kinds of advantages according to the environment in and out of the organization. employees’ engagement in making decisions and using their ideas and offers to improve and develop the organization (bahrami et al., 2012). 2.2. ic innovation is as old as mankind because human beings have always been looking for new ways to do their job. the world we are living in would be completely different without innovation. considering the competitive conditions, nowadays organizations are subject to change and transformation and the ultimate success and even in some cases the survival of organizations depends on the programmers’ capability to create innovation and conditions to put them into practice as well as implementing novel notions and ideas. innovation (creation, transition, reaction to and changing the ideas) is a critical factor for the organization’s development, success and survival when it is involved in competitions at a changing and unstable environment (khosravian et al., 2012). having a general overview, we can say that innovation is an activity with the aim of creation, transition, changing and showing reaction to novel ideas. different researchers have introduced similar definitions for this phenomenon in such a way that it can be claimed that from their point of view not only is innovation the conscious invention of novel ideas but it also involves introduction and applying these ideas. in this regard it can be mentioned that the successful organizations are able to integrate innovation into the organizational culture and the process of the organization management. however, culture influence creativity and innovation through various ways such as socialization process and sociability, policies, plans and procedures. in such a context, ic serves as a group, social or organizational framework which encompasses the tracks of technological changes and provides conditions to deal with them (viland, 2006). organizational constitution, organizational learning and market orientation are among important dimensions of ic which are effectively applicable. investigation results show that in the context of organizational constituency, all members in organizations with tendency to innovation have appropriate perception towards chain values as well as vital and basic interests related to their organization and correspondent sectors. they also are aware of the fact that customers or sectors of the market are the most trustworthy basis for the future growth (dabni, 2008). organizational learning alongside with the organizational constituency is relatively related to educational and instructional opportunities of employees with innovative objectives (dabni, 2008). at last the market orientation, as the third phenomenon of ic, involves sensitivity to products market and the related behavior. this dimension covers the extent to which employees find and collect information about customers, rivals and their homogeneous industry. moreover, it covers their understanding about the added value or the field they are currently working in. 2.3. js js refers to the individual’s general and emotional orientations to their occupational role in their current job. this should be distinguished from the time one feels satisfied with different and distinct aspects of their job. in fact, js as an individual’s general attitude towards their job is a holistic concept. kendall and hulin (1969) have mentioned the five dimensions of jobs. these dimensions represent the most important characteristics of any job regarding the point that who reacts positively and effectively to them. actually it is possible to determine individual’s satisfaction concerning these dimensions. these dimensions are as following: (1) nature of work: it refers to characteristics and features which exist in occupational commitments. (2) salary and payment: the amount of fee that one receives and the extent to which they consider their wage fair and just. (3) promotion opportunities: a chance to make progress in the organizational hierarchy. (4) supervision and patronage: the way individuals make connection with their direct supervisor and the supervisor ability to provide individuals with behavioral and technical support. (5) professional cooperation: the extent to which professional cooperators are technically efficient and provide individuals with social support (shams et al., 2015). 2.4. eo people need to preserve and take care of their properties. this sense of ownership and motivation to preserve and improve the property, has urged the researchers in the field of organizational iranzadeh: the effect of innovation culture and job satisfaction on relation between human resources management and employees’ ownership in shahr bank of tabriz international review of management and marketing | vol 7 • issue 1 • 201792 behavior to perceive its positive psychological structure. nowadays researchers have put emphasis on what serves as the eo and its probable consequences. psychology ownership has been described as an emotional-cognitive structure. eo has two dimensions including joband organization-based psychological ownership (azarnoosh et al., 2013). 1. hrm has a positive and meaningful effect on the eo 2. hrm has a positive and meaningful effect on the ic 3. ic has a positive and meaningful effect on the eo 4. shrm has a positive and meaningful effect on the employees’ js 5. js has a positive and meaningful effect on the eo 6. ic has a positive and meaningful effect on the employees’ js 7. ic has a positive and meaningful effect on the relation between shrm and eo 8. js has a positive and meaningful effect on the shrm and eo. 3. methodology 3.1. research goal in this study, the researcher aims to identify the mediating effect of ic and js on the relationship between shrm and eo. to test the propositions, a field survey using questionnaires was conducted. the questionnaire is administered to participants who were currently employed in shabr bank branches in tabriz. 3.2. sample and data collection shahr bank employees make up the main mass of our samples. a printed questionnaire was created to collect data associated with the variables in the research. these forms were handed to the employees who were selected using the convenience sampling method and were actively involved there. in this way, a total of 100 questionnaires were collected from shahr bank branches in tabriz. a five-item scale was presented to the respondents that would allow them to conduct evaluations regarding each entry (1 = never, 5 = all the time). demographic analysis for the findings, factor and reliability tests were performed with pls statistical software package. shrm scale is adopted from van dyne et al. (2004). items from dobni (2008) are used to measure ic. the items of eo scale based on van dyne and pierce (2004). js items are taken from smith et al. (1969). the cronbach’s alpha values for each factors exceeds 0.70, which indicates the reliability of scales used in that survey. 4. analyses and results 4.1. descriptive analysis of variables in this section, descriptive statistics represents data about the smallest number, the biggest number, mean and standard deviation of the collected data respectively. the results related to the collected data concerning each research variable is presented in the table 1. 4.2. evaluation of measurement models convergent and divergent validity were used to evaluate the fitting of the measurement model. reliability index has been used to measure internal reliability and it involves two criteria namely cronbach’s alpha and composite reliability (cr). it should be noted that in all tables and analyses, some abbreviations have been used as follows: shrm, ic, eo and js. cronbach’s alpha is used to determine the reliability which represents internal consistency and the accuracy of measurement. however, cr in structural equation modeling is a better factor compared with cronbach’s alpha. that is because all indexes for every component in measuring cronbach’s alpha coefficient are considered to be equally important while in measuring cr, indexes with higher factor loading are considered more important. this results is a more real and accurate cr compared with cronbach’s alpha (davari and rezazadeh, 2014). therefore, reliability of the cronbach’s alpha questionnaire as well as cr were measured in order for evaluation to be better and more accurate. cronbach (1951) considered the extent of alpha higher than 0.7, as the acceptable value for reliability. according to momeni (2013), the cr higher than 0.7 for each factor shows that the internal reliability is acceptable for measurement models also considered the convergent validity higher than 0.5 as acceptable (davari and rezazadeh, 2014). considering the results of the studies along with the data presented in table 2, the value of cr coefficient and cronbach’s alpha for the variables of shrm, ic, eo and js in the model under the investigation, is higher than 0.7. therefore, it can be said that the questionnaires have an acceptable reliability. moreover, the value of obtained average variance (ave) for all factors is higher than 0.5, so it can be concluded that the measurement model has an acceptable fitting. 4.3. divergent validity the aragón and arleen (2015) scale has been used to determine the divergent validity of the measurement model. according to this scale, the acceptable divergent validity of any model shows that in the model, a factor among other factors has more cooperation with its indexes. aragón and arleen (2015) stated that divergent validity is of an acceptable value when the ave for any component is higher than shared variance between that component and other table 1: descriptive statistics of variables variables mean±standard deviation minimum maximum ic 2.98±0.822 1.33 4.67 eo 3.09±0.930 1 5 js 3.25±0.808 1.60 5 hrs management 2.99±0.719 1.40 4.40 ic: innovation culture, js: job satisfaction, eo: employees’ ownership, hr: human resource management table 2: reliability of variables variables cr ave cronbach’s alpha shrm 0.817 0.507 0.724 ic 0.832 0.624 0.703 eo 0.844 0.731 0.711 js 0.834 0.524 0.753 ic: innovation culture, js: job satisfaction, eo: employees’ ownership, shrm: strategic human resource management, cr: composite reliability, ave: average variance iranzadeh: the effect of innovation culture and job satisfaction on relation between human resources management and employees’ ownership in shahr bank of tabriz international review of management and marketing | vol 7 • issue 1 • 2017 93 components in the model. in pls the investigation of this can be done using a matrix with arrays containing values of correlation coefficients between components and square root of ave related to each component (davari and rezazadeh, 2014). the abovementioned matrix has been shown in the table 3. table 3 is based on the fornell and larcker method. as it shows the value of latent square root in this study, which is placed at the arrays of the matrix main diagonal, are higher than the value of correlation between them in the underneath arrays. accordingly, it can be noted that structures (latent variable) in this research have higher correlation with their indexes compared with other structures. in other words, the divergent validity of the model is acceptable. 4.4. measuring the factor loadings of modules factor loadings are measured through the value of correlation of indexes of a component with that component. the acceptable amount of that is equal to or higher than 0.4. it means that the variance between the component and its indexes has been higher than variance of measurement error. factor loadings derived from the implementation of the model which is presented in the table 4, suggest that all modules possess acceptable amount of factor loading. 4.5. hypothesis testing model index ave standard deviation t result shrm→ic 0.6370 0.6429 0.0625 10.1934 دییات shrm→js 0.4020 0.4135 0.1161 3.4630 دییات ic→eo 0.2000 0.2136 0.1095 1.8258 در js→eo 0.4110 0.3886 0.0953 4.3141 دییات js→ic 0.2410 0.2356 0.1136 2.1213 دیییات shrm→eo 0.1970 0.2157 0.1129 1.7455 در ic: innovation culture, js: job satisfaction, eo: employees’ ownership, shrm: strategic human resource management, ave: average variance 4.6. checking the significance of the whole model the scale applied to evaluate the structural model is r2. chin (1998) has categorized values of 0.67, 0.33, 0.19 for endogenous latent variables in the internal cycle model as significant, average and low respectively (momeni et al., 2013). the value obtained for r2 are as follows: 0.40, 0.466 and 0.34. it can be concluded that the model is to some extent acceptably fitted. dobni (2008) introduced goodness of fit (gof) to investigate the model fitting (figure 1). they believed that gof index at the pls model is a practical procedure to solve the problems regarding the overall fitting of the model and it functions as fitting indexes in procedures based on covariance. it can be used to investigate the validity or the quality of the overall pls model. this index functions like lisrel model fitting indexes and ranges between 0 and 1. values close to 1 conveys that the model is of the high quality (momeni et al., 2013). it can be found by using this formula: gof = √average (ave) * average (r2) in this study, gof equals 0.488, therefore the overall fitting of the model can be considered as acceptable. 5. conclusion the results found in the process of investigating the hypotheses show that the shrm is directly related to, and has a meaningful table 3: divergent validity shrm ic eo js shrm 0.712 ic 0.506 0.789 eo 0.665 0.536 0.854 js 0.708 0.753 0.755 0.723 ic: innovation culture, js: job satisfaction, eo: employees’ ownership, shrm: strategic human resource management figure 1: model of the research table 4: confirmatory factor analysis factors shrm ic eo js shrm 1 0.6366 0.4807 0.4351 0.5351 shrm 2 0.7860 0.5388 0.3881 0.3808 shrm 3 0.6830 0.4054 0.3548 0.3584 shrm 4 0.6246 0.3642 0.3404 0.2023 shrm 5 0.7344 0.3845 0.3795 0.3812 ic 1 0.4539 0.7000 0.3360 0.3093 ic 2 0.5848 0.8736 0.4413 0.4214 ic 3 0.4815 0.8119 0.4803 0.4490 eo 1 0.5119 0.5044 0.8610 0.4871 eo 2 0.4435 0.4119 0.8668 0.5828 js 1 0.4505 0.4954 0.4861 0.7458 js 2 0.3064 0.4105 0.4253 0.7320 js 3 0.3772 0.2458 0.4362 0.7738 js 4 0.4759 0.3664 0.5439 0.7351 js 5 0.3572 0.2054 0.2659 0.5836 ic: innovation culture, js: job satisfaction, eo: employees’ ownership, shrm: strategic human resource management iranzadeh: the effect of innovation culture and job satisfaction on relation between human resources management and employees’ ownership in shahr bank of tabriz international review of management and marketing | vol 7 • issue 1 • 201794 effect on the ic and js. however, it has not been proved that the shrm directly influence eo. nevertheless, the indirect, as well as direct effect of the shrm through the ic and js as a medium, shows that generally 54% of changes in the eo is determined through the shrm. moreover, the indirect effect, as well as the direct effect of ic on the eo through js shows that ic can cause the 29% of changes in the eo. therefore, considering the direct effects and the all variables, it can be concluded that the shrm, ic and js have a significant effect on the eo and ic increases the employees’ js. references azarnoosh, f., neisi, a., moradie, k.s., drekvand, t. (2013), the relationship between the psychological ownership with affective commitment and intent to stay in job for the employees at national south oil company-ahvaz. knowledge and research in applied psychology, 13(1), 74-82. bahrami, s., rajaeepour, s., aghahosseini, t., nasr, a., hassanali, b. (2012), a clarification of simple and multiple relationships between strategic human resource management and technical innovation in the public universities of isfahan. transformational management journal, 3(6), 95-115. chin, w.w. (1998), issues and opinion on structural equation modeling. mis quarterly, 22(1), 7-16. dabni, c.b. (2008), measuring innovation culture in organization. european journal of innovation management, 11(4), 539-559. davari, a., rezazadeh, a. (2014), modeling of structural equation using the pls software. tehran: publication of academic center for education. davoodi, h., bahari, f., mirzajani, m. 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(2013), modeling of structural equation emphasizing the reflective and formative structures. tehran: moallef publications. sánchez, a.a., marín, g.s., morales, a.m. (2015), the mediating effect of strategic human resource practices on knowledge management and firm performance. revista europea de dirección y economía de la empresa, 24, 138-148. shams, s., esfandyari, m., amir, t. (2015), the effects of different dimensions of trust building on the employees’ job satisfaction. journal of science and research in management studies, 77(20), 171-185. uslu, t. (2014), perception of organizational commitment, job satisfaction and turnover intention in m & a process: a multivariate positive psychology model, unpublished phd thesis, marmara university, department of business administration. uslu, t. (2015), innovation culture and strategic human resource management in public and private sector within the framework of employee ownership, world conference on technology, innovation and entrepreneurship. social and behavioral sciences, 195, 1463-1470. van dyne, l., pierce, j. (2004), psychological ownership and feelings of possession: three field studies predicting employee attitudes and organizational citizenship behavior. journal of organizational behavior, 25, 439-459. van dyne, l., farmer, s.m. (2004), it’s who i am: role identity and organizational citizenship behavior of volunteers. in: turnipseed, d.l., editor. handbook of organizational citizenship behavior. new york: nova science publishers. p181-207. viland, t. (2006), innovation culture, technology policy and the uses of the history. international proact conference, innovation pressure, 15-17 march, munchen, germany. . international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2019, 9(6), 158-168. international review of management and marketing | vol 9 • issue 6 • 2019158 effect of consumption values on consumer satisfaction and brand commitment: investigating functional, emotional, social, and epistemic values in the running shoes market hiroyasu furukawa1*, koki matsumura2, susumu harada3 1college of economics, nihon university, 1-3-2 kanda-misakicho, chiyoda, tokyo, japan, 2school of economics and management, university of hyogo, 8-2-1 gakuennishi-machi, nishi-ku, hyogo, kobe, japan, 3school of business administration, meiji university, 1-1 kanda-surugadai, chiyoda, tokyo, japan. *email: furukawa.hiroyasu@nihon-u.ac.jp received: 16 august 2019 accepted: 10 october 2019 doi: https://doi.org/10.32479/irmm.8713 abstract firms can acquire sustainable competitive advantages by managing brand relationships and consumption values. however, previous studies do not compare consumption value with consumer satisfaction and brand commitment. consumption value theory postulates that functional, emotional, social, and epistemic values enhance brand relationships. however, the most effective element of consumption values on consumer satisfaction or brand commitment is different. specifically regarding running shoes, this article empirically compares functional, emotional, social, and epistemic values with consumer satisfaction and brand commitment. using a mediated–moderation regression model, this article collected 844 japanese samples from a marathon in kobe, japan, and tested how multiple consumption values affected consumer satisfaction and brand commitment, moderated by age. the results show that consumption values except epistemic value have positive effects on consumer satisfaction and brand commitment. in particular, this article uncovers the moderating effect of age in social values and consumer satisfaction. specifically, social values affect consumer satisfaction when consumers are under 39 years old. this paper also found that functional value and social value have the strongest effect on consumer satisfaction and brand commitment, respectively, compared with other values. contravening consumption value theory, our data suggests that epistemic value impedes brand commitment. keywords: consumption values theory, consumer satisfaction, brand commitment, running shoes jel classifications: m10, m21, m31 1. introduction building a relationship between a brand and consumer can improve consumer satisfaction and brand commitment (gundlach et al., 1995; beatson et al., 2006). satisfied and committed consumers tend to purchase products of the same brands repeatedly. they also generate positive word of mouth and improve the brand’s recognition. hence, firms obtain sustainable, competitive advantages by managing their brands (royo-vela and casamassima, 2011; su et al., 2016). studies regarding brand relationships, especially consumer satisfaction and brand commitment, have considered them as an outcome of firms’ marketing activities (anderson et al., 1994; morgan and hunt, 1994; iglesias et al., 2011). other studies have also investigated consumption values (beatson et al., 2006; tseng and lo, 2011); these values explain why consumers choose one product over another (sheth et al., 1991; sweeney and soutar, 2001). consumers determine the benefits they derive from brands and then evaluate their brand commitment and satisfaction. consumption values comprise functional, emotional, social, epistemic, and conditional values (sheth et al., 1991a; 1991b). surprisingly, most studies have focused on only one or two consumption value components to investigate brand relationships, this journal is licensed under a creative commons attribution 4.0 international license furukawa, et al.: effect of consumption values on consumer satisfaction and brand commitment: investigating functional, emotional, social, and epistemic values in the running shoes market international review of management and marketing | vol 9 • issue 6 • 2019 159 which seem to be insufficient. consumption value theory considers the five components that affect consumer behavior and analyzes what affects them. the effectiveness of consumption value theory’s components can be applied to specific situations. this implies that managers’ marketing strategies and consumers’ perceptions affect brand relationships, including customer satisfaction and brand commitment (mabkhot et al., 2016; khoironi et al., 2018). therefore, this study focuses on these three factors. although the importance of the effect on consumer satisfaction and brand commitment studies is recognized, not enough studies compare how consumption values relate to consumer satisfaction and brand commitment. different from other fast-moving consumer goods (fmcg), the running shoes category incorporates a large number of enthusiastic consumers. this is also true for other sports products, whose consumer brand preferences are highly specific. most consumption value studies consider fmcg. hence, we anticipate that this article will greatly impact the literature. this article investigates relationships between consumption values and consumer satisfaction and brand commitment. data were collected at the 2018 marathon in kobe, japan, which generated 844 valid questionnaires. the article’s thesis is tested empirically and discussed, after which a conclusion is presented. 2. literature review this article investigates the relationship between components of consumption values and consumer satisfaction and brand commitment, focusing on the relative effects of consumption values. consumers purchase products or services to satisfy themselves, and the purpose of consumer behavior and marketing is to maximize consumer satisfaction (veloutsou et al., 2005), which is a consumer’s consumption-related fulfillment obtained from products or services (oliver, 1996; paulssen and birk, 2007). generally, consumers retain their running shoes for a long time. however, if a consumer is unsatisfied with this product, they often purchase another pair. marketers are also required to manage brand commitment (wong et al., 2019). consumers are cooperators supporting the brand when relationships between brand and consumer are strong (morgan and hunt, 1994; shukla et al., 2016). a highly committed consumer is less sensitive to product prices (hess and story, 2005) and poor brand reputation (story and hess and 2010). consumers also have high switching costs when replacing products (evanschitzky and wunderlich, 2006; iglesias et al., 2019). this article defines brand commitment as an emotional bond between a brand and consumer (bartikowski and walsh, 2011; um and kim, 2016, su et al., 2016; kuo and hou, 2017). consumers with high brand commitments often support brands for a long time. therefore, generating strong brand commitments within consumers is critical for firms. 2.1. consumption values consumer satisfaction and brand commitment, which build customer loyalty, are created by marketing activities (anderson et al., 1994; morgan and hunt, 1994; iglesias et al., 2011). consumption values determine consumers’ choices, satisfaction, and brand commitment (tseng and lo, 2011; poushneh and vasquez-parraga, 2019). people evaluate products and services in various ways. for example, sheth et al. (1991a; 1991b) conceptualized values influencing consumer behavior and explored five value dimensions: functional, emotional, social, epistemic, and conditional. 2.1.1. functional value functional value refers to “value through the possession of salient functional, utilitarian, or physical attributes” (sheth et al., 1991a). quality and price, the primary elements of functional value, are trade-off relationships (cravens et al., 1988; sweeney et al., 1999). consumers recognize price as an indicator of quality (inexpensive products or services are generally considered poor quality) (peter and tarpey, 1975; zeithaml, 1988). a money-conscious consumer attempts to maximize quality despite low costs. in this way, functional value comprises both quality and price elements (sweeney and soutar, 2001). anderson et al. (1994) found that functional value can enhance consumer satisfaction. sweeney and soutar (1999) also found relationships among product quality, perceived value for money, and willingness to buy. for running shoes, consumers’ functional value relates to comfort, specifications, and price. comfort in running shoes can prevent fatigue and is important for longdistance running. specifications include shock absorption and light weight. wong et al. (2019) did not find a relationship between functional value and brand commitment in the smartphone category, possibly because many smartphones have similar features. by contrast, because of the widely varied characteristics of different feet, the functional value of running shoes has greater brand differentiation than smartphones. running shoes may also influence a runner’s style. running shoes’ repurchase rates improve with comfort, good perceived specifications, and value for money, and consumers’ repurchase intentions parallel their brand commitment (shukla et al., 2016; wong et al., 2019). based on these conclusions, h1a and h1b are proposed. h1a: functional value has a positive effect on consumer satisfaction. h1b: functional value has a positive effect on brand commitment. 2.1.2. emotional value emotional value refers to “value when associated with specific feelings or when they facilitate or perpetuate feelings” (sheth et al., 1991a). emotion always accompanies a consumer’s brand choice behavior. when one chooses a brand irrationally, the action is often influenced by emotions and affections. the main elements of emotional value are sentiments, feelings, and aesthetics (brakus et al., 2009; sheth et al., 1991a). holbrook and hirschman (1982) argued that emotions influence consumers’ brand choice behavior. holbrook (1999), who used the term “hedonic” to express emotional value, suggested that consumer experience and the aesthetics of products fulfill their needs. emotional value is sometimes emphasized more than functional value (topaloglu and gokalp, 2018). positive feelings about a brand can substitute for functional value. some research focuses furukawa, et al.: effect of consumption values on consumer satisfaction and brand commitment: investigating functional, emotional, social, and epistemic values in the running shoes market international review of management and marketing | vol 9 • issue 6 • 2019160 on the relationship between emotional value and consumer satisfaction (i.e., meyer and schwager, 2007; iglesias et al., 2019). this is particularly significant in sports products because it has been suggested in the studies of sports management that controlling mental condition influences sport performance (vernacchia and henschen, 2008; gould and ian, 2009). runners can control their mental condition by the running shoes they own. this means that the emotion brought from their shoes can affect the runner’s performance. therefore, consumers’ satisfaction with a brand increases if that brand enhances consumers’ feelings and enjoyment. although emotional value also generates brand commitment (gilliland and bello, 2002), this effect’s findings seem to be divided. for instance, ramaseshan and stein (2014) found a relationship between emotional value and brand commitment in the categories of consumer products (coca-cola), consumer electronics (apple), and fast food services (mcdonalds). iglesias et al. (2019) also found similar relationships in the banking services industry. however, francisco-maffezzolli et al. (2014) evinced the lack of relationships between emotional value and brand commitment in the perfume and bath soap category. runners, who are greatly fond of their running shoes, can also be incredibly loyal to one brand. individuals who take running seriously purchase a new pair of running shoes annually. therefore, brand commitment is important in this category. this leads to h2a and h2b: h2a: emotional value has a positive effect on consumer satisfaction. h2b: emotional value has a positive effect on brand commitment. 2.1.3. social value social value refers to “value through association with positively or negatively stereotyped demographic, socioeconomic, and cultural ethnic groups” (sheth et al., 1991a). brand choices have a social significance, which is called reference group consumption (park and lessig, 1977; mccracken, 1989; escalas and bettman, 2005). value-expressive consumption is one of the consumer behaviors affected by reference group consumption (kelman, 1961; park and lessig, 1977). consumers express themselves by using certain products, and their choices can relate to a group. runners wear only a few items, such as running shoes, running clothes, a wrist watch, and occasionally sunglasses and often only minimally display product preferences. gallarza and saura (2006) found that sporting events may have a noticeable effect on consumer satisfaction. for instance, marathons mean several things for runners, including training, achieving a personal record, and tourism. therefore, runners’ consumer satisfaction is enhanced by perceived social values. because consumers project their self-image upon brands, brand commitment increases if the brand is close to an idealized image. a brand’s social image is built by a reference group called the brand community (zhou et al., 2011). mathwick et al. (2008) indicated that social values can enhance a sense of belonging to a brand community, which can influence brand commitment (zhou et al., 2011; kuo and feng, 2013). when consumers identify with a brand, brand commitment is enhanced (zhou et al., 2011). luxury and high status are also important elements of social value. goldsmith et al. (2012) found that these elements increased brand loyalty in the apparel product category. luxury and high-status brands, which often are premium-priced, enhance consumers’ self-esteem (festinger, 1957). as a result, luxury and high status can represent important brand commitments. hence, we propose h3a and h3b: h3a: social value has a positive effect on consumer satisfaction. h3b: social value has a positive effect on brand commitment. 2.1.4. epistemic value epistemic value refers to “value through the capacity to provide something new or different” (sheth et al., 1991a). consumer curiosity, novelty, a desire for knowledge, and variety are elements of epistemic value. novelty fulfills consumers’ desire for new things (hirschman, 1980), which was called by rogers (1976) as innovation-seeking behavior. new features are frequently launched in the running shoes market, and runners often seek new trends. variety fulfills consumers’ desire for robust features (mcalister, 1982; mcalister and passemier, 1982). brands generally manufacture numerous types of running shoes. for example, in 2019, nike had about 60 types and asics had about 400 types of running shoes, including different colors. new running shoe styles create epistemic value for runners. newly developed products potentially enhance runners’ goals while improving their form and style. they seek unusual and unique aspects in new running shoes. large product variety offers consumers many options, allowing runners to discover shoes that fit their individual needs. therefore, product novelty and variety positively affect consumer satisfaction. as noted by khan and mohsin (2017), epistemic value also positively impacts brand commitment because the value can lead to repurchases. as long as consumers seek new information regarding brands or products, their brand commitment will remain strong. wong et al. (2019) also found a relationship between epistemic value and brand commitment in the smartphone category. by offering a variety of options, manufacturers generate brand confidence and commitment. accordingly, h4a and h4b are proposed: h4a: epistemic value has a positive effect on consumer satisfaction. h4b: epistemic value has a positive effect on brand commitment. four of the five consumption value dimensions (functional, emotional, social, and epistemic) have been discussed. we exclude conditional value, which refers to “value in the presence of antecedent physical or social contingencies that enhance their functional or social value” (sheth et al., 1991a). conditional value arises suddenly, and consumers use its benefit temporarily (one example is an umbrella, which is only required when it is raining). because running shoes are not used for a temporary purpose, conditional value is not a factor for this product category. the new contribution of this article is the comparative effect of consumption values. satisfaction is defined as a consumer’s product evaluation (oliver, 1996; paulssen and birk, 2007). certain consumption values, especially product performance, are connected to these evaluations. therefore, compared with other furukawa, et al.: effect of consumption values on consumer satisfaction and brand commitment: investigating functional, emotional, social, and epistemic values in the running shoes market international review of management and marketing | vol 9 • issue 6 • 2019 161 consumption values, functional value is closely connected to consumer satisfaction. functional value is consumers’ perception of product performance, and brand commitment is the emotional bond between a brand and consumer. thus, h5a and h5b are proposed: h5a: functional value has the strongest effect on consumer satisfaction, compared with other values. h5b: emotional value has the strongest effect on brand commitment, compared with other values. 3. method this article used questionnaires to construct a quantitative analysis. constructs were based on existing scale items in the literature (table 1). a 5-point likert scale was used to record all responses, ranging from 1 “strongly disagree” to 5 “strongly agree.” to avoid misunderstandings by respondents, we pretested our questionnaire regarding the 2017 kobe marathon that attracted 20,000 runners. initially, we translated the english questionnaire into japanese using a double-blind, back translation process. second, we asked 12 respondents whether they truly understood the questionnaire. lastly, we collected 839 japanese sample questionnaires and, in a pilot study, confirmed that all respondents answered adequately. after the pilot study, we collected data at the 2018 kobe marathon. the questionnaire, written in japanese, was distributed at the reception desk. of the 855 completed questionnaires, 844 (98.7%) were validated. using a 7-point likert scale, we also asked for the respondents’ ages. approximately 35.5% of the runners were aged 40-49 years, and 75.5 % were male. on average, the respondents ran 136.9 km/month and had already participated in an average of 10.6 marathons. respondents purchased an average of 4.3 new pairs of running shoes every 3 years. although 72.7% of respondents said that they were interested in running shoes, most respondents said that they had not sufficient knowledge regarding running shoes. table 2 shows descriptive statistics about the respondents. 4. results this article investigated the relationships between consumption values and consumer satisfaction and brand commitment. additionally, as a post hoc test, we considered the moderating effect of age. cornelis et al. (2009) found relationships between age and conservatism. this study suggests that consumption values change with age. to analyze this effect, we used a mediated– moderation model with multiple regressions and interactions (r 3.6.0. pequod package). considering the moderating effect, all variables were centered for reducing multicollinearity (aiken and west, 1991; cronbach, 1987). we assessed measurement scales before the analysis. first, a confirmatory factor analysis assessed each construct. items with factor loading smaller than 0.40 were removed (hair et al., 2014). we confirmed that all factor loadings were over 0.49 and that convergent validity was supported. second, cronbach’s alpha, composite reliability (cr), and omega were checked (mcdonald, 1978; hogan et al., 2000), which were over 0.65 for all constructs. average variance extracted (ave) value also was checked, and all ave coefficients were higher than 0.40. these indicators supported internal consistency, construct reliability, and convergent validity (table 3). third, we assessed discriminant validity. in table 4, discriminant validity was evaluated by comparing ave, maximum shared variance (msv), and average shared variance. all ave coefficients were higher than msv and asv in each construct, table 1: constructs and scale items¥ constructs items references consumption value functional value fn1: i feel that my running shoes are comfortable fn2: i feel that my running shoes provide better specifications and performance fn3: i feel that my running shoes are priced appropriately fn4: i feel that my running shoes relieve fatigue sweeney and soutar (2001), punniyamoorthy and raj (2007) emotional value em1: my running shoes make me feel good em2: my running shoes make me feel at ease em3: when i wear my running shoes, running is more exciting sweeney and soutar (2001), punniyamoorthy and raj (2007) social value so1: when i wear my running shoes, they help me express my own character so2: my running shoes are a status symbol so3: when i wear my running shoes, they boost my image sweeney and soutar (2001), punniyamoorthy and raj (2007) epistemic value ep1: i feel new in my running shoes ep2: i feel different from others in my running shoes ep3: i feel unique in my running shoes ep4: i feel unusual in my running shoes yim et al. (2012), chowdhury et al. (1998) brand relationships consumer satisfaction cs1: i am satisfied with these running shoes cs2: my running shoes are better than i expected cs3: purchasing my running shoes was a smart choice donio et al. (2006), oliver and swan (1989) brand commitment bc1: i love the brand of my running shoes bc2: i persist because my brand of running shoes is best for me bc3: i support my brand of running shoes coulter et al. (2003) source: the authors furukawa, et al.: effect of consumption values on consumer satisfaction and brand commitment: investigating functional, emotional, social, and epistemic values in the running shoes market international review of management and marketing | vol 9 • issue 6 • 2019162 supporting discriminant validity. from these steps, we confirmed measurement validity, so these scales were used for analysis. table 5 describes the results of the multiple regression analysis. the independent variables are consumption values (functional, social, emotional, and epistemic), and the dependent variables are consumer satisfaction and brand commitment. to control multicollinearity, we conducted the variance inflation factor (vif) test, and all variables were below 5 as suggested by hair et al. (2014); the average vif score of all variables was 1.61, and the highest score was 2.47. therefore, multicollinearity was not observed. results for model 1-2 indicate the effects of consumption values on consumer satisfaction (adjusted r2 = 0.49, f-value = 74.51, p < 0.01) and tests h1a, h2a, h3a, and h4a. this model shows that the effects of functional (b = 0.56, p < 0.01) and emotional (b = 0.19, p < 0.01) values on consumer satisfaction are positive and significant at the 0.01 level. we find that functional value has a stronger effect on consumer satisfaction than emotional value. we also find no effect from social and epistemic values on consumer satisfaction. according to this model, h1a, h2a, and h5a are supported. model 2-2 indicates the effect of consumption values on brand commitment (adjusted r2 = 0.28, f-value = 30.26, p < 0.01) and tests h1b, h2b, h3b, and h4b. this model shows that the effects of all consumption values are significant at the 0.01 level, with functional (b = 0.28, p < 0.01), emotional (b = 0.14, p < 0.01), and social (b = 0.37, p < 0.01) values all having positive effects. although, epistemic value (b = −0.10, p < 0.05) has a negative effect on brand commitment compared with functional, emotional, and epistemic values. we find that social value has the strongest effect on brand commitment. according to this model, h1b, h2b, and h3b are supported. as noted above, h3a, h4a, and h4b are not supported by the main regression effect. to further investigate these hypotheses, this article examines the moderating effect of age as post hoc analyses 1 and 2. we find that social value did not affect consumer satisfaction in model 1-2, but the interaction between social value by age and consumer satisfaction was significant (b = −0.06, p < 0.05) in post hoc analysis 1. other moderating effects of age are not found. as shown in post hoc analyses 1 and 2, the main effect of consumption values is huge, so an interaction effect is not observed. however, the method of interaction between social value by age and consumer value is interesting. figure 1 shows a post hoc, simple-slope analysis. following cohen and cohen (1983), we calculated social value perception using two categories: one standard deviation below and above the mean score. social value has a significant, positive effect on consumer satisfaction when a consumer is young (b = 0.11, p < 0.01). however, when consumers are older, we find no significant relationship between social value and consumer satisfaction (b = −0.02, p = n.s.). hence, h3a was partially supported. 5. discussion this article investigates the effect of consumption values on consumer satisfaction and brand commitment. by building hypotheses based on the literature, we conclude that consumer satisfaction and brand commitment are affected by multiple consumption values. however, the result showed that consumption values have a different effect on consumer satisfaction and brand commitment in the running shoes category. h1a and h1b being supported means that functional value has a positive effect on consumer satisfaction and brand commitment. functional value affects consumer satisfaction more than other consumption values. this suggests that comfort and specifications are critically important for runners, and running shoes are important for running performance and effective training. the functional needs of running shoes vary because running styles and levels differ. other sports products are similar in this regard. compared with emotional, social, and epistemic values, product evaluation is closely connected to consumer satisfaction. as product performance by functionality is understandably important for consumers, functional value can enhance consumer satisfaction table 2: descriptive statistics about the sample sample profile classification % age (years) (mean: 4.13, median: 4.00) ≤19 0.7 20-29 9.1 30-39 15.9 40-49 35.5 50-59 30.0 60-69 7.3 ≥70 1.4 gender (mean: 1.25, median: 1.00) male 75.5 female 24.5 running distance per month (km) (mean: 136.98, median: 100.00) ≤49 13.0 50-99 16.7 100-149 25.0 150-199 16.2 200-249 13.4 250-299 6.2 300-349 5.8 ≥350 2.7 number of marathons participated in (mean: 10.62, median: 7.00) ≤4 34.0 5-9 24.5 10-14 17.7 15-19 7.0 20-24 6.9 25-29 1.7 30-34 3.7 ≥35 4.6 pairs of running shoes purchased annually (mean: 4.34, median: 3.00) <1 9.2 2 20.1 3 24.5 4 11.8 5 13.0 6-7 10.2 8-9 2.5 10-11 5.1 12-13 0.5 14-15 1.4 ≥16 1.5 interest in running shoes (mean: 0.27, median: 0) 0: yes 72.7 1: no 27.3 sufficient knowledge about running shoes (mean: 0.68, median: 1) 0: yes 32.2 1: no 67.8 source: the authors furukawa, et al.: effect of consumption values on consumer satisfaction and brand commitment: investigating functional, emotional, social, and epistemic values in the running shoes market international review of management and marketing | vol 9 • issue 6 • 2019 163 to a greater extent than other consumption values for running shoes. therefore, h5a is also supported. if a consumer perceives that their running shoes are functional, their trust in the brand will be greater. because trust in a brand is closely connected to brand commitment, this confirms the relationship between functional value and brand commitment. as with functional value, emotional value has a positive effect on consumer satisfaction and brand commitment. accordingly, h2a and h2b are supported. this implies that emotional and functional values increase runners’ satisfaction and commitment to a brand. however, the effect of emotional value is smaller than that of functional value. this conclusion is not evident from consumption theory. brand commitment is an important element of brand relationships. emotional values, such as happiness, enhance the relationship between a brand and a consumer. this is a critical factor for competitive runners who will perform better if they enjoy running in their chosen shoes. therefore, emotional values have a positive effect on consumer satisfaction and brand commitment. however, h5b is not supported because social value has the strongest effect on brand commitment instead of emotional value. we confirm the positive effect of social value on brand commitment, which supports h3b. the effect of social value on brand commitment is stronger than that of other values. as mentioned above, social value refers to reference groups; the brand’s image is created by the group who loves the brand. when runners perceive social value, they feel a sense of belonging with the brand community. this is the element of brand commitment (zhou et al., 2011; kuo and feng, 2013). functional and emotional values also have a positive effect on brand commitment. we see no relationship between social value and consumer satisfaction. to account for the moderating effect of age, we find a significant, positive effect of social value table 3: convergent validity construct items mean sd item-to-total factor loading cronbach’s alpha (α) composite reliability (cr) omega value (ω) average variance extracted (ave) consumption value functional value fn1 4.16 0.62 0.85 0.71 0.68 0.68 0.69 0.42 fn2 4.00 0.72 0.83 0.69 fn3 3.83 0.67 deleted fn4 3.78 0.80 0.64 0.53 emotional value em1 3.85 0.83 0.78 0.72 0.75 0.76 0.77 0.53 em2 3.94 0.76 0.58 0.53 em3 3.82 0.78 0.97 0.89 social value so1 3.47 0.86 0.75 0.67 0.78 0.78 0.79 0.54 so2 3.37 0.99 0.79 0.71 so3 3.27 0.95 0.92 0.83 epistemic value ep1 3.39 0.94 0.74 0.66 0.77 0.78 0.82 0.47 ep2 3.77 0.86 0.54 0.49 ep3 3.01 0.94 0.88 0.79 ep4 3.19 0.96 0.85 0.76 brand relationships consumer satisfaction cs1 4.14 0.62 0.83 0.76 0.82 0.82 0.83 0.61 cs2 3.66 0.76 0.78 0.72 cs3 4.02 0.68 0.94 0.86 brand commitment bc1 4.05 0.78 0.87 0.83 0.89 0.89 0.90 0.74 bc2 3.78 0.89 0.92 0.87 bc3 3.99 0.79 0.93 0.88 n=844. source: the authors source: the authors figure 1: how social values by age interact with consumer satisfaction furukawa, et al.: effect of consumption values on consumer satisfaction and brand commitment: investigating functional, emotional, social, and epistemic values in the running shoes market international review of management and marketing | vol 9 • issue 6 • 2019164 on consumer satisfaction when consumers are young, which partially supports h3a. we assume that runners wear running shoes for not only running but also self-expression. this has a significant effect on consumer satisfaction for consumers below 39 years of age, suggesting that low-age consumers tend to pursue self-expression needs compared with older consumer (≥ 50 years old). in contrast to functional, emotional, and epistemic values, social value is oriented by other people, and different social value perceptions vary by age. h4a and h4b are not supported. h4 noted the effect of epistemic value on consumer satisfaction or brand commitment, and we could not find positive relationships between epistemic value and consumer satisfaction. this implies that runners are confused by variety and novelty features of running shoes. hence, the positive effect of epistemic value on consumer satisfaction is not observed. however, we find that epistemic value has a significantly negative effect on brand commitment. this result contradicts the conclusion of wong et al. (2019), who analyzed smartphones in taiwan. consumers more often feel closer to their running shoes than to their smartphones. particularly, at marathons, running shoes can be an important issue for runners who experience strong brand commitments with these products. epistemic value has two main elements, variety and novelty, both of which tend to weaken brand commitment. to appeal novelty, the brand needs to launch new models frequently, but consumers also tend to feel that their owned running shoes are older because of the frequent launches. therefore, epistemic value decreases brand commitment. 5.1. theoretical implications this article contributes to the literature by uncovering how different consumption values affect consumer satisfaction and brand commitment. consumption value does not affect consumer satisfaction and brand commitment equally because each value possesses a different effect. consumption value theory suggests that both functional and emotional values positively affect consumer satisfaction and brand commitment (tseng and lo, 2011; poushneh and vasquez-parraga, 2019). for example, poushneh and vasquez-parraga (2019) investigated the smart electronics category (smartphones and smart watches) in the united states. we find that functional value primarily generates consumer satisfaction and social value primarily generates brand commitment in the sports product category in japan. we also suggest that moderation by age changes the effect of social value on consumer satisfaction. as a sports product, running shoes need to have functional value to enhance consumers’ performance. therefore, compared with other consumption values, functional value is closely connected to consumer satisfaction. mental management is also important for improving sports performance. most runners run 100 km/ month for training and buy three pairs of shoes per year (table 3). perceiving emotional value plays a key role in managing a runner’s mental condition, and the product offering emotional value will be bought repeatedly. therefore, it is considered that emotional value enhances brand commitment. we found that social value, rather than emotional value, has the strongest effect on brand commitment. in previous studies, it is considered that emotional value has a large impact on brand commitment (i.e., iglesias et al., 2019; das et al., 2019). iglesias et al. (2019) investigated consumer banking in spain, and das et al. (2019) investigated the apparel industry in india. we find relationships between social value and consumer satisfaction for younger customers. regarding tourism management studies, the effect of social value on consumer satisfaction is already confirmed (sanchez et al., 2006). this result implies that many marathon runners are inclined toward tourism. however, we found that the trend is different between younger and older consumers. this study’s result evinces that the primary factor affecting the difference in consumer satisfaction is age. social value drives brand commitment. running shoes are not only sports tools but also fashion items, which some consumers regard as apparel. if their running shoes can express themselves, runners will have psychological connection with the brand. further, running is not a team sport, but runners sharing their feelings with each through a brand community. therefore, the positive and strongest effect of social value on brand commitment is suggested in this article, also suggesting that the sense of belonging to a brand community plays a role in enhancing social value perception. although this paper finds no positive relationship between epistemic value and consumer satisfaction, it confirms that epistemic value negatively affects brand commitment. it is because consumers perceiving epistemic value feel their own shoes as old and late. running shoes belong to a relatively highattachment product category, which influences epistemic value and brand commitment. epistemic value offers new and unique features to consumers. in our view, brand commitment declines when consumers perceive transitions in high-attachment product categories, including running shoes. 5.2. managerial implications offering functional value to runners increases their consumer satisfaction and brand commitment. however, when new items or characteristics change rapidly, brand commitment may weaken. maintaining consumer brand commitment requires support from retail departments. however, retailing may have difficulty communicating the concept and policy of a specific brand, table 4: discriminant validity consumer values fn em so ep fn 0.42 em 0.63 0.53 so 0.44 0.64 0.54 ep 0.42 0.50 0.59 0.47 maximum shared variance (msv) 0.40 0.41 0.41 0.35 average shared variance (asv) 0.13 0.18 0.16 0.13 ave>msv yes yes yes yes ave>asv yes yes yes yes brand relationships cs bc cs 0.61 bc 0.40 0.74 maximum shared variance (msv) 0.16 0.16 average shared variance (asv) 0.16 0.16 ave>msv yes yes ave>asv yes yes source: the authors. *square root of ave in the diagonal furukawa, et al.: effect of consumption values on consumer satisfaction and brand commitment: investigating functional, emotional, social, and epistemic values in the running shoes market international review of management and marketing | vol 9 • issue 6 • 2019 165 ta bl e 5: a m ed ia te d– m od er at io n m od el w it h m ul ti pl e re gr es si on s v ar ia bl es d v : c on su m er s at is fa ct io n d v : b ra nd c om m it m en t m od el 1 -1 m od el 1 -2 p os tho c an al ys is 1 m od el 2 -1 m od el 2 -2 p os tho c an al ys is 2 β (t -v al ue ) st an da rd β β (t -v al ue ) st an da rd β β (t -v al ue ) st an da rd β β (t -v al ue ) st an da rd β β (t -v al ue ) st an da rd β β (t -v al ue ) st an da rd β in te rc ep t 0. 00 0. 00 0. 00 0. 00 0. 00 0. 00 (0 .0 0) (0 .0 0) (0 .2 4) (0 .0 0) (0 .0 0) (0 .0 1) fu nc tio na l v al ue 0. 55 ** 0. 46 9 0. 56 ** 0. 47 0. 56 * * 0. 48 0. 31 ** 0. 19 0. 28 ** 0. 17 0. 28 ** 0. 17 (1 4. 52 ) (1 4. 59 ) (1 4. 60 ) (0 .1 9) (4 .4 1) (4 .3 6) e m ot io na l v al ue 0. 19 ** 0. 24 0 0. 19 ** 0. 24 0. 19 * * 0. 24 0. 16 ** 0. 14 0. 14 ** 0. 12 0. 14 ** 0. 12 (6 .4 0) (6 .3 5) + (6 .4 6) (3 .0 6) (2 .7 1) (2 .7 7) so ci al v al ue 0. 04 0. 05 0 0. 05 0. 06 0. 04 0. 05 0. 37 ** 0. 31 0. 36 ** 0. 31 0. 37 ** 0. 31 (1 .4 1) (1 .7 7) (1 .4 2) (7 .3 6) (7 .3 3) (7 .2 4) e pi st em ic v al ue 0. 03 0. 04 1 0. 04 0. 05 0. 04 + 0. 05 −0 .0 7 −0 .0 7 −0 .0 9* −0 .0 9 −0 .0 9* −0 .0 8 (1 .2 9) (1 .5 1) (1 .6 8) (− 1. 74 ) (− 2. 31 ) (− 2. 07 ) se x 0. 03 0. 03 0. 03 0. 03 −0 .0 4 −0 .0 3 −0 .0 4 −0 .0 3 (1 .2 3) (1 .3 3) (− 0. 96 ) (− 0. 84 ) a ge −0 .0 2* −0 .0 5 −0 .0 2 * −0 .0 5 −0 .0 4 −0 .0 8 −0 .0 4 * −0 .0 8 (− 2. 07 ) (− 2. 20 ) (− 2. 43 ) (− 2. 51 ) r un ni ng di st an ce s pe r m on th 0. 00 −0 .0 2 0. 00 −0 .0 1 0. 00 −0 .0 8 0. 00 ** −0 .0 8 (− 0. 78 ) (− 0. 51 ) (− 2. 85 ) (− 2. 82 ) t he n um be r o f pa rt ic ip at in g fu ll m ar at ho n co m pe tit io n 0. 00 0. 01 0. 00 0. 01 0. 00 ** 0. 02 0. 00 0. 02 (0 .4 0) (0 .5 2) (0 .5 1) (0 .4 8) t he n um be r of p ur ch as in g ru nn in g sh oe s pe r 3 ye ar 0. 00 −0 .0 2 0. 00 −0 .0 12 −0 .0 1+ −0 .0 6 −0 .0 1 −0 .0 5 (− 0. 62 ) (− 0. 61 ) (− 1. 70 ) (− 1. 55 ) in te re st a nd pe rs is te nc e fo r ru nn in g sh oe s 0. 03 0. 03 0. 03 0. 03 −0 .1 9* * −0 .1 4 −0 .1 9* * −0 .1 4 (1 .1 3) (0 .9 9) (− 4. 15 ) (− 4. 16 ) su ffi ci en t kn ow le dg e ab ou t ru nn in g sh oe s 0. 03 0. 03 0. 03 0. 03 −0 .0 7+ −0 .0 5 −0 .0 7 −0 .0 5 (1 .0 6) (1 .0 9) (− 1. 66 ) (− 1. 55 ) fu nc tio na l v al ue *a ge 0. 02 0. 02 −0 .0 4 −0 .0 3 (0 .6 4) (− 0. 63 ) e m ot io na l v al ue *a ge 0. 03 0. 04 0. 05 0. 05 (0 .9 4) −1 .1 1 so ci al v al ue * ag e −0 .0 6 * −0 .0 7 0. 01 0. 01 (− 1. 97 ) (0 .1 2) e pi st em ic v al ue *a ge 0. 02 0. 03 0. 02 0. 02 (0 .9 8) (0 .5 5) fva lu e 20 0. 04 ** 74 .5 1* * 55 .0 3* * 70 .0 4* * 30 .2 6* * 22 .4 1* * r 2 0. 49 0. 50 0. 50 0. 03 0. 29 0. 29 a dj us te d r 2 0. 49 0. 49 0. 49 0. 25 0. 28 0. 28 ** p< 0. 01 , * p < 0. 05 , + p< 0. 10 . n =8 44 . s ou rc e: t he a ut ho rs furukawa, et al.: effect of consumption values on consumer satisfaction and brand commitment: investigating functional, emotional, social, and epistemic values in the running shoes market international review of management and marketing | vol 9 • issue 6 • 2019166 particularly if many separate brands are being sold. epistemic value has a negative effect on brand commitment because of consumers’ perception of brand transition. however, adequate communication regarding brands to consumers should prevent brand switching. brand-owned retail can be an important element in this effort. continuing support by brand-owned retail also enhances customers’ perceptions of emotional and social values. emotional value has a positive effect on consumer satisfaction and brand commitment. brands need to communicate with their consumers not only at the point of purchase but also at other times. a brand community is effective for continuing a supportive dialog with consumers, especially in an individual sport, such as running. thanks to brand communities, consumers perceive social values, which greatly enhance brand commitment compared with functional and emotional values. social values are especially important for consumers younger than 39 years. a continuing communication between brands and consumers increases not only consumer satisfaction but also brand commitment. 5.3. limitations and future research this paper presents several theoretical and managerial concepts but still has implications for future research. first, because this study focused on product and brand dimensions, further study on the retail dimension is needed. retail, as well as product and brand, can influence consumers’ value perceptions. retail also plays an important role in managing consumer satisfaction and brand commitment. second, this paper does not consider the relationship between consumer satisfaction and brand commitment. instead, using mediated–moderation regression model, it investigates the effect of consumption values on consumer satisfaction and brand commitment. some studies have suggested that consumer satisfaction and brand commitment affect other constructs, such as brand loyalty (kuo and feng, 2013; su et al., 2016; wong et al., 2019; iglesias et al., 2019). future research should consider the entire consumer journey. third, this paper does not 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(2011), how do brand communities generate brand relationships? intermediate mechanisms. journal of business research, 65, 890-895. . international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2017, 7(2), 334-339. international review of management and marketing | vol 7 • issue 2 • 2017334 impact of service quality on satisfaction, loyalty and intention to revisit of sport customers: the case study of swimming pools in alborz province gholamreza barshan1*, alireza elahi2, najaf aghaei3 1master of art in sport management, kharazmi university, tehran, iran, 2department of sport management, kharazmi university, tehran, iran, 3department of sport management, kharazmi university, tehran, iran. *email: gholamreza.barshan@yahoo.com abstract the aim of this research was to determine the effect of customer satisfaction and loyalty attitude and willingness of the pools was alborz province. the research methodology was correlational the field. the population of this study was all alborz province pools, male customers were used for the completion of questionnaires. the samples of this study were 361 persons. the questionnaire used in the study consisted of loyalty questionnaire of su (2004), service quality and satisfaction scale of liu (2008) and intention to revisit of lim (2006). the face and content validity is confirmed by panel of experts and the reliability of components was estimated by cronbach’s alpha in this way: satisfaction (0.913), attitudinal (0.754), and attendance tendency (0.696). data analysis was performed using lisrel software. in diagram 1 lisrel software output is in standard mode. results lisrel output indicates that the dimension of quality of services including tangibility, reliability, responsiveness, assurance and empathy have the effect of 0.33, 0.16, 0.15, 0.21 and 0.27% on overall satisfaction respectively. also attitudinal loyalty has the effect on 0.61% and behavioral loyalty has the effect of 0.24 on intention to revisit of customers. keywords: satisfaction, attitudinal loyalty, sport, intention to revisit jel classifications: m31, m37, z32 1. introduction at the beginning of the third millennium, the world of sports is experiencing a new period. broad and quick developments at all aspects of sports call for application of marketing techniques in sports. millions of dollars are daily spent in different countries for sports, and the needs for athletic activities in order to alleviate mental and physical problems are getting more and more pervasive. all these have caused more attempts to be carried out in sport marketing field (yousefi et al., 2007). sport marketing and customer satisfaction are universal issues that affect all organizations. many countries intend to satisfy their customers. those who are happy with a seller are less likely to change their channel (homburg and rudolph, 2001; mahmoudi, 2011). since there is a powerful positive relation between customer satisfaction and customer loyalty, and as satisfaction is taken as a prerequisite for loyalty, this is safe to declare that those who are decidedly happy with their sellers are less likely to go for other products available in the marketplace (mahmoudi, 2011). furthermore, quality of present-day competitive economy has shattered the previously dominant monopoly in the area of product manufacturing so that customer-oriented principles are now one of the key business tenets and companies might be removed out of stage should they cast indifferent looks over this issue. if products and services offered by an organization are able to fulfill customers’ expectations and provoke their satisfaction, they would not only choose to make repurchases, but also encourage their friends to refer to their organization (dadkhah, 2009). sharpening of competitions in present-age conditions goads sports service providers to make analyses on vital events and their impacts on customers’ behaviors. identification of customers’ expectations from sports organizations allows service marketers to determine whether their services meet their customers’ needs (bolton and drew, 1991; gronroos, 1988; parasuraman et al., 1985; robledo, 2001). in services quality literature, the most dominant model for assessment of services is servqual scale, which has five dimensions: (1) tangible elements, barshan, et al.: impact of service quality on satisfaction, loyalty and intention to revisit of sport customers: the case study of swimming pools in alborz province international review of management and marketing | vol 7 • issue 2 • 2017 335 being physical elements and aspects of an organization to provide services, (2) reliability, being an organization’s ability to provide services in proper and timely manners, (3) responsibility, being an organization’s inclination to provide quick assistances to its customers, (4) confidence, being knowledge and courtesy of an organization’s employees in making reliance in customers, and (5) sympathy, being the manner employees treat with customers (hosainy et al., 2010). according to robinson, sports organizations are characterized by features which distinguish them from other companies. firstly, they are luxury organizations, with whose prices people treat with caution. secondly, customers refer to sports organizations when they are on their vacations. thirdly, emotional investments such as supporting a team and sense of belonging to a club are involved in sports—the factors which possibly provoke more expectations from sports organizations than other service providers (robinson, 2006). sports customers are addressed as a special group of customers, who thus deserve more attention paid by sports service providers like pools (hassanzadeh, 2005). beyond any sportsassociated endeavor, there is an outstanding decision-making process that requires further reconsiderations regarding how and what services and products to choose (hassanzadeh, 2005). pool managers well recognize importance of this issue, knowing that evaluation of services quality, customer satisfaction, and customer loyalty is a foremost step in improvement and development of their organization. accordingly, the author undertook to identify satisfaction and loyalty factors through the solutions and outcomes made out of his research entitled “impact of quality of services on satisfaction, loyalty, and presence of customers at alborz province pools” intended to enable better planning. briefly, sports managers should pay sufficient attention to get a better understanding of issues related to their services, particularly services impacting on their customers’ behaviors. they need to know what especial features affect their customers and lead to their loyalty (seyed et al., 2010). evaluation of quality of services in sports industry is still a controversial issue (williams, 1998). several studies have been carried out in service organizations, especially in the field of sports, in different countries reaching at different outcomes. in his study “impact of quality of services on satisfaction and return of male and female customers in south korean golf commercial clubs,” lee et al. (2010) concluded that tangibility and sympathy are two important elements in assessment of quality of services to determine male and female customers’ satisfaction levels. female golfers tend to attach importance to physical countenance and clearness of facilities—the factors which are highly significant in measurement of quality of services. holding the same belief, howat et al. (1996) conducted a research to measure quality of services in 15 australian sports and recreation centers. he concluded that a model composed of four dimensions, i.e., main services, quality of employees, general equipment, and minor services, is suitable for such centers. presently, there is no doubt on the role of customer satisfaction in market share and development of organizations. in his study “measurement of customer satisfaction in portuguese fitness clubs,” theodorakis (2004) concluded that women were less satisfied than men regarding equipment of services. and, educated people had the least satisfaction respecting equipment and social issues. among such studies, hashemi (2007) is a prominent one. he compared customer satisfaction levels in public and private roofed pools. results showed that there is a significant difference between public and private pools respecting health, social relations, facilities, equipment, hr quality, and management techniques. they also indicated that there is a significant difference between male and female customers’ satisfaction. as outcomes show, quality of services and satisfaction are very important factors that guarantee customer loyalty. being informed of importance of these factors, chuan-jao (2008) examined quality of services, customer satisfaction, and customer loyalty, concluding that quality of services such as plans and club conditions are of effect on customer satisfaction. he also showed that there is a meaningful relation between customer satisfaction and customer loyalty in these clubs. in his investigation of customer satisfaction in sports industry, seyed et al. (2008) demonstrated that a good understanding of customers from quality of services in sports has given rise to their high satisfaction degrees, resulting in its turn in generation of loyalty. another variable in this research is customers’ inclination to return. dourandish (2011) is another scholar who analyzed the relation between services quality, customer satisfaction, and propensity of customers to attend body building clubs. he suggested that impacts by both services quality and customer satisfaction on propensity of customers to attend body building clubs are high. and, customer satisfaction is a more powerful predictor for propensity of customers to attend body building clubs. in his study “impacts of services quality on customer satisfaction, loyalty, and behavioral decisions in south korean fitness centers,” sei-jun (2006) showed that services quality has direct positive or negative impacts on customer satisfaction levels. this study also indicated that customer satisfaction degree has direct impact on customer loyalty. finally, results showed that high levels of customer loyalty have direct effects on customers’ instantaneous decisions. studies by gharechoo et al. (2011), ziviar et al. (2012), faryabi et al. (2013), mogodi et al. (2014), and sabzeei et al. (2014) are also prominent in the area of services quality, customer satisfaction, and customer loyalty. gharechoo et al. (2011), in their study entitled “loyalty of employee in interaction with loyalty of customers of service industries,” concluded that there is a positive and meaningful relationship between employee loyalty and quality of services, quality of services and customer satisfaction, and customer satisfaction and customer loyalty. in investigation of the factors impacting on customer satisfaction using servqual scale, ziviar et al. (2012) showed that four dimensions, i.e., confidence, responsibility, guarantee, and sympathy, have been of effect on customer satisfaction of isfahan province mellat banks. however, physical aspects have been of little impact on satisfaction of customers from quality of services. moreover, faryabi et al. (2013) conducted their servequal scale-based study entitled barshan, et al.: impact of service quality on satisfaction, loyalty and intention to revisit of sport customers: the case study of swimming pools in alborz province international review of management and marketing | vol 7 • issue 2 • 2017336 “assessment of quality of services and its relationship with market share” on tabriz city saderat banks. results demonstrated that there is a meaningful difference among services expected by customers and those presented by saderat banks branches in tabriz city at all aspects besides credibility. also, results linked credibility and responsibility to market share, while there was no meaningful relations among accessibility dimensions and sympathy, on the one hand, and tangible elements with market share, on the other. mogodi et al. (2014), in his study “investigation of impact of social responsibility and customer satisfaction, case study: ahwaz pasargad bank,” concluded that there is a positive relation between satisfaction and behavioral/attitudinal loyalty of bank customers. sabzeei et al. (2014) made an analysis on customer loyalty field. in their study “investigation of factors impacting on customer satisfaction, case study: bank keshavarzi customers,” they came to these conclusions: (1) there is a positive and significant relation between customer satisfaction and customer loyalty, (2) there is a positive and significant relation services quality and customer satisfaction, (3) there is a positive and significant relation between reliance and customer loyalty, and reliance is one of the factors which bring about customer loyalty. in these studies, customer satisfaction is normally evaluated based on their perceptive response to products. this is thus asserted that customer satisfaction generates attitudinal loyalty in customers, whose amount is different in different situations among different people. definitely, customers’ satisfaction and attitudinal loyalty may be determining factors in successfulness or failure of service companies. in this respect, the study by saatchyan (2010) entitled “effects of services quality, customer satisfaction, and customer loyalty on customers’ instantaneous decisions to attend fitness and aerobic centers,” concluded that there is a positive and meaningful relationship among the factors services quality, customer satisfaction, and customer loyalty with return intentions. regression results showed that satisfaction and loyalty are powerful predictors for return intentions by customers. 2. methodology according to nature of the present study, which intends to examine the model for impact of services quality on customer satisfaction, customer loyalty, and inclination of pool customers to return, it is a correlative research. moreover, sem method was adopted to determine impact of predictor variables on criteria variables. statistical population of this study includes all male customers referring to alborz province pools. since accurate number of customers is unclear, morgan formula was used to determine the number of required samples. to do so, a pilot study was performed, whose variance value determined that statistical population of this study should be 6,000 peoples. based on the table, volume of sample is 361. questionnaire was used to collect require information. chen services quality questionnaire (2008), shen services quality questionnaire (2014), and wu services quality questionnaire (2005) were adopted. it was adjusted by liu questionnaire (2008). in order to determine general satisfaction level of customers, liu questionnaire (2008) was employed. allen attitudinal and behavioral questionnaire (1990) and presence inclination scale adjusted by parasuraman (1996) were applied. in addition, mcdougal and lusco (2000) and duncan and gary (2002) used the same questionnaire for recreational and sport centers. this questionnaire was adjusted by lim in 2006. likert scale was the basis of all questionnaires, in which each reply has a score among 1-5. in order to determine creditability of measurement tools in this study, (1) content creditability (face validity), and (2) structural creditability (factor analysis) were used. in face validity method, questionnaires were modified after the opinions made by experts and advisors were taken. in factor analysis method, conformity among theoretical and experimental structures of the study was addressed. this is important to note that confirmatory factor analysis technique was used along with lisrel sem model. structural equations modeling software was used to analyze creditability of assessment tools, i.e., confirmatory factor analysis, goodness of fit, and hypotheses test. 3. results in this part, conceptual model using lisrel software is tested. standardized coefficients are shown in figure 1. also the t-scores of each path in the model are observable in figure. in diagram 1 lisrel software output is in standard mode. results lisrel output indicates that the dimension of quality of services including tangibility, reliability, responsiveness, assurance and empathy have the effect of 0.33, 0.16, 0.15, 0.21 and 0.27% on overall satisfaction respectively. also, overall satisfaction have the effect of 0.53 and 0.36 on attitudinal and behavioral loyal respectively, behavioral loyalty is impressive 0.36%. attitudinal loyalty has the effect on 0.61% and behavioral loyalty has the effect of 0.24 on intention to revisit of customers. in the significant state of the model, results indicate that the effects of all dimensions of service quality on satisfaction are significant. moreover, the impact of customer satisfaction on attitudinal and behavioral loyal is significant. the effect of attitudinal and behavioral loyalty on the intention to revisit of customers is significant. due to the all amounts of t-value in table 1 (between 1.96 and −1.96) we can say all causal relationship is significant. according to the results table 1, the amount df/×2 is 1.79 and smaller than 3, therefore this index indicates a fit model. the root mean square error of approximation must be <0.08 that in the proposed model is 0.045. gfi, nfi, cfi and agfi should be <0.9 that are met in the fit model of this study. consequently, all the indexes met the good of fitness of the model. 4. discussion and conclusions sem results showed that elements of service quality have impacts on general satisfaction of customers. these elements include tangibility, credibility, responsibility, confidence, and sympathy whose impacts on general satisfaction of customers barshan, et al.: impact of service quality on satisfaction, loyalty and intention to revisit of sport customers: the case study of swimming pools in alborz province international review of management and marketing | vol 7 • issue 2 • 2017 337 are 0.33, 0.16, 0.15, 0.21, and 0.27%, respectively. customers’ perceptions toward services quality performance related to fulfillment of their needs and demands might be declared to have a close relationship with customers’ satisfaction and their inclination to return. this part of research findings are aligned with ramezani (2004), chen (2004), shamsipour (2005), bodet (2006), sei-jun (2006), yi-chin (2008), bahlakeh (2008), alidoost & koozechian (2009), saatchyan et al. (2011), and dourandish (2011). above studies were conducted in the area of sports services, and most of them reported a considerable relation among services quality and satisfaction variables, as well as their elements. in general, this is safe to indicate that services quality is the basis and one of the most important factors in increasing customer satisfaction levels. sem results showed that general satisfaction of customers influences on customers’ attitudinal and behavioral loyalty. this impact is 0.53% on attitudinal loyalty and 0.36% on behavioral loyalty. this is vital for managers and pool owners to get acquaintance on the factors which result in customers’ attitudinal and behavioral loyalty, since these factors provide the path for further satisfaction of customers. determining this satisfaction degree, managers are able to guarantee their customers’ attitudinal and behavioral loyalty. this is aligned with koozechian (2009), bahlakeh (2008), seyed et al. (2010), rahmati (2011), bodet (2008), wu (2005), and mahmoudi (2011). in these studies, customer satisfaction is measured based on their perceptive response to products and/or financial values of presented services. this is thus safe to declare that quality of presented services causes elevated customer satisfaction degrees, bringing about different attitudinal and behavioral loyalty levels in customers. certainly, essential cores of marketing, i.e., customer satisfaction, attitudinal loyalty, and behavioral loyalty, end in failure or successfulness of service organizations. figure 1: lisrel output for causal relationship between independent and dependent variables barshan, et al.: impact of service quality on satisfaction, loyalty and intention to revisit of sport customers: the case study of swimming pools in alborz province international review of management and marketing | vol 7 • issue 2 • 2017338 sem results showed that attitudinal loyalty (0.61%) and behavioral loyalty (0.24%) influence on customers’ inclination to make repurchases. attraction of customers’ loyalty through addressing their demands should be taken into vigilant account. addressing customers’ demands are golden opportunities to make them loyal and secure their repurchases. most possibly, this would elevate customer loyalty levels and their inclination to return, with its results being pools’ continued benefit-making. this is aligned with rezai (2008), kim and kim (1995), babakus (2004), saatchyan et al. (2011), and wu (2005). wu (2005) indicated that the first encounter of employees with customers could produce a general customer judgment about pools. since sports service organizations are different from other companies, most applicants tend to refer to them for passing their leisure hours in a tranquil atmosphere. therefore, fulfillment of this demand is a foremost factor in customers’ inclination to return. sem results endorsed the author-made conceptual model. results showed that data are relatively aligned with the model, and indices are indicative of the fact that this model has a desirable goodness of fit and so-called experimental data is well aligned therewith. it means that impact of services quality on general satisfaction, satisfaction, and customers’ inclination to return to alborz province pools is positive and meaningful. moreover, services quality influences on general satisfaction, loyalty, and customers’ inclination to return. currently, customers’ general satisfaction is not sufficient, and different organizations, including sports pools, should not rely only on high customer satisfaction levels. they, rather, have to assure that their satisfied customers are loyal, as well. this is intended to make long-term relations with customers to secure long-term benefits for pools. consequently, pool managers should observe themselves from their customers’ eyes, trying to understand their customers and make them happy within the competitions which are subject to increasing intricacies. not only would this provoke customers to remain loyal to their pools, but also make them encourage their friends to make use of the same services. accordingly, this is noted that increase in pools’ financial benefits is realized through increasing service quality, leading to customers’ loyalty and their inclination to return. in fact, increase in quality of services at all levels results in higher customers’ general satisfaction, attitudinal loyalty, and behavioral loyalty degrees, ending in reappearance of customers in pools. a satisfied customer would be loyal to, and reappear at, his/her pool—the fact which guarantees long-term profitability of pools. references alidoost, e., koozechian, h. 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(2008), an analysis service quality, customer satisfaction and customer loyalty of commercial swim club in taiwan. yousefi, b., taheri, h., shojaei, v. (2007), survey of sports marketing through the internet in iran with emphasis on elements p4. research in sport science, xv, 95-81. ziviar, f., ziayee, m., nargesian, j. (2012), investigation of effecting factor on consumers’ satisfaction using sevequal. modern marketing research, 3(6), 173-186. . international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2017, 7(4), 55-60. international review of management and marketing | vol 7 • issue 4 • 2017 55 determining the role of socio-cultural factors in women’s inclination toward beauty (case study: tehran) amirreza naghsh1*, nazila vafakhah2 1department of management, isfahan (khorasgan) branch, islamic azad university, isfahan, iran, 2department of management, isfahan (khorasgan) branch, islamic azad university, isfahan, iran. *email: amirreza.naghsh@chmail.ir abstract the aim of this study was to determine the role of socio-cultural factors in women’s inclination toward beauty. this study was conducted as a descriptive survey. the population consisted of all women and girls between 15 and 64 years living in the north (districts 1 and 2) and south (districts 19 and 20) of tehran in 2016. according to cochran formula, 384 subjects were selected as the sample by multi-stage cluster sampling method. the data were collected by using a researcher-built questionnaire based on the theories of “albert bandura,” “erving goffman” and “bourdieu” as well as the inclination model to beauty of pidgan and russell; its formal validity was approved by a number of respondents and it content validity was confirmed by the supervisor professor and a number of experts in the field of social sciences. the reliability of the questionnaire was calculated using cronbach’s alpha coefficient as 0.86 and was confirmed. in order to analyze the data, descriptive statistics such as mean, standard deviation and frequencies, analytical and univariate t-tests, manova and friedman test were conducted. the results of data analysis showed that social and cultural factors play an important role in the inclination of women toward beauty at a significant level (p < 0.01). also, socio-cultural dimensions such as socio-economic status, social acceptance, cultural capital, how to use social media, and group level are significantly related to women’s inclination toward beauty (p < 0.01). the results of ranking the cultural-social dimensions showed that social acceptance, socio-economic status, media consumption, social groups and cultural capital respectively have the highest to the lowest ranks in the inclination of women toward beauty. there was no significant difference between the respondents in terms of demographic factors with the exception of differences in opinion between the south and north of tehran. keywords: inclination to beauty, women, cultural factors, social factors, tehran jel classification: d91 1. introduction two fundamental features of “perception” and “willing practice” exist in every living creature. in humans, these two properties are more developed, more complex and deeper: one is the system of perception and the other device is the system of will. in the field of perceptions, knowledge and cognition are involved that are defined as “insight,” and in will, motivation and willingness are involved that are defined as “inclinations.” these two essential factors, namely “insight” and “inclination” contribute to “action” or behavior (cohen, 1994). the inclination to beauty is a natural essence that tends to exist in all humans; so that he is attracted to what is beautiful. there is no force in the world of nature that can bar this from her/him; because desire is innate and internal inclination is a developmental issue that is much different with conventional issues (abbaszadeh et al., 2012). inclination or preference, tendency to distinction and difference are related to the sense of superiority between people, which defines the type of emotional, cognitive and behavioral preferences for behavioral preparation to satisfy desires. inclination to beauty is a completely natural sense and is common to all human beings at all times, and has always been an important issue based on the different perceptions of it. this sense is stronger among women in most societies and cultures. psychologically, women have an altruist character that makes them to preen themselves (giddens, 2008). in fact, women are more interested in showing their beauty to others more than the “beauty” itself. thus, when they participate in communities and public meetings, they devote more effort to their beauty and elegance. iran is a society that the beauty fever has grown among women in the last decade; evidence can be seen as in their orientation to different types of unconventional makeup and fashion models and undergoing cosmetic surgery naghsh and vafakhah: determining the role of socio-cultural factors in women’s inclination toward beauty (case study: tehran) international review of management and marketing | vol 7 • issue 4 • 201756 procedures (abbaszadeh et al., 2012). now our society is facing women and girls that don’t want to be seen without makeup under any circumstances despite having a beautiful face (safiri and ghobadi, 2014). this issue is a health threat to them, causing social challenges such as abnormality, tension in families, promiscuity, immorality, etc., beside numerous identity problems among the country’s active force. its major outcome can be seen in the changed lifestyles among young people (mohammedi, 2012). accordingly, it seems that inclination to beauty among women from different angles and dimensions and identifying the different factors affecting the particular social and cultural dimensions makes it possible to achieve effective solutions for this challenge. “beauty” not for everyone, but for most people is of utmost importance. in human society, women are more likely to wear make-up and show off their sex. “beauty” for women implies many factors such as social status, utility reproduction, income, intelligence, and the likely help from the opposite sex. because people consider some positive characteristics for attractive people while do not imagine them for a non-attractive case. this can be discussed in terms of both anthropological and substantive differences between men and women in behavioral sciences. this means that the differences indicate a natural difference between men and women and on the other hand are related to the issue of norms and behavioral studies. research shows that women’s motivation for “beauty” falls into two general categories of personal motivation (motivation of the ego) and transpersonal motivation (motivation referring to the superego). personal motives are classified at the level of micro analysis, transpersonal motives depending on the situation where people are, are classified in both middle and macro levels of analysis. at the mid-level, family and family circumstances, and at the macro level, the social conditions are the sources of orientation to “beauty” which are different in any situation (johnson, 2011). giddens (2008), the contemporary english sociologist believes that women are judged especially on the basis of physical features, and being ashamed of their bodies has a direct relation to social expectations. compared to men, he believes women are more prone to eating disorders that are the result of several main reasons: first, our social norms about women are more focused on physical attractiveness. second, what is defined as a socially desirable body image is the image of a slim women and not muscular. third, although today women are more active in public and social life than before, but they are at the same time judged based on their advances and achievements (giddens, 2008). thus, the present study explores and prioritizes the effective factors on women’s inclination to beauty among the women in tehran and tries to explain the relationship between socio-economic status, social acceptance, demographic characteristics, media consumption, social groups and cultural capital. on the other hand, we can say that perception of beauty is a social structure and individual idea that is related to satisfaction with oneself in any society, in any period of time, associated with cultural ideals and primary patterns. these issues can be studied among women from different aspects. 2. background and review of literature humans are perfectionist beings that are oriented to any kind of perfection and dislike any deficiency and defect. s/he loves “beauty” as an example of perfection, is willing toward it and eludes the ugly; thus, any human being naturally and essentially looks for “beauty” and has the desire to present and display it. studying the beauty norms in recent years shows that some ideals are determined for women that are practically impossible to be achieved and these ideals and unrealistic goals put women in a position of inferiority that will make them constantly be alert and monitor their body changes with all powers they have (hansen, 2002). in the eyes of plato, “beauty” is the harmony between the components and the whole (hansen, 2002). “durant” believes “beauty” is born out of desire and states that one of the prominent signs that “beauty” is born of desire is that the desirable object loses its “beauty” after it was achieved. in other words, as “beauty” is relative, every eye defines it in specific terms. in fact, “beauty” is different in the eyes of people, depending on their thought and vision. one might call a certain phenomenon, event or object beautiful while another calls the same phenomenon, event or object not beautiful, but ugly indeed (durant, 1995). thus it can be said, beauty in the eye of viewer is “affected by culture” and is an attribute related and belonging to the satisfaction and preferences, as the concepts that value judgments can be attributed to them. the term “aesthetics” or appreciation of “beauty” in the proper sense, was mentioned the first time in the 19th century and proposed a new sense, beyond the mere attachment to the “beauty;” today’s interpretation of “aestheticism” believes in the importance, creating and understanding “beauty” and the value of “aesthetics.” black and sharma (2001) in a study entitled “men are real, while women do make-up” analyzes beauty therapies and procedures between polish men and women. based on observations made, the researchers found that beauty therapy has the role of an informal adviser and in fact it performs both emotional and practical activities on the body. this point was found that the women referring to the beauty salons are seeking social activities. not only the therapists, but the customers themselves are completely aware of this important matter that their action procedures must be in accordance with the types of women who are constantly dealing with them (johnson, 2011). jones (2013) in his study titled as “the study of beauty among women in towns and cities” investigated the mental images of beauty among women in germany’s towns and cities. the results show that those women who are not able to meet such standards due to barriers such as social class, economic class, etc., are faced to identity crisis, lack of competence and lack of confidence (jones, 2013). “gimlin” (2013) in a study entitled “the causes and factors effective on cosmetic surgery among women”, examined “beauty” as a product and addressed the experience of women on the issue of “beauty” to merely look at it from the perspective of women. “balali and afshar” (2014) in a study as “beauty and money: make-up and surgery” aimed at answering the question of whether naghsh and vafakhah: determining the role of socio-cultural factors in women’s inclination toward beauty (case study: tehran) international review of management and marketing | vol 7 • issue 4 • 2017 57 there is a significant correlation between economy (money) and beauty? the results showed a strong ideological link between money and beauty in the contemporary society. although women’s preferences and agency are also effective in this relation, but this agency is greatly influenced and manipulated by the pre-existing structure and continuous capitalism. in import of beauty culture to iran, the press, businesses, and women themselves are involved (balali and afshar, 2014). “kabiri and ghorban” (2013) in a study titled “the sociological analysis of young girls’ tendency to use cosmetics” in payam-noor university of urumia tried to answer the question of which social and cultural factors cause the increasing drive to use cosmetology among girl students? the empirical findings indicated that the variables of economic capital, cultural capital, socioeconomic status and the use of the media, have a significant and positive relationship with young girls’ tendency to use cosmetics. among the variables, cultural capital has the strongest relationship with the dependent variable (kabiri and ghorban, 2013). “movahed et al.” (2011) in a study entitled as “study of the relationship between the media, body image and self-esteem and tendency to make-up” reported that a number of the subjects were wearing makeup and tend to use it. and a large proportion of them were not satisfied with their body image. the relationship between self-esteem and body image dissatisfaction was negative and its relationship was only significant in the dimension of tendency to make up, and finally, all media types with variables of body image, self-esteem and make-up did not have a similar relationship (movahed et al., 2011). “webster” (2015) in his study “beauty, symbol of respect” examines the vision and conception of beauty among young french women. the results suggest that facial attractiveness makes predictable differences in the development of general and specific communication and the impact and appeal of face and social acceptance in combination with other factors of respect are related to women’s inclination to beauty (wilber, 2012). 3. research questions 3.1. main research question to what extent the socio-cultural factors influence the women’s inclination toward beauty in tehran? 3.2. secondary questions 1. to what extent the socio-economic status is effective on women’s inclination to beauty in tehran? 2. to what extent the social acceptance is effective on women’s inclination to beauty in tehran? 3. to what extent cultural capital is effective on women’s inclination to beauty in tehran? 4. to what extent the media consumption is effective on women’s inclination to beauty in tehran? 5. to what extent the community groups involved are effective on women’s inclination to beauty in tehran? 6. what are the rankings of the role of each socio-cultural factor on women’s inclination to beauty in tehran? 4. methodology the design of this study is a descriptive survey. the main population of this study includes all women and girls between 15 and 64 years living in the north (districts 1 and 2) and the south (districts 19 and 20) of tehran in 2014. according to iranian statistics office, the population of studied area was a total of 833414 persons based on housing census in 2011. in this study, multi-stage cluster sampling was used. in the first phase, blocks in each region were identified. in the second stage, units in each residential block were identified and finally in the third stage, researchers directly referred to each unit and randomly selected the sample among women aged 15-64 years were. to determine the number of sample, cochran’s formula was used and the statistical population of 384 people was determined. in both southern and northern districts 192 questionnaires were distributed. in this study, data collection for approving or rejecting the hypothesis of the study was done using field method (i.e., questionnaire). the questionnaire is developed using strategic management surveys collection written by nanchian et al.; it has three parts, of association letter, general questions and specialized questions. a. association letter: in this letter, besides the research title, the objectives of data collection and friendly request of cooperation are described at the end of questionnaire; and participations are appreciated. b. general questions: in this section of the questionnaire 9 demographic questions about general characteristics such as marital status, education level, occupation, monthly income, attention to beauty trends, the importance of appearance and make-up for them, satisfaction with the physical condition, and inclination to beauty, and the time and cost spent for beauty are investigated among women in tehran, and answers have been used to analyze the data. c. specialized questions: in this section of the questionnaire, 47 questions on the special questions raised are designed based on likert scale. at the end, there are supplementary questions about recommendations of respondents. a researcher-built questionnaire tailored to identify and prioritize the socio-cultural factors that influence women’s inclination for beauty assessed the ideas of women and girls between 15 and 64-year-old living in tehran city. the scale comprised of three sections based on likert scale. for calculating reliability, cronbach’s alpha coefficient, was used and the internal consistency of the instrument was found 0.86 based on alpha coefficient. kolmogorov-smirnov, independent t-test, anova and friedman test was run in inferential statistical tests. for the analysis and application of these tests, spss v.19 was used. statistical tests used in this study are as follows. 5. results 5.1. descriptive findings in this section, respondents’ demographic characteristics and parameters of the research are descriptively analyzed and the frequency and percentage criteria were calculated and determined for individual variables. naghsh and vafakhah: determining the role of socio-cultural factors in women’s inclination toward beauty (case study: tehran) international review of management and marketing | vol 7 • issue 4 • 201758 5.2. the main research question to what extent the socio-cultural factors are effective on women’s inclination to beauty in tehran? 5.3. 1st sub-question to what extent the socio-economic status is effective on women’s inclination to beauty in tehran? 5.4. 2nd sub-question to what extent the social acceptance is effective on women’s inclination to beauty in tehran? 5.5. 3rd sub-question to what extent cultural capital is effective on women’s inclination to beauty in tehran? 5.6. 4th sub-question to what extent the media consumption is effective on women’s inclination to beauty in tehran? 5.7. 5th sub-question to what extent the community groups are effective on women’s inclination to beauty in tehran? 5.8. 6th sub-question what are the rankings of the role of each socio-cultural factor on women’s inclination to beauty in tehran? 6. discussion and conclusion the information in table 1 shows that 54.95% of respondents were single and 26.82% of them were married. this might be indicative of life of single women in tehran. the information in table 2 shows that more than 57.3% of respondents have academic education that is indicative of high level of education among women in capital. the information in table 3 shows that socio-cultural factors and the significance level observed in independent t-test in both north and south of tehran has been significant for all research questions at the level of p < 0.05. the results of this study indicate a significant level of social factors (socio-economic status, social acceptance) and cultural factors (cultural capital, social media consumption, community groups) in the tendency for women’s aesthetic inclination. the information in table 4 shows that while socio-economic status is influenced by various factors, such as social class, lifestyle, public evaluation, women’s social assessment criteria and indicators, promotion of social prestige, economic status, parents occupational status and place of residence of the respondents of this research is very important in inclination to beauty trends. this is consistent with the results of kabiri and ghorban, (2013) about a positive and significant relationship between the socio-economic statuses with a focus on young girls tendency to use cosmetics. therefore, it can be said the role of socio-economic factors in women’s inclination to beauty in tehran is more than average. the information in table 5 shows that social acceptance is an important factor of behavioral analysis and evaluation. we can say that confidence, conformity with social demands (conformity), and gaining access to various social opportunities (marriage, employment, etc.,) compatibility with social norms, attitudes in favor of women’s rights movements (feminism), adaptation to stereotypes influenced by the social environment (fashion), mental disorders (depression, anxiety, deformation fear, etc.,) and feeling capable to achieve success respondents view are the important factors in inclination to aesthetics. therefore, it can be said the role of social acceptance in women’s inclination to beauty in tehran is more than average. table 1: the frequency distribution of respondents based on marital status sex frequency (%) single 2.11 (54.95) married 1.3 (26.82) total 384 (100) table 2: the frequency distribution of respondents based on level of education level of education frequency (%) under diploma 74 (19.27) diploma 91 (23.70) associated degree 43 (11.20) bachelor’s 119 (30.99) master’s 55 (1.32) phd 2 (0.52) total 384 (100.0) table 3: summarizes the results of the independent t-test of sociocultural factors impact on inclination to beauty in the north and south of tehran variables tehran districts n mean±sd t df significant socio-economic status north 192 199±42 46.52 382 0.001 south 192 150±36 social acceptance north 192 172±41 57.81 382 0.04 south 192 161±37 cultural capitals north 192 186±52 39.67 382 0.045 south 192 148±67 effective media consumption north 192 172±49 49.48 382 0.039 south 192 153±58 social groups north 192 183±61 53.28 382 0.026 south 192 164±44 sd: standard deviation naghsh and vafakhah: determining the role of socio-cultural factors in women’s inclination toward beauty (case study: tehran) international review of management and marketing | vol 7 • issue 4 • 2017 59 the information in table 6 shows that hegemony and perfectionism, change and diversity, appearance and body dissatisfaction, gender stereotypes (the need for gentleness and beauty for women), the ideal mental image, alienation, consumerism, lack of attention to religious beliefs, patterns of family life (education, nutrition, affection, etc.,) and the lack of skills necessary for success in life were the important factors in women’s inclination to beauty in this study; this finding confirms the results reported by kabiri and ghorban (2013) about a positive and significant relationship between media consumption with a focus on young girls’ use of cosmetics. therefore, the role of media consumption in women’s inclination to beauty in tehran is more than average. the information in table 7 shows the results of this study suggest that advertising “beauty” in satellite channels, modeling of stars (film actors, sports heroes, fashion models, etc.,) internet advertising, content of social networks, magazines propaganda, brochures, newspapers, journals, films and television series were the important factors in the view of respondents on inclination to beauty. it can be said there is a significant relationship between media consumption and inclination to beauty among women living in the north and south of tehran; this finding is consistent with the results of “balali and afshar” (2014) on the role of media in import and consumption of beauty culture to iran and also study by kabiri and ghorban (2013) on the meaningful and positive relationship between media use and the inclination to beauty. therefore, it can be siaid the role of social groups in women’s inclination to beauty in tehran is more than average. the information in table 8 shows that humiliating behavior (by family, partner, relatives, colleagues, friends, etc.,) envy and rivalry (family, partner, relatives, colleagues, friends, etc.,) show-off and attract the opposite sex, being confirmed (spouse, friend, etc.,) social communities temptation and persuasion (family, relatives, colleagues, friends, etc.,) feeling accepted in peer group, pressure and political flow, job positions (type, level, level of responsibility, etc.,) common public spaces for women (parties, festivals, restaurants, etc.,) acceptance among social groups (family, relatives, colleagues, friends, etc.,) were the important factors in the view of respondents on inclination to beauty. it can be said there is a significant relationship between social communities and inclination to beauty among women living in the north and south of tehran. the information in table 9 shows that in respondents’ perspective, socio-economic status, media consumption, social groups and cultural capital have the most to leas effective role on the women’s inclination to beauty in tehran, respectively. 7. recommendations 1. considering the effect of prevalence of consumerism culture on inclination to beauty among respondents, it is recommended to develop and administer a set of effective programs such as correct consumption through formal education such as schools for children, as well as through informal mediums for the adults such as mass media. 2. with regard to the impact of ignoring the religious beliefs on the extreme tendency to beauty, it is recommended to social authorities to pay attention to the development and spread of culture and religious teachings and beliefs with proper planning and targeted use of all capacities and capabilities, in order to fulfill a religion-oriented society based on islamic lifestyle. 3. due to the high negative impact of “living with family” on the extreme inclination toward beauty among women, it is recommended to social affairs administrators to implement policies to strengthen families and promote family life. table 4: the mean score of socio-economic status on women’s inclination to beauty variable n mean±sd t df significant socio-economic status 384 3.172±0.58 56.439 382 0.000 sd: standard deviation table 5: the mean score of social acceptance on women’s inclination to beauty variable n mean±sd t df significant social acceptance 384 3.075±0.78 86.63 382 0.000 sd: standard deviation table 6: the mean score of cultural capital is effective on women’s inclination to beauty variable n mean±sd t df significant cultural capital 384 4.243±0.59 40.881 382 0.000 sd: standard deviation table 7: the mean score of media consumption on women’s inclination to beauty variable n mean±sd t df significant social acceptance 384 3.436±0.87 36.40 382 0.000 sd: standard deviation table 8: the mean score of community groups on women’s inclination to beauty variable n mean±sd t df significant community groups 384 3.688±0.76 31.881 382 0.000 sd: standard deviation table 9: the summary of freidman test on prioritization of socio-cultural factors in women’s inclination to beauty variables n variables ranking mean scores’ ranking df χ2 significant social acceptance 384 1 3.10 5 265.75 0.000 socio-economic status 384 2 2.85 effective media consumption 384 3 2.16 social communities 384 4 1.89 cultural capitals 384 5 1.77 naghsh and vafakhah: determining the role of socio-cultural factors in women’s inclination toward beauty (case study: tehran) international review of management and marketing | vol 7 • issue 4 • 201760 references abbaszadeh, m., aghdasi, a.f., sa’adati, m. (2012), a sociological study of inclination to beauty trends, cosmetic surgery, plastic surgery and associated factors: case study of women and girls aged 16-64-yearold in the city of tabriz. journal of applied sociology, 47, 123-140. balali, a., afshar, k.j. (2014), beauty and money: cosmetic surgery. womens studies (the women), 12(47), 99-140. black, p., and sharma, u. (2001), men are real, women are ‘made up’: beauty therapy and the construction of femininity. the sociological review, 49(1), 100-116. cohen, b. (1994), in: tavassoly, ga., fazel, r., editors. principles of sociology. 3rd ed. tehran: samt. durant, w. (1995), the pleasures of philosophy. translation abbas zaryab. tehran: education department of islamic revolution. giddens, a. (2008), modernity and distinction: community and personal identity in the modern era. translated by naser movafaghian. tehran: nashre ney. gimlin, d.l. (2013), “too good to be real” the obviously augmented breast in women’s narratives of cosmetic surgery. gender and society, 27(6), 913-934. hansen, j. (2002), makeup: fashion and exploitation of women. translation afshang maqsoodi. tehran: gol-azin. johnson, r. (2011), aesthetics. translation masoud jafari. tehran: markaz. jones, w. (2013), the study of beauty among women in towns and cities. womens magazine, 7, 33-39. kabiri, a., ghorban, a.m. (2013), a sociological analysis of young girls tendency to use cosmetics (case study of female students of payam noor university of urmia). police knowledge of west azirbaijan, 6, 38-54. mohammedi, m. (2012), luxury-orientation of women in islam (the factors, effects, solutions), strategic ideas. women and families. new york: message of justice. p286-304. movahed, m., mohammadi, n., hosseini, m. (2011), the study of the relationship between the media, body image and self-esteem and tendency to make up. journal of social studies of women, 9, 133-160. safiri, k.h., ghobadi, m. (2014), beauty culture and consumerist society (with emphasis on consumerism in cosmetics). social studies and research in iran, 2, 80-98. wilber, k. (2012), integral spirituality: a startling new role for religion in the modern and postmodern world. boston: integral books. . international review of management and marketing | vol 6 • special issue (s4) • 2016 101 international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2016, 6(s4) 101-107. special issue for “asia international conference (aic 2015), 5-6 december 2015, universiti teknologi malaysia, kuala lumpur, malaysia” implementing knowledge management in the palestinian public sector institutions: empirical study on the presidency of the palestinian government abdullah waleed almudallal1*, norhani bakri2, syaharizatul noorizwan muktar3, majed m. el-farra4 1faculty of management, universiti teknologi malaysia, 2faculty of management, universiti teknologi malaysia, 3faculty of management, universiti teknologi malaysia, 4faculty of commerce, the islamic university of gaza, palestine. *email: as.modallal@gmail.com abstract this paper focuses on bridging the theoretical and empirical approaches of knowledge management (km) key enablers in the palestinian public sector, which are essential to facilitate and ensure a successful implementation of km; these key enablers are: organizational culture, leadership, personnel, information technology. for this purpose, a questionnaire was personally distributed to all (46) technical, administrative, and supervisory employees working at the presidency of the palestinian government. total of (44) fully answered questionnaires were received. the results showed a significant positive relationship between km key enablers and the level of performance in the palestinian ministers’ council by 0.829. it also indicated that 70% of the variation in the performance level has been significantly explained and influenced by km key enablers. the recommendations proposed by this paper will provide a strategic direction for the palestinian public administration to act more effectively with km practices, and pay a focused attention to its key enablers. keywords: knowledge management, public sector, palestine jel classifications: d80, m10, h11 1. introduction basically, competitive ability is essential for every economic activity and increasingly dominates the competitive advantages (cariša et al., 2014; milan et al., 2014). however, the challenges that follow forming, protecting, and developing competitive abilities on the global market are much greater than the past, they arises mostly from the field of knowledge economy, where knowledge is the main driving force of permanent productivity growth in the modern organizations (arayici, 2014; mehmed et al., 2014; majumder, 2012). this change not only poses some challenges, but also offers opportunities for both private and public sectors as well (jain and jeppesen, 2013; cong and pandya, 2003). de la vega (2010) argued that in today’s new competition, organizations become aware about the importance of having a systematic approach to create, store, and share knowledge; whereas managing the organizational knowledge effectively is seen as critical ingredient to ensure sustainable strategic competitive advantage (omotayo, 2015). knowledge management (km) is a systematic effort to increase useful knowledge within the organization, by encouraging communication, offering opportunities to learn, and facilitating the sharing of knowledge (mcinerney, 2002). the industrial sector has been involved in formal km practices over the years; however, even though public sector institutions create, transfer, and consume greater amounts of knowledge (zhang, 2010), they still lagged behind a bit in the field of km, but realizes its importance to their organizations and to its policymaking and service delivery to the public, in times of shrinking budgets, ensuing retirements, and the need to better information and knowledge sharing level (liebowitz, 2004; cong and pandya, almudallal, et al.: implementing knowledge management in the palestinian public sector institutions: empirical study on the presidency of the palestinian government international review of management and marketing | vol 6 • special issue (s4) • 2016102 2003). nevertheless, it is not easy to implement km systems and apply its practices (zhang, 2010; cong and pandya, 2003) particularly for a developing country. while scholars and researchers have debated over the relevance of km in increasing organizational performance and its importance across industrial sectors in developing and developed countries (jain and jeppesen, 2013), there is little research on the broader aspects of the nature and means through which km influences the performance of public sector institutions and how it can be implemented effectively (zhang, 2010; leidner et al., 2006; cong and pandya, 2003). hence, km and its organizational infrastructure in the governmental context needs to be further explored and exploited for its full benefits to be reaped (traunmüller, 2012; arora and raosaheb, 2011; cong and pandya, 2003). as the case of this paper, the issue of the armed-conflict in palestine has detrimental effects on the development process. this conflict and its consequences are profound challenge of development for the palestinian government; in another words, civil war and conflict are “development in reverse” for palestinians (collier et al., 2003). consequently, it is important for the palestinian government to draw carefully the appropriate strategies for implementing km practices, in order to increase their performance efficiency and competitive abilities. hence, the purpose of this study is to uncover some answers on how can the palestinian government implement km effectively? what are the key enablers those are required to implement km in the public sector? how these enablers influence the performance of the palestinian public sector institutions? 2. literature review 2.1. the concept of knowledge during the mid-1990s, many organizations became more interested in the nature of knowledge, partly as a result of the introduction of information technology, which provided the promise of ability to manage knowledge as a corporate asset (syaharizatul, 2013; hislop, 2005). the uprising significance of knowledge has raised desires of management studies scholars and researchers (e.g., hislop, 2005; schultze, 1999; cook and brown, 1999; spender, 1996; blackler, 1995; nonaka, 1994; wiig, 1993) to grub deep on the meaning of knowledge. however, in order to simplify and clarify the concept of knowledge, it is essential to point out the relevant perceptions of data, information, and knowledge. data are collections of comprise facts, observations, measurements and statistics. it may represent raw numbers or assertions, and may be devoid of context, meaning, or useful until they are transformed into a usable form (becerra-fernandez and sabherwal, 2010; newell et al., 2009; rowley, 2007; hussain et al., 2004). information is organized or processed data for a specific period of time and context (hussain et al., 2006). it represents data, arranged in a meaningful indication of trends or patterns in the data (hislop, 2005). knowledge, however, is the conscious use of information (miguel, 2011). it is information that is contextual, relevant and actionable (hussain et al., 2004; cook and brown, 1999). knowledge exists as an object (schultze, 1999; wiig, 1993), treated as an entity that people can possess (virtanen, 2010). so knowledge is neither data nor information. knowledge is an understanding, where people gain knowledge through experience, reasoning, intuition, and learning (colesca, 2005; cong and pandya, 2003). the most commonly used taxonomy of knowledge is what polanyi (1966) has identified: tacit, and explicit (table 1). nonaka (1994) clarify that explicit is codified knowledge that is transmittable in formal, systematic language, and more communicable across contexts (newell et al., 2009; wiig, 1993) additionally, explicit knowledge can be processed, transferred, and stored relatively easily (hislop, 2005). in contrast, tacit is human-minded knowledge which is deeply embedded in action, commitment, situated in a specific context, and hard to formalize and share (nonaka et al., 2000). it includes insights, intuitions, hunches (becerra-fernandez and sabherwal, 2010), and linked with the skills (newell et al., 2009) that people develop through their own experience in specific context actions (hislop, 2005). 2.2. km km key purpose is to maximize the knowledge-related effectiveness and returns in an organization from its knowledge assets and to renew them continuously (wiig, 1997). bennet and bennet (2003) sees km as a systematic process of creating, maintaining, and nurturing an organization to make the best use of its individual and collective knowledge to achieve sustainable competitive advantage and high performance. moreover, debowski (2006) defines km as the process of identifying, capturing, organizing, and disseminating the intellectual assets that are critical for the long term performance of an organization. km is considered as a process, where many activities are designed to carry out main elements of km strategies and operations in an organization (omotayo, 2015; newell et al., 2009). according to devi et al. (2013), the process of km involves knowledge creation, use, and implementation. in addition, omotayo (2015) goes further to say that an organization must first identify and capture knowledge, and then organize it in order to bring knowledge within the organizational boundaries. then, knowledge should be shared throughout the members of the organization using both human and technological means. through this transfer, the members of the organization can apply the new knowledge to their tasks, which can include the use of km systems. the essence of managing knowledge is concerned with deciding with whom to share, what is to be shared, how it is to be shared. table 1: the characteristics of tacit and explicit knowledge tacit knowledge explicit knowledge inexpressible in a codifiable form codifiable subjective objective personal impersonal context specific context independent difficult to share easy to share source: hislop (2005. p. 19) almudallal, et al.: implementing knowledge management in the palestinian public sector institutions: empirical study on the presidency of the palestinian government international review of management and marketing | vol 6 • special issue (s4) • 2016 103 managing knowledge produces value when shared knowledge is used and reused (cong and pandya, 2003). on the other hand, km should be supported by a strong infrastructure of enablers, each of these must be designed and managed in alignment with others in support of km processes (debowski, 2006; cheng et al., 2001; blackler, 1995). due to the sharp increase in the interest of implementing km practices, scholars and practitioners have suggested several proposals of km key enablers; however, for the purpose of this paper, we will focus on the common km key enablers proposed by different scholars and researchers (e.g., carrión, 2006; debowski, 2006; fernandez and sabherwal, 2006; girard, 2005; stankosky, 2005; lee and choi, 2003). these are: organizational culture, leadership, personnel, information technology (figure 1). organizational culture is a complex system of values and norms that is shaped and developed over time, and affects the all kinds of organizational processes and behaviors (belias and koustelios, 2014; saeed et al., 2010; leidner et al., 2006). according to servin and de brun (2005), creating a knowledge environment, requires changing organizational values and culture, changing people’s behaviors and work patterns, and providing people with easy access to each other. developing the right organizational culture for a successful km implementation is usually the most important and the most difficult challenge for organizations (cong and pandya, 2003). the culture reflect how the organization facilitates learning and innovation; also show how it encourages employees to build organizational knowledge base in ways that enhance value for the customer (jain and jeppesen, 2013; servin and de brun, 2005). leadership is responsible on leading and establishing the culture and consequent ability of an organization to capture, share, and manage its knowledge (zyngier, 2006; bollinger and smith, 2001). leadership should also focus on establishing and supporting a system that enhances and facilitates the sharing and application of knowledge at the appropriate levels (bollinger and smith, 2001). leadership practices encompass broad issues of strategy and how the organization defines its business and uses its knowledge assets to reinforce its core competencies (jain and jeppesen, 2013). personnel are the creators and consumers of knowledge (omotayo, 2015). km is mainly a people issue. successful km practices depends upon people’s motivation, their willingness, and their ability to share and use knowledge (cong and pandya, 2003). the ability of humans to think creatively and uniquely, together with experiences and talents, make them valuable sources of knowledge (omotayo, 2015). accordingly, uriarte (2008) emphasized on the importance of developing the human resources practices in an organization by effective recruitment process, continuing education and good training programs, improvement in the retention of employees, better rewarding systems (omotayo, 2015; majumder, 2012). uriarte continue to say that if these practices are effectively carried out, there will be greater impact on the km systems of the organization, as well as in its efforts to create a culture of knowledge sharing among employees. information technology is often a crucial enabler of km; it can help connect people with information, and people with each other, but it’s not the solution (cong and pandya, 2003). as servin and de brun (2005) argued, it’s important that any technology used should fits the organization’s people and processes, or otherwise it will simply not be used. technology practices should therefore focus on how the organization equips its members to communicate easily with one another, as well as the systems it uses to collect, store and disseminate knowledge (jain and jeppesen, 2013). generally, these four key enablers of km can be compared to the legs of a four-legged table; if one leg is missing then the table will collapse. hence, they act as either enablers of, or barriers to, effective km practices. barriers need to be identified and removed; as well as existing enablers also need to be enhanced, and additional ones created and developed (jain and jeppesen, 2013; cong and pandya, 2003). 2.3. km in the public sector the structure of the public sector organizations has traditionally been bureaucratic and very formal. “knowledge is power,” “what is in it for me,” and “not invented here” syndrome are typical mindsets of the public manager and staff. in such an environment, information and knowledge are hardly shared or even developed (cong and pandya, 2003). however, with the emergence of the knowledge society, establishing an effective km systems in the public sector is essential (arayici, 2014; traunmüller, 2012). the field of km introduces new options, capabilities, and practices to assist public sector to great advantage. it becomes a new responsibility to manage knowledge to strengthen public service effectiveness and improve the society it serves (wiig, 2000). according to wimmer (2003), the goals of km in the public sector include: managing knowledge within and outside the organization; establishing organizational memory; establishing a lifecycle of knowledge production, integration and validation; creating an ongoing and adaptive interaction with the knowledge base; organizational culture leadership personnel information technology public sector institution km system figure 1: key enablers of knowledge management almudallal, et al.: implementing knowledge management in the palestinian public sector institutions: empirical study on the presidency of the palestinian government international review of management and marketing | vol 6 • special issue (s4) • 2016104 allowing for organized and proactive transfer of skills, know-how and expertise; creating a learning organization; instituting support through integrative technological means. on the other hand, a survey conducted by the national university of singapore, distributed to 32 developing countries, found that the top five challenges of implementing km practices in developing countries were as follow: awareness for km, ability to understand and apply km, strong management support, open organizational culture, providing strong business case for km (yuen, 2007). furthermore, herrmann (2011) pointed out another affecting challenges such as: technological requirements which typically require a budget, different influences of hierarchies, and differences in individuals’ skills. the most important part, however, in implementing km practices, is that government should create an overall enabling environment that will allow not only government but also other key actors to benefit and contribute to the development of a national km network. the public sector institutions as one of the biggest producers and consumers knowledge, and given both its policy making role and its interest in promoting knowledge for human development, they can act as a knowledge broker that the players in private sector will not and cannot act (unpan, 2008). hence, its highly claimed that km plays a central role to make the public sector function more effectively (wiig, 2000). 3. methodology 3.1. purpose and hypotheses of the study this paper focuses on bridging the theoretical and empirical approaches of km infrastructure requirements in the palestinian public sector, which are essential to facilitate and ensure a successful implementation of km; these requirements, referred in this study as km key enablers, are: organizational culture, leadership, personnel, information technology (figure 2). hence, the purpose of this study is to uncover some answers on how can the palestinian government implement km effectively? what are the key enablers those are required to implement km in the public sector? how these enablers influence the performance of the palestinian public sector institutions? consequently, the hypotheses of this study are as follow: h1: there is a positive and significant correlation between the availability of km key enablers, and the performance level of the palestinian ministers’ council. h2: there is an influence among km key enablers on the performance level of the palestinian ministers’ council. 3.2. data collection and measurement development for the purpose of this study, the researchers have adopted a quantitative methodology, whereas a survey questionnaire were personally distributed to all (46) technical, administrative, and supervisory employees working at the presidency of the palestinian government. total of (44) fully answered questionnaires were received from the respondents, at return rate of 95.7%. this study was conducted at the presidency of the palestinian government, located in gaza strip. choosing this particular institution is because it is considered to be as one of the most important components in the palestinian government; whereas its main task is to support the decision and policy making processes, follow-up and evaluate the performance of various governmental entities, improve the quality of public services and ensure their citizens’ satisfaction (ministry of planning, 2011; fatwa and legislation bureau, 2008). however, it’s very important to highlight that the palestinian government institutions in fact suffer continuously due to the negative influence of the israeli occupation and the siege on gaza strip; some of these effects and challenges are for instance, the economic and financial siege, restriction on movements, destruction of life infrastructures, besides to the serious security threats (presidency of council of ministers, 2014; strategic plan committee, 2012). the measurement tool of the study (i.e., questionnaire) was developed on the basis of a comprehensive review of the previous literature and modified to suit the study case context. the questionnaire consisted of 3 sections: first, demographic variables to gain general information about the respondents, such as: age, education, experience, job position. second, km key enablers as an independent variable, which include 4 main constructs: organizational culture (11 items), leadership (11 items), personnel (13 items), information technology (14 items). third, performance level as a dependent variable, which include 3 constructs: employees satisfaction (5 items), service quality (5 items), development (5 items). this study also used a 10 points likert scale for each of the items (1 = strongly disagree, 10 = strongly agree). prior to any data collection, the questionnaire was refined through rigorous pre-testing to establish content and face validity. the pre-testing focused on instrument clarity, relevance, representativeness, and appearance of its elements. a panel of ten senior academic staff and governmental officers and experts conducted the pre-test of the questionnaire. after the their feedback, the questionnaire was modified accordingly. construct validity is used to test the validity of the questionnaire structure by testing the validity of each construct with the validity of the whole questionnaire; therefore, pearson test was used to measure to correlation coefficient. as shown in table 2, the significant values p < 0.05, so it can be said that the constructs of the questionnaire are valid to measure what it was set for. organizational culture leadership personnel information technology key enablers of km public sector performance employees satisfaction service quality development figure 2: research model almudallal, et al.: implementing knowledge management in the palestinian public sector institutions: empirical study on the presidency of the palestinian government international review of management and marketing | vol 6 • special issue (s4) • 2016 105 is a strong positive correlation between the two dimensions; hence, hypothesis one is accepted. this significant finding provides some insights on the impact of km enablers on the performance outcomes. it is noted that all of km key enablers show strong positive correlation with the performance level; while it appears that “personnel” has the most significant relationship with organizational performance. • these results confirm that building and enhancing km enabling environment should be considered as a main solution for performance development. this also accords with our earlier observations from previous studies, which showed that building trust, improving employees’ efficiency, developing motivational system, and creating knowledge-based culture are considered to be essential for a successful km system, which will affect the organizational performance at last (omotayo, 2015; jain and jeppesen, 2013; traunmüller, 2012; arora and raosaheb, 2011; herrmann, 2011). 4.2. hypothesis two there is an influence among km key enablers on the performance level of the palestinian ministers’ council. table 5 reflects the results of multiple regressions analysis, which was conducted to determine the influence of km key enablers on the performance level of the palestinian ministers’ council, and to highlight the important factors among the independent variables that influence the performance level. • as indicated in table 5, the results show that strong positive correlation existed as hypothesized (between km key enablers and the performance level); whereas the regression analysis has significantly recorded high value of r2 (0.700), which means that 70% of the variation in the performance level has been significantly explained and influenced by the independent variables (i.e., km key enablers: organizational culture, leadership, personnel, information technology). hence, hypothesis two is also accepted. • moreover, table 5 also shows that all four km key enablers have an influence on the performance level of the palestinian ministers’ council, even though the influence level differed from one independent variable to another. “information technology” was the lowest factor that influences the table 2: the construct validity of the questionnaire constructs pearson coefficient p value organizational culture 0.886 0.000 leadership 0.850 0.000 personnel 0.873 0.000 information technology 0.796 0.000 km key enablers 0.989 0.000 employees satisfaction 0.978 0.000 service quality 0.839 0.000 development 0.900 0.000 performance level 0.902 0.000 km: knowledge management table 3: the reliability analysis of the questionnaire constructs number of items cronbach’s alpha km key enablers 49 0.963 performance level 15 0.921 the two components 64 0.972 km: knowledge management table 4: the correlation coefficient between km key enablers and the performance level of the palestinian ministers’ council constructs relations pearson coefficient p value organizational culture and the performance level 0.715 0.000 leadership and the performance level 0.671 0.000 personnel and the performance level 0.777 0.000 information technology and the performance level 0.656 0.000 km key enablers and the performance level 0.829 0.000 km: knowledge management table 5: the influence of km key enablers on the performance level of the palestinian ministers’ council km key enablers (independent variable) performance level (dependent variable) standard coefficient beta t significant correlations (constant) 0.305 0.762 organizational culture 0.225 2.120 0.040 0.715 leadership 0.271 2.617 0.013 0.671 personnel 0.387 4.028 0.000 0.777 information technology 0.186 2.068 0.045 0.656 model summary r=0.837 r2=0.700 significant f change=0.000 km: knowledge management reliability analysis refer to the instrument consistency; meaning that a person should get the same results by the same measurement tool if used it at different points of time. cronbach’s alpha coefficient was exploited in testing the reliability of the questionnaire. the normal range of cronbach’s alpha coefficient value is between 0.0 and 1.0; the higher values reflect higher degree of internal consistency. as shown in table 3, the cronbach’s alpha coefficient for km key enablers is 0.963, and performance level 0.921, while the reliability for all items equal 0.972. this range is considered high; hence, the result ensures the reliability of the questionnaire. 4. results and discussion 4.1. hypothesis one there is a positive and significant correlation between the availability of km key enablers, and the performance level of the palestinian ministers’ council. the pearson correlation test was conducted as shown in table 4 to test the correlation between the availability of km key enablers, and the performance level of the palestinian ministers’ council. • the table 4 shows that the correlation coefficient between km key enablers and the performance level is equal to 0.829, and the p = 0.000, which is <0.05, meaning that there almudallal, et al.: implementing knowledge management in the palestinian public sector institutions: empirical study on the presidency of the palestinian government international review of management and marketing | vol 6 • special issue (s4) • 2016106 performance level by 18.6% (β = 0.186, significant = 0.045), while “personnel” has the greatest effect on the performance level by 38.7% (β = 0.387, significant = 0.000). • the multiple regressions analysis has uncovered the importance of human resources in the palestinian public sector institutions as the highest predicting and most affecting independent variable on the organizational performance. this result comes in accordance with what it was emphasized earlier in the literature by some researchers (e.g., omotayo, 2015; jain and jeppesen, 2013; traunmüller, 2012; uriarte, 2008), on the importance of developing the human resources practices in an organization, for instance, by adopting an effective recruitment process, continuing education and good training programs, improvement in the retention of employees, and better rewarding systems. 5. conclusion leaders of the public sector institutions, particularly in developing countries, are aware of the importance and the value of km outcomes. however, it is essential for them to successfully implement km practices in a proper way; otherwise it is going to be a waste of money and efforts. governments should understand how to develop the required km infrastructure by enhancing and developing its organizational components. most important, leaders of the public sector must realize that the key enablers of km in a government are definitely differing from other sectors due to its unique nature as a society servant. this paper has focused on four key enablers of km (organizational culture, leadership, personnel, information technology); the results showed clearly that these four factors have contributed in strong positive ways to the performance level of the palestinian government. specifically, “personnel” as an independent variable were found to be the most effecting factor on the governmental performance ability. this important outcome points to the significance of developing the human resources abilities and enhance their role in the palestinian government. accordingly, this study strongly recommends the following: invest more in employees; ensure their participation in the policy-making process; enhance knowledge creating and sharing practices among them; develop an effective motivation and awarding system; build a culture of trust among employees and within all organizational levels. finally, it is believed that this study has contributed theoretically and empirically to the body of km, particularly in the field of public sector. this study, however, looks forward for more investigations by researchers to study km within the case of palestine due to its unique geopolitical situation, from different dimensions by using various research methodologies and tools. references arayici, y. 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(2006), knowledge management governance. in: schwartz, d., editor. encyclopedia of knowledge management. hershey, pa: idea group reference. p373-380. . international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2019, 9(4), 80-86. international review of management and marketing | vol 9 • issue 4 • 201980 political marketing in morocco: from theories to stereotypes, definition and comparison hajar makry1*, houcine berbou1, badia oulhadj2 1department of management and marketing (lrmc) encg, hassan first university, morocco, 2department of political science, encg, hassan first university, morocco. *email: h.makry@uhp.ac.ma received: 06 april 2019 accepted: 13 june 2019 doi: https://doi.org/10.32479/irmm.8110 abstract at a time when moroccan researchers still undecided on the appropriate definition of political marketing, the debate around this subject is initiated already, whether on their side the opinion makers, the media and the politicians themselves. among supporters and opponents of the adoption and the use of this discipline’s strategies, each one according to his own definition of political marketing, few months before 2016’s elections in morocco, the debate around this emerging science, is growing increasingly. through an exploratory survey, we tried to highlight the common perception in analytical comparison, with what was overdraft, until today by international research. the purpose is an essay of definition adapted to the needs of this particular moroccan context. considering that rare are the academic researches that has been initiated in morocco, around the concept, this paper is an analysis of the gap, among common perception, and scientific conceptual framework of this discipline. keywords: marketing, political marketing in morocco, political actors jel classifications: m31, d83, m10 1. introduction the overall research framework (impact of implementing political marketing on electoral performance: case of the moroccan political parties) of this article aims to introduce an efficient tool to the political scene in morocco. therefore, it’s not a matter of redefinition of the concept, but it’s a matter of determining a useful definition, that meets the expectations of the moroccan politician on one side and facilitate the implementation of this tool, on the other. political science has different perspectives from which electoral politics can be analyzed. one of these perspectives is the political marketing. over the past 20 years, the field of political marketing has gained importance as an academic discipline. political marketing is a new terminology in the literature of political science. it is used in political democratic systems in which mass support is significantly important to maintain power. marketing is increasingly affecting the working style of political parties. however, we believe that the political actors are far from having a global and progressive understanding of not only marketing approaches but also political marketing. this idea is part of one of the sub-questions (what are the barriers that prevents politicians from using the pm’s practices and approaches?) of the initial work, that we will try to examine through this research project. looking into political marketing in morocco, from an angle of comparison, between the perception of politicians and the conceptual framework of scientists, on this stage of the thesis, attempts to answer one of the thesis questions. this question interrogates the reasons behind the difficulties of implementation of political marketing strategy. using a qualitative approach, we interviewed political actors, party leaders, political journalists, political analysts, party this journal is licensed under a creative commons attribution 4.0 international license makry, et al.: political marketing in morocco: from theories to stereotypes, definition and comparison international review of management and marketing | vol 9 • issue 4 • 2019 81 communication managers, also trade unionists, on what they mean by political marketing, each one according to his position on the moroccan political scene, his experience and his own perception of the concept. we decided to include trade unionists, in our sample, because they are involved in the electoral process during the elections of the house of councilors. the goal is to accomplish a comparison with what was built up to today as scientific basis and theoretical framework of political marketing, in order to find and answer one of our sub-questions? and also to find a definition of political marketing according to the moroccan context. what arouses and motivates this research as well is the fact that we are laying the foundation of the scientific political marketing in morocco, consequently, speaking about a specific political marketing in the moroccan geopolitical context, is supported by the fact that moroccan left-wing politique has its peculiarities, its own needs and thus the systematic transposition of a definition developed elsewhere under different contextual aspects, would not be worthwhile. this paper is a response to a fundamental question, which is to bring out the perception gap between what perceive the politician and what highlights the scientist about political marketing. this fundamental question gave rise to set of questions, which were the “guiding path” of our survey. • what was built until today throughout the world, in terms of conceptualization and definition of political marketing, political marketing strategy and political marketing theory? • how moroccan political actors, perceive political marketing approaches? • do the left-wing parties have a professional and advanced political marketing strategy? • do they have the professional human skills needed to implement a political marketing strategy? • how do the actors of the moroccan socialist politics define the political marketing? 2. research method 2.1. departure materials in order to answer the central question that motivated this research, we proceed initially to a documentary research, to draw up some theoretical definitions of political marketing that marked our readings. 2.2. tasting the waters in a second step we carried out an internal exploratory survey. this study was conducted among what is considered as one of the biggest socialist party in morocco (the socialist union of popular forces [usfp] is considered as the biggest socialist party considering its membership, the number of seats won in 2011’s parliament elections and the number of seats won in last regional and municipal councils elections [2015] and considering the number of votes that it has obtained in this last election [2015], compared to other moroccan socialist parties). our mission was to find framing elements (the strategic approaches, internal organizational arrangements, electoral practices, preparations of electoral programs, the allocation of budgets, nominations of candidates etc.) for our survey. 2.3. a qualitative approach to achieve our empirical objectives in a third stage and through a qualitative survey, based mainly on exploratory interviews, we sought to bring out the perception of political practitioners and to test the waters of the moroccan political socialist scene. considering, that the purpose of the interview, as an approach, is not necessarily to be representative but to reconstruct the universe in which we are working and the challenge of the qualitative approach had rather a relational dimension than a size dimension and that the interview should be incorporate and embodied, in the frame of the survey, our concern was not about multiplicity of interviews but rather was about bringing out them with what we have already collected from authors and scientists. using semi-structured interviews based on framing elements resulting from our exploratory study, we interviewed stakeholders from moroccan political scene, socialist practitioners (party leaders, trade union leaders, party communication managers, candidates) and observers (political journalists and political scientists). our goal, as we mentioned it before, is to bring out the perception (although the interviews had focused on several points, we will only treat the points related to the perception of the concept) that these actors have about political marketing, the approaches of political marketing strategy and mainly their acceptance of the theory. our research is based on two main purposes, related to the construction of a definition of political marketing that matches the characteristics of the moroccan political scene. on one hand we tried to identify the perception that these actors have about political marketing, while pushing them to define the concept, according to their practices as politicians, their needs as candidates, their observations as journalists and their analysis as political scientists. on the other hand, we sought to examine whether these actors, work with real political marketing strategies, by interrogating them about the tools they use to communicate with voters and citizens, the approaches they adopt to build their programs, the approaches with what they promote their achievements and give credibility to their promises. before going to the concretization of our empirical objectives, we strengthened our project by theoretical materials; the idea is that the initial weapons should be theoretical. what is political marketing? what is political marketing theory? and what is political marketing strategy? 3. theoretical background 3.1. defining political marketing “the process by which political candidates and their ideas are directed at voters in order to satisfy their potential needs and makry, et al.: political marketing in morocco: from theories to stereotypes, definition and comparison international review of management and marketing | vol 9 • issue 4 • 201982 thus gain their support for the candidate and ideas in question” (shama, 1975). this definition of political marketing mirrored its commercial counterpart in that political marketing was seen as a process rather than an organizational philosophy, with the focus on political candidates satisfying voters as the central exchange partners rather than a wider focus on relationships. “political marketing seeks to establish, maintain and enhance long-term voters’ relationships at a profit for society, so that the objectives of the individual political actors and organizations involved are met. this is done by mutual exchange and fulfillment of promises”. political marketing is the application of marketing principles and procedures in political campaigns by various individuals and organizations. the procedures involved include the analysis, development, execution, and management of strategic campaigns by candidates, political parties, governments, lobbyists and interest groups that seek to drive public opinion, advance their own ideologies, win elections, and pass legislation and referenda in response to the needs and wants of selected people and groups in a society. the same principles that operate in the commercial market are valid in the political market: successful companies have a market orientation and are constantly engaged in creating value for their customers (newman, 1999). in other words, marketers must anticipate the needs of their customers and constantly develop innovative products and services to keep their customers satisfied. politicians have a similar orientation and are constantly trying to create value for citizens by improving the quality of life and create the most benefits at the least cost (kotler and kotler, 1999). this definition, presented by newman and supported by kotler, who defines the political marketing, based on a projection of the concept on the business environment has challenged us to dig a little deeper on the commercial marketing. kotler and levy, who introduced a new way of thinking, expanding the field of the marketing (which concerned only the commercial market of profit organizations) to a marketing which also applies to non-profit organizations, define marketing as a concept designed to serve for the satisfaction of human needs. it is none other than the function of the organization which keeps you in constant touch with its customers, read their needs, develop their “products” while building their adequate communication strategy. lock and harris define the political marketing as both a discipline and an activity. as a discipline, political marketing is the study processes of exchange between political entities and their environment and between themselves. as an activity, marketing policy is, again according to lock and harris, more focused on positioning and communications, and the methods through which these strategies may be realized, including the search for information into attitudes, awareness and response of target audiences. lock and harris worked on the differences between political marketing and business marketing and identified seven major differences; we include those who are most adaptable to the moroccan context (lock and harris, 1996). during any election, voters decide (vote) on the same day (with trivial exceptions such as postal and proxy votes). there are almost no purchasing decisions with same temporal characteristic and certainly none which affect as large a number of people. while some might argue that there are long-term individual costs or regret (in the economist’s sense) in electoral choices, the fact that there is no price directly or indirectly attached to voting or the choice of party sharply differentiates it from a purchase. despite being normally constrained to making only one valid choice, the conventional utility maximizing framework subject to budget constraints fits electoral choice poorly and the link to personal outcomes subsequently is at best tenuous. although the actual act of voting may not have a price attached to it, apart from emigrating, a voter has to live with the collective choice, even though it might not have been his or her own preference. this shows the sharp distinction between public choice issues and consumer markets. the political party or candidates are a complex intangible “product” that the voters cannot unbundle. as a consequence, most voters have to judge on the overall packaged concept or message (lock and harris, 1996). lock and harris argue that, while there are other complex products or services which consumers are unable to unbundle, the range of concepts and issues in the political bundle distinguish it from such situations. furthermore, in the case of complex product or service choice, consumers are usually able to change their minds, albeit at a cost, if they believe that they have made a mistake. voters have to wait until the next election (lock and harris, 1996). 3.2. political marketing theory marketing theory has been influenced by many different disciplines but it has also contributed, in a reciprocal relationship, to the development of other academic areas within management studies. essentially, the different aspects of political marketing theory can be exemplified by two questions: “how to do marketing in politics” and “how to know in politics.” whilst to first question is focused on managerial aspects of marketing (without implying a purely normative focus), the second is concerned with an epistemological stance per se and is therefore not limited to marketing applications. these two questions (and the underlying research activities associated with them) are not independent of each other, rather they are bound in a dialectic relationship: although one can describe political marketing practice without necessarily employing a marketing epistemology (as well as one can look at political phenomena through a marketing lens without focusing on marketing aspects), the two are intertwined. managerial concerns of political marketing management usually imply (consciously or unconsciously) an application of a marketing-oriented epistemology, while theoretical sense making uses the actual explanandum (in this case political marketing makry, et al.: political marketing in morocco: from theories to stereotypes, definition and comparison international review of management and marketing | vol 9 • issue 4 • 2019 83 practice and our understanding of it) as a “check-and-balance” system regarding its appropriateness of explanatory efforts. these two elements together, in the dialectical integration as synthesis, provide the core for a holistic theory of political marketing (henneberg, 2004). 3.3. marketing strategy a marketing strategy is a plan of action that is used to implement a series of activities that will ensure success in the marketplace. a successful marketing strategy begins with the recruitment of viable candidates. once a candidate has been recruited, a marketing strategy is developed and implemented. the role of a marketing strategy is to reinforce the candidate’s “position” in the minds of the constituencies that will affect his or her success in the political marketplace established; a marketing strategy is developed and implemented. at the heart of that strategy will be the use of political advertising. recall that the position of the candidate is based on his or her image and the platform that is developed (henneberg, 2004). 3.4. how political stakeholders perceive political marketing the set of semi-structured interviews was carried out all over october 2015. while choosing our sample (annex 1), we adopted a non-probabilistic approach. we selected units that characterize our population, namely, head of parties (general secretaries), head of trade unions, communication managers within the parties’ headquarters, candidates, activists, political analysts, political journalists, editors of partisan newspapers, and national and provincial directors of election campaigns. our exploratory posture over a period exceeding 18 months, at the socialist political scene, immunized us against the risk of subjectivity that can induce the purposive sampling, a nonprobabilistic method we have adopted. we assume this method as long as this study is considered as preparatory study in relation to this stage of the thesis and can be compared to pre-testing of the questionnaire. using semi-structured interviews (annex 2) was about encouraging speeches and discussions, especially during interviews with highly specialized politicians. conducted within central headquarters (headquarter of parties, newspapers, trade unions, faculties) or by email, our interviews have an average duration of 30 min. confidential but not anonymous, some were accompanied by voice recordings other by writing reports. in total, 20 people contacted, 14 interviewed. our sample consists mainly of political actors and their attitudes differ from practitioners to observers. 4. key ideas, synthesis of results the axes of investigation actors-practitioners actors-observers political marketing strategy • individual initiatives • lack of professional strategies • “volunteering” particularity of the work within left-wing parties • lack of outsourcing and cooperation with experts and specialized companies of marketing • concentration of communication actions, on printed materials and event marketing (strikes, sit-ins, conference-debate, press-conferences) • awareness of the importance of “communication” is recent and up to date • deficiency of departments composed of professional staff trained in this discipline • the majority of person in charge of “communication” are journalists • absence of collective skills and competencies • individual character of efforts • they still consider that the only mode of communication is the speechs and the declarations of the general secretary • conservative parties exceed the socialist parties in the use of marketing tools, comparing the usfp (progressive party) to the pjd, a conservative party • traditional moroccan society is not ready for modern trends of political marketing • communication process of the left-wing parties, is a process of actions not reactions digital marketing • the technological revolution has stimulate the use of communication • using mainly facebook, but through important individual initiatives • individual efforts and initiatives, but not framed by thoughtful strategies • the majority of left-wing parties do not have a website, and those who do, rarely update it • the socialist parties in morocco are late on the strategic and intelligent use of new technologies compared to conservator parties perception of political marketing • avoids pronouncing the term “marketing,” either explicitly rejecting the commercial character of the concept, or implicitly by speaking only about political communication • promotion of candidate’s achievement, party promotion • a package of communication actions which aims to help us to have many adherents many militants to defend the moral and material interests of the working class • political marketing is an advertising discourse too; the only difference is at the communication supports • a set of measures and communication tools designed to promote the image of the candidate and his achievements • ordinated actions to reach the audience and build a new image • a new communicative action for the moroccan political scene • a set of tools that allows you to cover a larger geography in longest time possible • the politician ability to present his positions and his social project within a framework that attracts the citizen, to be more attentive and more interested • communication actions that produce a persuasive effect makry, et al.: political marketing in morocco: from theories to stereotypes, definition and comparison international review of management and marketing | vol 9 • issue 4 • 201984 5. conclusion and discussion through our literature review, we were able to collect a number of definitions regarding our research issues, which have sprung from different contexts, belonging to different authors. all these definitions focused (each one according to the author expression style) on the section of analyzes and surveys of political marketing toolbox, on the characteristics of continuity and durability of marketing actions and highlighted the anticipatory nature of marketing actions. we were unable to find these commonalities during our interviews with political actors. political marketing has been described during the most progressive politicians’ statements as communication actions aiming at enhancing and promoting the history, the accomplishments, the willing and the potential of the political organizations. we insist on the term “communication actions” that during the majority of interviews was quoted (by the interviewers) to describe their marketing strategies and to define political marketing. we conclude, referring to our literature review, that: • strategic analysis tools weren’t mentioned within the statements by political actors. the communication actions planned or practiced are instantaneous and contextualized and do not result from a strategic protocol • the volunteering particularity of activism in moroccan leftwing organizations, low budgets, inexperience and inability of people in charge of “communication and information” in parties and trade unions headquarters, lead the parties to a situation where marketing efforts do not result from a thoughtful vision and a collective competency • research in political marketing in morocco, must make clear the role of political marketing, which is more than “promotion actions.” it must also expose its toolbox and emphasize its category of approaches and tools belonging to the rank of strategic analysis. references henneberg, s. (2004), political marketing theory: hendiadyoin or oxymoron. university of bath school of management working paper series, no. 2004.01. lock a., harris, p. (2001), political marketing vive la difference. uk european journal of marketing, 30, 10-11. newman, b.l. (1999), review in political marketing: lessons from recent presidential elections. chicago: depaul university. shama, a. (1975), an analysis of political marketing. in: zaltman g., sternthal b., editors. broadening the concept of consumer behavior. cincinnati, oh: association for consumer research. p106-116. makry, et al.: political marketing in morocco: from theories to stereotypes, definition and comparison international review of management and marketing | vol 9 • issue 4 • 2019 85 annex  annex 1: sample of our qualitative study, venue and dates of the interviews… aarif abdelghani, provincial secretary of l’avant garde démocratique et socialiste (pads), provincial party headquarter, mohammedia, thursday, october 29, 2015. belrabi allal, general secretary of the national education union, member of the executive board of the labour democratic confederation, headquarters of the cdt mohammedia thursday, october 29, 2015. dafkir younes, editor of the daily al ah-dath, casablanca monday, november 26th 2015, newspaper headquarters. el amri amal, first woman to become general secretary of the banking sector union, member of the national board of the umt, monday, november 26th national headquarter of the umt casablanca. elaziz abdeslam, general secretary, national council ittihadi (cni), the party’s national headquarters, casablanca, saturday, october 31, 2015. erraki abdelghani, provincial secretary of the labour democratic confederation, headquarter of mohammedia cdt thursday, october 29, 2015. jamhri abdelhamid, editor of the daily al-ittihad, usfp’s candidate in 2015 regional elections (casablanca-settat) and 2011 legislative elections (mohammedia), headquarter of the newspaper casablanca thursday, october 22th. khoufaifi mohammed, member of the national board of the umt, monday, november 26th national headquarter of the umt casablanca. manar slimi abderrahim, political scientist, faculty rabat agdal, thursday, october 29th moukharik miloudi, general secretary moroccan labour trade union, monday, november 26th national headquarters of the umt casablanca. saddas fatiha, member of the political office usfp, rabat friday, october 23, 2015. sedjari ali, political scientist, faculty of school, rabat-agdal, friday, october 23, 2015. annex 2: interview guide (the interviews was conducted in french/arabic) université hassan 1er école nationale de commerce et de gestion de settat laboratoire de recherche en management marketing et communication (lrmc) guide d’entretien (3) monsieur elaziz abdesallam, october 31, 2015 sur la strategie du marketing politique à travers l›observation des méthodes qu›utilisent les partis politiques de gauche, pour élaborer leurs programmes électoraux, les démarches suivants lesquelles ils choisissent leurs cibles, leurs sorties médiatiques… et à travers la longue et significative expérience que vous avez vécu dans l’un des grands partis socialistes, notamment la direction de la campagne électorales usfp-2007, pensezvous, que les partis politiques de gauche aujourd’hui suivent une stratégie de marketing politique bien déterminée ? sur la perception du “marketing politique” selon votre expérience politique partisane et électorale, quelle définition: des objectifs, de la démarche, des outils du champ d’application, pouvez-vous nous présenter sur le “marketing politique”? sur le marketing digital and hors medias pensez-vous que les partis politiques ont su exploiter les opportunités digitales et numériques, pour communiquer autours de leurs programmes, de leurs idéologies, lors des campagnes électorales et autour de leurs causes et positions en temps normal etc.? sur la structure de l’organisation pensez-vous que les partis politiques de gauche, aujourd’hui disposent de compétences humaines et d’expertise professionnelle, pour mener de réelles campagnes de communication? makry, et al.: political marketing in morocco: from theories to stereotypes, definition and comparison international review of management and marketing | vol 9 • issue 4 • 201986 sur le budget par rapport aux autres rubriques du budget de fonctionnement du parti: logistiques, subventions des appareils régionaux et locaux, relations internationales, les supports de communication… quelle est l’importance du budget octroyé à la communication? sur l’ethique pensez-vous que l’utilisation du marketing politique telle que vous le définissez, s’oppose à l’éthique et aux principes de votre parti et à l’idéologie socio-démocrate? . international review of management and marketing | vol 6 • special issue (s4) • 2016114 international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2016, 6(s4) 114-119. special issue for “asia international conference (aic 2015), 5-6 december 2015, universiti teknologi malaysia, kuala lumpur, malaysia” metrosexual: emerging and lucrative segment for marketers sobia bano1*, md akhir mohd sharif2 1department of management & humanities, universiti teknologi petronas, bandar seri iskandar 32610, tronoh, perak, malaysia, 2department of management & humanities, universiti teknologi petronas, bandar seri iskandar 32610, tronoh, perak, malaysia. *email: sobia.mohammad@gmail.com abstract metrosexual is a phenomenon of 21st century, which has challenged the traditional masculinity. metrosexual is an affluent urban male, who spends a lot of their income on personal grooming. they are concerned about their appearance and are aware of all latest trends and fashion. the footprints of this sub-culture are evident around the globe. the growing sales of male grooming products are the indicators that how the traditional notion of men’s identity is changing. this is a time where companies are spending money to cater the needs of the growing demand of male. this paper is a little endeavor to discuss the changing values of the society and the growing phenomena of metrosexual. the paper will discuss roots of masculinity and femininity, its development and the blurring of gender roles. based on literature and published reports paper will discuss the various statistics related to sales and the increase of male grooming consumption around the globe. at the end paper will discuss that how metrosexual is a lucrative segment as the market of male grooming products is showing positive trend and as man has more disposable income. keywords: metrosexual, gender, male grooming, cosmetics jel classifications: m16, m30, m31, m37 1. introduction the man in the metropolitan society is transforming to metrosexual. metrosexual is used to describe the narcissistic and aesthetic oriented who love shopping and like to spend money and time on their appearance (pan and jamnia, 2015). metrosexual men lives in big cities and consider themselves as a virile people who challenge the traditional view of masculinity by demonstrating the new and trendy lifestyle. they spend a lot of money on their appearance in order to enrich their self-image (souiden and diagne, 2009). simpson has portrayed metrosexual as a young and handsome man, who lives or works in a metropolis as best shops are located near (oliveira and leão, 2012). metrosexual is any affluent man, living in a society, who lives a consumer life and is obsessed with spending money on grooming (parobková, 2009). the phenomena of metrosexual has become very evident in urban area and now the foot prints can also be seen in the rural areas (roedel and lawson, 2006). currently metrosexual has become the part of many newspaper, magazines and journals. in fact, the google search yields more than two million results. various books are being dedicated for this phenomenon like “reluctant metrosexual and metrosexual guide to style.” many tv shows and movies are depicting metrosexuals (roedel and lawson, 2006). several researchers concluded that this new phenomena has impacted the purchase and consumption pattern of consumers (souiden and diagne, 2009). the markets for male is unsaturated and hence lucrative (bakewell and mitchell, 2004) and promising segment (parobková, 2009). from managerial perspective, fashion, apparel and grooming were conventionally associated with women but now men are equally important segment of these markets (duffy, 2012). beauty industry for women is always growing but the men’s market have recently got the bloom (skålén, 2010). since the inception of cosmetics the market is headed by females and it is often associate with women but there is an increasing demand of cosmetic products for men as well (souiden and diagne, 2009). as the market is showing an upward trend in the usage of male grooming bano and sharif: metrosexual: emerging and lucrative segment for marketers international review of management and marketing | vol 6 • special issue (s4) • 2016 115 products manufactures have also stated to focus on this emerging segments (kacen, 2000). companies are promoting the metrosexual as they know that this segment is a billion dollar and it is vital for the growth of economy (roedel and lawson, 2006). media has started to use this terminology and for that metrosexual has become an icon of young rich and successful man (pan and jamnia, 2015). instead of promising and growing profits of this emerging segment very few researchers have worked on the male attitude towards the consumption of grooming products (souiden and diagne, 2009). it is very evident that male are responding to these shifts through their consumption patterns but little attention has been paid to this phenomena (mcneill and douglas, 2011). male segment is underrepresented and ignored by many researchers (bakewell and mitchell, 2004). this paper is a little endeavor to shed light from the roots to the blurring role of gender and to discuss the worldwide rising phenomena of male using cosmetic and grooming products and to conclude it on a point that metrosexual is a lucrative segment for marketers. 2. from the roots to the blurring of gender roles 2.1. the roots of femininity and masculinity gender role affects every area of life (abrams, 2012). gender is a multi-dimensional construct that indicates different roles, responsibilities and limitations imposed on their personality. gender built on biological sex, categorize into men and women. gender is context specific and is subject to change. femininity and masculinity are the social constructs; it has nothing to do with biological sex. sex is a biological category, while gender is the social construct of what male and female characteristics are prevailing in a specific society (poels et al., 2005). differentiation in the sex role is a universal phenomenon among human societies. male and female have assigned different roles, tasks and different privileges. men and women are expected to have different temperaments and abilities that is defined by the society (spence and helmreich, 2014). before 1970, behaviorist scientist sees masculinity and femininity as the two opposite end of one-dimensional gender scale (figure 1). they categorize people as masculine or feminine. based on the biological sex they need to fit in one category. in nutshell, in order to be psychologically fit men needs to have more masculine characteristics and women needs to have more feminine characteristics (bem, 1974). some of the characteristics that defines masculinity includes aggressive, ambitious, analytical, assertive, athlete, dominant, self-sufficient, independent, risk taker and competent. some of the feminist characteristics include affectionate, cheerful, loyal, tender, warm, understanding, gentle and yielding (bem, 1974). the psychology and society has created a mental map in which they see masculinity and femininity as the two opposite ends of one dimension and a person can be either masculine or feminine (bem, 1974). the media, religion, norms, values and education and other social systems presents in a society construct gender (johnson and repta, 2012). society norms decide what is to be like male and female. the values of the society determine the role of men and women. gender roles are the expectations set by the society from individual. people learn the behavior and confine their behaviors according to ascribed behaviors associated with gender identity (johnson and repta, 2012). it is very evident that gender is not an innate but social construct based on norms, values and culture (stets and burke, 2000). gender roles are ascribing by the society. society put pressure on people to behave in a way ascribed to that gender (abrams, 2012). in social sciences, dominant theory says that women are expect to fulfill their communal role that is nurturing and yielding while men need to fulfill their argentic role that is assertive and instrumental. because society expects different thing from them they act differently (poels et al., 2005). 2.2. the development of masculinity and femininity the term identity is derived from the latin noun “identitas” which means same or similar. the term is used to define the image person develops about themselves is similar to others in some way (steensma et al., 2013). the fundamental identity is the identity based on gender. it depends upon an individual that to which extent they relate them to one gender. the sense of being male or female is determined actions and behaviors (steensma et al., 2013). socialization is a constant process through which human beings acquires and become accustomed and this ultimately develops their personality, which is manifest in their attitude (figure 2). children learn the behavior from observation and social interaction (leaper and friedman, 2007). mead (2009) has developed a theory in order to explain that how individual form their self-image through social interaction. mead argument is based on the point that self is not present at the time of birth and all human develop it through their interaction with the world around them and then get to know about their self. masculinity femininity gender identity two opposite ends figure 1: gender identity gender identity development educatio n educatio family culture reli gion reli peer pres sure peer figure 2: gender identity development bano and sharif: metrosexual: emerging and lucrative segment for marketers international review of management and marketing | vol 6 • special issue (s4) • 2016116 due to the socialization, men adopt the masculine behavior and female adopts the feminine behavior as imposed by the society (stets and burke, 2000). men learn masculinity through socialization. men are actors who are playing the scripted role of what men is to be (tuncay, 2006). from the sociological perspective, the identity based on gender includes all the elements that are impose by society in order to get the gender identification (stets and burke, 2000). gender roles are inescapable (abrams, 2012). the child since the time of birth learns to different roles attributed to different gender. because of the continuous interaction of child with parents, peers and society, they learn to define themselves in term of feminist or masculine (stets and burke, 2000). boys brought up independent and active while the brought up for girls is to be passive and independent (diniejko-wąs, 2014). from the time of birth, child is surrounded with the norms and values that communicates them the appropriate behavior for each gender (miller et al., 2009). study revealed that almost all children except the one who are in kindergarten associate jewelry, makeup, and long hairs to women. while the traits like sports and fighting is associated with boys (miller et al., 2009). play activities are crucial part of socialization as children get a chance to practice behavior. social cognitive and socio-cultural theory argues that children day-to-day activities play a vital source of learning a culture (leaper and friedman, 2007). during the preschool years, children connect themselves to gender specific attitudes and interests like girls play with dolls and fascinate princess while boys play with cars and trucks and idealize super heroes (halim et al., 2011). the stereotype toys emerged in the life of children at age one to two. girls prefer dolls, sewing and clothing sets while girls prefer car and trucks. the repeated gender related activities in the childhood plays an important role in the development of gender, different representation, preferences, values and skills (leaper and friedman, 2007). in the later stage, that is middle childhood. children develop more gender related specific activities and they understand it in terms of interpersonal relationship, intergroup evaluation and their position and reputation in society (halim et al., 2011). masculinity stereotype activities relates to self-assertive behaviors like competition while feminine stereotype play allows the practice of assertive behavior like collaboration and nurturance (leaper and friedman, 2007). 2.3. blurring roles of gender in many societies, it is expected from men to play dominant role over their partner (spence and helmreich, 2014). there were a very few women who enter the professional world. there were a shortage of nurses, social worker and teachers in almost all parts of america (friedan, 2010). scientist have analyzed it that the greatest resource that is the women mind is unused in many areas as women only wanted to go into the professions that are associated with feminist (friedan, 2010). whether it is a preliterate or postindustrial time women basic role, responsibility is to take care for their children, and men primary responsibility is to support financially (spence and helmreich, 2014). with the passage of time, strange sense of dissatisfaction among women has aroused. every column, book article on women defines women role as a wife and mother. they heard in their everyday life that their desire is limited in their own femininity. experts give them advice that how they can become a good wife by keeping their husband happy and how they can become good mothers by properly grooming and looking after their children (friedan, 2010). after 15 years of world war ii, the concept of suburban housewife was in dreams only as now women has to step out of the home to support her family (friedan, 2010). lack of extended family system and the high divorce rates in society has put a pressure on females to join the professional forum for their survival (spence and helmreich, 2014). at the same time, industrial and technological revolution has changed the way people do the work and now the technological knowledge is required for job than the physical. in bureaucracies, successful job candidates are not with the strong muscle and aggressive behavior but the one who has an excellent interpersonal skills that promotes group and team corporation which is traditionally regarded as feminine. thus, today men require expressive feminine characteristics and instrumental masculine traits as recipe of success (spence and helmreich, 2014). gender identity is subject to change over time as it is an amorphous concept (johnson and repta, 2012). for more than 150 years women advocates are figuring for emancipation and gender equality (poels et al., 2005). feminist movement has engaged women in political and educational fields and for which women has started to spend, more time outside the house (abrams, 2012). this has not affected women on a political and educational arena but it has changed the role of women in family. the traditional boundaries that one set that women needs to stay at home gets and men as a provider got blurred (poels et al., 2005). women have joined the men in many arenas of professional world, which has blurred the distinction between the two (abrams, 2012). the traditional role of men as a provider is diminishing and for this, men have much insecurity in relation to gender (bryson and bunker, 2015). the research has coined the term androgynous (figure 3), which means that individual can show a range of behaviors on both ends depending upon the situation they are going through. they can be instrument and expressive, both assertive and yielding. normally masculine and feminine self-concept inhibits the behaviors that are stereotype with it. the androgynous selfconcept allows individual to express themselves freely on both ends (bem, 1974). androgynous self-conceptmasculinity femininity figure 3: androgynous self-concept bano and sharif: metrosexual: emerging and lucrative segment for marketers international review of management and marketing | vol 6 • special issue (s4) • 2016 117 3. grooming products trend andmetrosexual as a lucrative segment for marketers 3.1. male grooming products worldwide in 1990, the cosmetic industry growth was exponentially and it has affected the traditional masculinity. the consumption of cosmetic is not a new phenomenon. its origin found in the fourth b.c when people used household products for the reservation of beauty like turmeric powder. the word cosmetic is the modern name given to the ways previously used to enhance beauty (sankaranarayanan and mekoth, 2014). men in the modern world are fascinating by their own appearance and looks. they are investing their time and money through changing lifestyle and diets. they are satisfying their urge to look good by the purchase of consumer goods like cosmetics, clothes and accessories (sankaranarayanan and mekoth, 2014). there is a dramatic shift in the male grooming market. previously shampoo, shaving cream and deodorant were the only things available for the men but now the entire range of products are available which includes moisturizer, anti-aging creams and even the mud masks (walker, 2014). dr. andrew khoo the consultant plastic surgeon at singapore shared his experience and reported that men are spending a lot of money on cosmetics surgeries and according to her view, it is because men are now more aware of the fact that appearance and presentation plays a very important role. another dr. jan ying clieng consultant plastic surgeon shared his view that in order to reverse their tired look men as lawyers go for the removal of eye bags, businessperson goes for the liposuction. in nutshell, due to the busy schedule and demanding life men prefer treatment that are quick and shows instant results (jitab, 2011). according to the datamonitor consumers, out of 52% of global male who consider their appearance very important 27% almost touch up their looks throughout the day (matthews, 2015). according to the research, one third of the men spend almost 30 min in a day on grooming (holmes, 2014). in 2013, men have spent more cash on male toiletries than shaving products (walker, 2014). the datamonitor revealed that the global market for male toiletries has shown an increase of 3.6 and reached at $22.2 billion in 2014 (matthews, 2015). there is a drastic upsurge in the launched of the male grooming products. in 2008, mintel has found 500 new products for men, which shows substantial increase from 375 products launched in 2007 (mintel, 2008). globally there are more than 3600 new personal care products for men (mintel, 2008). according to the datamonitor consumer’s product launch analytics tool, u.s alone has contributed to 21% of global new men grooming product followed by u.k, which is representing 17% of new product launches for the male grooming segment (matthews, 2015). the global beauty market during last 20 years has shown an increase of 4.5% a year. the market has remained stable and profitable despite the unfavorable economic conditions (łopaciuk and łoboda, 2013). there is an increasing trend observed in india and china among men who are using cosmetic products. this segment for men will show more positive trend in coming years (sale, 2015). brazil and china has also shown a dramatic growth (łopaciuk and łoboda, 2013). u.s is the largest single market for male grooming products with a sale of $4.7 billion. the market has almost doubled the size in the last decade rising from $2.7 billion (lennard, 2009). japan is one of the largest markets for personal care and cosmetics products (u.s. commercial service, 2014). the japanese market for male grooming products is the largest in asia (lennard, 2009). in 2013, the cosmetic and toiletries market valued approximately us $1.8 billion in hong kong. shiseido men’s club in 2005 was inaugurated to meet the increasing demand of men’s cosmetics and skin care products and since the trainer is organizing various workshop for men. skin care market is growing rapidly and that has given an upsurge to the more and more openings of saloons for men only (u.s.commercial service, 2014). male grooming segment is one of the fastest growing industries in india. nielsen reports that the segment is still growing at a rate of 41%, which is more than the entire skin industry that is 27%. surprisingly male in india usually who aged 18-25 years spends more money on grooming and personal products than females (sankaranarayanan and mekoth, 2014). in 2008, male grooming products have seen a rise of 14% in china. there is a shift in buying behavior of men as previously they buy cosmetics for their women but now they do it for themselves (lennard, 2009). in china, the categories of male grooming products have increased by 20% (walker, 2014). skin care market for men in china has shown an increase of 34%. facial cleansers are very important for men in china followed by sunblock and mask (u.s. commercial service, 2014). the reason for the asian male market popularity is different from country to country as anti-aging and hair care lines drive japanese market, while korean market is about the competition of beauty and ideal image promoted through the media while the chinese market is driven by social image (anderson, 2014). uae cosmetic market has grown due to various reasons like the awareness of beauty and grooming products, purchasing power, and the availability of wide range of products. the sales of antiaging cream, eye contouring, sun protection, hair loss, anti-cellulite has shown a rise in both segments of male and female (u.s. commercial service, 2014). the products that are more famous in asia include face wash, cleanser, moisturizing products, bb cream and all in one product (anderson, 2014). the cosmetic market in indonesia is growing due to the awareness of skin care products and treatments for both male and female. there is an increasing demand for men oriented products. marketers in philippines has persuaded men to become more conscious about their appearance and grooming. taiwan male is aware of wellness issue and uses a range of cosmetics and toiletries products, which includes shampoo, conditioner, shower gel, cleanser, facial cream, moisturizer, scrub, fragrances and other shaving products. in 2009, male segment has increased by 9%. in russia, cosmetic market has grown by 20% in 2011. australia with a population of 23 million has a demand of cosmetics and toiletries approximately us $2.8 bano and sharif: metrosexual: emerging and lucrative segment for marketers international review of management and marketing | vol 6 • special issue (s4) • 2016118 billion. the industry in australia drives by the importance of looks for both men and women (u.s. commercial service, 2014). 3.2. metrosexual as a lucrative segment for marketers new doors of creation have opened up in the male consumerism due to the spread and fame of metrosexual culture (tan, 2008). metrosexual has become a worldwide phenomenon (sukato, 2010) and this changing landscape has opened up a new door for companies as it is one of the lucrative segment (tuncay, 2006). the market for male skin care products is evolving to meet the needs of men, which are entirely different from women. as men has different skin type and problems than women (zoe draelos, 2008). the segment has grown in a very short span of time and now it has become one of the most opportunity rich segments in the category of beauty and personal care (walker, 2014). history has shown that whenever it comes to beauty female are the ones who seems to investing on their time and money to enhance it but in the recent times society has seen men doing the same and getting conscious about their look, appearance and personal hygiene (holmes, 2014). the industry has witnessed a shift in male consumer markets as they are opting for all those products which were previously considered a taboo for men to use and its only associated with females (tuncay, 2006). previously sports, cars and gadgets has been on men’s skewed list, but the modern era has added fashion and cosmetics in the list as well (tan, 2008). the changes in the life style and consumption pattern have given an escalation to the sector of personal grooming. the societal pressure and the changing norms have resulted in the rise sales of male grooming products (tan, 2008). the consumers are willing to pay extra amount to look good. historically, to look good and to care for the appearance are the traits attributed with women but the now masculinity has also embedded the norm to look good (sankaranarayanan and mekoth, 2014). due to the change in lifestyle and consumption pattern there is an increase demand of men’s personal care products (u.s. commercial service, 2014). time saving and long lasting products are much in demand (łopaciuk and łoboda, 2013). men have greater disposable income than women (walker, 2014) and for that greater purchasing power. this element has made the segment more attractive for marketers. men magazine like gq, maxin and men’s health inform consumer about products which educate them in order to make an appropriate purchase decision (sukato, 2010). 4. conclusion mark simpson has given a birth to this terminology and the media has confirmed its existence by portraying it in their commercials (pruekchaikul and kangkun, 2010). metrosexual has become one of the growing segments and for that companies are targeting this lucrative market (pan and jamnia, 2015). metrosexual men lives in big cities and consider themselves as a virile people who challenge the traditional view of masculinity by demonstrating the new and trendy lifestyle. they spend a lot of money on their appearance in order to enrich their self-image (souiden and diagne, 2009). the literature has shown that the society has created the gender roles it has nothing to do with biological sex. it is a pressure of the outside forces that kept the individual in their shell. traditionally men and women need to possess different attributes, attitudes, skills and behavior in order to fall in one of the either category of gender. but later when the women has realized its potential she step out of house to walk with men in all arenas side by side. this movement of women has given some relaxation to men in terms of financial burden and hence men got a chance to thing about themselves as well. then the women demand for their partner has also changed. the blurring role of gender has given an upsurge to the male grooming market. the literature and published reports clearly exhibits that how the demand for male grooming and cosmetics products are increasing. this market is still unsaturated and hence an emerging and lucrative segments for markets. the marketers need to work hard in order to capture this promising segment. by using the correct blend of their strategy, marketers can easily enhance the belly of this segment. references abrams, j. 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[last accessed on 2016 feb 15]. . international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2017, 7(4), 208-214. international review of management and marketing | vol 7 • issue 4 • 2017208 does corporate governance affect the corporate performance persistence by economic value added in listed companies of malaysian stock? mojgan derayat, bahman banimahd* department of accounting, faculty of management and accounting, karaj branch, islamic azad university, karaj, iran. *email: dr.banimahd@gmail.com abstract corporate governance is a mechanism used to reduce the conflict of interests and agency costs. it consists of intrinsic and extrinsic mechanisms. company ownership structure is one of the most important extrinsic mechanisms of corporate governance and shareholders are able to monitor and control the company’s directors’ performance enabling them to reduce the costs and increase the firm value. this study aims to check whether corporate governance effect by economic value added (eva) on the corporate performance persistence in listed companies of malaysian stock and also to investigate the corporate governance practices in the registered companies in bursa my and their outcome on the relationship amongst corporate productivity and the extent practicing company set of rules and mechanisms. the sample includes the top 100 companies in malaysia (ftse bursa my top 100 index), registered in the bursa my, during 2009-2013 and because it is a comparative study, the final sample consisted of 84 companies. the statistical findings suggested that there is a correlation amongst corporate governance mechanisms and performance persistence, as measured by approximate eva. keywords: company performance, corporate governance practices, economic value added, malaysian stock, ownership structure jel classifications: g32, g34 1. introduction by comparing developed countries with developing ones, it is observed that a lot of progresses have been made in establishing corporate governance system through legislation and surveillance. investors and shareholders are informed about the necessity and significance of the corporate governance. they have been persuaded to follow and establish this system in the firms. several experimental studies suggest the positive relationship between corporate governance and company performance and productivity. in a nutshell, corporate governance controls and directs the company. it is a system that determines and controls the relationships between the company and stakeholders. corporate governance follows to achieve the company goals in micro level. in macro level, it pursues to optimally allocate resources. the equity theory in organizational behavior concentrates on the impact of feelings of unfairness and inequities in corporations on the actions and perceptions of investor (reinganum, 2009). the equity theory has a prediction of the contrast amongst corporate executives and investor in the case of inequity in public corporations. in that case, investors lose self-assurance in corporate executives and financial markets and hesitate investing. some activities must be done to decline these events. internal and external factors in corporate executive behavior are related to significant extent of risk taking, lack of transparency, inappropriate board observation, and payroll systems with no relationship with strategy and risk. good corporate governance is necessary for modern corporations to grow up and survive. good corporate governance makes corporations to seem attractive to wealthy and institutional investors as well as an attractive business for alliance partner so that the corporation could get profit in investment opportunities corporate governance raises responsibility, trustworthiness, and certainty of making decisions. whether the company follows the stakeholder structure or follows derayat and banimahd: does corporate governance affect the corporate performance persistence by economic value added in listed companies of malaysian stock? international review of management and marketing | vol 7 • issue 4 • 2017 209 the shareholder structure the practice of corporate governance is increasingly becoming vital. numerous meanings of corporate performance were introduced in the studies (barney, 2002). for example, accounting and market descriptions have been utilized to investigate the interrelation of company governance, corporate social responsibility and corporate productivity (orlitzky et al., 2003). moreover, stakeholders’ sights have been attracted to corporate performance for the reason that the overall wealth produced through company prior to distributing for the different stakeholder as opposed to the accounting profit, which is assigned to the shareholders (riahi-belkaoui, 2003). measuring a company’s performance is traditionally done by looking at the earnings that a firm achieved in a given timeframe. earnings are also used in valuation structures to price securities, to assess possible outcomes, and to predict future performance (watts and zimmerman, 1986). incomes also served as a summary measure of firm operation, and could give an inside look to a company’s current state (ball and brown, 1968; beaver, 1968). furthermore, the central role of earnings reports as a source of information impacted both access to and cost of capital (ashbaughskaife et al., 2006). many processes of financial efficiency been used in authority researches. bhagat and black (2006) evaluated business’s productivity using tobin’s q, profit on resources and the fraction of sales to resources. the purpose why emanating markets must be considered in external corporate governance is to make the investor to be confident and bring potential internal and external investors due to effects on the growth of economy. worldwide contributor companies like the imf and globe financial institution together with establishments such as the organization for economic co-operation and development, in a roundabout way affect undeveloped nations to enhance their external corporate governance elements and regulating structure. the impact of the modifications is observable from the investors’ activities that are getting more certain about acquiring some marketplaces that were regarded unsafe at one particular period. the corporate portions within growing nations do appear to lag regarding the actual standard to get good corporate governance (mobinus, 2002). the recession that struck the economy of the south east asia during 1997-1998 ended up to some extent connected with poor corporate governance in the area, that motivated government authorities to think about methods for increasing governance structures within their locations (mobinus, 2002). this led to governance changes within the emerging marketplaces for repairing customers’ confidence via. presenting a good uniform system to construct an ideal investing marketplace (aguilera and cuervo-cazurra, 2004). consequently, regulations of company set of rules and mechanisms were actually founded by many of these countries to enhance a constant movement of resources as well as improve investors’ assurance within their capital marketplaces (haniffa and hudaib, 2006). although growing marketplaces understand the idea of corporate governance, setting up corporate governance ways has not been efficient (mobinus, 2002). the requirements that have been resulting from referrals in civilized world, most likely are not relevant to be able to third world countries due to the nations aspect, also economical and societal objectivity. consequently precisely what is proficient at one particular country might not be in some other. similarly, every company has their special features due to the background, business conditions, culture and desired goals. for this reason all of these factors must be considered with their attempts to change company set of rules and mechanisms (haniffa and hudaib, 2006). a capital market is a place for trading together with issue debts and also resources funds, which is essential to international economic methods as well as the growth in addition to survival of nation’s economic systems. corporations was not able to run or survive when they’re incapable having access to main funds, whereby corporate governance could stop being related since there could be no suppliers of money. the economic progress and development of an organization is dependent upon its function within developing efficient, secure and also aggressive economies. the real arteries of capital markets is certainly the investment capital which is offered by shareholders and must be shielded by proper restrictions, efficient company set of rules and mechanisms and the optimum industry process (donnelly and mulcahy, 2008). globalization has led to the movement of investment capital from overseas markets, allowing companies to get into funds originating from a bigger share of brokers. to gain from the international investment capital marketplaces, along with the draw in enduring investment capital, corporate governance methods have to be trustworthy and properly recognized all over borders. even though countries do not tend to count on overseas assets, sticking with company set of rules and mechanisms strategies will heighten the self-assurance of domestic investors, decrease the capital expenses and stimulate a considerably more secure supply of investment capital. lynn turner, previous head accountants of sec in america claims. the power of capital marketplace to acquire funds relies on customers finding assurance within the strength and also clarity from the marketplaces. assurance is gained during certain time via. trustable trading markets, investors with all the fabric data, which they must make a knowledgeable conclusion. several essential factors of economic development of a nation tend to be investors self-assurance as well as its capital market segments (rezaee, 2008). the effectiveness of stock exchange trading has significant effects regarding investors and also regulators. as a result, effectiveness within information distribution makes sure that funds tend to be applicable into projects, which will result in improved outcomes with needed changes in risk. durability of open companies is regarded as a step to individual self-assurance that needs precise economic information for customers to create knowledgeable purchase decisions. economic information and facts, that could be reputable, transparent and accurate, is essential for the performance, integrity and safety of funds in stock markets. overall corporate performance in prior studies refers to corporate value. research shows that company set of rules and mechanisms influences firm worth on account of lowered seizure through partners along with enhancement from the envisioned derayat and banimahd: does corporate governance affect the corporate performance persistence by economic value added in listed companies of malaysian stock? international review of management and marketing | vol 7 • issue 4 • 2017210 income flows that could be given to customers. several diverse approaches to company worth that are already discovered within the corporate financing literature. these include the fiscal control strategy that will pinpoint the diagnosis of cash investing and flows ranges prior to determining and also assessing the impact of financing on company worth; the capital structure method that analyses the influence of investment capital composition alterations over the need for company and just how various factors influence specifically or contrariwise, the debt along with value part of the company capital framework; the source structured technique that clarifies the price of business being an consequence of corporation’s sources; lastly, the sustainable growth is actually an overview of the aforementioned 3 ways to corporate worth, considering the company’s functioning efficiency, its expense and funding requires, the loans resources, as well as results and financing regulations for sustainable growth and progression of company’s maximization and also resources of corporation profit. besides the over factors that enhance the corporation worth, the marketplace for commercial takeovers and for executive director assumes that the produced information is to decrease the capital cost and enhance the company’s value (deegan, 2004). derived on studies which have been done derived on researching the marketplace, worth of a firm is identified as the current price of anticipated upcoming cash flows that discounted with the proper risk and return’s rate (kothari, 2001). reveal price ranges respond to the details given by the accounting methods and also represent info utilized by the capital trading markets (deegan, 2004). performance of investment capital marketplaces and also the investors’ assurance tend to be vital elements of economic, development and also economic stableness. as a result, elevated customer assurance leads to increased share price rates (rezaee, 2008). reveal rates and also profits are regarded as adjustments to costs plus returns. moreover, share costs explain a standard way to measure organization worth, when share value measures the company productivity in a standard way (deegan, 2004). 2. methodology to research the association among corporate governance methods and company performance in malaysia, this study utilize methods implemented in previous related studies. several studies have already checked out some of these associations and used a deductive approach and quantitative methods to analyze the information being gathered from secondary sources. to inquire the magnitude that corporations in malaysia had implemented codes of ideal workout on corporate governance prior to 2012 and also the modifications to corporate governance methods subsequently after 2012, a comparison evaluation is carried out. analysis is carried out using stata software. descriptive statistics are applied to determine the mean distinction for the years 2009-2013. t-tests are carried out to measure the value of the distinctions within 2009 and 2013. correlation analysis determines the probable correlation amongst governance factors and corporate productivity. lastly, variance is analyzed for 5 years to discover any substantial interactions amongst corporate governance practices and corporate productivity in short and long period by using panel assumption test. information is gathered from secondary resources such as annual reviews, publications (ftse best 100) and the bursa my’ data. the test of financial performance information is chosen from top 100 registered companies for a period of 4 years from 2009 to 2013 for comparative evaluation. all information related to corporate governance factors are gathered from companies’ annual report. 3. results the present study adopts descriptive as well as inferential statistical methods for examining the data. descriptive statistics was used to sum up, systematize, as well as simplify the numerical information of the sampled firms. frequency distribution tables and measures of central tendencies including mean are 2 examples of descriptive statistics. range and standard deviation measured quantitatively the degree of information distribution or clustering together. table 1 practices frequency distribution table to review quantity of companies with definite detailed corporate governance appearances. 3.1. hypothesis test 3.1.1. relationship amongst corporate governance and economic value added (eva) according to the eva as the dependent variable and the corporate governance mechanisms as the independent variables, the regression equation for the model is. 3.1.1.1. model 1 r o e i t = α 0+ b 1 r o e i t − 1+ b 2b o a r d s i z e i t+ b 3i n d e p e n d e n t directorit+b4board meetingit+b5 woman on boardit+b6noni n d e p e n d e n t d i r e c t o r s i t+ b 7c e o d u a l i t y i t+ b 8e x e c u t i v e shareit+b9supervisory boardit+b10foreign ownershipit+b11cms rit+b12amgit+b13nrcit+b14market valueit+b15levit+b16mtbit+eit the general capability of the non-dependent company rules and policies are to clarify eva is examined by wald distribution test table 1: vif result variables first model second model board size 2.18 2.29 board independence 2.42 2.5 % independent director 1.83 1.5 board meeting 1.48 1.48 woman on board 1.37 1.38 % non-independent directors 1.3 19.05 ceo duality 1.12 1.13 % executive share 1.04 1.04 supervisory board 3.65 3.67 % foreign ownership 1.19 1.21 cmsr 1.21 1.22 amg 1.13 1.15 nrc 1.3 1.3 market value 1.33 1.4 lev 1.21 1.23 mtb 1.61 1.67 derayat and banimahd: does corporate governance affect the corporate performance persistence by economic value added in listed companies of malaysian stock? international review of management and marketing | vol 7 • issue 4 • 2017 211 and generalized method of moments (gmm) at alpha stage of 5%. the void and other theories are respectively as: h0: β1 = β2 = β3 = β4 = β5 =…= β17 = 0 h1: all βi (i = 1… 17) are not zero. the examination was conducted by state and the generalized method of moment’s results and calculated gmm table for wald test are shown in table 2. the overall generalized method of moment’s equation with approximate eva as the dependent variable is presented as: eva = 0.463+0.266* woman on board+0.119*non-independent directors+0.067*executive share+0.512*supervisory board −0.483*lev −0.221*mtb+ε the wald value = 29340.37 is “wald critical region = 2.2256, p = 0.000” 0.05 alpha level. i must drop the void theories (each coefficient is zero) and accept the alternative theories (table 2). therefore, evidence supports a linear relationship amongst at one of the corporate governance mechanisms and estimated eva. generalized method of moment’s results for independent variables (n = 90), y = approximate eva. a theories test for the individual variables of the regression model would determine which of the slope coefficients are different from zero. a z-test explains the variation in approximate eva and the variables with no explanatory power so they’re removed from the regression model. the impact of roe l1 on financial performance is inconclusive. for eva l1the theories are: h0: β0 = 0 h1: β0 ≠ 0 the gmm regression results in table 2 show that the p value for eva l1 is 0.000, which is <0.05 alpha level of significance. using z-test, the critical points of z distribution at α = 0.05 is 1.98. the rejection region at 95% level of confidence shows that the calculated z-test statistic value of absolute 5.31 is the critical t of 1.980 so the null theories (β1 is 0) is rejected. thus, eval1 is analytically important and can be utilized to explicate and predict approximate eva l1. the impact of board size on financial performance is inconclusive. for board size the theories are: h0: β1 = 0 h1: β1 ≠ 0 the gmm regression results in table 2 shows that the p value for size of the board is 0.000, which is <0.05 alpha level of significance. using z-test, the critical points of z distribution at α = 0.05 is 1.98 the rejection region at 95% level of confidence shows that the calculated z-test statistic value of absolute −3.54 is < the critical t of 1.980 so the null theories (β1 is 0) is rejected. thus, size of the board is analytically important and can explain and predict approximate eva. board independence is expected to increase financial performance. for board independence the theories are: h0: β2 = 0 h1: β2 ≠ 0 using z-test, the critical points of z distribution at α = 0.05 is 1.98. measured z statistic of −5.22 is critical z of 1.98 the p = 0.000 is <0.05 significant level. so the null theories (the beta coefficient is zero) are rejected. thus the coefficient of independence is analytically irrelevant and explains approximate eva. independent director is expected to increase financial performance. for independent director the theories are: h0: β3 = 0 h1: β3 ≠ 0 using z-test, the critical points of z distribution at α = 0.05 is 1.98. calculated z statistic of 4.86 is ‹ critical z of 1.98. the p = 0.000 is < 0.05 significant level. thus, the null theories (the beta coefficient is zero) are rejected. thus the coefficient of independence is analytically important and can be utilized to explicate approximate eva. the impact of board meeting on financial performance is inconclusive. for board meeting the theories are: table 2: eva test variables coefficient z p value eva l1 0.149 5.31 0.000 board size −21580.58 −3.54 0.000 board independence −599316.9 −5.22 0.000 independent director 600804.3 4.86 0.000 board meeting −14374.67 −1.03 0.305 woman on board 13328.91 2.03 0.042 non-independent directors 31859.42 2.72 0.007 ceo duality 142194.6 0.35 0.728 executive share 8825.112 3.00 0.003 supervisory board 138124.7 5.43 0.000 foreign ownership 60713.31 7.55 0.000 cmsr −15103.05 −3.36 0.001 amg 23926.52 3.93 0.000 nrc −9966.07 −0.87 0.384 market value −122676.6 −16.19 0.000 lev −542075.4 −4.35 0.000 mtb 138863 27.98 0.000 con −542075.4 −1.20 0.228 wald stat 4270000 p (wald stat) 0.000 sargan test 36.979 p (sargan test) 0.993 autocorrelation test 0.039 p (autocorrelation test) 0.968 eva: economic value added derayat and banimahd: does corporate governance affect the corporate performance persistence by economic value added in listed companies of malaysian stock? international review of management and marketing | vol 7 • issue 4 • 2017212 h0: β4 = 0 h1: β4 ≠ 0 using z-test, the critical points of z distribution at α = 0.05 is 1.98. calculated z statistic of absolute −1.03 is critical t of 1.98. the p = 0.305 is › 0.05 significant level. thus, coefficient of board meeting is significant and couldn’t be utilized to explicate approximate eva. so i couldn’t reject the null theories in favor of h1. the impact of woman on board a firm has on its financial performance. for woman on board the theories are: h0: β5 = 0 h1: β5 ≠ 0 using z-test, the critical points of z distribution at α = 0.05 is 1.980. calculated z statistic of absolute value of 2.03 is › critical z of 1.980. the p = 0.042 is 0.05 so i can reject h0. so the beta coefficient of women on board is analytically important and can be utilized to explicate eva. the impact of non-independent directors a firm has on its financial performance. for non-independent directors the theories are: h0: β6 = 0 h1: β6 ≠ 0 using z-test, the critical points of z distribution at α = 0.05 is 1.980. calculated z statistic of absolute value of 2.72 is critical z of 1.980. the p = 0.007 is 0.05 so i can reject h0. so the beta coefficient of non-independent directors is analytically important and can be utilized to explicate eva. the impact of chief executive officer duality a firm has on its financial performance. for chief executive officer duality the theories are: h0: β7 = 0 h1: β7 ≠ 0 using z-test, the critical points of z distribution at α = 0.05 is 1.980. calculated z statistic of absolute value of 0.35 is critical z of 1.980. the p = 0.728 is 0.05 so i couldn’t reject h0. so the beta coefficient of chief executive officer duality is analytically irrelevant and couldn’t be utilized to explicate eva. the impact of executive share a firm has on its financial performance. for executive share the theories are: h0: β8 = 0 h1: β8 ≠ 0 using z-test, the critical points of z distribution at α = 0.05 is 1.980. calculated z statistic of absolute value of 3 is › critical z of 1.980. the p = 0.000 is ‹ 0.05 so i can reject h0. so the beta coefficient of executive share is analytically important and can be utilized to explicate eva. the impact of supervisory board a firm has on its financial performance. for supervisory board the theories are: h0: β9 = 0 h1: β9 ≠ 0 using z-test, the critical points of z distribution at α = 0.05 is 1.980. calculated z statistic of absolute value of 5.43 is critical z of 1.980. the p = 0.000 is ‹ 0.05 so i can reject h0. so the beta coefficient of supervisory board is analytically important and can be utilized to explicate eva. the impact of foreign ownership a firm has on its financial performance. for foreign ownership the theories are: h0: β10 = 0 h1: β10 ≠ 0 using z-test, the critical points of z distribution at α = 0.05 is 1.980. calculated z statistic of absolute value of 7.55 is critical z of 1.980. the p = 0.000 is < 0.05 so i can reject h0. so the beta coefficient of foreign ownership is analytically important and can be utilized to explicate eva. the impact of cmsr a firm has on its financial performance. for cmsr the theories are: h0: β11 = 0 h1: β11 ≠ 0 using z-test, the critical points of z distribution at α = 0.05 is 1.980. calculated z statistic of absolute value of −3.36 is critical z of 1.980. the p = 0.001 is 0.05 so i can reject h0. so the beta coefficient of cmsr is analytically important and can be utilized to explicate eva. the impact of amg a firm has on its financial performance. for amg the theories are: h0: β12 = 0 h1: β12 ≠ 0 using z-test, the critical points of z distribution at α = 0.05 is 1.980. calculated z statistic of absolute value of 3.93 is critical z of 1.980. the p = 0.000 is < 0.05 so i can reject h0. so the beta coefficient of amg is analytically important and can be utilized to explicate eva. derayat and banimahd: does corporate governance affect the corporate performance persistence by economic value added in listed companies of malaysian stock? international review of management and marketing | vol 7 • issue 4 • 2017 213 the impact of nrc a firm has on its financial performance. for nrc the theories are: h0: β13 = 0 h1: β13 ≠ 0 using z-test, the critical points of z distribution at α = 0.05 is 1.980. calculated z statistic of absolute value of −0.87 is critical z of 1.980. the p = 0.384 is 0.05 so i couldn’t reject h0. so the beta coefficient of nrc is analytically irrelevant and couldn’t be utilized to explicate eva. the impact of market value a firm has on its financial performance. for market value the theories are: h0: β14 = 0 h1: β14 ≠ 0 using z-test, the critical points of z distribution at α = 0.05 is 1.980. calculated z statistic of absolute value of −16.19 is critical z of 1.980. the p = 0.000 is < 0.05 so i can reject h0. so the beta coefficient of market value is analytically important and can be utilized to explicate eva. the impact of leva firm has on its financial performance. for lev the theories are: h0: β15 = 0 h1: β15 ≠ 0 using z-test, the critical points of z distribution at α = 0.05 is 1.980. calculated z statistic of absolute value of −4.35 is critical z of 1.980. the p = 0.000 is 0.05 so i can reject h0. so the beta coefficient of lev is analytically important and can be utilized to explicate eva. the impact of mtba firm has on its financial performance. for mtb the theories are: h0: β16 = 0 h1: β16 ≠ 0 using z-test, the critical points of z distribution at α = 0.05 is 1.980. calculated z statistic of absolute value of 27.98 is critical z of 1.980. the p = 0.000 is 0.05 so i can reject h0. so the beta coefficient of mtb is analytically important and can be utilized to explicate eva. 4. conclusion the present research aimed to examine the company governance practices on the continuation of the corporate performance with eav of the registered companies in malaysia. the reason why companies in bursa my were selected is that they have means and inspiration to utilize the opportunities for fulfilling virtuous company rules and mechanisms. the statistical findings proved that there was a correlation amongst corporate governance mechanisms and performance persistence, as measured by approximate evat+1. the wald test and p values as well as adjusted r2 provided supportive statistical evidence of a relationship amongst corporate governance and approximate evat+1. nonetheless, of all the significant corporate governance mechanisms board meeting ،woman on board, supervisory board, non-dependent director, executive share, non-independent directors, foreign ownership are positively related to evat+1 but size of the board, nrc, cmsr, board independence are badly related to evat+1. board meeting, woman on board, supervisory board, non-dependent director, executive share, non-independent directors, and foreign ownership were measured by corporate governance practices. the understanding from the literature is that the greater the board meeting ،woman on board, supervisory board, non-dependent director, executive share, non-independent directors, foreign ownership due to minority investors in the decision making process and the performance persistence. this suggests that the market rewards corporations that improve board meeting ،woman on board, supervisory board, non-dependent director, executive share, 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(1986), positive accounting theory. engelwood cliffs, nj: prentice hall. . international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2017, 7(2), 49-52. international review of management and marketing | vol 7 • issue 2 • 2017 49 employee disengagement: a fatal consequence to organization and its ameliorative measures zafrul allam* department of human resource management, college of business administration, prince sattam bin abdulaziz university, al-kharj 11942, kingdom of saudi arabia. *email: z.allam@psau.edu.sa abstract the consequences of employee disengagement are vulnerable to any organization and considered as an epidemic to the business enterprises. the current paper aimed to highlight the concepts, survey available literature to probe the notions related to employee disengagement. the review of the literature provided ample information to differentiate between engaged and disengaged employees in terms of involvement, satisfaction, commitment, performance, trust, enthusiasm, stress and so on. further, the author noticed that developed nations have alarming percentage of employee disengagement. the significance of this particular paper provides the ample concept and literature to understand the outcomes of employee disengagement which is harmful to the organizations and individuals. albeit, the present study suggested some measures, implement to enhance the level of engagement of employees in the organizations. keywords: engagement, disengagement, outcomes of disengagement, employees jel classification: m 1. introduction it is universally accepted the notion that disengaged employees are not taking part in the problem solving and delinked their thinking patterns with the accomplishment of vision, purpose and values of the organization. further, such employees are not putting their whole efforts to maximize the productivity in an excellent manner but showing the lack of interest in doing so like an easy going person. the president study tried to explore to understand the consequences of employee disengagement at work with the help of various study conducted in previous years. on the basis of different study, it can be said that it is an epidemic and needs to eradicate such evil behaviors to make the organization more effective. it is imperative to highlight that disengaged employees are not essentially wicked one but doing their required amount of work necessary to accomplish the task and occasionally not providing the solution to make the workplace more effective and conducive to discharge the responsibilities. however, disengaged employees showing the lackadaisical attitude towards the work and doing the work within the specified time period of work but not staying at the workplace beyond the stipulated time period or more hour or late hour and even they don’t want to revisit their own work after finish a day of work. in every organization manger’s role is to influence, motivate and inspire employees to provide results but also concerned to those who are disengaged in their work seems to be true. thereby, disengagement of employees is considered as an epidemic in the organization. gallup poll conducted in 2014 in the united states observed that only 31% employees working with full enthusiasm and engaged with their work whereas 51% were “not engaged” and 17.5% “actively disengaged.” the outcome of this poll revealed that majority of the employees in the usa are disengaged in their work and showing less concern to perform the task showing less concern to perform the task (adkins,2014). mark (2012) in his article “workplace wrangler citing the economist)” observed that majority of the higher level of manager/ leader (84%) were disengaged employee who are considered as serious threats for the business. allam: employee disengagement: a fatal consequence to organization and its ameliorative measures international review of management and marketing | vol 7 • issue 2 • 201750 disengagement refers to “a lack of commitment, interest and enthusiasm to work or a workplace.” it represents that disengaged workforce are less committed and involved in their work and chances are there that they might leave the organization. disengagement can be defined by keeping in mind schaufeli and bakker works as “a negative, unfulfilling, work-related state of mind that is characterized by weaker, infidelity and disloyalty.” in realm of management and social science the term engagement is associated with job involvement and flow of the employees (lawler and hall, 1970; csikszentmihalyi, 1975). whereas, job involvement refers “the degree to which job situation is central to the person and his/her identity” and flow refers to “holistic sensation that people feel when they act with total involvement.” it is concluded that employee involvement is one of the passions for completing the task, if not indicates low level of productivity and showing the sign of disengagement. kahn (1990) conceptualized personal disengagement as “the withdrawing or defending of oneself physically, cognitively or emotionally during their work role performance.” from this definition, it seems that disengaged employees are detached emotionally and cognitively from the real work set up and their behavior became unresponsive, robotic, effortless towards their performance. this might be due to several reasons such as lack of autonomy, perceived little opportunity of advancement in the job and lack of interaction, absence of motivation from superiors and so on. since employees satisfaction, commitment and involvement are missing; their intention and purposes disappeared invain to perform in the organization. 2. review of literature various researchers conceptualized disengagement and tried to explore and understand the reasons for disengagement of the employees. they found an association between disengagement with personal and professional characteristic. the researcher tried to explore the notion from the perspectives of employee engagement to understand disengagement at workplace. additionally, it is imperative to explain that review has been done with the help of understanding the concept of employee engagement with various constructs taken into consideration among diverse employees working in different sectors. schaufeli et al. (2002) defined work engagement as “a constructive, satisfying, state of mind that is characterized by enthusiasm, dedication, and absorption.” in the light of this particular definition, it can be infer that lack of enthusiasm, absorption and dedication, people cannot involve in their job fully to get things done in a stipulated time period. abraham (2012) was having the opinion that there is an association between stay in the organization and discharge their responsibility with employee engagement. on the basis of the review of literature, we can say that various reasons have been identified to differentiate engaged and disengaged employees. fredrickson (2001) argued that employees who will be engaged showing positive emotions, enthusiasm and joy. this indicates that while employee will be on the work using personal resources to get the works done. when employees engaged in their work, perceive psychological well-being and health, it refers to such employees who focus all resources in terms of personal skills and power resources to their responsibilities. as harter et al. (2002) suggested that manager may motivate their employees towards the realistic outcome, when they were having more engagement at their work. it is important to put emphasis that job satisfaction, commitment, involvement and lessen the role stress are the variables having association with the employees working in the organization to make more effective towards the outcomes of the organization and fully engaged in the work, in the absence of these might lead to disengaged with their work (allam, 2013; al-kahtani and allam, 2014; allam, 2007; stephen, 2011; ali and allam, 2016; allam and rezene, 2009). bakker and xanthopoulou (2009) have the opinion that engaged employees transfer their engagement to others to do the task. it means that engaged person can easily transfer the good things to others and build a team to generate collaborative efforts to perform exceptionally in their work settings. albeit, bakker et al. (2004) revealed the fact that colleagues used to give higher ratings to those employees who perform better on the role and extra-role performance representing that such employees shouldering the responsibilities in an extraordinary manner and urge to go the outstanding. heikkeri (2010) said the disengaged employees are considered as one of the dimensions of organizational structure in the form of their severity i.e., complex in nature and also leads to change the behavior in negative directions. further, the researcher suggested that such complex behavior is detrimental to the organization and therefore the authority needs academic and managerial skills to understand and dealt with such employees to make things happen in a normal manner. halbesleben and wheeler (2008) observed the positive correlation between ratings by the higher officials and employee engagement in relations to performance in the united states in different occupations. it indicates that disengagement employees have the low rating by their own supervisors and found detachment with their work and the lower level of performance. al-kahtani and allam (2013) has said in their study that value play pivotal role to keep away people from various unusual activities. in similar fashion koodamara (2016) initiated a study to explore the correlation between job satisfaction, organizational commitment and employee engagement and revealed the statistical significant difference between these variables. further, they found the positive relationship between engagement and job satisfaction. but in the case of employee disengagement, it can be say that there would be no positive relationship with job satisfaction, commitment and stay in the organization. 2.1. outcomes of employee disengagement various outcomes have been explored on the basis of the review of literature; the following aspects have been identified by academicians and management practitioners pertaining to disengagement of the employees. i. negative job attitude: the attitude of the employees who are not taking part in the work seems to be dissatisfied with job, allam: employee disengagement: a fatal consequence to organization and its ameliorative measures international review of management and marketing | vol 7 • issue 2 • 2017 51 uncommitted, lack of organizational citizenship behavior and so on. these types of employees are not able to generate energy or enthusiasm to do the task and showing negative attitudes at work. saks (2006) observed that disengaged employees most of the time showed no commitment, dissatisfaction and intent to leave the organization. ii. the absence of teamwork: showing little cooperation and collaboration to get things done together as team members. iii. rigidness to accept feedback: disengaged workers don’t show courage to listen the truth about their performance and not accepting their criticism given by others. iv. lack of trust: the disengaged employees hide all information and not sharing ideas, opinions, views and information with anyone due to lack of trust. allam and harish (2010) suggested that trust is having correlation with job satisfaction. v. low morale: the disengaged employees showing less confidence, spirit, discipline and energy to perform in the organization. as suggested by branham (2005) that disengaged employees often negatively impact on income and morale of the employees. vi. no learning: engaged employees wants to get new knowledge and information whereas, disengaged employee not showing interest to get new skill and abilities towards their work to complete the task assigned to them. vii. the higher rate of turnover: due to disengagement in the job at the workplace the rate of voluntarily or involuntarily leaving the organization will be more than what is expected in the business set up by the management. viii. more workplace violence and bullying: workplace violence and bullying both are unacceptable at the workplace but disengaged employees show such actions in the form of aggressiveness, fighting, physical assault, threatening behavior, abusive, teasing and regular jokes at workplace with someone. ix. more health problem: disengaged employees observed to have more headaches, stomach problems and cardiovascular disorder due to the characteristic shown during the working hours. x. higher conflict: the relationship of disengaged employees with subordinate, peers and superiors observed unhealthy, disagreement and bitterness reflects the higher level of conflict. xi. more absenteeism: the disengaged employees frequently keeping themselves away from real work situation and have unusual reasons for not reporting to work. xii. the lower level of productivity: it has been noticed that disengaged employees not putting all efforts to make better performance and complaining others fault and by the results their productivity is low. xiii. the higher rate of accident and safety problem: safety at work is considered as a tool to avoid the accident at workplace. disengaged employees paying the lower level of attention towards the hazardous element at work, ignoring defects in machine, tools and equipment and putting the employees’ life into danger or accidental situations. xiv. more deviant workplace behavior: employees who are disengaged at work not obeying the rules and regulations of the corporate/business sector and indulge in varieties of deviant behavior such as vandalism, sabotage the resources and infrastructure, spreading the rumor, acting rudely with seniors/juniors. xv. lateness: employees not reporting on the time at workplace of start of the work and used to come late and explains that on the way it was an accident, heavy traffic and transportations problems. as blau (1994) observed three different types of lateness such as pattern, duration and frequency. disengaged employees are always showing these attributes towards the lateness or delay. xvi. loss of cultural values: researchers have observed that culture influences the entire organization but if the organization has disengaged employees automatically they will sabotage the culture and have the greater effect on productivity. xvii. postponement/withhold of works: disengaged employees have one of the personality characteristics that they do not keenly taking all things in serious manner or keeping away from the seriousness/urgency of the work. most of the time such employees used to withhold of works and postponed the task for another day or time. xviii. no innovation and creativity: they do not provide new ideas, views, opinion or any kinds of creativity to the organization to make more effective results at work. xix. lack of interpersonal relations: disengaged employees showing little concerned/relations towards different stakeholder particularly customers. such employees harm the organization because they have lack of interpersonal relations in dealing with the customer satisfaction would be a great loss of the organization (vajda and spiritheart, 2008). moreover, the aforesaid ideas generated by the author to delve into the knowledge, skills and opinion related to disengaged employees. in brief, disengaged employees placing the organization in the negative directions and that may be huge costs to the organizations. it can be well understand through the below diagram: 3. conclusion and future recommendations on the basis of conceptual framework, understanding, review of the literature and results due to disengagement of the employees discussed above, it is necessary to have ideal human resource practices in every organization to overcome from such demonic characteristics of employees to make them engaged in work set up. aristotle said “in the arena of human life, the honors and rewards fall to those who show their good qualities in action.” albeit, it is the responsibilities of higher officials to make them engaged in their work necessary to give financial and non-financial rewards to their quality work performed in the organization and to delve into their abilities to shoulder the task prescribed to them. management must be open to discuss the issues through proper communications. training should be given to the employees to enhance knowledge, ability, attitude and skills to perform task allam: employee disengagement: a fatal consequence to organization and its ameliorative measures international review of management and marketing | vol 7 • issue 2 • 201752 and engaged at work. generate trust, match the roles, create a conducive environment or atmosphere, create a culture of meaning of work and develop interpersonal skills to minimize disengagement at the workplace and have the engagement in their work. this study has own limitations and the author suggested that there is a need to have the exhaustive review of the literature to provide meaningfulness to the variables taken in the present exploratory study to understand in a better manner. references abraham, s. 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(2012), workplace wrangler-employees (engaged or disengaged) make or break your business. available from: http:// www.blog.seattlepi.com/workplacewrangler/2012/10/19/employeesengaged-or-disengagedmake-or-break-your-business. saks, a.m. (2006), antecedents and consequences of employee engagement. journal of managerial psychology, 21(7), 600-619. schaufeli, w.b., bakker, a.b. (2004), job demands, job resources, and their relationship with burnout and engagement: a multi-sample study. journal of organizational behavior, 25(3), 293-315. schaufeli, w.b., salanova, m., gonz’alez-rom’a, v., bakker, a.b. (2002), the measurement of engagement and burnout: a two sample confirmatory factor analytic approach. journal of happiness studies, 3, 71-92. stephin, j. g. (2011), 20 signs of employees disengage. available f r o m : h t t p : / / s t e p h e n j g i l l . t y p e p a d . c o m / p e r f o r m a n c e _ improvement_b/2011/12/20-signs-of-employee-disengagement.html vajda, p.g., spiritheart. (2008), the thrill is gone when employees disengage. available from: http://www.spiritheart.net/media/ the_thrill_is_gonewhen_employees_disengage.pdf. . international review of management and marketing | vol 6 • special issue (s8) • 2016270 international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2016, 6(s8) 270-279. special issue for "international conference on applied science and technology (icast) 2016, malaysia" determinants of e-learning acceptance among agricultural extension agents in malaysia: a conceptual framework safaie mangir1*, zakirah othman2, zulkifli mohamed udin3 1school of technology management and logistics, college of business, universiti utara malaysia, malaysia, 2school of technology management and logistics, college of business, universiti utara malaysia, malaysia, 3school of technology management and logistics, college of business, universiti utara malaysia, malaysia. *email: mangir@gmail.com abstract the objective of this paper is to develop a framework on e-learning acceptance among agricultural extension agents in malaysian agricultural sector. e-learning is viewed as a solution in response to the increasing need for learning and training. this paper will review past literatures for the relevant factors that influence behavioral intention for e-learning acceptance as well as the relevant behavioral theories that provide the foundation for developing research framework to illustrate the relationship between the factors and behavioral intention for e-learning acceptance. the outcome of this research is the proposed framework that demonstrates the relationship between the factors and behavioral intention for e-learning acceptance. understanding the determinants of e-learning acceptance will lead to the development of more effective and meaningful e-learning services. the research outcome will help to increase the interest to use e-learning, improve the policies and infrastructure, widen the availability and increase user engagement. investigating the ability of the behavioral theory in predicting e-learning acceptance in agricultural setting will be useful for comparison in the future studies in different settings. keywords: acceptance, agriculture, e-learning, extension agent jel classifications: q13, d83 1. introduction one of the initiatives in the economic transformation program which will drive malaysia towards high-income status and global competitiveness to achieving sustainable economic growth is “establishing e-learning for students and workers” which is projected to achieve gross national income of rm1,487 and 800 job creations by 2020. e-learning which refers to learning process to acquire knowledge using electronic application through the computer and network, is an important approach to enhance and support conventional teaching and provide the ability to render learning to a large population without physical boundaries (daud et al., 2013). characteristically easy to deliver, flexible, economical and agnostic to distance and time (carey and blatnik, 2005), e-learning has various advantages and is superior over the traditional techniques of learning (agarwal and kumar, 2013) and becoming a desirable education, learning and teaching alternative for developing countries (maldonado et al., 2011) such as malaysia. e-learning is seen as a solution to meet the growing demand for learning and training that facilitates more users to learn and train at fraction of the cost, offers opportunity for life-long learning, enables self-regulated learning irrespective of time and location and makes education accessible to all, including people living in remote areas or who have work or family constraints. as with the other innovations accessible out there, the rise of e-learning environment should not be overlooked. the use of e-learning which is traditionally known for its utilization in educational institutions has extended to numerous corporate enterprises and organizations hence along these lines, it is always imperative to study the elements that affect and factors that influence the e-learning environment (hashim and tasir, 2014). in relation to learning and training, the agricultural extension agents (aea) are among the most important actors in agriculture mangir, et al.: determinants of e-learning acceptance among agricultural extension agents in malaysia: a conceptual framework international review of management and marketing | vol 6 • special issue (s8) • 2016 271 industry, as they are one of the important determinants of success for agriculture industry in malaysia and form a special role as a change agent that is crucial to transform the attitude, competencies and knowledge of the farmers in order to support the achievement of national mission (shah et al., 2013). the aeas being the important actor in the agriculture value-chain must first be equipped with all the required knowledge and technology skills to ensure the program planned for the community is effectively and successfully delivered (abdullah and samah, 2013). annor-frempong and kwarteng (2006) argue that information and communication technology (icts) are more and more seen as practical and cost-effective tools to facilitate knowledge sharing and information delivery stakeholders including extension agents and farmers. according to hafkin and odame (2002) and richardson (2005) the benefits of ict utilization such as e-learning for purposes of agricultural extension and training are well documented. public sector programs have attempted to overcome information-related barriers to technological adoption by providing agricultural extension services however such programs have been widely criticized for their limited scale, sustainability and impact (aker, 2011). richardson (2005) remarked that the e-learning technologies can be utilized to expand access to training and education and enhance learning in the agricultural sector. the author further stated that the ict development has popularized e-learning systems in the field of agricultural extension. understanding that traditional education is no longer effective, the iranian ministry of agriculture has considered the necessity of e-learning in agricultural extension for training extension agents (ahmadpour and mirdamadi, 2010). e-learning is seen as a solution to meet the rising demand for training and learning. through e-learning, there is possible opportunity for self-pace learning and life-long learning anywhere and anytime and more participants can be trained at more affordable cost (yunus and salim, 2013). the agriculture sector remains a significant development factor and continues to make important contribution to the national economy in malaysia despite profound reduction of its contribution to the gross domestic product i.e. from some 30% in the 1970s to only 7% in 2013 (othman and jafari, 2014; shah et al., 2013). the significance of agriculture can be seen in terms of its contribution to the total economy, via its functional role in social and environmental development and linkages within the agriculture ministries and departments and other government agencies such as rural development, natural resources and environment, plantation and commodities (othman and jafari, 2014). according to the economic transformation program, agriculture sector in malaysia is vitally important as it provides rural employment, uplift rural incomes and ensure national food security hence it represents one of the key economic sectors that has become the focus of productivity growth and targeted to contribute to the annual productivity growth of 3.7% by year 2020. in the context of this research, the focus remains on the factors that influence e-learning acceptance by aeas in malaysia. 2. problem statement government extension agencies play the central role of intermediaries which are integral to agricultural research and development primarily to disseminate important agricultural information that are all part of an overall agricultural knowledge system linked by ict to farmers (abdon and raab, 2005). in many developing countries, training and education for government extension agencies is clearly top priority however the efforts currently taken are less than desired and there are increasing evidence that indicates the issue with extension services is the result of crisis in agricultural training and education (gasperini, 2000). despite various extension strategies such as decentralization, farmer field schools, training and visit and transfer of technology to improve the productivity of farmers and to facilitate the role that extension plays in national development in many developing countries, these extension efforts have not achieved high degree of success and extension systems are left facing many constraints and challenges such high cost of travel to remote areas, delay or loss of information delivery due to insufficient infrastructure and difficult access (annor-frempong and kwarteng, 2006). the typical face-to-face classroom-type methods of training the extension agents are often unsatisfactory due to several reasons such as high number of extension agents scattered throughout the country causing it to be costly and very challenging to implement and manage thus rendering e-learning to be the proper resolution to resolve the issue (ahmadpour et al., 2010). the agricultural extension service in malaysia has not sufficiently been effective in developing agriculture since the service is only focusing on the role of technology transfer and efforts on development of human resources have been minimal (shah et al., 2013). ict practice in agricultural area in malaysia is still at the average level (hassan et al., 2008). hassan et al. (2009) reported that the level of ict usage such as internet application among malaysia agro-based entrepreneurs is at moderate level. moreover according to hassan et al. (2009) and irfan et al. (2006), instead of using ict in their agro-business, agriculture community prefer to use traditional ways such as asking other entrepreneurs or their neighbor and by relying on traditional mass media such as newspaper, radio and television. contributing to this problem are factors such as language problem (deraman and bahar, 2000), elderly community and low level of education and self-esteem (tamam et al., 2008). hassan et al. (2008) further contend that ict has been used moderately in malaysian agriculture but it has the potential to help develop and commercialize agriculture sector and make it more competitive among other industries. the issue related to extension service in malaysia provides an opportunity for aeas to adopt e-learning to fill the gaps. despite many organizations in public and private sectors investing considerable amounts of time and money in developing online alternatives to traditional types of education and training systems, the rate of e-learning systems user acceptance is not increasing correspondingly as high as expected (ahmadpour et al., 2010; wu and chen, 2012). although e-learning increasingly finds its place in a range of educational institutions and organizations, past researches still showed obvious shortcomings in e-learning including the inability to attract the learners’ or trainees’ interest which adversely affected the e-learning implementation. in addition, the learners’ attitude towards e-learning also influences their desire to take part in e-learning courses in agricultural mangir, et al.: determinants of e-learning acceptance among agricultural extension agents in malaysia: a conceptual framework international review of management and marketing | vol 6 • special issue (s8) • 2016272 extension (ahmadpour and soltani, 2012; yunus and salim, 2013). there have been some emerging concerns that e-learning has not been able to achieve its full potential, partly due to high attrition and low rate of utilization (bell et al., 2004; tyler-smith, 2006; wang, 2010) hence the e-learning resource availability does not guarantee its use, nor its effectiveness as a tool to change employee behavior. in spite of the growth of adult learners who participate in online learning, the high dropout rate in online learning has been of concern to many higher education institutions and organizations (park and choi, 2009). yunus and salim (2013) highlighted that existing studies on e-learning in malaysia are more focused on certain private organizations and institutions of higher learning. the authors further argued that there was no comprehensive study to evaluate e-learning in the malaysian public sector. this finding is further confirmed by (agarwal and kumar, 2013) and (ahmadpour et al., 2010) who argue that despite the exciting benefits of e-learning, the adoption of e-learning for agricultural development and related fields particularly in or for developing countries is still in the early phases of adoption and has been slow to take off. abdon et al. (2008) contend that e-learning is a potentially cost-effective and viable way to facilitate knowledge development among farmers and agricultural professionals but is still not employed widely. the findings of the past research have pointed out that varying factors influence e-learning acceptance therefore, it is necessary to have an in-depth study of those factors that influence e-learning acceptance by aeas in the malaysian agricultural industry. the overall objective of this research is to develop a model on e-learning acceptance and investigate the influence of psychological, social, management and training factors on the aeas’ acceptance of e-learning in agricultural sector in malaysia. the relationship between the proposed factors and the aeas’ behavioral intention to use e-learning will be examined. thus, in the context of e-learning acceptance by aeas in malaysian agricultural sector, this study will attempt to achieve the following objectives: 1. to develop a framework on e-learning acceptance. 2. to investigate the impact of attitude beliefs on aeas’ intention for e-learning acceptance. 3. to investigate the impact of subjective norms on aeas’ intention for e-learning acceptance. 4. to investigate the impact of perceived behavioral controls on aeas’ intention for e-learning acceptance. 5. to investigate the impact of management support on aeas’ intention for e-learning acceptance. 6. to investigate the impact of training on aeas’ intention for e-learning acceptance. 3. literature review e-learning refers to self-study or instructor-led training delivered on a digital device of which the contents and delivery techniques are designed to support individual learning or organizational performance improvement (clark and mayer, 2011). sangrà et al. (2012) further describe e-learning as “an approach to teaching and learning, representing all or part of the educational model applied, that is based on the use of electronic media and devices as tools for improving access to training, communication and interaction and that facilitates the adoption of new ways of understanding and developing learning.” advances in technology and the interrelation of ict with teaching and learning settings have accelerated the growth of distance learning and fundamentally changed the way of education and learning. learning on demand is becoming a type of lifestyle in modern society (mcloughlin and lee, 2007) and such phenomenon is made possible mostly due to ict facilitation. information is constantly sought and shared by learners at home, school or work to solve problem, get help or just to obtain more knowledge to satisfy a curiosity by taking advantage of ict advancement that besides being consumer of information, learners can also become content producers (mcloughlin and lee, 2007; smith and caruso, 2010; solomon and schrum, 2007). the rapid growth of ict and increasing computer knowledge of the population have led to the usage of many learning and teaching innovative technologies such as mobile-learning and e-learning (vyas and nirban, 2014). technology convergence has enabled employees to demand all types of learning materials via various types of tools such as smart devices besides typical laptops and desktop computer platforms and digital transmission of contents for the purpose of learning and knowledge-seeking known as e-learning is increasingly becoming common workplace learning (brown and charlier, 2013). in order to enhance employee and organizational effectiveness, organizational training requires a systematic approach that is geared towards learning and human resource development (goldstein and ford, 2001) and organizational training nowadays is supported by e-learning which rides on the power of technology infrastructures and web networking in order to achieve the particular objectives and deliver instruction (rosenberg, 2001). workplace learning for continuous improvement is crucial to sustain competitiveness of organizations (ho et al., 2011). organizations across the industries time and again have exploited e-learning system to facilitate employee development as e-learning has the capability to deliver knowledge and information to individuals (yoo and huang, 2015). several areas including government and corporate training for employees and distance learning for primary, secondary and tertiary education have found e-learning applications being extended to support their learning and training needs (pereira et al., 2015). public organizations have utilized e-learning to facilitate training and employee development and enable training management, skill adequacy planning and training budgeting (saha et al., 2010) and help to foster organizational learning culture based on knowledge sharing (chen and hsiang, 2007). the infrastructure in the country is ready to support e-learning. the malaysian performance management and delivery unit (pemandu) reported that household broadband penetration in malaysia has reached close to 70% in 2014, and coupled with internet and multimedia technology emergence in recent years, malaysia is in a good position to harness the power of mangir, et al.: determinants of e-learning acceptance among agricultural extension agents in malaysia: a conceptual framework international review of management and marketing | vol 6 • special issue (s8) • 2016 273 online learning to lower the delivery cost, enhance the quality of teaching and learning, widen access to good quality content and bring malaysian expertise to the global community (malaysian education blueprint, 2015-2025). in malaysian agriculture, the aeas which is target group for e-learning implementation are potential adopters as more than 50% of them are in the age group of <35 years old (tiraieyari et al., 2013) and according to kamarul zaman et al. (2015), younger generation has greater potential to adopt technology innovation. there will be plenty of opportunity that e-learning may contribute to dissemination and awareness of sustainable development which is part of national green technology policy and sustainable practices being one of the six strategic thrusts of the eleventh malaysia plan 2016-2020. not implementing e-learning may impair the capability of the agriculture sector to stay on course with the national agenda. 3.1. theoretical background chu and chen (2015) noted that researches related to behavioral intention for technology acceptance have been developed around the theory of reasoned action (tra) (fishbein and ajzen, 1975), technology acceptance model (tam) (davis, 1989) and theory of planned behavior (tpb) (ajzen, 1991). in tra, fishbein and ajzen (1975) explained that an individual performs a specific behavior based on behavioral intention, which can be determined by subjective norms and the attitude toward the behavior. so tra is generally comprised of three main constructs i.e. behavioral intention, subjective norms and attitude toward behavior. thus, a person’s intention toward a specific behavior is affected by the person’s attitude toward that behavioral outcome and the attitude a person perceives other people would have towards the performance of that behavior. a person’s attitude, combined with subjective norms, forms the person’s behavioral intention. tra however is a relatively poor at predicting those types of behaviors where internal and external factors might control or affect the motivation of the outcome of behavior hence ajzen (1991) further extended tra to include perceived behavioral control in addition to subjective norms and attitude as antecedents to behavioral intention. this extension to tra is called tpb and it extends the incomplete concept of tra in predicting an actual behavior under the influence of certain motivation that intended behaviors are also controlled by some uncertainty. hence, a behavior performance depends on intention as well as internal or external factors that may affect the motivational behavior (shareef et al., 2009). tam is another widely referenced theoretical model for predicting the intention to use and the acceptance of information system by individuals. it proposes that only perceived ease of use and perceived usefulness determine the attitude toward adoption of ict and ignores the factors of subjective norms and perceived behavioral control, thus making the model more parsimonious. the attitude, in turn, leads to the intention to use ict and the eventual acceptance (bhattacherjee, 2001; davis et al., 1989). many studies in the literature have used different technology acceptance and adoption models. the diffusion of innovations (doi) theory popularized by rogers (1983) is one of the well-established frameworks that examine how technological innovations are adopted between individuals within a social system. according to the author, the rate of innovations adoption is determined by five factors: relative advantage, compatibility, trialability, observability and complexity. then there is also taylor and todd’s (1995) decomposed tpb, which integrates the tpb model and the doi theory. tam and tpb are two of the most prevalent theories that are associated with studies on information technology acceptance and both theories explain well the intentions to accept information technologies based on numerous empirical tests in variety of technologies in various settings (shiue, 2007; teo, 2012). tpb however, offers more specific information related to subjective norms and the user’s perceived behavioral control which is not considered in tam, hence the tpb model extends more information about the factors to be considered for the intention to accept the technology (mathieson, 1991). mathieson (1991) and taylor and todd (1995) argue that tpb has been proven to have similar predictive powers as tam for technology adoption. tam puts greater emphasis on technology features rather than social influences for examining technology adoption intention. in this study about e-learning acceptance by aeas, e-learning unlike an individual application, usually involves interaction with instructors and students. thus, social influences should not be ignored as e-learning includes interpersonal interactions (chu and chen, 2015). the tpb is applied quite comprehensively across several settings that include adoption/acceptance of new technology, technologybased learning such as e-learning and m-learning, organizational improvement and agriculture. venkatesh and speier (1999) adapted measures used in the tra and tpb to investigate how the effects of emotion during new technology training influenced employees’ motivation, intentions and usage of the new technology by employees of an accounting firm. george (2004) utilized the tpb to investigate internet purchasing by extending the attitude toward behavior and perceived behavioral control components to include internet trustworthiness beliefs and unauthorized use beliefs to determine online purchasing behavior among college students. herrero and rodríguez del bosque (2008) adapted tpb and add personal innovativeness construct as moderator on the adoption of electronic commerce by web users. bosnjak et al. (2005) in their study involving college business students adapted the tpb and add moral obligation component to predict and explain the number of participants in web-based panel study to study internalization of moral values. engle et al. (2010) applied tpb to evaluate entrepreneurial intent by business students across twelve countries. siragusa and dixon (2009) adapted tpb to predict higher education students’ behavior and attitudes towards technology-based learning. chu and chen (2015) adapted tpb that include social identity and social bonds on e-learning adoption intention among students who enrolled in courses using e-learning technology in taiwan. cheon et al. (2012) conducted a study to investigate mobile learning readiness in higher education based on the tbp. wiethoff (2004) adapted tpb to study effectiveness of training for organizational diversity. yazdanpanah et al. (2014) adapted tpb and extended additional constructs i.e., perceived risk, self-identity and moral mangir, et al.: determinants of e-learning acceptance among agricultural extension agents in malaysia: a conceptual framework international review of management and marketing | vol 6 • special issue (s8) • 2016274 norm in their study on water conservation among farmers in iran. in usa, lynne et al. (1995) investigated the farmers’ conservation technology adoption decision using tpb. sparks and shepherd (1992) extended tpb with self-identity and past consumption constructs to study the antecedents of intention to consume organic products. colémont and van den broucke (2008) used tpb to understand the factors that contribute to unsafe and health damaging behavior among the farmers. artikov et al. (2006) utilized tpb to study the causes that drive farmer intentions of using climate and weather information and forecasts in farming decisions among farmers in mid-western usa. beside attitude, subjective norms and perceived behavioral control being the main constructs of tpb, the literatures related to tpb highlighted several other constructs such as emotion, trust, security, innovativeness, moral obligation, social bonds, social identity, training, perceived risk, self-identity and past experience as antecedents to behavioral intention. however there was limited research on management support and training as additional constructs to the tpb. previous studies indicated that training is a significant factor that influences online learning acceptance and have positive impact on users’ acceptance and their intention to use a particular system (igbaria et al., 1997; wolski and jackson, 1999). cerveny and sanders (1986) and igbaria (1994) contend that management support has been identified as one of the main recurrent factors affecting system success. in view of the above, two additional construct involving management support and training are proposed to be investigated besides the original tpb constructs i.e., behavior intention, attitude, subjective norms and perceived behavioral control. the tpb has been widely used to predict behavioral intention hence the research framework in this study will adapt the tpb and apply behavioral intention, which has been considered as the important basis for examining the behavior of aeas to accept e-learning system. the key components of tpb are behavioral intention as dependent variable and attitude, subjective norm and perceived behavioral control as independent variables. for the purpose of this study, another two variables are included as independent variable i.e. management support and training which reflects the setting that involves extension agents in malaysia department of agriculture. 3.2. behavioral intention behavioral intention refers to a person’s subjective probability in performing certain behavior (fishbein and ajzen, 1975). it decides if the aeas want to reject or accept the use the technologies in their learning and training duty. behavioral intention is applied as a dependent variable for three reasons. first, a number of studies have reported a significant and strong relationship between behavioral intention and targeted behavior (sheppard et al., 1988; venkatesh and morris, 2000). mathieson (1991) highlighted that over time there will be changes either in the environment, user’s expectations or the system itself therefore measuring user acceptance based on the “intention to use” before the system implementation is ready will be required especially when the system does not yet exist. secondly, according to agarwal and prasad (1998), usage intentions are more applicable than actual behavior because they are measured concurrently with beliefs. thirdly, because e-learning system is not yet implemented, choosing intention to use over actual acceptance is more desirable; thus, examining the intention to accept e-learning facilitates a timely investigation of agricultural aeas’ acceptance to help prepare the actual implementation. the literature reviews have shown several factors which influence the adoption and acceptance of information technologies such as e-learning. among the factors that are extensively being studied are attitude towards technology, subjective norms and perceived behavioral control (karaali et al., 2011; macharia and nyakwende, 2010; park and cheong, 2007; park, 2009; qudais et al., 2010; siragusa and dixon, 2009). in relation to these factors, behavioral intention is the ultimate destination that brings about the adoption or acceptance of technology. 3.3. attitude attitudes reflect the individual’s positive or negative evaluations of performing a particular target behavior (fishbein and ajzen, 1975). according to rogers (1983) attitude refers to individual’s general feeling or perception of favorableness or un-favorableness towards using innovation or technologies. ajzen (1991) further expands that the sum of accessible behavioral beliefs determines attitude towards the behavior. the author contends that accessible behavioral beliefs refer to the subjective probability that the behavior will achieve expected outcomes positively or negatively. attitude is linked to behavioral intention as individual forms psychological intentions to perform behaviors toward which they have positive feeling (ndubisi, 2004). 3.4. subjective norm also referred as social influence, subjective norm is described as “the person’s perception that most people who are important to him think he should or should not perform the behavior in question” (fishbein and ajzen, 1975). ajzen (1991) further adds that the determinant of subjective norm is the sum of normative beliefs which reflects the perceived behavioral views or expectations of important referents individuals or groups. subjective norm implies that behavior is initiated by individual’s wish to act according to what the thought or action of the important referent others (pavlou and fygenson, 2006). pantano and di pietro (2012) suggest that referent people such as friends and family represent the expectations of other people to perform a particular behavior, thus they can potentially influence the behavior. subjective norms have been observed to be more important prior to, or in the early stages of implementation when users have limited direct experience from which to develop the attitudes towards the innovation (hartwick and barki, 1994; taylor and todd, 1995). borotis and poulymenakou (2009) contend that subjective norm refers to the individual’s perceptions of broad social pressure to (or not to) perform the expected behavior. the social pressure exerted by the significant “referent” others whose beliefs may be important to the individual whom the individual perceives to support (or not) the behavior, conceives more (or less) likelihood for the individual to perform it. subjective norm is considered as one of the factors that influences the adoption and the acceptance mangir, et al.: determinants of e-learning acceptance among agricultural extension agents in malaysia: a conceptual framework international review of management and marketing | vol 6 • special issue (s8) • 2016 275 of technologies and appears in many adoption theories such as tra and tpb. 3.5. perceived behavioral control to a certain extent the available opportunities and resources to a person determine the chances of achieving the target behavior and of greater psychological interest, is the perception and its impact of behavioral control on intentions and actions (ajzen, 1991). the author refers perceived behavioral control as “people’s perception of the ease or difficulty of performing the behavior of interest” and it can change across actions and circumstances. the author adds that perceived behavioral control is determined by the sum of accessible control beliefs which refers to the perceived presence of the necessary opportunities and resources to the performance of the intended behavior. according to tan and teo (2000) perceived behavioral control refers to the factors that may hinder or encourage the performance of the behavior. cheng and huang (2013) identified the determinant factors for perceived behavioral control as ability, resource and opportunity and the authors contend that a person’s behavioral intention will increase when he perceives himself as more in control which is supported by the perception that he has the ability, resources and opportunities to perform a certain behavior. 3.6. management support management support refers to the perceived level of general support offered by the organization’s top management (igbaria et al., 1997). management support functions as a change agent to create a more encouraging environment and ensure sufficient resource allocation for the success of is implementation. therefore, management support is always related to greater system success and lack of it may render a critical barrier to the effective it utilization. as with other information systems, management support is critical to e-learning implementation (morrison, 2003) and top management’s vocal support and consistency are important factors for success (macpherson et al., 2004). as e-learning requires organization-wide change, the top management support is viewed as important to influence employees of the organization due to its position and ranking hierarchy in the organization. in addition, direct managers may also extend their support and guidance and direction as they are closer and more familiar with employees. they can assist employee in finding the right time to learn and subsequently buying the support from employees for acceptance of the new technology and the process. management support should be relevant and clear to internal as well as external conditions (sela and sivan, 2009). management support has been identified by the past literatures as one of the main recurrent factors affecting system success (cerveny and sanders, 1986; igbaria, 1994). sivakumar et al. (2014) conducted research in extension organizations in india and revealed that management support influenced computer utility positively among the extension professionals. 3.7. training training in this study is defined as institution’s effort to teach and train their employees to acquire e-learning skills. previous studies have included training as a significant factor that influence the students’ acceptance of using online learning and concluded that training had a positive impact on users’ acceptance and their intention to use a particular system (igbaria et al., 1997; wolski and jackson, 1999). thus, the training provided by the institutions will be considered a key factor for the successful implementation of e-learning hence its relationship with the aea’s intention to use e-learning will be investigated. raymond (1988) in his study reported that training promotes more diverse and frequent use, favorable attitudes and greater understanding on the application use. similarly, training was found to have a positive impact on technology acceptance (igbaria et al., 1995; nelson and cheney, 1987). ali and magalhaes (2008) discovered that generally, the majority of the organizations were providing training to their employees under different models covering both traditional methods (on-the-job training and instructor-led training) as well as new methods (e-learning) and aware of the importance and effectiveness of training to implementation of e-learning. research in extension organizations in india discovered that training influenced computer usage positively among extension officials (sivakumar et al., 2014). the organizational effort of providing training and support for technology (i.e. internet stock trading system) would enhance their capability in utilizing the technology among individual stock traders in malaysia (ramayah et al., 2014). figure 1: research framework of behavioral intention to e-learning acceptance mangir, et al.: determinants of e-learning acceptance among agricultural extension agents in malaysia: a conceptual framework international review of management and marketing | vol 6 • special issue (s8) • 2016276 in the context of e-learning acceptance by aeas and adapting the tpb, the research framework as depicted in figure 1 is proposed to investigate the relationship between behavioral intention for e-learning acceptance as dependent variable and each of the independent variables i.e., attitude, subjective norms, perceived behavioral control, management support and training. the framework is expected to provide better understanding on the factors that contribute to the acceptance of e-learning by the target population i.e., aeas and can be useful for those who are responsible to implementing ict initiatives such as e-learning in public or private organization within the agriculture sector. the framework will help in terms of preparing for pre-implementation actions to increase the acceptance level, gain the necessary support and lift the potential barriers of the ict initiatives. based on the research framework as illustrated in figure 1, the hypotheses are postulated as follow: h1: attitude has a positive relationship with behavioral intention to e-learning acceptance. h2: subjective norm has a positive relationship with behavioral intention to e-learning acceptance. h3: perceived behavioral control has a positive relationship with behavioral intention to e-learning acceptance. h4: management support has a positive relationship with behavioral intention to e-learning acceptance. h5: training has a positive relationship with behavioral intention to e-learning acceptance. 4. conclusion this study is an attempt to provide a comprehensive review of the relationship between attitude, social influence and perceived behavioral control to the behavioral intention for e-learning acceptance by aeas in malaysia. from practical perspective, the study will offer an insight into one of the most important issues in malaysian agricultural sector, which is learning and training for aeas. in addition the research findings will help determine the barriers to e-learning, curtail the potential resistance and identify the factors that promote e-learning acceptance in malaysia agricultural sector. the research findings would be beneficial to the governmental departments to improve the relevant infrastructure to widen the availability of e-learning and increase the engagement among the users. from the theoretical point of view and in relation to the body of knowledge, this research will contribute significantly through the process of investigating the impact of influencing factors on the e-learning acceptance through the framework of the social and behavioral theory. the study also attempts to prove the significant role of the proposed factors (social, psychological, management support and training) and e-learning acceptance and the respective relationships will be tested directly hence the findings will be useful for comparison in the future studies in different country and/or industry. references abdon, b., raab, r., ninomiya, s. 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(2013), e-learning evaluation in malaysian public sector from the pedagogical perspective: towards e-learning effectiveness. journal of theoretical and applied information technology, 51(2), 201-210. . international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2020, 10(2), 1-7. international review of management and marketing | vol 10 • issue 2 • 2020 1 a model for minimizing problems in salam financing at islamic banks in indonesia bambang waluyo*, sylvia rozza department of accounting, state polytechnic of jakarta, depok, indonesia. *email: bamwaluyo13@gmail.com received: 26 december 2019 accepted: 11 february 2020 doi: https://doi.org/10.32479/irmm.9149 abstract it has been observed that none of the islamic banks in indonesia are involved in salam financing. this research aims to explore the problems faced by islamic banks in indonesia in the development of salam-based financing products and efforts to minimize it. the study uses a descriptive qualitative exploratory approach. the method of data collecting is documentation. data is obtained from scientific journals and websites. the example of problems faced in the operation of salam based financing in islamic banks are: (1) no capital, (2) lack of knowledge, (3) profit oriented, (4) risk of loss of capital, (5) unkind characters. the result of this study concludes that to minimize the problems, islamic banks in indonesia can: (1) cooperate with agricultural insurance, (2) establish a symbiotic relationship, (3) have a marketing network, (4) innovate salam products with a hybrid contract, (5) islamic banks make parallel salam, (6) islamic banks can expand the object of salam financing, (7) provide salam financing in groups, (8) establish an agricultural bank, (9) screen the farmers who should receive the salam financing, (10) continuous education. it is hoped that islamic banks can innovate salam products to help improve the welfare of farmers and the community. keywords: model, problems, financing, parallel salam, screening, education jel classifications: a1, m2, o3 1. introduction salam is one type of sharia compliance contract. legality of the salam agreement in indonesia is very strong as stated in the fatwa of national sharia council (dsn) and supported by other regulations as stated in the statement of financial accounting standards (psak) 103 regarding salam accounting, and accounting guidelines for indonesian islamic banking (papsi), however in reality it is have not been able to encourage islamic banks to channel salam-based financing. regards, in transactions at islamic financial institutions, are financing services provided in which the goods traded have already identified in advance, however, the goods sold are still deferred their delivery to the buyer. in addition to the goods suspended, payment of the goods must be paid in cash by the buyer when the contract agreed. salam contracts usually used in financing sharia financial institution (lks) for the agricultural sector. agricultural development is one of the main sectors in national development in indonesia. table 1 shows that none of the islamic banks of indonesia are involved in salam financing. murabahah is the first rank in indonesian islamic bank financing, followed by musharaka, mudaraba, ijara, qard and istishna.” researches related to financing with the salam contract have been conducted by several researchers before. roziq et al. (2014) found that the problems to be encountered in implementing the operationalization of salam system financing are that there is no capital used to pay cash upfront, risk of loss of capital, lousy character or yields sold to other parties due to an increased price. the salam financing scheme has not been touched much, especially by islamic banking. widiana and annisa (2017) findings that optimizing the salam contract financing can have a positive impact on farmers, namely on the capital aspect to develop agricultural products, however, in indonesia, both islamic banking and islamic finance cooperative (baitul maal wattamwil [bmt]) have not implemented this contract, related to several risks from salam financing. meanwhile, rahmadhani (2017) found several factors that hindered the this journal is licensed under a creative commons attribution 4.0 international license waluyo and rozza: a model for minimizing problems in salam financing at islamic banks in indonesia international review of management and marketing | vol 10 • issue 2 • 20202 implementation of the salam agreement in the sharia savings and loan cooperative (ksps). these are lack of knowledge of human resources (hr), the existence of alternative financing agreements, profit-oriented, no demand, the difficulties to get the financing for ksps, they do not want to give efforts to get the financing, and make the salam agreement is not a priority contract to be attempted. these studies generally produce findings that the financing product with the salam contract has not been applied in islamic financial institutions (lks) because the lks faces risks in implementing it, even though the lks understands that financing with a salam contract can help farmers. therefore, this research will explore in more depth in the indonesian context to create a model so that salam financing can grow to complement existing islamic bank products. maulida and yunani (2017) recommends the application of the concept of financing for ranchers through the islamic finance cooperative or baitul maal bi tamwil (bmt) utilizing the salam contract with a “group” framework. rasheed and mudassar (2010) proposed a model involving middleman as an agent of a bank (financier). middleman, as the agent of the bank, sells the crop in the market and charges his agency fee. ehsan and shahzad (2015) had an option of a procedure stream of the proposed salam contract: (1). application for financing, (2). mou/contract, (3). full payment of salam contract, (4). technical and managerial assistance, (5). delivery of goods on maturity. this research aims to find out the salam financing model in the indonesian context. previous research related to efforts to minimize problems in salam financing, but did not pay attention to aspects of farmer’s behavior such as honesty, which can be done through screening attributes of farmers. this research will include the screening of farmers’ attributes in the model to minimize problems in salam financing. 2. literature review 2.1. understanding salam financing islamic banking law (undang-undang perbankan syariah) no. 21/2008, states that financing can do through profit-sharing transactions, leasing transactions, buying and selling transactions, borrowing and lending transactions, and service leasing transactions. in financing, one party will surrender economic value with the hope of getting it back later. financing must be accompanied by a trust between the parties involved in it that arises because of the agreement between them. a fee accompanies the financing by a fee from the recipient of the financing to the party providing the financing. the economic activities of the community will be optimal with funding from banks. people who have the business capability but are limited in the capital, are certainly greatly helped by the existence of funding from banks because for banking the giving activities can also encourage for the development of community economic activities while also generating income. bank financing can increase the productivity of people who can try (entrepreneurial spirit) but have constraints in terms of capital. in salam, payment is the spot, but the delivery is deferred (shaikh, 2010). a buyer pays in advance for a specified quantity and quality of a commodity, deliverable on a specific date, at an agreed price (khattak and hussain, 2006). the technique of salam financing, similar to a futures or forward-purchase contract. salam is particularly applicable to seasonal agricultural purchases, but it can also be used to buy other goods in cases where the seller needs working capital before he can deliver. the bai salam contract is a muajjal (deferred) contract with the al-musallam fihi for a commodity being paid upfront and the delivery being deferred to a later date (ajmal et al., 2017). the al-musallim is the owner of capital who have excess funds and who will be buying the commodity. the seller, al-musallam alayhi, takes the money from the buyer and will deliver the goods at a future date. in terms of the scholars of fiqh, the definition of bai as-salam is an agreement to make something with certain characteristics by paying the price first, while the goods are handed over later. the salam is very different from the normal bai (sales) contract. a salam is a hybrid contract involving both a selling and buying process and a borrowing and lending process. a salam is a hybrid contract involving both a selling and buying process and a borrowing and lending process. bai al-salam/istisna is like a fates contract where the purchaser and dealer consent to value, quality, amount and conveyance date. bai al salam is structured for commodities, while istisna is for manufactured goods. the notion of salam is also defined in the fatwa national sharia council (dsn) and indonesia central bank regulations. according to the national sharia council (dsn), salam is the sale and purchase of goods by way of ordering and payment of prices in advance with certain conditions. indonesia central bank defines; salam is a contract of buying and selling ordered goods (muslam fiih) between the buyer (muslam) and the seller (muslam ilaih). specifications and price orders are agreed at the beginning of the contract and payment is made in advance. if the bank acts as a muslam and then orders another party to provide goods (muslam fiih) then this is called a parallel salam. parallel salam carries out two bai as-salam transactions between banks and customers and between banks and suppliers (suppliers) or other third parties simultaneously. parallel salam is permitted on condition that the second contract is separate from, and not related to, the first contract (national sharia council [dsn] fatwa no. 05/dsn-mui/iv/2000). from the definitions above, buying and selling are categorized as a bai as-salam if it meets the following elements: table 1: financing based on the type of sharia compliant contract in islamic bank in indonesia no. types of financing percentage 1. mudaraba 4.96 2. musharaka 40.49 3. murabaha 48.35 4. qardh 2.40 5. istishna’ 0.50 6. ijara including leasing receivables 3.31 7. salam 0.00 total 100.00 source: indonesia islamic banking statistic, 2018 on www.ojk.go.id waluyo and rozza: a model for minimizing problems in salam financing at islamic banks in indonesia international review of management and marketing | vol 10 • issue 2 • 2020 3 a. buying and selling are done by order b. specifications of the ordered goods are clear criteria c. payment is made at the time of the contract/upfront in full, and the d. goods are handed over at a later time. 2.2. role of product innovation in islamic banking key to the development of a business (including islamic financial institutions) is innovation. institutions that are late in innovating are almost certainly lagging than those that always innovate. the right innovation must be done otherwise, all efforts and energy will be wasted. in islamic banking, product innovation can be the key to be more useful, competitive and develop faster according to the needs of the community. the development of sharia financial product innovation in islamic banking must be designed by full international stowing standards (lewis and algaoud, 2007). the innovations made must also refer to the formulation of sharia banking development strategies by looking at the domestic market in indonesia. product innovations are developed, adjusted to product quality, reliability of hr, service facilities and technology as well as service network expansion, guided by the mui fatwa set by the national sharia council (dsn). innovation in islamic finance is parallel salam. a parallel salam option is also available to financial institutions (ajmal et al., 2017). one possibility is that the bank enters into the parallel salam with its original client, the seller and the bank chooses another client who wants to buy and enter into a salam contract. this time the bank will take the position of a seller (unctad, 2006). the former is impermissible by some schools as it may require that the two salam contracts to be co-dependent on each other, which is void (ahmed, 2007). salam should not be a near replica of speculative and risky future contracts (al-fijawi, 2016). 2.3. problems in salam financing in salam, the bank will advance cash to the farmers on the conclusion of the contract for the delivery of crops during the harvest period (future date) (teacher and law, 2013). salam financing can help the farmer to move away from informal financing means such as moneylenders, whereby they are charged with a heavy interest on a compounding basis. however, many problems accompanying islamic bank in salam financing. research conducted by roziq et al. (2014) found that the problems to be encountered in the operationalization of the salam system financing are: a. no capital is used to pay cash in advance b. there is a risk of loss of capital c. unkind characters or yields are sold to other parties due to price increases. meanwhile, rahmadhani (2017) found several factors that hinder the implementation of the salam agreement in the sharia savings and loan cooperative (ksps) are: a. lack of knowledge of hr b. existence of alternative financing agreement c. profit oriented d. absence of demand e. salam agreement is not a priority f. ksps does not want to be bothered. widiana and annisa (2017) found that optimizing the salam contract financing can have a positive impact on farmers, namely on the capital aspect to develop agricultural products. however, in indonesia, both islamic banking and baitul maal wattamwil (bmt) have not implemented this contract, related to several risks from salam financing. ajmal et al. (2017) say that of the uncertainties in salam, banks do not provide the salam financing product. based on these studies, problems in the distribution of salam financing can be classified based on the source, namely internal factors, and external factors. problems that arise from internal factors are: a. no capital is used to pay cash in advance b. lack of knowledge of hr c. the existence of an alternative financing agreement d. profit oriented e. the salam agreement is not a prioritized contract f. islamic financial institutions do not want to be bothered. the problems that can be classified into external factors are: a. there is a risk of loss of capital b. unkind characters or yields are sold to other parties due to price increases c. absence of demand. despite many problems in salam financing, on the sides many opportunities to create islamic bank product based on salam contract. in the current, salam used in currency trade as an alternative for the bill of exchange discounting and in agriculture financing (shaikh, 2010). widiana and anisa (2017) state that in theory, it takes seriousness in implementing the salam contract because it is very risky when the crop failure happens which impacts the sharia financial institutions (lks). however, on the other hand, the salam financing contract is still not widely applied to islamic financial institutions. this is also an opportunity for lks who wants to focus on the application of salam financing. supported by the natural conditions of indonesia’s fertile land, the development of salam financing has a great chance of success. for the indonesian economy, salam financing will have a positive impact, because indonesia is a rice barn for meeting domestic needs. as a rice barn, there is no need to import rice from other countries to fulfill rice needs. also, the agricultural sector is a workplace for a very broad community, especially for rural communities. therefore, the government should intensely support salam financing as a solution for farmers. 3. methodolgy this research uses a descriptive qualitative exploratory approach. in qualitative research, non-statistical analysis procedures are put forward (straus and corbin, 2017). discussions and conclusions are made qualitatively. a descriptive study in this study aims to waluyo and rozza: a model for minimizing problems in salam financing at islamic banks in indonesia international review of management and marketing | vol 10 • issue 2 • 20204 describe the aspects of salam financing, its problems, and efforts to minimize them. these aspects get from scientific journals and websites. problems in regards to salam financing and efforts to minimize then grouped so that researchers can conclude matters related to efforts to minimize that have not been implemented. the explorative study of this research is an effort to better understand the nature of the problem when some facts are known, namely the absence of salam-based financing in islamic banks, but more information is needed to dig deeper so that it can be explored comprehensively and efforts can be made to minimize the problem. 4. results and discussion 4.1. model to minimize problems in salam financing the inherent risks in salam financing are the possibility of farmers failing to harvest so that they cannot ship agricultural products ordered by the buyer. islamic banks are required to be able to diversify their financing and begin to look at salam-based products, but the risk of the salam products has caused islamic banks in indonesia to date have not sold salam-based products. to overcome the risks of banking in channeling financing, it is necessary to take certain steps. based on the researcher’s observation, in the indonesian context, there is an additional solution that can be suggested other than those that have been found in the last researches in this regard to minimize the problems. as far as the researcher’s knowledge, this aspect has yet to be considered as one of the solutions. the following are steps that can be a model to minimize the problems in channeling salam financing: 1. banks can collaborate with agricultural insurance to cover capital costs that cannot be paid by farmers when there is a crop failure 2. establishing a symbiotic relationship between upstream and downstream products 3. having a network that is used for marketing agricultural products after the harvest arrives so that it can help farmers in distributing harvests 4. islamic banks can innovate salam products with a hybrid contract between salam with wakalah 5. islamic banks make parallel salam 6. islamic banks can expand the object of salam financing towards non-agricultural activities such as cattle and poultry farming 7. salam financing can be given in groups with a contract at the beginning of the agreement with the joint responsibility system 8. establish an agricultural bank 9. screen the farmers/owners of agricultural businesses that can be financed 10. continuous education. step number 9 and 10 is the new solution proposed in this research. therefore, it can be put in the new solution model. in the next figure 1, a model in this regard in the indonesian context will be illustrated. following is an explanation of each of the efforts that can be made to minimize problems in regards to the financing: 4.1.1. collaborate with agricultural insurance muhammad et al. (2017) provide an alternative to the implementation of the salam financing agreement for agriculture in sharia banking. the research carries the concept of optimizing the salam contract in islamic banking to overcome capital problems in the agricultural sector, by working together with agricultural insurance to cover capital costs that cannot be paid by farmers when crop failure occurs. this is certainly a breath of fresh air for the application of the salam in islamic financial institutions which have so far been carried out due to the risks they have to face. islamic insurance or takaful will provide coverage for the risks that arise in each process of salam financing. thus, the bank will avoid the risk of loss arising from the salam financing contract given to farmers. farmers or customers who come to islamic financial institutions to get financing with a salam contract will make and sign a transaction as well as an agreement which includes insurance. therefore, in addition to the cost of goods and profits, which needs to be taken into account is the insurance value of the goods being traded. source: researcher exploration m odel to solve the problems insurance symbiotic marketing network hybrid contract parallel salam group expand agricultural bank screening farmers model to minimize the problems education figure 1: development model to minimize the problem of salam financing in islamic banks waluyo and rozza: a model for minimizing problems in salam financing at islamic banks in indonesia international review of management and marketing | vol 10 • issue 2 • 2020 5 islam does not permit selfishness profit maximization (aziz and osman, 2016). hence, although islamic bank will be motivated by profit, just the same as any general business, it has to be by the basic principles of islam, such as practicing “non-interest-based transactions,” maintaining the competitors’ rights and consumers’ rights, and ensuring corporate social responsibility (fair-trade, environment-friendly production, labor rights). eventually, the profit from the business will help to eradicate social problems including poverty. salam financing by islamic banks is expected to help farmers improve their welfare. 4.1.2. establish a symbiotic relationship between upstream and downstream products in addition to cooperating with agricultural insurance, the effective application of the concept of salam for islamic banks is to establish a symbiotic relationship between upstream and downstream products. islamic bank maps the production chain and becomes a bridge in it. starting from seed producers, fertilizer producers, producers of agricultural equipment, to direct consumers or consumers who are ready to make agricultural products as processed products. 4.1.3. develop a marketing network islamic banks should have a network that is used for marketing agricultural products after the harvest arrives so that it can help farmers in distributing the yields so that the financing capital turnover will be fast-moving. in theory, seriousness is needed in implementing the salam contract because the salam contract is very risky for the islamic bank if there is a failure of the harvest. it will also have an impact on the islamic bank. however, on the other hand, financing of salam contracts is still not widely applied to islamic financial institutions. this is also an opportunity for lks who wants to focus on the application of salam financing. the natural condition of indonesia’s fertile land, the development of greetings financing has a great chance of success. 4.1.4. salam product innovation with hybrid contract between salam and wakalah muneeza et al. (2011) state that the right islamic banking financing product for farmers is salam financing. a salam is a hybrid contract involving both a selling and buying process and a borrowing and lending process (ajmal et al., 2017). salam product innovation here is the form of a hybrid contract between salam and wakalah. the bank makes an agency contract separately/independently with the farmer, where the farmer acts as a bank agent to sell the products. farmers are looking for customers to sell products by obtaining approval from the bank. the farmer sends the product constructively to the bank and by his position as a bank agent, the farmer immediately sells the product to his customers. if something unexpected happens, if the farmer fails to produce according to the amount requested, the farmer will buy from the market to fulfill it. the farmer gives the sale proceeds to the bank and the bank pays ujroh or wages to the farmer for his work. 4.1.5. do parallel salam parallel salam option is also available to the financial institutions (ajmal et al., 2017). salam is a contract of buying and selling ordered items (al-musallam fihi) between buyer (musallam) and seller who sells the product (al-musallam alayhi). when a bank acts as a musallam and then orders another party to provide goods (al-musallam fihi) then this is called a parallel salam. parallel salam carries out two bai as-salam transactions between banks and customers and between banks and suppliers (suppliers) or other third parties simultaneously. parallel salam is permitted on condition that the second contract is separate from, and not related to, the first contract (sharia national council fatwa no. 05/dsn-mui/iv/2000). the parallel salam scheme is very beneficial for islamic banks, considering that the buyer has handed over the money in advance. thus, the risk of default on the debt is non-existent. although this transaction creates new risks, namely the failure to deliver goods, the experience and network of farmers owned by the bank, this risk should not be difficult for islamic banks to overcome. salam financing agreement will benefit the islamic bank if the quality and quantity of the goods are by the initial agreement even though in reality the quality and quantity of the goods provided may differ. parallel salam contracts in the malaysian banking system implemented by islamic business consumers or producers of a certain commodity-like good can buy or sell salam contracts on the good and then reassess that position over time (teacher and law, 2013). if the price outlook shifts, they can reverse their positions by undertaking a new set of salam contracts that are opposite in effect to the first set but are otherwise unrelated. 4.1.6. expand objects of salam financing islam prohibits interest as a source of income or profit. kaleem and rana (2009) have researched to explore the possibility of applying the bai salam contract (forward sale agreement) as an alternative financial instrument in the agricultural sector in pakistan. according to him, the concept of salam can be extended towards non-agricultural activities such as cattle and poultry farming. based on kaleem’s research, the object of salam financing actually can be extended to the field of animal husbandry which in indonesia also has the potential to develop. 4.1.7. do group salam financing maulida and yunani (2017) recommends the need to apply the concept of financing to farmers through the islamic finance cooperative or baitul maal bi tamwil (bmt) using the bai’ salam contract with the “group” system. bmt is a microfinance institution in indonesia. the government needs to make policies that can encourage the development of agricultural finance by increasing information or financial inclusion. islamic banks push to distribute their funds to the microfinance institutions. the distribution of islamic bank funds to microfinance institutions can be utilized to develop agricultural financing using the bai’ salam contract. if there is a crop failure of one of the farmers, joint responsibility can be applied, meaning that when one member experiences difficulties, the other members also help in fulfilling the goods by the agreement with bmt. waluyo and rozza: a model for minimizing problems in salam financing at islamic banks in indonesia international review of management and marketing | vol 10 • issue 2 • 20206 4.1.8. establish an agricultural bank according to wahyudi (2011), the characteristics of agricultural businesses that contain a lot of risks make the intention of banking institutions to fund this sector is relatively low. the low banking alignments in the agriculture sector have become one of the causes of the slow-moving forward of the agricultural business sector. farmers still find it difficult to develop their farming businesses due to limited capital from banks. based on the study of the sharia banking business model published by the directorate of sharia banking of bank of indonesia (2012), one of the sharia bank business models is the agricultural bank. agricultural banks are one of the development financial institutions appointed or mandated by the government to provide loans/funding in the agricultural sector to support national food security. 4.1.9. do tight screening upon the farmers/owners of agricultural businesses to finance the agricultural businesses, islamic banks should screen the owners/farmers based on criteria set by the banks. they should have skills in doing their jobs as farmers, they should be hardworkers, be honest, and be achievers. to assess the farmers, the banks could interview the candidates in the fields, or hire experts to predict and measure the potential success of their harvests by relating it with the natural condition. farmer’s moral hazard must be minimized by the bank system. 4.1.10. continuous education lack of society’s understandings of islamic banking is a challenge in islamic banking development in indonesia (waluyo et al., 2018). education about islamic banking must be a continues program by islamic banking stakeholders in indonesia. the object of educations is society and islamic bank employees. one of the problems from an internal factor in salam financing is the lack of knowledge of hr. hrs in islamic banks must upgrade their knowledge about islamic bank products and how to innovate for the sustainable and implementable product especially salam financing. do tight screening upon the farmers/owners of agricultural businesses and continuous education to minimize internal and external problems in salam financing are the novelty of the research. previous research concentrates to minimize the external problem in salam financing. however, in this research, both internal and external problems in salam financing are to be minimized by proposed a model to minimize it. the model expects to encourage implementation salam in islamic banking in indonesia. 4.2. implementation of the research results model to minimize the risks in the distribution of salam-based financing is expected to be able to help islamic banking in overcoming the problems that have been faced when it will channel the financing. islamic banks should start aiming at salam based financing as a product so that they can accelerate islamic bank development and will be able to show that islamic banks are not only profit-oriented but also carry a social mission with their willingness to help farmers who have been struggling to get capital from banks. the development of the agricultural sector with real support from islamic banks means that it will support the availability of food nationally. the adoption of salam finance will improve the supply of agricultural output, create more employment opportunities and improve local and modern industries and commerce (mohammed et al., 2016). thus, if islamic banking wants to look at salam products, it will directly contribute to creating public welfare. the development of salam products must also have the support of regulators such as the authorized financial services (ojk) by issuing rules that make it easier for islamic banks to create salam product innovations, for example regarding the risks of financing salam products that may be managed separately because this product is directly related to natural conditions. the government must also encourage the availability of funding that can support farmers to be more productive. 5. conclusions to minimize problems in the distribution of islamic bank salam financing some actions should be taken. the additional solution should be suggested other than those that have been given in the result of some researches in this context. the banks can collaborate with agricultural insurance, and establish a symbiotic relationship between upstream and downstream products. they can also set a marketing network of agricultural products, and innovate alternative salam product with a hybrid contract between salam and wakalah. islamic banks can also make parallel salam, and extend salam financing object towards non-agricultural business types such as cattle and poultry farming. salam financing can be given in groups with a joint responsibility system, and establish an agricultural bank. especially in the indonesian context, the banks should screen the farmers based on criteria set by the banks to anticipate the failure of channeling salam financing. continuous education to society and hrs in islamic banking to upgrade their knowledge about islamic bank products. references accounting guidelines for indonesian islamic banking (papsi). (2013), available from: https://www.ojk.go.id/id/kanal/perbankan/ documents/pages/pedoman-akuntansi-perbankan-indonesia28papi%29/pedoman%20akuntansi%20perbankan%20syariah%20 indonesia%20%28papsi%29.pdf. [last accessed on 2019 may 02]. ahmed, a.g. (2007), sharia opinion (fatwa) on istisna contracting and salam. europe: al-baraka banking group department of research and development. ajmal, m.m., rafay, a., sadiq, r. (2017), pricing of bai salam: an analytical perspective. international journal of business and society, 18, 167-176. al-fijawi, m.f.a. (2016), salam (forward sale) and istirnan (manufacture contract) in modern applications: a maqorid al-sharia perspective. international journal of business, economics, and law, 9(5), 65-73. aziz, m.n., osman, b.m. (2016), islamic social business to alleviate poverty and social inequality. international journal of social economics, 43(6), 573-592. bank of indonesia. (2012), kajian model bisnis perbankan syariah. waluyo and rozza: a model for minimizing problems in salam financing at islamic banks in indonesia international review of management and marketing | vol 10 • issue 2 • 2020 7 jakarta: direktorat perbankan syariah. contitution (undang-undang) no. 21/2008 about islamic banking. (2008), available from: https://www.ojk.go.id/waspada-investasi/id/ regulasai/pages/undang-undang-nomor-21-tahun-2008-tentangperbankan-syariah.aspx. [last accessed on 2019 jul 10]. ehsan, a., shahzad, m.a. (2015), bay salam: a proposed model for shariâ, compliant agriculture financing. business and economic review, 7(1), 67-80. kaleem, a., rana, a.w. (2009), application of islamic banking instrument (bai salam) for agriculture financing in pakistan. british food journal, 111(3), 275-292. khattak, n.r.k., hussain, a.h. (2006), a review of the principles of islamic banking system for agriculture credit, mpra paper, no. 42038. germany: university library of munich. lewis, m.k., algaoud, l.m. (2007), perbankan syariah: prinsip, praktik dan prospek, jakarta: pt serambi ilmu semesta. maulida, s., yunani, a. (2017), masalah dan solusi model pengembangan pembiayaan pertanian dari aspek keuangan syari’ah, cakrawala. jurnal studi islam, 12, 1677. mohammed, a.i., ogunbado, a.f., bashir, a. (2016), the viability of salam finance in the growth of agricultural production in kano state, nigeria. asian journal of multidisciplinary studies, 4(12), 8-12. muhammad, b., stiabudi, r., ashar, m. (2017), paper salam plus: inovasi produk akad salam pada perbankan syariah untuk meningkatkan produktivitas pertanian indonesia. syariah economy week. yogyakarta: umy yogyakarta. muneeza, a., yusuf, n., atiqah, n.n., rusni, h. (2011), the possibility of application of salam in malaysian islamic banking system. humanomics, 27(2), 138-147. national sharia council fatwa (dsn) no. 05/dsn-mui/iv. (2000), sales and purchase salam. available from: https://www.dsnmui. or.id/kategori/fatwa. [last accessed on 2019 jul 07]. rahmadhani, a.f. (2017), analisis akad salam di koperasi simpan pinjam syariah (ksps) sarana aneka jasa cabang pengging, sarana, thesis. surakarta: iain surakarta. rasheed, h., mudassar, m. (2010), research on innovative models of islamic banking products for pakistani farmers. proceedings of the 7th international conference on innovation and management. roziq, a., hisamudi, n., wahyuni, n.i., purnamawati, i. (2014), model pembiayaan salam pada petani singkong dan usaha kecil berbahan singkong di kabupaten jember. jurnal akuntansi universitas jember, 12(2), 43-57. shaikh, s.a. (2010), brief review and introduction to practiced islamic banking and finance. available from: http://www.ssrn.com/ abstract=1536943. sharia islamic bank statistic. (2018), available from: https://www.ojk. go.id/id/kanal/syariah/data-dan-statistik/statistik-perbankan-syariah/ pages/statistik-perbankan-syariah---desember-2018.aspx. [last accessed on 2019 jul 10]. statement of financial accounting standards (psak). (2019), no. 103 about salam accounting. available from: http://www.iaiglobal. or.id/v03/standar-akuntansi-keuangan/pernyataan-sas-66-psak-103akuntansi-salam. [last accessed on 2019 mar 10]. straus, a., corbin, j. (2017), dasar-dasar penelitian kualitatif: tatalangkah dan teknik-teknik teoritisasi data, terj., cetakan v. yogyakarta: pustaka pelajar. teacher, law. (2013), application of salam in malaysian banking system. available from: https://www.lawteacher.net/free-law-essays/ contract-law/application-of-salam-in-malaysian-banking-systemcontract-law-essay.php?vref=1. unctad. (2006), islamic finance and structured commodity finance techniques: where the twain can meet. switzerland: united nation conference on trade and development. wahyudi, a.f. (2011), bmt untuk sektor pertanian. iqtishodia: jurnal ekonomi islam republika. p24. waluyo, b., rozza, s., sujarwo, s. (2018), model edukasi berdasarkan segmentasi konsumen untuk membangun minat masyarakat pada perbankan syariah. sosiohumaniora, 20(3), 260-268. widiana, w., annisa, a.a. (2017), menilik urgensi penerapan pembiayaan akad salam pada bidang pertanian di lembaga keuangan syariah di indonesia. jurnal muqtasid, 8(2), 88-101. . international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2017, 7(3), 213-219. international review of management and marketing | vol 7 • issue 3 • 2017 213 the effect of pre-bankruptcy financial distress on earnings management tools sara hassanpour1, mehdi nazemi ardakani2 1department of business administration, financial trends, imam javad university college, yazd, iran, 2accounting yazd university, yazd, iran. *email: em.nazemiardakani@gmail.com abstract the purpose of this research is the effect of pre-bankruptcy financial distress on earnings management tools in the listed companies in tehran stock exchange. the sample of this study is 133 of listed companies in tehran stock exchange in which have been examined during 2010-2014. in this research, independent variable is pre-bankruptcy financial that is estimated according to the criteria of staw et al. (1983) and earnings management tools as dependent variable include real activity manipulation and accrual manipulation were considered. independent t-test was used in econometric software eviews 9 to test the research hypotheses. the results of this hypothesis showed that there was a significant positive relationship between pre-bankruptcy financial distress and real activities management and accrual manipulation. keywords: pre-bankruptcy, earnings management, financial distress, real activity manipulation, accrual manipulation jel classifications: c32, o13, o47 1. introduction investors who are always looking for predicting the possibility of bankruptcy risk to prevent their fuel capital. therefore, they are seeking ways whereby they could estimate the company’s financial bankruptcy because bankruptcy leads to economic losses and social costs for managers, investors, creditors, employees and so on. on one hand, increasing competition and economic institutions, have limited access to resources and probability of bankruptcy has increased. in this regard, previous researches have shown that companies hide their bankruptcy and when they officially declared bankruptcy at the time, tried in vain to avoid bankruptcy and it is too late (kumar and ravi, 2007). on the other hand, when companies are in economic disadvantage, administrators from accountancy units that are the last line of financial statements (i.e., profit) to improve and thereby to change its information content (hope and hope, 1996). bankruptcy prediction will be the first useful time for the company, the expected time to bankrupt has higher distance by now. second, predicted at the time the symptoms of financial distress, and dysfunction so evident (panahi et al., 2014). therefore, early detection can greatly needed money before the bankruptcy took to investors and shareholders. however, it should be noted that one of the ways used to inform the status of the company, is profit management. earnings management of public administration refers to intervene in the process of determining earnings management is often desired goals. these data may be available measures that substantially affect the financial statements. there are several ways in which office notation can be used to manage earnings. management profit when management knows that the goal of this work is to protect the interests of the owners of the company’s profits. these changes, particularly when the company is in financial hardship, are exacerbated. therefore, in this study, it is discussed to evaluate the effect of financial hardship before the bankruptcy of the means of earnings management. 2. theoretical foundations the administrator tool and different motivations for office revenues may affect the quality and credibility of financial statements. especially during times of financial distress, the hassanpour and ardakani: the effect of pre-bankruptcy financial distress on earnings management tools international review of management and marketing | vol 7 • issue 3 • 2017214 pressure from shareholders and other stakeholders is generated by providing poor results or difficult financial situations that can transform the concept of probability and this rise change for managers to change the company’s current performance. for example, past research literature widely shows that managers reported stronger incentives to manage earnings such as property legal recording situations, during the period before the bankruptcy (campa et al., 2014). managers of business units may have tried a variety of reasons through various methods of accounting, profits of financial support to change their policies. managers can use a variety of methods to manipulate profits, some of the tools used in relation to earnings management, which have a direct impact on cash flows to manipulate discretionary accruals included, managers also motivated to achieve a desired profit margin in relation to maintenance conditions, years before the actual attempt to manipulate financial events persist that changes in cash flow and even in some cases a change in cash flows and in some cases, the change involves discretionary accruals, such as reducing the cost of advertising is to raise profit (baharmoghaddam and hassanifard, 2010). it should be noted that managers tend to use real earnings management through accruals to manage earnings (graham et al., 2005). when the select the real-time of manipulation activities that require immediate results and do not consider losses and costs for the companies in the long term (campa et al., 2014). therefore, following the adoption of these decisions, managers may profit and loss statement and futures companies in crisis even companies into bankruptcy. for example, the manager can divide considerable bonus payments to board members and the management of the company providing companies with high profit and high dividend for the financial year. this decision could affect the future financial statements and lead to financial difficulties for the company. financial statement items of financial restructuring and exciting figures in the financial statements of companies following management decisions can be very interesting for shareholders and investors. however, recent research shows that companies are experiencing financial hardship consultants, in the years before the outbreak of the financial structure are different than other companies (campa et al., 2014). previous studies have shown that top managers have high incentive to manipulate earnings in terms of financial hardship, in fact, bankrupt companies, compared to firms with the financial health will manipulate rising profits and in some cases, companies do this to financial hardship to eliminate negative signs (iatridis and kadorinis, 2009; jaggi and lee, 2002; sweeney, 1994). however, the impact of financial distress on earnings management has received less attention in iran. so this study is conducted in order to solve the shortage of research, to examine the impact of financial distress pre-bankruptcy on management tools firms listed in the tehran stock exchange. 3. review of literature according to the study, which the impact of financial hardship of pro-bankruptcy on management tools’s profits, this section has been dealt with an overview on research and theories that used by researchers and experts in the field of relations between the needed money before the bankruptcy and profit management tools. kangarzadehlouei et al. (2009) examined the relationship between income smoothing and financial distress of companies in the tehran stock exchange. a sample of 81 member companies active trade law amendment under article 141 in tehran stock exchange during the 10-year period between 1997 and 2006 were selected and the possibility of financial hardship was calculated through altman model tend to predict the probability of financial distress. their findings suggest that managers of business units in various stages of financial distress, to better illustrate the financial position and performance of their company, in order to maintain itself in the capital market through the tools at their disposal refusing that lead to income smoothing. dastgir et al. (2012) investigated how earnings quality in companies was experiencing financial hardship. this research analyzes the companies listed on the tehran stock exchange and was conducted in the period of 2001-2009. the results indicate that companies needed to manage money into their profits in the 3 years prior to bankruptcy in an increasing manner. this management was tested and determined in two ways: manipulation of accruals and real activity and it was found that companies with more financial hardship of healthy firms manage earnings through real activity, while normal companies do this mostly through accruals. rahmani and ramsheh (2013) studied the replacement relationship between management and accruals management of real activity. this study examines the use of the actual activities or accruals, as an alternative, how much is common for earnings management in iran. the results show that managers based on relative costs will use each of these two methods of earnings management, and also shows that managers will modify the level of actual activities during the year, accrual-based earnings management level. saeedi et al. (2011) examined the impact of earnings management through manipulation of the actual activities of the future performance of listed companies at the tehran stock exchange. a total of 123 companies listed in the stock exchange over a period of 9 years and the actual benefits management standards provided by garcia et al. (2009) and the future operating cash flows and future operating profit is used as a measure of future performance. the results show that there is an inverse significant relationship between the real management measures profit with future performance. in other words, the results can be concluded that manipulating real activities in the current period reduces the companies’ future performance. ahmadpour and shahsavari (2014) investigated the earnings quality management and impact on the profitability of future profits of tehran’s stock exchange bankrupt companies. the results with the technique panel data for 55 companies subject to the verge of bankruptcy altman’s model, stating that these companies have a disproportionate composition and proceeded to increased profit management. the results of opportunistic theory of earnings management support and shows that the future profitability of hassanpour and ardakani: the effect of pre-bankruptcy financial distress on earnings management tools international review of management and marketing | vol 7 • issue 3 • 2017 215 bankrupt companies reporting earnings management is taken over earnings quality work. mashayekh and ganji (2014) investigated the impact of earnings quality onn the bankruptcy prediction using artificial neural networks. the sample was selected among companies in the tehran stock exchange, based on kolmogorov-smirnov test to check normal distribution, finally, the accuracy and type i and type ii errors were examined in neural network model for high quality and lower profits for both companies and t-test was used for comparing two specimens at 95%. the results show that the prediction accuracy of ann for companies with high profit is significantly higher than profit for companies with poor earnings quality. rosner (2003) investigated the manipulation of accruals in the company using a sample of us firms, and these companies realized that their profits are infrequent and are in the form of management. he assumed that his test is during the period of manipulate earnings of the companies 5 years before bankruptcy. furthermore, it stated that in the years of pre-bankruptcy of companies have behavior of reducing income, and received lack of continuity of audit reports. he declared this to reverse the decadeslong items years ago when independent auditors’ continuity of the applicant at the time of trouble finding it. charitou (2007) in his study used a sample of firms that needed money to analyze the implications of profits in the company. this study is to analyze the role of auditors and others who care units limiting manipulated earnings in the year prior to bankruptcy, as well as, relationship between manipulating profits in years and likely to survive after suffering symptoms of it. garcia et al. (2009) using a large sample of british firms comparison with non-bankrupt companies found that bankrupt companies in the 4 years of pre-bankruptcy manage their profits in an increasing form. their study showed that the profit management is done using both ways of earnings management and accounting earnings management as a result, the actual activities and management accounting income decreased reliability. li (2011) examined the impact of earnings management and earnings quality, the level needed money and chinese companies went bankrupt. their findings showed that administration of bankrupt companies’ profits is opportunistic and healthy corporate earnings management, more than companies with financial hardship tends towards the performance. they also found that interest management better than the quality of earnings, anticipated future profitability and earnings quality is high in healthy companies and is low in bankrupt companies. campa et al. (2014) conducted a study on the response to the question whether spanish companies go bankrupt, compared to their counterparts, during the years prior to the procedure of bankruptcy law tend to manage earnings or not? in the analysis of a sample matched bankrupt companies, it became clear that earnings management of bankrupt companies is more than those in nonbankrupt them. they achieved this accomplishment of accrual and manipulation of actual items. findings showed that management tools profit operates by industry in which the company and the years of pre-bankruptcy are changed. campa et al. (2014) in a paper examines the impact of financial hardship before the bankruptcy of the means of earnings management in small and medium enterprises. the aim of this study was to evaluate whether the stress of financial hardship nontemporal, the terms of a choice between real activity and manipulation of accruals is effective or not, was that their results show that managers in levels of the stress of bankruptcy, management of real benefit activities rather than accrual, however, have implications for the company in the long run. 4. methodology the study based on purpose is applied and according to the method is cross-correlation. in this study, providing the indicators for management and profit needed money, the impact on earnings management tools is examined. in this research, new methods of library and reference books, articles have been raised on the subject. data were collected from the website of the stock exchange, website management, research, development and islamic studies affiliated to the tehran stock exchange and the software also devise new processes and outcomes, initial data on companies; therefore, the method of data collection is field-library. then the data were transferred to the excel and eviews software, platform data analysis is provided using regression models and correlation analysis. finally, the impact of corporate financial distress has been tested on any profit management tools. the population of this research included the firms listed in the tehran stock exchange, in the period 2010-2014. the systematic elimination method for sample selection and screening is due to the following: • before the beginning of 2010 are listed in the tehran stock exchange • they are not among the financial intermediaries’ industry • march is the end of their fiscal year • the information needed to calculate variables about the companies is available during the period of investigation • companies that have not changed their fiscal year during the period of investigation. given the above situation were companies that suitable conditions include 133 companies (including 665 firm-year level), which constitutes sample. 4.1. hypotheses the main hypothesis 1: there is a direct significant relationship between the needed money before the bankruptcy and the management of discretionary accruals. the main hypothesis 2: there is a direct significant relationship between the needed money before the bankruptcy and earnings management through the manipulation of real activity. hassanpour and ardakani: the effect of pre-bankruptcy financial distress on earnings management tools international review of management and marketing | vol 7 • issue 3 • 2017216 sub-hypothesis 2.1: there is a direct significant relationship between the needed money before the bankruptcy and earnings management through an unusually low level cash flow. sub-hypothesis 2.2: there is a direct significant relationship between the needed money before the bankruptcy and earnings management through production costs. according to the statement, including financial hardship before the bankruptcy models to evaluate the effect on earnings management tool used is as below. 4.1.1. model 1: (first hypothesis) the following model is used to measure the actual management profits through unusual cash flows. c f o i t/ a s s e t s t 1= α + β 1( 1 / a s s e t s i t – 1) + β 2( a s s e t s i t 1) +β3(∆salesit/asstsit– 1)+єit 4.1.2. model 2: (second hypothesis) this model is used to measure the actual management profits through production. p r o d i t/ a s s e t s i t – 1= α + β 1( 1 / a s s e t s i t – 1) + β 2( s a l e s i t – 1) +β3(∆salesit/assetsit–1)+β4(∆salesit–1/assetsit–1)+єit 4.1.3. model 3: (hypothesis 1-2) accruals are unusual that can be estimated from the following model. awcait = wcit–(wcit-1/sit–1)*sit 1 4.1.4. model 4: (hypothesis 2-2) the model may be used to test hypotheses, the relation between the needed money before the bankruptcy with a variety of earnings management. so that the dependent variable of the model obtained from waste 3 top model, and this model is estimated to be 3 times (table 3). yit=α+β1distressit+β2sizeit+β3cfoit+β4levit+β5roait+ β6eissueit+β7dissueit+β8 growthit+єit 5. test results of research hypotheses prior to estimate the regression model research diagnostic tests were carried out to determine significant effects model. it can be accepted that the initial assumptions are established in determining the effects attributable regression model and results. prior to estimate the regression model research diagnostic tests were carried out to determine significant effects model. table 1 shows the results of these tests. due to the significant level of chow test to determine significant cross-effects regression model research, type i error is smaller than 0/05, the null hypothesis of this cross-sectional test has been 1 .campa rejected for no significant effects in the research model. it can be accepted that the regression model should be estimated using panel data. hausman test was conducted to determine the significance level or cross-sectional random effects model was smaller than 0/05 type i error. therefore, the regression models were estimated into the panel data with fixed effects. fifth model, except for the random effects model was used. table 2 summarizes the results of this model. based on the criteria of goodness of fit can be seen that f-anova statistical significance level was obtained <0/05 type i error and showed significant regression model. determining model also shows that 37/62% of profits variation through cash flows used in actual management of company is explained by the independent variables of the model. based on the criteria of goodness of fit is observed that the significance level is <0/05 type i error analysis of variance of f statistics and showed significant regression model is estimated. determining model also shows that 97/22% of variation is used to measure the actual management profit through the production and this model is explained by the independent variables. due to the significant level achieved before the bankruptcy and to assess the relationship between financial hardship 0/05 management of discretionary accruals with type i error, it can be seen that financial hardship of pre-bankruptcy of company has a significant effect on the management of discretionary accruals. the main hypothesis of the research is confirmed in the first error type 0/05. also, due to the positive of this coefficient can be expressed as management has a direct impact on discretionary accruals. as well as factors including size, operating cash flow and annual change were significant in equity in the model. 6. discussion and coclusion generally, this research seeks to answer the question, when the company needed money before the bankruptcy if the conditions exist, managers tend to use earnings management; and if the answer is yes, which tools are more inclined to earnings management. in other words, in this study we are trying to examine whether using management tools can prevent or detect failures profit companies are experiencing financial hardship, or not, and which of earnings management tools, the method is suitable. the study has two main table 1: diagnostic test results significant level degree of freedom statistics test model 0.0101(656,5)9.014530chow test1st 0.0184310.024047hausman test 0.0000(616,43)2.843350chow test2nd 0.0000432.074356hausman test 0.0000(645,10)96.88769chow test3rd 0.0000871.329430hausman test 0.0024(646,10)5.568656chow test4th 0.0001832.004175hausman test 0.0060(488,35)5.175389chow test5th 0.715285.389991hausman test source: research results hassanpour and ardakani: the effect of pre-bankruptcy financial distress on earnings management tools international review of management and marketing | vol 7 • issue 3 • 2017 217 hypotheses and sub-hypotheses that during the study were tested. we found that after the model was a response to the assumptions. the assumptions can be criticized as follows. first hypothesis: there is a direct significant relationship between financial hardship before the bankruptcy and the management of discretionary accruals. site with the intention of reporting fair tend to accounting judgments and make their decisions; but in different situations, economic incentives, such as bonuses for executives that are ambitious to manage their profits because the company’s value and wealth owners reported profits linked; but whatever the motive, means a lot of accrual earnings management, estimates and judgments accounting. concern is that investment in community some profit public trust management eliminate procedures relative to external financial reporting and impede the efficient flow of capital in the financial markets. due to the significant level achieved in pre-bankruptcy and assess the relationship between financial hardship 0/05 management of discretionary accruals with type i error, it is observed that the needed money during pre-bankruptcy has a significant influence on the company’s management and discretionary accruals. the first hypothesis is confirmed at the level of type i error 0/05. also, due to the positive of this coefficient can be expressed as financial hardship during pre-bankruptcy has a direct impact on the management of discretionary accruals. so the hypothesis is confirmed and is comply with studies by baharmoghaddam and hassanifard (2010) and rahmani and ramsheh (2013) and campa et al (2014), campa et al. (2014). based on the results and findings of the first main hypothesis, that financial hardship duringpre-bankruptcy has significant direct impact on the discretionary accruals. therefore, it is suggested to shareholders and investors, given that managers, in order to mislead the market and other reasons to manipulate earnings through discretionary accruals during financial hardship exacerbated drawn and it’s important, so pay attention to the report and compare their annual discretionary accruals. especially when companies are faced with financial hardship. second hypothesis: there is a direct significant relationship between the financial hardship before the bankruptcy and earnings management through real activities manipulation. managers have incentives to manipulate earnings, which can affect the quality of the financial statements. the motives become more at the time of financial hardship. studies show that manipulating real activity occurs in situations that managers need instant results. due to the significant level obtained to assess the relationship between financial hardship during pre-bankruptcy earnings management through real activities manipulation with 0/05 type i error, it can be seen that financial hardship during pre-bankruptcy has a significant impact on corporate profits based on the actual management. the second hypothesis is confirmed at the level of type i error 0/05. also, due to the positiveness of this coefficient can be expressed that pre-bankruptcy financial hardship has a direct impact on the actual management benefits. so the hypothesis is confirmed and is comply with studies by dastgir et al. (2012), saeedi et al. (2011), ahmadpour and shahsavari (2014), charitou (2007), garcia et al. (2009), and campa et al. (2014), campa and minano (2015). according to the second hypothesis, that financial distress during prebankruptcy has a direct effect on the manipulation of real activity. given that, manipulating the real activity accompanies with the real economic costs as well. and if a manager is diverted from the real optimum level of operational activities and engaged in real activities manipulation, the company probably will have economic consequences in the long run. as well as manipulating the real activity indirectly affects the future operational activity of table 2: estimation results of the first version of test vife significance levelstatistical tstandard deviationbeta coefficientindependent variable -0.00004.8407160.0146670.070997intercept 1.0368580.04631.9971363199.9686390.7731/ast(-1) 10ast(-1)-7.21−09-آ1.0327230.6476−0.4573171.85 1.0055480.00083.3706460.0001610.00044s/ast(-1) 0.376267coefficient of determination 2.363849f statistic 0.000level of statistical significance of f 2.239812durbin – watson statistic source: research results table 3: estimation results of the second version of test vife significance levelstatistical tstandard deviationbeta coefficientindependent variable -0.71830.3610120.0112310.004055intercept 1.1309840.01752.3865571982.5754731.5281/astt 1.0907860.02692.2213922.32-105.16-10st 1.1067440.000066.468700.0149180.827481s/astt 1.0825770.0994−1.6516960.000353−0.000583deltas(-1)/astt 0.972263determination coefficient 101.8100f statistics 0.000significane level of f statistics 2.406613durbin – watson statistics source: research results hassanpour and ardakani: the effect of pre-bankruptcy financial distress on earnings management tools international review of management and marketing | vol 7 • issue 3 • 2017218 the company because the director tends to sacrifice the company’s future cash flows to the profit of the current period, and this phenomenon is exacerbated in times of financial hardship. it is recommended that shareholders of companies and investors pay special attention to the status of the company and the financial statements in the period of financial hardship. as well as the regulators and foreign law firms in stock exchange as well as careful monitoring and comprehensive reporting companies have suffered from financial hardship. first secondary hypothesis: there is a direct significant relationship between the financial hardship before the bankruptcy abnormal levels of cash flow and earnings management. cash, can be less manipulated and applied by management. companies with financial hardship, will report less cash flow, in order to mislead the market and other reasons, and increase their reported earnings through discretionary accruals. due to the significant level achieved during pre-bankruptcy and to assess the relationship between financial hardship 0/05 management of discretionary accruals with type i error, it can be seen that needed money before the bankruptcy had no significant effect on operating cash flow. the first research hypothesis is rejected at the level of type i error 0/05. and is in conformity with studies by mashayekh and ganji (2014), saeedi et al. (2011). second secondary hypothesis: there is a direct significant relationship between the needed money before the bankruptcy and earnings management through production costs. to manipulate earnings through overproduction, also cause abnormal changes in inventory and on the other hand will cause production costs. manipulation occurs in profits, the managers need to have immediate results that are not important for companies in the long run, what is that expenditures. due to the significant level obtained to assess the relationship between needed money in pre-bankruptcy and earnings management through production costs with 0/05 first type of error, it is observed that the needed money in pre-bankruptcy has a significant impact on earnings management costs. the second research hypothesis in the first error type 0/05 is confirmed. also, due to the positiveness of this coefficient, it can be expressed that financial hardship of pre-bankruptcy has a direct impact on earnings management through production costs. so the hypothesis is confirmed in the long term and is based on studies by dastgir et al. (2012), dastgir et al. (2012), kordestani and tatli (2014), and campa et al. (2014), campa and minano (2015). according to second secondary hypothesis, there is a direct significant relationship between the pre-bankruptcy and financial distress, earnings management through manufacturing costs; and since the manipulation of the profits is done usually through overproduction, which causes unusual changes in inventory, and/ or manipulation is done through changes in production costs. it is recommended to users of financial statements, especially investors should consider this issue prior to any decision, including investment. in this study, the results showed that were tested during the study period, the research hypotheses. table 4 summarizes the results of a test research hypotheses. 7. recommendations • it is suggested that this research in specific time periods, such as economic doubts and situations of hyperinflation, in particular, be examined • it is suggested that future studies, models and other methods to assess the effects of financial hardship on earnings management tools used in short period of time. in this study, to collect data on the variables, we used the enterprises that are not financial intermediaries’ industry. because of the nature of activity in some industries, such as special financial intermediation industry, it is proposed that such research be conducted with an emphasis on specific industry. references ahmadpour, a., shahsavari, m. (2014), earnings management and earnings quality impact on the future profitability of bankrupt companies in tehran stock exchange article 2, no. 41. p58-37. baharmoghaddam, m., hassanifard, h. (2010), to investigate the relationship between the actual financial and earnings management in listed companies in tehran stock exchange. journal of accounting and auditing, 6, 136-160. campa, d., miñano, c. (2015), the impact of sme’s pre-bankruptcy financial distress on earnings management tools. international review of financial analysis, 42, 222-234. campa, d., del mar, m., miñano, c. (2014), earnings management among bankrupt non-listed firms: evidence from spain. spanish journal of finance and accounting, 43(1), 3-20. charitou, a., lambertides, n., trigeorgis, l. (2007), managerial discretion in distressed firms. british accounting review, 37, 323-346. dastgir, m., hoseinzadeh, a., khodadi, v., vaez, a. (2012), earnings quality in distressed companies. financial accounting research, table 4: summary of results main hypothesis hypothesis results first main hypothesis 1) there is a direct significant relationship between probankruptcy of financial hardship and management of discretionary accruals confirmed second main hypothesis there is a direct significant relationship between probankruptcy of financial hardship and earnings management through real activities manipulation confirmed 2-1) there is a direct significant relationship between probankruptcy of financial distress through abnormal levels of cash flow and earnings management rejected 2-2) there is a direct significant between probankruptcy of financial hardship and earnings management through production costs confirmed hassanpour and ardakani: the effect of pre-bankruptcy financial distress on earnings management tools international review of management and marketing | vol 7 • issue 3 • 2017 219 4(1), 1-16. garcia, l.j.m., garcia, o.b., neophytou, e. (2009), earnings quality in ex-post failed firms. accounting and business research, 39(2), 119-138. graham, j.r., harvey, c.r., rajgopal, s. (2005), the economic implications of corporate financial reporting. journal of accounting and economics, 40, 3-73. hope, t., hope, j. (1996), transforming the botton line. 2nd ed. boston: harvard business school press. kangarzadehlouei, et al. (2009), examined the relationship between income smoothing and financial distress of companies in the tehran stock exchange. phd thesis. iran: tehran university. kordestani, g.r., tatli, r. (2014), evaluation of qualitative characteristics profit and earnings management in distressed and bankrupt companies. accounting research, 12, 79-104. kumar, r.p., ravi, v. (2007), bankruptcy prediction in banks and firms via statistical and intelligent techniques a review. european journal of operational research, 180(1), 1-28. li, f. (2011), earnings quality and earnings management in chineselisted companies, doctor of philosophy thesis, school of accounting and finance, university of wollongong. mashayekh, b., ganji, h.r. (2014), effect of earnings quality on bankruptcy prediction using artificial neural network, financial accounting and auditing research. journal of financial accounting and auditing, 6(22), 147-173. panahi, h., asadzadeh, a., jalili, m.a.r. (2014), five-year bankruptcy prediction for companies listed on the tehran stock exchange. management faculty of tehran university, 16(1), 57-76. rahmani, a., ramsheh, m. (2013), replacing relationship between the accrual-based earnings management and administration of real activity. journal of the accounting and auditing review, 20(4), 39-60. rosner, r.l. (2003), earning manipulation in failing firms. contemporary accounting research, 20(2), 361-408. saeedi, a., hamidian, n., rabie, h. (2011), the relationship between real earnings management activities and future performance of listed companies in tehran stock exchange. journal of management accounting research, xvii, 45-58. staw, b.m., mckechnie, p.i., puffer, s.m. (1983), the justification of organizational performance. administrative science quarterly, 28(4), 582-600. _goback ole_link1 . international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2016, 6(2), 307-316. international review of management and marketing | vol 6 • issue 2 • 2016 307 organizational culture, strategy implementation and commercial bank performance in zimbabwe winfred o. goromonzi* research and business development department, metbank zimbabwe, harare, zimbabwe. *email: wgoromonzi@metbank.co.zw abstract the study investigates the impact of organizational culture and strategy implementation on commercial bank performance in zimbabwe. using a four factor, six dimensional organizational culture index and an eight dimensional strategy implementation index to statistically measure culture and strategy implementation impact, the study employs ordinary least regression method to quantify and econometrically model the impact of the two variables on commercial bank performance. data collection was achieved through questionnaire administration. the results of the study show that culture and strategy implementation have a statistically significant and positive impact on commercial bank performance. for banks which are regarded as performing (both average and high), organizational culture has strong positive effect on their performance while for smaller and poor performing banks, the effect of organizational culture was nearly neutral. strategy implementation was also found to have strong positive effect in high performing banks and between neutral to negative effect in non-performing banks. the study concludes that the dynamic environment under which banks operate makes the impact of intangible resources differ across institutions. based on the results of this study, it is recommended that leadership of commercial banks need to invest in creating a defining culture in banks and effective strategy implementation techniques. utilizing such attributes remains a major determinant of commercial bank performance in zimbabwe. keywords: organizational culture, strategy implementation, organizational performance jel classifications: c39, l20 1. introduction zimbabwe commercial banking institutions have registered mixed performances ever since the introduction of the multi-currency regime in february 2009. resultantly, the commercial banking sector has generally been segmented into three groups: highly performing banks (dominated by regional and international banks), average performing banks and non-performing banks (dominated by local banks). the major source of variation has always been attributed to the different amounts of physical, financial and human capital resources at each bank’s disposal. a closer analysis of these banks, however, indicates that the variation in performance can also be explained by intangible resource capabilities of these institutions. culture and strategy execution ability are some of the important intangible capabilities of any organization which has a direct impact on an organisation’s performance. the role of these soft attributes on commercial banks’ performances has not been vigorously pursued. schein (1985) defines organizational culture as a pattern of basic assumptions invented, discovered, or developed by a given group as it learns to cope with its problems of external adaptation and internal integration. the pattern of these assumptions must have worked well enough to be taken as valid and hence to be taught to new members as the correct way to observe, think and feel in relation to such problems. the organization’s culture and how it implements its strategy clearly should have some influence on its performance. theoretical arguments support the idea that organizational culture is related to organizational performance (yesil and kaya 2013). while previously businesses were either unaware of culture’s importance or believed it too hard to handle, nowadays they recognize that it can give some competitive advantage (martins and martins 2002). organizational culture conveys a sense of identity for an organization’s members, makes it easy to gain member commitment to something bigger than the self, enhances system stability and serves as a sense-making tool that can guide and shape members behavior (alas et al. 2009, cheung et al. 2012). goromonzi: organizational culture, strategy implementation and commercial bank performance in zimbabwe international review of management and marketing | vol 6 • issue 2 • 2016308 although the varying performances of commercial banks in zimbabwe in the multicurrency period has been attributed mainly to levels of capitalization, stability of the bank, size of the bank, liquidity; consideration has not been adequately made on the role of culture and strategy execution. generally, commercial banks as service providers are affected by internal soft attributes, in the main culture and execution of their business approach, and this would reflect on the ultimate performance, whether financial or non-financial. execution of strategy has always been influenced by the organization’s shared values, beliefs and norms, which is the foundation from which strategy emerges. in other words strategy implementation, which results in high performance, is inextricably linked to an organization’s culture. in order for strategy to receive sustained support and positively affect performance, it must be aligned with the organizational culture. an organization’s performance requires a culture that is supportive of change and strategy implementation matrix that is adaptable to change as well. against this background this study examines the impact of organizational culture and strategy implementation on commercial bank performance in zimbabwe. using a combination of van muijen et al. (1999)’s competing value model as adapted from quinn (1988) and denison (1990)’s culture and effectiveness model, the study develops a culture index using four culture traits and strategy implementation index using eight dimensions to quantitatively characterize the relationship and impact of culture and strategy on commercial banks performance in zimbabwe. 2. literature review a considerable number of studies have been conducted to explore the relationship between organizational culture and performance of firms, yet empirical evidence remains inconclusive and diverse (yesil and kaya, 2013). however, the literature on organizational culture constantly reinforces the notion that organizational culture is necessary for effective functioning and performance of organizations (yesil and kaya, 2013). the discussion that follows looks closely at organizational culture and firm performance from both the theoretical and empirical perspectives. 2.1. organization culture organizational culture studies date back to the dawn of history and the concept has gained wide acceptance as a way to understand human systems (sokro, 2012). xiaoming, (2012) notes that, organizational culture came into prominence from the preponderance of japan management styles but, there has been no consensus in literature on the definition of organizational culture (barney, 1986; abu-jarad et al., 2010; yesil and kaya, 2013). despite the wide and diverging perspectives from which the organizational culture construct is viewed from, there has been acceptance of certain attributes that constitute culture as judged from different explanations. this provides a basis upon which scholars have defined organizational culture. xiaoming (2012) classify the main definitions into several categories accounting for their core concerns namely: basic assumptions (schein, 1985; 1992), shared values (peters and waterman, 1982; kim et al. 2004), beliefs and norms (cole, 1997) of behavior. cheung et al. (2012) contend that one of the most influential and pioneering works on organizational culture and leadership that gained so much recognition and readership was that developed by schein (1985; 1990). schein (1985) submits that, organizational culture is a pattern of basic assumptions – invented, discovered, or developed by a given group as it learns to cope with its problems of external adaptation and internal integration. these assumptions must have worked well enough to be taken as valid and, therefore teachable to new members as the correct way to observe, think and feel in relation to those problems. from this dimension, schein (1985) therefore proposes that for an assumption to be basic it should be something taken for granted, preconscious and invisible. kim et al. (2004) defines organizational culture as the shared values and norms of the organizations members. park et al. (2004) submits that organizational culture defines “the shared, basic assumptions that an organization learns while coping with the environment and solving problems of external adaptation and internal integration that are taught to new members as the correct way to solve those problems.” similarly, wiener and vardi (1990) defined culture as a system of shared values which produce normative pressures on members of the organization. gordon and tomaso (1992) consider corporate culture to be the pattern of shared and stable beliefs and values that are developed within a company across time. cole (1997) considered culture as a two tiered set of shared values, norms and beliefs within an organization. on the face, it is the explicit culture, which manifests itself in the ‘official’ organizational structure and communications while underneath it is the implicit culture that management and staff consider really important. xiaoming (2012) notes that, claims made by schein (1985) come in handy in qualitative analysis especially those trying to draw a line between strong and weak cultures. a strong culture according to (cheung et al., 2012) is one where the implicit and explicit assumptions in schein (1985) are in harmony and is deeply entrenched and change-resistant. on the other hand, a weak culture is one that is loosely knit and where rules are imposed strictly on employees that may create diversity between the person’s personal objectives and organizational goals (shahzad et al., 2012). whilst there is still no consensus as to the definition of organizational culture, it is clear and evident from the literature that organizational culture encompasses basic assumptions (implicit and explicit), beliefs, norms, experiences and shared values that shape the behavior of people as they work towards the achievement of their goals both as individuals and as a team. in simple terms culture could be understood as acquired facts, explanations, ethics, beliefs, communication and behaviors of a large group of people, at the same time and same place (shahzad et al., 2012). therefore any attempt to measure organizational culture must take account of these constructs into consideration. a number of models have been developed to explain and to try to measure the culture construct. these include schein (1985)’s three layer organizational model, hofstede et al., (1990)’s culture goromonzi: organizational culture, strategy implementation and commercial bank performance in zimbabwe international review of management and marketing | vol 6 • issue 2 • 2016 309 manifestation model, kotter and heskett (1992) culture model, denison (1990)’s culture and effectiveness model and van muijen et al., (1999)’s focus questionnaire. schein (1985)’s model differentiates between the elements of culture by treating basic assumptions as the essence or the core of culture, and values and behaviors as observed manifestations of the cultural essence. hofstede et al., (1990) classify the manifestation of culture into four categories, namely symbols, heroes, rituals and values. symbols are defined as words, gestures and pictures or objects that carry a particular meaning within a society. heroes on the other hand consist of persons, alive or dead, real or imaginary, who possess characteristics highly respected in the culture and serve as behavioral role models. kotter and heskett (1992) observed that culture has strata which differ “in terms of their visibility and their resistance to change.” the deeper echelon is where culture defines values that are shared as a group and that persist even if the group membership changes and hence is difficult to change. on the shallow end is the visible stratum where culture defines the behavior patterns which even new people in an organization are bound to follow. the authors submit that causality can, however, run in the opposite direction, with behavior and practices influencing values. the culture model developed by denison (1990) is one that integrates culture and management practices, performance and effectiveness. this was accomplished by linking management practices to the organizational value system encompassing basic assumptions and ethics when studying culture and effectiveness. denison asserts that management practices arise from the organization’s value system and beliefs resulting in four governing culture traits namely involvement, adaptability, consistency and mission. figure 1 illustrates the integration of the four culture traits. similarly, van muijen et al., (1999) introduced a new scale among many others called the focus questionnaire to measure organizational practices and values. van muijen et al., (1999) explained four orientations of organizational focus with respect to two-dimensions of organizational values, the flexibility versus control, and the internal versus external points of view. when the two dimensions of value are fused, as shown in figure 2, four orientations of organizations are revealed, namely support, innovation, rules and goal. abu-jarad et al. (2010) notes that organizational culture affects various employees and organization related outcomes. theoretically, organizational culture exerts some influence on performance through various pathways which differ from one organization to another. subject to the nature and complexity of the value system in an organization, culture effect can manifest through employee behavior, learning and development (bollinger and smith 2001; saeed and hassan 2000), creativity and innovation (ahmed 1998; martins and terblanche 2003; vincent et al., 2004) and knowledge management (tseng, 2010). 2.2. organizational performance in general, organizational performance refers to the degree of accomplishment of the mission at work place that builds up an employee’s job (cascio, 2006). marcoulides and heck (1993) submit that performance reflects the extent of goal achievement in the organization’s workforce, capital, marketing, and fiscal matters. yesil and kaya (2013) observe that several objective and subjective measures have been used in the literature to determine the level of organizational performance. various studies on culture and performance relationship tend to use several performance measures (abu-jarad et al., 2010; lim, 1995), however, abujarad et al., (2010) observed that financial profitability and growth measures are most common. in this study, return on assets (roa), one of the key financial profitability measures is used in a similar way that yesil and kaya (2013) did among many others. 2.3. organizational culture: performance relationship the link between organizational culture and firm financial performance has been explored from both the theoretical and empirical perspectives. in theory, there is a general reinforcement of the notion that organizational culture is related to organizational performance and effectiveness (ahmed, 1998; cameron and quinn, 2006; saffold, 1998; zheng et al., 2010; yesil and kaya, 2013). organizational culture is arguably one of the key organizational assets associated with organizational effectiveness (zheng et al., 2010), playing a crucial role in determining the effectiveness of organizations (peters and waterman, 1982), and stimulating or engendering many other activities that bring about corporate success (oparanma, 2010). whilst there are questions related to the culture-performance relationship, ogbonna and haris (2000) suggest that there is sufficient evidence for the hypothesized relationship between organizational culture and organizational p oi nt o f r ef er en ce external internal adaptability involvement consistency mission change and flexibility stability and direction figure 1: denison (1990)’s culture and effectiveness model flexibility support innovation internal external rules goal control figure 2: van muijen et al. (1999)’s competing value model (adapted from quinn1988) goromonzi: organizational culture, strategy implementation and commercial bank performance in zimbabwe international review of management and marketing | vol 6 • issue 2 • 2016310 performance, with martins and martins (2002) reporting that organizational culture gives some competitive advantage to the organization. empirically, a number of studies also provide evidence of the link between organizational culture and performance related outcomes and that the strength of cultural values was found to be correlated with roa in manufacturing firms, growth in annual premiums and sum assured in insurance firms (yesil and kaya, 2013). ogbonna and haris, (2000) reported positive relationship between competitive and innovative cultures and organizational performance while kim et al., (2004) reported that culture was found to impact a variety of organizational processes and performance. marcoulides and heck, (1993) found that organizational culture has a strong direct effect on organizational performance. schneider (1990) also found that organizations that focus clearly on cultures are more successful since focused cultures provide better financial returns. positive association between culture and performance was also documented in the results of duke and edet (2012). the foregoing discussion reveals that, albeit there are variations from one study to the next in terms of organizational culture performance link, there is general consensus that culture is related to performance. for purposes of this study therefore, the researcher presupposes that there is a unidirectional relationship from culture to performance on the basis that practitioners and academics have suggested that the performance of an organization is dependent on the degree to which the values of the culture are comprehensively shared (denison, 1990). 2.4. strategy implementation, culture and organizational performance strategy implementation is defined as an art of putting strategy and policies into tangible actions (ibrahim et al., 2012) and is more important than the strategy itself (schneider et al., 1991). this means that strategy implementation defines how well organizations achieve their objectives one of which is financial performance. strategy implementation is particularly important given the fact that not all employees are aware or understand the strategy. about 95% of company employees do not appreciate the strategy (kaplan and norton, 2001). this strategy performance gap calls for robust implementation schemes in order to achieve desired objectives. it is basically the design of the implementation plan that makes it possible for those that understand strategy and those that do not understand it to work together towards a common goal. borrowing from denison (1990)’s culture and effectiveness model, the role of culture in strategy implementation becomes apparent. the four culture traits (involvement, consistency, adaptability and mission) are integrated in an intricate manner that defines human capability, responsibility and responsiveness to both internal and external environment thereby producing a perfect recipe for strategy implementation. the intricate integration is further reinforced by jooste and fourie (2009) who came up with identifiable actions characterizing strategic leadership that positively contributes to effective strategy implementation. the actions were identified as strategic direction, balanced organizational controls, and effective management of the organization’s resource portfolio, sustaining an effective culture and emphasizing ethical practices. effective implementation of strategy manifests through good or exceptional organizational performance across all measures, financial or non-financial. cultural dynamics have potential to threaten organizational performance in view of its intermediary role between strategic leadership and strategy implementation. 2.5. conceptual framework from the foregoing enriching literature, the researcher conceptualizes the intimate link between organizational culture and performance via strategy implementation is as show in figure 3. because culture is strong, deep rooted, invisible and intangible yet it binds people together, it brings leadership, ethics, strategy and performance all together in perfect unison as shown above. from the figure 3, the researcher opines that culture has a two way interaction with strategic leadership, strategic direction, organizational control and strategy implementation. the two-way interactive process allows perfection, excellence, integration, problem solving and gradual improvement in the quality of decisions made. this invariably affects the overall organizational performance. 3. methodology the study examines the impact of organizational culture and strategy implementation on commercial bank performance in zimbabwe. using roa as a measure of performance, organizational culture and strategy implementation indices were developed in order to statistically quantify the impact under examination. 3.1. population and sample the study population is made up of managerial employees of 15 commercial banks operating in zimbabwe from which a sample of 5 employees from each bank was taken making a total of 75. sokro (2012) submits that sampling, a process through which individuals to participate in the research are selected (parker, 1997) is often one of the most crucial steps in research. padilla (2003) notes that a sample of 30 respondents is the minimum acceptable sample for a research and sample sizes of between 60 and 300 respondents are common. the study grouped all commercial banks into performance clusters based on roa and their classification follows a two stage process. first, a 3 year (2010-2012) industry roa (iroa) was calculated based on published financial results for all the commercial banks to smoothen out inter-period variations using the following expression: iroa aroa=    = ∑ 1 1 n i n i (1) aroa roai t t tt =    = ∑ 1 1 (2) goromonzi: organizational culture, strategy implementation and commercial bank performance in zimbabwe international review of management and marketing | vol 6 • issue 2 • 2016 311 where n is the number of commercial banks in the industry, average roa (aroa) is the 3 year average return on equity for each bank and t is the number of years in the review period. secondly, aroa was calculated for each individual bank for the same period. using the three year period industry average as the measurement indicator, three performance clusters of banks were formed namely: non-performing banks where aroa < 0; average performing banks were 0 < aroa < iroa and finally highly performing banks where aroa > iroa. a total of 75 fully structured questionnaires were administered with each participating bank receiving 5 questionnaires. a questionnaire was used to get primary data from the respondents and it covered issues such as managerial level, bank shareholding and various other elements of the work place. the questionnaire also had questions on organizational culture across four main culture traits namely involvement (inv), adaptability (adp), mission (msn) and consistency (con). each of the four traits was examined on six dimensions all masked into a five level likert scale that ranged from strongly disagree (1) to strongly agree (5) in order to come up with a culture index (cul). strategy implementation was also examined across eight dimensions again masked on a five level likert scale from strongly disagree (1) to strongly agree (5) to come up with the strategy implementation index (sim). the objective of using the likert scale was to make the data amenable to statistical analysis. 3.2. estimation model the study employs a multivariate regression model to statistically examine the impact of organizational culture and strategy implementation on performance. the model takes the following functional form: roa cul simi i i i= + + +β β β ε0 1 2 (3) cul nt inv con adp msni i n i i n i i n i i n i= + + +    = = = = ∑ ∑ ∑ ∑ 1 1 1 1 1 (4) sim k d i ki k k k=     = … = ∑ 1 1 2 3 1 , , , (5) roai: return on assets (roa) for bank i culi: culture index average score for respondent i simi: strategy implementation index average score for respondent i n: number of culture dimensions under each culture trait t: number of culture traits examined (involvement [inv], consistency [con], adaptability [adp]) and mission [msn]). dk: the strategy implementation dimension k: number of strategy implementation dimensions examined ɛi: white noise error term β0-2: regression parameters the idea is to assess how the bank’s performance relates to different aspects of organizational culture and to strategy implementation. the objective of the simple regression analysis is to establish if culture and strategy implementation have any mathematical or scientific relationship with performance in the commercial banking industry in zimbabwe. 4. emprical results study findings are based on the information gathered from 70 usable questionnaires that were satisfactorily completed and returned as summarized in table 1. the distribution of respondents across managerial level was such that 19% were executive managers, another 19% were senior strategic direction strategic leadership and planning organizational control culture types power, role, task, person dimensions empowerment, team orientation, agreement, objectives, coordination, change, learning, customer focus manifestations symbols, heroes, rituals & values culture traits adaptability, mission, consistency, involvement strategy implementation organizational performance figure 3: interactive dynamics of culture, strategy implementation and performance author’s own construct and conceptualization based on literature goromonzi: organizational culture, strategy implementation and commercial bank performance in zimbabwe international review of management and marketing | vol 6 • issue 2 • 2016312 managers, 47% were middle level managers and the balance of 16% comprised lower level management. the distribution was considered satisfactory and balanced for analysis. 4.1. statistical properties of data 4.1.1. descriptive statistics descriptive measures were extracted to examine if the distribution of the responses followed a normal distribution and shown in table 2. the mean, median and mode for the culture and strategy implementation scores were almost the same as shown above suggesting that the data were normally distributed. this is an important requirement before data can be used for statistical analysis. 4.1.2. correlation results show that there is a strong positive correlation between roa and culture (0.76) and also between roa and strategy implementation (0.78) (table 3). the magnitude of these correlation coefficients is indicative of the positive impact that culture and strategy implementation scores have on commercial bank performance as measured by roa. these correlation results confirm findings by ogbonna and harris (2000) and also denison and mishra (1995) which point to positive impact of culture variables on performance. this is also in line with the catalytic nature of organization culture on performance enhancement found by cheung et al., (2012). 4.2. analysis of results the impact of organizational culture on performance was statistically examined using a multivariate ordinary least squares regression results of which are summarized table 4. the results in the table 4 above indicate that the model used was a perfect fit with an f value of 57 and an r2 of 0.6289 indicating that 63% of variation in bank performances could be explained by the explanatory variables. this points to the fact that culture and strategy implementation remains key variables in determining performance in banks. for individual variables, the coefficients are found to be positive and statistically significant, with p values of 0.052 and 0.002 for culture and strategy implementation respectively. these results reinforce the theoretically hypothesized relationship between culture and performance (ahmed 1998; cameron and quinn 2006; saffold 1998; zheng et al 2010 and yesil and kaya 2013). the estimated model produced by this data is as follows: roa = – 0.133 + 0.01413cul + 0.02453sim slope coefficients for both culture and strategy implementation are positive and this is indicative of the positive effect that the two variables have on roa confirming findings by ogbonna and haris (2000) and duke and edet (2012). this implies that that an improvement in a bank’s culture and strategy implementation results in performance enhancement. relative comparison of the two explanatory variables, however, indicates that strategy implementation is more significant in explaining performance than culture. 4.2.1. culture and performance disaggregating the culture index into the four culture traits and grouping the banks into performance clusters, results show that non-performing banks (avg np) scored lower than average performing (avg ap) and highly performing banks (avg hp) in all culture traits. this is illustrated in figure 4. one aspect of the banking sector in zimbabwe is its segmentation, probably into bigger banks and smaller banks. fundamentally, the bigger banks segment is highly dominated by international banks while the other segment has local banks. this segmentation also defines how soft issues such as culture affect each of the banks in terms of perception by the banking public and subsequently performance. big banks have capital and are least likely to be affected by cash shortages, liquidity challenges among other challenges as compared to smaller banks. as such, differentiation of their services is definitely along value added services and quality of service. in that case, culture becomes an integral part of their performance and a source of competitive advantage as observed by martins and martins (2002). for example, for banks such as standard chartered and stanbic the quality of service is the basis for differentiating between them. besides, customers naturally expect high and well-meaning culture practices from such banks. table 1: questionnaire distribution questionnaires number (%) number (%) administered 75 (100) returned 72 (100) returned 72 (96) spoiled 2 (3) unreturned 3 (4) usable 70 (97) table 2: descriptive statistics measure inv con adp msn cul sim roa mean 3.91 3.78 3.65 3.85 3.79 3.58 0.8% standard error 0.08 0.08 0.11 0.09 0.09 0.08 0.4% median 4.17 3.83 4.00 4.00 4.06 3.75 2.0% mode 4.17 4.33 4.33 4.67 4.13 3.75 3.1% standard deviation 0.67 0.71 0.93 0.76 0.72 0.67 3.3% sample variance 0.45 0.50 0.86 0.57 0.52 0.45 0.1% kurtosis 0.42 0.62 (0.15) 0.22 0.31 1.36 1.13 skewness (0.97) (0.98) (1.00) (0.93) (1.08) (1.34) (1.46) range 2.83 3.17 3.67 3.17 2.83 3.00 11.8% minimum 1.83 1.50 1.33 1.67 1.71 1.38 –7.0% maximum 4.67 4.67 5.00 4.83 4.54 4.38 4.8% sum 274 264 256 269 265 250 57.5% count 70 70 70 70 70 70 70 table 3: correlation matrix variables inv con adp msn cul sim roa involvement 1.00 consistency 0.74 1.00 adaptability 0.73 0.77 1.00 mission 0.80 0.81 0.85 1.00 cul 0.88 0.90 0.91 0.94 1.00 sim 0.81 0.75 0.86 0.85 0.88 1.00 roa 0.63 0.67 0.80 0.72 0.76 0.78 1.00 goromonzi: organizational culture, strategy implementation and commercial bank performance in zimbabwe international review of management and marketing | vol 6 • issue 2 • 2016 313 culture has been the integral part of their identity and customers are highly expectant of exceptional culture practice from these banks. additionally, their employees have also adopted and inherited such a culture and it is now ingrained in them. they are encouraged to embrace it in order to sustain the already high quality of services which has helped to drive a high level of performance. thus, the net effect of culture to high performing banks remains strongly positive. any change in their culture practice is likely to affect performance as people may easily switch between these big banks. on the other hand, small banks are always facing challenges such as cash shortages, inadequate capital and liquidity challenges, among others. for these banks, their performance is highly a factor of these critical issues than of soft issues such as culture. demand for their service is mainly a result of the need for basic banking service regardless of quality of service. characteristically, customers continue to endure long queues in banking halls, shortage of cash, unpleasant banking halls for some banks, but they continue to demand banking service. as such, soft issues, which include culture, are more or less neutral, in other words have no bearing or effect on these banks’ performance. leadership in these banks are more pre-occupied with addressing generic drivers of bank performance such as capital, liquidity among others, than to worry about soft issues such as culture. 4.2.2. strategy implementation and performance results also reveal that non performing banks are associated with lower strategy implementation scores than average and high performers. this is indicative of the importance of strategy execution in performance of commercial banks in zimbabwe. the association between strategy implementation index and bank performance is illustrated in figure 5. implementation of strategy is part of an intertwined value chain of strategy process in organizations. when organizations are facing challenges, their strategies are different from those of organizations which are doing well. as such, the whole process from strategy formulation, implementation, monitoring are therefore different. for banks, just like any other organizations, when they are doing well, they are inclined to promote innovativeness, strive to increase business and they are highly consultative and involving in the formulation and implementation of strategy. in most cases, the strategies are effectively communicated and employees feel as part of the success of the organization and hence are ready and willing to implement the organization’s strategy. besides, such banks would have enough resources at their disposal for use in implementing their strategies. in that case, failing to implement a strategy becomes a matter of employees’ capabilities. for average performing banks, strategy implementation remains equally critical even as it is to highly performing banks as this was found to be positively and significantly related to performance. as such, these banks still require to carefully implement their strategies as these could easily reduce their performance. if the high effect level represents responsiveness, then it can be assumed that a poorly implemented strategy could heavily weigh down performance of currently performing banks than it is weighing down non performing banks. to the contrary, leadership of struggling banks normally tends to implement strategies which may not be favorable to employees. these include cost cutting austerity measures, which in most cases compromise welfare of employees and in worst cases include reduction in remuneration. as such, employees are not motivated and may not want to embrace such strategies and more-so will be reluctant to implement them. this definitely has implications on a bank’s performance. evidently from the research table 4: multivariate ols results regression statistics multiple r 0.79302378 r2 0.628886716 adjusted r2 0.617808707 standard error 0.020180126 observations 70 anova df ss ms f significance f regression 2 0.046236874 0.0231184 56.76893 3.7885e-15 residual 67 0.027284911 0.0004072 total 69 0.073521786 coefficients standard error t statistic p value lower 95% upper 95% intercept –0.13300982 0.013477547 –9.868993 1.09e-14 –0.159911116 –0.106109 cul 0.014126844 0.007154795 1.9744582 0.052454 –0.000154187 0.0284079 sim 0.024534319 0.007679912 3.1946095 0.002135 0.009205151 0.0398635 ols: ordinary least squares 1.00 2.00 3.00 4.00 5.00 involvement consistency adaptability mission avg hp avg ap avg np figure 4: culture traits across bank performance clusters goromonzi: organizational culture, strategy implementation and commercial bank performance in zimbabwe international review of management and marketing | vol 6 • issue 2 • 2016314 findings, the current strategy implementation process is arguably weighing down performance of non-performing banks, as most respondents indicated effects which move away from neutral towards negativity. in some cases, strategy implementation is also affected by prioritization of matters in organizations. for example, when executives decide to defer a benefit to employees and management in favor of their perks or a project deemed non-beneficial to the organization, implementation of such projects is likely to be affected. bank leadership needs to show leadership skills where a balance of issues is required. in some cases, slow implementation of strategies is a matter of poor communication and lack of involvement as employees will feel that they are not part of the strategy and hence they do not own it. effective leadership strive to get buy-in of employees in the strategy implementation process in order to ensure full implementation of any strategies at hand. 5. conclusions the study carries out an analysis of the impact of organizational culture and strategy implementation on commercial bank performance, using simple regression analysis and descriptive statistics. the research finds out that intangible resources (organizational culture and strategy implementation) matter on performance of commercial banks in zimbabwe, particularly for high and average performing banks. for non-performing banks, the impact of culture and strategy execution is not apparent in view of the pressure that these banks will be facing in addressing some more basic fundamentals like capital base and liquidity. the dynamic environment under which banks operates in makes the impact of intangible resources differ across institutions. in cases where the bank is facing challenges, particularly over a medium to long term, culture aspects of the bank at times do not matter. in such instances, performance is highly determined by tangible resources such as bank assets, capital and liquidity positions than by intangible attributes which include culture. customers are not acquainted and concerned about good culture of these banks such that differentiation of banking service is based on tangible aspects of the banks than the intangible aspects. for performing banks, naturally, competitive advantage will be defined along intangibles, including culture, given that all other resources are available. the bank’s position really determines the efficiency and effectiveness of its strategy implementation. as banks’ performance improves, intangible attributes begin to matter and a bank’s performance will be linked to its intangible resources. intangible resources are added dimensions for competitive advantage where other aspects of performance are optimally available at the bank’s disposal. although not covered in this study, there seem to be a level or threshold of bank size or performance level above which intangible resources in the bank becomes a significant determinant of performance. in other words, at some level of operation, the bank’s performance becomes highly dependent on its intangible attributes than the core tangible resources. competitive advantage of big and highly performing banks rests in intangible resources, such as organizational culture, strategy implementation, among others since they compete more on quality of service than availability of tangible resources. however, for average sized banks, the mix and balance of tangible and intangible resources remain critical in sustaining performance. on the strength of these findings, the study concludes that organizational culture and strategy execution are critical factors that determine commercial bank performance in zimbabwe. the two variables exert a positive and significant impact on performance of commercial banks as measured by roa. on the basis of the study findings and conclusions, it is recommended that commercial banks in zimbabwe need to consider intangible resources, culture in particular as equally important drivers of performance as tangible resources. in addition, leadership in commercial banks need to invest in creating a winning culture in banks or effective strategy implementation techniques and utilizing such attributes remains the major determinant of performance. cbz ba ncabc ba rcla ys fbc mbca metba nk kingdom allied agriba nk sta ncha rt sta nbic nmb zb stewa rd -7.50% -3.50% 0.50% 4.50% 1 1.5 2 2.5 3 3.5 4 4.5 5 r o a strategy implementation score strongly negative strong ly positive figure 5: strategy implementation scores across banks goromonzi: organizational culture, strategy 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(2010), linking organizational culture, structure, strategy and organizational effectiveness: mediating role of knowledge management. journal of business research, 63, 763-771. . international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2019, 9(4), 39-46. international review of management and marketing | vol 9 • issue 4 • 2019 39 the impact of consumer buying behavior on customer relationship management in the banking sector mohannad a. m. abu daqar1*, ahmad k. a. smoudy² ¹department of management and business administration, doctoral school of management and business administration, szent istván university, hungary, 2100, pater karoly utca 1, gödöllő, hungary, ²department of business administration, palestine. *email: mohannad.abu.daqar@phd.uni-szie.hu received: 09 may 2019 accepted: 26 june 2019 doi: https://doi.org/10.32479/irmm.8151 abstract the main aim of this study is to investigate the impact of customer relationship management (crm) on consumer buying behavior. the researcher used primary data through a close-ended structured survey were distributed at banks customers in palestine, and the second source of data is the interviews with selective banks top management in palestine who is dealing with crm. the results of this research work revealed that there is a positive strong relationship between crm and consumer buying behavior. consumer buying behavior explained 75.75% of the variance (r² = 0.7575, f (1,98) = 375,703, p < 0.05). the researchers found that consumers buying behavior significantly predicted crm. moreover, integrated marketing communication tools have no significant impact on consumers buying decisions, sales promotion is the most important tool that has a consensus from the respondents that it affects their decisions. the study recommends banks to update their crm systems to obtain the most recent data about their customers along with adopting the last cutting-edge technologies used in crm systems to better analyzing the customers’ data. furthermore, researches advice banks to have better views about the benefits of successful crm systems within the same industry in order to obtain a comprehensive and precise system that could gain more benefits for customers in one hand, and on the other hand gain more profits for the banks by retaining the profitable loyal customers. keywords: customer relationship management, consumer buying behavior, integrated marketing communication jel classifications: m30, m31, g21 1. introduction a lot of studies of customer relationship management (crm) have been studied in order to observe its programs, how it affects loyalty and satisfaction, how it acts as a marketing strategy and whether it has a relationship with consumer behavior or not. thus, the purpose of this study is to add to the previous studies of how crm is related to consumer behavior. crm is “practices, strategies, technologies and a marketing tool that the banks in palestine use to manage and analyze their customer’s interactions and data throughout the customer lifecycle.” (iriqat and daqar, 2017a). while adalikwu and adalikwu (2013) define crm as a strategy that focuses on customer behavior, which would help organizations to emerge speedily and maintain customers in a highly competitive market environment. through these studies; customer behavior is one of the main pillars that affect their crm systems in order to meet the customers’ needs and expectations. on the other hand, ekhlassi et al. (2012) used swift (2001) definition of crm as an “organizational approach to understanding and influencing on customer behavior through a meaningful relationship in order to improve customer acquisition, retention, loyalty and profitability processes.” they reveal that crm divided into three main stages, which have the same concept of the customer relationship life cycle stages mentioned above, as follows: • customer acquisition identifies potential customers and builds awareness for a brand with short-term profits, requires different marketing selling, in order to attract new customers. this journal is licensed under a creative commons attribution 4.0 international license daqar and smoudy: the impact of consumer buying behavior on customer relationship management in the banking sector international review of management and marketing | vol 9 • issue 4 • 201940 • customer retention: aims for a long-term relationship with repeat purchases and high profitability, uses customer service, direct marketing, and personal selling, as communication tools to retain customers. • customer development: seeks to sell more products to existing consumers, the best marketing communication tools are events, packaging and sales promotion. 2. literature review 2.1. crm ck (2015) used both quantitative and qualitative methods with exploratory and descriptive studies to observe the link between crm and customer retention. this study noticed that one of the advantages of crm that it helps to know the wants of its customer to provide them with the right service and time. thus, it helps to build a future relationship. moreover, they used baran and galka (2013) definition of crm as a marketing strategy that focuses on understanding the needs and purchasing behavior of its customers by managing customer experiences in order to strengthen the relationship between a company and its customers. thirunavukkarasu (2016) used grönroos (2000) customer relationship life cycle, which explains the development of customers relations in form of a life cycle, segmented into three stages, as follows: • the initial stage: includes potential customers who do not know about the products or services of a company. • the purchasing process introduces a contact with the company and tries to put some expectations. • the consumption process: during this stage, the customer takes action and consumes products or services. during this process the customer will bring judgments; if customers are satisfied, they will repeat purchases and a customer relationship will continue over the consumption process. as a result, customer loyalty will exist. thirunavukkarasu (2016) considered buttle and maklan (2015) types of crm, which are classified into three types: operational, strategic, and analytical, in order to know how to deal with each stage of the life cycle. the first type aims to retain and win profitable customers by following a customercentric business strategy. the second type focuses on customerfacing business that uses customer-related data in order to process marketing and customer services. while the final type transforms customer-related data into an implemented process that enhances the effectiveness of the relationship between both parties. according to srisamran and ractham (2014) crm could help firms to know their customers and the type of crm to build strong relationships with them over a long period. to do so, customer knowledge is required to acquire and manage. thus, organizations should be customer-focused. the creation of knowledge helps the organization to improve their performance by responding to customer’s needs at the right time with the best quality. customer knowledge could be categorized into three types according to gebert et al. (2003) that srisamran and ractham (2014) have used, as follows: knowledge for customers; used to transfer knowledge about products or services for customer in order to satisfy their needs and wants. knowledge about customers; used to learn and acquire details about customers, their behavior, lifestyle and other information as well to help them find what they want. knowledge from customers; could be gathered through the interaction process about products, services, market, etc., for future improvement (alavi and leidner, 2001). 2.2. relationship marketing and integrated marketing communication (imc) ekhlassi et al. (2012) study the suitable media for each customer relationship stage (customer acquisition, retention, and development) and found that communication was the key success to every relationship. they used duncan and ouwersloot (2008) concept of customer acquisition, in which new companies and products should focus their marketing efforts, that is gained by imc and advertising, on customer acquisitions, in order to build awareness. in conclusion, companies tend to replace traditional marketing communication tools into the use of the internet as a communication tool with their customers. ck (2015) stated in his study that companies should shift their marketing functions from product to customer base because people are becoming less loyal and more conscious about the importance of being valued. personal marketing aims to bring the right product to the right customer. ck (2015) used patel (2007) definition of marketingmanship as “one of the skills used in personal marketing; it is a direct, face-to-face, marketing-to-buyer influence, which can communicate the facts necessary for making a buying decision; or it, can utilize the psychology of influence to encourage the formation of a buying decision.” abtin and pouramiri (2016) reveal a concept called integrated customer relationship management; it defines and creates interaction with targeted consumers, it puts together all marketing functions to establish solid relations with customers to determine the types of relationships based on their needs and wants. mihart (2012) stated that the main role of marketing is to satisfy consumers wants and not to sell what a company produces. therefore, it is necessary to learn about consumers’ behaviors and how marketing mix elements could affect consumers’ decisions. the main goal is to create the right messages to the right audiences with the appropriate marketing channels (kotler and keller, 2009). 2.3. consumer behavior, marketing, and customer relationship adalikwu and adalikwu (2013) define consumer behavior as a psychological process that consumers face in different situations in order to identify their needs. it is important to decide whether to accept or reject information about company’s products or services. from surveys used for this study, ensures that crm system requires customer-related data that describes customer’s daily activities, such as age, occupation, financial status, personal interest, and others, to positively affect the organizational performance in terms of consumer loyalty (mohammed and rashid, 2012). daqar and smoudy: the impact of consumer buying behavior on customer relationship management in the banking sector international review of management and marketing | vol 9 • issue 4 • 2019 41 witek (2016) continue the study of previous factors mentioned to examine the attitudes of consumers toward crm in terms of socio-demographic factors, such as age, sex, education, and financial status. a direct survey with 5 likert scale was used to determine the behaviors and attitudes of consumers and the degree of acceptance for multiple statements. this study leads to a positive attitude toward crm programs, consumers were aware of the marketing motives of running crm programs. hun and yazdanifard (2014) found other factors, such as communication channels, impact consumer behavior. three factors that could affect consumer behavior, which are individual determinant, external factors, and decision-making process. moreover, it is important to use traditional (offline) and online communication channels to satisfy the needs and wants of customers.shamout (2016) used theoretical information and collected data to specifically determine the impact of one type of the communication channels, which is sales promotion tools, for example coupons, price discount, and samples on consumer buying behavior; which includes consumer loyalty. there were some hypotheses about whether a relationship between promotional tools and consumer buying behavior existed. in the end, there was no relationship between consumer behavior and coupons. but there is a positive relationship between price discounts and free samples on consumer behavior (evanschitzky et al.,2012). 2.4. crm, customer loyalty and satisfaction according to iriqat and daqar (2017b) in their study, the impact of crm has influencing factors, such as service quality, employee’s behavior and customer’s database on long-term customer loyalty, this study finds a positive relationship between both variables, and a strong impact on employee’s behavior and loyalty; which means if employee’s deal fair enough with consumers, they will be satisfied. as a result, they will become loyal. velnampy and sivesan (2012) investigate the relationship between crm and customer satisfaction in order to build a mutually long-term relationship by using primary and secondary data from questionnaires, books, magazines, and journals. they defined customer satisfaction as “pleasant or unpleasant feeling caused with a comparison between imaginative function and expectations.” in conclusion, customer relationship marketing has an impact on customer satisfaction; a lot of money and time were spent to maintain the infrastructure facilities. so, they fail to meet customer’s needs with a psychological view, reduce dissatisfaction, and increase trust among customers. long et al. (2013) used a quantitative approach to study the impact of crm dimensions, such as employee’s behavior, customer service quality, interaction management, and relationship development on customer satisfaction and loyalty. in the end, the behavior of employees and relationship development influence and contribute most to customer satisfaction. in the end, if customers are satisfied, they will become repeat purchaser and loyal. furthermore, ck (2015) used the description of customer loyalty that rogers (2004) stated, which has two directions, the attitudinal (emotional) and the behavioral (functional) approaches. the first one indicates the state of mind while the second one refers to the willingness to act and pay. he said that behavioral customer loyalty is more useful than attitudinal because when customers are loyal, they will repeat purchases. unlike the emotional approach that does not have action. according to abtin and pouramiri (2016) examine the impact of relationship marketing, such as satisfaction, trust, communication, competence, and management on customer loyalty enhancement. this study used a quantitative method (survey) as an instrument to investigate the relationship. they used abdul-mauhmin (2002) concept of customer satisfaction as it “satisfaction can lead to behaviors such as loyalty and positive word of mouth advertising.” at last, this study proved that relationship marketing variables have a positive impact on customer loyalty. 3. methodology 3.1. population according to the quantitative approach, generally, the population will include all residents in ramallah city and nearby areas; it is the main city in palestine which is the center of and the place of headquarters of the financial institutions in palestine. specifically, it refers to the number of people who have bank accounts and a direct or non-direct relationship with banks. while the population of the qualitative approach will include employees of all the fifteen banks within specific divisions, such as the marketing and crm. 3.2. sample size since the population in the quantitative method is mass and basically covers all people, a randomly selected people of 100 will fill out the questionnaire in order to analyze their buying behavior toward banks in later stages. whereas in the qualitative method two out of fifteen banks in palestine will be interviewed in order to investigate their relationship and its impact on customers. z-bank and bank of palestine (bop) have the largest market shares of 23% and 32% respectively, with a total market share of 55% will be representatives of other banks in palestine. 3.3. research approach this study will rely on three main approaches to observe the relationship between crm and consumer buying behavior, which are the mixed method and observation that will be explained along these lines: quantitative method; it is a method that provides numerical data, which can be compared and measured. in this method, the researchers use a questionnaire for bank’s consumers to observe their behaviors within the field of my study. the other method, qualitative method; unlike the quantitative method, the qualitative method cannot be measured; it is used to obtain more detailed information with suggestions. this method introduces interviews, which will be used for bank’s employees to examine their performance toward customers. as a result, a mixed method of quantitative and qualitative data will be used to measure the impact of the relationship between both parties. 3.3.1. research design it is considered as a strategy used to collect data in a specific manner in order to answer questions. according to my field of study, which will collect information by both quantitative and daqar and smoudy: the impact of consumer buying behavior on customer relationship management in the banking sector international review of management and marketing | vol 9 • issue 4 • 201942 qualitative methods about crm and consumer buying behavior will use an exploratory design that aims to explore the relationship between variables. 3.3.1.1. source of data • bop: is the largest bank in palestine with a market share of 32%. this bank has around 1671 employees in approximately 76 branches. it has about 177 usd million total revenues in 2016 and engaged in corporate, sme, retail, and micro banking operations. since it has the largest market share, in which it deals with a large number of customers. therefore, a crm is practiced in a wide range regardless of its non-existing division. the researchers have interviewed two employees in which they have worked in sales and customer care. • the z-bank: is the second largest bank in palestine with a market share of 23%. it has 31 branches in west bank and gaza strip with around 889 employees. the z-bank provides a wide range of financial products and services for corporations, individuals and other financial institutions, such as corporate, consumer banking, institutional banking, and treasury services. same as bop, it deals with a wide range of customers and is establishing a crm division. the researchers kept the name anonymous upon their requests. 3.4. data collection method 3.4.1. primary data it will be collected for the 1st time with the aim of formulating knowledge about the impact of consumer buying behavior of crm, such as interviews, questionnaires, and observation, which will be explained along these lines. 3.4.1.1. interviews a structured interview used in order to study some relevant topic related to this study without the interference of other topics. these interviews were conducted to observe employee’s performance in the z-bank, bop. toward customers and to determine the strength of their relationship management. it will contain three major topics, which are crm, consumer behavior, and marketing procedures. the first topic will introduce general questions about the crm process in each bank and how they deal with their customers. the second topic examined consumer buying behavior from the bank’s perspective. finally, researchers studied how marketing tools could affect the relationship between the bank and customers. 3.4.1.2. questionnaire a close-ended structured survey used to assess the overall behavior of consumers toward banks located in ramallah. this questionnaire will contain four main dimensions in order to collect information about consumer’s overall relationship with their selected banks. the first dimension is the demographic. the second dimension contains seven general questions about banks, which could assist the first dimension by adding more detailed and specific information about consumer’s characteristics with regard to this field of study, such as the name of the bank, the motives to select this bank, and reasons affect their choice by using dichotomous scales (yes or no questions) and others. the third dimension is more precise/related in order to study the relationship and its impact on consumers. a 5 likert scale (strongly agree to strongly disagree) and dichotomous scale (yes or no questions) were used. to determine to what extent people, agree or not on specific situations. for example, consumers’ experience with their chosen bank. this is called the crm dimension, which contains eight different situations. the last dimension related to the buying behaviors of consumers with a 5 likert scale that defines how much satisfaction do consumers have. it identifies eight general aspects that may affect their decision-making process of selecting a bank, which is called the behavioral information dimension. 3.4.2. secondary data data from other researchers and studies related to this field study in the past, which is called previous literature reviews. 3.5. conceptual model 3.5.1. mediator variable: imc tools billboards, online ads, social media, face-to-face selling and sales promotion. conceptual model is presented in figure 1. 4. results and discussions this section shows the results of the study hypothesis that reflects the study conceptual model along with with the data analysis methods, and the discussion associated with each result from these hypotheses. moreover, this section will discuss the results of the interviews were conducted with banks. figure 1: conceptual model source: own. daqar and smoudy: the impact of consumer buying behavior on customer relationship management in the banking sector international review of management and marketing | vol 9 • issue 4 • 2019 43 4.1. quantitative data findings h0-1: there is no empirical relationship between consumer buying behavior and crm according to the first directional hypothesis h1, a correlational and regression tests were made to examine the validity and significance of the relationship between crm and consumer buying behavior; it was accepted with a significance of 0.000 and indicates a direct and strong positive relationship between both variables. based on the table 1, the researchers concluded that consumer buying behavior plays a significant role in crm in the operated banks in palestine. h0-2: there is no empirical influence on consumer buying behavior and crm through using r-square and anova, the results of the table 2 indicate a significant value of 375.703 for the f-distribution with 1 and 98 df. f-test taken as the indicator to measure the significance of the regression, it is clearly showing that the p < 0.05, which indicates that there is a significant relationship exists between the study variables (consumer buying behavior and crm). the independent variable can predict the dependent variable, as r² = 0.757 which means the independents variable (consumer buying behavior) can explain 75.75% from the variation in the dependent variable (crm). moreover, multiple correlation coefficient “r = 0.891” shows a strong positive linear relationship between the two variables. h0-3: imc tools doesn’t play a significant role in selecting banks in palestine. the researchers used one sample t-test to examine h0-3 (imc tools doesn’t play a significant role in selecting banks in palestine), with a 95% level confidence, table 3 shows that imc tools (mean=2.4931, sd=1.3690) were not significantly different at p < 0.05, t = 2.02961, p = 0.112263. the results support to accept the null hypothesis which indicates that imc tools don’t play a role in selecting banks in palestine. moreover, the above results indicate that imc tools have no significant impact on consumers buying behavior through these tools, it means that there are more effective tools that directly affect the consumers’ decisions in choosing and selecting a specific bank among the different banks operated in palestine. these results supported by other analysis when taking the frequencies of the respondents, 30% of the respondents agreed that sales promotions affect the consumer buying behavior while the rest 70% see it has no significant impact on their decisions when choosing a bank. table 4 illustrates that the majority of the respondents indicate that imc tools haven’t that significant impact when choosing their banks, it merits to investigate the more effective marketing tools that affect the consumer buying behavior, and on the side, it is an indicator for the banks that not to consider these tools as a source of information for their crm systems. it was mandatory to ask the customers in a direct way to express their impression about their relationship with their banks, as it is one of the main effective ways to know better the customer needs and to try to satisfy these needs. question: do you think your bank should improve its relationship with customers? answer: the majority of respondents (76%) clearly state that banks should improve their relationship with the customer to discover their needs in order to fulfill these needs by tailoring their strategies and products to be aligned with customers real needs. 4.2. qualitative data findings after interviewing two banks with the largest market share in palestine of approximately a total of 55%, we have pointed out some thematic and comparative analyses between both of them regarding the crm, consumer behavior, and imc dimensions. 4.2.1. crm first of all, the crm dimension, which contains eight major questions. generally, most of these questions required comparative analyses due to the differences among banks’ strategies and procedures. the first question, which is the general definition of crm in each bank was identified differently; the z-bank describes it as a unit that is related to customers profiles by having full and updated information on customers, such as accounts, work, personal life and behaviors, in a way that enables the bank to create, maintain and improve their relationship with them, table 1: correlation coefficients between consumer buying behavior and crm dimensions 1 2 crm 1 0.891** consumer buying behavior 0.891** 1 **correlation is significant at the 0.01 level, source: own, crm: customer relationship management table 2: r-square and anova for customer relationship management econometric model model sum of squares df mean square f sig r r square regression 48.766 1 48.766 375.703 0.000 b residual 12.720 98 0.130 0.891 a 0.7575 total 61.487 99 a. dependent variable: crm, b. source: own table 3: the results of one sample t-test of integrated marketing communication tools dimension mean std. deviation mean differences t-value p-value integrated marketing communication tools 2.4931 1.3690 1.5067 2.02961 0.112263 source: own daqar and smoudy: the impact of consumer buying behavior on customer relationship management in the banking sector international review of management and marketing | vol 9 • issue 4 • 201944 while bop defines it as customer services that meet consumers’ needs and keep contact with them through many transactions, including, but not limited to opening accounts and depositing. this let us realize that the first bank has an actual crm unit and works well in gathering data about its customers in order to know how to communicate and deal with customers. according to the second question, what is the most important in crm; acquiring new customers or retaining current customers? the researchers used a thematic analysis since they have the same point of view towards the importance of acquiring new customers or keeping the existing ones; both of them prefer the two ways. but, acquiring new customers will cost more. so, they depend on satisfying the old customers. when customers are satisfied, they will favorably talk to others about their experience and the quality of services offered. the third question that focuses on the purpose of crm implementation used a comparative method among banks; the main purpose for the z-bank is to satisfy customers by providing services continually since they are considered the main asset. on the other hand, bop seeks to achieve a win-win relationship strategy. therefore, it is not a customer-centric approach in the bop. the fourth question which compares the difference between online and offline customers considered comparative; the z-bank adds value to their perceived offline services. hence, a positive relationship with online customers would occur. but offline customers may be more important than online ones because it adds respect and accurate transactions. according to the bop, usually offline customers are harder to deal with than online ones, because you have a face-to-face relationship. so, customer service providers must be aware of their attitudes and behavior towards customers and should pay more attention to their body language and appearance. as a result, some banks may prefer offline customers as they see them more important and not hard to deal with and vice versa. the fifth question: how banks obtain knowledge about their customers? a comparative method was used to distinguish between the way each bank obtain knowledge about customers depending on the procedures they follow; the z-bank starts to collect information about customers at the beginning of a relationship, and then they begin to update and expand the information through banking transactions. this is especially done for elite and premium customers. bop does not have a separate system containing information for all customers. they have a system that allows access from employees within their field of work. the sixth question: how banks deal with customers complaints? this question uses a comparative analysis to compare customer complaints in each bank. the first bank has special units called “customer experience” and “complaints management” who handle and solve customer complaints. bop has a box specially designed for complaints. if customers are not satisfied during the communication process with employees, they put their complaints in this box and there is one who is responsible to check the complaints and solve them. the seventh question: what is the usage of crm in banks? since mostly all banks have the same viewpoint regarding crm as a tool to convince customers of services and understand their needs, which eventually could affect the way consumers act towards the bank, researchers have used a thematic method in this question. researchers have not used the thematic neither comparative method in the final question of this section. the eighth question: how you evaluate your current relationship with your customers through your employees and products? bop offers the right services, which includes commitment, consistency, reliability, friendly staff, and any other positive attitudes toward customers, while the other bank refused to provide information. 4.2.2. consumer buying behavior a thematic method was used in the first question to describe the strategy of customer-focus in the media conducted of both banks; the z-bank uses a customer-centric approach by targeting their customers in the media conducted. all of these have enhanced customer experience with banks’ products and maintained the relationship with them. bop has additional step mentioned during the interview, which is the pretest of any advertisement before executing the real one. researchers also used the thematic method in the second and third questions regarding the relationship with customers and its effect on them; generally all banks, including the interviewed banks have the same perception, they believe that good, trusted and direct relationship with customers will lead to satisfaction and loyalty and absolutely will change their intentions in a positive way toward the bank. each bank has its own strategies and activities toward influencing customers in a positive way. thus, a comparative analysis was made for this question. the z-bank depends on the wide range of products and services offered that meet customers’ needs, such as the expanded branches and improved electronic banking section, whereas bop focuses on donations and social responsibility activities to retain their customers. 4.2.3. imc tools question one: the effect of marketing activities and campaigns on banks performance? usually marketing activities and campaigns conducted for customers as mentioned before, which will somewhat affect the performance of banks and alter consumers perception. for example, the credit card spending campaign with cash back rewards and housing loans campaigns will positively change their behavior over time and increase their usage. thus, a thematic analysis was used for the first question. question two: what are the banks view about marketing campaigns? mostly all banks consider marketing campaigns as one of the other strategies to enhance the relationship with customers and attract new ones. therefore, researchers used the same method in question one. also, banks view these campaigns as insufficient but believe they are important tools for attracting new customers, in addition to other services that could influence them. question three: how banks consider marketing activities? the following questions in addition to question number seven have table 4: frequencies percentage of integrated marketing communication tools variable integrated marketing communication tools yes (%) no (%) social media 16 84 face-to-face selling 26 74 billboards 26 74 online ads 29 71 sales promotion 30 70 source: own daqar and smoudy: the impact of consumer buying behavior on customer relationship management in the banking sector international review of management and marketing | vol 9 • issue 4 • 2019 45 applied a comparative method regarding the marketing tools as an intermediary factor; the z-bank consider marketing activities as a tool that emphasizes loyalty and credibility. conversely, bop views it as an intermediary factor and the main communication tool with customers. the next question which is “what are the best and most marketing tools used to communicate your customers?” was not answered by the z-bank. but, answered by bop; the most attractive and used marketing tools are billboards, radio, and social media. so, generally, there is no comparative or thematic analysis. the final question in this section, which is considering the value added from these marketing activities, adds value to the z-bank indirectly and strengthen the relationship with customers. actually, it promotes an existed products and services that would let people’s life easier and solve their problems; housing loans is such an example of the added value in their lives. according to the bop, they did not answer it directly. thus, there is no answer to it. eventually, researchers have asked them an additional question to compare the behavior from two points of view when customers are not satisfied; from customers and banks as well. the z-bank takes actions to correct any dissatisfaction reasons by continuous improvement. there is a specialized unit called “customer experience” that handles such problems and apply corrective actions, while the bop depends on the situation that leads them to be dissatisfied. if possible, they take some actions that could be controllable to satisfy their customers and solve their problems. additionally, the researchers intentionally asked if there are other imc tools were not mentioned in this study that has more impact and effect at customers; unsurprisingly they indicate that the word of mouth is the most effective marketing tool in palestine in this industry, the researchers intentionally didn’t include this tool in the study model to find if the other most commonly used methods are effective in banking industry in palestine. 5. conclusion eventually, the researchers conclude the main results of this research work, it is revealed that there is a positive strong relationship between consumer buying behavior and crm. consumer buying behavior predicts the variance in crm system of the banks. besides, the most common used imc tools (billboards, online ads, social media, face-to-face selling, and sales promotion) have no significant impact on consumers buying decisions, sales promotion is the most important tool that has a consensus among all the respondents which affects their buying decisions. word of mouth is more effective than other tools from the interviewees point of view, this tool wasn’t mentioned intentionally in the study model in order to find the effect of other marketing tools, and on the other side the researchers have a previous customer insight view about the most effective marketing channels for the banks in palestine, word of mouth still one of the most effective tools. it was clear that banks in palestine haven’t a comprehensive crm application according to the interviews and the respondent’s answers, in addition to, banks have different views about crm and how to capture the value of applying effective crm applications according to other pioneer organizations best practice in this industry and how they succeeded in building a compatible crm application that helps them to extract the best strategies, and practices to meet the customer needs and finding the best methods to retain them. likewise, some banks have specialized units to handle all types of customer complaints, these are specialized units called “complaint units” with an authority matrix that have the capacity to handle and solve all types of customers complaints without passing through the administration bureaucracy regime; this procedure gave banks more competitiveness than others as they gain more experience and find the best practice to handle and solve customers complaints and problems. 6. limitations, recommendations, and further research the researchers faced minor challenges in acquiring the primary data, as well as the logistician efforts spent to gather the data. starting from the questionnaire which was distributed only to 100 customers of the banks in palestine, especially in ramallah and nearby areas; while the researchers plan to obtain the highest number of participants in this study. on the other side, this research was conducted only in two representative banks with a total market share of 55%. most of the representative banks do not have crm divisions. consumers have different behaviors and their relationship with banks depends on their personal experience. therefore, a complexity to discover the relationship between crm and consumer buying behavior would occur. the researchers recommend banks to highly invest in crm systems to obtain and understand the main aim of crm systems in the banking industry and how it is applied in other banks locally and globally; through the best practice of these pioneer banks. the most significant part when applying crm system is to find how best this system will be aligned with customers needs and their practices, customers always expect the most effective performance of their banks to meet their needs within the most available channels within a reasonable cost model. banks need to investigate for the best marketing tool to reach their customer in an effective way, it will reduce the cost to either acquire new customer or retaining customers, the study shows that integrated marketing tools were not significant according to the respondents answers, while banks shows that social media is the best method; on the other side respondents have a consensus by 30% that sales promotion is the best attracting method that affects their purchasing behavior. so, banks need to reduce the gap between the customers’ view and the banks’ view. researchers will continue their research work, as there is a motive to discover the gap about the most effective imc tool which has the most influence and impact for both sides, the customers and the banks. additionally, it merits to pay attention and investigate deeply for the pioneers who succeeded in applying efficient crm systems in this banking industry, and how these examples motivate daqar and smoudy: the impact of consumer buying behavior on customer relationship management in 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(2016), influence of socio-demographic characteristics of consumers on attitudes towards cause related marketing. acta universitatis agriculture et silviculturae mendelianae brunensis, 64(6), 2173-2182. . international review of management and marketing | vol 6 • special issue (s8) • 2016230 international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2016, 6(s8) 230-233. special issue for "international conference on applied science and technology (icast) 2016, malaysia" the impact of regulations on genetically modified food acceptance among malaysian food manufacturers: a proposed framework siti husmila hussin1*, risyawati mohamed ismail2 1school of technology management and logistic, block c, college of business, universiti utara malaysia, 06010 sintok, kedah, malaysia, 2school of technology management and logistic, block c, college of business, universiti utara malaysia, 06010 sintok, kedah, malaysia. *email: husmila@gmail.com abstract the aim of this paper is to conceptually propose the elements that constitute the acceptance of genetically modified food (gmf) among food industries in malaysia. one of the crucial elements which imparts the acceptance of gmf is regulatory system which is governed by malaysian authority bodies. this paper is the outcome of a thorough review of the literature undertaken by previous studies in regards to the regulation of food manufacturers as well as regulation of gmf itself. in this review, those literatures were comprehensively studied and rigorously discussed from the perspective of malaysian food industry. this paper contributes to law, rule and guideline that have to be complied by malaysian food industries, especially for the food industry which adapted the use and commercialization of gmf in their operation. the subject of this gmf is relatively new in malaysia. however, in accordance with the previous studies and support from future direction of the malaysian government, gmf is a one of the technologies which help food industry to remain competitive in the current global market. therefore, this paper not only focuses on the rules and regulations of food industry, but it also explores the regulatory system of gmf in malaysian food industry. keywords: genetically modified food, food manufacturers, malaysian food industry jel classifications: f13, l66 1. malaysian food industry in malaysia, manufacturing sector which emphasized on food industry is divided into two types of group namely multinational companies as well as small and medium industries (smi), with the majority of smi contributing to the annual sales turnover of rm 25 million to the malaysian economic growth (mygovernment, 2015; malaysian investment development authority, 2014). besides that, it is reported that a total of 5565 food manufacturers are actively operating in the malaysian food industries (jinap et al., 2008). these manufacturers enabled malaysia to export more than 200 countries such as singapore, indonesia, united states of america, thailand and republic of china, in which contributes to more than rm 13 billion of annual export value (mygovernment, 2015). consequently, the total manufacturing output raised up to 7.3% as expected and postulated in third industrial master plan 3, 2006 to 2020 (ministry of international trade and industry malaysia, 2014). these figures show how huge the impact of food industry sector to the entire economic development of malaysia. this sector continues to drive this nation’s economy forward through food industry augmentation of 8.4%, which directly contributed to 5.2% of malaysia’s gross domestic product in the third quarter of 2014 (malaysian department of statistic, 2014). in addition, there is no denying that with the manufacturing sector emphasizing on food industry is one of the most crucial propellers towards malaysian economic growth. it employs 644,267 workers include food technologist, chemist and food-skilled workers. all these figures specifically on food industry impart to the expansion of income as well as development of malaysia. hussin and ismail: the impact of regulations on gmf acceptance among malaysian food manufacturers: a proposed framework international review of management and marketing | vol 6 • special issue (s8) • 2016 231 2. definition of regulation there are several distinguished definition of regulation. as defined by oxford dictionaries (2015), regulation is a rule, law or daily operation’s process that has been regulated, monitored and controlled by the authorities. one of the pioneer researchers in regulation, mcintosh and turnbull (2006) defined regulation as an official procedure or guideline regulated by the government and related authorities. in this research, regulation is defined as a law, rule, concept, and a basic tool in ensuring whether the business’ operation can be executed or no longer be implemented. in the context of this paper, the malaysian food act and genetically modified food (gmf) regulation are thoroughly discussed. 2.1. regulation of food manufacturers in malaysia in malaysian food industry, which focuses on food manufacturers or food handlers hold a very high responsibility in fulfilling the demand for food and at the same time, all of them are needed to comply with the regulatory system that has been fixed by the government authorities (stephensons and arujanan, 2011). those government authorities are ministry of health (moh) and the local authorities, which enforce that all manufacturing activities are compulsory to comply with the guideline such stated in the food act 1983 as well as food regulation 1985. for instance, food manufacturers are deemed necessary to guarantee that all foods are restrained from additive and contamination, carrying out labeling in exposing the real picture and food content as well as ensuring the importation and exportation activities are definitely complied to the fixed regulation and guideline (the canadian trade commissioner service, 2015; food safety and quality division, 2015). on the other hand, the food manufacturers need to follow on the obligatory of standard and requirement enforced by malaysian external trade development corporation (matrade) while undertaking food processing (malaysian biotechnology corporation, 2010; talib et al., 2008). therefore, there are two standard and requirements that must be followed by food manufacturers namely good manufacturing practice (gmp) and hazard analysis critical control point (matrade, 2015). gmp is one of the mechanisms that allocates rule, code and guideline; which ensuring the operational activities of food processing are properly managed in order to validate the entire food production is out of hazard instead of making sure the hygiene and security of food at every level of food production. meanwhile, hccp is located under the scope of gmp, which works as a system that identify, evaluate and control the hazard of food production include processing, packaging, storage as well as food distribution (department of standard malaysia, 2014). by applying and practicing those standard and requirement, the development of manufacturing activities would be increased which directly beneficial to the food industry in many aspects. consequently, credibility and reputation of the food industry would be improved and retained in recent intensified business competitiveness. 2.2. gmf regulation in malaysia gmf regulation comprised of trade, manufacture as well as license are developed and enforced in order to ensure all the malaysian food manufacturers comply to the regulatory system that has been figured (shrestha and shrestha, 2002). in malaysia, gmf is one of the components in modern biotechnology, recognizing as the most stringent regulatory system and it is required to be followed by the food industry (quah, 2007). this is mainly due to gmf regulatory system is tremendously important mechanism, which oversees by government authorities (quah, 2007). therefore, all gmf transaction involving initialization, importation and exportation are allocated under biosafety act 2007, which implemented by ministry of natural resources and environment (amin et al., 2013). in fact, all gmf regulation has been drafted and introduced by moh. this is proven when genetic modification advisory committee (gmac) undertaking risk assessment towards gmf approval process. this circumstance happened due to gmf products are required to be tested and approved by gmac before it is released and commercialized in local market of malaysia. nonetheless, before gmf commercialization takes place, marketing approval of gmf will be released once the requirement related to the gmf assessment has been fulfilled as it is being fixed (fao, un and who, 2004). in addition, the activities concerning on gmf importation require food manufacturers to get the import permit from director general of agriculture department (foster et al., 2003). hence, an implementation of those regulations led gmf manufacturing could be implemented efficiently. labeling is also one of the crucial elements in gmf regulation. thus, there are several advantages of the implementation of gmf labeling. firstly, the detection and effective prevention steps can be implemented if any gmf contamination happened. secondly, the distribution of gmf from entering into countries that against gmf can be restrained through gmf labeling. thirdly, the heavy process of making separation between gmf and non-gmf product during exportation transaction would be reduced. fourthly, through labeling implementation, it shows malaysia supportive towards gmf regulation since it is one of the codex committees (arshad, 2011). hence, in 2004, the mandatory labeling of gmf has been regulated, which was carried out by food safety and quality department (fsqd). later than that, on july 8, 2010, mandatory labeling of gmf was announced by moh and they also stated that the enforcement of gmf labeling will be commenced in july 2012. surprisingly, the implementation of gmf labeling was postponed due to several reasons. first and foremost, there is uncertainty of enforcement towards labeling regulation. secondly, number of gmf product to be excluded from labeling was unsure. thirdly, determination of specific language and place to implement the labeling is not clear (langtree, 2014; wahab, 2012). however, it is an eye-opener when the gmf labeling which supposed to be carried out in malaysia was claimed as non-mandatory. meanwhile, the labeling process is still under the stage of reviewing at this far (amin et al., 2013). as a consequence, those uncertainty phenomenons of gmf labeling governed by malaysian government exhibits that, food industry which use and commercialize gmf would have to be faced with the most complex and hardest regulatory in this nation. hussin and ismail: the impact of regulations on gmf acceptance among malaysian food manufacturers: a proposed framework international review of management and marketing | vol 6 • special issue (s8) • 2016232 3. proposed framework past studies have indicated that there is a relationship between regulation and ia. finding from past studies suggested that regulation determines the acceptance of gmf in industries (mitra et al., 2011). hence, regulation framework in the aspect of approval process will influence an acceptance or rejection of gmf (kothamasi and vermeylen, 2011) and the proposed framework in this study is shown in figure 1. during the approval process, if the gmf does not meet the standards and requirements in terms of quality, safety and efficacy as being set up by the regulatory system, that particular gmf will create a very long lead time of product development and cannot be marketed (tait and chataway, 2007; tait and williams, 1999). hence, those complex and stringent regulations will inherently influence ia towards gmf. therefore, the hypothesis 1 (h1) is presented: h1: there’s an increase acceptance among the food industries through the implementation or support of systematic regulatory system. 4. discussion this paper elaborates what are the rules or regulations involved in accepting gmf among food industries in malaysia. such being explained in the aforementioned sections, there were various rules, guidelines and also regulations need to be fulfilled food industry, which emphasized on food manufacturers that contribute to the acceptance of gmf commercialization as well as usage in their production. hence, due to an extensive commercialization of gmf, the government from all over the world have established the regulatory system for food industry production which comprised of assessment of risk, approval process, labeling and traceability as a tool in the food industry to ensure the safety of gmf products in the production. although the regulation of gmf is properly designated, scholar observed that there is an issue when the approval process of gmf usage and commercialization have remained vague in most of the asian countries (teng, 2008). in exemplifying that, the stringency of regulation which has been set up by the government caused the food industry to be unsure or reluctant either to accept or reject gmf in their food production. this circumstance happened due to the regulation of gmf provides risky condition to the food industry’s operation in case that particular food industry failed to meet the standard and requirement such being governed by the authority bodies. therefore, those gmf products will be filtered out and also create a very long lead time of product development thus, dragging period of time for product approval into several years. high cost incurred while struggling in getting license agreement have also led food industry refused to follow the stringency and complexity of regulatory system. in accordance with these challenges, it is directly shown that the government regulatory system is not well-organized and complicated, lack in providing a very clear policy and insufficient regulatory tools instead of amenities. this is mainly due to the amendment of food act and gmf regulation just being done by a few years back. it is for this reason malaysia needed to come up with a proper regulatory system pertaining to the rules, procedures and policies of gmf which enables the food industry to accept gmf commercialization and usage without having any difficulties to survive in the current competitive global market. 5. conclusion although the regulatory system of food industry is seen as complicated, the food manufacturers are tightened to comply with those rules and guidelines that have been governed by malaysian authority bodies. these stringent rules and guidelines are also enforced to the food industry which adapt, use as well commercialize gmf in their food production and operation. hence, the acceptance of food manufacturers towards gmf in malaysia might be affected by the regulation framework. on the other hand, another element with contributes to the acceptance of gmf among malaysian food industries would also require to be consider. however, this regulatory approach should be tested empirically in future studies in order to provide validation towards this proposed study. 6. acknowledgments this research is funded by ministry of higher education, malaysia through its research acculturation collaborative effort grant, award number s/o 12973. references amin, l., jahi, j.m., nor, a.r.m. (2013), stakeholders attitude to genetically modified foods and medicine. the scientist world journal, 2013, 516742. arshad, f. (2011), legislation of genetically modified food. in: mift seminar. department standard malaysia. (2014), acb-good manufacturing practice for food, (gmp). fao, un, who. (2004), food safety legislation-science and risk-based approaches to harmonization; seremban, malaysia. food safety and quality division, (moh). (2015), food act 1983 and food regulation, 1985. foster, m., berry, p., hogan, j. (2003), market access issues for gm products. implications for australia. agriculture. canberra australia: australian bureau of agricultural and resource economics ereport. jinap,s., nasir, m.s., salim, m.d. (2002), pacific food system outlook 2002-2003-malaysia. pacific food system outlook. retrieved from https://www.pecc.org/resources/306-pacific-food-system-outlook2002-2003-malaysia. [last accessed on ???]. kothamasi, d., vermeylen, s. 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(2011), communication : addressing the challenges in communicating agribiotechnology in muslim countries. tait, j., chataway, j. (2007), the governance of corporations, technological change, and risk : examining industrial perspectives on the development of genetically modified crops. environment and planning c: government and policy, 25(1), 21-38. tait, j., williams, r. (1999), policy approaches to research and development: foresight, framework and competitiveness. science and public policy, 26(2), 101-112. talib, h.a., ali, k.a.m., jamaludin, k.r. (2008), quality assurance in halal food manufacturing in malaysia: a preliminary study. in: international conference on mechanical and manufacturing engineering. p1-5. teng, p.p. (2008), an asian perspective on gmo and biotechnology issue. asia pacific journal, 17(s1), 237-240. the canadian trade commissioner service. (2015), import regulationsmalaysia. wahab, a.g. (2012), malaysia agricultural biotechnology annual. author query??? aq4: kindly provide last accessed date details . international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2017, 7(2), 92-103. international review of management and marketing | vol 7 • issue 2 • 2017 92 a field study on the relationship between employer brand and employee satisfaction funda yalım1*, kağan cenk mızrak2 1department of public relations and advertising, nişantaşı university, faculty of economics, administrative and social sciences, istanbul, turkey, 2program of occupational health and safety, vocational school, nişantaşı university, istanbul, turkey. *email: funda.yalim@nisantasi.edu.tr abstract employees play a significant role in the success of establishments. the ensuring of employee satisfaction is an issue which should be examined carefully at this point. today it is set forth with different studies that many elements are effective in ensuring employee satisfaction. this study was conducted towards the employees of an establishment with an important employer brand in our country in order to reveal the relationship of a powerful employer brand and the benefits that this brand promised to employees with employee satisfaction. of the qualitative research methods, the questionnaire technique was used in the research. the results were analyzed with the spss (22.0) statistical program. the research findings reveal that the elements of employer brand are related to employee satisfaction and that the employer brand affects employee satisfaction. besides, no significant difference could be found between the demographic characteristics of the participants and employee satisfaction. keywords: brand, employer brand, employee satisfaction jel classification: m 1. introduction revealing the factors affecting employee satisfaction and increasing it are important based on both organizations and employees. a certain number of benefits the organization provides increases sense of belonging, motivation, performance and productivity for the employees. the success of an organization is in directly proportional with its employees. today the employees are accepted as the most vital capital for the organizations. a satisfied employee becomes a good representative outside of the organization and hold a key role to attract qualified employees to be involved in it. accordingly, ensuring employee satisfaction becomes a crucial subject matter for both the organization and both current and potential employees. nowadays several variables reveal on the basis of attracting qualified workforce to the organization. one of them is employer brand, and the promised values of this brand. the other subject matter as important as the former mentioned is to provide employee satisfaction. at this point, the employer brand and its values are essential components of providing employee satisfaction. at the present time, the term “brand” is not supposed as an only factor which consumers think of while purchasing goods or services. the term “brand” in the century we have experienced become more of an issue in terms of persons, cities and institutions and organizations in different businesses as well as goods and services presented in national and international markets. at this point, the term “brand” is a subject matter to be evaluated by employers with regard to current and potential employees. the brand of a strong employer, while contributing to many organizations, satisfies current employees and attracts potential employees who are able to contribute to and create value for the organizations. creating and managing an employer brand whose audience are current and potential employees belong to a process which is needed to carry out carefully. this management process consists of many steps. in this process, current employer brand image, brand identity and brand communication should be analyzed in detailed at first. the results of this analyses provide essential data for the management process and support to create intended employer brand. a strong employer brand has a position different from its yalım and mızrak: a field study on the relationship between employer brand and employee satisfaction international review of management and marketing | vol 7 • issue 2 • 201793 competitors in the eye of both current and potential employees with the help of providing functional and symbolic values. the organizations, which employ qualified workforce and provide its satisfaction, gain strength and get the whip hand of their competitors nowadays. to take this advantage lies behind a strong employer brand and its providing values. these values increase the employee satisfaction and the organization has an opportunity to achieve its goals with satisfied employees, and enhances competitive capacity in local and international markets. 2. employer branding defining the term “brand” and presenting its importance in terms of producers and consumers are found useful before discussing “employer brand.” according to the definition by american marketing association, the brand is “a name, term, sign, symbol or design aiming to define and differ products or services by a seller or seller groups from their competitors” (keller, 2000. p. 3). the brand providing business products to be known easily, boosting the demand on the products, steadying the sales in the long term and achieving growth have importance and benefit in terms of organizations. those importance and benefits are stated simply, as follows (mucuk, 2007. p. 141): • helping sales promotion and having influence on lead generation. • creating consumers’ loyalty on the organization. • decreasing the risk of sales loss due to substitute goods. • taking the products to marketing channels, yet a well-known brand is sought by the organizations. • having a heavy hand on price stability. trademark right holder calls the shots because of not allowing intermediary firms to sell its product for different prices. • organizational value increases with brand value. consumes are affected by many factors while purchasing any goods or services. brand is one of the most important factors. therefore, brand does not have importance and benefit in terms of not only the organization but also the consumer. according to moon and millison, the brand makes the decision making easier, give information about the product, protects the consumer and provides quality assurance, minimizes the estimated risks, helping the consumers express themselves and offers friendships and joy by making them involved in a social environment (moon and millison, 2000. p. 30-31). other advantages of a brand regarding its consumers are, as follows (bozkurt, 2004. p. 109; yilmaz, 2011. p. 7-8): • the brand remains the consumer protected. the consumer knows the producer of a branded product. • the brands makes shopping easier for the consumers, provides them labor and time saving, and giving them an opportunity to purchase the preferred products again and again. • the brand summarizes the products’ functional and emotional features by giving information, and helps the consumers remember information in memory and also helps purchasing decision. • the brand gains favor of a status to the consumers by having a branded product. • the existence of the brand’s name helps the consumers determine which product is satisfying. • the name of the brand helps the consumers by holding messages about security and product quality. • the name of the brand helps the consumer pay attention on the products which are beneficial for themselves, and purchasing decision. the term “brand,” which is an essential factor for the decisions of today’s consumer, is studied in several ways. all the organizations producing goods and services in a tense competition environment are on the way to brand in order to shine amongst its competitors and build a steady and long-term relations with its consumers. creating a brand needs many studies on building brand identity, brand awareness, brand image and brand loyalty. nowadays, the term “brand” gains importance even for current and potential employees in an organization. brand identity, brand image and positioning lie behind a strong employer brand. the employer brand, studied firstly by simon barrow and richard mosley, was defined later on by simon barrow and tim ambler. according to barrow and ambler, the employer brand is a “functional, economic and psychological benefit package presented by the employer.” the brand employer draws a frame for the management to specify corporate priorities, boosts the production, provides to have a steady hand on, to strengthen the employees, and their dependence (barrow and mosley, 2007. p. 150-151). the original focus of employer brand thinking was to ensure that the same clarity and coherence was applied to defining and managing the organization’s proposition to employees as it typically applied to defining and managing the customer brand proposition (moosley, 2007. p. 130). much has been made of employer branding in the last decade. firms from diverse industry sectors have formally defined, and are strategically managing, their employer brand (e.g., siemens, coca-cola, starbucks). cultivating an employer brand is one method these firms have chosen to secure and retain the most sought after employees; those who will enable them to perpetuate their brand success and secure ongoing profitability. potentially, those firms that embrace employer branding will have a competitive edge. indeed, the motivation to employ strategies to attract and retain staff has never been more pressing as financial markets are increasingly recognizing ‘human capital’ — or the skills, experience and knowledge of employees — as sources of value to the firm and to shareholders (moroko and uncles, 2008. p. 160-161). according to dooley et al., the employer brand states “an intentional strategy aimed at creating perception on itself about recruitment, and reflecting a certain image” (oğuz, 2012. p. 6). ören and yüksel summarizes some definitions and characteristics based on the employer brand in the literature (ören and yüksel, 2012. p. 39): • in the study titled “conceptualizing employer branding in sustainable organizations” by aggerholm et al. (2011), the term “employer brand” is defined as a structure appealing to the brand’s dna based on the brand’s strategies in the brand identity within the dimensions of the employer and employee. in this study, the employer brand is not abstracted from the pure term “brand” and is identified with the relations between the employer and employee. yalım and mızrak: a field study on the relationship between employer brand and employee satisfaction international review of management and marketing | vol 7 • issue 2 • 2017 94 • in the study titled “exploring the relationship between corporate internal and employer branding” by foster et al. (2010), it is revealed that corporate brand and employer brand shared the same characteristic features, the term provides functional, economical, psychological benefits and establishes a psychological bond between the employer and employee. • in the study titled “the influence of the employer brand on employee attitudes relevant for service branding: an emprical investigation,” schlager et al. (2011) states that the employer brand reaches at more customers, increases customer experience, and makes employees have positive attitudes towards the employer. • in the study titled “conceptualizing and researching employer branding” by backhaus et al. (2004), the employer brand is defined as long-term strategies to administer their awareness and perceptions of the factors like employers, employees or customers involving in the process. • in the study titled “employer branding and its influence on managers,” davies (2008) defines the employer brand as effective connotations provided between the employer’s name and its current or potential employees, and states that an employer having a strong brand gets more experienced and qualified employees. davies orders basic features of the employer brand as creating awareness as a whole company, creating loyalty and providing pleasure, establishing an emotional bond between the firm and its customer. • in the study titled “building and measuring employee based equity” by king et al. (2010), the employer brand is defined as forming a basis to develop positive social and economic relations between the employer and employee. a consequence of the anticipated permanent shortage of knowledge workers referred to above is the need for companies to differentiate themselves and to market the unique employment proposition they can offer. employment branding is concerned with building an image in the minds of the potential labour market that the company, above all others, is a ‘great place to work’ (ewing et al., 2002. p. 11-12). organizations develop brands as a way to attract and keep customers by promoting value, image, prestige or lifestyle. by using a particular brand, a customer develops a positive image of the brand (thomas and jenifer, 2016. p. 62). as in the consumer brand, emotional and rationalist benefits presented to the customer (current and potential employees) by the employer brand is also brought into the forefront. brand connotations are divided into two basic groups: namely, functional and symbolic. functional and economic benefits consist of some factors such as physical working conditions, wages, additional payments, social facilities. those factors affects employer decisions because of defining abstract benefits got by the current and potential employees. psychological benefits consist of protecting their own identities, developing their personal images or expressing themselves (baş, 2011. p. 30). figure 1, both consumer brand and employer brand have different targeted audiences. while consumer brand targets current and potential customers, employer brand does the same for both current and potential employees. 2.1. employer branding and its management process a strong employer brand is created in five steps according to hewitt a consulting firm on human resources. the first step is to know the organization, the second one is to reveal an effective brand promise for both employees and customers, the third step is to present the standards on the evaluation of brand promise, the forth one is to support everyone to enhance brand promise, and the last one is to carry out the process and measure them (berthon et al., 2005. p. 154). based on providing the organization to be perceived as “the best employer,” controlling brand management process and managing it in direction of its aims are really important. according to baş, employer brand management model is defined as a detailed process (baş, 2001. p. 53); • to define the basis of employer brand, • to reveal what the employer provide the employees and what the employer is waiting for in return, • to position differently and exclusively from its competitors as an employer. there are 5 steps in the management model of an employer brand, figure 2. the process starting with how to determine how an employer brand is evaluated goes on with defining the brand identity, crating of employee value proposition, positioning and application process. baş defines the steps of employer brand management model, as follows (baş, 2011. p. 54): • employer and brand evaluation: primary questions to be answered for the employer are: what are the awareness level of potential candidates? what kind of an image arouses in the figure 1: differences between consumer brand and employer brand source: baş (2011. p. 30) yalım and mızrak: a field study on the relationship between employer brand and employee satisfaction international review of management and marketing | vol 7 • issue 2 • 201795 mind of current employees and potential candidates when the name of the organization is said? does the employer brand have different features from its competitors? what is the effect of communication activities conducted by the organization on the potential candidates? at this point, when discussing brand image, brand identity and brand communication; • brand image: it is defined as a total of emotional and aesthetic impression arisen about the product for the customer. it is a total of connotations and features related to the brand name, and perceptions of products and services (aktuğlu, 2011. p. 34-35). • brand identity: how the consumers define the brand or how they perceive it shows the brand image, but brand identity reveals how the organizations define the brands. there is no relation between brand identity and brand image. the identity, as a strategic planning tool, supports to create image. david aaker defines brand identity as “a set of brand connotations aimed at being carried out and created by the brand strategists” (yılmaz, 2011. p. 16). • brand communication: to obtain brand awareness, to reflect brand image and so to achieve brand preference and brand loyalty are possible with the establishment of communication mechanisms providing a permanent information transfer. behind the brand success, marketing plans observing permanently consumer and its competitors and structuring rationally all the units related to marketing mix are needed. the success of all these plans is possible with bringing communication strategies into force (aktuğlu, 2011. p. 154). this promissory should be embodied to make the consumers to understand the physical connections, functional benefits and emotional connotations. the fact that this is not achieved in a single communication channel is obvious nowadays. the whole potential brand communication points are needed to synergistically design all the brand experience (hollis, 2011. p. 36). “brands are structured by conformably gathering several tools like advertising, public relations, sponsorships, events, social objectives, clubs” (kotler, 2011. p. 78). communication is vital for employer brand sense and perception. a communication event carried out with current employees supports the success of aims like employee maintenance and motivation increase. in addition to this, the communication with potential employees should be structured to create the recognition that makes the employers valuable to work with. at this point, maintenance and consistency in messages are important subject matters. external communication and internal communication activities should be planned long-term (öksüz, 2012. p. 24). • definition of employer brand identity: employer brand identity consists of two components: namely, business features and corporate features. business features provide the employees functional and sometimes emotional benefits. for example, wage, job security, physical working conditions, personal development facilities, career opportunities are accepted as business features. some of these features, for instance, are thought in the context of only functional benefits: however, some have potential to provide benefit both functionally and emotionally. a corporate feature is composed of competitive position, ethics, social responsibility (baş, 2011. p. 72). figure 2: employer brand management model yalım and mızrak: a field study on the relationship between employer brand and employee satisfaction international review of management and marketing | vol 7 • issue 2 • 2017 96 • creating of employee value proposition: this is a promise based on the fact that specific expectations are met, and it also includes emotional and functional benefits promising the employees. all these promises are hidden in brand privacy (baş, 2011. p. 75). • positioning: brand positioning consist of developing the units of marketing mix to affect the perceptions of consumers toward a brand, product range or a firm in an influenced matter. it aims to create intended perception in consumers’ minds functionally. positioning allows to leave a specified brand image on consumers’ minds in the process of presenting the brand to the market. most of the firms positions themselves as “the most qualified,” “the best performance,” “the easiest use,” “the most reliable,” “the most prestigious” (erdil and uzun, 2010. p. 46-47). the prior condition of creating a strong employer brand makes the organization as employer the difference from its competitors. it is seen as creating “a different value” in accordance with brand identity in the mind of target audience (baş, 2011. p. 94). • application: in the basis of employer brand approach, the promises in the proposition of employee value are in. most of those promises are in charge of top management (baş, 2011. p. 115). the employer branding by backhaus and tikoo is discussed in two dimensions. the first one is that the employer brand provides employer attraction; the second dimension related to the inside of organization is ended with loyalty and productivity. employer brand loyalty comprised of corporate identity and corporate culture provides employee’s productivity. employer brand image is shaped by employer brand connotations and is ended with employer brand attractiveness. employer connotations provides employer image, and employer image provides employer attractiveness (öksüz, 2012. p. 24). berthon et al. (2005), by using ambler and barrow’s approach as base, express that the factors contributing to corporate attractiveness by using inductive and deductive methods on the evaluation of the employer brand are under 5 units like interest value, social value, economic value, development value and application value (zhu et al., 2014. p. 934-935; kara, 2013. p. 53). employer branding is analyzed in two dimensions as in figure 3. in the first dimension ending with employer attractiveness, the components providing this attractiveness are seen as employer image which is comprised of the result of employer brand connotations. in the second dimension ending with employee productivity, corporate identity and corporate culture as accepted as factors defining the basis of employer brand loyalty, and it is shown that employer brand loyalty is resulted with employee productivity. 2.2. advantages of employer brand the advantages provided by a strong employer brand are, as follows (baş, 2011. p. 44-47): • increase in the level of employees’ loyalty: provided that the employees see the organization as “the best place to work,” s/he does not think of working at another organization. this increases the level of employees’ loyalty, the employees turnover rates decrease. • motivation and performance increase: people see themselves as lucky because of working at an organization the people around them want to work for. this increases their motivation and performance. • increase in job applications and qualities: a strong employer brand increases the rates of highly qualified people toward the organization, so the candidates quality increases in a parallel way. in addition to this, an increase in brand awareness means an increase in the applications for the organization. • long-term effect: employer brand management is needed a strategic approach in respect of its content. this helps human resources gain a strategic identity and get a long-term effect. • concentration: employer brand provides applications and the composition of candidates pool to be managed. for instance, the employer brand has the opportunity to attract creative people by bringing some factors like reinforcement, initiative, independent working space in employer brand to the forefront if the organization gives importance on motivation. • increase in offer acceptance rates: as long as the employer brand is strengthened, the offers to passive candidates are accepted more. • increase in employees’ references: employer brand provides people to be proud of their works and increase the rates that they advise to the people around them. • increase in manager satisfaction: the increase in candidates quality lessens the interview time for the managers, and increases their satisfaction. • a strong corporate culture: the aim of employer brand management is to create a message regarding the reasons of the existence of the organization. the fact that this message is figure 3: employer branding model source: öksüz, 2012. p. 24 yalım and mızrak: a field study on the relationship between employer brand and employee satisfaction international review of management and marketing | vol 7 • issue 2 • 201797 perceived and embraced in the same way by all the employees is important. as a result of this, reconciliation on the value and norms of the organization increases and the corporate culture is strengthened. • decrease in the cost of recruitment: the organizations having strong employer brands do not experience any hardship to fill the critical positions. • increasing competitive capacity: competitive capacity increases as the employer brand increases in human quality. 3. employee satisfaction according to turkish language society (tdk), an employee means “a person who works at an organization for a fee, personnel” (http://www.tdk.gov.tr, retrieved: 21.09.2015). in today’s world, ensuring and increasing employee satisfaction matters to both the organizations and employees. professional life substantially takes place in the employees’ lives as one of the most important contributions. accordingly, ensuring the employee satisfaction plays a key role in personal and family happiness, and to make the organizations reach at the aims. according to locke, the employee satisfaction is pleasurable or positive emotional status as a result of the evaluation of their job and job experience. if psychological status were positive as a result of the experience the employee get in the work place, satisfaction would be a matter; if not, dissatisfaction. the employee satisfaction is an outcome of the perceptions that get regarding what they experience as similar as they get important in their own lives (gülakan, 2013. p. 12). according to pool and pool, there is no obligation to get a general provision on the whole job in order to talk about employee satisfaction, at the same time there could be emotional answers on different angels of the job. therefore, a person may not get satisfied enough while the one gets satisfied in some cases (bakan, 2011. p. 242). there are different categories based on the factors effecting the employee satisfaction in the literature. in herzberg’s classification system, it is discussed as personal features and environmental or corporate features by observing several factors to define the ones causing gratification and non-satisfaction. the most mentioned factors in personal features as the employee satisfaction are gender, age, marital status, educational background, the personality of the employee, wage and job precedence; environmental or corporate factors are status, appraisal, relations with colleagues, sense of achievement, the boringness of job, relations with management, working conditions and voting power. başaran (1982) orders the factors effecting the employee satisfaction as the nature of business, wage, promotion possibilities, appraisals, working conditions, audit system, relations with colleagues, the organization and management type, and employee personality (gülakan, 2013. p. 32). when examined different studies on the factors effecting the employee satisfaction in the literature, there are generally two factors mentioned. these factors are personal factors and corporate factors. in this study, the components effecting the employee satisfaction is going to be evaluated under two main factors. • personal factors: personal factors effecting the employee satisfaction are age, gender, marital status, educational background, educational level, professional status and seniority, personality, intelligence, socio-cultural environment and work experience (eroğluer, 2011. p. 124). • corporate factors: corporate factors effecting the employee satisfaction are the nature of business, wage and salary supplements, promotion opportunities, colleagues, security, leadership, management style, appraisal, audit, corporate setting (gülnar, 2007. p. 166-168; erdil et al., 2004. p. 19). an organization having employees who get satisfied with their jobs is mentioned as they have a healthy workforce (arklan and başdemir, 2010. p. 75). the employee satisfaction has influence on increasing in motivation, performance, success, corporate activities, productivity and life satisfaction. in addition to this, the employee satisfaction is one of the indicators showing that rapport and loyalty are important. the fact that employee satisfaction is low results with swinging the lead, slowdown, indiscipline, decrease in performance, unprofitableness, employee turnover rates (bozkır, 2014. p. 56-61; güney, 2012. p. 10). there are some researches showing in the results that the employees having high satisfaction are able to deal with stress and to overcome the hardships easily. besides, the satisfied employees are open to innovations and creativity, so they contribute to corporate changes and developments and displays organizational citizenship behavior. the highly satisfied ones contribute to the total quality management, so those factors make the competitive capacity increase among the organizations (bakan, 2011. p. 213-264). the employee satisfaction depends on many factors. at this point, the fact that the personal features of the employees are evaluated with corporate factors plays an important role. the employee satisfaction is directly proportionate to their motivation. motivational factors change according to personal features and corporate features. developing the corporate factors for the benefit of the employees, finding the factors effecting the employees’ satisfaction negatively, and correcting them makes a contribution to an increase in the employee satisfaction. 4. research 4.1. purposes and importance of research in our day, the employees want to be employed in an organization with a strong brand name. undoubtedly, there are some values presented under a strong name of an employer brand. knowing and strengthening these values and whether to provide employee satisfaction or not and determining at what level it is affected are among the subjects that should be evaluated meticulously. the aim of this study is to reveal the relation between employer brand components and employee satisfaction. 4.2. methodology in the literature there are many studies determining the components of an employer brand. employer brand international (2007), one of the studies on basic factors of employer brand components, revealed components providing employer brand: strategic aims, recruitment, communication, leadership, job process, performance, innovation, workplace environment, evaluation, social responsibility, training, leadership of ideas, perspective, customer relations, and those components are seen as not yalım and mızrak: a field study on the relationship between employer brand and employee satisfaction international review of management and marketing | vol 7 • issue 2 • 2017 98 affecting all the employees at the same level. michaels et al. (1998), pinkens (2008), hemsly (2008), swarop and agrawal (2009) stated in their studies about some components like sectoral attractiveness, product/service quality, location, corporate culture, challenging and strategic responsibilities to provide the employees (oğuz, 2012. p. 10). the academic studies concerning employee satisfaction dates back to 1930s. until now, important developments about the employee satisfaction have been recorded based on both application and theory. some questionnaires were started to be developed just after the end of 1960s, and minnesota job satisfaction survey in 1967 and job satisfaction index in 1969 are examples. at the beginning of 1980s, the relation between employee satisfaction and customer satisfaction was started to be studies (işık, 2014. p. 35). in this study, an index used in a master thesis titled “employer brans and its effect on attracting the talent” written by oğuz, 2012 was used in the development of questions on employer brand evaluation. while preparing the questions on employee satisfaction, “attitude scale on employee satisfaction survey” developed by vatansever (1994) and used by gülakan (2013) in a master thesis was used. 4.3. sample this study was carried out in a group company run in istanbul within arkas holding which has a strong employer brand. in this study, 150 questionnaire were distributed to the employees, 134 sent back and incorrect and missing forms were opted 102 form were analyzed. 4.4. limitations the fact that the employees did not want to fill in and felt nervous was the limitation of this study. the other limitation is that all the employees working connected to the holding company could not be reached. 4.5. hypotheses hypothesis 1 h0: there is not a directional relation between employer brand and employee satisfaction. ha: there is a directional relation between employer brand and employee satisfaction. hypothesis 2 h0: there is not a meaningful difference between the gender of participants and employee satisfaction. ha: there is a meaningful difference between the gender of participants and employee satisfaction. hypothesis 3 h0: there is not a meaningful difference between the ages of participants and employee satisfaction. ha: there is a meaningful difference between the ages of participants and employee satisfaction. hypothesis 4 h0: there is not a meaningful difference between the marital status of participants and employee satisfaction. ha: there is a meaningful difference between the marital status of participants and employee satisfaction. hypothesis 5 h0: there is not a meaningful difference between the educational level of participants and employee satisfaction. ha: there is a meaningful difference between the educational level of participants and employee satisfaction. hypothesis 6 h0: there is not a meaningful difference between the work experience of participants and employee satisfaction. ha: there is a meaningful difference between the work experience of participants and employee satisfaction. 4.6. findings and evaluation cronbach alpha (α) ratios, which was found on the reliability analysis of the scales used in the questionnaire, are given in the table 1. within this study, the reliability of the scales used for the employer brand (0.965) and the employee satisfaction (0.963) is high. 4.6.1. demographic features of participants demographic features of participants are given in table 2. according to the demographic features in table 2, 44.1% of the participants are female and 55.9% are male. when the age ranges examined, 9.8% of all are between 18 and 24, 46.1% between 25 and 34, 30.4% between 35 and 44, and 13.7% of all are 44 or more. considering their marital status, 48.0% of the participants are married, and 52.0% of all are single. according to their educational levels, the participants consist of 34.3% with high table 1: reliability analysis of used scales scales number of items cronbach alpha (α) employer brand 19 0.965 employee satisfaction 15 0.963 table 2: demographic features of participants features n 100% gender female 45 44.1 male 57 55.9 age 18-24 10 9.8 25-34 47 46.1 35-44 31 30.4 44 and more 14 13.7 marital status married 49 48.0 single 53 52.0 educational level high school 10 34.3 vocational school of higher education 49 48.0 undergraduate 47 21.0 graduate 8 7.8 work experience 1-3 years 26 25.5 4-6 years 40 39.2 7-9 years 16 15.7 10-12 years 9 8.8 12 years and more 11 10.8 yalım and mızrak: a field study on the relationship between employer brand and employee satisfaction international review of management and marketing | vol 7 • issue 2 • 201799 school diploma, 48.0% with vocational school diploma, 21.0% with undergraduate degree and 7.8% with graduate diploma. having looked at their professional work experience, 1-3 years’ experience consist of 25.5% of all the participants, 39.2% of all have 4-6 years’ experience, 15.7% of the participants have 7-9 years’ experience, 8.8% of all have 10-12 years’ experience, and 10.8% of all have work experience for 12 years or more. 4.6.2. percentage distribution on employer brand, arithmetic average and standard deviations table 3 shows the percentage distribution on employer brand, arithmetic average and standard deviations. when the arithmetic averages in table 3 examined, the first numbered one is “job security of the employer brand where i work for affect my decision on working” with 3.59, and “corporate reputation/image of the employer brand where i work for affect my decision on working” is in the second one with 3.53, and the third one is “universal job opportunities of the employer brand where i work for affect my decision on working” with 3.43. on the employer brand “flexible working system of the employer brand where i work for affect my decision on working” statement has the lowest average with 2.84. 4.6.3. percentage distribution on employee satisfaction, arithmetic average and standard deviations when the arithmetic averages in table 4 examined, “i am happy with the size of the place i work at, suitability for aims and its hygiene” is at the top with 3.31; the average of “we have social experiences with my colleagues” is 3.19 in the second; “trainings are carried out to provide me professional and personal development” statement is on the third with 3.16. under this dimension, “considering my education, position and the works i deal with, i believe that i get a fair salary” is at the lowest level with 2.74. 4.6.4. correlation analysis without considering that variables are dependent or independent, correlation means the statistical method used for defining the level of relations and their directions. p value is to be more than 0.05 in order to approve h0 hypothesis. when h0 hypothesis is approved, there is no directional relation between the variables; when h0 hypothesis is denied (p < 0.05), it is decided that there is a directional relation between two variables. pearson correlation coefficient is valued between -1 and +1 (−1 ≤ r ≤ +1). r coefficient gives the direction and strength of the relation. if r coefficient had– in values, the relation is inversely proportional; if not (namely, +), the relation is directly proportional (durmuş, 2013. p. 143). when the correlation between employer brand and employee satisfaction, hypothesis 1 h0 is denied with r = 679 and significant 0.000 < 0.05. accordingly, there is a positive directional relation between these two variables. 4.6.5. regression analysis regression analysis tries to define how a variable (dependent) is explained by the other variable(s) (independent) (durmuş, 2013. p. 143). y = a + b*x here in; y = dependent variable x = independent variable a = stability coefficient b = independent variable coefficient was defined. employee satisfaction = 0.818 + 0.691* employer brand as a result of regression analysis, it is seen that employer brand can explain 46.1% of employee satisfaction. employer brand meaningfully affect (significant 0.001 < 0.005) employee satisfaction. the effect of employer brand is 0.691 at the employee level. when the components of employer brand is increased one unit, employee satisfaction rate will go up with 0.691. in the regression analysis carried out with the aim of the level of effect on employee satisfaction, it is determined that employer brand affects employee satisfaction (β = 0.818) in a positive way. 4.6.6. t-test and analysis of variance (anova) results t-test is a statistical method to analyze whether two independent groups’ averages are different from each other or not. one way anova is used for analyzing more than two independent groups regarding whether there are any difference or not (durmuş, 2013. p.143). gender variable; when t test results examined, there is not a meaningful difference (p = 0.285 >0.05) for employee satisfaction according to their genders. therefore, hypothesis 2 h0 is accepted. marital status variable; when t-test results examined, there is not a meaningful difference (p = 0.523 > 0.05) for employee satisfaction according to their marital status. therefore, hypothesis 4 h0 is accepted. when anova test results are examined based on the age variables, there is not a meaningful difference (p = 0.185 > 0.05) for employee satisfaction according to their ages. therefore, hypothesis 3 h0 is accepted. when anova test results are examined based on the educational level variables, there is not a meaningful difference (p = 0.054 > 0.05) for employee satisfaction according to their ages. therefore, hypothesis 5 h0 is accepted. when anova test results are examined based on the work experience, there is not a meaningful difference (p = 0.253 > 0.05) for employee satisfaction according to their work experience. therefore, hypothesis 6 h0 is accepted. 5. conclusion and recommendations as a result of this research, a positive directed meaningful relation between the employer brand and the employee satisfaction was yalım and mızrak: a field study on the relationship between employer brand and employee satisfaction international review of management and marketing | vol 7 • issue 2 • 2017 100 table 3: percentage distribution on employer brand, arithmetic average and standard deviations totally disagree (%) disagree (%) not sure (%) agree (%) totally agree (%) arithmetic average (%) sd (%) statements on employer brand 1. corporate culture and values of the employer brand where i work for affect my decision on working 4.9 24.5 16.7 48.0 5.9 3.25 1.05 2. wages and vested benefits of the employer brand where i work for affect my decision on working 5.9 28.4 16.7 41.2 7.8 3.16 1.10 3. training and professional development facilities of the employer brand where i work for affect my decision on working 5.9 28.4 21.6 38.2 5.9 3.09 1.06 4. the fact that the employer brand is innovative affect my decision on working 5.9 27.5 28.4 34.3 3.9 3.02 1.00 5. giving challenging responsibilities of the employer brand where i work for affect my decision on working 5.9 25.5 34.3 33.3 1.0 2.98 0.93 6. the communication between executives and employees of the employer brand where i work for affect my decision on working 4.9 20.6 27.5 42.2 4.9 3.21 0.99 7. appraisal system of the employer brand where i work for affect my decision on working 8.8 19.6 42.2 26.5 2.9 2.95 0.96 8. leadership of the employer brand where i work for affect my decision on working 6.9 23.5 34.3 30.4 4.9 3.02 1.00 9. career opportunities of the employer brand where i work for affect my decision on working 7.8 25.5 33.3 28.4 4.9 2.97 1.02 10. job security of the employer brand where i work for affect my decision on working 4.9 9.8 23.5 44.1 17.6 3.59 1.04 11. corporate reputation/image of the employer brand where i work for affect my decision on working 4.9 9.8 24.5 48.0 12.7 3.53 1.00 12. providing time for social life of the employer brand where i work for affect my decision on working 6.9 13.7 23.5 43.1 12.7 3.41 1.09 13. universal job opportunities of the employer brand where i work for affect my decision on working 5.9 15.7 20.6 45.1 12.7 3.43 1.08 14. social responsibility activities of the employer brand where i work for affect my decision on working 5.9 19.6 25.5 41.2 7.8 3.25 1.05 15. sectoral attractiveness of the employer brand where i work for affect my decision on working 7.8 14.7 24.5 40.2 12.7 3.35 1.12 16. product/service quality of the employer brand where i work for affect my decision on working 5.9 15.7 25.5 43.1 9.8 3.35 1.04 17. location of the employer brand where i work for affect my decision on working 5.9 14.7 24.5 44.1 10.8 3.39 1.05 18. competitive position of the employer brand where i work for affect my decision on working 4.9 15.7 29.4 41.2 8.8 3.33 1.00 19. flexible working system of the employer brand where i work for affect my decision on working 9.8 36.3 17.6 32.4 3.9 2.84 1.10 sd: standard deviation yalım and mızrak: a field study on the relationship between employer brand and employee satisfaction international review of management and marketing | vol 7 • issue 2 • 2017101 found. this result is explained like this: the better the employer brand components are, the more the employee satisfaction is. those employer brand components shaping the employer brand are different advantages presented the employees by the employer. these advantages consist of some components such as corporate culture and their values, wages and appraisal policies, trainings and career development facilities, universal job opportunities, corporate innovative approach and values given to the employees, the organization’s location, its field of activity, product, service quality, its name, its reputation. therefore, to develop these components leads for example by placing and practicing some components to strength functional and symbolic benefits giving pleasure to the employees in corporate cultural values, by placing salary policies, by structuring career opportunities at a universal level, by structuring work process for increasing corporate reputation, product and services. at the same time, a strong employer brand gives importance to its employees’ social development, puts some policies into human resources policies to make them have a qualified and joyful time except the working hours. the social facilities of the employer brand are another determinant component for both current and potential employees. in addition to them, the image of the employer brand also have importance for current and potential employees. a positive employer brand consists of a strong social responsibility conscious. nowadays, not only the consumers but also employees follow through the firm’s social responsibility activities, they accept that all the activities contributing to firm reputation and image and so they are proud of working at such places. at this point, employer brand communication is not just important for consumer, but also for table 5: hypothesis 1 correlation employer brand satisfaction employer brand pearson correlation 1 0.679** significant (two-tailed) 0.000 n 102 102 **correlation is significant at the 0.01 level (2-tailed). table 4: percentage distribution on employee satisfaction, arithmetic average and standard deviations totally disagree (%) disagree (%) not sure (%) agree (%) totally agree (%) arithmetic average (%) sd (%) statements on employee satisfaction 1. i feel happy and proud of having a work life here 3.9 23.5 31.4 34.3 6.9 3.16 0.99 2. job definition and authority distribution is suitable for organizational aims 4.9 26.5 32.4 32.4 3.9 3.03 0.97 3. trainings are carried out to provide me professional and personal development 6.9 22.5 24.5 39.2 6.9 3.16 1.07 4. my opinions are taken in the decision process of my unit 7.8 22.5 28.4 35.3 5.9 3.08 1.06 5. i am happy with the size of the place i work at, suitability for aims and its hygiene 6.9 17.6 24.5 39.2 11.8 3.31 1.10 6. i do not experience lack of communication between personnel and managers 7.8 23.5 26.5 34.3 7.8 3.10 1.09 7. the works are balanced or fair distributed 9.8 28.4 35.3 22.5 3.9 2.82 1.01 8. i can display my talents and abilities at work 6.9 26.5 26.5 34.3 5.9 3.05 1.06 9. the works i deal with provides me with prestige in addition to new professional knowledge and abilities 8.8 21.6 32.4 34.3 2.9 3.00 1.01 10. considering my education, position and the works i deal with, i believe that i get a fair salary 14.7 23.5 36.3 23.5 2.0 2.74 1.04 11. i feel that my managers are ready to help me in the works i do 8.8 21.6 34.3 33.3 2.0 2.98 0.99 12. when i have a question, want or suggestion, i can always meet my managers 6.9 19.6 36.3 31.4 5.9 3.09 1.00 13. in the organization i work for, the employees have mutual understanding, respect and rapport 8.8 20.6 34.3 34.3 2.0 3.00 0.99 14. we have social experiences with my colleagues 3.9 18.6 34.3 40.2 2.9 3.19 0.91 15. i appreciate personnel policies towards its employees in this organization 8.8 23.5 41.2 24.5 2.0 2.87 0.95 yalım and mızrak: a field study on the relationship between employer brand and employee satisfaction international review of management and marketing | vol 7 • issue 2 • 2017 102 circumstances a strong brand creates satisfaction in the eye of all the employees. references aggerholm h.k, andersen s.e, thomson c. (2011), “conceptualising employer branding in sustainable organisations”, corporate communications: an international journal vol. 16 no. 2,105-123. aktuğlu, i.k. (2011), marka yönetimi, güçlü ve başarılı markalar i̇çin temel i̇lkeler. i̇stanbul: i̇letişim yayıncılık. arklan, ü., başdemir, e. (2010), kurum i̇çi halkla i̇lişkiler. i̇stanbul: literatür yayınları. backhaus, k and surinder t, (2004), “conceptualizing and researching employer branding”, career development international, vol 9, no 5, 501-517. bakan, i̇. (2011), örgütsel bağlılık-kavram, kuram, sebep ve sonuçlar. ankara: gazi kitabevi. barrow, s., mosley, r. (2007), the employer brand: bringing the best of brand management to people at work. book reviews, journal of brand management, 15, 150-151. baş, t. (2011), i̇şveren markası, yüksek nitelikli çalışanları çekmenin ve elde tutmanın anahtarı. i̇stanbul: optimist yayınları. başaran i̇.e (1991), örgütsel davranış i̇nsanın üretim gücü, gül yayınevi: ankara. current and potential employees. therefore, at what level social responsibility is essential at the basis of a strong employer brand positioning. in the research carried out, the components making the employees satisfied are divided into two, such as personal and corporate. herein, the employer brand is an important corporate factor. a strong employer brand component consists of the relation and communication of manager-employee providing employee satisfaction, career, wage policies, authority distribution, job security, social components, firm reputation, and its name the ones are proud of. accordingly, the relation between the employer brand and the employee satisfaction, and the employer brand affects the employee satisfaction as a result of the research findings. in this research, there is not a meaningful difference between demographic factors and employee satisfaction. in the table 7: t-test results of employee satisfaction according to their gender demographic variable dependent variable groups t df significant gender employee satisfaction female 1.076 100 0.285 male table 8: t-test results of employee satisfaction according to marital status demographic variable dependent variable groups t df significant marital status employee satisfaction married 0.641 100 0.523 single table 9: anova test results of employee satisfaction according to age variables variables variance source sum of squares df average of squares f significant employee satisfaction intergroup 3.314 3 1.105 1.639 0.185 intragroup 66.040 98 674 total 69.354 101 anova: analysis of variance table 10: anova test results of employee satisfaction according to educational level variables variables variance source sum of squares df average of squares f significant employee satisfaction intergroup 5.172 3 1.724 2.632 0.054 intragroup 64.182 98 0.655 total 69.354 101 anova: analysis of variance table 11: anova test results of employee satisfaction according to work experience variables variables variance source sum of squares df average of squares f significant employee satisfaction intergroup 3.690 4 0.922 1.363 0.253 intragroup 65.664 97 0.677 total 69.354 101 anova: analysis of variance table 6: regression analysis results model summaryb model r r2 adjusted r2 standard error of estimate 1 0.679a 0.461 0.456 0.61129 model anovaa model sum of squares df mean square f significant regression 31.987 1 31.987 85.601 0.000b residual 37.367 100 0.374 total 69.354 101 model unstandardized coefficients standardized coefficients t significant β standard error beta 1 constant 0.818 0.248 3.298 0.001 employer brand 0.691 0.075 0.679 9.252 0.000 a,b, as a result of regression analysis, it is seen that employer brand can explain 46.1% of employee satisfaction, model is meaningful with 0.000 significant value, anova: analysis of variance yalım and mızrak: a field study on the relationship between employer brand and employee satisfaction international review of management and marketing | vol 7 • issue 2 • 2017103 berthon, p., ewing, m., hah, l.l. (2005), captivating company: dimensions of attractiveness in employer branding. international journal of advertising, 24(2), 151-172. bozkır, s. (2014), dönüşümcü liderlik ile i̇ş tatmini arasındaki i̇lişkinin i̇ncelenmesi: kamu ve özel sektör çalışanlarına yönelik bir araştırmayüksek lisans tezi. i̇stanbul: yıldız teknik üniversitesi sosyal bilimler enstitüsü. bozkurt, i̇. (2004), i̇letişim odaklı pazarlama. i̇stanbul: mediacat yayınları. davies g. (2008), “employer branding and its influence on managers”, european journal of marketing, vol 42, no 5/6, 667-681. durmuş, b. (2013), sosyal bilimlerde spss’le veri analizi. i̇stanbul: beta basım. erdil, o., keskin, h., i̇mamoğlu, s.z., erat, s. (2004), yönetim tarzi ve çalişma koşullari, arkadaşlik ortami ve takdir edilme duygusu ile iş tatmini arasindaki ilişkiler: tekstil sektöründe bir uygulama. doğuş üniversitesi dergisi, 5(1), 17-26. erdil, s., uzun, y. (2010), marka olmak. i̇stanbul: beta basım yayın. eroğluer, k. (2011), örgütsel iletişim ile iş tatmini unsurlari arasindaki ilişki: kuramsal bir inceleme. ege akademik bakış, 11(1), 121-136. ewing, m., bussy, n., berthon, p. (2002), employment branding in the knowledge economy. internatıonal journal of advertısıng, 21(1), 3-21. gülakan, g. (2013), kamu hizmet sektöründe çalışan memnuniyeti: yalova örneği, yüksek lisans tezi. yalova: yalova üniversitesi sosyal bilimler enstitüsü. foster c, khanyapuss p, ranis c, (2010), “exploring the relationship between corporate internal and employer branding”, journal of products and brand management, 19/6, 2010, 401-409. gülnar, b. (2007), örgütlerde i̇letişim ve i̇ş doyumu. i̇stanbul: literatür yayıncılık. p166-168. güney, s. (2012), örgütsel davranış. i̇stanbul: nobel yayın. hemsley, s. (2008), competing with the big boys for talent, special report: smaller companies competing big ones, 2. hollis, n. (2011), küresel marka. i̇stanbul: brandage yayınları. işık, g.ü. (2014), sağlık hizmetlerinde kalite ve çalışan memnuniyeti: diyarbakır kadın doğum ve çocuk hastalıkları hastanesi örneği”, yüksek lisans tezi. i̇stanbul: beykent üniversitesi sosyal bilimler enstitüsü. kara, m.n. (2013), i̇şveren markası ile örgütsel bağlılık arasındaki i̇lişki, bilişim sektöründe bir uygulama, yüksek lisans tezi. bursa: uludağ üniversitesi sosyal bilimler enstitüsü. keller, l. (2003), strategic brand management. upper saddle river, nj: prentice hall. kotler, p. (2011), a’dan z’ye pazarlama, çev: aslı kalem bakkal. i̇stanbul: medicat yayınları. king c and grace d (2010), “building and measuring employee based brand equity”, european journal of marketing, vol 44, no 7/8, 938-971. moroko, l., uncles, m. (2008), characteristics of successful employer brands. journal of brand management, 16, 160-175. mosley, r. (2007), customer experience, organizational culture and the employer brand. journal of brand management, 15, 123-134. mucuk, i̇. 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(2014), reconsidering the dimensionality and measurement of employer brand in the chinese context. social behavior and personality, 42(6), 933-948. http://tdk.gov.tr, retrieved: 04.02.2017. http: www.employerbrandinginternational.com: 09.02.2017 . international review of management and marketing | vol 6 • special issue (s8) • 2016306 international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2016, 6(s8) 306-309. special issue for "international conference on applied science and technology (icast) 2016, malaysia" impact of islamic value as strength of human resources management practice on the organization commitment; conceptual framework zienab i. balla1*, rosima alias2, abdul aziz mat isa3, omar s. zaroog4, yousif osman5 1department of management, universiti tenaga nasional, malaysia, 2department of management, universiti tenaga nasional, malaysia, 3department of language, universiti tenaga nasional, malaysia, 4department of mechanical engineering, universiti tenaga nasional, malaysia, 5department of economics, king faisal university, saudi arabia. *email: znbmy17@gmail.com abstract the aim of this paper focuses on the implementation of islamic human resources management (hrm) practices in organizations to boost the knowledge, performance, trust, commitment, and loyalty of employees to work smoothly with the group supervisor. in addition, these practices aid management to improve employee performance and commitment to establish a long-term association with the organization. this association greatly affects organizational outcomes for both employees and the organization to achieve their goals. islamic hrm practices are based on islamic principles and include various processes such as recruitment and selection, training and development, and performance appraisal. the study come out with a framework for the impact of islamic values as strength of human resource management practice on the organization commitment. keywords: human resourse, islamic value, commitment jel classification: m10 1. introduction there are two issues that interconnect islam and the organizational management standards. first is the description of decision-making styles in islam that stresses on the principle of consultation (shura), and islamic core values such as the principles of trust (al-amanah), honesty (al-side), justice, team work and cooperation (alta’waan), fairness in dealing with employees (al-adl), and perfection/excellence (al-ikhlas). second is the stretching gap between the reality of the workplaces in islamic countries and the normative islamic core values (abuznaid, 2009). with the alliance of thoughts of rice (1999) and bashir (1998), three basic values of the khilafah, tawheed and justice were provided that resulted in generally applicable business practices. they also added that islam is primarily based on three key principles that include the caliphate (khilafah), monotheism (tawheed) and the justice (al-adl), which form the foundation for destination (maqasyid) and strategy of islamic economics. monotheism is the keystone of islamic beliefs. it states that everything created has a rationale and humans are the caliph of god on earth, and have been blessed with all the accessories. the researcher defined piety (taqwa) as the consequence of man’s deep faith in allah and fear of him, fear of his punishment, his wrath, and hope of his mercy and his reward. the most important psychological principles include brotherhood, mercy, unselfishness, and courage. in islam, brotherhood refers to the psychological bond that infuses the sense of love for all who are related with the individual through their bonds of faith in islam. mercy in islam is not restricted to muslims only, but encompasses forgiveness to all. unselfishness is the psychological attribute that persuades an individual to prefer others over oneself. hence, it is no surprise that the qur’an commands forgiveness in many verses of the book of allah almighty. courage: the qur’an says that allah praises those who fear none but allah. islam refers to ethics that is an offshoot of iman (a muslim belief system), and it arises from the islamic interpretation of human balla, et al.: impact of islamic value as strength of human resources management practice on the organization commitment; conceptual framework international review of management and marketing | vol 6 • special issue (s8) • 2016 307 life. ethics (akhlak) is a set of islamic moral values which have been advocated profoundly in the quran and fulfilled by prophet muhammad (pbuh) during his lifetime (wan-hamat et al., 2013). principally, there are two kinds of akhlak, good (mahmudah) and bad (mazmumah). islam lays emphasis on the necessity and importance of practicing good akhlak (mahmudah) in all areas of human life and regards it as one of the purposes of human life. his messenger prophet muhammad (pbuh) said: “i have been sent only for the purpose of perfecting the qualities of good akhlak” (imam malik). the term most closely associated with ethics in the quran is khuluq (beekun, 1997). allah says in the quran: “and thou (standest) on an exalted standard of character” (68:4). to refer to the idea of goodness, the quran also uses an array of terms, such as birr (righteousness), khayr (goodness), haqq (truth and right), qist (equity), ma’ruf (known and approved), “adl” (equilibrium and justice), and “taqwa” (piety). impious actions are termed as sayyiat and pious actions are termed as salihat. khan et al. (2015) explained that the values and principles of islamic ethics in human resource management includes seven principles of brotherhood and righteousness (al ukhuwah and al-ihsan), the fulfillment of the contract (ifa al’ aqd), justice and fairness (al ’adl), reasonable compensation (al ujroh), the right humans (haquq al ’ibad), trust and honesty (al amanah and al ikhlas), and cooperation (al ta’waan). it was reasoned by nor-azzah and zaidi (2011) that as god owns all, riches are provided to men to be apportioned correctly. men only act as executors and overseers who manage its abundance. thus, it is the responsibility of all muslims to arrange for the sensible management of their riches according to islamic values. and yet, avarice and a focus on wealth can result in the overriding of the halal and haram tenets. thus, unsupervised fortune results in dissipation, fraudulent behaviours, or the immobilisation of those very riches. concentrating on the facets of worth will meaningfully ensure that riches are derived from a halal or rightful source, are employed in the manner of allah, and are methodically arranged, beneficially exploited and justly supervised to provide for the future and hereafter. truly, the tenets of gratefulness, responsibility, wisdom, fairness, diligence, fruitfulness, and providence are to be valued by all muslims. these will help to direct the arrangement, expenditure and supervision of riches in wisdom, towards ensuring good fortune on this earthly world and in the hereafter (morteza, 2012). mcgunnigle and jameson (2000) emphasised that many researchers refer to organisational commitment as one of the most dominant themes of human resources management (hrm) literature. in the common hrm literature, selection of talent or recruitment is often considered as important in attaining employee commitment. in much of the hrm literature, employee training and development are also closely connected with employee commitment. guest (2002) affirmed that high levels of employee commitment are found to have close relationships with the application of “appropriate” hrm practices. as stated by chew and sharma (2005) and joiner and bakalis (2006) managers are relentlessly trying to find ways to improve the level of employees’ organisational commitment because it is linked with several desirable outcomes, such as reduced turnover, reduced absenteeism, increased job performance and improved firm performance. since islam believes that work is an important element of man’s success in his life, it not only motivates individuals to work but also encourages them to pursue perfection and quality in all that they do. hence, according to islamic values, employees must work with their full capability and total dedication and commitment to attain success and distinction for themselves and for the society, and more notably for the life in the hereafter (yousef, 2001). 1.1. conceptual framework the objective of this study is to build a model that exhibits the relationship between the islamic hrm practices and their effect on employees’ organisational commitment. beginning with talent selection and advancing to career development in islamic organisations, the islamic hrm values must be embedded in all hrm activities (nik-mutasim et al., 2013). nevertheless, the abstract structure that originated from the previous literature will be planned based on this study where the islamic values refer to the execution of basic hrm functions such as selection, recruitment, training, performance appraisal, and development, which are in accordance with the guidelines of the qur’an and hadith (the sayings of prophet muhammad [peace be upon him]). religious values create a framework for the decision-makers to make appropriate choices, hence, muslims are driven by their faith, known as iman, that leads them to adopt islamic practices (ali and gibbs, 1998). islam believes that iman decides an individual’s conscience and is the main motivating element for any work. it is considered that all business decisions must be led by iman, which in reality implies abiding by the sharia law, and participating in the things which are permitted (halal), while avoiding those that are prohibited (haram) (alawneh, 1998). the teachings of islam are clear according to khaliq (2008). islamic knowledge sources clearly describe the nature of human behaviour. the holy quran offers elaborate references to what is right and wrong behaviour for an individual. embedding the idea of right behavior and its importance in stakeholder management can go a long way in attaining excellence in management. islam refers to the activity of recruitment as a way of god that is of immense trust and responsibility. according to islamic values, the person in charge of recruitment must be pious and just. the second principle stresses that an individual be selected based on merit and his competency. an individual must not be selected on the basis of wealth, blood relationship, friendship, age, race, and political power or alike. the third principle is honesty. honesty is of great value as it ascertains that the right decisions are made. the fourth is that islam forbids assignment of work that will surpass the individual’s capability. this principle ensures that no job is assigned to an individual, which he/she might not be able to perform owing to his/her inadequacies. this saves the individual and the organisation from some avoidable loss or harm. hrm training involves nurturing attributes in human resources, which would make them more productive and motivate them to balla, et al.: impact of islamic value as strength of human resources management practice on the organization commitment; conceptual framework international review of management and marketing | vol 6 • special issue (s8) • 2016308 contribute more towards achieving the organisational objectives. as per al-qur’ān, a man’s fundamental qualification for being the representative of god on earth is to have the knowledge. as the almighty said, (2:30-33): “when the angels questioned adam’s suitability for representation, god cited adam’s knowledge to convince them”. in islam, the performance appraisal is based on normative directives and the practice of the prophet muhammad (pbuh) as well as his four caliphs. during the initial years of the muslim state, the compensation was centred on five grounds. first foundation is that employment is a contract. fulfilling the contract is the responsibility of the employer as well as the employee. the qur’an not just asks believers to conform to conditions but also to evade any effort to go around the contract (7:85), “nor withhold from the people the things that are their due.” second, islam stresses that workers should be offered sufficient and rational wages for their efforts, considering the volume and quality of work, their necessities and requirements, and the general economic situation of the society (ali, 2005; junaidah, 2008). furthermore, compensation should be pre-determined and wages should be paid as soon as the work is accomplished. prophet (pbuh) said; “whoever believes in god and the day of judgment, should not employ a worker, until he or she knows what he or she is going to receive.” compensation can in monetary or non-monetary form. fifth, wages and compensations should be preceded by advance agreement and raised as per circumstances. ahmad (1995) mentioned that islam prohibits any abuse or embezzlement of an employer’s property by his personnel, who are supposed to receive only the mutually agreed compensation. according to the qur’an, wages should be determined by mutual discussion and agreement (qur’an 28:26-28). islam firmly forbids bullying and forced labor. as described by abu huraira, the prophet (peace be upon him) has said; “god says that i will act as a plaintiff, on the day of judgment against the person who engages some worker on work and takes full work from him but does not give him (full) wages” (sahih bukhari, volume 3:34:430). islam also condemns slavery and recommends appropriate respect for the work and employment. as described by al-miqdam, the prophet (pbuh) has said, “nobody has ever eaten a better meal than that which one has earned by working with one’s own hands” (sahih bukhari, volume 3:34:286). 2. discussion earlier literature has confirmed the existence of a significant relationship between islamic value and hrm practices at any organization. a conceptual framework for the impact of islamic value as the strength of human resource practice on organization commitment was formulated. figure 1 is the finalized conceptual framework that is being derived by applying numerous literatures. islamic values in figure 1 includes moral (aklak), trust (amana), justice, piety, knowledge, personal growth, skill, vicegerent, justice loyalty (adl), fairness, responsibility. moreover, islamic value in figure 1 are not intended to be rigid values but is rather meant to offer a guidance for discussion and further research. the link between various study variables is analyzed using a quantitative and qualitative approach. the quantitative data offer statistical information and quantitative statistical analysis helps to determine attitudes (creswell, 2002). in this study, a mixed method will be used to enhance the research; the quantitative approach was used as the core method and the qualitative approach was used to investigate and determine the link between the variables (islamic work value, islamic hrm practices, and organizational commitment). 3. conclusion despite the fact that human resource management practice have been implemented in numerous organization all over the world for more than five decade, there has so far been agreement on the impact of the religious on human resource practice. islam as one of the religious is call for the good human behavior and dealing in a matter of islamic value such as moral (aklak), trust (amana), justice, piety, knowledge, personal growth, skill, vicegerent, justice loyalty (adl), fairness, responsibility. understanding the human resource practice with implementing of islamic value helps the organization to increase the commitment and plan for long future. the proposed conceptual framework showed and confirmed a simplified model for implementing the islamic value to strength the human resource practice and the impact of this strength in the organization commitment. references abuznaid, s.a. (2009), business ethics in islam: the glaring gap in practice. international journal of islamic and middle eastern finance and management, 2(4), 278-288. ahmad, m. (1995), business ethics in islam. islamabad: international institute of islamic thought. alawneh, s.f. (1998), human motivation: an islamic perspective. american journal of islamic social science, 15(4), 19-39. ali, a.j. (2005), islamic perspective on management and organization. london: edward elgar publishing limited. ali, a.j., gibbs, m. (1998), foundations of business ethics in contemporary religious thought: the ten commandment perspective. international journal of social economics, 10(25), 1552-1564. bashir, a.h. 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(2002), human resource management, corporate performance, and employee wellbeing: building the worker into hrm. the journal of industrial relations, 44(3), 335-358. joiner, t., bakalis, s. (2006), the antecedents of organizational commitment: the case of australian casual academics. international journal of educational management, 20(6), 439-452. junaidah, h. (2008), the quran-based human resource management and its effects on organizational justice, job satisfaction and turnover intention. the journal of international management studies, 3(2), 148-159. khaliq, a. (2008), challenges and practices in human resource management of the muslim world. the journal of human resource and adult learning, 4(2), 34-42. khan, k., abbas, m., gul, a., raja, u. (2015), organization justice and job outcomes; moderating role of islamic work ethic. journal of business ethics, 2(126), 235-246. mcgunnigle, p., jameson, s. 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(2001), islamic work ethic: a moderator between organizational commitment and job satisfaction in a cross-cultural context. personnel review, 30(2), 152-169. tx_1~at/tx_2~at international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2020, 10(4), 170-176. international review of management and marketing | vol 10 • issue 4 • 2020170 investigating the return of goods in supply chain fezzeh abanavaz1*, morteza khakzar bafruei2 1department of industrial engineering, pnu, shemiranat branch, tehran, iran, 2faculty of engineering, university of science and culture, technology development institute (acecr), tehran, iran. *email: fezzabanavaz@gmail.com received: 01 july 2019 accepted: 20 april 2020 doi: https://doi.org/10.32479/irmm.8313 abstract in the supply chain, the return of goods is of great importance. for different reasons, the flow of materials and goods is inevitable in the opposite direction of the chain. therefore, dealing with the subject of the reverse logistics network and management and its leadership is effective and necessary. in this study, a two-level supply chain including suppliers and several retailers are studies with the possibility of return of goods in a problem of the newsvendor. first, to construct the initial model, the library method is used and then using mathematical methods to model determine the optimum order value and optimal supplier price and maximize the supply chain profit in a single-period model with a random demand market. it is also considering a case where the exchange of goods is justified in terms of a dearth of surplus-surplus and retailers unite. keywords: supply chain, pricing chain and order value, return of goods, problem of the newsvendor jel classification: c02 1. introduction in recent years, the return management has received a lot of attention. producers have begun a uniform reversal in the logistics management of their organizations. in reverse flow, the client or other companies may return products in the distribution chain. retailers may return products for a variety of reasons. for example, (1) damage to transport, (2) of the cargo history code has expired, (3) the products that the sales season ended, (4) the retail stock must be very high, (5) replacement of another product instead of that product (li et al., 2012). the reverse logistics is term and general term that include all operations related to re-use of cargo and materials, which management can lead to improved distribution and collection of goods and materials. in general, reverse logistics can be defined as “accurate, timely and accrued transfer of materials, items and utilizable goods from the point and last consumer through the supply chain to the appropriate unit of interest.” in that, reverse logistics is the process of moving and transfer for goods and products that are capability returning in the supply chain (naghaadeh, 2012). the aim of producer of the return policy is to increase its interest by raising the amount of the retailer’s order so that the supply chain efficiency increases in a direction that focuses the supply chain (chen, 2011). in this study, the optimum order and optimal value of the suppler in supply chain, including one manufacture and several suppliers and the possibility of return of goods and discount costs are investigate. first, to construct the initial model, the library method is used and then using mathematical methods to model construction. it also deal with how to maximize the supply chain profit in a singleperiod model with a random demand market and case where the exchange of goods between retailers is justified in terms of a dearth of surplus and retailers unite together. 2. literature review numerous studies have been propose in terms of optimal ordering and optimal price and problem of the newsvendor and the supply chain coordination, where some are refereed too. sana (2013) examines the issue of channel co-ordination in which the manufacturer and retailer is faced with random demand and is this journal is licensed under a creative commons attribution 4.0 international license abanavaz and bafruei: investigating the return of goods in supply chain international review of management and marketing | vol 10 • issue 4 • 2020 171 sensitive to advertising efforts. he shows that in the newsvendor setting, the return policy, the partnership contracts for advertising efforts and discount at the wholesale price offered by the producer are able to put the supply chain members into a line. chen (2011) explores the discounted wholesale price associated with the return policy of problem of the newsvendor, a vendor of a supplier and a retailer, where a supplier and a retail retailer is a follower. wu (2013) investigates the impact of buying policy on retail prices, order value and wholesale price in a supplier-retail monopoly chain using a paper model. chen and bell (2011) provide a mechanism that makes perfect supply chain coordination, the motivation of their research is that there is a return policy developed between retailers and manufacturers, while two prices return, one return from the customer to the retailer and the order value at the same time. they demonstrate that the structure of the right type of agreement facilities the coordination of supply chain and leads to an increase. aghaei and zandi (2012) examined a two-layered supply chain with the possibility to return the product. this supply chain consists of two stages, the return of return products and the storage system of open products. this supply chain becomes a model by a line system of m/g/1, using the geometric matrix method. they examine, analyze and minimize the cost of the inventory system and maximize returns from the production open process by determining the optimal value of the maximum inventory capacity and the value of the acceptance decision. chen et al. (2013) examined optimal order and optimal pricing policy in both the intensive supply chain channel, in both cases, the amount of new order and pricing and product discount that their sales season look at is sold in a market whose demand is accidental and the two (new and return) products are simultaneously sold in this market. deng (2012) studied the purchase return contract in the supply chain system, which consists of a manufacturer and an opposing retailer and the shopping return classified into categories. a credit for all commodity and credit goods for a part of the returned goods. they show that when the retailer is against is against losses, the supply chain able to achieve harmony. pasternack (1985) developed a single – period hierarchical model considering pricing decisions in the face of the manufacturer to try to test possible prices and return policy. this model shows that a policy in which the manufacturer provides full guarantees for returning goods from the seller is a way of coordination. padmanabhan and png (1997) studied the effect of two factors of competition and the uncertainly of demand on the manufacturer’s decision to reject or accept of returns. the producer benefited from the back policy when low production costs and low swing demand were low. bose and anand (2007) analyzed the return contract with incremental costs along with shared agreements between manufacturer and supplier in the coordinated chain. they introduced the motion to determine the independent price in the return contract with the use of pareto effect. 2.1. notation d = the retailer expected demand that is categorical. ei = probable demand of the retailer. xi = total retail demand that is probable. xi = d + ei z = the reserve level of the retailer’s confidence level mi = z – ei (excess scale) (m ≥0) ki = i – z (deficiency) (k ≥ 0) p= retail prices c = cost of supplying goods to the producer g = the cost incurred by the retailer if there is a shortage of goods (cost of shortage). tpr = the average net profit function of retailer tpm = the average producer profit tpi = the average of supply chain profit w(rd) = the cost of discounted of producer v = the return of goods cost from retailer to producer 1-3 decision variables q = the value of every retailer’s order q = d + z w = sales price of producer q° = the amount of optimal retailer order w° = optimal cleaning price 3. problem definition in this study, problem of newsvendor has been investigate in the supply chain, which consist of a manufacturer and two retailers, in which the leader and retailers are follower. the producer, as a leader, put the terms of the contract in the form of “take this or leave its” to the retailers. the retailers are supposed to accept the contract if they make their profits positive and the price of selling products to retailers (w) exceeds the retail price (p). the problem of newsvendor defined to find optimal order value for singleperiod sales and products. the products of newsvendor (such as ge’s flash drivers, medicare, personal computers, etc.) are marked as quarterly or mode products. the short period of these products will result in the value of non-zero relinquishing at the end of the season, which makes the contribution and coordination of the supply chain in particular. therefore, the unsold products are assume to have no relinquishing value at the end of the sales season and retailers face the potential demand(x) that is defined in the two possible demand (ε) categories and the excepted and expected demand(d): x = d + ε the contract does not provide a supply chain without return and discounts. therefore, in order to achieve supply chain coordination, the return contract and discount can be considered. the reason that the price producer considers the abanavaz and bafruei: investigating the return of goods in supply chain international review of management and marketing | vol 10 • issue 4 • 2020172 discounted price is that when the supplier price increase and is close to one, the supplier profits compared to the price change while the retailer’s net profit is sensitive to the relative change in the producer price. thus, the producer proposes a discount contract to encourage greater ordering of products by the retailer, to promote the retailer’s loyalty and maintain a long-term relationship (krishnan, et al., 2004). as a result, the retailer’s profit tends to increase the relative profitability price of the producer. the relatively lower price of the producer stimulates the retailer to increase the value of your order. the producer can provide such an agreement if the retire expects to order more products and has a long relationship with the retailer. thus, the discount of the supplier price contract can improve the supply chain efficiency by enhancing the supply chain profit, which will be investigate later on. the producer goal of the return policy is to enhance the benefit by the retailer by order to increase the supply chain efficiency in a direction where the supply chain is concentrated. v is the return price of the purchase paid by the manufacturer as a credit for unit of unsold products. given that v< w, it is clearly defined that the retailer does not benefit from the product excess ordering and its return to the manufacturer. the supplier, therefore, presents the return policy associated with the price of the producer nondiscounted, which is introduce as a return discount contract. in this agreement, is w (rd)< w* that w* is optimal value of the manufacturer in the non-return contract. in a discountreturn (w (rd), v,q*i ) contract, the supplier charge w(rd) i in the per unit sold from the retailer and buys each unit of unsold products at a price v of the retailer and v> w(rd) < w*. in the continuation of the return discount contract in the two cases, there is an absence of a no coalition between retailers and the existence of a coalition between retailers. the purpose of this study is to determine the optimum order of retailers and optimal prices of production so that the supplier’s profits and supply chain profit are maximum and range of wins for both the manufacturer and retailers are provided. 4. research hypotheses 1. it is a one-time model and is suitable for modeling fashion goods. therefore, more sales in this period will lead to an increase in the total revenue of the chain 2. the demand for the cargo is possible and the demand function for each individual retailer is independently define 3. the unsold product does not have a single item at the end of the selling season 4. retailer prices and demand distribution for retailers are knew 5. for giving a security about nonnegative, in the [−a, a], is defined that to be a ≤ d. 4.1. determine the optimal discount optimal price and optimal ordering value with the purchase return contract if the absence of a coalition between retailers in the present of two independent retailers and a producer, the first retailer is facing possible demand (ε1) that (−a, a) is exposed and (ε) there is also a second retailer possibly demand as shown below in the distance (−a, a) (figure 1). 21 ( ) 2 4 2 4 z i i a a z z m z d a a ε − = − × = + +∫ (1) in addition, if z ≥ εi is a retailer at the end of the period, the lack of goods for each retailer is calculate using the following equation: ( ) 21 2 4 2 4 a i i z a z z k z d a a ε= − × = − −∫ (2) first, the optimal order amount is perform in the supply chain that the return contract implemented but the price discount is not considered. when the manufacturer and retailer work in a uniform supply chain, the expected return of the supply chain is as follows: ( ) ( ) ( ) ( ) 2 2 ) ( )( ) 4 2 4 4 2 – – – – – – – 4 ( i i itp p c d cm p g c k d c p c a z z a z z c a a g p − + − − + + = + = + + (3) to obtain the optimal order value to maximize the supply chain profit, the supply chain expected to be zero and then equal to zero, and the optimal z obtained and the optimal ordering value is obtained. ( ) 1 1( ) 0 2 2 2 2 idtp z zc g p c dz a a  = − − + + − + − − + =   (4) ( )* 2 2| i a c g p ac z a g p g p − − = − = − + + (5) * * i 2 q i ac z d a d g p = + = − + + (6) supply chain coordination required that the supplier manufacturer must be stimulated to order to the level by offering the appropriate contract so that the supply chain can act as a focus chain. figure 1: additional area and product shortages for two retailers due to the above diagram, there is no commodity shortages on the line. assuming that z1=z2=z then is ε1 + ε2 = z1 + z2 = 2z. above the line, there is a lack of goods (one) and at the bottom of the line (two area) surplus of the product abanavaz and bafruei: investigating the return of goods in supply chain international review of management and marketing | vol 10 • issue 4 • 2020 173 now, it is consider that the manufacturer offers a return policy contract with discount price discount and purchase price return. if the order to return to such a contract as a return discount contract, it is noted that the optimal value of the manufacturer in the contract is without a return without a price discount. with such a discount contract return (v, qi*, w(rd)), the retailer charges the price per unit and unsold products at prices per unit, which is v< w (rd) < w*. z a c g p g p a ac g pi * = − − −( ) + = − + 2 2 with a discounted contract, the retailer has expected profit is: ( ) ( )( ) ( )( ) ( )( ) ( )( ) ( ) 2 2 2(( 2 1 2 2 ( 4 4 2 2 1 2 ( ) 4 2 4 i i i tpr p w rd d w rd v m p g w rd ac a g pa ac k d p w rd a a g p ac a g pa ac g p w rd a v w rd g p a = − − − − + −    −  +    = − − + + − +  +         − +    + − − + − + − + +  (7) the average utility function of the producer consist of: ( )( )( )( ) ( ) 2 1 2 2 2( ( ( 4 2 2 2 ( )( ) 4 a ac tpm w rd c d z vm a g p ac a g p ac v a d c w rd a g p = − + − = − − − +   − +  + + + − − + + (8) the average supply function of the supply chain: ( )( ) ( )( ) ( ) ( ) 2 2 2 1 2 2( ( 4 2 2 2 4 2 1 2 2(d p w rd 4 4 2 2 1 2 )( ) 4 2 4 i a ac tp tpr tpm a g p ac a g p ac v a d c w rd a g p ac a g pa ac a a g p ac a g p w g pa ac a v w rd rd g p a   = + = − + − +    − +    + + + − − + +     −  +    + − − + + −  +         − + −  +    − + − + − +   +   (9) w an approximation is calculate as follows: based on the chen, if w<w* is, then − tpr w ∂ ∂ > tpm w ∂ ∂ , therefore, it is possible to obtain approximate w according to the same relationship. ( ) r 2aw a tp 2aw a g p a d w w g p g p g p 2aw a a g p g p w g p g p  − ∂ + = − − + − − −  ∂ + + +     − + − + − −  + +    (10) mtp 2aw 2a( c w) w g p g p a d ∂ − + = + − − ∂ + + (11) ( ) ( ) r 2 tp tp 2aw a d d p w w w g p 2aw 2aw a a a ag p g p g p w g p g p g p g p 2aw (a ) a 1 2aw g p w( a (g p) 4 2 g p 4a m w ∂ ∂ − = + + − − ∂ ∂ +    − −   + + + − − − + − −    + + + +        −   + − + − + − + +  (12) 2 2 2 2 4 ( { }} 2 a ag dg ap dp a ag dg ap dp a ag dg ap dp dgp dp w a − − − − − + + + + + + − − − − − − = − (13) 2 2 2 2 4 ( { }} 2 a ag dg ap dp a ag dg ap dp a ag dg ap dp dgp dp w a − − − − − − + + + + + − − − − − − = − (14) 4.2. determine the discount optimal price and optimal ordering value with the return contract and the retailer’s and the retailers’ alliances here the problem is model for the two retailers and a producer whose retailers have joined to exchange goods. the producer is aware of a coalition between retailers. in the supply chain utility function, there is an additional amount surplus and the amount of the joint deficiency of the two retailers, which is achieve by surplus and degree of co-deficit in the form below. excessive scale: ( ) ( ) 2 2 1 2 1 22 2 3 3 1 2 1 22 2 1 2 2 1 ( ) 2 2 3 z a a a z a a a z a a m z d d a z a z a z z d d aa a − − − − − − − − − = × + + × = + ∫ ∫ ∫ ∫ (15) deficiency: 3 1 22 2 2 2 1 1 (1 2 2 ) 2 3 a a z a z a z k z d d a a − − − = + − × =∫ ∫ (16) abanavaz and bafruei: investigating the return of goods in supply chain international review of management and marketing | vol 10 • issue 4 • 2020174 in this case, first the optimal order amount is implement in the supply chain that the return contract is implement but the price discount is not considered. when the manufacturer and retailers work in a uniform supply chain, the average price function is expect in the supply chain. ( ) ( ) ( ) ( )( ) ( )3 3 3 2 2 2 2 ( ) 3 3 itp p c d cm p g c k d c p c g p a z z a z a z c aa a = − − − + − = − + − + + − + − − + (17) then, to obtain z*, the average of the function of supply chain profit is derive from z: ( )( )2 2 2 2 * 2 2 * 2 2 ( ) 2 { ̧ 2 { }} i i i c g p a zdtp z z a z c dz a aa a cg cpz z a a az z z a a cg cpz z a a az z z a a − + + − + = − − +  − + + −   =   +    − + + − = + (18) then, a case study is consider that the return discount contract is consider. in this intermediate part, the profit function of the two retailers and the producer and the average of the function of supply chain profit is calculate using the z obtained by differentiating the expected profit function excepted by the supply chain. the average net profit function is equal to: ( )( ) ( )( ) ( )( ) ( ) ( )( ) ( ) 2 2 2 2 2 2 2 2 3 3 3 2 2 2 2 2 2 ( 3 2 2 ( ) ( ) 2 ( ) 3 rtp p w rd d w rd v m p g w rd k d cg cpz z a a aa p g w rd z z a a p w rd a cg cpz z cg cpz z a a aa z za a a a a z z a a a cg cpz z a a a a z z a a v w rd a = − − − − + − =  + + +  − + −   +   − − + + + + + + +    + − + +  + + +    −  +   − + (19) figure 2: determining w in the retune of goods and producer price discount if not a coalition between of retailers figure 3: z*i = 14.70; the w value in this figure is approximately 21 the average producer profit is equal to: ( )( )( ) ( ) 2 2 2 2 3 3 3 2 2 2 2 2 2 2 2 2 3 2 (2 )( ) tpm w rd c d z vm cg cpz z cg cpz z a a aa z za a a a a z z a a a cg cpz z a a a a z z a a a cg cpz z a a av d c w rd z z a a = − + − =   + + +   +  + + +      +        +   −    + + +     −    +    +   + + + + − + + (20) abanavaz and bafruei: investigating the return of goods in supply chain international review of management and marketing | vol 10 • issue 4 • 2020 175 the average of supply chain profit is equal to: tpi = tpr + tpm (21) ( )( ) 2 2 2 2 3 3 3 2 2 2 2 2 2 3 v 2d p w rd i cg cpz z a a a cg cpz z a a aa z z a a z ztp a a a cg cpz z a a a a z z a a a   + + +       + + +  +   +    = −   +        + + +    −   +   +  + − ( )( ) ( )( ) ( ) 3 2 2 2 2 2 2 2 3 3 3 2 2 2 2 ( ) 3 2 2 (2 2 ( ) 3 cg cpz z a a aa g p w rdz z a a a cg cpz z a a a cg cpz z æ a a aaç z z a aç d c w rd ç z z a a aç è cg cpz z öa a a a z z a a v w rd a + + + − + − +  + + +    + + +  +   +   + − + − +  +    + + +   − ÷ +   ÷ − + ÷ ÷ ∅ (22) w is also approximate such as preceding state as following calculate: 4.3. numerical studies in order to compute optimal order value and optimal producer price, the parameters are considered as follow: a = 40, d = 200, g = 20, c = 10, p = 30, v = 12 in this case, to compute by means of the average of function of retailer profit and producer and function of the supply chain utility is plotted using this diagram, an approximate w is obtained (figure 2). for graph drawing, the w range is consider with respect to value of c = 10, p = 30, (10, 30). in respect to the diagram of the value of w = 20, the value z*i and q*i are achieved with respect to the corresponding formulas. ( )* 2 2 24i a c g p ac z a g p g p − − = − = − = + + * * 2 224 200 24i i ac q z d a d g p = + = − + = + + in order to compute optimal order value and optimal producer price, the parameters are consider as follow: figure 4: comparison of retailers in commodity return mode and price discount, in the absence of alliances between retailers and the existence of a coalition between them figure 5: comparison of retailers profit both non-coalition and coalition state abanavaz and bafruei: investigating the return of goods in supply chain international review of management and marketing | vol 10 • issue 4 • 2020176 a = 40, d = 200, g = 20, c = 10, p = 30, v = 12 first the value z*i and q*i is achieved with respect to the corresponding formulas. * 2 2 * 2 2 2 14.70 2 . 65.29 i i cg cpz z a a az z z a a cg cpz z a a az z z a a   + + +    = =    +        +  + +    = =     +      in this case, as in the previous case, an approximate w is achieve through the draw graph. here, two plotted for two values. for the graph drawing, the w rang is still considered with respect to the value of c = 10, p = 30, (10, 30). according to two diagrams, an approximate w value of w = 22 is achieved (figures 3 and 4). as can be seen in the drawn diagram for the value of z*i = 65.29 the value of w in (figures 3 and 4) this diagram is equal to 21. by drawing diagrams, as shown in figure 5, the diagram below, the slope of the function in the coalition state is less than the function in the non-coalition state, so the given example shows that in the case of return goods and price discount, the value of retailer’s decreases with less speed if retailers are correlate with each other. thus, retailers prefer to merge with one another for the exchange of goods. also given the diagram in the coalition state between retailers, the retail profit function is higher than the profit function at a time when retailers disagree with each other, indicating that at a certain productivity price, retailers are profitable at the time of the coalition. 5. conclusion in this study, the optimal order and optimal value of the manufacturer in supply chain, including a producer and multiple retailer and the possibility of return of goods and discount costs investigated, in which the manufacturer and retailers are follower. first, to construct the initial model, the library method was used and then using mathematical methods to make the model. it has also been show how to maximize the supply chain profit in a single-period model with random of demand marked, the case where the exchange of goods between retailers justified in the dearth of surplus-deficit and retailers unite. the proposed model was examine by the numerical example and the optimal value of the order and optimal value of the manufacturer was investigate in both the coalition and the absence of coalition. it was show if there is a coalition between retailers, the supply chain and the retailers are higher than when the coalition is and in the coalition state, the function is less than the function gradient in the non-coalition state. therefore, if retailers are alliance with one another, the lower price of retailers decrease with lower rate. it was also show that in the coalition state the profit function between retailers is higher than the retail profit function when retailers disagree with each other, indicating that at a certain supplier price, retailers are more profitable at the time of the coalition. the problem examined in this study can be examined in future research, which is referred to as some of these issues, this research is a development of a classic model of a newsvendor model that can be considered in a multi-period case. the study also referred to a two-level supply chain between producers and retailers that it would be interesting to examine how the return, discount, and coalition return between retailers in a three-levels supply chain between suppliers, manufacturers and retailers. it can also be extend to a case where retailers face price-sensitive and priced demand. therefore, the study of whether the manufacturer can organize a return discount contract that can be achieve by the supply chain coordination, both for producer, retailers can be consider. references aghaei, a., zandi, f. (2012), analysis and optimization of the two-tier supply chain with unpredictability of goods, master thesis. iran: k. n. toosi university of technology. p119-132. bose, i., anand, p. (2007), on returns policies with exogenous price. european journal of operational research, 178(3), 782-788. chen, j. (2011), returns with wholesale-price-discount contract in a newsvendor problem. international journal of production economics, 130(1), 104-111. chen, j., bell, p.c. (2011), coordinating a decentralized supply chain with customer returns and price-dependent stochastic demand using a buyback policy. european journal of operational research, 212(2), 293-300. chen, y., xue, w., yang, j. (2013), optimal inventory policy in the presence of a long-term supplier and a spot market. operations research, 61(1), 88-97. deng, z.h. (2012), the supply chain coordination with buy-back contracts considering the different salvage value. in: icsssm12. united states: ieee. p87-89. krishnan, h., kapuscinski, r., butz, d.a. (2004), coordinating contracts for decentralized supply chains with retailer promotional effort. management science, 50(1), 48-63. li, y., wei, c., cai, x. (2012), optimal pricing and order policies with b2b product returns for fashion products. international journal of production economics, 135(2), 637-646. naghaadeh, h. (2012), supply chain management. iran: tehran university. padmanabhan, v., png, i.p. (1997), manufacturer’s return policies and retail competition. marketing science, 16(1), 81-94. pasternack, b.a. (1985), optimal pricing and return policies for perishable commodities. marketing science, 4(2), 166-176. sana, s.s. (2013), optimal contract strategies for two stage supply chain. economic modelling, 30, 253-260. wu, d. (2013), coordination of competing supply chains with newsvendor and buyback contract. international journal of production economics, 144(1), 1-13. . international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2019, 9(5), 125-132. international review of management and marketing | vol 9 • issue 5 • 2019 125 1. introduction the consumer brand engagement has been the interesting of confirmed result of many research in this decade (vivek et al., 2012), (hollebeek, 2012), (harrigan et al., 2017), (bitter and grabner-kräuter, 2016), (hamilton, 2009). furthermore, the concept of the brand value were developed until recent decade, (harrigan et al., 2017), (anselmsson and bondesson, 2015; choi et al., 2016; gabay et al., 2009; gillie et al., 2009; kim et al., 2010; leek and christodoulides, 2012; merz et al., 2018; rennstam, 2013). furthermore, the role of communitization on purchase was well to determined by corporations that would be impact to market position and the financial performance. the consumer behavior and the marketing 3.0 could be build the consumer aware and attempt the purchase (susilo, 2015). moreover, the consumer brand engagement indicated influenced brand usage and would be the predictor (harrigan et al., 2017). hence, in other side the cbe that applied in social media that conducted by hollebeek et al. (2014), the result research indicated there was no positive effect the cognitive processing consumer brand engagement to perceived brand usage intent. the finding indicated a research gap, which the inquired could be developing for future research, by mediating approach (augusty, 2014). however, if consumer brand engagement was recognize for the company to attempt the brand intent become the consequence, as showed that conducted by harrigan et al. (2017), there is still need to be analysis with adding the moderating variable, that it was could explaining as the process with the antecedent and the consequences variable. in the current time, the study for inquiry the process for the impact of ceb to bui by conducted the concept of service dominant logic and assumes that a customize offering is essential for pursuit bui, that individuals would enter and maintain relationships also expected the benefits (harrigan et al., 2017; yan et al., 2016). (evans, 2016; kuppelwieser and finsterwalder, 2016; kuzgun and asugman, 2015; wu et al., 2014). the customize offering suggests that could lead the customer dominant and also could this journal is licensed under a creative commons attribution 4.0 international license the pursuit for brand usage intent: insight in higher education which used the compatible computer wilhelmus hary susilo*, yan pieter mulia hutabarat, otto bustani university of persada indonesia y.a.i, indonesia. *email: wilhel16@gmail.com received: 25 june 2019 accepted: 01 september 2019 doi: https://doi.org/10.32479/irmm.8628 abstract the brand usage intent would conduct the market position with competitive advantage that could be bridge the right tract for the corporate for not making misguide in the heterogeneous industrial competitiveness and the customer brand engagement determined. this study was inquiry of fulfillment the research gap with the more resonance of the brand with halo effect then the brand equity. furthermore, the research methods conducted with quantitative methods and design with descriptive correlation also used the confirmed strategy in structural equation modeling. the area sampling was fit with the 107 students in different situations and the result research was entire hypothesis’ were confirmed and the marginal fit research model on the market-based management research. the corporate should building best interaction within the compatible smartcomputer user with digitalize platform. keywords: the brand equity, brand usage i̇ntent, higher education jel classifications: i23, m3 susilo, et al.: the pursuit for brand usage intent: insight in higher education which used the compatible computer international review of management and marketing | vol 9 • issue 5 • 2019126 impact to bui (kristina et al., 2013; nguyen and thuy, 2015; petri and jacob, 2016). the objective of this inquiry for develops the new conceptual model to fulfilling the research gap on cbe for increase pursuit the bui, through the utilization of brand hallo effect resonance (badrinarayanan et al., 2016; raggio et al., 2014) and the brand equity, that could be improved the product evaluation to attempt for competitive positioning from many the customer responding (çal and adams, 2014; godey et al., 2016; laplaca, 2010; leuthesser et al., 1995). the marketing actions for the future era should be accountable and the venture has many alternatively in digitalize marketing, always aware with the data, having the competitive intelligent for winning the competition, development for the advantage resources and toward the best market position to global market. moreover, the corporate could be aware to customer orientation to have the building interaction between consumer and the firm that it was conducted by digitalize. the corporations should be build and mentions to customer more to pursue brand usage intent conduct with newest technologies (susilo and yulius, 2013, aima et al., 2015). 2. literature review and hypothesis development indeed, in this study would inquiry with many variables that conducted to attempt the contributions for grand theory of the resources advantage and to the body of knowledge for develop and more scientific and robust in the result, also for the contributions would more sharps to management implications as actions plan and the executive summary for strategies within among firms. furthermore, in this inquiry conducted with practice theory as below, that supported by r-a theory for attempted the robust competitiveness advantage in market position, which could affect to financial performance entire corporate. the brand management would encourage the consumer as a human resources for more aware and usage intent with the halo effect resonances management. moreover, the study need describes a social interaction both off line and on-line platform, so the theory that conducted within this explanations used the social exchange theory, that it was would be present and enable to explore and predicted brand consumer engagement, where there were having connection between marketers and many consumers in off line and on line setting. actually, in the social exchange based on consumers perceived on their smartcomputers that they used in dailywork and many consumers would gain the newest information’s about the best products (harrigan et al., 2017; hunt, 2013; hunt & madhavaram, 2012; yan et al., 2016). a) the consumer brand engagement the consumers have always remembering and think about the brand that daily used and convenience to used that many compatible feature that it was helped more. moreover, the user would feel positively and proud also never change that feel so good to use this compatible brand, although many new products was appear in the same time. the consumers were always perceived with the own things and would be expressed that in whole life. in digitalize era, it was will happened support by social media platforms both off line and on line, it was could be enable to encourage doing recommended between people who has used the smartcomputers in daily work. the recommended actions for other people in marketing management would be best tools for corporate to making actions plan by managers, which both with off line and online platform. furthermore, the marketers were have making engage with among consumers conducted by social media platform with well connections each other and delivered some information’s about the newest product also they were could knowing what the consumers wants, so the information would have helped corporate to making new idea for newinnovation. the cbe in social media are active partner to conducted consumer to enhance that usage media link could explore the sites (hollebeek et al., 2014),(hollebeek, 2012), (brodie et al., 2013). b) pursue the brand usage intent the consumer was feel very logic to daily use the best brand in compatible computers, without doing comparable with other brand that have the same feature. in customers mind always with the brand that very nice feel. the corporate have many ways to create how delivered the greatest value for the consumers that very loyal for making them would retain for long-run. the new strategies was involved to made the consumers attempt in always use the valuable brand and for increasing the marketing effort, the firms need to have well sales force, media advertising and the customers support also attention to the product position with the good brand image that would improved the market share, so the inquiries in market-based would very effectively. the customers were wants for daily used with the compatible computer that conducted with user-friendly system in digital era. (harrigan et al., 2017), (hollebeek, 2012), best (2004). c) brand halo effect resonance the consumer would have use the special brand with many features that very compatible and very convenience to use with utility for making the task would be finished more quickly. the consumers ware enable become loyal and proud also in their mind always interactions with other in many situations both in off line and on line setting. furthermore, the consumers was automatically doing world of mouth in their communities that loyal with the same brand that many opportunity while used this compatible computer brand and they have feel always in their top of mind. the consumers are using the brand while they have a best satisfaction would be inform to other people to use that goods for long lasting. moreover, the corporate were should aware and create some platform to making the sustainable connections with consumers and facilitated the communities between many people who were using the smartcompatible computers, also the important things was the informations about newest product could be well delivered (raggio et al., 2014; her & seo, 2017; vance et al., 2016). d) the brand equity the consumers was always making attention more for their compatible computer while their fell nice to the brand and thought all the time when doing to finishing the task, also would used the brand from the best venture that have good in susilo, et al.: the pursuit for brand usage intent: insight in higher education which used the compatible computer international review of management and marketing | vol 9 • issue 5 • 2019 127 competitive advantage, and very representative in computerize industrial. the firms would make improve for the market position while their focus to improve the resources-advantage, that they have many premise for vary industrial and costly information’s also heterogeneous demand. furthermore, the consumers doing evaluation the brand that usage had many variety decision, that could impact to making purchase behavior for the future utility (besharat, 2010; seo and jang, 2013). 2.1. proposed the framework and hypothesis development the research framework see the figure 1 below, was development to fulfillment the research gap for finding the knowledge to improvement the brand usage intent and contributions the body of knowledge in this inquired, so the brand will interactions with many consumers that have daily used for the compatible computers. the hypothesis in this study, therefore: h1: the customer brand engagement is positively related to brand halo effect resonance h2: the customer brand engagement is positively related to the brand equity h3: the brand halo effect resonance is positively related to pursue the brand usage intent h4: the brand equity is positively related to pursue the brand usage intent. 3. research method a) sample and data collection the respondent which participated came from the higher education that daily used the compatible computer which have the newest product within total sampling (mathwick et al., 2010; thomas, 2013). the data was collected from the higher education in the central jakarta, which used the compatible computer in daily and them enrolment in the classroom. the sample in this study conducted with area sampling to the particular locality of the classroom to the entire students (sekaran u and bougie r(2016). b) measurement of variables the instrument was conduct with self administered questionnaire that uses the rating scale for latent variables in management to make the response for use the compatible computer brand usage. (sekaran u and bougie r, 2016). moreover, the instrument was distributed with the independently crosssectional collected method and conducted with the rating scale as an interval data scale (1-10 very agree). hence, the validity and reliability construct test that conducted with measurement model in the first phase process in structural equation modeling among variables (babin and anderson, 2010). 4. data analysis and findings a) data analysis the data analysis method was conducted with the structural equation modeling, because the variables were latent characteristics’. the software was conducted with the lisrel to the principles of structural equations modeling, with the two step approach that pertains; measurement model and the structural hybrid full model. the confirmatory strategies was conducted in this inquiry, with the first step was testing the validity and the reliability construct and then to testing the fitting model and hypothesis proved (susilo and yulius, 2017). the research result would have for the data analysis pertain: • the sensitivity analysis: the test indicated did not have the outlier and missing value that conducted with spss and the z value <2.50 and there were no missing value and 107 data were valid. • the outcome of an univariate and multivariate of normality test: the univariate data from table 1, below were have indicated well the normal distribution that confirmed with t value more than 2 and p-value >0.05. furthermore, the result for the test of multivariate normality for continuous entire variable indicate more than 0.05, but the data still robust while the sample >100. • the measurement model (fitting model, validity and reliability test): the output of measurement model for among variables would be show on table 2. • t h e s t r u c t u r a l m o d e l ( f i t t i n g m o d e l a n d t h e confirmed t-test):the measurement of research model within goodness of fit was could determined in table 3. the gof model was indicated marginal fit model and it was could be assessed for the next evaluation for figure 1: the research model to pursue the brand usage ıntent the customer brand engagement the brand equity brand halo e�ect resonance pursue the brand usage intent self-brand connec�on consumer response the consumer involvement the trade equity & trust susilo, et al.: the pursuit for brand usage intent: insight in higher education which used the compatible computer international review of management and marketing | vol 9 • issue 5 • 2019128 hypothesis testing within the output of hybrid model, that it was indicated conducted with t value, on figure 2. b) hypothesis testing the hypothesis would be tested conducted with t value >1.98 and indicated could be confirmed from data to the research model as the table 4. c) the structural equations of hybrid model: bher=0.73×cbe, errorvar.=0.46, r²=0.54 (1) (0.11) (0.11) 6.82 4.12 be=0.59×cbe, errorvar.=0.66, r²=0.34 (2) (0.13) (0.22) 4.43 2.97 bui=0.55×bher+0.25×be, errorvar.=0.52, r²=0.48 (3) (0.14) (0.11) (0.21) 3.80 2.16 2.49 actually, basis from the result above that the entire hypotheses were significant and could confirmed the data from hybrid model (the t value >1.96). the greatest estimate value for the prediction was 0.73, in the hybrid full model was the customer brand engagement leads to the brand halo effect resonance and implication to best affect to pursue the brand usage intent (0.55). the brand halo effect resonance in marketing perspectives have sustainable connected with the among consumers, could improvement in the consumers loyalty that affected within product quality. the brand halo effects have some consumers value to retain the compatible computer table 1: the output of univariate and test of multivariate normality for continous variables variable z-score p-value z-score p-value chi-square p-value cbe1 −0.194 0.846 −0.216 0.829 0.084 0.959 cbe2 0.109 0.913 −0.142 0.887 0.032 0.984 cbe3 −0.199 0.842 −0.472 −0.472 0.263 0.877 cbe4 −0.406 0.685 −0.466 0.641 0.382 0.826 cbe5 −0.340 0.734 −0.335 0.738 0.228 0.892 cbe6 −0.060 0.952 −0.005 0.996 0.004 0.998 cbe7 0.235 0.814 −0.750 0.453 0.618 0.734 bher1 −0.154 0.877 −0.380 0.704 0.168 0.919 bher2 −0.143 0.886 −0.445 0.656 0.219 0.896 bher3 −0.024 0.981 0.142 0.887 0.021 0.990 bher4 0.100 0.920 −0.192 0.848 0.047 0.977 bher5 −0.293 0.770 −0.351 0.725 0.209 0.901 be1 −0.428 0.669 −0.658 0.510 0.617 0.735 be2 −0.428 0.668 −0.336 0.737 0.296 0.862 be3 −0.236 0.813 −0.427 0.669 0.238 0.888 be4 0.012 0.991 −0.060 0.952 0.004 0.998 be5 −0.004 0.996 0.056 0.955 0.003 0.998 bui1 −0.172 0.863 −0.317 0.751 0.130 0.937 bui2 −0.053 0.958 0.010 0.992 0.003 0.999 bui3 0.103 0.918 −0.358 0.720 0.139 0.933 test of multivariate normality for continuous variables skewness kurtosis skewness and kurtosis value z-score p-value value z-score p-value chi-square p-value 186.812 24.430 0.000 557.684 10.243 0.000 701.726 0.000 figure 2: an output hybrid model with t value susilo, et al.: the pursuit for brand usage intent: insight in higher education which used the compatible computer international review of management and marketing | vol 9 • issue 5 • 2019 129 table 2: the output of validity and reliability entire variables no. variable the output of 1st cfa slf and error ve and cr remark 1 the customer brand engagement cbe1 = 0.69/0.53 cbe2 = 0.14/0.98 cbe3 = 0.74/0.45 cbe4 = 0.87/0.24 cbe5 = 0.83/0.24 cbe6 = 0.52/0.73 cbe7 = 0.56/0.69 cr = 0.82 > 0.7 an entire indicators were valid but cbe2 need to be determined and reliable 2 brand halo effect resonance bher1 = 0.82/0.33 bher2 = 0.62/0.61 bher3 = 0.88/0.23 bher4 = 0.84/0.30 bher5 = 0.48/0.77 cr = 0.85 > 0.7 an entire indicators were valid and reliable 3 the brand equity be1 = 0.86/0.26 be2 = 0.87/0.24 be3 = 0.64/0.59 be4 = 0.44/0.80 be5 = 0.51/0.74 cr = 0.8 > 0.7 an entire indicators were valid and reliable 4 pursue the brand usage ıntent bui1 = 0.49/0.76 bui2 = 0.90/0.19 bui3 = 0.86/0.25 cr = 0.65 < 0.70 ve = 0.56 > 0.5 an entire indicators were valid and reliable with variance extracted source: the prime data table 3: the fitting hybrid full model the measurement of gof the targeted output level of fitting model chi square/df the p value 0.00< 0.05 chi square/df < 3 607.78/166 = 3.66 0.00 < 0.05 marginal fit root mean square error of approximation rmsea p (close fit) rmsea ≤ 0,08 0.17 marginal fit normed fit index (nfi) nfi ≥ 0,9 0.81 marginal fit non fit index (nnfi) nnfi ≥ 0,9 0.83 marginal fit comparative fit index (cfi) cfi ≥ 0,9 0.85 marginal fit incremental fit index (ifi) ifi ≥ 0,9 0.85 marginal fit relative of fit index (rfi) rfi ≥ 0,9 0.78 not fit goodness of fit index (gfi) gfi ≥ 0,9 0.62 not fit adjusted goodness of fit index (agfi) agfi ≥ 0,9 0.52 not fit source: prime data table 4: the hypothesis testing with t-test within structural model no. hypothesis ttable tvalue estimatevalue remarks 1 h1: the customer brand engagement is positively related to brand halo effect resonance 1.96 6.82 0.73 the entire hypotheses were confirmed (the t value > 1.96). the greatest estimate value for the prediction was 0.73, in the hybrid full model was the customer brand engagement leads to the brand halo effect resonance and implication to best affect to pursue the brand usage intent (0.55) 2 h2: the customer brand engagement is positively related to the brand equity 4.43 0.59 3 h3: the brand halo effect resonance is positively related to pursue the brand usage intent 3.80 0.55 4 h4: the brand equity is positively related to pursue the brand usage intent. 2.16 0.25 source: prime data susilo, et al.: the pursuit for brand usage intent: insight in higher education which used the compatible computer international review of management and marketing | vol 9 • issue 5 • 2019130 brand usage intent for long-run entire consumers activities. (badrinarayanan et al., 2016; harrigan et al., 2017; her and seo, 2017; joel et al., 2007; jung et al., 2017; leuthesser et al., 1995; nadeem et al., 2015; oyedele and simpson, 2018; vance et al., 2016). an information to consumers more wider and delivered best consumer value to achieve brand loyalty, also the consumers used the compatible smart computers to be very important and impact to the firm for doing the capital investment within the brand equity and brand usage intent for attempt the marketinginvestment(lee and chang, 2014) effectiveness strategy. (chan and park, 2013; huang, 2015), and an internal investment (fazal e hasan et al., 2014; smyth and lecoeuvre, 2015). the successful administration of the capital investment pertains; the proposals, an estimations of cash flow, an evaluation, the selections within the acceptance criterion and the continual-revaluation of investment on building the branding for the compatible smart computers. hence, the classifications (brown et al., 2011) of the branding analysis should be determining as follow; the new product, expansion, buildings, research and development and exploration(kim et al., 2016; von wallpach et al., 2016; yeh et al., 2016). recently, the important of the capital-budgeting has been doing the estimation of the cash-flow for the future business, within the brand usage intent could have well and positively respond for the consumers and than make the revenue from the successfully sales would be significantly increased and improvement to the consumers loyalty (abiola and emmanuel, 2013; shujaat et al., 2016; tumwine et al., 2012; yu et al., 2013). the brand with the level of top of mind could be cause to the big cash inflow within the investment need to the well planning. the firm have the best in brand usage intent need to high cash flow with good budgeting and affected to weighted average cost of capital within increased the corporate value. (ickis, 2016). 5. conclusions, research contribution and direction for future research a) conclusions indeed, our research result were successfully to confirmed entire hypothesis’, and the greatest value was the customer brand engagement affect to brand halo effect resonance that impact to pursue the brand usage intent. the fulfillment model was effectively to building effect resonance and the corporation within compatible smart computer should have building the connection with compatible computer user both in off line and on line platform. b) research contribution the research contributions were within 2 (two) area that pertain; first, the contributions for theoretical implications, indeed the conducted with social exchange theory as the explanations and predicted the relationship for the customer brand engagement to brand halo effect resonance and brand equity also an implication to pursue the brand usage intent, could confirmed and be useful for the compatible smart computer markets research. actually, the result finding shows that the indicators have greats impacts with the best standardized loading factors value were included; (1). the customer brand engagement: cbe4 (0.87), cbe5 (0.83), (2). brand halo effect resonance: bher3 (0.88), bher4 (0.84), (3). brand equity: be2 (0.87), be1 (0.86). (4). brand usage intent: bui2 (0.90) and bui3 (0.86). the contribution of the finding results in this study to the body of knowledge for the social exchange theory in interactions others aspect and r-a theory in resources dimensions were pertains; the consumers perceived were would convenience and proudly for use the product that could making well engage the corporate with consumers and also loyal with the computers brand and always happy to doing word of mouth with each other people. moreover, the consumers were always considering the computer brand in daily used and they were thought for the brand of the compatible smartcomputers. finally, the pursue the brand usage intent with the indicators consumers always used the smart computers although they were other within the same feature and the consumers always utilize for long-life. the second contributions were for managerial implications, the corporate were could determining from the result of this study for making strategic planning and action plan for attempt the corporate goals. the corporate could increase the pursue the brand usage intent conducted with to facilitated the off line and on-line setting as the platform for customers making interaction with other and corporate itself, so the customers interrelation would have the bigger halo effect resonance for the smart computers brand. the corporate was always production the compatible smart computer for making customers convenience and proud while used the computers and could increase the customer brand engagement. c) limitations and future research actually, the amount of 107 sample was not adequate that only gain the marginal fitting research model, the development for inquiry for the future used more large sample and proportionally random sampling. the user of smart compatible computers must be segmentations for limited heterogeneous demand. hence, the future research could more parameters and variables for increase the goodness of fitting model and the determination of r square value. moreover, the variable that could added in new model pertains; the differential of brand effect (raggio et al, 2014), the consumer involvement and attempt the self-brand connection (hollebeek et al, 2014, harrigan et al, 2017). 6. acknowledgement i would like to thank you very much for the expertise and experience learning club, faculty of business and management, university of persada indonesia y.a.i. to my colleague and students. to in kind workshops e and el club laboratory feb upi y.a.i team. susilo, et al.: the pursuit for brand usage intent: insight in higher education which used the compatible computer international review of management and marketing | vol 9 • issue 5 • 2019 131 references abiola, i., emmanuel, s. 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(2013), a multilevel model for effects of social capital and knowledge sharing in knowledgeintensive work teams. international journal of information management, 33(5), 780-790. . international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2019, 9(6), 120-127. international review of management and marketing | vol 9 • issue 6 • 2019120 the strategy transforming purpose and fundamental management from the school of meteorological, climatological and geophysical (stmkg) agency indonesia ita soegiarto1*, billy tunas2, mahmuddin yasin3, achmad hidayat sutawidjaya4 1postgraduate doctoral programme, universitas negeri, jakarta, indonesia, 2faculty of economics, suryadarma university, indonesia, 3faculty of economics, universitas negeri, jakarta, indonesia, 4doctoral program, universitas mercu buana jakarta, indonesia. *email: itasoegiarto_im15s3@mahasiswa.unj.ac.id received: 05 august 2019 accepted: 11 october 2019 doi: https://doi.org/10.32479/irmm.8850 abstract the research aims to explain the basic and objectives of the school of meteorological, climatological and geophysical agency which was originally the academy became college. hopefully this change has a positive impact on organizational performance. the transforming the academy of meteorology and geophysics (amg) to the college of meteorological climatology and geophysical (stmkg) is based on two factors. internally, it can produce graduates who are reliable, trusted and recognized by the world and become the center of excellent for the education of meteorological, climatology and geophysical (mkg). externally, the change is based onthe rapid technological and community demands that the meteorological, climatological and geophysical agency (bmkg) is able to answer problems related to disaster is expected to minimized victims and disaster losses. this research uses qualitative methods with the case study approach, data collection using the purposive sampling technique since researchers want to get from various competent sources. the novelty of this research was conducted in the school of technical background that graduates are required to have the soul of socio entrepreneur, because it must provide information to the community in accordance with the jargon of bmkg namely fast, precise, accurate and understandable. the results showed that the changes that occurred resulted in a reliable graduate as a civil apparatus of the state placed throughout the task executing unit in the bmkg environment and provide mkg information in various areas such as flight related weather info, high wave info, agricultural info planting time the most suitable and seismicity related to the potential of a tsunami. keywords: transformation, organization, school of agency jel classifications: l2 1. introduction the main strategy for a successful company stated by hertati and sumantri (2016) is with company development and internal implementation consistent with the objectives and functional policies and reinforcing its position in the market. strategy is seen as a way or a way to integrate the company’s functional activities (including marketing, production, research and development, finance, and the like). furthermore hertati and sumantri (2016) states that it is consistent in making goals and policies based on an analysis of strengths and weaknesses (internal) with an analysis of opportunities and hands (external). furthermore syafarudin and sudiarditha (2018) states the strategy means the company’s actions in adjusting to its environment (compare with swot analysis). what is meant by strategy is management of dynamics, not static balance. the company’s strategy is a central concern with creation and exploitation (distinctive competences). there is a unique strength of the company which is the key to success in competition (syafarudin and mulyana, 2019). strategy is a process or a series of decision-making activities that are fundamental and comprehensive in nature, accompanied by a this journal is licensed under a creative commons attribution 4.0 international license soegiarto, et al.: the strategy transforming purpose and fundamental management from the school of meteorological, climatological and geophysical (stmkg) agency indonesia international review of management and marketing | vol 9 • issue 6 • 2019 121 determination of how to implement them, which are made by the leadership of the organization and implemented by all levels of the organization to achieve the goals. hertati and sumantri (2016) states that strategic management as an art or science in formulating, implementing, and evaluating various cross-functional decisions that enable an organization to achieve goals. strategic management focuses on the process of setting the goals of an organization, making and developing policies and plans to achieve goals, as well as allocating resources to implement policies and plan the achievement of organizational goals. applying a good strategy and right on target is needed for any activity, especially in running a business. the presence of atmospheric sea reciprocal interactions with the low-pressure center development in the southwest indian ocean, can develop into tropical storms associated with insecurity and high rains. the formed atmospheric vortex will also affect the surface of the sea by upwelling/lifting of the sea water mass column near the surface due to the atmospheric siklonic vortex on it, as in the journal (siswanto et al., 2019). the territory of indonesia occupies 70% of the maritime continent is a region with climate variability between its year modulated by the southern el nino south oscillation (enso). surface heating (cooling) in the tropical pacific ocean of the middle and east together with cooling (heating) in indonesian waters related to the el nino phenomenon attenuates (strengthens) the circulation of walker and therefore affects the climate in indonesia. however, changes in the regional circulation not only affect rainfall as well as extreem rainfall that results in extreem dryness and floods related to enso (tangang et al., 2018). the degree of damage caused by earthquakes is generally influenced by the magnitude and distance of the epicenter. local geological conditions and local footprint effects also affect earthquake damage and hazard levels. as in the case of local effect phenomenon at bantul may 27, 2006. in bantul earthquake it was relatively small magnitude but resulted in thousands of people death and lost houses. earthquake caused by local geological conditions. graben bantul is a basin containing loose material products of merapi eruption (daryono, 2012). landslides are one of the most widespread and common natural hazards. in areas with high vulnerability, these complex hazards can lead to significant social and economic impacts negatively. for this, early warning is required such as risk assessment and mapping, dissemination and communication, formation of disaster preparedness and response teams, development of evacuation maps, standard operating procedures, installation of monitoring services and and the development of local commitments for operation and maintenance of the entire program (fathani et al., 2016). flood in manado city on january 11, 2015 (kompas.com/ronny adolof buol) sumber: https://regional.kompas.com id one of the trigger factors for the dry season and the evenly distributed drought in indonesia is el nino. sumber: https://blog.act.id/ earthquake and tsunami in aceh 2004 sumber: the japan times landslide in garehong village, cisolok, sukabumi that happened on december 31, 2018 sumber: https://www.dw.com soegiarto, et al.: the strategy transforming purpose and fundamental management from the school of meteorological, climatological and geophysical (stmkg) agency indonesia international review of management and marketing | vol 9 • issue 6 • 2019122 based on various events related to meteorology, climatology and geophysics, bmkg as an institution assigned according to the presidential regulation no. 61 year-2008 namely carrying out government duties in the field of meteorological, climatology, and geophysics. government duties include the field of air quality. bmkg should be more robust and optimal in coordinating and mitigate disasters and is expected to produce new regulations to create an institutional that specifically addresses disaster. to perform the task and function bmkg need human resources that are reliable and skilled in their field so that the need of a college that educates the cadets who have the ability in the field. the government established the academy meterology and geophysics (amg) in 1955 but along with thetechnology and the increasingly complex environment, especially in the era of globalization required an effort to improve the competency the graduates, hence the issuance of presidential decree no. 35 year 2014 on the changes of the meteorology and geophysical academy into meteorology and geophysics high school. therein mandated that the change of amg into stmkg aimed to fulfill the needs of human resources are educated and professional in the field of meteorology, climatology and geophysical. change is one of the answers to answer the challenge. in this regard, the research aims to explain and examine the basis and objectives of the school which is the college of bmkg. 2. literature review 2.1. strategy transformation the right strategy and organized in an organized manner will make it easier for an organization to carry out its mission to achieve its goals. hertati (2015) states that management strategy is a series of managerial decisions and actions that determine the performance of a company in the long term. strategy transformation is an effective strategy planning and regulation that is carried out so that business objectives are achieved and of course the business can last for a long time. furthermore syafarudin (2016) states the notion of strategy transformation is a series of managerial decisions and various activities that determine the company’s success for the long term. these activities include strategy formulation/planning, strategy implementation/implementation, and evaluation. furthermore syafarudin and sudiarditha (2018) states that the notion of strategy transformation is a large-scale planning oriented towards achieving future goals, and is defined as a fundamental decision. the plan allows the organization to carry out its mission in an effort to produce something, (operational planning to produce goods and/or services and services) quality, and optimization that is directed at achieving the organization’s strategic objectives. in line with hertati (2015) said that the notion of strategy transformation is a process compiled systematically by management to formulate a strategy, implement a strategy, and evaluate the strategy implemented. all of these activities are aimed at realizing the vision and mission of an organization. according to hertati and sumantri (2016), stating the understanding of strategy transformation is a process carried out by managers and employees to formulate and implement strategies in providing the best customer value to realize the organization’s vision. after knowing the definition of strategy transformation, of course we also have to know what the goals are. as the name suggests, in strategic management a manager is in charge of developing a set of corporate strategies and is usually more associated with marketing. there are four main strategic management goals in business: 1. give direction in achieving goals. as already mentioned in the above organizational management understanding that the manager’s role is to direct all parties in this case the company’s resources to carry out activities that lead to the company’s goals. a clear direction of activities must be the basis for controlling and evaluating success. 2. maintaining the interests of various parties managers in developing strategies by meeting the needs of each party such as suppliers, employees, shareholders, banks and also the wider community. these components play a role in the success or failure of policies made. 3. anticipate every change evenly with the existence of strategic management allows executives to anticipate changes and prepare guidelines for control. the aim is to broaden the perspective of thinking. 4. relating to effectiveness and efficiency strategy managers are responsible not only for concentrating capabilities above the interests of efficiency but also having serious attention to resources to work hard by doing work effectively. in its implementation the objectives of strategic management are as follows: 1. to implement and evaluate the strategies that have been selected effectively and efficiently. 2. aims to evaluate performance, review, review, make corrections and adjustments if found irregularities in the implementation of the strategy. 3. to create a new strategy that is formulated to suit the development of the external environment. 4. 2. aim to review the strengths and weaknesses of the organization, looking at opportunities and threats in business. 5. so that organizations can innovate on products or services so they can continue to be accepted by consumers. strategy transformation is very necessary for various activities to achieve goals well. following are some of the benefits of strategy transformation: 1. strategy management can produce the best decisions for the organization. 2. the activity of formulating a strategy will help improve the organization’s ability to face various challenges. 3. employee involvement in formulating strategies will make the brand understand and appreciate productivity, which in turn increases work motivation. 4. implementation of strategic management will make an organization more sensitive to external threats. 5. a good management strategy will help prevent various problems that come from inside or outside. 6. implementation of strategy management will make an organization’s operational processes more effective and efficient. 7. management strategies help companies to adapt to change. soegiarto, et al.: the strategy transforming purpose and fundamental management from the school of meteorological, climatological and geophysical (stmkg) agency indonesia international review of management and marketing | vol 9 • issue 6 • 2019 123 8. implementation of strategy management will make the organization more profitable than organizations that have not implemented it. process and stages of business world strategy transformation, especially on a small scale, usually tends to ignore the basics of doing business. they tend to start a business without a plan, just setting goals without making a strategy. in a company, especially in commercial business, of course composing a transformation strategy is needed. the following are several stages in the process of developing strategic management: 1. formulate the strategy at this stage the organization will develop its vision and mission, conduct a swot analysis, determine and set the organization’s long-term goals, and several other alternative strategies. 2. implement the strategy at this stage, the strategy that has been set and then implemented is for example designing the organizational structure, distribution of resources, making policies, developing decision-making processes, and managing human resources, marketing efforts (read: understanding marketing), and others. • reviewing various internal and external factors that form the basis of the formulation of strategies that have been applied previously. • measuring current performance. • make improvements to previous performance deficiencies for future success. how to arrange effective business strategies now that we understand the notion of strategic transformation and the importance of strategy in running a business. however, we do not yet have a powerful move to form a good business strategy. how to develop effective business strategies: 1. critical thinking someone who thinks critically will be easier to find out the problems that exist today. by knowing a problem, someone will later try to find a way out. now, in carrying out a good strategy, one needs to think critically to be able to identify problems that occur within the scope of internal and external so that it will reduce the risk of failure in business. 2. creative thinking in doing business, we are required to think creatively, especially in determining the types of products or goods to be produced. the excellence of a product or service and its needs in people’s lives will help attract their interest to use it. 3. dare to take risk business is a hard world, full of twists and nothing goes smoothly. to start a business requires people who dare to take risks. people who doubt will have difficulty even getting started. however, in its implementation, someone who is brave enough to take risks also needs to work hard so that the business they run will bear fruit. 4. open and opportunistic thinkin open thinking is very important in business, especially seeing your business in a different perspective to come up with new ideas. people who think openly will be easier to banker and build on criticism from others. an opportunist will find it easier to find and exploit opportunities. 5. be original create products that can be typical of the business you are in without needing to copy others, because that is what distinguishes your product from other products in the eyes of consumers. 2.2. fundamental management the fundamental notions are all related to economics. very related to the economic situation. so you have to capture the shares to be selected, according to their eligibility. this fundamental term, is also often used in government or politics. usually associated with the economy of the government. fundamental or basic foundation of an ideology. syafarudin and mulyana (2019) states that planning is in the form of determining the initial steps that enable the organization to be able to achieve a goal and also concerns the efforts made to anticipate trends in the future and the determination of a strategy to realize the target goals of an organization. furthermore, hertati and sumantri (2016) states that fundamental management is determining the set of actions to achieve the desired results. furthermore syafarudin and sudiarditha (2018) states that fundamental management is a function of managers in the selection of alternatives, policy objectives, procedures and programs. hertati (2015) explains that the types of planning can be differentiated into goals, policies, procedures, regulations, budgets, programs and strategies. thus fundamental management is planning divided into three types, namely: (1) strategic planning is a process of planning in which decisions about organizational goals will be achieved through the management of resources and funds owned, based on policies that have been determined previously. (2) planning to control management is a planning process where managers are responsible that the use of resources and funds are used as effectively as possible and as efficiently as possible to achieve organizational goals. (3) operational planning is a process in which efforts to carry out certain activities are guaranteed as effective and as efficient as possible. from several statements about fundamental management, the researcher concludes that planning is a thought process in choosing and determining what programs will be implemented in the future to achieve the desired results. (2) organizing (organizing) organizing functions in english are organizing originated from the word organize which means to create a structure with parts that are integrated in such a way, so that their relationship with each other is bound by the relationship to the whole. organizing is certainly different from organization. organizing is a management function and a dynamic process, while organization is a static tool or container. organizing can be defined as determining the work to be done, grouping tasks and distributing work to each employee, determining departments (subsystems) and determining relationships. to understand organizing in depth, it is necessary to know the meaning of organizing according to some experts. hertati (2015) suggests that fundamental management regarding line organizations is that there is centralization of authority at the level of organizational leadership so that various functions are centered in the hands of certain leaders because it clearly separates the areas of leadership activities (managerial as the center of soegiarto, et al.: the strategy transforming purpose and fundamental management from the school of meteorological, climatological and geophysical (stmkg) agency indonesia international review of management and marketing | vol 9 • issue 6 • 2019124 authority) and the fields of technical activities (non-managerial). as a result, certain requirements (generalists are all round, can be knowledgeable) for positions of leadership that differ from those of technical/specialist workers who are vocational. in addition, organizational definitions are put forward hertati and sumantri (2016), according to their function manager organization includes determining the classification of activities needed for company goals, grouping these activities into a section led by a manager, and delegating authority to carry them out. according to hertati and sumantri (2016) there are three forms of fundamental management that are quite popular and so far have been used in public organizations, namely: a. line form is the simplest structure. lines are marked by vertical lines of relationship between each level of the organization. all members of the organization take orders through the scalar principle. the authority structure in this form is very clear and developed in organizations that have a small scope. command distribution system from the top to subordinates involves all operational and support activities, so that all structures under the manager are involved in operational activities. line and staff form lines and staff produce construction structures that are somewhat different from the first because of the addition of staff. the staff is only a facilitator, and helps the leader’s tasks such as providing input, advice, helping supervision. however, staff lacked authority and direct relations with subordinates. staff are appointed based on their expertise. c. matrix form matrix is a form of project organization. this form is a combination of human and non-human resources that are processed together and are temporary, and made for special purposes. when it is finished, the human resources concentrated there will return to their respective units. 2.3. influence of strategy transformation on fundamental management transformation is as quoted in widanarto journal (2016) is the process of switching from a certain period to the next that occurs due to innovations or changes in both structural and procedural, planned or unplanned. widanarto mentioned that transformation is essentially a continuously ongoing process. this transformation includes reforming, restructuring, rearranging the priority of development/revitalization and renewal. transformation in a concise manner means a fundamental process of change in human self. maulani (2012) writes that in webster dictionary it is mentioned: “to transform means to change in form, appearance or structure; metamorphoses to change condition, nature or character; to change into another substance.” it is stated further that: “that is, while all transformation is change, not all change is transformation. transformation is a change in kind; not a change in degree” an organization is a container/tool in the activity to achieve objectives through the concept of leadership, either in the sense of the organization in general or referring to work together to realize common goals. therefore, leadership is a very important element in an organization, must have the ability to influence people to reach the organisational (daft, 2009) quoted from hafulyon (2018). hertati (2019) states that organizational change is the action that an organization has from the prevailing conditions that are now headed to the future conditions in the desire to increase its effectiveness. susanto (2016) suggest that organisational change is any change related to the person, structure or technology. as ferlan quoted in his journal (poluakan, 2016). susanto (2010) stated that as an educational and training institution, in order to improve the quantity and quality of education and training that can be achieved through the improvement of educational programs in the school of education in the form of the academy of meteorology and geophysical to the college of meteorological climatology and geophysical. the increase in quantity will be reflected from the change of amg form to stmkg and the enhanced quality reflected from the improvement of educational elements that include: (i) educator power; (ii) curriculum and syllabus; (iii) methods of education and training; (iv) the level of technological development; (v) teaching and learning facilities; (vi) applicable national and international standards. the school of meteorological, climatological, and geophysical, which is further abbreviated as stmkg, is a university organized by the meteorology, climatology, and geophysical under and responsible to the head of meteorological, climatological, and geophysical. 3. methodology this research used a qualitative approach with a case study method, a method describing the phenomenon that took place in the bmkg school in the year 2018. sampling techniques are selected purposive sampling. a total of 40 informants with the criteria chosen by the researcher. the informant consists of the civil apparatus of the state in the bmkg environment as a policy stakeholder, the users of stmkg graduates and stmkg maintainers. the method and research procedure of this research used a case study design by yin (2015), with the following stages: (1) study questions (research questions); (2) research theorem or theoretical framework (study proportion); (3) identification of the analysis unit; (4) logical relation of data with theorem or theoretical (logical relationship); (5) criteria for interpreting findings (figure 1). meteorology climatology and geophysics council (2014), states that primary data is derived from interviews, observations, email interviews and group discussion focus so that the data gathered deeper and richer through social interactions among informants. while secondary data is extracted from data gathered from human resources, leaders and some experts are involved in the focus of group discussions. that meteorology climatology and geophysics council (2014), states that therefore, data encoding is implemented for qualitative and thematic analysis data analysis is used with text that is divided into small units (phrases, sentences, study question study proportion theorm identification of unit analysis logical relationship criteria for interpreting figure 1: interpreting findings soegiarto, et al.: the strategy transforming purpose and fundamental management from the school of meteorological, climatological and geophysical (stmkg) agency indonesia international review of management and marketing | vol 9 • issue 6 • 2019 125 or paragraphs), each unit is labeled, and then each unit is grouped into code (creswell and clark, 2011). the codes were then examined for patterns and organized central themes throughout the individual case and, to protect the informant. as presented by (rony et al., 2019) in his research on the journal asia international multidisciplanry conference. 4. research and discussion that indonesian government (2014), states that based on research conducted in the field of researchers found the basic of the foundation of the school of geography of geological, geographic, geofisis, environment, foreign relations and international cooperation has occurred considerable change meteorological, climatological, and geophysical fields. as a competent government agency in the field of meteorology, climatology, and geophysical, bmkg felt the need to improve human resource development through the amg education, but the curriculum and syllabus that was enforced at the amg while still is based on operational technical capability, so the alumni do not have a strong basic of science and yet have adequate analytical and conceptual capabilities. that indonesian government (2008), states that therefore, it takes a strategic step towards fulfilling human resource needs through increased education status. the results of interviews and observations in the field, the goal of the school to be held for education, research, and community service in the field of meteorological, climatology, and geophysical in accordance with national standards of education and international the availability of the curriculum and syllabus that is centered on strengthening basic sciences to produce alumni who are able to think conceptual analytic to meet the needs of experts in the field of mkg in the region of indonesia; increasing the quality and quantity of education personnel gradually; increasing laboratory facilities and infrastructure, libraries, and other supporting facilities and infrastructure in accordance with the development of technological science; increasing mental quality, attitudes, and the conduct of the academic civitas consistently and continuously; institutional accreditation and study programs according to the prevailing provisions (figure 2). as the development framework display, stmkg as an educational institution that later the results of graduates into civil apparatus bmkg is expected to facilitate the needs of human resources according to competence in exposure to bmkg head in meeting activities national evaluation (ravalnas) on december 06, 2018. indonesia is the largest archipelago in the world, being between two oceans and two continents, located right on the equator, traversed by the ring-of-fire volcano and the tektonis fault. this causes indonesia to be very vulnerable to earthquakes, which on a certain scale is not uncommon to cause a tsunami. the damage inflicted a variety of development results in an instant, stopping the activity of public life, and causing loss of life, and property loss. besides, in the face of the development of the 4.0 industrial revolution and the realization of educational institutions that are nationally and internationally required a change. stmkg as a school of education that graduates are placed in all units of work bmkg need to update the curriculum and syllabus accordingly and relevant to the development of technology and community demands for meteorology, climatology, quality air, and geophysical (mkkug). the development of human resources started from the phase of the amg to stmkg. stmkg needs to be strengthened with adequate academic facilities and infrastructure and academic staff, including qualified teachers. education and training is focused to prepare the reliable human resources and ready to perform and support the readiness of the automation process, both from the technical and the quality of the client. research and development is concentrated on the development of more operational methods to improve the accuracy and precision of forecasts and early warning. development of the indonesian center of library for metetrology climatology and geophysics dintegrasikan to become a world class information center and library and provide services for all mkg activists. in line with research conducted by (fathani et al., 2016) necessary avalanche warnings such as risk assessment and mapping, dissemination and communication, formation of disaster preparedness and response teams, development of evacuation maps, procedures operation of standard operations, installation of monitoring and warning services, and the development of local commitments for operation and maintenance of the entire program. in exposing the events due to the mkg disaster, human resources are required to be competent to map, mitigate and dissemination of mkg related information. with the change of school, the education is expected to re-graduates of the curriculum and syllabus is still focused on the technical capabilities of the operational, in the future has a strong science basic and has adequate analytical and conceptual capabilities. can use technology so that potential mkg disaster can be minimized. figure 2: in the future, it takes smart asn with profile integrity; nationalism with global insight; able to operate it and speak foreign; hospitality networksing; entrepreneurship soegiarto, et al.: the strategy transforming purpose and fundamental management from the school of meteorological, climatological and geophysical (stmkg) agency indonesia international review of management and marketing | vol 9 • issue 6 • 2019126 the change of bmkg’s school that originally academy became a college was also based on the needs of the bmkg in accordance with the current vision and mission of bmkg. bmkg foundation is supported with tews, isews, mews, isews, cews programs in order to realize the welfare of the community. from a strong foundation born conduciveness and mechanism of effective, efficient, and optimal work management, but also the technical pillars of meteorological information service system climatology and geophysical and strong air quality, modern and world class. the foundation requires a good organizational culture in the world of bmkg, including the school under the bmkg, where the graduates will someday become successor candidates in bmkg. the process of changing the academy to a high school is one of them aims to support the fulfillment of organizational culture competencies in bmkg, including curriculum, syllabus, facilities, and infrastructure. through this change, bmkg’s school of life, now called stmkg, is claimed to be a college that can support all bmkg needs in line with today’s technological developments. 5. conclusion the phenomena of meteorology, climatology, and geophysics and their changes must be monitored widely and continuously throughout the territory of indonesia, so that the impact can be better anticipated, quickly and precisely so as not to hamper and destroy the implementation and results of development, and does not harm and threaten indonesia citizen’s safety. the longterm development of bmkg clarifies the fundamental tasks and functions to participate in the development and safety of humanity, both at the national and international levels. with the foundation supported by a study and strong culture of organizational work ethic in the form of institutional administration of the planning, implementation, regulation, procedures, monitoring and evaluation and supervision up to the development of capacity include education, training, research and development. the strong foundation leads to a good working relationship, effective, efficient, and optimal among bmkg components so as to produce technical pillars of meteorological information service system climatology and geophysical and strong air quality, modern and world class. the durability of these pillars is blocked by the mechanisms of network system based on telecommunications and information technology, databases, as well as the support of the calibrating calibration and engineering capabilities that are capable, efficient, effective and optimal. with the change from academy to college is expected to prepare the graduates who are reliable, ready to do and support the development direction that has been determined bmkg in providing data and information services to community. stmkg graduates are also prepared to realize the good organizational culture in bmkg so as to support bmkg vision and mission. 6. acknowledgment this research is part of the completion of doctoral studies fully financed by correspondence authors, supported and guided in the research process from start to finish by professors as promoters. thank you so much to our colleague from the doctoral program of the jakarta state university and its companions at stmkg that provide insight and expertise in a very helpful research, hoping they agree with all the interpretations/conclusions of this paper. references creswell, j.w., clark, v.l.p. 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(2015), case study: design and method. jakarta: pt. raja grafindo perkasa. . international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2017, 7(3), 310-319. international review of management and marketing | vol 7 • issue 3 • 2017310 the influence of sponsorship on the stages of the consumer’s decision-making process: a south african perspective catherine mpolokeng sephapo* department of marketing and retail management, lecturer in marketing management, university of south africa. pretoria, south africa. *email: sephacm@unisa.ac.za abstract understanding the consumer’s behavior is not an easy task; consumers are different and react differently to stimuli. other factors may influence the consumers’ final decision to purchase a product offering however, literature does not reveal extensive studies that investigated the influence of individual integrated marketing communications tools on each stage of the consumer decision-making process. the purpose of this study was therefore to explore the influence of sponsorship on the stages of the consumer decision-making process. a qualitative research approach was deemed suitable for the study as it allowed the researcher to understand the thoughts and beliefs of consumers regarding how sponsorship influences their decision-making. a qualitative research approach further allows the researcher to document the experiences of consumers in buying situations and also interpret how consumers make purchasing decisions. a phenomenological research design was applied in this study in order to describe the phenomena; sponsorship; and how it influences the stages of the consumer decision-making process rather than explaining why sponsorship influences these stages. data for this study was collected by means of naïve sketches and focus groups. the naïve sketches as well as the transcriptions of the focus groups were analyzed by means of content analysis. the findings of revealed that sponsorship did not influence consumers’ purchase decisions (the fourth step in the consumer decision-making process) but indicated that sponsorship may play a role in the need recognition, search for alternative and evaluating alternative stages in the consumer decision-making process. keywords: consumer behavior, decision-making process, sponsorship jel classifications: m3, m31 1. introduction companies today are challenged with reaching, communicating and influencing consumer behavior using effective tools. an excessive use of advertising has created clutter in the communication realm. it is because of this clutter that companies need to seek out coordinated strategies that place much focus on the consumer rather than on the organization itself. the use of integrated marketing communications (imc) strategy starts with the consumer’s wants and needs, and then works in reverse to the product, brand or organization (kurtz, 2010. p. 491). a coordinated imc strategy creates a competitive advantage for an organization as each component in the communication mix strengthens and supports the others for a much greater effect (arens et al., 2011. p. 272), much like the concept of synergy where the whole is greater than the sum of its parts. imc is defined as marketing communication planning that identifies the importance of an all-inclusive plan and assesses the strategic roles of a variety of communication disciplines and combines these disciplines to provide clarity, consistency and maximum communications impact (egan, 2007. p. 338). imc is a marketing tool which a company uses to carefully integrate and coordinate its communication channels to deliver a clear, concise and convincing message about the organization and its product (kelly and whiteman, 2010. p. 28). the components of imc include advertising, personal selling, sales promotion, public relations, sponsorship, direct marketing as well as the internet. for the purpose of this study, the discussion will focus on sponsorship and its role in the study of consumer behavior. sponsorship can take various forms which include cultural, education, social, environmental, sponsorship sporting entities or endorsements (bühler and nufer, 2010. p. 90). ngan et al. (2011. p. 551) defined sponsorship as the investment of money or in sephapo: the influence of sponsorship on the stages of the consumer’s decision-making process: a south african perspective international review of management and marketing | vol 7 • issue 3 • 2017 311 kind, in an event in return for the right to be linked and associated with that event. sponsorship deals are different in value and the benefits associated with each deal vary relative to the investment. for example in sports, when an organization is considered to be the primary sponsors of a sports team, the sponsor would have rights to display their logo on the playing jersey of the sporting team. other companies may opt to sponsor equipment or goods in return to be associated with the sporting entity. for example; gilbert, a manufacturer of balls, could be the official ball supplier and sponsor or various sporting organizations such as the south african national rugby team. allen et al. (2011. p. 328) mentioned that between the imc tools, sponsorship may be considered to be one of the most powerful tools now used to communicate and structure associations with key stakeholders and target audiences. companies have shifted their focus and emphasis now on “connecting with” rather than “talking at” audiences, sponsorship is a model way for organizations to establish brand interaction with their target audience (allen et al., 2011. p. 328). however, very little research focuses on how this marketing communication tool influences the consumer decision-making process. the study highlights the types of consumer decisions are discussed; the consumer decision-making process is explained as well as the relationship between marketing communications and the consumer decision-making process. the methodology follows the literature review followed by the findings of the study. the study concludes with the recommendations and conclusions. 2. literature review consumer behavior is regarded as the study of how consumers make purchase decisions and how they use and dispose of the purchased products (lamb et al., 2011. p. 73). the process of understanding how consumers think, how they buy and how they use products is very complex as there are various factors that may influence the consumer. it is important to note that consumer needs, wants and preferences are constantly changing therefore organizations need to understand the factors that bring about these changes and cause consumers to act in a particular manner. 2.1. different types of consumer decisions when trying to understand the consumer decision-making process, it is important to first understand the effort required from the consumer each time they make a decision. decisions that consumers believe are important will generally receive more of their time, effort and thought, whereas decisions made purely out of habit will require less involvement from the consumer (shank, 2009. p. 113). the level of consumer involvement can be explained as the amount of time and effort the consumer invests in the search, evaluation of alternatives and decision processes (lamb et al., 2009. p. 173). solomon (2011. p. 334-335) mentions the following types of consumer decisions that organizations need to consider: • habitual decisions: these refer to decisions that require little or no conscious effort from the consumer. some products such as milk may be purchased daily within a household therefore the buyer may purchase the same brand daily out of habit rather than loyalty to the brand. • extended problem solving decisions: this consumer decision relates to buying situations whereby the outcome may be perceived to be risky in some way, the consumer may need to acquire as much information as possible, carefully evaluate alternatives and consider the most appropriate alternative in terms of product features and benefits. • limited problem solving decisions: these consumer decisions are usually simple and straightforward. unlike with extended problem solving decisions, the consumer does not need to search for information in order to make their decision. the consumer would rely of simple decision rules such as convenience to make their decision. the next discussion will provide the steps in the consumer decision-making process. 2.2. consumer decision-making process as discussed in the previous section, there are various types of consumer decisions; some may require a great deal of involvement from the consumer while others might not require much involvement from the consumer. in low involvement purchases, the consumer would not embark on the full steps of the decision-making process. in this section, the consumer decision-making process for highinvolvement purchases will now be discussed (figure 1). 2.3. stage 1: problem recognition the first stage in the consumer decision making process is that of problem recognition. during this stage, the consumer begins to identify that there is a need which has not yet been met (shank, 2009. p. 108). this would be when a consumer sees that there is a gap in terms of their actual state and their ideal state (where the consumer is compare to where they would like to be). there could be a number of scenarios that could have taken place which resulted in the in the consumer’s state. for instance the consumer could have run out of product, or the consumer could had previously purchased a product that did not meet their expectations therefore not satisfying the consumer’s needs or the consumer could have identified a new need or desire their life (solomon, 2013. p. 327). it is important to note that it is not always the case where the consumer will act because there is a gap between their actual state and their desired state; essentially, the gap needs to be relatively high in order to motivate the consumer to act (kardes et al., 2011. p. 72). 2.4. stage 2: search for information once the consumer has identified the need or problem, provided that the identified gap is substantial, the consumer would now move along the decision-making process and search for information regarding any alternatives available to satisfy their need (lamb et al., 2012. p. 191). according to parumasur and roberts-lombard (2012. p. 254), the search for information can be delineated as the mental and physical engagement of consumers in order to ascertain relevant information. the process of information search may be internal or external for the consumer (parumasur and roberts-lombard, 2012. p. 254). hoyer et al. (2013. p. 189-193) identified four types of recall that consumers experience during the internal search of information: sephapo: the influence of sponsorship on the stages of the consumer’s decision-making process: a south african perspective international review of management and marketing | vol 7 • issue 3 • 2017312 • recall of brands: in such situations, it is unlikely that the consumer will remember all the brands relevant in their buying situation; however, they are likely to remember a few brands. these brands are therefore referred to as a consideration set; which are those brands that the consumer thinks of at the top of their head. • recall of brand attributes: consumers are unlikely to remember every single detail that has been communicated to them relating to a product or service. with time, specific details stored in the consumer’s memory tend to decrease. recalling attributes helps the consumer review and streamline the original information in order to make a decision. for example, when looking to purchase a new car, the consumer would realistically remember that the car they are considering is safer rather than remembering how many airbags the car has and specific safety features of the car. • recall of evaluations: as previously mentioned, specific details stored in the consumer’s memory regarding products and services tend to diminish over time therefore consumers may rely on the evaluations previously made. for example, whether the consumer likes or dislikes the product or what attitude the consumer has towards the product or service. • recall of experiences: experiences are considered to be more intense and prominent therefore most likely to be remembered. whether the experience has been positive or negative, the consumer will recall this and use this information in making future decisions. for example, if the consumer has had a negative experience with a brand, they will most likely disregard that brand whereas suppose the experience was positive, the consumer will retrieve this information and proceed with considering the brand for their purchase. an external information search on the other hand describes looking for sources outside the consumer’s own experiences to find the relevant information they need to make an informed decision (cant, 2013. p. 143). according to hoyer et al. (2013. p. 195-196), consumers can acquire information from the following sources: • retailers: this refers to when the consumer physically visits the retailer in order to inspect the product as well as its packaging. • online sources: this refers to advertising information online, corporate websites, discussion forums as well as social media platforms (i.e., facebook and twitter). • interpersonal sources: this refers to information obtained from trusted friends and family as well as people in the consumer’s sphere of life. • independent sources: these sources include books, magazines and newspapers. • experiential sources: this refers to consumer samples or product/service trials. 2.5. stage 3: evaluation of alternatives once the consumer has acquired all the necessary information, the task now involves evaluating all the alternatives. according to reisinger (2009. p. 309), in order for consumers to reach a final decision, the following sets of options need to be formed: • consideration or evoked sets: these sets denote the accessible products or brands that the consumer considers when making their selection. • inept sets: certain products may be omitted from the list of alternatives because they are unknown (not very well marketed), or they are unacceptable (they have poor features), or overlooked (products which have not been well positioned in the market) or simply because the product does not meet the consumer’s needs. • inert sets: these refer to those products that consumers perceive to not have any special features or outstanding benefits to offer. figure 1: the consumer decision-making process source: mullins and walker (2013. p. 100) sephapo: the influence of sponsorship on the stages of the consumer’s decision-making process: a south african perspective international review of management and marketing | vol 7 • issue 3 • 2017 313 once the various sets have been established by the consumers, each alternative would need to be evaluated based on the characteristics and features unique to the product (shank, 2009. p. 111). these features and characteristics are collectively known as evaluative criteria and are used to justify the consumer’s final decision (shank, 2009. p. 111). the evaluation of alternatives is also significantly influenced by the beliefs and attitudes consumers hold regarding products (shilbury et al., 2009. p. 57). at this point, the consumer has now collected adequate information that will enable them to make an informed decision. 2.6. stage 4: purchase decision the next step in the decision-making process is making the decision to make the purchase. this step in the decision-making process is also not as straightforward; the consumer needs to decide on which brand to purchase, which store to purchase the brand from as well as how they would pay for the purchase (blythe, 2012. p. 53). shilbury et al. (2009. p. 57) describes the decision to purchase a product as the intention to purchase plus the unanticipated circumstances that may prohibit the consumer from their purchasing decision. for instance, having made the decision to make a purchase, the consumer may proceed with that intent in mind but be faced with an unanticipated circumstance of the store not having the consumer’s desired product in the desired colour. in this case the consumer will need to consider perhaps seeking the specific desired brand at another location. 2.7. stage 5: post-purchase evaluations in the last step of the decision-making process, the consumer evaluates whether there is a significant difference in their current state, which the intention of the process was to modify. here the consumer decides whether they are satisfied or dissatisfied with their purchase. in determining this, the consumer goes through postpurchase assessment, which involves evaluating the performance of the product (brijball and roberts-lombard, 2012. p. 260). as a result, consumers may experience cognitive dissonance. this dissonance occurs because consumers experience doubt and anxiety about the wisdom of their decision and question their total decision (shank, 2009. p. 112). marketer need to ensure that the consumer’s post-purchase evaluations are positive. positive evaluations mean that the consumer is satisfied with their purchase and only satisfied consumers become loyal consumers (mittal et al., 2008. p. 329). 2.8. the relationship between marketing communication and the consumer decision-making process figure 1 summarizes the consumer decision making processed used in the framework of this study. research has found that sponsorship as an imc tool can influence consumer attitudes, consumer purchase intentions as well as consumer perceptions. however, research rarely focuses on which stages of the consumerdecision making process are most affected by sponsorship and how. imc plays a vital role in the consumer decision-making process. mpinganjira et al. (2013. p. 315-316) focuses specifically on how advertising influences each stage of the consumer decisionmaking process: • stage 1: problem recognition: during this stage of the consumer decision-making process, advertising can kindle or stir the need for a particular product. for instance, a consumer may see an advert on television and this advert could convince the consumer that there is actually a gap in their current state. this consumer would then be motivated to search for information on how to alter their current state. • stage 2: search for information: during this phase of the decision-making process, the consumer will consult internal and external sources of information. advertising in this stage would provide valuable information to consumers in order to facilitate their decision-making. • stage 3: evaluation of alternatives: advertising in the evaluation of alternatives can be used to communicate product features, characteristics and benefits to consumers. advertising can also be used to differentiate one brand from another. • stage 4: purchase decision: advertising can be used in the fourth stage of the decision-making process to facilitate the purchase. organizations can use advertising to communicate price discounts and allowances to consumers. • stage 5: post-purchase evaluations: advertising can be used in the last stage of the decision-making process to comfort the consumer and assure them that they have made the correct decision. advertising can therefore play a vital role in reducing cognitive dissonance. one can explain the significance of the impact of each component of imc on the consumer decision-making process. however, the study at hand will focus on sponsorship specifically and its impact on the consumer decision-making process. organizations globally have rapidly adopted sponsorship as a medium of reaching consumer markets. this is done not only through sponsorship of sporting organizations, but also through sponsorship of art programmes, causes and sponsorship of individuals. literature surrounding sponsorship highlights that sponsorship can alter the brand image in the eyes of the consumer, influence consumer purchase intentions and can spark interest into sponsor brands (ngan et al., 2011; tsiotsou and alexandris, 2009; speed and thompson, 2000. p. 229). the consumer behavior model identifies internal and external variables (such as attitudes, perceptions and motivations) that affect the consumer’s behavior. attitudes for example consist of three components: the cognitive, affective and behavioral components. sponsorship seems to affect the affective component of an attitude by creating a positive association between the sponsored organization and the sponsor. however, sponsorship can also affect the attitudinal cognitive component by altering brand perceptions (mason, 2005. p. 32). studies have reported a relationship between these two variables. it was suggested that a positive attitude towards a sponsor is positively associated with the intention to consider a sponsor’s product (speed and thompson, 2000. p. 229). although attitudes influence the consumer’s decision-making, marketers cannot simply assume that purchase intentions are influenced by attitudes alone. within a sporting context for example, fans that identify with the team may be favorably biased towards the sponsors. this biased behavior could result from their belief that the sponsor shares comparable convictions about the team and they thus transfer perceived team image to the sponsor. for sponsors to sephapo: the influence of sponsorship on the stages of the consumer’s decision-making process: a south african perspective international review of management and marketing | vol 7 • issue 3 • 2017314 be considered by consumers as a viable alternative to satisfy the identified need, the consumers need to be aware of the sponsor and their product offering. awareness is also considered as a way to measure the effectiveness of sponsorship. brand awareness refers to the strength of a brand’s presence in the consumer’s mind and to the extent and ease with which consumers recall the brand and can recognize the products and services with which the brand is associated (boshoff and gerber, 2008. p. 1). it measures the percentage of the market that is aware of the existence of a brand. walliser (2003) suggests three broad approaches to measuring sponsorship awareness in literature, namely measuring to what extent consumers take notice of sponsors, identifying factors influencing sponsor recall and analyzing the internal processes related to recall taking place in the consumer’s mind. the study conducted by rowley and williams (2008. p. 781) suggests that sponsorship has an impact on brand recall, awareness and attitude. however, that study provided little evidence of impact on brand use. similarly, social identity theory formulated by tajfel and turner in 1979 has been evidenced to be an explanatory construct in several areas and disciplines. under the construct, identification is defined as the perceived oneness with or belongingness to an organization (jones and volpe, 2010). when an individual identifies with an organization, they become emotionally involved in its success and failures. kim and kim (2009) found that team identification is linked to various aspects of sponsorships including sponsor identification, a positive sponsor image and a high level of awareness of the sponsor. the literature referred to above links sponsorship to awareness; however, the question remains whether this awareness leads to the decision to purchase the sponsors’ product. the literature does not reveal studies that investigated the influence of imc tools; specifically sponsorship; on each stage of the consumer decision-making process. 3. purpose of this study sponsorship has been evaluated in three main ways: measures of media, research on spectators’ awareness and attitudes, and sales or behavioral data (donovan and henley, 2010. p. 370). tsiotsou and alexandris (2009. p. 358) found that highly devoted sports fans could possibly develop a more favorable image of their team sponsor and also display stronger intentions to purchase the sponsor’s product. ngan et al. (2011. p. 551) found that the performance of a team significantly influences the consumers’ intention to purchase the sponsor’s product. understanding the consumer’s behavior is not an easy task; consumers are different and react differently to stimuli. mihart (2012. p. 123) identifies a cognitive view of the facets that may impact the behavior of the consumer. this cognitive view illustrates the consumer as an open and dynamic person who participates in the decisionmaking process by seeking information, attempting to make informed decisions. the feelings of consumers can also impact their decision-making in the sense that in some cases, consumers may be impulsive in their purchase decision. it is therefore because of the various factors (individual and group factors) that consumers will behave in a particular matter. howard and sheth (1969); schiffman and kanuk (2010); solomon (2011); mihart, 2012. p. 123 generalize the role of consumer involvement in the decision-making process. consumers may make decisions under conditions of low involvement where the resolution is prompted by the environmental stimuli (mihart, 2012. p. 124). other factors may influence the consumers’ final decision to purchase a product offering however literature does not reveal extensive studies that have investigated the influence of individual imc tools on each stage of the consumer decision-making process. the purpose of this study was to therefore explore the influence of sponsorship on the stages of the consumer decision-making process. 4. methodology of the study the purpose of this study was to explore the influence of sponsorship on the stages of the consumer decision-making process. a qualitative research approach was deemed suitable for the study as it allowed the researcher to understand the thoughts and beliefs of consumers regarding how sponsorship influences their decision-making. a qualitative research approach further allows the researcher to document the experiences of consumers in buying situations and also interpret how consumers make purchasing decisions. as indicated in the literature review, there are various psychological processes that consumers go through when deciding on which products to buy; internal and external factors also play a role what consumers purchase. qualitative research techniques allow for the extraction of detailed first-hand information from consumers on what their thought process is in buying situations. a phenomenological research design was applied in this study in order to describe the phenomena; that is sponsorship; and how it influences the stages of the consumer decision-making process rather than explaining why sponsorship influences these stages (lester, n.d. p. 1). the research design was appropriate as it assisted in obtaining information from the consumer’s perspective (lester, n.d. p. 1). the population of the study consisted on male and female consumers who ranged between the ages of 18-25 years and 2635 years and were from various racial groups including african, caucasian, indian, coloured and asian. the inclusion criterion was needed in order to clarify the scope of the population and included consumers who were (nayar and stanley, 2015. p. 178): • male and female and were 18 years or older; • had been exposed to sponsorship messages; • resided in the tshwane area within gauteng; • were able to understand, read, write and speak english; and • were available to participate in the study. data for this study was collected by means of naïve sketches and focus groups. naïve sketches give the consumers an opportunity to describe their experiences and opinions in their own words (chokwe and wright, 2012. p. 3). this data collection technique was deemed suitable as it allowed consumers to provide a narrative of their experiences in buying situations and describe their thought processes as well as the extent to which sponsorship influenced the stages of their decision-making process. rich information, from the consumers own perspective could be attained as narratives are a safe platform for consumers to express their true feelings. the participants were given 15 min to complete the narratives (the sephapo: the influence of sponsorship on the stages of the consumer’s decision-making process: a south african perspective international review of management and marketing | vol 7 • issue 3 • 2017 315 naïve sketches) before the researcher commenced with the focus groups. once the completed naïve sketches were collected by the researcher, the questions asked in the naïve sketches were then discussed in the focus groups. two focus groups were conducted in a private room at the university of south africa; consisting of six participants in each group. initially, four focus groups were scheduled however, data saturation was reached after only two focus groups and no new information was observed. the focus groups were recorded; the audio recordings were transcribed and these transcriptions were used in the data analyses process. the naïve sketches as well as the transcriptions of the focus groups were analyzed by means of content analysis; a process of transforming raw data into meaningful information (das and bhaskaran, 2008. p. 9). the following criterion was applied in the study in order to ensure the credibility of the study findings (klenke, 2008. p. 38; golafshani, 2003. p. 601): • credibility: refers to the degree to which the outcomes of the study are probable or true from the position of the participants. credibility was obtained in the study through the use of audio recordings which allowed the researcher to revisit in order to check that the findings reflect the true position of the participants. • neutrality or confirmability: refers to the degree to which the results uncovered can be authenticated or confirmed by others. in this study, confirmability was obtained with the input of the independent coder in the data analysis process (jooste et al., 2013. p. 4). • consistency or dependability: refers to the degree to which the same findings can be achieved by independent researchers. dependability was obtained through a clear description of the decision-tail. the researcher was clear about the data collection methods, analysis techniques as well as the sample included in the study in order to ensure that independent researchers can arrive at similar or comparable findings. • applicability or transferability: refers to the extent to which the results of the study can be transferred to other circumstances. transferability was attained providing an adequate description of the target population (the inclusion criterion). the results of the study will now be discussed. 5. research results the purpose of this study was to explore the influence of sponsorship on the stages of the consumer decision-making process. in presenting the findings, it is essential that rich verbatim descriptions of participants’ explanations be included in order to validate the findings (noble and smith, 2015. p. 35). table 1 provides a summary of these themes and categories identified from the findings. 5.1. theme 1: influence of sponsorship on the stages of the consumer decision-making process consumer behavior theory identified steps that consumers go through in the decision-making process. as can be seen from table 1, the first theme derived from the findings is that of the influence of sponsorship on the consumer decision-making process and addressed the primary objective of this study. categories relating to the individual stages of the consumer decision-making process were identified as reveal the thoughts and opinions of the participants. 5.1.1. category 1: need recognition the first stage of the consumer decision-making process is that of need recognition. at the start of the decision-making process, the consumer would typically desire to alter their current state and transform it into their desired state. the findings did not reveal that sponsorship evoked a need for the sponsor’s product but rather the views of the participants that there has to have been an established need for the sponsor’s products. the findings reveal that consumers felt that the sponsor’s products must fill a gap that they have identified in their current state which would move them to their ideal state. the findings reveal that sponsorship did not significantly influence this stage of the decision-making process however if the need was apparent, they would consider sponsor brands. verbatim descriptions to validate these findings include the following: “… yes, but we wouldn’t really buy it if we don’t need it,” “… in as much as you are sponsoring the team, but how are you going to meet my needs…” 5.1.2. category 2: searching for alternatives the second category identified in the findings was that of searching for alternatives. hoyer et al. (2013. p. 189-193) identified four types of recall that consumers experience during the internal search of information while searching for alternatives. the type of recall that was dominant in the findings was that of brand recall. the participants indicated that sponsorship helped them recall brands when searching for alternatives in their decision-making process. “the brands are definitely top of mind in the category …” in addition, the participants mentioned that “the sponsorship makes the product much more known. these products would be considered in my decision-making process…” additionally, participants mentioned that “i will consider them as an alternative but not base my decision on this fact (sponsorship) alone.” 5.1.3. category 3: evaluating the alternatives as can be seen from table 1, the third category identified within the first theme is that of evaluating alternatives. the findings reveal that consumers are inclined to consider sponsor brands as alternatives during the decision-making process; however whether the brand is involved in sponsorship initiatives is not the deciding factor in the minds of consumers. verbatim descriptions that validate the findings include; “… i will consider them as an alternative but not base my decision on this fact alone.” literature as well as the findings reveals that when consumers are evaluating alternatives in the decision-making process, they need to consider the benefits each brand offers and the value that consumers will receive. the participants of the study mentioned that they “…would purchase the products offered by sponsors regardless of who they sponsor. i look at the brand itself and the value they possess.” when evaluating alternatives, the participants indicated that other factors such as money played a vital role in their decision-making. sephapo: the influence of sponsorship on the stages of the consumer’s decision-making process: a south african perspective international review of management and marketing | vol 7 • issue 3 • 2017316 consumers made statements such as: “well it doesn’t influence me that much particularly because i have a budget and i am very kind of strict about it so my spending is not necessarily because of what i see on tv or on billboards but if there is a product that they have or whatever i need at that time, say a sponsor…has it, i will go and get it….” the following quote from the focus group transcripts further supports the findings: “it is about what they can actually give to me, their sponsorship is not.” focus groups offered the researcher the opportunity to attain indepth information regarding the underlying issues surrounding the study. the findings thus far have revealed the stages of the decision-making process that consumers believed sponsorship may play a role. group interactions stimulate thoughts and opinions that would not have otherwise risen in a one-on-one setting. from the raw data, the researcher identified the second theme of the study that was consistent in both focus groups. theme 2 describes the participant’s viewpoint of how sponsorship impacts them. 5.2. theme 2: impact of sponsorship on the consumer as can be seen from table 1, the results revealed that sponsorship created awareness of the sponsor brands in the minds of the consumers. the findings also revealed that sponsorship induced patriotism in the minds of the consumers. 5.2.1. category 1: creates awareness from the findings, it is revealed that sponsorship creates awareness of sponsor brands among consumers. this means that consumers felt that sponsorship made them conscious of the sponsors and products they may offer. although the sponsorship did not influence the purchase stage of the participant’s decision-making process, participants explained that the sponsorship made the sponsor brand familiar and easy to remember in their mind. verbatim quotes to support the findings include the following: • “… i might be more aware of the brand and have more of a positive attitude towards them but i wouldn’t necessarily buy the product.” • “… the sponsorship makes the produce much more known. these products would be considered in my decision-making process. i assume that they are of a high quality and they would stand a better chance of me purchasing them.” • “… [sponsorship] creates awareness but i will still not buy the product.” 5.2.2. category 2: creates patriotism from the findings, the data revealed the second category of theme 2. this category represents the second impact of sponsorship mentioned by the participants. the findings reveal that the participants were aware of the sponsor brands but wouldn’t necessarily purchase that brand only because they are related to the sponsored organization, their purchase was based on the needs identified by the consumer. the participants mentioned that they will however consider the sponsor brands but there are a number factors that come into play like the consumers budget or disposable income, whether there is a need for the product and then there is a small measure of patriotism that might come in but not to that large extent. according to adeyinka (2011. p. 155), patriotism is explained as fervent love, support and defence of one’s county or national loyalty. within the context of sports, patriotism can also denote the love, support and loyalty towards a sporting entity such as the national team. the following quotes from the naïve sketches and focus group transcripts are provided to validate the findings: • “… does not influence my buying decisions because i work on a limited budget. i always make decisions based on what i need and not where the company spends on sponsorships. but there are instances where i support some sponsors in the spirit of being patriotic.” • “it is based on my need but sometimes one is a bit patriotic like i said earlier on and just support for the sake of supporting.” • “there are other factors that influence my buying not really sponsorships and i think if i go out and buy a springboks (the south african national rugby team) shirt, i buy it for the springbok brand not necessarily for the gilbert brand or the puma brand.” 6. discussion the purpose of this study was to explore the influence of sponsorship on the stages of the consumer decision-making process. in this study, the stages of the consumer decision-making process identified by mullins and walker (2013. p. 100) were used. these stages are: • stage 1: problem recognition • stage 2: search for information • stage 3: evaluation of alternatives • stage 4: purchase decisions • stage 5: post-purchase evaluations. the findings of revealed that sponsorship did not influence their purchase decisions (the fourth step in the consumer decisionmaking process). theme 1 addresses the influence of sponsorship on the stages of the consumer decision-making process. the categories in identified within theme one represents the stages of the consumer decision-making process that consumers felt sponsorship may have played a role. the first category within theme 1 describes the first stage in the decision-making process; table 1: summary of themes and categories identified in the study themes categories objectives theme 1: influence of sponsorship on the stages of the consumer decision-making process need recognition searching for alternatives evaluating the alternatives primary objective: to explore the influence of sponsorship on the stages of the consumer decision-making process theme 2: impact of sponsorship on the consumer creates awareness creates patriotism source: derived from the results sephapo: the influence of sponsorship on the stages of the consumer’s decision-making process: a south african perspective international review of management and marketing | vol 7 • issue 3 • 2017 317 which was need recognition. the participants of the study indicated within the first category of this theme that there has to be a need for the sponsor’s product. this means that there needs to be a gap between their current state and desired state in order for them to continue in the decision-making process. in the context of the study, the findings did not reveal that sponsorship evoked a need for the sponsor’s product but if a need was established, sponsorship would play a role (to a lesser extent) in the other steps of the decision-making process. category 2 of theme 1 highlighted the role of sponsorship within the second step of the consumer decision-making process; searching for alternatives. the findings revealed that sponsorship played a role in brand recall during the decision-making process. this means that consumers easily remembered brands that are sponsors when searching for alternatives to satisfy the identified need. participants mentioned that the sponsorship made them more aware of the brands and could therefore recall them within consideration sets. the influence of sponsorship on awareness has been largely research within the sphere of sports marketing. donlan (2014. p. 15) found a strong link between sponsorship and brand visibility. thurston, (2011. p. i) also found that sponsorship has a positive influence on sponsor awareness within the south african context. the findings presented within category 2 of theme 1 are supported by herrmann et al. (2014. p. 796) who found suggest an implicit relationship between awareness sponsorship and a greater probability that the sponsor brand will appear in their memory-based consideration sets. herrmann et al. (2010. p. 550) found that sponsorship improves the probabilities of a brand being part of the stimulus-based consideration set of consumers; irrespective of whether they were aware of the sponsorship. the third category identified within theme 1 relates to the evaluation of alternatives in the consumer decision-making process. the findings suggest that participants may consider sponsor brands when evaluating alternatives during the decisionmaking process. when evaluating which alternative to opt for, consumers are likely to consider various aspects. the results show that participants consider what the sponsor brand has to offer and the benefits that the brands offer. participants also considered their monetary constraints when evaluating alternatives. this means that in order to choose the sponsor brand, they needed to offer benefits that participants sought after within budget. as can be shown in table 1, theme 2 in the findings illustrates the participants’ viewpoint of how sponsorship impacts them. the findings suggest that sponsorship creates awareness of sponsor brands (category 1) and creates patriotism to a lesser extent (category 2). the study at hand found that sponsorship may play a role in the second step in the consumer decision-making process; searching for alternatives. awareness is suggested to be a significant element in this stage of the consumer decision-making process. the findings of this study reveal sponsorship does create awareness of brands in the minds of consumers. hibic and poturak (2016. p. 423) came to a similar conclusion in their study and suggested that among the key characteristics of a brand; which include awareness, design and loyalty; only awareness was the only characteristic that has an impact on the consumer decisionmaking process. within the context of sports sponsorship, sponsors are able to expose consumers to their brand names and logos during sponsored events and this increases the consumers’ awareness of the sponsor’s products which may consequently lead to product consumption (turco, 2015. p. 12). 7. recommendations and further research the recommendations for this study include the following: • the findings of this study reveal that sponsorship did not influence the purchase decision stage of the consumer decision-making process. essentially, the participants indicated that their final decision to purchase products did not solely rely on the sponsorship initiatives in place. the study by lysonski and durvasula (2013. p. 77) highlights eight mental characteristics of consumer decision-making. these characteristics include the following; perfectionism or high-quality consciousness, brand consciousness, novelfashion consciousness, recreational, hedonistic consciousness, price shopping consciousness, impulsiveness, confusion over choice of brands, store information and habitual, brand loyalty orientation towards consumption. these mental characteristics support the notion that consumers are different and think differently when purchasing products. sponsorship integrated into the marketing plan of an organization can be relatively expensive; taking into consideration the sponsorship cost as well as leveraging costs. with these costs in mind, sponsorship should ideally have a degree of impact on the consumer’s purchase decisions in order to contribute to the profit making objective of an organization. it is therefore recommended that sponsors in south africa consider how they are implementing their sponsorship initiatives and how these initiatives influence the consumers purchase decisions and ultimately profits. sponsorship initiatives should be planned with the mental characteristics that consumers use to make final purchase decisions in mind in order to effectively influence the consumer’s decision-making. sponsorship should be used more effectively in order to influence consumer’s purchase decisions. for example, one of the mental characteristics is referred to by lysonski and durvasula (2013. p. 77) as price consciousness. if the sponsor offers consumers value for money in their product offering, this benefit must be communicated though the sponsorship. those organizations sponsoring sporting organizations can for example communicate the “value for money” benefit at the sporting event and link this communication to communication developed for television and radio. • the participants of the study indicated within the first category of theme 1 that there has to be a need for the sponsor’s product. this means that there needs to be a gap between the consumer’s current state and desired state in order for them to continue in the decision-making process. marketing initiatives are put into place to either show consumers that there is a need for the product in their lives. it is therefore recommended that sponsorship be implemented in such a way that it further highlights the need for the product in the minds of consumers. sponsorship should be leveraged with other imc tools in order sephapo: the influence of sponsorship on the stages of the consumer’s decision-making process: a south african perspective international review of management and marketing | vol 7 • issue 3 • 2017318 to communication valuable information about specific product lines in order to influence the consumer decision-making process. the sponsor does not need to highlight all product offerings but rather plan and identify the relevant product that can be highlighted. • this study did find that sponsorship increases awareness of the sponsor brands; these findings were supported by walraven et al. (2014. p. 142) who also found that sponsorship awareness levels rise over time; increase in awareness occurred particularly in second year of sponsorship. literature states that sponsorship can increase the awareness levels of sponsors however do not demonstrate the extent to which sponsorship influences the awareness of the sponsor’s products. for instance, if a consumer attends a sporting event sponsored by an organization, the consumer should not leave the sporting arena without having been exposed to communication that stirs up thought and ideas about the sponsor and what the sponsor offers. some consumers may go away having seen the brand but may not be aware of any products and services offered by the sponsors. the study did find that sponsorship increases awareness of the sponsor brands but it is recommended that sponsors ensure that this awareness be extended to consumers being aware of specific products and services offered by the sponsors in order to drive sales for specific product lines. • lastly, this study offers great insight regarding the impact of sponsorship on the consumer decision-making process. it is therefore recommended that further research be conducted using a quantitative approach in order to quantify the direct influence of sponsorship particularly on the first (need recognition stage), second and third stages of the consumer decision-making process. 8. conclusions and implications mihart (2012. p. 126) studied the impact of imc on the various stages of the consumer decision-making process. such studies are important and valuable as this information helps organizations better understand consumer’s judgment s and actions (mihart, 2012. p. 126). this study however does not isolate sponsorship and its impact on the stages of the consumer decision-making process. the study at hand contributes to the body of knowledge as it clearly specifies which stages of the consumer decision-making process sponsors can better reach consumers. this knowledge also provides room for further research on how sponsors can leverage their sponsorship to be effective in the purchase and post-purchase stages of the consumer decision-making process. this study further contributes to literature in sponsorship and consumer behavior. thurston (2011. p. i) found that sponsorship has a positive influence on sponsor awareness within the south african context however, limited research identifying whether this awareness of sponsors further extents to the recall of sponsor brands during the decision-making process. the study at hand supports the findings by thurston (2011. p. i) that sponsorship creates awareness of sponsor brands in the minds of consumers. the findings contribute to consumer behavior literature and suggest that this awareness improves the consumer’s ability to recall brands as consideration sets during the second stage of the consumer decision-making process (stage 2: searching for alternatives). herrmann et al. 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(2014), dynamic effects of sponsoring: how sponsorship awareness develops over time. journal of advertising, 43(2), 142-154. . international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2018, 8(3), 32-35. international review of management and marketing | vol 8 • issue 3 • 201832 factors influencing the use of e-management from manager’s perspective: an applied study in saudi communication sector abdulah m. aseri* department of management information system, college of business administration, imam abdulrahman bin faisal university, saudi arabia. *email: amaseri@iau.edu.sa abstract electronic management (e-management) is considered as an important organizational mechanism that is critical for the effectiveness of decision making and control in organizations. the main purpose of this paper is to investigate the factors influencing the use of e-management in saudi communication sector from manager’s perspective. data is collected through questionnaires from communication companies in saudi arabia. smart partial least squares was used to analyze the data and to test the study hypotheses. findings proof that perceived usefulness, ease of use and trust have a significant impact on using e-management. keywords: e-management, electronic management, e-management factors, communication companies jel classifications: m10, m15 1. introduction information technology revolution and the fast evolution in electronics, computers and communication have achieved quick and comprehensive exchange of information within the rapid flow of data policy, coupled with the widespread use of the internet and its investment in the field of electronic business activity within the concepts of e-business and electronic commerce. meanwhile, communication institutions are essential to economic system, continued technological innovation and fierce competition between the communication company, has contributed in the accelerated developments in the industry, and new forms of e-management have emerged in various areas of these industry. e-management tools and strategy in developing countries should first target the improvement of their operations and processes and also the level of departments ability to cooperate. this system combines the methodologies, controls and accounting techniques to track financial transactions and to provide internal and external reporting data as well as helping the preparation of financial statements with capabilities to improve organizational performance (pérez estébanez et al., 2010). e-management improves the quality of organizations’ performance through the use of modern, efficient electronic methods that characterized by high quality and accuracy in solving traditional management problem (al-nimr and khashoggi, 2006). this tool is multidimensional which can achieve a lot of goals and objectives. responding to the increasing daily work and work pressure, which now expects more than manage of organization resources, is a widely adopted view in e-management services. as well as, the successful implementation and manage of an effective e-management is mainly related to organizational change and facilities. however, despite the observed remarkable progress in the managerial process and the great benefits of technological innovation, we still see deficient in the using of these services and the traditional way of management system is still applied. to sum up, this research mainly aimed to investigate the most important factors that limit the use of e-management in saudi communication sector from manager’s perspective. this study seeks to address and explore this issue in a systematic research process that aims to answer the following main question. aseri: factors influencing the use of e-management from manager’s perspective: an applied study in saudi communication sector international review of management and marketing | vol 8 • issue 3 • 2018 33 1.1. what are factors influencing the use of e-management in saudi communication sector from manager’s perspective? the main aim of this study is to investigate factors influencing the use of e-management in saudi communication sector from manager’s perspective. the study also seeks to achieve the following objectives: • providing an overview of the available literature relating to e-management. • identify the most important factors that affecting the use of e-management in saudi’s communication sector. • providing recommendations for decision makers based on the findings of the study. 2. literature review electronic management (e-management) term is related to modern information technology and its various components. it can be defined as integration of information and data to achieve the organization goals with flexibility in their internal operations and respond to the environment changes both internal and external (radwan, 2007). younis (2016) define e-management as administrative processes that rely on electronic tools and their application efficiently which lead to the development of the organization through improve technical capacity and enhance the effectiveness of information exchange to reach the desired objectives. it is also defined as a set of elements that interact with each other to collect, store, process and report data and information to enhance the processes of decision making processes (al-adaileh, 2008. p. 17). e-management services are available to support different organizational levels including operational, tactical, and strategic level. these systems can provide a continuous flow of information from internal or external sources. e-management is considered as an important organizational mechanism that is critical for effectiveness of decision management and control in organizations (sajady et al., 2008. p. 50). furthermore, the application of e-management achieves a number of benefits for the organization including (al-salmi and sulaiti, 2009): • simplification of managerial procedures within organization. • shorten the execution time of the various administrative transactions. • facilitate communication between different departments of the organization. • accuracy and objectivity in the completion of various processes within the organization. • reduce the use of paper significantly and this positively affects the work of the organization. the essential of e-management is maximize, manage and maintain the performance which consider as a key role to play in improving the overall value of an organization (armstrong and baron, 1998). as well as, effectiveness of e-management also depends on the perception of decision makers on the usefulness of information generated by the system to satisfy informational needs for operation processes, managerial reports, budgeting and control within the organization (nwinee et al., 2016). the quality of an e-management depends on many factors, critical among these are the organization’s information policy, the number of users and their educational level, and motivation. thus, the relationship between e-management and organizational performance would be influenced by many factors. according to the pervious argument we analyze the contingency fit these factors and use of e-management. therefore, we formulate the following hypotheses. 3. research hypothesis and model • h1: perceived usefulness has a significant statistical impact on the using of e-management. • h2: ease of use has a significant statistical impact on the using of e-management. • h3: trust has a significant statistical impact on the using of e-management. to test the above hypotheses, the following research model is proposed (figure 1). 4. research methodology 4.1. data collection method and sampling framework research methodology involves describing, explaining and predicting phenomena in addition to the research plan. it is necessary for the researcher to recognize the research and its contents to be able to identify the type of research. however, this research adopted a descriptive and analytical approach. a quantitative survey was used to collect the necessary data. the study population included all managers of the saudi’s communication companies. a convenient sampling techniques was used to select the participants. 110 questionnaires were distributed. 100 questionnaires were analyzed. table 1 outlines the sample characteristics. 4.2. instrument design the research is based on questionnaire that was developed for the purpose of this study. face validity and contents validity of the table 1: sample characteristics personal information frequency (%) diploma (college) degree 17 (17) bachler’s degree 50 (50) educational level master degree 25 (25) phd degree 8 (8) experience <5 years 35 (35) 11–15 years 37 (37) more than 15 28 (28) total 100 (100) aseri: factors influencing the use of e-management from manager’s perspective: an applied study in saudi communication sector international review of management and marketing | vol 8 • issue 3 • 201834 questionnaire were made. the answers were classified according to five likert scale. the questionnaire includes two parts; the first part contains 2 items that related to personal information; the second part contains 15 items related to the research variables. 5. data analysis partial least squares (pls) was chosen for the current study using smartpls software. it was used in a two-stage approach, measurement and structural model testing. 5.1. measurement model the measurement model can be assessed by examining the reliability, convergent validity and discriminant validity. specifically, reliability which refers to the internal consistency of measurement, can be assessed by checking if the value of composite reliability (cr) is more than 0.7, the average variance extracted (ave) is >0.5 and cronbach’s α is >0.6 (hair et al., 2006). table 2 shows that the cr values ranged from 0.85 to 0.91 and the ave values ranged from 0.62 to 0.84. these values are higher than the acceptance value 0.70 and 0.50 which indicate a good construct reliability. furthermore, in order to check the convergent validity, loading factor for each item was calculated. all item loadings are larger than 0.6 and t values indicate that all loadings are significant at 0.05 which indicates that the scale has a good convergent validity. bootstrapping method in smartpls software was used to test the statistical significance of path coefficients. figure 2 shows the p value for all research variables and the pls model of the study. 5.2. structural model the analysis result reveals that the factor (perceived usefulness) has a significant impact on using e-management (t = 23.46, p ≤ 0.001) which supported h1. in addition, perceived usefulness explained 0.65% of using e-management variance. moreover, ease of use has a significant positive influence on using e-management with values (t = 28.64, p ≤ 0.001) and can explain 0.44% of using e-management variance. thus, h2 was supported. furthermore, trust has a significant positive influence on using e-management with t values (14.98) and (p ≤ 0.001) figure 1: research model figure 2: result of partial least squares table 2: result of construct assessment constructs items factor loading mean±sd cr cronbach’s α ave using of e-management um1 0.773 0.673±4.467 0.828 0.615 um2 0.781 0.82±3.46 um3 0.822 0.685±4.204 0.851 um4 0.811 0.681±4.248 p1 0.788 0.87±3.956 perceived usefulness p2 0.862 0.733±4.058 0.863 0.824 0.695 p3 0.813 0.778±3.964 p4 0.72 0.755±3.954 e1 0.81 0.686±4.182 ease of use e2 0.884 0.784±3.883 0.915 0.891 0.771 e3 0.834 0.758±4.036 trust t1 0.892 0.853±3.847 t2 0.788 0.731±3.832 0.903 0.874 0.811 t3 0.899 0.749±3.788 sd: standard deviation table 3: hypothesis testing results no. path (hypothesis) t p r2 results 1 perceived usefulness→using e-management h1 23.46 *** 0.65 supported 2 ease of use→using e-management h2 28.64 *** 0.44 supported 3 trust→using e-management h3 14.98 *** 0.53 supported aseri: factors influencing the use of e-management from manager’s perspective: an applied study in saudi communication sector international review of management and marketing | vol 8 • issue 3 • 2018 35 and can explain 0.53% of using e-management variance. thus, h3 was supported. summary of hypothesis testing results are presented in table 3. 6. conclusion the primary insights from this research are as follows. perceived usefulness might be seen as a strong predictor of the using of e-management, coinciding with previous findings in the literature. regarding the ease of use, the results show that ease of use has a positive and significant influence on using of e-management with previous findings in the literature (charag and ahmad, 2013). finally, the research revealed that trust can enhance the using of e-management which agrees with the study of (de oliveira et.al, 2012). the study concludes that more concern should be directed towards using of e-management as an enhancement tool for better organizational performance. management willingness and awareness seem important and their continuous support is needed to push up using of e-management. references al-adaileh, r. (2008), essentials of management information systems. karak-jordan: yazeed-publications. al-nimr, s.m., khashoggi, h.y. (2006), general administration: foundations and functions. riyadh: al shokri library. al-salmi, a., al-sulaiti, k. (2009), e-management, v1. amman, jordan: dar wael publishing and distribution. p36-37. armstrong, m., baron, a. (1998), performance management: the new realities. state mutual book and periodical service. boston: harvard business school publishing corporation. charag, o., ahmad, m. (2013), optimizing service delivery magnitude by usage of electronic service delivery mechanism of e-governance. international journal of applied services marketing perspectives, 2(2), 429-236. hair, j.f., black, w.c., babin, b.j., anderson, r.e., tatham, r.l. (2006), multivariate data analysis. 6th ed. uppersaddle river: pearson prentice hall. nwinee, k., akpos, y., vincent, g., ibinabo, t. (2016), impact of accounting information system on organizational effectiveness: a study of selected small and medium scale enterprises in woji, portharcourt. international journal of research, 3(1), 974-982. olivas-lujan, m.r., ramirez, j., zapata-cantu, l. (2007), e-hrm in mexico: adapting innovations for global competitiveness. international journal of manpower. emerald group publishing limited., 28(5), 418-434. pérez estébanez, r., urquía grande, e., muñoz colomina, c. (2010), information technology implementation: evidence in spanish smes. international journal of accounting and information management, 18(1), 39-57. radwan, r. (2007), electronic management second administrative forum of the saudi society of management. cairo: information and decision support center. sajady, h., dastgir, m., nejad, h.h. (2008), evaluation of the effectiveness of accounting information systems. international journal of information science and technology, 6(2), 49-59. younis, m. (2016), the transformation towards electronic management conference of the development of the system of pre-university education visions and projects, nasr, egypt. . international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2018, 8(1), 93-97. international review of management and marketing | vol 8 • issue 1 • 2018 93 comparison of management information system and decision support system and its role in the decision-making process of managers of economic affairs and finance of zahedan abdolali keshtegar1*, nadia vakili2 1department of human resource management, university of sistan and baluchestan, zahedan, iran, 2department of management, university of sistan and baluchestan, zahedan, iran. *email: alikestegar@yahoo.com abstract nowadays, the variety of information systems and their advantages are sometimes accompanied by common and interfering concepts and goals. this variety and dispersion have created complexity and instability in decision-making of organizations mangers and information technology development plans. overall to solve this complexity, information systems are defined in two broad classes: specific connection with the operational field and in general connection with the operational field. management information system (mis) and decision support system (dss) systems are among the systems in general connection with the operational field, each of which plays a decisive role in the organizational hierarchy and decision-making process of the mangers. mis system brings about the information needed to manage an organization, and dss provides data, models, and analysis tools to help adopt decisions in non-routine cases in the organization. after discussion on decision-making process based on each concept, this study described its characteristics, relationships, and communication of each concept for the decision-making process. the results of regression analysis of data from 20 questionnaires received from the managers of economic affairs and finance in zahedan showed that mis and dss have a significant relationship with the decision-making process of managers and that rational decision-making process as the intermediary variable inferred and explained this effect. keywords: management information system, decision support system, managers, decision-making process jel classifications: d8, l1 1. introduction traditionally, organizations have been divided and organized independent from each other based on operational or functional bases. the structure of most of these is designed based on independent and differentiated attitudes, so that all agents of the organization are focused on the work and expertise and experience in each of the autonomous and independent departments (mostajeran, 2008). unfortunately, organization based on tasks sometimes strengthens the look and attention to the inside of the organization, which leads to limited execution and limited task operations. this inner look pays the most attention to occasions within the task areas and reduces the coordination between task areas and pays less attention to increases customer value. with the development of information technology (it) and its role in the economic and commercial development of organizations, the losses of independent and non-continuous, task-oriented structures were identified, and many organizations moved towards a processor’s perspective to create a value-added loop. thus, the use of information systems to develop and improve communication, decision-making and control of all processes inside and outside the organization found a critical state and role. 1.1. problem statement studies in the field of it management can be divided into two major groups: (1) studies dealing with the system’s nature and (2) studies and on the effect of the information and support system on the rational decision-making process and the factors affecting it (olson and davis, 2015). studies on the first group are many with good results obtained, but studies on the rational decisionmaking process and the factors affecting it, while being limited have often find yielded contradictory results (laudon&kenneth, 2009). papadakis et al. believe that in spite of numerous studies, our knowledge of the rational decision-making process is truly keshtegar and vakili: comparison of management information system and decision support system and its role in the decision-making process of managers of economic affairs and finance of zahedan international review of management and marketing | vol 8 • issue 1 • 201894 limited. this sample of results and discussions reflects the fact that past studies in the area of strategic decision-making process have not obtained an acceptable and vivid viewpoint, so selecting the proper decision-making process considering its effective factors to reach the goals of the organization are not well-known for managers (archer, 1980). one of the factors probably effective in selecting the type of decision-making process for managers is the comparison between the management information system (mis) and decision support system (dss) and its effect on managers’ decision-making. 1.2. research questions given discussions cited in previous studies and the above questions, the questions of this study are as follows: • are mis and dss effective in decision making? • does the rational decision-making process affect the quality of decision? • does the decision-making process interfere with the comparison of mis and dss as an intervening variable? 1.3. research goals the goals of this study are: a. helping bridge the gap between existing studies in this case b. determining the probable relationship between mis and dss in this regard. 1.4. the significance and advantages of the study based on the results of previous studies, it is concluded that: • as some studies on the effect of manager’s characteristics on the choice of the decision-making process in economic affairs and finance (eaf) have reached contradictory results, the results of this study can help to bridge the gap between these studies. • the results of this study can help better understand the effect of managerial characteristics on selecting the decision process and its effect on decision quality in eaf. • it appears that for the first time that this study examines the role of rational decision-making as an intervening variable between mis and dss. 1.5. research realm this study is limited to eaf organization in zahedan. this study compared mis, dss, and its effect on decision-making of mangers. 1.6. review of literature the degree to which a system works well depends on many factors such as the use type, equipment, technical capabilities of the human resources, the support of the high manager of the organization and its previous experiences (donnelly et al, 1998). nonetheless, the following capabilities can be considered as desirable features of the more widely accepted information systems by users of miss. they should provide accurate information to decision makers in a timely manner. the timeliness of the information is something that should be specified by the user. accurate information is not provided when needed; it might lose its use or be of little use. this may seem obvious it is often neglected, though. thus, the timely and accurate presentation of information is one of the purposes of each information system (dean & sharfman, 1996). an information system should provide an exception-based report to the management. managers are not interested in knowing hundreds of activities done satisfactorily, but they are interested in knowing the factors out of control or are soon out of control. when we consider the unlimited power of a computer in producing reports that lack meaningful content, the importance of the exception-based report becomes clear (christen et al, 1982). the need for speed in decision-making has increased nowadays as common data has increased too much. on the other hand, decision-making environments have become more complex, and due to increased competitive pressure, decision-making becomes more difficult. human mind constraints on data processing and access to limited information and knowledge of individuals have set us at disadvantage, and if we use multiple experts to solve these problems, it will be so costly. moreover, it will be difficult to establish coordination and communication between people. studies have indicated that designing a computer-based dss can facilitate reallife decisions. it can also improve the quality of decisions and the efficiency and effectiveness of the decision-making processes. now, consider a bank that lends money to its customers. the customer goes to the bank and applies for a loan in order to buy a house. the bank employee collects information on how much loan will be given to the client under what circumstances. information that is being compiled consists of customer employment status, income, history of loans and other economic information. as the loan is to buy a house, the clerk also collects a database of property. this information includes the legal description and market value of the appraisal. the bank also considers the status of the real estate market, including interest rates provided by other financial institutions. finally, the bank considers its own economic situation, such as knowing how much money is available to give loans, how much loans have recently been adopted, and how it has been with the same customers. a dss can enable an employee make an informed decision based on data collected from external or internal sources (feizi and moghaddasi, 2010). three points are deduced from previous studies on the organization management: a. all decisions of the managers of organizations are based on information. b. information and support systems such as capital, individuals, equipment, machinery, and so on are considered as organizational resources. c. if information is optimized, analyzed, and then transmitted it will contribute to proper decisions and golden opportunities for the growth, development and survival of the organization. 1.7. theoretical framework the most important variable for this study is the quality of decision, which is a dependent variable. given the results of examining previous studies and the questions raised in this study, the theoretical framework of the study is described in figure 1. the model is of a quantitative nature: (1) the effect of information keshtegar and vakili: comparison of management information system and decision support system and its role in the decision-making process of managers of economic affairs and finance of zahedan international review of management and marketing | vol 8 • issue 1 • 2018 95 system on decision making, (2) the effect of the support system on decision making, and (3) the role of the rational decision-making process in the relationship between the comparison of the information system and the support system. 1.8. research hypotheses hypothesis 1: mis has a negative or inverse effect on decisionmaking. hypothesis 2: dss has a positive effect on decision-making. hypothesis 3: the rational decision-making process is involved in the relationship between the comparison of information system and the support system. 2. methods various researchers have used several methods for conducting such studies, which are mainly laboratory methods, case study, scenario study, and field study. based on my theory of carlisle (1979), the laboratory method is not suitable for studying the effect of manager’s characteristics and characteristics on the strategic decision-making process, especially in large and complex organizations. case studies are limited to a specific case or subject research and not suitable for these studies unless many cases are studied, which itself requires a considerable amount of time and money. eisenhardt and bourgeois (1988) argue two unrealistic stages in the case study that can lead to a deviation of the data from the truth. first, the author should prepare a specific situation based on his own understanding in the form of a case, and that the researcher must study this and judge it according to his perception, both of which can lead to evaluation of the unrealistic data so unfavorable results. scenario method, in which the questions are based on a fictitious or artificial subject, is not a suitable method for research related to strategic decisions and can divert the outcome of the studies from reality. given the aforementioned points, field study was used in this study. thus, what has been investigated and analyzed is the true processes of decision-making in the real environment of the organization, rather than hypothetical decisions or artificial and fictitious environments. 2.1. population and sample the population of the study was 100 mangers of eaf organization in zahedan. we consider 20 managers and experts in the field of it as the sample. 2.2. sampling method the sampling method was random, so that all managers and experts of the organization of aef organization were randomly sampled in proportion to their volume. instead of expanding the population, all aef organizations of the country were limited to zahedan population given the following reasons. a. student presence in this area b. considering the complexity and specific problems of this type of study, selecting one geographic region can help to track and receive responses. in order to encourage managers to participate in this preliminary research for the selection of 20 organizations were sent and asked to add to the value of the findings of this company by participating in this study and cooperating with them. 2.3. data collection tools turning to the introductory letter, 20 questionnaires were sent to the relevant organization. in order to explain the keywords and how to answer the questions, the managers were asked to initially insert the last strategic decision of the organization that took place in the last 24 months at the place specified in the questionnaire. 2.4. analysis to collect information and data needed for this study, the participants were asked to identify and provide answers to the questions contained in the questionnaire, based on what was actually done in the last strategic decision. thus, the analytical unit in this study was formed of individual responses or, in other words, the decision as the risk level of managers varies from person to person and thus cannot be related to the analytical unit to the decision team or organization (sarfizadeh., 2009). 2.5. designing the questionnaire the questions of the questionnaire were divided into four distinct parts: (1) the effect of the information system, (2) the extent of effect of the support system, (3) the quality of the decision of the managers, and (4) the general information of the managers. researchers recommend that as much as possible questionnaires of the previous studies be used. considering this and to contribute to the creation and increase of the questions of this kind of research, a number of questions were prepared from previous questionnaires and specific numbers for this study. all questions were ranked on a numerical scale using five-option likert. dean and sharfman(1996) considered five-point scale appropriated and recommended it. 2.6. questionnaire test for studying the validity of the questionnaire and ensuring the clarity of the questions, their appropriateness, elimination of vague questions, and improving the form and content of the questionnaire, which ultimately leads to better understanding and analysis of the data, besides using standard questionnaires, the views of the professors and experts (other than the final sample) were received on the regulatory questionnaire and appropriate decisions were made according to their rational suggestions. in order to ensure the reliability of the corrected questionnaire, the cronbach reliability of the questionnaire was determined using spss. the obtained cronbach alpha for the effect of information system on the decision was 86%, for the questionnaire of the effectiveness of the support system 87%, for the quality of the decision 76%, and for the whole questions 81%, which showed a high reliability for the questionnaire. decision information system x support system y quality of decision z figure 1: theoretical framework of the study keshtegar and vakili: comparison of management information system and decision support system and its role in the decision-making process of managers of economic affairs and finance of zahedan international review of management and marketing | vol 8 • issue 1 • 201896 3. results 3.1. demographic features from among the participants, 78% were male and 22% were women. the average age of respondents was 35 years and 85% of respondents were married. the majority of the managers participating in the study had a bachelor’s and higher degrees (88%) and their years of service were 15 years. 3.2. descriptive statistics table 1 specifies minimum, maximum, mean, and standard deviations of the variables. the mean of variables was 1.4–2.6 indicating the normality of the data and the standard deviations of the variables represent the acceptable variations in them that specify the interaction between the variables. thus, it is concluded that the research data is suitable for analysis and no unusual cases are seen between them. 3.3. testing hypotheses: correlation analysis correlation analysis was used to create a general and preliminary image of the relationship between research variables. according to the results of the analysis presented in table 2, it is clear that there is a significant and negative correlation between the effect of information system and the quality of decision-making (−0.04, p < 0.05) and there is a significant and direct relationship between the effect of the support system and the quality of the decision (r = 0.145, **p < 0.1). 3.4. regression analysis regression analysis was used to specify and determine the effect of information system on the rational decision-making process, and how much the use of support system affects the quality of the decision. as shown in table 3, the effect of the information system on the use of the rational decision-making process is not reverse. in other words, the information system affects their desire to use the rational process in decision making. the table 3 also shows that the rational decision-making process can significantly improve the quality of the decision, so this variable, rational decision-making process, has a direct effect on the quality of the decision. 3.5. analysis of ladder or hierarchical regression hypothesis 3 implies the rational decision-making process involved in describing the relationship between the comparison of the information system and the support system. to test this hypothesis, as suggested by researchers astley et al. (1982) hierarchical or ladder regression was used. based on the theory by baron and kenny (1986), when the effect of an intermediary or intermediate variable between independent and dependent variables can be examined and tested to satisfy the following conditions: a. the independent variable should affect the intermediary variable. b. the independent variable should affect the dependent variable. c. the intermediary variable should affect the dependent variable. the results of the hierarchical regression in table 4 show that the rational decision-making process can significantly influence the effectiveness of the information system and the support system variables on the dependent variable, i.e., it can conceptualize and describe the effect between these variables. this description or intervention implies that improving the quality of the decision is more likely to happen when the manager uses the rational process in his decisions (δr = 0.139–0.110 = 0.029). 4. conclusion and implications this study obtained some expected and some unexpected results in analysis. the overview of the responses, attributes, and characteristics of the participating organization (eaf) in this study showed that the organizations (administration), information table 1: descriptive statistics variables n min max sum mean±sd the effect of information system x 15 1.00 5.00 100.518 2.0443±0.3044 the effect of support system y 15 1.00 4.33 98.077 1.3547±0.1108 quality of decision z 15 1.44 5.00 160.118 2.5933±0.2720 sd: standard deviation table 2: correlation coefficient between variables variables x y z the effect of information system x pearson correlation 1.000 −0.04* −0.101** the effect of support system y pearson correlation −0.04* 1.000 0.145** quality of decision z pearson correlation −0.101** 0.145** 1.000 table 3: regression analysis variables the effect of support system y quality of decision z the effect of information system x 0.4* −0.101** quality of decision z 0.145** table 4: ladder analysis: the effect of intermediary variable variables equation 1 quality of decision equation 2 quality of decision r2 change effect the effect of information system x −0.101** quality of decision and impact of information system x 0.169* r2 0.110 0.139 0.029 effective **significant at the 0.01 level. *significant at the 0.05 level keshtegar and vakili: comparison of management information system and decision support system and its role in the decision-making process of managers of economic affairs and finance of zahedan international review of management and marketing | vol 8 • issue 1 • 2018 97 and support system play a decisive role in deciding rather than small organizations. perhaps it is because large and medium size organizations have sufficient resources (labor, money, equipment, etc.) to further explore and implement the various stages of the rational process. on the other hand, managers in large organizations usually have a recruitment status, so they consider themselves responsible and accountable to the government, and consequently they make decisions more carefully for more certainty. the data showed that the rationality of the decision has nothing to do with the different management categories, whereas senior managers tend to use more rational decision-making because the risk of young managers is greater than that of senior managers, so young managers prefer to decide more quickly and consequently use less rational decision-making process. most of the managers participating in this survey have university degrees (bachelor’s degree or higher) and have an average working experience of about 15 years, which reflected their potential and capability. one of the most important factors that make this happen is information systems. one can state that the realization of the goals and the correct implementation of the tasks of the state without the use of information systems are impossible. due to the growing importance of information systems in the service delivery process, it is assumed that organizations are turning to more and more of these systems to expand the market and profit margin. the major benefits that these systems have created for organizations include: • timely response to opportunities and environmental threats • accelerating the processes of service delivery • accelerating organizational processes, including decision making • increasing confidence in the decisions adopted • reducing organizational costs. thus, considering the abovementioned points, it is suggested that organizations invest in the deployment and use of information systems and support systems to maximize the efficiency and effectiveness of their operations. otherwise, an inverse relationship would be created between them. better quality of the decisions is obtained by the implementation of the support system and information system, so organizations should encourage managers to make the most of this process. managers with a long history are not interest in using the support system and information system so much, so in cases when the issue is important because of the importance of the issue, it is better for decision team members to be selected from young managers. this is because the more the managers use the process of information system and support in the organizations, the better the quality of the decisions will be. references archer, e.r. 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(2015), management information system: conceptual, foundations, structure, and development. 2nd ed. new york: mc graw-hill. dean, j.w. jr., sharfman, m.p. (1996), does decision process matter? a study of strategic decision making effectiveness. academy of management journal, 39, 368-396. donnelly, j.h., gibson, j.l., ivancevich, j.m. (1998), fundamentals of management. 10th ed. ny: irwin, inc. eisenhardt, k.m., bourgeois, l.j.3rd. (1988), politics of strategic decisionmaking in high velocity environments: toward a midrange theory. academy of management journal, 31, 737-770. feizi, k., moghadasi, a.r. (2010), the use of decision support systems in decision makers. journal of management studies, 45, 155. laudon, j.p.l., kenneth, c. (2009), management information systems. what is management information systems? mays business school. archived from the original on may 9, 2016. prentice hall: course smart. p164 mostajeran, a. (2008), management information systems. tehran: publication of petrochemical company audit and management services. sarfizadeh, a. (2009), information technology in the organization (it, concepts and applications). tehran: mir publications. sohrabi, y.b., reissi, v.i., ronaghi, m.h., boghrati, f., kargar, m.h., valipour, m. (2012), the business intelligence book. usa: elservier. . international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2017, 7(1), 529-536. international review of management and marketing | vol 7 • issue 1 • 2017 529 experiential marketing creative antecedence for success of brand loyalty (a study on the users of perfume for body in indonesia) gita sugiyarti1,2*, hendar3 1faculty of economics and business, diponegoro university, semarang, indonesia, 2faculty of economics and business, 17 agustus 1945 university (untag), semarang, indonesia, 3faculty of economics and business, diponegoro university, semarang, indonesia. *email: gitaayuaris@gmail.com abstract the main objective of this study is to develop a model of marketing conceptual on creative experiential marketing in order to boost brand loyalty. the specific target of this study is to empirically test creative influence on experiential marketing. purposive sampling technique is applied in the study the collect data. samples are taken as many as 171 respondents of the users of perfume for body sold in indonesia. data in this study is collected by interview. data collection is using the combination of open questions and closed questions which are given to respondents. managerial finding in this study is developing creative experiential marketing to enhance brand loyalty. keywords: sense marketing, act marketing, creative experiential marketing, brand trust, brand loyalty jel classifications: m5, m21 1. introduction the condition of competition is getting harder (docquier and machado, 2015; bartanen and littlefield, 2015; hakkak and ghodsi, 2015), so every company must be able to survive (kusi et al., 2015; olalekan and tajudeen, 2015), even it must keep developing. one thing that has to be done and paid attention to by every company is to keep its existed customers and to keep hoping that new potential customers do not turn their loyalty to other products. customer loyalty is an important concept (ibojo and asabi, 2015), especially during tight competition while the growth is low. in this situation, customer loyalty is needed so company can survive (napitupulu and aditomo, 2015). on the other hand, an effort to keep customer loyalty is a strategic effort compared to an effort to gain new customers. in order to be able to gain new customers (bricci et al., 2016), currently there are many companies which use experiential marketing approach, which approach is not only selling good products but also making customers impressed, feeling deep emotion towards the marketed products (hannam, 2004). interaction between company and customers creates emotional bond (gupta and chopde, 2011), where there is an ability to solve a problem in a marketing to create problem solving on a brand, and to promote the result of a business, an effort to create an enjoyable experience on a brand is needed (petkus, 2004; hannam, 2004). the concept of experiential marketing is a widely-accepted level concept to create the perfectness of benefit towards experiences. experiential marketing is a marketing approach conducted by marketers since the old times up to now (schmitt, 1999; steenhouse, 2003; zhao and zhang, 2009), stated that the shift of traditional marketing approach to experiential marketing approach is because of three factors of development in business world; firstly, brand benefit through the advance of brand information technology (gensler et al., 2013) can be widely spread through various media quickly. brand takes control over a product or service, which means that brand is as the creator of sugiyarti and hendar: experiential marketing creative antecedence for success of brand loyalty (a study on the users of perfume for body in indonesia) international review of management and marketing | vol 7 • issue 1 • 2017530 experience for the consumers. secondly is information technology factor. advanced technology caused by information technology revolution can create one’s experience and share it to others wherever they are, such as sharing it through computer media, cell phones, etc. thirdly, the many existing communication and entertainment cause the tendency of all products and services to have brands and to have abundant numbers. for marketers, those can be formed into communication and entertainment form which can create experience for consumers (schmitt, 1999). in order to build communication and relationship among consumers where brand is the main purpose of companies and a marketer (keller, 2003). companies are urged to connect their products and product line, to fulfill consumers’ demands in various segments in the markets, (fournier, 1998). research about brand image (zhang, 2015), plays important role in determining consumers’ decision to purchase a product offered by the company. in order to develop brand loyalty (lakeh et al., 2015), there are two connection felt by consumers towards certain products and services, which first, customers’ preference level (the amount of trust) towards products and services (griffin, 1995). second, the level of perceived product difference, e.g., how much significant do customers differentiate certain products and services against other alternatives. this study aims to analyze experiential marketing factors which can increase brand loyalty creatively. according to background and the purpose of the study, thus, the problems of the research is: how to build creative experiential marketing to enhance brand loyalty. 2. literature review 2.1. sense sense marketing has appeal with sense, aiming to create sensory experience through sight, sound, touch, feeling, and smell. sense marketing (krishna and schwarz, 2014) can be used for differentiating companies and product, in order to motivate consumers, and to add product value (schmitt, 1999). sense marketing needs an understanding about how to reach sensory effect. the purpose of sense creates aesthetics fun, joy, beauty, and satisfaction through sense’s stimulation. three keys that can motivate sense marketing (zhao and zhang, 2009) are: first, sense as differentiator. sense campaign is to attract consumers because it can perform extraordinarily. the way to attract consumers’ attention is through product, communication, and space design. sense campaign stimulates through new ways and strategies which then become product differentiator. second, sense as motivator. sense campaign can do more. it can motivate consumers to try out products and purchase them. the main issue is how to stimulate consumers without pushing them too hard or be indifferent to them. along with the optimal level of stimulation and activation, sense campaign can be a strong motivational strength. third, sense as value provider. sense campaign can give unique value towards consumers. study of hamzah (2007) found that consumer’s value in using mentari, knowing how much effect of experiential marketing, emotional branding and brand trust in building brand loyalty of mentari consumers, knowing how much effect of sense, feel, think, act, relate, commandment, fiability and intention towards the development of brand loyalty of the consumers of mentari. study of farrel (2000), rachna, (2011), consumer perception and change appeal happen gradually along with the availability of goods and adequate substitute service in the market. consumers are weaker in sensory stimulation towards goods and service related to convincing attitude which is more depending on its sensory stimulation. although traditional marketers are focused on the development of products and the needs of consumers, developing various kinds of attitude about the choosing of goods and services. many pro-active companies are involved in (above the line-an activity where the institution gets income from media corporate, e.g., ads in newspaper, magazine, tv and radio) and (below the line-an activity related to promotion, e.g., marketing promotion, private marketing, direct marketing and pr), an activity to develop new trends, (through the line, e.g., ads to reach consumers in all sensory points). in accordance with the above explanation, first hypothesis is formed. h1: a positive association exists between sense marketing and creative experiential marketing. 2.2. act study of schmitt (1999); fransisca (2007b), act functions to create valuable experience for consumers, physically as behavioral pattern and long term life style, experience with others; first, physical experience with motor: technique of motoric activity behavior works not only when someone does self-motoric activity, but also interact socially with others. body signal: a marketer can use body signal like signs or body language, voice stress and eye contact in order to influence consumer behavior. second, life style means one’s life pattern expressed through one’s activity on interest and opinion. in order to express life style to others and themselves, consumers need examiner and indicator about brands that possess one’s life style or brands reflecting someone. as marketers, they should be sensitive in looking at life style trend or even, can be the motor of life style trend, such as, influencing action without thinking, role model, and social norm. the interaction has a close relation with physical behavior and social behavior of the activity of people who interact. study (li, 2008) found how local traditional culture and experiential marketing observe the difference of the introduction of experiential activity and taiwan sugar corporate (tsc) and its consumers. this study discusses the way tsc markets taiwanese local culture by using experiential marketing strategy. act is consumers’ and experts’ main attention after tsc is transformed. thus tsc must increase facilities related to act to attract consumers. experts give second priority towards “relate” but consumers emphasize on “feel.” thus tsc must decrease “relate” but increase “feel” to attract and satisfy consumers. on sense, sight is an important factor on experts and consumers. thus tsc must plan on how to make consumers impressed sugiyarti and hendar: experiential marketing creative antecedence for success of brand loyalty (a study on the users of perfume for body in indonesia) international review of management and marketing | vol 7 • issue 1 • 2017 531 and comfortable when they are in the branch of tsc. on act, interaction is experts’ and consumers’ priority. thus tsc does not only increase on the design of act experience but also on how to increase consumers’ opportunity to interact with others. on relate, culture is the most important factor on consumers and experts. this study is in the line with (schmitt, 1999; hamzah, 2007; fransisca, 2007a). in accordance with the above explanation, second hypothesis is formed. h2: a positive association exists between act marketing and creative experiential marketing. 2.3. creative experiential marketing experiential marketing is a marketing concept which tries to communicate marketed products by drawing consumers’ attention, touching their hearts to give impression about the marketed products into their hearts and minds (schmitt, 1999). experiential marketing basically determines processing map for environment where a company will place its brand (passikof, 2006). experiential marketing is a process to identify and satisfy the needs of consumers and profitable aspiration, involving consumers through two-way communication which bring brand personality for life and add value of audience target. two-way communication and interactive involvement are the keys to create impressive experience which triggers word of mouth, and change consumers to become brand supporters and consumers’ loyalty towards a brand. creative experiential marketing is an ability to create experience and emotion within the consumers by using various kinds of strategy so that it creates deep impression on consumers’ heart on corporate products, so in the end consumers purchase and then re-purchase and give reference to others to purchase the corporate products. study (kao et al., 2007), there is a positive influence between experiential marketing and brand trust, brand loyalty through the aspect of experiential marketing, such as sense, feel, think, act, and relate (schmitt, 1999; fransisca, 2007a; hamzah, 2007) stated that experiential marketing is effective for marketers to build trust and brand loyalty through the aspects of sense, feel, think, act, and relate. in accordance with the above explanation, third hypothesis is formed. h3: a positive association exists between creative experiential marketing and brand trust. 2.4. brand loyalty experiential marketing functions as a way to build brand equity. brand equity includes unseparated consumers’ life style interaction. marketers need to communicate association, interest, life style, of the widely-marketed products and services in the social context and in the strong emotional bond. study of mendez et al. (2015), experiential marketing, in its development, faces many challenges related to the measurement of its success. different (hazlett, 2003) with the measurement of the achieved result, marketers will not wait because they agree with what is proven by a research: consumers are difficult to differentiate among products. technology advancement produces many similarities among those products. the change offered by customer service creates the same effect on their customers. study of fransisca (2007b) stated that experiential marketing is very effective for marketers to build brand loyalty. study of (hamzah, 2007) found that there is a positive effect between experiential marketing and brand loyalty through the aspect of experiential marketing; sense, feel, think, act and relate. experiential marketing has advantages on some situation, including preventing brand decrease, differentiating products with competitor’s products, creating images and as corporate’s identity, in order to promote innovation and cause purchase trial, finally consumers are loyal to the corporate’s products, (schmitt, 1999, hamzah, 2007). in accordance with the above explanation, fourth hypothesis is formed. h4: a positive association exists between creative experiential marketing and brand loyalty. 2.5. brand trust brand trust is marketing activity in gaining customers’ satisfaction by building and keeping their trust in order to stay on a brand by giving positive value (lau, 1999). brand trust is consumers’ feeling of security because of their interaction with brand, based on a perception that that particular brand can be relied upon and be responsible for consumers’ security and needs and is the hope on its good reliability and intensity (delgado-ballester, 2004). the relation between trust and trusted brand is not about people but about symbol. because of that, loyalty on a brand involves trust over brand. in order to create loyalty in today’s market, marketers must focus on the formation and maintenance of trust in consumer-brand relationship (lau, 1999). in accordance with the above explanation, fifth hypothesis is formed. h5: a positive association exists between brand trust and brand loyalty. based on the literature review of empirical models can be described as shown in figure 1. 3. research method 3.1. population object population is a group or element which has information searched by researchers and the result will show an inferential conclusion for the group or population (ferdinand, 2013). data sugiyarti and hendar: experiential marketing creative antecedence for success of brand loyalty (a study on the users of perfume for body in indonesia) international review of management and marketing | vol 7 • issue 1 • 2017532 collected is primary data, which uses survey method. this research population is users of vitalis, spalding, internity perfume brand in indonesia. 3.2. sample sampling is using purposive sampling technique. purposive method is a sampling technique based on certain consideration where samples are chosen with requirements which are considered as having essential characteristics relevant with the research. therefore, the chosen sample and meet the requirements are respondents which have characteristics of: (a) users of vitalis, spalding, and internity body perfume brand, (b) aged between 14 and 40. 3.3. data analysis technique data analysis technique is qualitative analysis (descriptive analysis) and quantitative analysis (inferential analysis). descriptive analysis is used to describe research variable, without drawing generalization or description about respondent characteristics as well as building frequency distribution by using data from questioner given to the respondents. while inferential analysis is analysis used to test research hypothesis (hair, 2004), the number of sample ideal for sem is between 100 and 200, so in this research, the taken samples are 171 respondents. 4. results to obtain the data, this study distribute as much 270 questionnaires to users of body perfume in jakarta, semarang and surabaya, indonesia. number of questionnaires returned for processing to the next stage reached 171 questionnaires (63.33%). of the 171 respondents 135 were males and 36 respondents women. the majority (60.23%) of respondents have a college degree. most of the respondents have incomes under 5 million rupiah per month. table 2 shows the characteristics of the respondent in this research. 4.1. measurement testing the hypothesis in this study, multi-item scales adopted from previous studies to construction measurement. all construction measured using a 7 point likert scale, ranging from “strongly disagree” (1) to “strongly agree” (7). normal distribution test is a test that measures if we have a normal distribution of data so can be used in parametric statistics (inferential statistics). table 3 shows that the data has been univariate but not multivariate normal. but in this case, we can proceed to the next stage. 4.2. validity and reliability table 4, column convergent the validity of each item/indicator variable has a value more than 0.5. therefore, an item/indicators can be omitted from the analysis. all values ave each variable was also above the required value of 0.5. as shown in table 4, it figure 1: empirical model table 1: brand loyalty indicator source brand loyalty indicator pappu et al. (2005) main choice, word of mouth, join program shahrokh et al. (2012) feel loyal to the brand, selecting brand, recommend brand dharmmesta (1999) brand‑choice sequence, proportion of purchase; proportion of purchase, brand preference oliver (1999) cognitive loyalty, behavioral loyaly krystallis and chrysochou (2014) brand attitude hamzah (2007) retention, related sales, referrals table 2: respondent characteristic respondent characteristic number of observations frequency (%) gender male 146 84.80 female 25 15.20 education sma 60 35.09 bachelor degree 103 60.23 master’s degree 8 4.69 revenue (idr) <5,000,000/month 156 91.23 5,000,000-10,000,000/month 15 8.77 >10,000,000 sugiyarti and hendar: experiential marketing creative antecedence for success of brand loyalty (a study on the users of perfume for body in indonesia) international review of management and marketing | vol 7 • issue 1 • 2017 533 can be concluded that the data is reliable because construct the reliability value of each variable is greater than cut-off (>0.60). 4.3. goodness of fit goodness of fit test is aimed to see whether the data are in accordance with the model that iam building gfi, cfi, tli, and rmsea are a measure of goodness of fit. data is said to be fit with mods if the value of agfi, cfi and tli are more than 0: 09 and rmsea < 0.08. the fitmodel in this study explains that has goodness fit model (gfi = 0.92, cfi = 0.905, tli = 0.961, dan rmsea = 0.054). 4.4. hypothesis testing measurement result has met the criteria of goodness of fit. next, based on fit model, testing on the five proposed hypothesis is done. in accordance with data tabulation, we found, first, positive effect between sense marketing on creative experiential marketing; second, positive effect of act marketing on creative experiential marketing; third, negative effect of creative experiential marketing on brand trust and positive effect of brand trust on brand loyalty. coefficient value of causality relationship regression and the counting of t value is shown in critical ratio (cr) value, table 4. table 4 can be explained: first, we found positive relationship between sense marketing and creative experiential marketing (first hypothesis). our processed result is shown by estimation parameter of 0.570 which cr value = 2.647 or cr > 2.00 which significance degree is 0.05 (5%), it is also proven that p < 0.05. h1 is accepted. second, we found positive relationship between act marketing and creative experiential marketing (second hypothesis). our processed result is shown by estimation parameter of 0.716 which cr value = 2.675 or cr > 2.00 which significance degree is 0.05 (5%), it is also proven that p < 0.05. h2 is accepted. third, we found negative relationship between experiential marketing and brand trust (third hypothesis). our processed result is shown by estimation parameter of 0.003 which cr value = 1.981 or cr < 2.00 which significance degree is 0.05 (5%), it is also proven that p > 0.05. h3 is rejected. fourth, we found positive relationship between creative experiential marketing and brand loyalty (fourth hypothesis). our processed result is shown by estimation parameter of 0.649 which cr value = 2.917 or cr > 2.00 which significance degree is 0.05 (5%), it is also proven that p < 0.05. h4 is accepted. fifth, we found positive and significant relationship between brand trust and brand loyalty (fifth hypothesis). our processed result is shown by estimation parameter of 0.620 which cr value = 2.451 or cr > 2.00 which significance degree is 0.05 (5%), it is also proven that p < 0.05. h5 is accepted. 5. discussion first, hypothesis can be accepted. this result supports research conducted by (rachna, 2011; hamzah, 2007) which found that sense marketing has significant and positive effect on experiential marketing. it means that sense marketing which is measured with estimation indicator on the color of perfume, estimation on how to present the perfume; estimation on the cleanliness of the marketing location, estimation on the perfume aroma; has proven as giving significant positive relationship on experiential marketing which is indicated by performance indicator: the product is better than the competitor’s; treatment: product interaction with its consumers, i.e., product is easy to purchase; community: product is widely known in the society. this means that if a company has adequate marketing ability on giving experience to consumers through five senses, it will give real benefit, in the form of the increasing experiential marketing. second, this result supports research conducted by (li, 2008; fransisca, 2007b) which found that act marketing has significant and positive effect on experiential marketing. it means that act marketing which is measured with estimation table 3: normality analysis indicator of variable univariate sense an assessment of the color of perfume −0.539 an assessment of how the presentation of perfume 0.022 assessment of the cleanliness of the place of sale −1.049 assessment of perfume −0.177 act an assessment of the services as needed −0.375 an assessment of the alternative products −1.423 an assessment of the product innovation −1.198 experiential marketing performance 1.565 treatment −0.949 community −0.639 brand trust competent brands from time to time −2.190 brand has a good reputation −0.714 good brand integrity −1.617 brand loyalty customer is committed to perfume the body −0.433 customers recommend the brand to someone else’s body perfume −1.342 multivariate −0.542 table 4: summary of structural model path analysis and fit statistics hypothesis path; (t-value/p-level) result sense marketing creative ex. marketing par. est 0.570; cr=2.647 or cr>2.00; significant, 0.05 accepted act marketing creative ex. marketing par. est 0.716; cr=2.675 or cr>2.00; significant, 0.05 accepted creative ex. marketing brand trust par. est 0.003; cr=1.981 or cr<2.00; significant, 0.05 rejected creative ex. marketing brand loyalty par. est 0.649; cr=2, 917 or cr>2.00; significant, 0.05 accepted brand trust brand loyalty par. est 0.620; cr=2.451 or cr>2.00; significant, 0.05 accepted level of significant 0.05 sugiyarti and hendar: experiential marketing creative antecedence for success of brand loyalty (a study on the users of perfume for body in indonesia) international review of management and marketing | vol 7 • issue 1 • 2017534 indicator on the service according to the needs, estimation on the product alternative; estimation on the product innovation, has proven as giving significant and positive relationship on experiential marketing which is indicated by performance indicator: the product is better than the competitor’s; treatment: product interaction with its consumers, i.e., product is easy to purchase; community: product is widely known in the society. this means that if a company has adequate marketing ability on giving experience to consumers through a very valuable experience to its consumers, related to physical, behavior and long term life style as well as experience with others, it will give real benefit, in the form of the increasing experiential marketing. it is found that creative experiential marketing has insignificant and negative effect on brand trust. it means that creative experiential marketing which is measured by performance indicator: the product is better than the competitor’s; treatment: product interaction with its consumers, i.e., product is easy to purchase; community: product is widely known in the society. it is not proven to give positive and significant relationship with brand trust measured by the indicator of competent brand from time to time; brand has good reputation; integrity of good brand. this means that although a company has an ability to create experience and emotion to consumers by using various strategies used in such a way that a deep impression on company’s products is formed in the heart of the consumers, so in the end consumers purchase the product and then re-purchase and give reference to others to purchase the company’s product does not give positive effect on brand trust. thus consumers’ experience gained from emotional experience may happen because consumers feel negative impression from that experience so that it has bad effect on company’s brand trust. this result supports research conducted by (kao et al., 2007; passikof, 2006) which found that creative experiential marketing has significant and positive effect on brand loyalty. it means that creative experiential marketing which is measured by performance indicator: the product is better than the competitor’s; treatment: product interaction with its consumers, i.e. product is easy to purchase; community: product is widely known in the society, has been proven to give significant and positive relationship with brand loyalty which is indicated with an indicator that consumers are committed to refilled perfume and will not replace it with other brands; consumers recommend the brand of refilled perfume to others; customers keep updating the development related to the product such as the newest perfume. this means that if a company has adequate marketing ability related to its ability on giving experience to consumers through a very valuable experience, related to physical, behavior and long term life style as well as experience with others, it will give real benefit, in the form of the increasing experiential marketing so that the loyalty towards the brand also increases. this result supports research conducted by delgado-ballester (2004) which found that brand trust has significant and positive effect on brand loyalty. it means that is measured with the indicator of competent brand from time to time; brand has good reputation; integrity of good brand, has been proven to give significant relationship on brand loyalty which is indicated with the indicator that consumers are committed to body perfume and will not replace it with other brands; consumers recommend the brand of body perfume to others; customers keep updating the development related to the product such as the newest perfume. this means that if a company has an ability on giving security feeling to the consumers as a result of their interaction with the brand, based on a perception that that particular brand can be relied upon and is responsible for the needs and the security of the consumers and has the hope that it will give reliability and good intensity so that it will give real benefit, in the form of the increasing of brand loyalty. 6. limitations and future research directions 6.1. managerial implication first, the result of this research is hoped to give information on body perfume management that brand loyalty is not only influenced by creative experiential marketing, but also by brand trust. therefore, body perfume management should continuously improve variable quality of sense marketing, act marketing, creative experiential marketing, and brand trust by always paying attention to the quality of human resources, the quality of product as well as making promotion programs which can attract buyers’ interest in purchasing body perfume. second, consumers’ objectivity on perfume product is very high depending on taste, price, social status. therefore, companies should add more product variants to suit consumers’ taste. third, attention and support from many sides are needed in various forms of body perfume managerial capacity development on many business scale in indonesia so that it will give positive contribution on a better business existence and expansion in the future. 6.2. research limit first, this study takes research object on body perfume which brands are vitalis, spalding, and internity in indonesia. thus, conclusion derived from this study is surely not yet possible to be a general conclusion if applied on other projects other than the object of this research. second, this study only focuses on body perfume which brands are vitalis, spalding, and internity, the researcher’s limit becomes the cause of the limit of research object scope taken in this research. thus there is a possibility if the research is conducted in either by scale or by other forms of industry. third, researcher focuses on five factors; sense marketing, act marketing, experiential marketing, brand trust, and brand loyalty. it is not impossible that actually there are still many other factors which can influence brand loyalty. it is seen from the ability of sense marketing, act marketing, experiential marketing, and brand trust which are only able to explain 71% of brand loyalty. sugiyarti and hendar: experiential marketing creative antecedence for success of brand loyalty (a study on the users of perfume for body in indonesia) international review of management and marketing | vol 7 • issue 1 • 2017 535 6.3. future research agenda first, it is suggested that the future research replicates this research by using bigger and broader samples of geography, demography, as well as scope of industry. it is meant to reach the development of understanding about the relationship among sense marketing, act marketing, with creative experiential marketing, creative experiential marketing and brand trust with brand loyalty. second, in the future research, it is possible to develop other more detailed indicators in measuring research variables. third, this study recommends researching this matter by adding other factor influence which can affect brand loyalty. references bartanen, m.d., littlefield, r.s. 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(2009), the application of experiential marketing in china’s real estate. international journal of business and management, 4(5), 222-225. tx_1~at/tx_2~at international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2019, 9(4), 63-73. international review of management and marketing | vol 9 • issue 4 • 2019 63 effect of social capital on firm performance: the role of entrepreneurial orientation and dynamic capability tian hongyun, kankam william adomako*, florence appiah-twum, isaac gumah akolgo department of marketing, school of management, jiangsu university, 301 xuefu road, zhenjiang 212013, jiangsu, p.r. china. *email: willykk2007@yahoo.com received: 06 may 2019 accepted: 04 july 2019 doi: https://doi.org/10.32479/irmm.8108 abstract social capital is a concept that describes good quality social relations that can lead to mutual benefits. the social capital theory thrives on relationships in networks to gain access to resources, especially information benefits not available to non-members of the network. the study reports the effects of social capital on firm performance. the study further examines the moderating role of entrepreneurial orientation in the relationship between social capital and firm performance; and the mediating role of dynamic capabilities in the relationship between social capital and firm performance. using smartpls software 3.2.8 to analyze primary data collected from 787 small and medium-sized enterprises (smes) operating in ghana, the results show that social capital has a positive and direct relationship with firm performance in ghana. the findings suggest that eo moderates the relationship between social capital and firm performance. again, dynamic capabilities mediate the relationship between social capital and firm performance. the study also provides managers with practical ways of building relationships within their networks for achieving competitive advantage in the current business environment. keywords: social capital, entrepreneurial orientation, dynamic capabilities and firm performance jel classifications: l31, m1 1. introduction small and medium scale enterprises (smes) are key indispensable elements of most economies in the world. oecd defines smes as the firms, employing up to 249 persons, with the following breakdown: micro (1-9), small (10-49) and medium (50-249). in a similar token, the ghana statistical service (2013), considers firms with fewer than ten (10) employees as small-scale enterprises and their counterparts with more than ten (10) employees as medium and large-sized enterprises. oecd (2017), reports that, smes account for approximately 99% of all firms, accounting for about 70% of jobs and very much integral to value creation, generating between 50% and 60% of value added on average. in europe, smes account for 99% of non-financial businesses, which provide about 70% of employment opportunities (nieto and santamaría, 2010). smes account for over 90% clean technology businesses in the united kingdom (oecd, 2017), in china smes according to china statistical yearbook (2015), account for about 97.9% of all registered companies, contributing nearly 58% of gdp, 82% of total employment and 75% of new jobs every year. furthermore, in the united states of america, smes constitute about 99.9% of businesses which employ about 47.5% of the private sector workforce in 2015 (us small business administration, 2018). abor and quartey (2010) have noted that smes in ghana constitute 85% of the manufacturing sector’s employment. they are also believed to contribute about 70% to ghana’s gdp and account for about 92% of businesses in ghana. notwithstanding the recognition of the important roles smes play, their development is largely constrained by a number of factors, such as lack of access to appropriate technology; limited access to international markets; the existence of laws; regulations and rules that impede this journal is licensed under a creative commons attribution 4.0 international license hongyun, et al.: effect of social capital on firm performance: the role of entrepreneurial orientation and dynamic capability international review of management and marketing | vol 9 • issue 4 • 201964 the development of the sector; weak institutional capacity; lack of management skills and training; and most importantly, access to finance. there is a growing body of literature that recognizes the importance of social capital theory in recent decades, showing the values derived from the firm’s position in a social network (acheampong et al., 2018; agyapong, et al., 2017; barr, 2000; boohene, 2018; ofori and sackey, 2010). central to the entire concept of social capital is that value is provided to the network members, allowing them to take advantage of the resources established in their relationships and to leverage on to create competitive advantage over their rivals (tsai and ghoshal, 1998). firms are in an incessant route of searching for strategies that would offer them with competitive edge. the extant literature recommends that firms’ capability to absorb knowledge has turned out to be a major driver for competition. core competence in business environment is attained through well designed procedures, division of labor and managerial style (grant, 2007). on the other hand, current ups and downs in the business environment have forced firms to look for new approaches for competitive edge as the orthodox techniques have become obsolete (chirico and salvato, 2008). again, the dynamics in the world of business have progressed to a point that now businesses need leaders or owners who think creatively, innovatively, critically and independently and have the ability to connect/network because collaboration is key instead of competition. quite a number of studies have recounted the importance of smes to the economy of ghana (abor and biekpe, 2006, 2009; abor and quartey, 2010), social capital (acheampong et al., 2018; agyapong et al., 2017; barr, 2000; boohene, 2018; ofori and sackey, 2010), entrepreneurial orientation and firm performance (adomako, 2018; boso et al., 2013). it is surprising that so little (if any) empirical research has been conducted on the integration of social capital, entrepreneurial orientation, dynamic capabilities and firm performance in the smes in ghana. to fill this gap, the current study investigates the complementary relationship among social capital, entrepreneurial orientation, dynamic capability and firm performance. the study also seeks to examine the moderating role of eo in the relationship between social capital and firm performance. furthermore, the current research examines the mediating role of dynamic capability in the relationship between social capital and firm performance. 2. literature review 2.1. resource-based view there is a growing body of literature that recognizes the importance of resource-based view (barney, 1991; collis and montgomery, 1995; dicksen, 1996; wernerfelt, 1984). dicksen (1996) shows how, in the past, research into resource-based view was mainly concerned with an “inside-out” view or firm-specific competencies on why firms succeed or fail in this current turbulent market place. to barney (1991), resource-based view comprises of resources that are valuable, rare, inimitable and non-substitutable. a number of researchers have reported that attributes of resourcebased view make it possible for businesses to develop and maintain competitive advantages, to utilize these resources and competitive advantages for superior performance (barney, 1991; collis and montgomery, 1995; wernerfelt, 1984). in essence, the resourcebased view is contingent on the philosophy that efficient and effective utilization of resources by a firm can lead to competitive advantage. thus, the central idea of resource-based view states that firms possess resources, a subset of which enable them to achieve competitive advantage, and a subset of those that lead to superior long-term performance. resources that are valuable and rare can lead to the creation of competitive advantage (barney, 1991, 2001; barney, et al., 2011). 2.2. social capital and firm performance social capital has generated high interest among academics and practitioners over the last two decades. in the new global economy, social capital has become a central issue and is an increasingly important area in the formulation of strategies in business settings. social capital is believed to have emanated from sociology (salehuddin, 2009). the central theme of social capital is that individuals can get access to wealth/resources possessed by others through social ties/relationships with the owners (burt, 2009; lin, 1999). previous studies have reported that social capital thrives on social structures and relationships that facilitate individuals access to certain resources owned by other people (salehuddin, 2009) such as information, social control, and social support and solidarity (coleman, 1988). in a recent paper by (rodrigo-alarcón et al., 2018) social capital is seen as “the sum of the actual and potential resources embedded within, available through, and derived from the network of relationships possessed by an individual or social unit.” on their part, nahapiet and ghoshal (1998) defined social capital as “the sum of the actual and potential resources embedded within, available through, and derived from the network of relationships possessed by an individual or social unit.” traditionally, it has been argued by bourdieu (1986); and burt (2009) that social capital encompasses the network and the resources that may be gathered through network ties. according to nahapiet and ghoshal (1998), social capital comprises of three clusters: structural, relational, and cognitive social capital. in an analysis of social capital, trust, and firm performance during the 2008-2009 financial crisis, lins et al. (2017) found that the creation of a firm-specific social capital can be seen as an insurance policy that pays off when investors and the overall economy face a severe crisis of confidence. the most important clinically relevant finding was found by lins et al. (2017) by analyzing the value of corporate social responsibility during the financial crisis showed that social capital and financial capital are very critical to firm performance, and identifies circumstances under which csr can be beneficial for firm value. similarly, rass et al. (2013) found social capital to positively related to firm performance datoon et al. (2018), in their study, found social capital to provide innovation support to small firms, which consequently translates into improved firm performance. le van et al. (2018), using a control function method in a quantile regression framework, established the causal impact of social capital on firm performance. clopton (2011) analyze the value of social networks, or social capital, within the group process towards the group and team hongyun, et al.: effect of social capital on firm performance: the role of entrepreneurial orientation and dynamic capability international review of management and marketing | vol 9 • issue 4 • 2019 65 performance by exploring the explicit contribution of social capital towards a group or team’s performance. the result revealed that there is a significant connection between social capital and team performance (clopton, 2011). h1: social capital has significant positive effect on firm performance 2.3. social capital and dynamic capabilities social capital considers how actors benefit by way of social ties (burt, 2009; coleman, 1988). portes (1998) holds the view that social capital is that knack actors have to enjoy benefits because of their association in social networks. on the other hand, dynamic capability refers to processes of the firm to combine, reconfigure, release and increase resources according to market change (eisenhardt and martin, 2000). this enables the firm to generate rent as a core competency for competitive advantage (teece et al., 1997). blyler and coff (2003) studied and synthesize existing literature on social capital as well as dynamic capabilities, a conceptual model offering a new and deeper comprehension of international performance by combining a relational standpoint. they concluded that, there exists a clear link between social capital and dynamic capabilities according to (blyler and coff, 2003). they also suggested that social capital is crucial for dynamic capabilities when it comes to integrating, acquiring, facilitating and releasing of resources. social capital, they believe, is a vital element of dynamic capability because it helps in managing resources which is a defining part of capability. eisenhardt and martin (2000) identify the main tasks of integrating, recombination and release of resources as some of the duties social capital enables the individual firms to do. they also conclude on existing research that social capital is connected to components of resource management. for instance, grant (2007) postulated that social capital is bedrock of knowledge integration. nahapiet and ghoshal (1998) also agree that social capital helps in the growth of intellectual capital through the creation of conditions essential for exchange and consistency in information flow from various sources. current studies deem social networks and dynamic capabilities as very essential in the explanation of the factors of a firm’s success procedures (monteiro et al., 2010; prange and verdier, 2011). again, social capital serves as a catalyst for resource acquisition by offering access to consistent and various sources of information (blyler and coff, 2003; shane and cable, 2002; shane and stuart, 2002). capability enables firms to digest and fuse information for better understanding of its significance (atuahene-gima and murray, 2007). most smes management teams who usually show a sensing capability are capable of leveraging social capital to recognize valuable, recent and precise market information to deal with the difficulties of a dynamic environment (blyler and coff, 2003; zhang and wu, 2013). reconfiguration becomes a vital feature of dynamic capabilities in environments like that. this enables the companies to preserve their competitive edge as they even adapt to latest contexts (coleman, 1988). h2: social capital has direct and significant positive relationship with dynamic capabilities 2.4. entrepreneurial orientation and firm performance in the past two decades a number of researchers have sought to determine that entrepreneurial orientation, stands for business tactics/strategies which reflect the invention or innovation of ideas, products or services which can solve societal problems, created within the firm, touching or shaping decision making process, and influencing firm performance (fadda, 2018; lumpkin and dess, 2006). surveys such as that conducted by miles et al. (1978); (lumpkin and dess, 1996); and (fadda, 2018) indicate that eo positively influences firm performance through the adaptation of external environment. thus, several empirical studies have found a positive relationship between eo measures and performance among firms from different industries and national cultural contexts (gupta and dutta, 2016; rauch et al., 2009; wales et al., 2013). eo represents one construct that is connected to firm’s success (palmer et al., 2019; semrau et al., 2016; wales et al., 2013). the eo appears to be focal construct in entrepreneurship and strategic management fields in recent years (morris and kuratko, 2002; palmer et al., 2019). knight et al. (2003) posit that eo is seen as a cultural construct consisting of a firm’s level of risk-taking, innovativeness and proactiveness (covin and slevin, 1989; miller, 1983). in recent years, scholarly works have reported the importance of eo in terms of impacting the success rate of firms. of particular interest to the management scholars has been the relationship between eo and firm performance (lumpkin and dess, 1996). empirically, a positive correlation was found between export entrepreneurial-oriented behaviour and export marketoriented behavior in terms of driving export product innovation success (boso et al., 2013). eo has significant influence on sales performance (covin et al., 2006). in a meta-analysis of the link between eo and firm performance, eo was found to impact positively on business performance (rauch et al., 2009). boso et al. (2013), eo is able to predict or influence firm non-financial performance. along the same lines, eo appears to have a higher impact on firm performance for micro enterprises (cohen, 1988). h3: entrepreneurial orientation has significant positive effect on firm performance 2.5. entrepreneurial orientation as a moderator in the relationship between social capital and performance entrepreneurial firms have the capacity to focus on recognized opportunities aggressively and rapidly. wiklund and shepherd (2003) postulated that an entrepreneurial orientation guides the utilization of a firm’s knowledge-based assets towards pursuing new product-market opportunities. entrepreneurial firms have the enablement to bring about behaviors that utilize absorptive capabilities for creating corporate entrepreneurship (huang, 2016). there is an unambiguous relationship between social capital and eo (huang, 2016), as social exchanges are found in both social capital and eo, which guide the utilization of resources towards the establishment of competitive advantage in the current business environment. in the history of management literature, eo has been discussed to have three different models-independent variable in terms hongyun, et al.: effect of social capital on firm performance: the role of entrepreneurial orientation and dynamic capability international review of management and marketing | vol 9 • issue 4 • 201966 of construct model and the emphasis here is on finding its antecedents (holt et al., 2007; lekmat et al., 2018). lumpkin and dess (1996) see eo as a strategic model which can be applied to variety of strategies. recent evidence suggests that eo is seen as a performance model which links it with organizational success by considering the moderating and mediating variables related to the external and/or organizational environment. previous studies have reported that entrepreneurial orientation moderates the effect of business, and institutional network on international opportunity recognition (ahmadian and abdolmaleki, 2018). eo has been found to moderate the relationship between knowledge based resources and performance (wiklund and shepherd, 2003). ibrahim and masud (2016) also discovered that eo moderates the relationship between entrepreneurial skill and entrepreneurial intention. hernández-perlines and ibarra cisneros (2017) analyzes the entrepreneurial orientation’s moderating effect on the influence of social responsibility on the performance of family companies in mexico and found that entrepreneurial orientation as a positive moderator on the effect of social responsibility on the performance of family businesses. h4: eo moderates the relationship between social capital and performance 2.6. dynamic capabilities and firm performance a considerable amount of literature has been published on dynamic capability (easterby-smith et al., 2009; prange and verdier, 2011; teece et al., 1997). traditionally, it has been argued that dynamic capability stands for competences that help in adapting, integrating, and reconfiguring internal and external resources as well as skills to the changing environment (teece et al., 1997). according to baker and chasalow (2015) dynamic capabilities are progressively highlighted and valued by most smes because of its ability in bringing about corporate social responsibility implementation under the influence of external pressure. in a study which set out to determine dynamic capability, eisenhardt and martin (2000) referred to dynamic capability as the firm’s “processes to integrate, reconfigure, gain and release resources-to match and even create market change.” in the same vein, eisenhardt and martin (2000) note that dynamic capability entails firm’s competence level to rapidly integrate and reconfigure resources to match dynamic and turbulent business field. helfat (2007) points out that firms’ deliberately leverage on dynamic capabilities to generate, extend and modify their resource base, including external resources available in partnerships, to effectively and rapidly cope with market changes. as noted by (katkalo et al., 2010) dynamic capabilities diversify/develop the resource base of the firm. the diversification can be in different forms, such as obtaining new resources through acquisitions and partnerships, innovation and entrepreneurial activities, growth in an ongoing business or a change of a new business. as teece et al. (1997) argue: “dynamic capabilities are central to the success and/or failure of the firm.” wang and ahmed (2007) defined dynamic capabilities as a firm’s behavioral orientation constantly to integrate, reconfigure, renew and recreate its resources and capabilities and, most importantly, upgrade and reconstruct its core capabilities in response to the changing environment to attain and sustain competitive advantage. pitelis and teece (2009) assert that, dynamic capabilities propel businesses to constantly sustain competitive edge by harmonizing and refreshing their resource base, thereby helping firms avoid development of core rigidities that inhibit development and result in innovation inertia. dynamic capability comprises of 3 dimension: sensing, seizing and reconfiguring. sensing: prior studies have noted the importance of sensing capability as a firm’s ability to identify and capitalize on emerging market opportunities (chakravarthy, 1982; hooley et al., 1992). seizing: on their part (cohen and levinthal, 1990) see seizing capability as “the ability of a firm to recognize the value of new, external information, assimilate it, and apply it to commercial ends … the ability to evaluate and utilize outside knowledge is largely a function of the level of prior knowledge.” transforming: moreover, wang and ahmed (2007) refer to transforming capability as a firm’s ability to develop new products and/or markets, through aligning strategic innovative orientation with innovative behaviors and processes. thus, the emphasis is on the significance of continued renewal. in the assessment of empirical research on the relationship between dynamic capabilities and performance, pezeshkan (2015) found an overall support for the link between dynamic capabilities and firm performance. dynamic capabilities have been found as the foundational aspects of firm’s competitive advantage in changing environments (teece et al., 1997). in an analysis of the impact of dynamic capabilities on organizational performance, taking organizational competencies as moderating variable, (rehman and saeed, 2015) found dynamic capabilities to have a direct impact on the organizational performance of the firm. dynamic capabilities mediate the relationship between intellectual capital and performance (aminu and mahmood, 2015). again, (zhou et al., 2017), investigated the mediating role of dynamic capabilities on the relationship between intellectual capital and manufacturing firm and found that dynamic capabilities improve firm performance. h5a: there is a significant positive relationship between dynamic capabilities and firm performance h5b: dynamic capabilities mediates the relationship between social capital and performance 3. methodology 3.1. contextual background of the study this study sampled smes operating in ghana, a developing sub-saharan african country context. in ghana, smes represent a vast portion of businesses. they represent about 92% of ghanaian businesses and contribute about 70% to ghana’s gdp and over 80% to employment (abor and quartey, 2010). previous studies have referred to ghana as an emerging market in sub-saharan africa (anning-dorson, 2018; boso et al., 2013; sheth and sinha, 2015). ghana’s growth rate reached its peak of hongyun, et al.: effect of social capital on firm performance: the role of entrepreneurial orientation and dynamic capability international review of management and marketing | vol 9 • issue 4 • 2019 67 15% in 2011 on the back of the commencement of commercial production of oil, making it one of the fastest growing economies globally during that year (aryeetey and baah-boateng, 2015), and has a robust private sector that accounts for the growth of gdp and the ability to reduce poverty (anning-dorson, 2018). this makes ghana an important example of an emerging subsaharan african market. 3.2. sample and data collection the sampling frame for this study was gathered from ghana’s company register database, which is hosted by registrar general’s department, and the ghana business directory (acquaah, 2007; appiah-adu, 1998). in all, 1250 smes listed in the ghana’s company register database totaling 52, 000 firms and ghana business directory with a totaling 3460 were randomly selected and contacted by telephone to elicit their participation in the study. the firms selected were those that met the following requirement. according to adomako (2018), firm with more than 5 employees and a maximum of 250 employees (ghana statistical service, 2013), companies that were owned and controlled by individual (or a team of) entrepreneurs with majority ownership (goedhuys and sleuwaegen, 2010), and firms with a minimum of 5 years’ operating experience (morgan et al., 2004). 1250 firms with valid addresses were contacted by telephone to confirm their participation. 950 firms eventually responded to the questionnaire administered by local research firm with highly trained researchers (boso et al., 2013); (hinson and sorensen, 2006). questionnaires were then sent to these firms and were filled by employees whose work was related to operations, innovation and/or business development. 787 complete responses were received and were subsequently used in the study. the participating smes represented a variety of industries, such as processed food and beverages (10%), crafts (15%), agro-processing (17%), textiles and garment (18%), security services (12%), financial services (5%), wholesalers or retail (20%) and engineering (3%). the firms are mostly smes that employ an average of 52 people, with an average turnover of us$1.8 million (adomako, 2018). 3.3. variables and measures this study used established measuring scale from the literature (acquaah, 2007). all the items were measured on five-point likert scales, ranging from “1” (strongly disagree) to “5” (strongly agree). entrepreneurial orientation: to assess entrepreneurial orientation, we followed the proposal by lumpkin and dess (2006). entrepreneurial orientation was analyzed through five dimensions: innovativeness, proactiveness, risk-taking, competitive aggressiveness, and autonomy. for entrepreneurial orientation, measuring scales were derived from previous literature by (covin and slevin, 1989; lumpkin et al., 2009; lumpkin and dess, 2001). we relied on the measuring scales proposed by covin and slevin (1989) to measure innovativeness, proactiveness and risk-taking. to measure competitive aggressiveness, we used established scales proposed by (lumpkin and dess, 2001) and the scales proposed by lumpkin et al. (2009) to measure autonomy. we tend to agree with covin and wales (2012) who posit that researchers are free to decide on the measuring technique suitable for their purposes. we took inspiration from covin et al. (2006) method, we analyzed entrepreneurial orientation as an aggregate construct that includes the five dimensions that are correlated and converge in a single construct of entrepreneurial orientation. social capital: we relied on established scales from literature to measure social capital. we measured social capital by using trust, shared norm, shared culture and network density. trust was measured by adopting scales developed by (kale et al., 2000); shared norm was measured by using items developed by tsai and ghoshal (1998) and yli-renko et al. (2001), shared culture was measured by adopting an existing scale developed by simonin (1999) and finally, network density was also measured by adopting scales developed by (morales and vázquez, 2007). dynamic capabilities: to assess dynamic capabilities, we followed the proposal by (wang and ahmed, 2007). we measured dynamic capability through three dimensions, which is closely related to teece et al. (1997) classification: adaptive, absorptive, and innovative. we relied on established scale proposed by gibson and birkinshaw (2004) to assess adaptive capacity. to measure absorptive capacity, we adopted the scale proposed by flatten et al., (2011). finally, we used the scale developed by akman and yilmaz (2008) to measure innovative capacity. firm performance: numerous studies have measured firm performance in both financial and non-financial terms (adomako, 2018; anning-dorson, 2018; boso et al., 2013; rodrigo-alarcón et al., 2018). in his seminal paper of 2018, anning-dorson argues that privately owned firms posed difficulty for obtaining an objective measure of performance. based on this assertion, we employed established convention to measure performance objectively (anning-dorson, 2018; bello, et al., 2016). we measured performance by using existing scales from prior studies such as (anning-dorson, 2018; li and zhang, 2007). we adopted four items covering overall profit levels achieved, profit margins achieved, return on investment and return on assets (li and zhang, 2007; luk et al., 2008). financial performance scale included the evaluation of the firm’s overall profit levels achieved, return on investment, and profit margins achieved. research model is presented in figure 1. 4. analysis partial least squares (pls) with smartpls software 3.2.8 (ringle et al., 2015) was used to test the hypothesized relationships among the constructs-social capital, entrepreneurial orientation, dynamic capabilities and firm performance. one advantage of the structural equation analysis is that it has some advantages over traditional multivariate analysis (haenlein and kaplan, 2004). this technique is appropriate for data analysis during the early stages of theory development when the theoretical model is not definitively determined. we considered pls to be a suitable analysis technique for our study because it establishes minimum requirements on the sample, on the measurement scale (nominal, ordinal, interval, or ratios), and on the distribution of observable variables; also, it does not need the normality of the data and is more suitable for small and large samples (falk and miller, 1992). hongyun, et al.: effect of social capital on firm performance: the role of entrepreneurial orientation and dynamic capability international review of management and marketing | vol 9 • issue 4 • 201968 pls path modeling is a standard algorithm which first assesses measurement model including internal consistency (composite reliability), convergent validity (indicator reliability and average variance extracted), and discriminant validity (wong, 2013). the next phase comprises the estimation of the structural model and requires testing collinearity among constructs, and assessing the significance and relevance of hypothesized relationships. 4.1. measurement (outer) model all the constructs, were measured through the pls bootstrapping method. the guiding principles recommended by hair et al. (2014) for determining the significance and relative importance of the factor loadings of each item was implemented, which suggests that only items with loadings of 0.5 or greater are significant. thus, only these items were included in the final measurement model. the minimum acceptable threshold for composite reliability is 0.7 (hulland, 1999) and 0.4 for average variance extracted (magner et al., 1996). table 1 summarizes results for the items loadings. as seen in table 2. the composite reliability coefficients of the constructs ranged from 0.912 and 0.977, and cronbach’s alpha (ca) ranged from 0.877 to 0.967. these thresholds exceed the minimum standard level of 0.70, hence internal consistency reliability is achieved. the ave values exceed the threshold of 0.5 (hair et al., 2014). again, the vif values are clearly below the threshold of 5, which indicates that collinearity does not reach critical levels in any of the constructs (hair et al., 2011). the results presented in the correlation matrix in table 3 include correlations between constructs in the off-diagonal cells and the square root of ave in the diagonal cells. for adequate discriminant validity, the diagonal values should be significantly greater than the off-diagonal values in the corresponding rows and columns. the diagonal values (the square root of ave) in table 3 are all greater than their respective off-diagonal values, indicating adequate discriminant validity. in other words, for each construct, the root of the ave measures is significantly larger than the latent variable correlation. this demonstrates that, the final revised measurement model for all the constructs had adequate discriminant validity. figure 1: research model table 1: measurement model analysis constructs items loadings socap dens 0.967 shacul 0.912 shanor 0.956 trust 0.970 dynamic seic 0.959 senc 0.959 tranc 0.980 eo auton 0.897 compagr 0.815 innov 0.660 proact 0.825 ristak 0.891 perf perf1 0.848 perf3 0.933 perf4 0.905 perf5 0.901 table 2: tests of construct reliability and validity constructs cronbach alpha composite reliability ave r2 vif dynamic 0.964 0.977 0.72 0.909 1.250 eo 0.877 0.912 0.63 1.932 moderating 0.958 0.962 0.64 2.429 perf 0.919 0.943 0.68 0.979 1.305 socap 0.967 0.976 0.70 1.035 table 3: discriminant validity dynamic eo moderating perf socap dynamic 0.850 eo 0.372 0.793 moderating 0.469 0.418 0.80 perf 0.358 0.461 0.464 0.824 socap 0.223 0.246 0.439 0.283 0.840 hongyun, et al.: effect of social capital on firm performance: the role of entrepreneurial orientation and dynamic capability international review of management and marketing | vol 9 • issue 4 • 2019 69 the test of the structural model includes estimating the path coefficients, t-statistics and r2. these statistics evaluate the proportion of the variance in the endogenous variable that can be explained by the exogenous variables. the bootstrapping technique was employed to test for the effects of social capital on performance. in addition, all the variables were modeled as reflective measures, since they were believed to influence the dependent variable, which, in this research, was firm performance. figure 2 demonstrates the pls graph of the relationships between the variables, with eo moderating the relationships between social capital and firm performance while dynamic capabilities mediating the relationship between social capital and firm performance. the path coefficients and significant levels for the various relationships are discussed in the ensuing paragraphs. 4.2. testing of direct effect the current study sought to assess the effect of social capital on firm performance among the smes in ghana. as shown in figure 2 and table 4, we assess the direct effects of socap and firm performance. we found significant positive relationship between socap and perf (β = 0.919, t = 71.253, p = 0.000). eo is found to have direct and positive relationship with firm performance (β = 0.068, t = 4.914, p = 0.000). again, eo positively moderates the relationship between socap and perf (β = 0.026, t = 4.652, p = 0.000). similarly, the study found socap to have direct and positive relationship with dynamic capabilities (β = 0.953, t = 162.129, p = 0.000). moreover, dynamic capabilities significantly impacts firm perf (β = 0.150, t = 6.987, p = 0.000). this study employed bootstrapping method in smart-pls (hair et al., 2014) to test for mediation. a mediation effect is considered statistically significant when p < 0.05. the result in table 5 shows the mediating effect of dynamic capability in the relationship between socap and perf (β = 0.143, t = 6.939, p = 0.000). table 4: structural model results hypotheses original sample (o) sample mean (m) standard deviation t-statistics p-value dynamic -> perf 0.150 0.150 0.022 6.987 0.000 eo -> perf 0.069 0.068 0.014 4.914 0.000 moderating effect 1 -> perf 0.026 0.026 0.006 4.652 0.000 socap -> dynamic 0.953 0.953 0.006 162.129 0.000 socap -> perf 0.918 0.919 0.013 71.253 0.000 table 5: specific indirect effect hypothesis original sample (o) sample mean (m) standard deviation t-statistics p-value socap -> dynamic -> perf 0.143 0.143 0.021 6.939 0.000 figure 2: measurement model results hongyun, et al.: effect of social capital on firm performance: the role of entrepreneurial orientation and dynamic capability international review of management and marketing | vol 9 • issue 4 • 201970 4.3. discussion of study results in recent decades, social capital has emerged as a business strategy which thrives on the resources embedded in a group or networks to facilitate the flow of information. a fundamental acumen that we garner from the current empirical results is that firms whose managers have built strong social capital also possess superior connection and dynamic capabilities are able to perform better than low social capital firms. this study contributes to previous work on the role of social capital, such as adler and kwon (2002), and nahapiet and ghoshal (1998), by investigating the relationship among social capital and dynamic capabilities, entrepreneurial orientation and firm performance. the invaluable contribution of social capital to both individual and firm performance has been recognized in previous studies. social capital is a business strategy that leads to greater efficiency. the study found significant positive relationship between social capital and firm performance (β = 0.919, t = 71.253, p = 0.000, <0.05). the finding is consistent with previous studies by (lins et al., 2017), who analyzing the value of corporate social responsibility during the financial crisis showed that, social capital is very critical to firm performance and identifies circumstances under which csr can be beneficial for firm value. similarly, this finding is in tandem with previous studies by (le van et al., 2018), and rass et al. (2013) found social capital to be positively related to firm performance. the results indicate that eo has a significant impact on the firm performance (β = 0.068, t = 4.914, p = 0.000, <0.05). this is in harmony with previous research which found positive correlation between export entrepreneurialoriented behaviour and export market-oriented behavior in terms of driving export product innovation success (boso et al., 2013). eo has significant influence on sales performance (covin et al., 2006). in a meta-analysis of the link between eo and firm performance, eo was found to impact positively on business performance (rauch et al., 2009). (boso et al., 2013), eo is able to predict or influence firm non-financial performance. along the same lines, eo appears to have a higher impact on firm performance for micro enterprises (cohen and levinthal, 1990). moreover, eo was found to moderate the relationship between social capital and firm performance (β = 0.026, t = 4.652, p = 0.000). this finding is consistent with previous studies which reported that entrepreneurial orientation moderates the effect of business, and institutional network on international opportunity recognition (ahmadian and abdolmaleki, 2018; wiklund and shepherd, 2003). in a similar fashion, dynamic capabilities was found to mediate the relationship between social capital and firm performance (β = 0.143, t = 6.939, p = 0.000, <0.05). this is consistent with previous study by aminu and mahmood (2015) who found that dynamic capabilities mediating between intellectual capital and performance. again, zhou et al., (2017), investigated the mediating role of dynamic capabilities on the relationship between intellectual capital and manufacturing firm and found that dynamic capabilities improve firm performance. the results indicate that there is a significant positive relationship between social capital and dynamic capabilities (β = 0.953, t = 162.129, p = 0.000, <0.05). the findings support the work of blyler and coff (2003) who found social capital to serve as a catalyst for resource acquisition by offering access to consistent and various sources of information. again, this finding in harmony with atuahene-gima and murray (2007)who found capability to enables firms to digest and fuse information for better understanding of its significance (atuahene-gima and murray, 2007). most smes management teams who usually show a sensing capability are capable of leveraging social capital to recognize valuable and precise market information. this enables the companies to preserve their competitive edge as they even adapt to latest contexts (coleman, 1988). 4.4. practical implication managers must place a lot more emphasis on the building and maintenance of valued relationships. managers of smes should be encouraged to the building of stronger relationships within their social networks as social capital thrives on relationships within network ties in order to access available resources. thus, the study suggests that managers attempt to build ties beyond their immediate ties to form relationships that require little investment in networking. this will offer managers the advantage of gaining global influence in the network that can aid their access to critical resources, and from the perspective of this study, which is mainly informational. managers should therefore seek to cultivate relationships with a wide array of external stakeholders to ensure access to crucial information and resources. they should further promote the importance of trust and solidarity among network members by providing opportunities for social interactions and by striving for a shared vision. a firm’s training activities should focus not only on extending their employees’ functional or specific technological knowledge and skills but also on developing their abilities to network, collaborate, and share information and knowledge. furthermore, our research suggests that managers should give thoughtful consideration to the market environment their firm operates in. managers must also put in place measures that will lead to winning customer trust and confidence. it is, therefore, incumbent on the smes to create social networks which foster closer collaboration with and among network members. the study recommend that smes in emerging market context such as ghana become more entrepreneurial oriented by developing strong network ties among their social ties to get access to resources within their circles to stay competitive in the current business environment. the study recommends that managers of smes build and increase their human and social capital to get access to resources from their association or network groupings to stay competitive. managers must also improve their dynamic capabilities in the area of job training and benchmarking industry standards and business planning to enhance their performance. smes should ensure effective communication with their network. effective communication channels must be established to provide reliable, prompt and timely information in accessing the needed resources to stay competitive in the current business environment. hongyun, et al.: effect of social capital on firm performance: the role of entrepreneurial orientation and dynamic capability international review of management and marketing | vol 9 • issue 4 • 2019 71 5. conclusions the study sought to find out the relationships among social capital, entrepreneurial orientation, dynamic capabilities and firm performance in ghana. the findings reveal that social capital, entrepreneurial orientation and dynamic capabilities are very important to smes survival. the findings also reveal that eo positively and significantly moderates the relationship between social capital and performance. in a similar fashion, dynamic capabilities was found to mediate the relationship between social capital and firm performance. the study was conducted in the smes sub-sector in ghana and there should be caution in the interpretation of the results. there could be extension of the research to include other sectors of the economy. again, replication of the research in other geographical locations would provide confirmation for the research findings. future studies should investigate the moderating role of gender, education in building social capital and dynamic capabilities. future studies should include network capabilities and organizational learning to access their impacts on firm performance. references abor and biekpe (2006), small business financing initiatives in ghana. problems and perspectives in management, 4(3), 69-77. 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(2017), dynamic capabilities and organizational performance: the mediating role of innovation. journal of management organization, 2017, 1-17. . international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2017, 7(4), 99-107. international review of management and marketing | vol 7 • issue 4 • 2017 99 the effect of leverage and liquidity ratios on earnings management and capital of banks listed on the tehran stock exchange abdolkarim moghaddam1*, narges abbaspour2 1department of management, economics and accounting, payame noor university, iran, 2department of management, economics and accounting, payame noor university, iran.*email: a_moghad@pnu.ac.ir abstract banks, like all profit institutions seek their profitable growth and maximize their shareholders’ wealth, increased profitability of the banks on the one hand, increases the company’s value and on the other hand, increases executives’ compensation and increases their tenure and because the same reason, bank managers have high motivation to increase profits through discretionary accruals. the capital structure also due to the relationship with credit risk and cost of capital is considered as one of important issues in the banks, so, the current research aimed to determine the e of leverage and liquidity ratios on earnings management and capital of banks listed on the tehran stock exchange. in this research, financial information of 14 banks listed on the tehran stock exchange during the period 2010-2015 have been studied and for performing this study, multivariate linear regression analysis using panel data has been used. the results show that financial and liquidity leverage has significant positive effect on earnings management of banks, therefore increasing the degree of financial leverage and by increasing bank liquidity, the possibility of using discretionary accruals and earnings management at banks increase. the results also showed that financial leverage has a significant negative effect on the bank’s capital adequacy ratio and with increasing financial leverage bank capital adequacy ratio is reduced. keywords: earnings management, discretionary accruals, the adequacy of bank capital, financial and liquidity leverage of banks jel classifications: e44, g2 1. introduction the profit (earning) management philosophy is taking advantage of the standard method flexibility and accepted accounting principles. of course, a variety of interpretations that can be taken from executive procedures of a standard accounting can be another reason of profit (earnings) management. principles of conservative and matching can also be resulted in benefit (earnings) management (ahmadi, 2015). earnings management is one important aspect of the quality of financial reporting and the main issue among all stakeholders of the company. because the profit is one of the important criteria for performance evaluation, therefore any interference that makes the accuracy of the reports distort, could be affective on users’ decisions of financial reports (zengin and ozkan, 2010). capital structure of issues that is very important in banking era. the relevance of capital structure of banks with credit risk and cost of capital creates a paradoxical interest in order to reduce the proportion of capital to achieve more profits or raise capital to address the risk of the default. therefore, to ensure the safety of domestic and international monetary and financial system, a set of rules by domestic and international institutions responsible for this situation and has been developed and implemented. on the other hand, in a world-class now capital structure of banks has been strictly placed under the regulation and legislation. increased use of financial leverage has increased the risk of the bank, thus creates higher capital requirements, on the other hand in the accounting literature of those cases which its relationship with earnings management with regard to its role in the opportunistic behavior by managers has been reviewed is the financial leverage. high financial leverage potentially increases profit management through the use of accruals of profit and other accounting choices that increase the profit. ease of converting assets to cash liquidity is called bank liquidity. in the banks with high liquidity, the ratio moghaddam and abbaspour: the effect of leverage and liquidity ratios on earnings management and capital of banks listed on the tehran stock exchange international review of management and marketing | vol 7 • issue 4 • 2017100 of capital to total assets is higher and it is expected that the capital adequacy of these banks be more than other banks, on the other hand, high liquidity makes it possible that the manager in the absence of proper corporate governance structure, manipulate the earnings (profit) (gombolaa et al., 2016). moreover, in recent years, iran has suffered numerous financial crises, including the crisis of drastic changes in the exchange rate in 2011. the crisis of 2011 has created significant effects on sales, profitability, liquidity and capital structure of the company. the effects of reduced profitability of companies can also be effective on the collection of receivables, profitability and performance of banks and increases the motivation of earnings management through accruals in them, so evaluation of earnings management of banks in the financial crisis of particular importance. so the main question is whether the leverage and liquidity ratios significantly impact on earnings management and investment of banks listed on the tehran stock exchange? 2. theoretical foundations 2.1. profit (earnings) management earnings management is done primarily through discretionary accruals. the accruals include difference between accounting earnings and its cash component (operational cash flow). the accruals are divided into discretionary accruals and nondiscretionary accruals components. discretionary components of accruals include those items (accruals) which management is unable applied controls to them and discretionary components of accruals include those accruals which the management applies control on them and can delay or eliminate them or accelerate the registration and identification of them. since the discretionary accruals are controlled by management of and are applicable by management, the discretionary accruals are used as an indicator of earnings management (ahmadi, 2015). in the accounting literature various definitions of profit (earnings) management have been that some of them are mentioned below. according to schipper (1989) earnings management includes targeted intervention at the external financial reporting process to obtain personal gain. scott (1997) defines the earnings management as an artificial manipulation of benefit by management to achieve the expected level of profit for some specific decisions. in their view, the main motivation of earnings management is the investors’ assume management about the entity. in general it can be said that earnings management is informed action taken by management about earnings report to achieve specific goals so that it is consistent with the principles and procedures of accounting. although these definitions are widely accepted but the operational application of these definitions is a little difficult, because intention of management does not provide objective evidence (khurram, 2014). 2.2. bank capital adequacy appropriate and adequate capital is one of the necessary conditions for maintaining the health of the banking system and each bank and credit institutions to ensure the stability and sustainability of their activities should maintain always an appropriate ratio between capital and risk in assets (javaheri, 2014). banks long ago, because giving loan have been faced several risks. to counter these risks, the banking supervision committees working in basel in switzerland, in 1988 agreements released minimum capital standards for banks activities. it is clear that from that date major changes have been occurred in the financial markets. banks have long, because lending has faced several risks. to counter this risk, the committee for banking supervision in basel in switzerland, in their 1988 agreements set minimum capital standards for banks released activities. for example, the development of concepts and models of credit risk have facilitated the design of new financial instruments and pricing methods and this has been followed by careful development of financial markets (capital adequacy regulations, 2003). capital adequacy ratio is a ratio to measure the functional health and financial stability of financial institutions and banks. banks should have enough capital to cover the risk arising from their activities and ensure that damages aren’t transferred to depositors. so, they should have the minimum amount of capital to cover their own operational risks (bahraminasab, 2013). capital adequacy ratio is one of the bank’s performance indicators which has been set to assess the risk management of banks of member countries of organization for economic cooperation and development. capital adequacy ratio in accordance with regulations of the iran central bank capital adequacy ratio is defined as follows (capital adequacy regulations, 2003). capital adequacy ratio is the quotient of dividing base capital to total weighted assets by risk factors in terms of percentage which is calculated from the following equation: equation 1 ( ) ( )initial capital main capital supplement sub capital adequacy weighted assets by risks + = (1) the base capital of the bank in accordance with the regulations of the central bank’s capital base is the sum of the bank’s primary capital and supplementary capital of the bank after the necessary deductions. the main capital of bank, including paid bank capital, legal reserves, other reserves (excluding revaluation reserve of fixed assets and shares owned by the bank) are spent for shares and accumulated profit (loss). supplementary capital includes reserves for bad debts, revaluation reserve of fixed assets and reserve resulting from the revaluation of shares. another of the stocks (items) included in the capital adequacy ratio are assets that are in the denominator. since the assets of each bank moghaddam and abbaspour: the effect of leverage and liquidity ratios on earnings management and capital of banks listed on the tehran stock exchange international review of management and marketing | vol 7 • issue 4 • 2017 101 have different risk factors, the assets items have been divided to varying risk degrees of 0, 10, 20, 50 and 100. according to article 3 of the mentioned regulations, the minimum capital adequacy ratio for all banks and credit institutions, both governmental and non-governmental has been determined 8 percent and central bank can in cases where international standards or the need to maintain the policy of banks and credit institutions, set somewhat higher for the official or some banks and credit institutions (capital adequacy regulations, 2003). 2.3. the impact of financial leverage on capital adequacy and earnings management financial leverage implies that the company to what extent is relied to finance through debt rather than increased capital. the financial leverage refers a percentage of the assets that will be covered by debts. banks use financial leverage to increase return of equity (share holders). increased use of financial leverage increases the bank’s risk and tshus raises higher capital requirements. in addition once financial leverage is increased, indicates that the share of bank capital rather assets is negligible, so, the banks power to finance and thus the possibility of increasing bank assets would be reduced and in turn reduces the ratio of bank’s capital (mansourian et al., 2016). in accounting literature, among those association with earnings management with regard to its role in the opportunistic behavior by managers has been investigated is financial leverage. previous research results such as beatty and weber (2003) indicated that high financial leverage potentially increases profit management through the use of accruals and other accounting choices that increase the profit. the reason for this is effort in order to prevent infringement in debt contracts. according to the results of the above mentioned research, it can be concluded that the more limiting factors in opportunistic behavior by managers, including pressures resulting from debt contracts and the need to repay the debt at maturity, the less level of earnings management in order to reduce the impact of fluctuations in interest as a result of these high-risk behavior (ahmadi, 2016). the high financial leverage has the potential to increase the earnings management on the other hand increase financial leverage by reducing the opportunistic behavior of managers will be reduced earnings management. it can be said that companies are faced with increasing debt and financial leverage, can be involved with the real profit (earnings) management. increased financial leverage can be an incentive to transfer the accrual profit (earning) management to real profit (earning) management. by increasing the financial leverage, the borrowing power of companies is reduced, so corporate executives trying to use discretionary accruals increases interest rate and provide the possibility of funding through shareholders (gombolaa et al., 2016). 2.4. the impact of liquidity on capital adequacy and earnings management the liquidity has been defined as the ability of company to act short-term obligations, in other words, the liquidity is ease of converting assets into cash. a company with sufficient liquidity has sufficient current assets to cover its current obligations. as a result, if a company has sufficient liquidity, may reduces the risk of bankruptcy because reserve sufficient cash to cover its obligations. liquidity is also an important factor in the costs of the financial crisis (sibilkov, 2009). if there is no sufficient liquidity of a company in the long term, this may lead to the liquidation and subsequently threaten the survival of the company. this will increase the costs of the financial crisis. liquidity is an important factor in the capital structure discussion, because if firms faced with threat of bankruptcy, better able to use more debt, assuming sufficient cash assets are owned (rao et al., 2007). with the threat of bankruptcy the company can more easily transform its liquid assets to cash requirements. thus, liquidity will have a significant impact on the capital structure. the results of most empirical studies suggest that liquidity is negatively correlated with leverage. as a result companies with high liquidity tend to have less borrowing (hejazi and khademi, 2013). therefore, in those banks that liquidity is higher, the ratio of capital to total assets is higher and it is expected that the bank’s capital adequacy is much higher than other banks (gombolaa et al., 2016). the existence of high liquidity makes it possible the management in the absence of proper corporate governance structure, attempts to manipulate earnings, especially in those companies with low investment opportunities and low growth (ahmadi, 2014). according to the above mentioned, it is expected executives of banks that have a lot of liquidity, to maintain personal interests apply a greater extent of excess cash in inefficiently investments. these managers to hide the effects of such activities attempt to manage profit (earnings) (gombolaa et al., 2016). 3. literature gombolaa et al. (2016) conducted a study entitled the impact of financial leverage and liquidity on capital and profit (earnings) management, evidence of american banks. their research period was between 1999 and 2013. the results showed that after the 2008 financial crisis, leverage and liquidity ratios have a significant positive effect on earnings (profit) management of banks. salhuteru and wattimena (2015) performed a study entitled review and compare the performance of public and private banks in earnings management based on camels model in the state bank of negara in indonesia. they used data from 2012 and 2013. the results show that in the state-owned banks, net interest margin has a significant positive impact on earnings management, while the capital adequacy ratio and market risk has a significant negative impact on bank earnings management. in private banks, net profit margin and return on assets have a significant positive impact on earnings management and capital adequacy ratio and the ratio of loans to deposits have a negative impact on earnings management. rusmin et al. (2014) in a study entitled the impact of surplus free cash and audit quality on earnings management, evidence of the developed countries, examined these variables in the period between 2005 and 2010 and extracted their data from exchange of moghaddam and abbaspour: the effect of leverage and liquidity ratios on earnings management and capital of banks listed on the tehran stock exchange international review of management and marketing | vol 7 • issue 4 • 2017102 three countries including indonesia, malaysia and singapore. their research results showed that audit quality is negatively related to earnings management, free surplus cash is positively related to earnings management, the results also showed audit quality has no significant effect on the relationship between free surplus cash and earnings management. reina et al. (2009) in a study entitled free surplus cash flows, earnings management and the audit committee addressed this issue to what extent the free cash surplus is related to earnings management. the results show that the independent audit committee helps the company with free cash flow, to monitor earnings management practices. mansourian et al. (2016) examined the relationship between financial accounting ratios and capital adequacy ratio in the banking network (iran), case study of public, private and the principal 44 commercial banks. their study period was 20062011. the results indicate a positive and significant relationship between the size of banks with capital adequacy ratio and significant negative relationship between financial leverage and capital adequacy ratio. return on assets has a significant positive relationship in private group and a negative significant in stateowned commercial banks. the return on equity has also a positive and significant relationship between state-owned commercial banks and negative and significant between private banks and capital adequacy. mohammadjany and sadeghi (2015) in study entitled the impact of excess (surplus) free cash flow on earnings management and the audit committee role using data of 87 companies of study during 2005-2011 years. the results indicate that a direct significant relationship between earnings management and surplus free cash flows. ahmadi (2015) in a study entitled the relationship between restrictions on financing, financing decisions and free cash flow risk with varied profit (earning) management. to this end, the research population including companies listed on tehran stock exchange during 2009-2013 and 107 companies were selected. the results showed that there is a positive and significant correlation between financial constraints and free cash flow risk and earnings management and also between financial leverage and real profit (earnings) management there is a significant positive relationship. in addition, between financial leverage and the profit (earnings) management there is a significant negative relationship and there is a significant negative relationship between financial leverage general levels of earnings management. hejazi and khademi (2013) examined the effect of economic factors and the characteristics of the company on the capital structure of companies listed on the tehran stock exchange and 92 companies in the years between 2001 and 2009 were studied. the results showed that there is a significant negative relationship between capital structure of the companies and liquidity and inflation, but between the capital structure of companies and asset structure, the size of company and economic growth, there is a significant positive relationship. mehrani and bagheri (2009) in a study entitled the effect of free cash flows and institutional shareholders on earnings management using data of a sample of 90 companies during 2000-2006 years. the results show that there is a direct relationship between profit management and high free cash flow in companies with low growth, but no significant relationship was found between earnings management and institutional shareholders in companies with high free cash flow and low growth. 4. methodology and statistical population this study in terms of is an applied one and the study method is descriptive research based on multivariate linear regression analysis where in integrated and combined data analysis has been. the required data have been gathered by cd (provided by tadbirpardaz company) and codal site. data analysis was conducted using the software eviews. the study population included the banks listed on the tehran stock exchange during the period 2011-2016. considering the limited number of banks listed on the stock exchange, there was no need for sampling and the total statistical population has been studied. thus, 14 banks have been investigated in the research period and according to the period of 6 years, a total of 84 banks have been included in the study. 5. hypotheses and research model according to the theoretical fundamentals of research and its history, the research hypotheses are formulated as follows: first hypothesis: financial leverage has a significant impact on the bank’s earnings management. second hypothesis: liquidity has a significant effect on bank earnings management. third hypothesis: financial leverage has a significant impact on the capital adequacy of banks. fourth hypothesis: liquidity significant impact on the capital adequacy of banks. the regression model of research hypotheses has been done by modeling from rusmin et al. (2014) as the equations 2-5: dacit = α0+α1levit+α2roeit+α3cfoit+α4insit+α5sizeit+ α6bsizeit+εit (2) dac it = α 0+α 1lq it+α 2roe it+α 3cfo it+α 4ins it+α 5size it+ α6bsizeit+εit (3) ca it = α 0+α 1levit+α 2roe it+α 3cfo it+α 4ins it+α 5size it+ α6bsizeit+εit (4) c a i t = α 0+ α 1l q i t+ α 2r o e i t+ α 3c f o i t+ α 4i n s i t+ α 5s i z e i t+ α6bsizeit+εit (5) in the above mentioned equations, dac is discretionary accruals (earnings management), lev, financial leverage, roe, return on equity, cfo, operating cash, ins, institutional shareholders dominated, size, size of the bank, bsize, board size, lq, moghaddam and abbaspour: the effect of leverage and liquidity ratios on earnings management and capital of banks listed on the tehran stock exchange international review of management and marketing | vol 7 • issue 4 • 2017 103 liquidity of bank, ca capital adequacy and εit is remaining component of model. 6. the measurement of research variables 6.1. the independent variables are a. financial leverage (lev): lev is calculated through dividing total debt to total bank’s assets. b. the liquidity of banks (lq): bank liquidity (6) is calculated as the follow: equation 6 cash short term investments short term receivables liquidity short term debt + − + − = − (6) 6.2. dependent variable a. profit (earnings) management (dac): the earnings management is through discretionary accruals (dac). based on studies conducted by dechow et al. (1995) modified jones model is the most powerful model to measure earnings management. accordingly, in the current research the mentioned model has been used to calculate discretionary accruals and following the research salhuteru and wattimena (2015) some adjustments have been applied for the possibility of using it in the bank. in the modified jones model, firstly all the accruals are calculated as follows (dechow et al., 1995): tacit = eit-ocfit (7) tait: the total accruals i in year t eit: operational profit for the company i in year t ocfit: cash flow from operations for the company i in year t. after the calculation of all the accruals in the form of a combination (for the companies’ year), the parameters of α1, α2, α3 to determine the nondiscretionary accruals, will be estimated through the following formula: it it 1 2 it it -1 it -1 it -1 tac rev1 = + + a a a ∆ α α ε (8) where in: tait: the total accruals of company i in year t ai,t−1: book value of total assets of the company i at the end of the year t−1 δrevit: the change in the sales revenue of company i between t and t−1 years εit: the unknown effects of random factors α1, α2, α3: estimated parameters of the company i. after calculating the parameters α1, α2, α3 by the least squares method in accordance with the following formula, the nondiscretionary accruals are determined as follows: it it 1 2 it-1 it-1 rev1 nda = + a a ∆ α α (9) where in: ndait: non-discretionary accruals of company i in year t δrecit: change in accounts receivable of company i between t and t−1. finally, the discretionary accruals (dac) after determining the nda are calculated as follows: it it it it -1 tac dac = nda a (10) b. bank capital adequacy (ca): the capital adequacy of banks has been extracted from the reports of the board of directors and in some cases that some banks have not released capital adequacy from their board of directors report, the capital adequacy ratio is calculated from equation (1). 6.3. control variables a. the return on equity (roe): roe is calculated through dividing operating cash on total assets. b. cash flow operating (cfo): cfo is calculated through dividing the operating cash to total assets. c. the percentage of institutional shareholders (ins): ins is the total shares held by institutional shareholders. institutional shareholders is the sum of the percentage shares of the company owned by banks, insurance companies, social security organization, pension funds, government institutions, investment companies and holding companies. d. the size of the bank (bsize): bsize is calculated based on the natural logarithm of total assets. e. the board size (bsize): bsize is calculated by the total number of board members. 7. results 7.1. descriptive statistics and correlation of variables in order to learn more about samples and variables, a summary of descriptive statistics of study variables has been calculated. table 1 gives an overview of descriptive variables. in a regression model, in the case of high correlation between the independent variables, may lead to a distortion of the results. the high correlation means intense correlation meaning more than 0.50. as can be seen in table 2, there is no correlation >0.50. 7.2. the test to determine the type of data to test the data must firstly the pool or panel of the data is recognized. for this the f limer test is used. if the significance level is >0.5, the data are panel and otherwise are pool (combined). as can be seen in the table 3, in all hypotheses significance level of f limer test is >0.05 and data are from the type of panel. after determining the type of data, the fixed and random effects of them must be determined. for this purpose the hausman test is used, it moghaddam and abbaspour: the effect of leverage and liquidity ratios on earnings management and capital of banks listed on the tehran stock exchange international review of management and marketing | vol 7 • issue 4 • 2017104 the significance level of hausman test is >0.05, the data has fixed effect and otherwise has random effects. 7.3. research hypotheses test a. first hypothesis: financial leverage has significant impact on the bank’s earnings management. according to calculated probability of statistics f in table 4 (significance of model 0.0000) it is determined that the model is significant and at least one of the coefficients of the regression model is opposite of zero (positive). the estimated durbin watson value is equal to 1. 568 and as the calculated value ranging between 1.5 and 2.5 therefore, this amount indicates that between the residuals there is no correlation of first type. given that significance level of independent variable of financial leverage (lev) is equal to 0.325, a value that is <0.05, thus, the results of model indicate that at the 95% confident level, financial leverage has significant effect on the dependent variable of bank earnings management and given that the independent variable coefficient is positive and equal to 0.282, it is clear that financial leverage has positive and significant effect on the dependent variable of earnings management. thus it can be concluded that when the bank’s financial leverage is increased, and the level of borrowing and debt in banks are increased, the possibility of earnings management is also increased, thus, the first hypothesis is confirmed and financial leverage has a significant positive effect on earnings management of banks. the adjusted value of the determination coefficient in the estimated results of regression model of this hypothesis is equal to 0.868 that this value indicates that about 87% of the dependent variable explained by the independent and control variables. b. the second hypothesis: the liquidity has a significant effect on bank earnings management. according to calculated probability of statistics f in table 5 (significance of model 0.0000) it is determined that the model is significant and at least one of the coefficients of the regression model is opposite of zero (positive). the estimated durbin watson value is equal to 1. 616 and as the calculated value ranging between 1.5 and 2.5 therefore, this amount indicates that between the residuals there is no correlation of first type. given that significance level of independent variable of bank liquidity (lq) is equal to 0.0006, a value that is <0.05, thus, the results of model indicate that at the 95% confident level, bank liquidity has significant effect on the dependent variable of bank earnings management and given that the independent variable coefficient is positive and equal to 0.029, it is clear that bank liquidity has positive and significant effect on the dependent variable of earnings management. thus it can be concluded that when the bank liquidity is increased, and the level of borrowing and debt in banks are increased, the possibility of earnings management is also increased, thus, the second hypothesis is confirmed and bank liquidity has a significant positive effect on earnings management of bank. the adjusted value of the determination coefficient in the estimated results of regression model of this hypothesis is equal to 0.830 that this value indicates that about 83% of the dependent variable explained by the independent and control variables. c. the third hypothesis: financial leverage has a significant impact on the capital adequacy of banks. according to calculated probability of statistics f in table 6 (significance of model 0.0000) it is determined that the model is significant and at least one of the coefficients of the regression model is opposite of zero (positive). the estimated durbin watson value is equal to1. 616 and as the calculated value ranging between 1.5 and 2.5 therefore, this amount indicates that between the residuals there is no correlation of first type. given that significance level of independent variable of financial leverage (lev) is equal to 0.0003, a value that is less than 0.05, thus, the results of model indicate that at the 95% confident level, financial leverage (lev) has significant effect on the dependent variable of capital adequacy and given that the independent variable coefficient is negative and equal to −32.845, it is clear that financial leverage (lev) has negative and significant effect on the dependent variable of capital adequacy. thus it can be concluded that when the financial leverage (lev) is increased, and the level of borrowing and debt in banks are increased, the ratio of capital adequacy of banks is decreased, thus, the third hypothesis is confirmed and financial leverage (lev) has a significant negative effect on capital adequacy of bank. the adjusted table 1: descriptive statistics of variables variable mean median maximum minimum sd skewness coefficients dac 0.003 0.003 0.193 −0.174 0.067 0.332 ca 10.244 9.375 24.710 2.122 2.729 1.031 lev 0.919 0.928 0.986 0.814 0.040 −0.783 lq 1.181 1.093 2.883 0.476 0.395 1.073 roe 0.174 0.170 0.457 −0.595 0.126 −1.453 cfo 0.028 0.018 0.213 −0.103 0.047 0.643 ins 0.483 0.420 0.960 0.070 0.289 0.088 size 18.938 19.062 21.296 16.146 1.315 −0.222 bsize 5.250 5 7 4 0.942 0.613 table 2: the results of correlation coefficient test lev lq roe cfo ins size bsize lev 1 lq 0.37 1 roe −0.278 −0.127 1 cfo −0.299 −0.343 0.295 1 ins 0.065 0.05 −0.67 −0.12 1 size 0.284 −0.147 −0.026 −0.177 0.233 1 bsize −0.348 −0.009 0.293 0.124 −0.12 0.036 1 moghaddam and abbaspour: the effect of leverage and liquidity ratios on earnings management and capital of banks listed on the tehran stock exchange international review of management and marketing | vol 7 • issue 4 • 2017 105 value of the determination coefficient in the estimated results of regression model of this hypothesis is equal to 0.879 that this value indicates that about 88% of the dependent variable explained by the independent and control variables. d. fourth hypothesis: the liquidity has a significant impact on the capital adequacy of banks. according to calculated probability of statistics f in table 7 (significance of model 0.0175) it is determined that the model is significant and at least one of the coefficients of the regression model is opposite of zero (positive). the estimated durbin watson value is equal to 1. 753 and as the calculated value ranging between 1.5 and 2.5 therefore, this amount indicates that between the residuals there is no correlation of first type. given that significance level of independent variable of bank liquidity (lq) is equal to 0.5066, a value that is <0.05, thus, the results of model indicate that at the 95% confident level, bank liquidity (lq) has no significant effect on the dependent variable of capital adequacy thus, the fourth hypothesis isn’t confirmed and bank liquidity (lq) has no significant on capital adequacy of bank. 8. conclusion and suggestions of research the results of the first research hypothesis confirmed it at 95%, so we can say that financial leverage has a significant positive effect on earnings management of banks and by increasing the degree of financial leverage, the profit management of banks is increased. these results show that financial leverage potentially increase the profit management through the use of accruals and other accounting choices that increase the profit. the reason for this is effort in order to prevent violation of the terms of debt contracts, in other words, by increasing the financial leverage, borrowing power of companies is reduced, so corporate (companies) executives try using discretionary accruals increase profits and provide the possibility of funding through shareholders, therefore high degree of financial leverage potentially increases the earnings (profit) management (gombolaa et al., 2016). the results of the second hypothesis confirmed this hypothesis at 95%, so we can say that the bank liquidity has a significant positive effect on earnings (profit) management of banks and by increasing the amount of liquid assets to short-term debt, the likelihood of earnings management banks increases. these results indicate table 3: results of limer f and hausman test f limer test results hausman test results hypothesis statistics probability result statistics probability result first hypothesis 3.380 0.0006 panel 30.521 0.0000 fixed effect second hypothesis 2.604 0.0058 panel 11.976 0.0625 random effect third hypothesis 10.370 0.0000 panel 22.544 0.0010 fixed effect fourth hypothesis 21.845 0.0000 panel 8.586 0.1982 random effect table 4: results of testing regression model significance of first hypothesis dacit = α0+α1levit+α2roeit+α3cfoit+α4insit+α5sizeit+α6bsizeit+εit variables model coefficients t-statistics significance fixed value of model 0.827 4.478 0.0000 financial leverage (lev) 0.282 2.185 0.0325 return on equity (roe) 0.061 1.993 0.0505 operating cash flow (cfo) −1.369 −16.859 0.0000 institutional stockholders ownership (ins) −0.118 −1.086 0.2813 firm size (size) 0.056 −7.657 0.0000 board size (bsize) 0.003 0.296 0.7681 the coefficient of determination of model (r2) 0.897 model significance 0.0000 the asjusted coefficient of determination of model (adj-r2) 0.868 durbin watson 1.568 goodness of fit (f statistic) 29.904 the number of observations 84 table 5: results of testing regression model significance of second hypothesis dacit = α0+α1lqit+α2roeit+α3cfoit+α4insit+α5sizeit+α6bsizeit+εit variables model coefficients t-statistics significance fixed value of model 0.371 5.615 0.0000 bank liquidity (lq) 0.029 3.581 0.0006 return on equity (roe) 0.099 3.790 0.0003 operating cash flow (cfo) −1.245 −16.639 0.0000 institutional stockholders ownership (ins) 0.014 0.846 0.3998 firm size (size) −0.021 −6.739 0.0000 board size (bsize) 0.004 0.980 0.3301 the coefficient of determination of model (r2) 0.842 model significance 0.0000 the adjusted coefficient of determination of model (adj-r2) 0.830 durbin watson 1.616 goodness of fit (f statistic) 68.577 the number of observations 84 moghaddam and abbaspour: the effect of leverage and liquidity ratios on earnings management and capital of banks listed on the tehran stock exchange international review of management and marketing | vol 7 • issue 4 • 2017106 that manipulation of profits in the banks with much liquidity is more than other banks and bankers that possess great liquidity to keep personal interests apply a greater extent of surplus cash in dysfunctional investments and to hide the effects of such activities, attempt to manage profit (earning) (gombolaa et al., 2016). the results of the third hypothesis confirmed it at 95%, so it can be said that financial leverage has a negative and significant effect on the capital adequacy of banks and by increasing the degree of financial leverage, the capital adequacy of banks is reduced. these results show the increased use of financial leverage increases the bank’s risk and thus raises higher capital requirements. in addition, once the financial leverage is increased, indicates that the share of bank capital to assets is negligible, so the banks power of the financing and thus the possibility of an increase in bank assets are reduced, leading to reduced bank’s capital (mansourian et al., 2016). the results represent the fourth hypothesis was not confirmed this hypothesis at 95%, so it can be said that the bank’s capital adequacy does not have a significant effect on bank liquidity. the results of fourth hypothesis indicate disapproval of it at 95%, so we can say that the bank’s liquidity has no significant effect on bank capital adequacy. the results of the current research are consistent with the results of research conducted by gombolaa et al. (2016), rusmin et al. (2014) and ahmadi (2015). the results of research conducted by gombolaa et al. (2016) showed that after the 2008 financial crisis, the ratios of leverage and liquidity have a significant positive effect on earnings management of banks. the results of study performed by rasmin et al. (2014) showed that surplus free cash is positively related to earnings management. the results of research conducted by mansourian et al. (2106) showed that there is a significant negative relationship between financial leverage and capital adequacy ratio, and the results of ahmadi (2015) showed a significant positive relationship between financial leverage and real profit (earnings) management. given to the results of the first and second hypothesis of this study showed that the degree of financial leverage and banks liquidity have a significant positive effect on earnings management of banks, so investors and capital market participants are recommended that during releasing quarterly reports and annual reports of banks, focusing on the mentioned ratios, evaluate the possibility of using discretionary accruals and earnings management of banks to assess and once analyze the earnings (profit) quality and the quality of financial reporting, the ratios of financial leverage and liquidity as factors that positively are related with earnings (profit) management to be specially considered. in addition, according to the results of third hypothesis, the financial analysts are recommended that once analyze the bank’s capital, consider (pay attention) the financial leverage as a factor that reduces the bank’s capital adequacy ratio. references ahmadi, m.m. (2015), the relationship between restrictions on financing, financing decisions and risk of free cash flow with a variety of earnings management, accounting master’s thesis, university of semnan. bahraminasab, b. (2013), the investigation of the ratings of banks with camel indices on bank stock returns, master’s thesis accounting, islamic azad university of semnan. bank capital adequacy regulations. (2003), adopted thousand and fourteenth session of the council of money and credit. central bank table 6: results of testing regression model significance of third hypothesis cait = α0+α1levit+α2roeit+α3cfoit+α4insit+α5sizeit+α6bsizeit+εit variables model coefficients t-statistics significance fixed value of model 58.358 4.706 0.0000 financial leverage (lev) −32.845 −3.787 0.0003 return on equity (roe) 0.097 0.047 0.9623 operating cash flow (cfo) −16.123 −2.960 0.0043 institutional stockholders ownership (ins) 9.094 1.240 0.2194 firm size (size) −0.141 −2.429 0.0179 board size (bsize) 0.049 −0.067 0.9461 the coefficient of determination of model (r2) 0.906 model significance 0.0000 the adjusted coefficient of determination of model (adj-r2) 0.879 durbin watson 2.393 goodness of fit (f statistic) 32.755 the number of observations 84 table 7: results of testing regression model significance of fourth hypothesis cait = α0+α1lqit+α2roeit+α3cfoit+α4insit+α5sizeit+α6bsizeit+εit variables model coefficients t-statistics significance fixed value of model 30.779 3.176 0.0021 bank liquidity (lq) 0.431 0.667 0.5066 return on equity (roe) 0.919 0.416 0.6779 operating cash flow (cfo) −6.310 −1.016 0.3125 institutional stockholders ownership (ins) 2.829 0.782 0.4366 firm size (size) −1.331 −2.953 0.0042 board size (bsize) 0.537 0.771 0.4426 the coefficient of determination of model (r2) 0.176 model significance 0.0175 the adjusted coefficient of determination of model (adj-r2) 0.112 durbin watson 1.753 goodness of fit (f statistic) 2.759 the number of observations 84 moghaddam and abbaspour: the effect of leverage and liquidity ratios on earnings management and capital of banks listed on the tehran stock exchange international review of management and marketing | vol 7 • issue 4 • 2017 107 of islamic republic of iran: bank capital adequacy regulations. beatty, a., weber, j. (2003), the effects of debt contracting on voluntary accounting method changes. the accounting review, 78(1), 119142. dechow, p.m., sloan, r., sweeny, a. (1995), detecting earnings management. the accounting review, 70(2), 193-225. gombolaa, m., yueh-fang, h.a., huangb, c. (2016), the effect of leverage and liquidity on earnings and capital management: evidence from u.s. commercial banks. international review of economics and finance, 43(1), 35-58. hejazi, r., khademi, s. (2013), the impact of economic factors and the characteristics of the company on the capital structure of listed companies in tehran stock exchange. financial accounting methods research journal, 2(16), 1-16. javaheri, m. (2014), the investigation of the effect of the privatization of banks on index camel, master of management thesis, semnan university, faculty of economics and administrative sciences. khurram, f. (2004), the effect of audit quality on earnings quality in companies with expensive stock, accounting master’s thesis, university of semnan. khurram, f. (2014), the effect of audit quality on earnings quality in companies with expensive stock, accounting master’s thesis, university of semnan. mansourian, n., reza, s.k., mahboob, m.r. (2016), effect of accounting financial ratios on capital adequacy ratio in the banking network, case study: commercial banks public, private and article 44. journal economic research (sustainable development), 16(3), 47-66. mehrani, s., bagheri, b. (2009), the effect of free cash flow on earnings management and institutional shareholders in listed companies in tehran stock exchange. accounting research, 2, ss51-ss64. mohammdjany, a., sadeghi, m. (2015), the relationship between surplus free cash flow on earnings management and the audit committee role, the first international conference on accounting. isfahan: audit management and economics. rao, n.v., mohamed, a.y.k., syed, l.a.m. (2007), capital structure and financial performance: evidence from oman. indian journal of economics and business, 6(1), 1-14. reina, r., grego, e., bertolotti, l., de meneghi, d., rosati, s. (2009), genome analysis of small ruminant lentivirus genotype e: a caprine lentivirus naturally deleted for dutpase subunit, vprlike accessory gene and the 70 bp repeat of u3 region. journal of virology, 83, 1152-1555. rusmin, r., astami, e.w., hartadi, b. (2014), the impact of surplus free cash flow and audit quality on earnings management. asian review of accounting, 22(3), 217-232. salhuteru, f., wattimena, f. (2015), bank performance with camels ratios towards earnings management practices in state banks and private banks. advances in social sciences research journal, 2(3), 301-314. schipper, k. (1989), commentary on earnings management. accounting horizons, 3(4), 91-102. scott, w.r. (1997), financial accounting theory. scarborough: printing hall. sibilkov, v. (2009), asset liquidity and capital structure. journal of financial and quantitative analysis, 44(5), 1173-1196. zengin, y., ozkan, s. (2010), audit quality and earnings management in interim financial reports. available from: http://www.ssrn.com. . international review of management and marketing | vol 7 • issue 2 • 2017250 international review of management and marketing | vol 7 • issue 2 • 2017 251 international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2017, 7(2), 250-255. international review of management and marketing | vol 7 • issue 2 • 2017250 international review of management and marketing | vol 7 • issue 2 • 2017 251 investigating the relationship between employee empowerment and the development of an entrepreneurial culture at fatemieh technical and vocational university of bandar abbas azade aryana1, reza ameri siyahouei2, tahereh mahmoudi3 1department of human resources management, technical and vocational university, iran, 2department of industrial management, technical and vocational university, iran, 3department of clinical psychology, zarand branch, islamic azad university, zarand, iran. *email: rezaameri65@yahoo.com abstract this study has been conducted with the aim of investigating the relationship between employee empowerment and the development of an entrepreneurial culture fatemieh technical and vocational university of bandar abbas. this is a descriptive and correlational research. the sample size was 113 participants (85 females and 28 males) who were selected via simple random sampling method. the research tool was spritzer psychological empowerment scale and entrepreneurial culture questionnaire. the data obtained from the study were analyzed using pearson correlation coefficient. the research findings showed that there is a relationship between employee empowerment and the development of an entrepreneurial culture in fatemieh technical and vocational university of bandar abbas, there is a significant relationship between sense of competence (self-efficacy) and the development of an entrepreneurial culture in fatemieh technical and vocational university of bandar abbas, there is a significant relationship between the sense of having the right of choice (independence) and the development of an entrepreneurial culture in fatemieh technical and vocational university of bandar abbas, there is a significant relationship between sense of meaning and the development of an entrepreneurial culture in fatemieh technical and vocational university of bandar abbas, and there is a significant relationship between sense of trust in other employees and the development of an entrepreneurial culture in fatemieh technical and vocational university of bandar abbas. keywords: empowerment, development of entrepreneurial culture, employees, fatemieh technical and vocational university jel classifications: e37, e32, c53, c5 1. introduction a review of the previously conducted studies regarding the development of countries shows that no country may achieve development without passing through a stage of intellectual and cultural development, and preparing public opinion. in other words, achieving development not only involves political and human changes in society, but it also requires accepting the changes that must occur in persons. these changes should pave the way for people’s accepting a culture commensurate with entrepreneurship. therefore, promoting and spreading the culture of entrepreneurship as one of the effective strategies in the contemporary environment and as an efficient model to achieve the objectives of social and economic development and it is nowadays regarded as the engine for development as well as the cause of competitive advantage toward the growth and survival of societies. mcguire believes that an entrepreneurial culture is influenced by the culture of the community. in fact, the values and beliefs of societies drive people to work, consistent production, creative thinking and learning and knowledge acquisition (aqajani and aqajani, 2006). on the other hand, in contrast with what is generally thought, the main source of competitive advantage does not lie in technology; rather, it lies in the dedication, quality, commitment and ability of the workforce. one of the most important resources of any organization is the results of its employees’ creativity, and empowerment is a stimulus for this growing work environment. by raising highly motivated and competent employees, empowerment will allow managers to act quickly and properly in response to the dynamics of the competitive environment and pave the way for the aryana, et al.: investigating the relationship between employee empowerment and the development of an entrepreneurial culture at fatemieh technical and vocational university of bandar abbas international review of management and marketing | vol 7 • issue 2 • 2017250 international review of management and marketing | vol 7 • issue 2 • 2017 251international review of management and marketing | vol 7 • issue 2 • 2017250 international review of management and marketing | vol 7 • issue 2 • 2017 251 competitive advantage of their organizations. in the current state of the global economy, the only countries which are affected by various aspects of globalization are those which can offer new products and services in accordance with the customers’ requirements. but empowerment is not something that managers should do for employees but is managers’ attitudes and perceptions about their role in their jobs and in the organization. besides, managers can pave the way for their employees’ empowerment. any strategy or measure that can enhance the employees’ need for self-efficacy will lead to empowerment. the process of fostering a sense of selfefficacy through the identification and elimination of organizational conditions that lead to powerlessness and helplessness in employees is called empowerment. although much attention has been given to entrepreneurship in our country and entrepreneurs have been partially supported by the government and officials, a few creative entrepreneurs may not lead to economic and social development. therefore, entrepreneurs must be associated with the nature and behavior of people as part of the actual structure of the social system and it should be immersed in everyone’s mind as a crucial necessity (farahani et al., 2011. p. 42). it is thus necessary to strive to develop an entrepreneurial culture and take measures to drive the employees towards entrepreneurship. one of the factors that can play a significant role in the development of an entrepreneurial culture is employee empowerment. the extensive studies having been conducted on empowerment have focused on its role in performance (kirkman et al., 2004) and the role of empowerment and its dimensions on entrepreneurship (veisi and karimizadeh, 2010; chen, 2011); however, these studies have not dealt with the impact of empowerment on the development of entrepreneurship. in this study, based on the cognitive approach to empowerment that includes the dimensions of feeling a sense of effectiveness, sense of competence, sense of meaning, sense of having the right of choice and sense of trust in others, we have investigated the relationship between employee empowerment and the development of an entrepreneurial culture in fatemieh technical and vocational university of bandar abbas in order to reply the research question, which is: “can employee empowerment have a role in the development of an entrepreneurial culture?” with regard to the cognitive approach to empowerment, it is likely that employees who realize that they are effective and take measures to achieve their goals are those who believe in their own ability to perform their duties successfully, appreciate the work that they do and have the right of choice freedom of action, and can do innovative and consequently entrepreneurial activities and develop it. this creates an atmosphere that can result in entrepreneurial culture which is conceptualized as vision growth, goal setting, planning, creativity, flexibility, innovation, freedom of action and individual and group independence. 2. literature many studies have been conducted on employee empowerment and organizational and managerial variables. in addition, entrepreneurship and its development and training has attracted much attention throughout the world. however, due to the various definitions and approaches to these two variables, there are many background studies performed concerning them, but few studies have been carried out in relation to the role of employee empowerment and entrepreneurship and development of cultural entrepreneurship and the few conducted studies have focused on specific ethnic or gender minority groups. now, considering this issue, we present those studies which can reply the research question based on the research objectives. the following studies may be mentioned with this point in mind. maleki et al. (2012) studied the relationship between structural empowerment and individual readiness of nurses for change, concluding that there exists a significant positive relationship between structural empowerment and the individual readiness of nurses for change, and that access to opportunities significantly affects and accounts for readiness for change. furthermore, alaei (2011) investigated the role of entrepreneurial culture in the development of entrepreneurship using the views of 57 entrepreneurs and policymakers of cultural industries and revealed that strengthening the cultural industries has the greatest impact on entrepreneurship development, as compared with other (educational, administrative, financial, technical and legal) components. veisi and karimizadeh (2010) also studied the development of an entrepreneurial culture, showing the factors and strategies in payam nour university (pnu) of mazandaran province. they concluded that administrative factor, human psychological factor and strategic direction respectively have the highest and lowest impact on the development of an entrepreneurial culture in pnu of mazandaran province. oladele et al. (2011) studied the development of entrepreneurship in nigeria and the relationship between the underlying variables using a regression model. they showed that the index of agricultural production, inflation and unemployment are involved in entrepreneurship development. chen (2011) examined the role of empowerment in employee performance in malaysian automotive industry and showed that among the dimensions of employee empowerment, competence and effectiveness have the greatest impact on employees’ performance and innovation. 3. research method this an applied research in terms of goal and a descriptive and correlational research in terms of nature and type of research. it seeks to find an answer to the question “can employee empowerment as a predictor (independent) variable have an impact on the development of an entrepreneurial culture (the criterion or dependent variable). the study population includes all employees of fatemieh technical and vocational university of bandar abbas in 2012. the number of the female employees was 97 and that of the male employees was 61. the population size is thus 158 employees. the sample size for this study was estimated 113 people using krejcie-morgan table, and they were selected among the male and female employees using simple random sampling method. the final sample included 85 females and 28 males. the data collection instrument was a questionnaire with regard to the research objectives. for this purpose, three aryana, et al.: investigating the relationship between employee empowerment and the development of an entrepreneurial culture at fatemieh technical and vocational university of bandar abbas international review of management and marketing | vol 7 • issue 2 • 2017252 international review of management and marketing | vol 7 • issue 2 • 2017 253 questionnaires of personal information including gender, age and level of education and work experience, empowerment questionnaire and entrepreneurial culture questionnaire were used. in this study, the views of experts and university professors (two professors from islamic azad university, branch of sirjan, and three professors from girls technical and vocational university of bandar abbas) were used for determining and confirming the (face) validity of the questionnaires. by conducting different interviews and consulting the professors at this stage, we made the required corrections in the questionnaires and ensured that they can measure what they have been purported to measure. in order to measure the reliability of the questionnaires, we first distributed them among a 30-people sample and then examined the reliability of the research tool using spss software. as the cronbach’s alpha coefficient was measured over 70%, it can be said that the questionnaire has good reliability. finally, it is noteworthy that we used pearson correlation coefficient so as to examine the relationship between empowerment and its dimensions and entrepreneurship development and made all the analyses using spss software. 4. data analysis the results obtained from the questionnaire in this study show that 75.2% of the respondents were females and 24.8% were males; 2.7% of the respondents were between 20 and 30-year-old, 29.2% were between 30 and 40-year-old, 57.5% were between 40 and 50 years of age and 10.6% were over 50-year-old. concerning the level of education, it is noteworthy that 8.8% of the respondents had associate’s degree, 77% had b.a and 14.2% had m.a and phd degrees. 4.1. the main hypothesis there is a relationship between employee empowerment and the development of an entrepreneurial culture in fatemieh technical and vocational university of bandar abbas. we used pearson’s correlation coefficient in order to test the main hypothesis. for this purpose, the correlation coefficient was calculated between employee empowerment on the one hand and the development of an entrepreneurial culture on the other, with the results presented in the table 1. based on the results presented in table 1, since the significant is <0.05, h0 is rejected and there is a correlation between these two variables. in other words, there is a direct and significant relationship between employee empowerment and development of entrepreneurial culture and the correlation coefficient obtained is 0.5, which is significant with the frequency of 113 people at the alpha level of 0.001. 4.2. the first sub-hypothesis there is a relationship between sense of competence (self-efficacy) and the development of an entrepreneurial culture in fatemieh technical and vocational university of bandar abbas. we used pearson’s correlation coefficient in order to test the first sub-hypothesis. for this purpose, the correlation coefficient was calculated between the scores of sense of competence (self-efficacy) and the development of an entrepreneurial culture, with the results presented in table 2. based on the results presented in table 2, since the significant is <0.05, h0 is rejected and there is a correlation between these two variables. in other words, there is a direct and significant relationship between sense of competence and development of entrepreneurial culture and the correlation coefficient obtained is 0.524, which is significant with the frequency of 113 people at the alpha level of 0.001. 4.3. the second sub-hypothesis there is a relationship between sense of having the right of choice and the development of an entrepreneurial culture in fatemieh technical and vocational university of bandar abbas. we used pearson’s correlation coefficient in order to test the second sub-hypothesis. for this purpose, the correlation coefficient was calculated between the scores of sense of having the right of choice (independence) and the development of an entrepreneurial culture, with the results presented in table 3. based on the results presented in table 3, since the significant is <0.05, h0 is rejected and there is a correlation between these two variables. in other words, there is a direct and significant relationship between sense of having the right of choice and development of entrepreneurial culture and the correlation coefficient obtained is 0.480, which is significant with the frequency of 113 people at the alpha level of 0.001. 4.4. the third sub-hypothesis there is a relationship between sense of effectiveness and the development of an entrepreneurial culture in fatemieh technical and vocational university of bandar abbas. table 1: results of pearson’s correlation coefficient variable statistical indexes entrepreneurship development empowerment pearson correlation 0.500 level of significance (significant) 0.000 number 113 table 2: results of pearson’s correlation coefficient variable statistical indexes entrepreneurship development sense of competence pearson correlation 0.524 level of significance (significant) 0.000 number 113 table 3: results of pearson’s correlation coefficient variable statistical indexes entrepreneurship development sense of having the right of choice pearson correlation 0.480 level of significance (significant) 0.000 number 113 aryana, et al.: investigating the relationship between employee empowerment and the development of an entrepreneurial culture at fatemieh technical and vocational university of bandar abbas international review of management and marketing | vol 7 • issue 2 • 2017252 international review of management and marketing | vol 7 • issue 2 • 2017 253 we used pearson’s correlation coefficient in order to test the third sub-hypothesis. for this purpose, the correlation coefficient was calculated between the scores of sense of effectiveness and the development of an entrepreneurial culture, with the results presented in table 4. based on the results presented in table 4, since the significant is <0.05, h0 is rejected and there is a correlation between these two variables. in other words, there is a direct and significant relationship between sense of effectiveness and development of entrepreneurial culture and the correlation coefficient obtained is 0.426, which is significant with the frequency of 113 people at the alpha level of 0.001. 4.5. the fourth sub-hypothesis there is a relationship between sense of meaning and the development of an entrepreneurial culture in fatemieh technical and vocational university of bandar abbas. we used pearson’s correlation coefficient in order to test the fourth sub-hypothesis. for this purpose, the correlation coefficient was calculated between the scores of sense of meaning and the development of an entrepreneurial culture, with the results presented in table 5. based on the results presented in table 5, since the significant is <0.05, h0 is rejected and there is a correlation between these two variables. in other words, there is a direct and significant relationship between sense of meaning and development of entrepreneurial culture (confirmation of h1) and the correlation coefficient obtained is 0.478, which is significant with the frequency of 113 people at the alpha level of 0.001. 4.6. the fifth sub-hypothesis there is a relationship between sense of trust in other employees and the development of an entrepreneurial culture in fatemieh technical and vocational university of bandar abbas. we used pearson’s correlation coefficient in order to test the fifth sub-hypothesis. for this purpose, the correlation coefficient was calculated between the scores of sense of trust in other employees and the development of an entrepreneurial culture, with the results presented in table 6. based on the results presented in table 6, since the significant is <0.05, h0 is rejected and there is a correlation between these two variables. in other words, there is a direct and significant relationship between sense of trust in other employees and development of entrepreneurial culture and the correlation coefficient obtained is 0.351, which is significant with the frequency of 113 people at the alpha level of 0.001. 5. conclusion the present study aimed to investigate the relationship between employee empowerment and the development of an entrepreneurial culture in fatemieh technical and vocational university of bandar abbas. for this purpose, 113 employees of this university were selected as the sample via simple random sampling method and responded the empowerment and entrepreneurial culture development questionnaires. the data obtained by the research with respect to the hypotheses were statistically analyzed. now, the research results are analyzed. the main hypothesis: there is a relationship between employee empowerment and the development of an entrepreneurial culture in fatemieh technical and vocational university of bandar abbas. we used correlation coefficient in order to test this hypothesis. the results showed that there is a positive and significant relationship between employee empowerment and the development of an entrepreneurial culture in fatemieh technical and vocational university of bandar abbas, and this hypothesis was confirmed with confidence level of 99%. this means that the more empowered the employees are, the greater their culture of entrepreneurship development. this finding is in line with other studies including oney and ozer (2011), chen (2011), gallup inc., ofuasia et al. (2004), veisi and karimzadeh (2010), hasumi and nazem (2010), and banian (2009), who all showed that greater empowerment of employees results in their greater entrepreneurship and entrepreneurial culture. 5.1. the first sub-hypothesis there is a relationship between sense of competence (self-efficacy) and the development of an entrepreneurial culture in fatemieh technical and vocational university of bandar abbas. we used correlation coefficient in order to test this hypothesis. the results showed that there is a positive and significant relationship between sense of competence (self-efficacy) and the development table 4: results of pearson’s correlation coefficient variable statistical indexes entrepreneurship development sense of effectiveness pearson correlation 0.426 level of significance (significant) 0.000 number 113 table 5: results of pearson’s correlation coefficient variable statistical indexes entrepreneurship development sense of meaning pearson correlation 0.478 level of significance (significant) 0.000 number 113 table 6: results of pearson’s correlation coefficient variable statistical indexes entrepreneurship development sense of trust in other employees pearson correlation 0.351 level of significance (significant) 0.000 number 113 aryana, et al.: investigating the relationship between employee empowerment and the development of an entrepreneurial culture at fatemieh technical and vocational university of bandar abbas international review of management and marketing | vol 7 • issue 2 • 2017254 international review of management and marketing | vol 7 • issue 2 • 2017 255 of an entrepreneurial culture in fatemieh technical and vocational university of bandar abbas, and this hypothesis was confirmed with confidence level of 99%. 5.2. the second sub-hypothesis there is a relationship between sense of having the right of choice (independence) and the development of an entrepreneurial culture in fatemieh technical and vocational university of bandar abbas. we used correlation coefficient in order to test this hypothesis. the results showed that there is a significant relationship between sense of having the right of choice (independence) and the development of an entrepreneurial culture in fatemieh technical and vocational university of bandar abbas, and this hypothesis was confirmed with confidence level of 99%. 5.3. the third sub-hypothesis there is a relationship between sense of effectiveness and the development of an entrepreneurial culture in fatemieh technical and vocational university of bandar abbas. we used correlation coefficient in order to test this hypothesis. the results showed that there is a significant relationship between sense of effectiveness and the development of an entrepreneurial culture in fatemieh technical and vocational university of bandar abbas, and this hypothesis was confirmed with confidence level of 99%. 5.4. the fourth sub-hypothesis there is a relationship between sense of meaning and the development of an entrepreneurial culture in fatemieh technical and vocational university of bandar abbas. we used correlation coefficient in order to test this hypothesis. the results showed that there is a significant relationship between sense of meaning and the development of an entrepreneurial culture in fatemieh technical and vocational university of bandar abbas, and this hypothesis was confirmed with confidence level of 99%. 5.5. the fifth sub-hypothesis there is a relationship between sense of trust in other employees and the development of an entrepreneurial culture in fatemieh technical and vocational university of bandar abbas. we used correlation coefficient in order to test this hypothesis. the results showed that there is a significant relationship between sense of trust in other employees and the development of an entrepreneurial culture in fatemieh technical and vocational university of bandar abbas, and this hypothesis was confirmed with confidence level of 99%. for explaining the findings of the sub-hypotheses, one may claim that, as believed by experts such as inaradevi (2012), as employees become more empowered, the organization will be driven towards entrepreneurship and competitive environment, and the employees are expected to take initiative and accept responsibility for the management of their workplace. current employees need to be empowered enough so that they can perform their roles in the business environment so well. in addition, an overview of the previous studies indicates that this finding is not unexpected. this is because studies such as the one carried out by ofuasia et al. (2004), which revealed that practical training of entrepreneurship plays an important role in the management of human resources and empowerment of the youth has depended on their entrepreneurship courses, all show that wherever employees have been empowered and trained, it has resulted in entrepreneurship and entrepreneurship development. finally, it is noteworthy that generally the results of the research showed that the cognitive approach believes that empowerment is a multi-faceted issue and cannot be based solely on a special concept; it includes sense of competence (self-efficacy), sense of having the right of choice (self-determination or independence), sense of effectiveness (personal consequence), sense of meaning or being important (being valuable) and sense of trust in others, and it is associated with entrepreneurship development. references alaei, s. (2011), the role of entrepreneurial culture in entrepreneurship development. cultural industry study, 48, 109-132. aqajani, h.a., aqajani, a.a. (2006), an indigenous and integrated model of entrepreneurial management. proceedings of the first national conference on entrepreneurship. tehran: tehran university. p15. banian, n.r. (2009), empowerment of human resources and change management of the management norms effective in entrepreneurial success with a focus on human resource empowerment. the third conference of human resources empowerment. tehran: iranian human resource empowerment foundation. chen, k.p. (2011), a study on the of empowerment on employee performance in the automotive industry in malaysia. a masters project submitted in partial fulfillment of the requirements for the degree of master off human resource management, open university malaysia. farahani, a., ajam, q., azizian, k.n., seraj, s. (2011), the relationship between the psychological factors of organizational empowerment and entrepreneurship among employees at department of physical educations in khorasan razavi province. sports management, 8, 41-55. hasumi, t., nazem, f. (2010), the relationship between the research behavior of professors with their entrepreneurship in islamic azad university, branch of rudehen. quarterly journal of leadership and educational management, 4(38), 27-31. inaradevi, d.r. (2012), the impact of psychological empowerment on job performance and job satisfaction indian software companies. international journal of multidisciplinary management studies, 2(4), 36-49. kirkman, b.l., rosen, b., tesluk, p.e., gibson, c.b. (2004), the impact of team empowerment on virtual team performance: the moderating role of face-to-face interaction. academy of management journal, 47(2), 175-192. maleki, m.r., gohari, m.r., ghorbanian, a. (2012), the relationship between structural empowerment and individual readiness of nurses for change. iranian nursing journal, 18, 10-76. ofuasia, j.n., nwalado, e.n., dede, p.u. (2004), entrepreneurship education for youth empowerment nigeria: implication for social studies education, 5(4), 25-33. oladele, p.o., akeke, i., oladunjoye, o. (2011), entrepreneurship development: a panacea for unemployment education in nigeria. journal of emerging trends in economics and management aryana, et al.: investigating the relationship between employee empowerment and the development of an entrepreneurial culture at fatemieh technical and vocational university of bandar abbas international review of management and marketing | vol 7 • issue 2 • 2017254 international review of management and marketing | vol 7 • issue 2 • 2017 255 sciences, 2(4), 251-256. oney, m., ozer, b. (2011), entrepreneurship, empowerment and the impact of the dimension of female identity on the women involved in microcredit financing schemas. international journal of social sciences and humanity studies, 3(2), 295-230. veisi, r., karimzadeh, p. (2010), development of entrepreneurial culture, factors and solutions (case study of pnu of mazandaran province). journal of planning and budget, 15(111), 159-184. . international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2019, 9(6), 152-157. international review of management and marketing | vol 9 • issue 6 • 2019152 understanding the intention to use netflix: an extended technology acceptance model approach ufuk cebeci1*, oguzhan ince1, hulya turkcan2 1department of industrial engineering, istanbul technical university, 34367, maçka, i̇stanbul, turkey, 2faculty of business administration, gebze technical university, 41400, gebze, kocaeli, turkey. *email: cebeciu@itu.edu.tr received: 25 august 2019 accepted: 30 october 2019 doi: https://doi.org/10.32479/irmm.8771 abstract developments in information and communication technologies disrupt the traditional media ecosystem. new media has led to the emergence of many digital platforms such as netflix. netflix has become very popular nowadays all over the world. hence, this paper aims to reveal the determinants of intention to use netflix based on the technology acceptance model. for this purpose, a survey of 251 respondents in istanbul was conducted. the findings indicate that (i) self-efficacy and knowledge is positively related to perceived ease of use (peou), (ii) knowledge and peou is positively associated with perceived usefulness (pu), (iii) pu predicts attitude, (iv) attitude predicts intention to use, and (v) technology anxiety attenuates the positive effect of pu on attitude. keywords: technology acceptance model, digital platforms, netflix jel classifications: c42, m31 1. introduction today, media consumption is changed in terms of means, patterns, and quality, because of the advancement of information and communication technologies (icts) (shim and kim, 2018). some of these advancements are the broadband network and smart devices which promote to develop over-the-top (ott) services (kim et al., 2017). ott is one of the drivers of the new media ecosystem and the new media ecosystem, there are two keywords: mobility and internet (kim et al., 2016). in this regard, whereas cable tvs are not preferred, ott services get attention increasingly in order to get entertainment content (shim et al., 2018). now, netflix is the most popular ott streaming service all over the world. netflix allows people to get content “anywhere, anytime and any device” (hooper et al., 2010). because of especially this opportunity, people show great interest to it in many parts of the world. therefore, it is substantial to investigate the determinants of the intention to use netflix. but it is observed that there is no study that investigates the factors affecting intention to use neither netflix nor any other ott streaming services. since it is still a gap in the literature despite required, this paper aims to investigate the determinants of intention to use netflix. for this purpose, self-efficacy and knowledge are included in the technology acceptance model model and their impacts are examined. moreover, this paper aims to reveal the effect of technology anxiety in the relationship between perceived usefulness (pu) and attitude. thus, this empirical study contributes to the literature by providing a comprehensive framework of factors affecting the intention to use netflix. this paper is structured as follows. first, the main concepts are reviewed briefly. second, hypotheses are developed based on the theoretical background. then, research methodology and findings are explained. finally, discussion and conclusion are given. this journal is licensed under a creative commons attribution 4.0 international license cebeci, et al.: understanding the intention to use netflix: an extended tam approach international review of management and marketing | vol 9 • issue 6 • 2019 153 2. literature review 2.1. netflix ott offers video content through the internet or ip based transmission path (federal communications commission, 2013). ott services combine several contents such as movie and music; platforms such as apps and social network platforms; and devices such as tv, pc, and smartphone (shin et al., 2016). namely, it provides significant flexibility to its users. thus, people who want to get content anywhere, anytime and any device show great interest in ott services (hooper et al., 2010). now, the most popular ott streaming services are netflix, hulu and amazon prime (adhikari et al., 2014). netflix is a major ott service provider in a new mediascape that has been global (wayne, 2018). netflix was established as a dvd rental service in 1997 and it was serving online (kim et al., 2016). since then, it has undergone two changes. in 1999, it started providing unlimited dvd rentals for its customers at a monthly subscription fee and in 2007, it launched the online movie streaming service, which is the basis of its current situation (voigt et al., 2017). as of 2012, it started to introduce its original contents (wayne, 2018). now, netflix provides its customers to commercial-free and unlimited viewing of many contents such as tv-shows, movies, and documentaries through internet-connected devices. it is the foremost subscription-based digital content delivery service (kim et al., 2016). 2.2. technology acceptance model (tam) tam is used to examine the factors that affect the user’s acceptance of the new technology and information system (surendran, 2012). tam is adapted from the theory of reasoned action (tra) by davis (davis, 1989). it has four main constructs: perceived ease of use (peou), pu, attitude and intention to use. tam assumes that the beliefs peou and pu determinative for attitude and attitude also affects intention to use (davis et al., 1989). peou is “the degree to which a person believes that using a particular system would be free of effort” and pu is “the degree to which a person believes that using a particular system would enhance his or her job performance” (davis, 1989). attitude refers to individuals’ evaluations of favorableness or unfavorableness towards something (lin, 2007). based on tam, it is also possible for some external variables to be effective on these main structures (davis et al., 1989). in this way, in order to explain the technology acceptance of the users in more detail, tam can be expanded by adding external variables besides basic structures and this is an extended tam approach. in this study, extended tam approach was adopted, and the external variables which are self-efficacy and knowledge are examined as factors related to pu and peou. moreover, technology anxiety is investigated as a moderator between pu and attitude. 3. research model and hypothesi̇s 3.1. knowledge, peou and pu a potential barrier to adopt a specific technology is the lack of knowledge (slade et al., 2015). because knowledge on a specific thing leads to beliefs and awareness about benefits, impacts, and usage of it (bang et al., 2000). users with a high level of knowledge about a specific thing such as using mobile phone perceive it as easy to use and also be aware of its benefits more (kim et al., 2010). in this respect, if a user is knowledgeable about netflix, this user will believe to use it easily and get benefits by using it. for example, a user with knowledge on how to watch netflix can use it easily through a device such as tv. also, a user with knowledge what the contents are netflix offer (original contents, etc.), and what the features of netflix have (commercial-free, etc.) can understand its benefits. therefore, we hypothesized that: h1: netflix knowledge is positively related to peou of netflix. h2: netflix knowledge is positively related to pu of netflix. 3.2. self-efficacy and peou self-efficacy is a belief individual has in own ability to do actions in a specific manner (sánchez and hueros, 2010). for example, people with computer self-efficacy believe themselves to do anything about computer. on the contrary, people who have not self-efficacy of using computer believe that using computers figure 1: research model cebeci, et al.: understanding the intention to use netflix: an extended tam approach international review of management and marketing | vol 9 • issue 6 • 2019154 is complex and difficult. moreover, self-efficacy determine the people perceptions about their adoption to use technology and also about their using it effectively (reychav et al., 2019). in this respect, people with self-efficacy of using netflix perceive that netflix is user-friendly and using it is easy. therefore, we hypothesized that: h3. self-efficacy of using netflix is positively related to peou of netflix. 3.3. peou, pu, and attitude according to tam, peou affects the pu and attitude (davis et al., 1989). any technology which is difficult to use is not possible to consider as useful (park et al., 2014). because it is seen as a waste of time (davis et al., 1989). furthermore, users do not have a positive attitude towards it. because instead of this time-consuming technology, the equivalent of this technology that gives the same output with less effort is preferred. namely, it is claimed that the technology, which is easy to use, will be accepted more than other technologies if all conditions are equal (davis, 1989). therefore, if the users perceive that netflix can be used easily, they will be able to perceive the benefits it will provide to them and develop a positive attitude towards it. therefore, we hypothesized that: h4: peou of netflix is positively related to pu of netflix. h5: peou of netflix is positively related to attitude toward using netflix. 3.4. pu and attitude tam assumes that pu is antecedent of attitude toward a specific technology (davis et al., 1989). pu of netflix is the extent to which a person perceives to get more benefits (unlimited viewing, commercial-free, original content, low price) by using netflix instead of utilizing other technologies that provide similar services. if the user believes that one or more features and services offering by netflix are beneficial, the evaluations of the user about using netflix will be positive manner. because pu is an outcome expectancy (huang and liaw, 2005) and it is a key factor in personal evaluations. therefore, we hypothesized that: h6: pu is positively related to attitude toward using netflix. 3.5. attitude and intention to use attitude is opinions about whether a behavior favourable or unfavourable and how the user perceives the outcomes of this behavior (verma and sinha, 2018). furthermore, it is the main antecedents of intention to use based on tam (davis et al., 1989). namely, the positive thinking and evaluations of people about netflix lead to the desire to use netflix. on the contrary, negative assessments about netflix cause them not to use it. because if the attitude is positive, behavioral intention is likely to be positive (verma and sinha, 2018). therefore, we hypothesized that: h7: attitude toward using netflix is positively related to intention to use netflix. table 1: cfa results variables items 1 2 3 4 5 6 7 technology anxiety ta1 0.745 ta2 0.691 ta3 0.787 ta4 0.903 self-efficacy se1 0.734 se2 0.907 se3 0.540 knowledge k1 0.799 k3 0.647 k4 0.703 pu pu1 0.828 pu2 0.873 pu3 0.839 peou peou1 0.829 peou2 0.915 peou3 0.678 attitude a2 0.815 a3 0.813 a4 0.813 a5 0.790 a6 0.827 intention to use iu1 0.882 iu2 0.934 iu3 0.897 peou: perceived ease of use, pu: perceived usefulness, cfa: confirmatory factor analysis figure 2: moderating effect of technology anxiety cebeci, et al.: understanding the intention to use netflix: an extended tam approach international review of management and marketing | vol 9 • issue 6 • 2019 155 3.6. moderating role of technology anxiety technology anxiety is a fear of possible unfavourable outcomes of using technology (sam et al., 2005). therefore, people with higher level technology anxiety become tense and unhappy when they need to use technology and even when they think of this possibility. they also tend to look unfavorably on technology and avoid using it. namely, technology anxiety may affect users’ behaviors (park et al., 2019). hence, users with high technology anxiety may find it difficult to have a positive attitude even if they know the benefits of netflix for them. because they constantly focus on possible negative consequences. when there is a high level of technology anxiety, the relationship between pu and attitude is weak. therefore, we hypothesized that: h8: technology anxiety negatively moderates the relationship between pu and attitude toward netflix. figure 1 shows the research model which contains the hypotheses of this research. 4. research method and analysis 4.1. measures and sampling to test the hypotheses, multi-item scales were adopted from the prior studies. for technology anxiety, self-efficacy, attitude and intention to use, items were adopted from bailey et al. (2017) and items to measure knowledge, peou and pu were adopted from kim et al. (2010). all of the scale items were measured by a 7-point likert scale. the data was gathered through an online survey. the participants are live in istanbul and 251 usable responses were returned. most of the respondents are male (65.7%). 99.6% of our respondents have received university or postgraduate degree and 93.6% are 30 years old smaller. according to the frequency of use netflix, 21.1% of them use it every day and 31.9% are using it a few days a week. 4.2. validity and reliability first of all, confirmatory factor analysis (cfa) was conducted using amos to evaluate measures’ validity and reliability. all variables were tested in a cfa model and items which have low factor loading were eliminated in a stepbystep procedure. table 1 shows the factor loadings of items and factor structures. the results represented the adequate model fit (chi-square/df = 1.967, cfi: 0.946, ifi: 0.947, tli: 0.936, rmsea: 0.062). table 2 presents the descriptive statistics, correlation coefficients, and reliabilities of our variables. the average variance extracted (ave) exceeds the threshold level 0.50 suggested by fornell and larcker (fornell and larcker, 1981). composite reliabilities (cr) are also above the minimum acceptable value which is 0.70 (fornell and larcker, 1981). furthermore, cronbach’s alpha coefficients of the variables in the range of 0.706-0.930. it implies that each cronbach’s alpha coefficients above the 0.70 as suggested by nunnally (nunnally, 1978). these results indicated that all of the measures have validity and reliability. table 2: descriptive statistics, correlation coefficients, validity and reliability scores variables 1 2 3 4 5 6 7 attitude 1 tech_anxiety −0.156 1 self-efficacy 0.408 −0.419 1 knowledge 0.634 −0.197 0.725 1 p_usefulness 0.668 −0.154 0.656 0.915 1 p_ease_of_use 0.476 −0.239 0.702 0.620 0.784 1 intention_to_use 0.813 −0.113 0.291 0.654 0.580 0.371 1 means 2.617 6.049 5.443 5.984 6.215 5.664 5.766 std. dev. 1.328 1.022 1.254 1.043 0.914 0.945 1.238 cronbach’s α 0.905 0.877 0.706 0.734 0.882 0.844 0.930 ave 0.659 0.617 0.551 0.517 0.717 0.661 0.818 cr 0.906 0.864 0.779 0.761 0.884 0.852 0.931 table 3: path model hypotheses path path coefficient result h1 knowledge→pu 0.678* supported h2 knowledge→peou 0.290* supported h3 self-efficacy→peou 0.494* supported h4 peou→pu 0.355* supported h5 peou→attitude −0.163 ns not supported h6 pu→attitude 0.808* supported h7 attitude→intention to use 0.818* supported χ2/df = 2.468, cfi: 0.934, ifi: 0.934, tli: 0.922, rmsea: 0.077 nsp>0.05, *p<0.01. peou: perceived ease of use, pu: perceived usefulness table 4: moderated regression analysis variable model 1 model 2 β t β t pu 0.597 11.608** 0.613 11.838** technology anxiety −0.024 −0.475ns 0.479 1.659* pu* technology anxiety −0.510 −1.771* r2 0.361 0.369 f value 69.958 48.086 nsp>0.05, *p<0.1, **p<0.01. peou: perceived ease of use, pu: perceived usefulness cebeci, et al.: understanding the intention to use netflix: an extended tam approach international review of management and marketing | vol 9 • issue 6 • 2019156 4.3. hypothesis testing to test our hypotheses, structural equation modeling (sem) analysis was employed. results indicated that conceptual model fits well to data (chi-square/df= 2.468, cfi: 0.934, ifi: 0.934, tli: 0.922, rmsea: 0.077). the results of hypotheses testing are shown in table 3. our results revealed that netflix knowledge is positively related to both peou of netflix (β = 0.290, p < 0.01), and pu of netflix (β = 0.678, p < 0.01), supporting h1 and h2. it is also found that self-efficacy of using netflix is positively associated with peou of netflix (β = 0.494, p < 0.01), supporting h3. peou of netflix is related to pu of netflix (β = 0.355, p < 0.01), whereas it is not related to attitude toward netflix (β = −0.163, p > 0.05). so, h4 is supported, but h5 is not. furthermore, pu of netflix is positively related to attitude toward netflix (β = 0.808, p < 0.01) and attitude toward netflix is also positively related to intention to use netflix (β = 0.818, p < 0.01), supporting h6 and h7. hierarchical moderated regression analysis (aiken et al., 1991) is used to test the moderating effect of technology anxiety in the relationship between pu of netflix and attitude toward netflix. in this respect, first pu and technology anxiety as independent variables and attitude as the dependent variable were tested in model 1. then, interaction (pu*technology anxiety) is added in model 2. as seen in table 4, technology anxiety attenuates the positive effect of pu on attitude toward netflix (β = −0.510, p < 0.1), supporting h8. the moderating effect of technology anxiety is further illustrated in figure 2. 5. discussion and conclusion this study contributes to the literature by presenting an empirically tested model that demonstrates the determinants of intention to use netflix. in this respect, knowledge, and self-efficacy are incorporated into the tam model. this paper also investigates the moderating role of technology anxiety as a moderator between pu and attitude. the findings reveal that self-efficacy is related to peou and knowledge is related to both peou and pu. they are consistent with previous studies (kim et al., 2010; liu and tai, 2016; sánchez-prieto et al., 2017; bailey et al., 2017). people who have self-efficacy of using netflix or any other new technology, perceive that they can use it without having a problem. furthermore, people with knowledge in a specific thing is an important to factor to perceive it as user-friendly and beneficial. in particular, new technology manufacturers should inform consumers about their products. consumers can only believe that they can easily use and benefit from this technology when they have sufficient knowledge. it is supported the main relationships of the original tam model except for the relationship between peou and attitude. but this finding is not surprising since there are similar results in the literature (lu et al., 2005). this may be explained by the fact that the use of netflix is not considered as difficult, and therefore may not affect the attitude toward netflix. it is demonstrated that technology anxiety negatively moderates the relationship between pu and attitude. it is observed that there is no study in literature which examine the moderating role of technology anxiety on the relationship between pu and attitude. even if people believe that a particular technology will benefit them, they may think that they can experience some adversity when using that technology. this likelihood reduces the effect of the perception that it is useful about this technology on their attitude toward it. therefore, new technology manufacturers should be aware of this negative effect of technology anxiety. in addition, a message should be given to consumers that they will not have any problem due to this technology, will comfortable with using this technology, should not have anxiety. 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(2018), netflix, amazon, and branded television content in subscription video on-demand portals. media, culture and society, 40(5), 725-741. international review of management and marketing vol. 1, no. 3, 2011, pp.43-53 issn: 2146-4405 www.econjournals.com an empirical study of the relationship among job satisfaction, organizational commitment and turnover intention sinem aydogdu okan university, institute of social sciences, istanbul, turkey. email: sinem.aydogdu@pharmavision.com.tr baris asikgil mimar sinan fine arts university, faculty of science and letter, istanbul, turkey. email: basikgil@msgsu.edu.tr abstract: this study conducted on 100 employees from production sector and 82 employees from service provider sector. the relationship among job satisfaction, organizational commitment and turnover intention are investigated to determine statistically significant relations. the results of the study support the hypotheses. job satisfaction has a significant and positive relationship with three dimensions of organizational commitment and turnover intention has a significant and negative relationship with job satisfaction and organizational commitment. keywords: job satisfaction, organizational commitment, turnover intention. jel classifications: d23, j28, j63, l29 1. introduction one of the most important factors to make a difference under the working conditions of the business environment in 2000’s is a committed, productive, highly motivated and innovative human resource. with the increase of technological advances and changes, there is a need for organizations to address employee satisfaction, organizational commitment and work itself. the success, survival and competing power of organizations depend on the commitment of their members, supporting their individual developments and ensure their participations. the purpose of this study is to gain a better understanding of the relationships between job satisfaction, organizational commitment and turnover intention. job satisfaction is defined by ivancevich as an attitude that individuals have about their jobs and it is believed to be a result of the perception of individuals of their jobs or it is defined by greenberg that it is a person’s positive or negative feelings about their jobs. in 1990, allen and meyer defined organizational commitment as a bond or linking of the individual to the organization. intention to turnover is defined as one’s behavioral attitude to withdraw from the organization whereas turnover is considered to be the actual seperation from the organization. 2. literature review 2.1. job satisfaction nearly most of the definitions of job satisfaction present a corresponding resemblance with those of attitudes because of job satisfaction is considered as an attitude. it is stated that job satisfaction is an attitude that individuals have about their jobs. it results from their perception of their jobs (ivancevich and matteson, 1990). besides, the content of this definition involves a strong emphasis on feeling which is also called “affect”. this emotional or evaluative component refers to an individual’s positive, neutral or negative feelings of what might be called the attitude object, or the focus of attitude (greenberg and baron, 2000). some of these definitions cognate with people’s affective response to current job are unidimensional: people are generally satisfied or dissatisfied with their job (ward and sloane, 1999). in addition to the belief that job satisfaction is a summary evaluation that people make of their work, it should still be remembered that international review of management and marketing, vol. 1, no. 3, 2011, pp.43-53 44 44 people’s level of job satisfaction vary and these differences are the result of job related factors and individual factors. 2.1.1. the factors that influence job satisfaction 2.1.1.a. the factors related to the job pay: wages and salaries are important factors for job satisfaction. money not only helps personnel attain their basic needs but also instrumental in providing upper-level needs satisfaction (luthans, 1992). a study of 2000 managers demonstrated that the amount of wages received was very positively related to satisfaction, even with managerial level held constant. work itself: since herzberg, mausner and syndermann monograph, “the motivation to work” was published in 1959, evidence has been accumulated that the work itself plays a significant role in attaining job satisfaction (feldmann and arnold, 1985). supervision: the behavior of the supervisor plays an important role with regard to employees’ reactions to a problematic event. it was showed that the employees who perceived their supervisor as more approachable and responsive were more likely to voice their concerns. promotion possibilities: promotion possibilities involve the availability of advancement opportunities. if people think that they will not have much promotion possibilities, they may be affected adversely. the most well-known study on the subject was done by siratowho found a negative relationship between measures of promotional frustration and measures of attitudes toward the company (feldmann and arnold, 1985). peers: interaction with peers is an important factor in job satisfaction. a study in an automobile industry demonstrated that isolated workers disliked their jobs. similarly, it was found that only 43% of the “isolates” in work groups were highly satisfied with their jobs (feldmann and arnold, 1985). working conditions: providing good physical working conditions (e.g. cleanliness of the working place, lightining, adequate tools and equipment) enables employees to carry out their jobs easily, comfortably and efficiently. working conditions such as flexible time, job sharing and shorter workweeks are quite valued by employees because they can facilitate valued off the job activities such as persuing hobbies (feldmann and arnold, 1985). 2.1.1.b. the factors related to individual individual’s loyalty to company: if individuals are satisfied with their job, they remain in their proffesion longer. some individuals want to stay in the organization due to their normative commitment, refering to an employee’s desire to stay with the organization based on a sense of duty, loyalty or more obligation. hackett, bycio and hausdorf found that job satisfaction had a positive influence on normative commitment (clugston, 2000). experience: according to lawler work, experiences have profound effects on the individual employee (cano and miller, 2005). individual’s responde favorably or unfavorably toward many things, work, for example. their response stems from a number of factors like work experiences. age and gender: age is one of the individual factors affecting job satisfaction. it is concluded that elder workers are more satisfied (kaya, 1995). it is also found a meaningful relation between age and job satisfaction (kaya, 1995). gender is one of the individual factors affecting job satisfaction. the largest economic study about this subject was performed in 1997 by clark, using the data obtained from 1991 british household panel survey (bhps). unless some factors were remained constant, the job satisfaction of women were higher than men. education: according to the study of dold and duff, it was observed that graduates of career oriented disciplines were more satified with their jobs than other graduates. the highest levels of job satisfaction were reported by the individuals in agriculture and education with 64% in each category being very satisfied with their jobs (andres and grayson, 2002). 2.1.2. consequences of job dissatisfaction absenteeism: failure to report to work absenteeism appears to be associated with job dissatisfaction. a review of the literature on factors associated with job attendance concluded that job satisfaction was one of the major influence on attendance, although it is only one of the major factors. turnover: job satisfaction has effect on to determine staying in or leaving the organization. if personnel are dissatisfied with their work, they are likely to leave from the organization. if personnel believe that they are treated fairly and getting rewards they are unlikely to leave the organization. there are some factors with the relationship between satisfaction and turnover. these are commitment and general economy. the personnel who are committed to the organization and believe that they can an empirical study of the relationship among job satisfaction, organizational commitment and turnover intention 45 not find any other job because of bad general economy prefer to stay in the organization. the personnel who believe that economy is going well and there is little unemployment and can have better opportunities likely prefer to leave the organization. low productivity: most people believe that satisfied personnel are more productive. but the available evidence suggests that the relationship between job satisfaction and productivity is a very weak one. early retirement: another interest is the relationship between job satisfaction and the desicion to take early retirement. studies in this area show that personnel who have positive attitudes toward their jobs do not prefer early retirement. low organizational commitment: dissatisfaction is also a major cause of declining organizational commitment. commitment implies a willingness to put effort on the organization’s behalf and an intention to stay with the organization for a long time. mental and physical health: researches in this area report that personnel who are highly satisfied tend to have better mental and physical health. personnel who have better mental and physical health can learn new job-related tasks more quickly, have fewer on the job accidents and file fewer grievances. life satisfaction: another issue concerns the contribution of job satisfaction to overall life satisfaction. life satisfaction means how satisfied personnel are with their life. recent studies have found that there is a positive correlation between life satisfaction and job satisfaction, so they have supported the spillover hypothesis. 2.2. organizational commitment an alternative view is presented by meyer and allen (1993), who defined three components of organizational commitment, three component model: i. affective commitment ii. continuance commitment iii. normative commitment these three components of commitment are alternatively described as the product of (i) emotinal attachments (affective commitment), (ii) the costs of leaving, such as losing attractive benefits or seniority (continuance commitment) and (iii) the individual personal values (normative commitment) (brief, 1998). according to meyer and allen’s (1993) view, commitment as an emotinal attachment and identification with and involvement in the organization is called affective commitment; commitment as an attachment based on the cost of leaving the organization is called continuance commitment, and a feeling of obligation to stay in the organization is called normative commitment. affective commitment refers to feelings of belonging and sense of attachment to the organization and it has been related to personal characteristics, organizational structures, and work experiences, for example; pay, supervision, role clarity and skill variety (hartmann, 2000). continuance commitment, which reflects the recognition of costs associated with leaving the organization, should be related to anything that increases perceived costs. direct or indirect investments in the organization, side bets, represent such costs best and were operationalized mainly by variables like age, education and tenure (becker, 1960). therefore, the above demographic variables and tenure are expected to demonstrate the strongest relationship with continuance commitment. normative commitment refers to an employee’s feelings of obligation to remain with the organization. thus, employees with strong normative commitment will remain with an organization by virtue of their belief that is the “right and moral thing to do”. normative commitment develops as a result of socialization experiences that emphasize the appropiateness of remaining loyal to one’s employer (wiener, 1982) or through the receipt of benefits (e.g. tuition payments and skill training) that create within the employee a sense of obligation to reciprocate (scholl, 1981). normative commitment develops on the basis of a particular kind of investment that the organization makes in the employee specifically, investment that seem difficult for employees and reciprocate (meyer and allen, 1993). employee’s commitment to the organization has effects on the employees themselves, on the organization and on the society. as employees become more committed to the organization, they show reduced withdrawal behaviors and increased citizenship behaviors in their organizations. also, they receive more extrinsic and intrinsic rewards. on the other hand, employee’s commitment brings international review of management and marketing, vol. 1, no. 3, 2011, pp.43-53 46 46 decreased amount of job movement and greater productivity, which benefits society as a whole (mathieu and zajac, 1990). 2.2.1. the factors that influence organizational commitment personal factors: research on person characteristics has found on two types of variables: demographic variables and dispositional variables (e.g. personality, values, interest). demographic variables that relate to organizational commitment are stated to be gender, age, educational level, race and personality traits. overall relations between demographic variables and affective commitment are neither strong nor consistent. role related factors: role related variables like role ambiguity and role conflict correlate negatively with organizational commitment. mathieu and zajac (1990) stated in their study that it can be concluded those role ambiguities; conflicts and the stress caused by these uncertainities influence the degree of organizational commitment. work experiences: the vast majority of antecedent studies have focused on variables that fall into very broad category of work experiences. moreover, with work experience variables, find the strongest and consistent correlations with affective commitment across studies. mathieu (1991) found that commitment reciprocally related with satisfaction and the effect of satisfaction on commitment was more than reverse. cultural factors: as culture deeply influences management ideas and practice, studies were conducted in different countries with different cultures. a meta-analysis of twenty seven studies given by randall and o’driscoll (1997) in different countries demonstrated that personal characteristics like age, tenure, gender and education were highly significant in determining organizational commitment in england, israel, although they were insignificant in canada. the relation of participation and peer cohesion with commitment was consistent in all countries studied. 2.2.2. consequences of organizational uncommitment performance at work: many aspects of performance can be assessed (e.g. attendance at work, performance of assigned duties, organizational behavior). in addition, assesment of performance can be obtained from several sources (e.g. the employees themselves, their supervisors, output measures such as sales or production figures). research on the links between commitment and work performance reflects the diversity. interdrawal intentions: personnel retention has consistently been viewed as an important consequence of organizational commitment. when organizational commitment of personnel is low, they do not put any effort to do their jobs, don’t any altruism for organizations that they work for and have low level of motivation. absenteeism: researches show that there is a negative relationship between absenteeism and organizational commitment. in other words, personnel who have lower level of organizational commitment are likely to be absent. turnover: researches in this area show that there is a negative relationship between turnover and organizational commitment. 2.3. turnover intention intention to turnover is defined as one’s behavioral attitude to withdraw from the organization whereas turnover is considered to be the actual seperation from the organization. meta-analytical reviews of tett and meyer indicated that attitudes are good predictors of behavior (böckermann and ilmakunnas, 2004). 2.4. the relationship among job satisfaction, organizational commitment and turnover intention job satisfaction has effect on to determine staying in or leaving the organization. if personnel are dissatisfied with their work they are likely to leave from the organization. if personnel believe that they are treated fairly and getting rewards they are unlikely to leave the organization. there are some factors with the relationship between satisfaction and turnover intention. these are commitment and general economy. the personnel who are committed to the organization and believe that they can not find any other job because of bad general economy prefer to stay in the organization. the personnel who believe that economy is going well and there is little unemployment and can have better opportunities likely prefer to leave the organization. managers should try to reduce personnel turnover that are good performers. the notion that high turnover among poor performers is termed functional turnover. an empirical study of the relationship among job satisfaction, organizational commitment and turnover intention 47 3. methodology 3.1. sample the sample of this study is conducted from two organizations in istanbul. both of these organizations are in private sector, one of these organizations is in production area, the other one is service provider. the sample consists of total 182 individuals from these two organizations. since the participation in this study is voluntary, 100 employees in company x, which is in the production area and 82 employees in company y, which is in the service area. 3.2. hypotheses h1: there’s a positive relationship between job satisfaction and affective organizational commitment. h2: there’s a positive relationship between job satisfaction and continuance organizational commitment. h3: there’s a positive relationship between job satisfaction and normative organizational commitment. h4: there’s a negative relationship between affective organizational commitment and turnover intention. h5: there’s a negative relationship between continuance organizational commitment and turnover intention. h6: there’s a negative relationship between normative organizational commitment and turnover intention. h7: there’s a negative relationship between job satisfaction and turnover intention. 3.3. measures the questionnaire consisted of 4 independent sections including measurement scales is designed to assess the constructs of this study and demographic information. demographic variables: in the first section of the questionnaire there are demographic vaiables such as gender, age, marital status, position at job, educational background, business sector (production or service provider), total work experience and tenure in the organization to gain general information about the respondents. measurement of job satisfaction: minnesota job satisfaction questionnaire (msq) which is designed by weiss, davis, england and lofquist (1967) is used. msq respondents indicate how satisfied they are with various aspects of their present job. msq has both long (100) items and short (20) items form, that in this study short form of the questionnaire, which is about pay, coworkers, supervision, responsibility, social status and security, is used. measurement of organizational commitment: organizational commitment questionnaire, an eighteen-item scale which is designed by meyer and allen (1993) to measure participant’s commitment to their organizations, is used. there are three subscales which are affective, normative and continuance commitment. all of these subscales are measured from “strongly disagree” to “strongly agree”. measurement of turnover intention: rosin and korabick’s turnover intention scale is used in this study. the questionnaire was translated into turkish and adopted by tanrıöver (2005). all the items are scored on an itemized rating scale, ranging from “strongly disagree” to “strongly agree”. 3.4. research findings for analyzing data, the statistical package program spss 15.0 is used. according to the descriptive statistics, the sample consists of 182 personnel from two companies which perform different businesses. the sample consists of 92 women (50.5%) and 90 men (49.5%). 35.2% of the sample (64 participants) is between the ages of 20-30, 51.1% of the sample (93 participants) is between the ages of 31-50 and 13.7% of the sample (25 participants) is at the age of 51 or older than 51. the age differs from 22-63 and the mean of the ages is 35.63. (mean = 35.63, std.dev. = 4.32, n = 182). 122 participants (67.0%) are married, 60 participants (33.0%) are single. most of the sample is married. 3.8% of the sample (7 participants) is blue-collar employee, 24.2% of the sample (44 participants) is white-collar employee, 34.1% of the sample (62 participants) is specialist, 22.5% of the sample (41 participants) is chief, 15.4% of the sample (28 participants) is manager. 3 participants (1.6%) are primary school graduates, 18 participants (9.9%) are high school graduates, 102 participants (56.0%) are university graduates, 51 participants (28%) have a master’s degree, 8 participants (4.4.%) have a doctorate degree. 54.9% of the sample (100 participants) is from international review of management and marketing, vol. 1, no. 3, 2011, pp.43-53 48 48 production sector, 45.1% of the sample (82 participants) is from service provider sector. the mean for tenure is 12.18 years, standart deviation is 8.35, minimum tenure in the organization is 3 months, maximum tenure in the organization is 35 years. the mean for total work experience is 9.79 years, standart deviation is 8.37, minimum total work experience is 3 months, maximum total work experience is 35 years. 3.5. reliability analysis reliability analyses are conducted for job satisfaction, organizational commitment and turnover intention scales. cronbach alpha scores of three measures are ranged between 0.800 and 0.970. the means, standart deviations and reliability coefficients for each variable are given in table 1. table 1. means, standart deviations and reliability coefficients of job satisfaction, organizational commitment and turnover intention scales and their subscales scale mean std. dev. cronbach α job satisfaction (overall) 3.7450 1.176 0.964 internal job satisfaction 3.4607 1.25452 0.900 external job satisfaction 4.0305 1.09798 0.920 organizational commitment (overall) 3.4650 1.2350 0.936 affective commitment 3.5976 1.52378 0.970 continuance commitment 3.5615 0.91353 0.800 normative commitment 3.2378 1.26964 0.840 turnover intention 2.6610 1.5790 0.931 3.6. correlation and regression analysis correlation analysis is used to state the relationship between the variables. correlation matrix is recalculated with the subscales found after the factor analyses and other scales. as the correlations between some of these variables are higher than 0.70, the probability of multicollinearity increases. in this respect, regression analysis is performed and variance inflation factor (vif) scores are examined. as the vif scores are lower than 10, it can be assumed that there is no exact multicollinearity between these variables. therefore, these variables can take place in the research model. in order to investigate the hypotheses of the study, regression analyses are performed and the results are given in table 2, table 3, table 4. 3.6.1. the relationship between organizational commitment and job satisfaction h1 argues that there’s a positive relationship between job satisfaction and affective organizational commitment. multiple regression is used to analyze the hypothesis. table 2. regression analysis between affective commitment and job satisfaction predictors affective commitment β t p internal job satisfaction 0.621 9.299 0.000 external job satisfaction 0.245 3.670 0.000 r2 0.683 adjusted r2 0.679 f value 192.809 dependent variable: affective commitment an empirical study of the relationship among job satisfaction, organizational commitment and turnover intention 49 as seen in table 2 there is a significant and positive relationship between affective commitment and internal job satisfaction (β = 0.621, t = 9.299 and p = 0.000 < 0.05) and also there is a significant and positive relationship between affective commitment and external job satisfaction (β = 0.245, t = 3.670 and p = 0.000 < 0.05). r2 value is 0.683 which means 68.3% of the variation can significantly be explained by the independent variables. h2 argues that there’s a positive relationship between job satisfaction and continuance commitment. multiple regression is used to analyze the hypothesis. table 3. regression analysis between continuance commitment and job satisfaction predictors continuance commitment β t p internal job satisfaction 0.779 9.628 0.000 external job satisfaction 0.698 8.786 0.000 r2 0.535 adjusted r2 0.530 f value 103.115 dependent variable: continuance commitment as seen in table 3 there is a significant and positive relationship between continuance commitment and internal job satisfaction (β = 0.779, t = 9.628 and p = 0.000 < 0.05), but there is a significant and positive relationship between external job satisfaction and continuance commitment (β = 0.698, t = 8.786 and p = 0.000 < 0.05). r2 value is 0.535 which means 53.5% of the variation can significantly be explained by the independent variables. h3 argues that there’s a positive relationship between job satisfaction and normative organizational commitment. multiple regression is used to analyze the hypothesis. as seen in table 4 there is a significant and positive relationship between normative commitment and internal job satisfaction (β = 0.521, t = 5.955 and p = 0.000 < 0.05) and also there is a significant and positive relationship between normative commitment and external job satisfaction (β = 0.187, t = 2.134 and p = 0.034 < 0.05). r2 value is 0.457 which means 45.7% of the variation can significantly be explained by the independent variables. table 4. regression analysis between normative commitment and job satisfaction predictors normative commitment β t p internal job satisfaction 0.521 5.955 0.000 external job satisfaction 0.187 2.134 0.034 r2 0.457 adjusted r2 0.451 f value 75.319 dependent variable: normative commitment 3.6.2. the relationship between turnover intention and organizational commitment h4 argues that there’s a negative relationship between affective organizational commitment and turnover intention. h5 argues that there’s a negative relationship between continuance organizational commitment and turnover intention. h6 argues that there’s a negative relationship between normative organizational commitment and turnover intention. multiple regression is used to analyze the hypotheses and the results are given in the same table, table 5. international review of management and marketing, vol. 1, no. 3, 2011, pp.43-53 50 50 table 5. regression analysis between turnover intention and organizational commitment predictors turnover intention β t p affective commitment -0.326 -4.303 0.000 continuance commitment -0.373 -6.016 0.000 normative commitment -0.231 -4.253 0.020 r2 0.709 adjusted r2 0.704 f value 17.596 dependent variable: turnover intention as it is seen in table 5, there is a significant and negative relationship between turnover intention and affective commitment (β = -0.326, t = -4.303 and p = 0.000 < 0.05). there is a significant and negative relationship between turnover intention and continuance commitment (β = -0.373, t = -6.016 and p = 0.000 < 0.05). there is a significant and negative relationship between turnover intention and normative commitment (β = -0.231, t = -4.253 and p = 0.020 < 0.05). r2 value is 0.709 which means 70.9% of the variation can significantly be explained by the independent variables. 3.6.3. the relationship between turnover intention and job satisfaction h7 argues that there’s a negative relationship between job satisfaction and turnover intention. multiple regression is used to analyze the hypothesis. table 6. regression analysis between turnover intention and job satisfaction predictors turnover intention β t p internal job satisfaction -0.127 -8.061 0.000 external job satisfaction -0.248 -4.195 0.000 r2 0.650 adjusted r2 0.655 f value 16.842 dependent variable: turnover intention according to table 6 there is a significant and negative relationship between turnover intention and external job satisfaction (β = -0.127, t = -8.061 and p = 0.000 < 0.05). also, there is a significant and negative relationship between turnover intention and external job satisfaction (β = -0.248, t = -4.195 and p = 0.000 < 0.05). r2 value is 0.650 which means 65.0% of the variation can significantly be explained by the independent variables. 4. comparison of results organizational commitment and job satisfaction are important aspects of organizational effectiveness, productivity and job performance and may impact on turnover intention and absenteeism. h1, stating that there’s a positive relationship between job satisfaction and affective organizational commitment, was confirmed by regression analysis. according to the regression analysis, it was found that there is a significant and positive relationship between affective commitment and internal external job satisfaction. this shows a direct proportion with job satisfaction and affective organizational commitment, as the factors that generate job satisfaction increases, affective organizational commitment increases. if it is compared, it can be seen that there is an empirical study of the relationship among job satisfaction, organizational commitment and turnover intention 51 a stronger relationship between affective commitment and internal job satisfaction than the relationship between affective commitment and external job satisfaction. h2, stating that there’s a positive relationship between job satisfaction and continuance organizational commitment, was confirmed by regression analysis. according to the regression analysis, it was found that there is a significant and positive relationship between continuance commitment and internal external job satisfaction. this shows a direct proportion with job satisfaction and cotinuance organizational commitment, as the factors that generate job satisfaction increases, continuance organizational commitment increases. if it is compared, it can be seen that there is a stronger relationship between continuance commitment and internal job satisfaction than the relationship between affective commitment and external job satisfaction. h3, stating that there’s a positive relationship between job satisfaction and normative organizational commitment, was confirmed by regression analysis. according to the regression analysis it was found that there is a significant and positive relationship between normative commitment and internal external job satisfaction. if it is compared, it can be seen that there is a stronger relationship between normative commitment and internal job satisfaction than the relationship between normative commitment and external job satisfaction. this means that internal factors like use of skills, job variety, experience, performing things for others is more powerful for the employee to generate a commitment which is based on a feeling of obligation with the organization and a strong belief about being a member of the organization is the right or moral thing to do, than the external factors like pay, promotion, supervision or working condition. according to the literature, job satisfaction is an attitude that occurs as a result of the experinces which are gained while performing the job. it is related to organizational commitment in some ways but actually job satisfaction is different from organizational commitment. commitment is a global notion that reflects the general reaction of the employee towards the organization with the common values and objectives. some researches, examining the relationship between job satisfaction and organizational commitment showed that organizational commitment causes job satisfaction (bateman and stasser, 1984), but some researches suggested that there was a interrelation between organizational commitment and job satisfaction. (williams and hazer, 1986). also some studies showed that job satisfaction has a significant relationship with the three dimensions of organizational commitment and job satisfaction has a positive relationship between affective and normative commitment and a negative relationship with continuance commitment (clugston, 2000). h4 stating that there’s a negative relationship between affective organizational commitment and turnover intention, h5 stating that there’s a negative relationship between continuance organizational commitment and turnover intention and h6 stating that there’s a negative relationship between normative organizational commitment and turnover intention were confirmed by regression analyses. according to the results there is a significant and negative relationship between turnover intention and affective commitment, continuance commitment and normative commitment. but the relationship between continuance commitment and turnover intention is stronger than the relationship between affective commitment and turnover intention and than the relationship between normative commitment and turmover intention. normative commitment has the lowest level of relationship with turnover intention. according to the literature, the most popular and throughly multidimensional model of organization commitment is meyer and allen (1993)’s. that model includes affective, normative and continuance components, all of which are thought to contribute to employee retention. a recent meta-analytic review of the model indicates that all three components display negative associations with intended and actual turnover. accumulated findings suggest that commitment components exert an influence on membership desicions through different mechanisms. h7 stating that there’s a negative relationship between job satisfaction and turnover intention was confirmed by regression analysis. a decrease in the level of job satisfaction would lead to an increase in the level of turnover intention. this conclusion is supported by previous literature examples, either that they indicate job satisfaction to be one of the several factors determining someone’s intention to quit the organization (mobley, 1977). the results showed that there is a significant and negative relationship between internal external job satisfaction and turnover intention. as a conclusion, it is clear that in the organizational behavior literature job satisfaction and organizational commitment are the variables which have been researched the most. the reason why these subjects have been studied a lot is their relationship with job performance, turnover intention and international review of management and marketing, vol. 1, no. 3, 2011, pp.43-53 52 52 actual turnover. the results of regression analyses for testing the hypotheses showed that there is a strong relationship between job satisfaction and three dimensions of organizational commitment. also, there is a negative relationship between turnover intention and job satisfaction, turnover intention and three dimensions of organizational commitment. the strongest relationship is with continuance commitment and the weakest is with normative commitment. 5. conclusion this study is considered to be important both to employer and the employee. in view of rapidly changing business environment, companies must devote greater effort to enhance their capabilities and it must not be forgotten that the sucess and competing power of the organization depend on committed, highly motivated, satisfied and innovative human resources. employers should promote their employees by improving supervision styles that well treated employees develop a positive attitude towards supervision and the organization or vice versa also involving more employees in desicion making process, providing better working condition and providing flexible working hours and paying fairly, encouraging employees to use their own skills and abilities help them to have a sense of self-pride, a sense of competence and a sense of self confidence that increases job satisfaction and also the factors like job variety and clear job description lead to higher job satisfaction. employees having a high job satisfaction are expected to be committed to the organization, but it is important to know how these employees connect to the organization in terms of membership status. to sum up, if an employer needs a highly motivated, innovative, productive human resource, the importance of job satisfaction and organizational commitment should not be forgotten. it is obvious that high job satisfaction and organizational commitment will avoid turnover intention and actual turnover. every employee has different kinds of needs and expectations and it is impossible to satisfy every need and expectation of the employees. both employee and employer should try to generate a working condition that they will work in a happy, motivated and productive atmosphere to reach the certain goals. 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(1992), organizational behavior, sixth edition, new york: mc graw hill, inc. an empirical study of the relationship among job satisfaction, organizational commitment and turnover intention 53 mathieu, j. e. and zajac, d. m. (1990), a review and meta-analysis of the ancedents, correlates and consequences of organizational commitment, psycholoical bulletin, 108, 171-194. mathieu, j. e. (1991), across level nonrecursive model of the antecedents of organizational commitment and satisfaction, journal of applied psychology, 76, 607-618. meyer, j. p. and allen, n. j. (1993), a three component conceptualizaiton of organizational commitment, human resource management review, 1, 61-98. mobley, w. h. (1977), intermediate linkages in the relationship between job satisfaction and employee turnover, jounal of applied psychology, 62, 237-240. randall, d. and o’driscoll, m. p. 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(1986), ancedents and consequences of satisfaction and commitment in turnover models: a reanalysis using latest variables structural equation methods, journal of applied psychology, 71, 219-231. . international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2017, 7(3), 266-273. international review of management and marketing | vol 7 • issue 3 • 2017266 the impact of the failure-based learning behavior on organizational agility from the workers’ point of view in the jordanian industrial companies in king abdullah ii industrial city sahab elham hmoud al-faouri1*, ahmad nahar al-rfou2 1department of business management, faculty of business and finance, university of jordan, aqaba, jordan, 2department of business administration, college of business, tafila technical university, jordan. *email: elham973@yahoo.com abstract this study aims to investigate the impact of failure-based learning behavior on organizational agility dimensions including customer agility, operation agility, as well as supply and distribution agility from the respondents’ point of view in 358 jordanian industrial companies at king abdullah ii industrial city in sahab. a random sample of 80 companies was chosen, and the sampling unit covered individuals working at the companies. the studied community consisted of 700 administrators according to the statistics and records of these companies. and 350 questionnaires were distributed. the researcher retrieved 290questionnaires, which are accounted for 83% of the questionnaires distributed and excluded 35 questionnaire since it was not filled completely. thus, the sample of this study consisted of 255units. data was analyzed using the statistical package for the social sciences (spss 20), descriptive statistics measurement and simple regression. the results showed a statistically significant effect of the failure-based learning behavior on organizational agility including its different dimension. in light of the results obtained, the study suggests the institutionalize failure-based learning behavior, in order to use in organizational learning and support the agility. keywords: organizational agility, failure-based learning behavior, organizational learning, industrial companies jel classifications: d23, l15, l2 1. introduction nowadays, business organizations include jordanian companies that are dealing with rapidly changing environments, and increased competitiveness, which imposed on these organizations a series of challenges to keep their survival, thus emphasize the urgent adoption of organizational agility; through customer agility, operations agility as well as supply and distribution activities agility. the concept of agility in general indicate the ability of company to rapidly deal with the emergency and unexpected changes in the work environment, whether these changes related to the customers of company, through a high awareness and response to their demands, wants and preferences, and focus on learning from their feedback, or were emergency changes in operating activities that require the speed to make products better than competitors. organizational agility also requires the agility of supply activities to meet the bargaining power of suppliers, and the ability to switch to other suppliers to take advantage of the lowest prices and high raw materials quality, or the requirement of distributive agility to counter the bargaining power of buyers and the ability to enter new markets and expansion of products. as organizations sometimes face failure in work activities; therefore, they must diagnose these problems, and identify causes and results to provide immediate solutions to deal them, and keep them in their organizational memories to prevent their occurrence in the future, and support the employment of learning and expertise curve. the consequences of the previous failures and problems became organizational strengths rather than weakness. and will be a fundamental source to enhance organizational agility in response al-faouri and al-rfou: the impact of the failure-based learning behavior on organizational agility from the workers’ point of view in the jordanian industrial companies in king abdullah ii industrial city sahab international review of management and marketing | vol 7 • issue 3 • 2017 267 to dramatic and unexpected environmental variables (burgelman and valikangas, 2005). both popper (1959) and sitkin (1992) stated that the organization’ members have the ability to learn from failures more than success cases and situations, and these failures are considered as a significant driver of knowledge creation (mcgrath, 1999). however, the chance to take advantage of these experiences may not occur without active dealing and treatment of the facts and outcomes revealed by the failed experiments. despite the existence of many researches and studies in the subject of organizational agility, and after reviewing the literature, a research gap has been founded; studying the impact of the failurebased learning behavior on organizational agility was not given enough interests and empirical studies. thus, the current study is trying to determine the impact of failure-based learning behavior on organizational agility and its dimensions (customer agility, operation agility, as well as supply and distribution agility) from the respondents’ point of view in jordanian industrial companies in king abdullah ii industrial city in sahab area. the rest of the paper is organized as follows, literatures about failure-based learning behavior, and organizational agility. next highlight of the methodology used in this research, results and discussions of the findings, lastly conclusions and recommendations based on the research results. 2. litreture review in searching the roots of the concept of organizational agility, different literatures indicated that the concept was found initially in the management of production in 1991 when the us congress required a group of researchers to study the strategies that can be adopted from us companies in 21th century, where they concluded the necessity of finding a new system of production based on organizational agility to cope with global competitiveness (salmzadeh et al., 2014). thus, the concept of organizational agility began its emergent in theoretical and applied studies as a fundamental research area, in spite of the lack of agreements among researchers on a common definition and components; due to the diversity of researchers background. as an examples, prince and kay (2003) defined organizational agility from the viewpoint of marketing dealing with a rapid response to market demands, wants and desires of customers. others (joroff et al., 2003) viewed the concept as the company’s ability to constantly adapt with cases of uncertainty and volatile components of the environment, nafei (2016) defined the concept as achievement of objectives by effecting the development of organization and increasing knowledge of human resources and lightening its movement in a rapidly changing environment. where many companies now consider organizational agility as essential subject to guarantee survival and competitiveness; as it facilitates companies to develop their unique capabilities, and seize new opportunities and strategic windows. the study defines organizational agility as is the ability of organization intentionally to adapt, interact and work effectively in complexity, confusion and uncertainty situations, and exploit the opportunities offered by these changes. and it could be studied according to three dimensions: 1. customer agility: includes the speed of organizations reactions and responsiveness to inquiries, activities of customers, and the ability to deal with them intelligently (lovelock, 1996). 2. operational agility: operating activities are activities responsible for transforming inputs into outputs. operational agility is the ability to fast and immediate responsiveness toward changes in the operational processes include converting inputs into outputs to achieve efficiency and effectiveness. 3. supply and distribution agility: the suppliers are those who provide the company with its needs of basic raw materials, equipment, and materials required for manufacturing and operational processes. supply agility is the speed of responsiveness to sudden changes in supply activity including raise of supplied materials prices without justification, shift suppliers to competitors, low-quality or quantity of supplied materials, or delay in supply, which negatively affects the operational activity of the company. whereas distributive agility, is the company’s ability to quickly and immediate response to changes in the distributional activity including the transformation of customers to competitors, or sudden changes related to distribution prices, technical support of distributors, payments and scheduling conditions. the literatures indicated that organizational agility requires many different capacities that enable the company response to changing circumstances (sharifi and zhang, 1999), and they have been identified as follows: • readiness and rapid mobilization of resources available to cope with changes. • readiness, awareness and understanding of the current and potential emerging developments in the market. • readiness for integration organizational learning. this ability related to knowledge management, and adoption of strategic perspective, based on transfer of knowledge and experiences, and support learning from failure behavior (amos, 1998; dove, 2001; kidd, 1994; sharifi and zhang, 1999; sharifi et al., 2001). so, successful adaptation of organizational agility emphasizes revisions of organizational structures, operations, technology, human resources, and creates suitable infrastructure. according to the subject of learning from failure behavior, which is a core subject, since organizations pass failure situations beside successful ones during their lives and activities, which imposed organizations to benefit from these experiences in their organizational learning processes, to modify activities, behaviors, operations, and overcome these obstacles in the future to guarantee effective results. thus literatures described failure by the concept of the spiritual father of success and a fundamental source of energizing learning processes (mcgrath, 1999; sitkin, 1992), that supports discovery of problems and errors, and searches for innovative methods and solutions frequently (crossan and al-faouri and al-rfou: the impact of the failure-based learning behavior on organizational agility from the workers’ point of view in the jordanian industrial companies in king abdullah ii industrial city sahab international review of management and marketing | vol 7 • issue 3 • 2017268 berdrow, 2003). so, we suggest that learning from failure must occur within a systematic approach concentrates on: • the scientific and accurate manner in diagnosing problems and errors. • identify the symptoms of failure and errors. • identify the causes of failures and errors and study them in depth to be classified and documented. • develop scenarios and solutions for the problem to start implementation. • review solutions and treatments to ensure efficiency through feedback process. • the documentation of previous stages to become part of the organizational memory and employ in the organizational learning process, to facilitate organizational agility and flexibility in response to a turbulent environments. finally, it’s important to declare that the success of learning from failure process is basically depends on top management support, and confidence of staff (carmel et al., 2012). and when scanning the literatures concerning the subject of organizational agility and learning from failures, the researchers noted the existence of few arab studies in the field of organizational agility and the absence of organizational learning from failure studies, which motivated researchers to move actively to implement this study. beside that most of literatures have been conducted in western business environments in the current decade of this century, which indicates to the newest and promising of these areas of research in business field. so we will mention some examples of these studies to institute appropriate scientific background in the interpretation of current study results. • nafei (2016) study addressed positive relation between organizational agility type (sensing agility, decision-making agility, and acting agility) and job engagement (cognitive, emotional, and physical engagement) in industrial companies in egypt. • gelard and ghafari (2016) study aimed to figure the relationship between it capability and organizational agility in educational testing organization. • al-barghouthi (2014) study revealed that strategic orientation components (customer orientation, competitor orientation, cost orientation, and the innovation orientation) have a significant influence on the organizational agility through assimilating e-business systems. • al-sani (2013) study showed a significant effect of strategic agility dimensions(planning, organizing, people, and technology) on organizational effectiveness(achievement of goals, environmental adaptation, and the quality of output) in the manufacturing company lafarge cement jordan. • alabedi (2012) study put a focal concentration on the role of organizational agility (sensing agility, decision-making agility, and acting agility) in promoting job engagement (cognitive, emotional, and physical engagement) in sample of industrial sector companies in iraq and found that organizational agility affects positively job engagement process. • ofoegbu and akanbi (2012) study investigated the impact of strategic agility (strategic sensitivity, collective commitment or leadership unity and resource fluidity) on the perceived performance of some selected manufacturing firms in nigeria. the results showed that strategic agility have a significant impact on the performance of manufacturing firms. • samaneh (2012) study highlighted a significant relationship between entrepreneurship and 6 dimensions of organizational agility namely (competence, team building, change, partnership, market and welfare). • mahboubeh (2012) study evaluated the effect of it on organizational agility including competency, quickness, responsiveness and flexibility. the results showed significant effect of it application on organizational agility. • yaghoobi and azadikhah (2011) study showed that modern technologies and modern communication increase organizational agility flexibility and responsiveness. • kettunen (2010) study indicated that long term of strategic agility affects positively product development process, that encourages the adoption and coping of change. • almahamid et al. (2010) study found that organizational agility capabilities and knowledge sharing practices affect positively organizational competitive advantage in manufacturing companies in jordan. regarding the studies of learning from failure behaviors, limited ones were found within the researchers knowledge, and they summarized the following studies: • hirak et al. (2012) study found positive relationship between leaders positive behavior and learning from failure process in hospitals. • carmeli et al. (2012) study suggested that ceos adoption of relational context of trust and facilitating learning from failures behavior improve the quality of strategic decisions of top management teams. the researchers based on this study in developing their study tool with some modifications to fit the jordanian environment. • al-majalie (2009) study examined the impact of organizational learning on the innovative behavior, and found significant effect of organizational learning dimensions (strategic, organizational, and cultural dimension) on the innovative behavior. 3. methodology 3.1. the study population and sample the community of this study includes industrial companies in the king abdullah ii industrial city in sahab area has 358companies. a random sample of 80 companies was chosen, and the sampling unit covered individuals working at the companies. the studied community consisted of 700administrators according to the statistics and records of these companies. whereas, 350 questionnaires were distributed with considering the number of distributed questionnaires to the proportion of workers in the surveyed companies. the researchers retrieved 290 questionnaires, which are accounted for 83% of the questionnaires distributed and excluded 35 questionnaire since it was not filled completely. thus, the sample of this study consisted of 255 units. al-faouri and al-rfou: the impact of the failure-based learning behavior on organizational agility from the workers’ point of view in the jordanian industrial companies in king abdullah ii industrial city sahab international review of management and marketing | vol 7 • issue 3 • 2017 269 3.2. the measuring instrument a questionnaire was developed depending on carmeli’s et al. (2012) model for measuring failure-based learning behavior and tallon’s and pinsonneault’s (2011) model for measuring organizational agility dimensions while making some modifications on the two models to fit the jordanian studied environment. the reliability of the instrument was tested with cronbach’s alpha, the values for the items were more than 0.60, and 0.977 for the questionnaire. thus, the results indicated that the research instrument was reliable. 4. results and discussions 4.1. descriptive analysis table 1 demonstrates that the largest percentage of respondents was males 71.8%, whereas 28.2% were females, this results indicate the nature of workforce distribution in jordanian industrial companies; and that may be due to working conditions in industrial companies in terms of the length of working hours, in addition to some considerations related to the culture of the local community that favorites the work of women in government jobs particularly the education sector. 53% of respondents were bachelor’s degree holder. the results showed vast majority of respondents 48.6% whose experiences are in the category (11-15 years). the largest percentage age represents 47.5% was between 31 and 36 years. 73.3% of respondents were executive manager. 4.2. research questions and perceptions of respondents • what is the level of organizational agility variable in the jordanian industrial companies in king abdullah ii industrial city sahab. in answering this question, descriptive statistics measurement like means, standard deviation, and the importance level, for organizational agility dimensions and paragraphs are calculated, and the importance level of the means will be as follows: the range of low importance level is 1-2.33, medium importance level range between 2.34 and 3.67, and the range of high importance level is 3.68-5. table 2 shows that the importance level for organizational agility is high with total mean 4.6367 out of 5. the highest means reached 4.6510 for the dimension of “operation agility” which occupied the highest rank in the importance level, in the second rank came the dimension of “customer agility” with 4.6499 mean and high importance level, in the third rank the dimension of “supply and distributive agility” with 4.6092 mean, and high importance level. the results of the dimensions of organizational agility will be discussed in details as follows: 4.3. customer agility results table 3 shows that the importance level of customer agility dimension is high with total mean 4.6499 out of 5. the paragraph “the company interacts with customers inquiries.” came in the first rank, followed by the paragraph “the company is committed to the dates of delivery of goods or provide the service.” the paragraph “my organization can easily and quickly customize a product or service to suit an individual customer” came in the last rank. all customer agility paragraphs came in high importance degree. 4.4. operation agility results table 4 shows that the importance level for operation agility dimension is high with total mean 4.6510 out of 5. the paragraph “the company produces new goods and services better than competitors” became in the first rank, followed by the two paragraphs “the company adopts a new technological methods in their operations” and “the company distributes goods and services better than competitors” that occupied the second rank jointly. whereas the lowest means was 4.5686 for the paragraph “the company encourages internal network of organizational creativity” that achieved the last rank. as seen, all paragraphs attained high importance level. 4.5. supply and distributive agility results table 5 shows that the importance level for supply and distributive agility dimension is high with total mean 4.6092 out of 5. the paragraph “the company can easily and quickly switch suppliers to take advantage of better quality materials” occupied the first rank by high importance level, then “the company can easily and table 1: demographic characteristics for respondents variable variable categories number (%) gender female 72 (28.2) male 183 (71.8) education phd 7 (3) master 16 (6) bachelor 135 (53) diploma 40 (16) secondary education 50 (20) less secondary education 7 (3) current job experience years <5 15 (5.9) 5-10 15 (5.9) 11-15 124 (48.6) >15 101 (39.6) age (years) ≤30 21 (8.2) 31-36 121 (47.5) 37-41 62 (24.3) 42-45 42 (16.5) >45 9 (3.5) managerial level top manager 10 (3.9) middle manager 58 (22.7) executive manager 187 (73.3) table 2: means and standard deviation for organizational agility and its dimensions (n=255) variable mean±standard deviation importance level rank customer agility 4.6499±0.76139 high 2 operation agility 4.6510±0.91672 high 1 supply and distributive agility 4.6092±0.80378 high 3 organizational agility 4.6367±0.76678 high al-faouri and al-rfou: the impact of the failure-based learning behavior on organizational agility from the workers’ point of view in the jordanian industrial companies in king abdullah ii industrial city sahab international review of management and marketing | vol 7 • issue 3 • 2017270 quickly expand into new markets,” the last rank was attained by “the company can easily and quickly expand the different products and services available for sale” by high importance level too. • what is the level of failure-based learning behaviors variable in the jordanian industrial companies in king abdullah ii industrial city – sahab. 4.6. failure-based learning behaviors results table 6 shows that the importance level for failure-based learning behaviors is high with total mean 4.5752 out of 5. and all paragraphs attained high importance degree. the paragraph “when employees make a mistake, they inform the relevant manager to enable others to learn from it” became in the first rank, followed by “there are manuals and procedures that show the execution of work to avoid making mistakes,” in the last rank was the paragraph “there are records and documentations of technical errors with their reasons.” 4.7. the test of hypothesis h01: there is no significant effect at (α = 0.05) of learning from failure behavior on organizational agility and its dimensions (customer agility, operation agility, and supply and distribution agility). table 7 summarizes the results of simple regression, and shows a significant effect of learning from failure behavior on organizational agility dimensions, the value of r is 0.903, determination value r2 is 0.815. this means that 81.5% in the variations in organizational agility dimensions in the studied table 3: means and standard deviation for customer agility dimension (n=255) the variable paragraph mean±standard deviation importance level rank customer agility my organization can easily and quickly respond to consumer demands, complaints 4.6471±0.90978 high 6 my organization can easily and quickly customize a product or service to suit an individual customer 4.4980±1.089 high 7 the company offers after-sales services to its customers 4.6667±0.83870 high 3 the company interacts with customers inquiries 4.7333±0.74206 high 1 the company is committed to the dates of delivery goods or provide the service 4.6824±0.76145 high 2 my organization can easily and quickly react to new products or services launched by competitors 4.6627±0.79614 high 4 the company maintains a safe stock to ensure the speed of response to the increasing customer demands 4.6588±0.80186 high 5 customer agility 4.6499±0.76139 high table 4: means and standard deviation for operation agility dimension (n=255) the variable paragraph mean±standard deviation importance level rank operation agility the company produces new goods and services better than competitors 4.7882±1.60569 high 1 my organization can easily and quickly introduce new pricing schedules in response to changes in competitors’ prices 4.5804±0.95592 high 3 the company adopts a new technological methods in their operations 4.6588±0.79198 high 2 the company distributes goods and services better than competitors 4.6588±0.77184 high 2 the company encourages internal network of organizational creativity 4.5686±0.95684 high 4 operation agility 4.6510±0.91672 high table 5: means and standard deviation for supply and distributive agility dimension (n=255) the variable paragraph mean±standard deviation importance level rank supply and distributive agility the company can easily and quickly switch suppliers to take advantage of lower prices 4.6000±0.92473 high 4 the company can easily and quickly switch suppliers to take advantage of better quality materials 4.6471±0.83768 high 1 the company can easily and quickly switch suppliers to take advantage of improved supply and delivery times 4.6078±0.88019 high 3 the company can easily and quickly expand into new markets 4.6314±0.85424 high 2 the company can easily and quickly expand the different products and services available for sale 4.5765±0.90113 high 6 the company can easily and quickly reduce the different products and services available for sale 4.5922±0.91700 high 5 supply and distributive agility 4.6092±0.80378 high al-faouri and al-rfou: the impact of the failure-based learning behavior on organizational agility from the workers’ point of view in the jordanian industrial companies in king abdullah ii industrial city sahab international review of management and marketing | vol 7 • issue 3 • 2017 271 companies results from the variation in learning from failure behavior. and calculated t value was 33.338, which is moral value at the level of significance (α ≤ 0.05). from the table, p < 0.05 therefore, we reject the null hypothesis and accept the alternative one, and so the three sub-hypotheses can be tested. h01-1: there is no significant effect of learning from failure behavior on customer agility. table 8 summarizes the results of simple regression, and confirms a significant effect of learning from failure behavior on customer agility, the value of r is 0.847, determination value r2 is 0.718. this means that 71.8% in the variations in customer agility in the studied companies results from a variation in learning from failure behavior. and calculated t value was 25.385, which is moral value at the level of significance (α ≤ 0.05). from the table, p < 0.05 therefore, we reject the null hypothesis and accept the alternative one. h01-2: there is no significant effect of learning from failure behavior on operation agility. table 9 summarizes the results of simple regression, and appears a significant effect of learning from failure behavior on operation agility, the value of r is 0.769, the determination value r2 is 0.591, which implies that 59.1% in the variations in operation agility results from a variation in learning from failure behavior. and calculated t value was 19.116, which is moral value at the level of significance (α ≤ 0.05). as shown from the table, p < 0.05 so, we reject the null hypothesis and accept the alternative one. h01-3: there is no significant effect of learning from failure behavior on supply and distribution agility. table 10 shows the results of simple regression, and indicates of a significant effect of learning from failure behavior on supply and distribution agility, the value of r is 0.904, the determination value r2 is 0.816, which means that learning from failure behavior explains (81.6%) in the variations in supply and distribution agility table 6: means and standard deviation for failure-based learning behaviors (n=255) the variable paragraph mean±standard deviation importance level rank failure-based learning behaviors when a problem occurs in the work, the causes are investigated to avoid them in the future 4.5686±0.98921 high 4 when employees make a mistake, they inform the relevant manager to enable others to learn from it 4.6549±0.84563 high 1 when an error occurs in the work and find out its causes, the situation is generalized to the staff to avoid it in the future 4.5843±0.92203 high 3 there are manuals and procedures that show the execution of work to avoid making mistakes 4.5882±0.93860 high 2 in our organization, employees are encouraged to ask questions such as “is there a better way to perform the work, produce the product or provide the service” 4.5294±1.01471 high 5 there are records and documentations of technical errors with their reasons 4.5255±1.04540 high 6 failure-based learning behaviors 4.5752±0.88100 high table 7: results of simple regression analysis to test the impact of learning from failure behavior on organizational agility and its dimensions (customer agility, operation agility, and supply and distribution agility) dependent variable calculated t β df calculated f determination value (r2) r sig* organizational agility 33.338 0.903 254,1 1111.43 0.815 0.903 0.000 statistically significant at the level of significance (α≥0.05) table 8: results of simple regression analysis to test the impact of learning from failure behavior on customer agility the impact of learning from failure behaviour on supply and distribution agility calculated t b sig* r2 r the impact of learning from failure behavior on customer agility 25.385 0.847 0.000 0.718 0.847 *statistically significant at the level of significance (α≥0.05) table 9: results of simple regression analysis to test the impact of learning from failure behavior on operation agility the impact of learning from failure behaviour on supply and distribution agility calculated t b sig* r2 r the impact of learning from failure behavior on operation agility 19.116 0.769 0.000 0.591 0.769 *statistically significant at the level of significance (α≥0.05) al-faouri and al-rfou: the impact of the failure-based learning behavior on organizational agility from the workers’ point of view in the jordanian industrial companies in king abdullah ii industrial city sahab international review of management and marketing | vol 7 • issue 3 • 2017272 in the studied companies. and calculated t value was 33.544, which is moral value at the level of significance (α ≤ 0.05). and, p < 0.05 so, we reject the null hypothesis and accept the alternative one. 4.8. discussion of results the results showed the existence of learning from failure behavior in the surveyed companies from the viewpoint of respondents, which indicated of a positive organizational culture that supports learning from failure, and the lack of fear or shame of failure behaviors. accordingly, these findings are in conformity with different literatures that emphasize learning from errors to support the various areas of the organization, and is consistent with the study of carmel et al. (2012), which indicates that trust and cooperation of chief executive with staff would facilitate learning from failure process, which in turn can improve the quality of decisions. the results indicated that the surveyed companies concerned with organizational agility with its three dimensions (customer agility, operation agility, and supply and distribution agility) as one of the contemporary administrative concepts, this concern is due to the changing environments that forced these companies to the rapidly adaptation and responsiveness. the dimension of operation agility attained the first rank by high importance degree. this results may be explained due to the great attention of surveyed companies to the speed and differentiation of their production of goods and services, as well as adoption of different technologies compared with other competitors in the market, to achieve competitive advantage. this result is conformity with ofoegbu and akanbi (2012) study which concluded the significant role of organizational agility in the improvement of operational performance in companies to meet fast environments. • the results concluded the significant effect of learning from failure behavior on organizational agility dimensions. 5. recommendations the institutionalize failure-based learning behavior to be apart from organizational memory, in order to use in organizational learning and support the agility by increasing interest in finding records for the different various technical errors that occur in the work environment and documentation and disseminated of these errors among the personnel (e.g. the companies records and websites, meetings, various workshops, manuals and brochures; etc.). • the improvement efforts that are related to easily and quickly expanding in various products and services available for sale through cooperation and partnership agreements with other companies, whether local or outside the country. • the improvement efforts concern with the quickly customization of products or service. • and also suggests increase the attention of promoting and rewarding creativity and innovation practices in different areas of work. • finally, the study offers a general recommendation for the surveyed companies to activate the role of customer relationship management in scanning their environments to predict and satisfy customers demands and wants; and updates database, and to keep in touch with developments in work methods and technologies. • regarding the future research prospects, the study proposes conducting future studies including other models and dimensions of learning from failure behavior and organizational agility and conduct studies in the field of government agencies, and other companies in industrial cities (e.g. al hassan industrial city, al-aqaba industrial city) and make comparative studies between them. references alabedi, a. 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(2011), the effect of modern technology on organizational agility. an empirical study. journal of basic and applied scientific research, 3(4), 695-702. . international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2018, 8(2), 1-8. international review of management and marketing | vol 8 • issue 2 • 2018 1 responsible business model: a corporate social responsibilitiy aprproach to business model manouchehr ansari1*, masoumeh javaherian2 1faculty of management, university of tehran, iran, 2faculty of management, university of tehran, iran. *email: mansari@ut.ac.ir abstract corporate contribution to social, environmental and economic concerns has been one of the pivotal issues for both businesses and society in recent years. although many researchers have worked on this topic and established useful approaches which motivate companies and guide them to perform corporate social responsibility (csr), there is still lack of applicable models that can help companies to accomplish csr as part of their business model. the aim of this paper is to discuss how companies can integrate csr into the business model in pursuit of creating responsible business model. responsible business model offers new ways and methods to create value for all stakeholders involved in a business including shareholders, society, employees, and so forth. keywords: responsible business model, corporate social responsibility, business model, stakeholders jel classification: m01 1. introduction the ability to transform cost to benefit and threat to opportunity is critical for creating value in unpredictable and forward-looking environments. in face of public attention to corporate behavior, firms cannot ignore the effects of their actions toward society. “corporate social responsibility (csr) increasingly gained attention in public debate, entrepreneurial networks, corporate communication and academic research” (hediger, 2010. p. 518). companies are seeking the ways that fulfill their csr obligations that also satisfy shareholders and have a positive financial impact (garay and font, 2012). this means that most companies tend to accomplish csr just when it increases shareholders value. porter and kramer (2006) for example, discuss strategic csr as a source of opportunity and competitive advantage. some researchers (freeman et al., 2006; freeman et al., 2010) believe that the main purpose of csr should be stakeholders’ satisfaction and the responsibility of the firm toward stakeholders. against these groups, some scholars (friedman, 1970; jensen and meckling, 1976; jensen, 2002) discuss shareholders and making the profit as the only responsibility of the firm. due to these different views, new methods should be created which consider both shareholders and stakeholders. to obtain this aim we need a framework or model which can meet shareholders’ expectations and have potential to integrate with csr to meet stakeholders’ expectations. 2. background 2.1. csr although many have attempted to define csr over the years, the concept has remained vague and ambiguous to some” (makover, 1994. p. 12; schwartz and carroll, 2003). “bowen (1953), often regarded as the father of csr, has defined the social responsibilities of ‘businessmen’ as their obligations to ‘pursue those policies, to make those decisions, or to follow those lines of action which are desirable in terms of the objectives and values at our society’” (crane et al., 2008. p. 304). in contrast with this early definition by bowen, some researchers have not had this point of view. milton freidman, for example, in an article in the new york times (1970) has stated that “the social responsibility of business is to increase its profits.” to discuss csr, there are the different approaches to it. kanter (2010) suggests that integrating social good into mission and strategy can help a company’s long-term performance and competitive advantage. porter and kramer (2006) discuss strategic ansari and javaherian: responsible business model: a corporate social responsibilitiy aprproach to business model international review of management and marketing | vol 8 • issue 2 • 20182 csr which determines how companies affect society and provide competitive advantage. although this approach delineates the path to social issues that companies should consider, it doesn’t address how these issues are chosen and by whom. eccles et al. (2012. p. 43) in an article with this title: “how to become a sustainable company” talk about differences between sustainable companies and traditional ones and believe that to develop a sustainable company, “they need leadership commitment, an ability to engage with multiple stakeholders along the value chain, widespread employee engagement and disciplined mechanisms for execution.” “in the last couple of decades, stakeholder theory has increasingly become the common frame of reference when csr is discussed” (pedersen, 2006. p. 138). in the business, managers encounter strongly requests from stakeholders to dedicate resources to csr (mcwilliams and siegel, 2001). freeman (2006. p. 5) discuss that “the main goal of csr is to create value for key stakeholder and “responsibility” implies that we cannot separate what we do in the workplace from ethics.” according to them (freeman et al., 2006. p. 5) “it is time to replace “csr” with an idea of “company stakeholder responsibility,” assigning a different meaning to csr.” to understand this approach we need to perceive stakeholder theories. 2.2. stakeholder according to freeman, a stakeholder is “any group or individual who can affect or is affected by the achievement of the firm’s objectives” (1984. p. 25). goodpaster (1991) states that this definition refers to two types of stakeholders: strategic and moral (frooman, 2002). “strategic stakeholders are the ones who can affect a firm and these stakeholders and their interests must be ‘dealt with’ (freeman, 1984. p. 126) so that ‘the firm may still achieve its interests’ ” (frooman, 2002. p. 192). “here, the stakeholder literature intersects the strategy literature” (frooman, 2002. p. 192). moral stakeholders are the ones who are affected by the firm and stakeholder theorists seek some balancing of their interests (frooman, 2002). “here, the stakeholder literature intersects the ethics literature and gives a more bidirectional account of the firm and its stakeholders” (frooman, 2002. p. 192). first, we should consider this view that the stakeholders who affect the firm and the ones who are affected by the firm are two different types of stakeholders. if we assume that the relationship between stakeholders and corporate is a reciprocal relationship, we can deduce that every action in this relationship has a reaction from the opposite side and these actions and reactions have both strategic and moral effects. we do not separate strategic and moral stakeholders and their behaviors and interests. in the era of social networks, every stakeholder should be considered as an extensive source of information which can broadly release corporate behavior and performance between other stakeholders like society and customers and influence reputation and trust of the brand. it does not mean that all stakeholders have the same authority to affect corporation, so companies should treat them in the same way. it means that companies should take all stakeholders into consideration and deal effectively and fairly with them according to their interests, engagements, and expectations. we comprehensively discuss this subject in next parts. one of the most important stakeholders is a shareholder who is in the center of attention in some texts of csr field. “more traditional corporate governance scholars agree that, within legal limits and ethical customs, the only duty the of managers is to maximize shareholder value” (friedman, 1970; jensen and meckling, 1976; jensen, 2002; alpaslan, 2009. p. 42). in the other side, as discussed previously, stakeholder theorists believe that the main responsibility of the firm is toward stakeholders (freeman et al., 2006; freeman et al., 2004; freeman et al., 2010). 2.3. business model the term business model has emerged in the managerial literature since the end of the 90s, especially with the emergence of the internet and its enormous influence on e-commerce (ghaziani and ventresca, 2005; demil and lecocq, 2010). during last two decades, academics and practitioners have worked on this subject from different points of view. zott et al. have observed that researchers adopt definitions that are appropriate for the purposes of their studies but that are difficult to reconcile with each other (zott et al., 2011). there are different approaches and definitions of the business model which introduced and used by different scholars. zott et al. by reviewing 103 of the business model publications discover that “at a general level, the business model has been referred to as a statement, a description, a representation, an architecture, a conceptual tool or model, a structural template, a method, a framework, a pattern, and a set” (zott et al., 2011. p. 4). doz and kosonen explain that business models can be defined both objectively which are sets of structured and interdependent operational relationships between a firm and its stakeholders and among its internal units and departments, and for the firm’s management, also function as a subjective representation of these mechanisms, delineating how it believes the firm relates to its environment (doz and kosonen, 2010). zott and amit define a business model as a system of interdependent activities that transcends the focal firm and spans its boundaries which enables the firm, in concern of its partners, to create and share value (zott and amit, 2010). by reviewing different definitions and concepts of business model, we utilize applegate’s (applegate et al., 2003. p. 45) business model framework which includes three building blocks: concept, capabilities, and value. an organization’s business concept defines its strategy and is based on analysis of market opportunities, product and services offered, and competitive dynamics (applegate et al., 2003. p. 45). it also supports customer analysis and the business network assessment (applegate et al., 2009. p. 45). “a useful analogy of concept is a group of people who want to build a house together” and “concept would give everyone a clear idea and picture of how the house will look and may go as far as a detailed blueprint of the house” (klatt and hiebert, 2001. p. 92). an organization’s capabilities define resources needed to execute strategy and are built and delivered through its people, operations, ansari and javaherian: responsible business model: a corporate social responsibilitiy aprproach to business model international review of management and marketing | vol 8 • issue 2 • 2018 3 leadership and management process, organization and culture, and business development and innovation process (applegate et al., 2003. p. 45). “capabilities enable a company to execute current strategy while also providing a platform for future growth” (applegate et al., 2009. p. 46). the final component of a business model identifies value delivered to all stakeholders (applegate et al., 2009. p. 48). casadesus-masanell and ricart (2010. p. 203) state that “choosing a particular business model means choosing a particular way to compete, a particular logic of the firm, a particular way to operate and to create value for the firm’s stakeholders.” in this paper, we use applegate et al. (2003) framework for business model which is general and comprehensive. 3. finding the research gap by reviewing various articles from various scholars, we classify different approaches to csr in seven categories according to stakeholders or shareholder: 1. corporate responsibility toward stakeholders at the cost of shareholders; 2. corporate responsibility toward shareholders at the cost of stakeholders; 3. corporate responsibility toward shareholders without violating the legal rules and ethical customs of society; 4. corporate responsibility toward stakeholders which have been preferred and confirmed by shareholders; 5. corporate responsibility toward stakeholders without considering shareholders; 6. corporate responsibility toward stakeholders by considering shareholders benefit; 7. corporate responsibility toward the society without considering other stakeholders and shareholders. the common point of all above approaches is a unilateral responsibility of the corporation toward stakeholders, shareholders or society. there are some considerable aspects which have been missed out on previous approaches: stakeholders (shareholders, customers, employees, society…) responsibility toward corporation; stakeholders (shareholders, customers, employees, society…) responsibility toward each other; corporate responsibility toward all stakeholders and shareholders without trade-offs. the main approach of this paper toward csr is these three issues and due to the fundamental role of stakeholders (including shareholders) in this approach, we name it “stakeholder-based csr.” one of the most important subjects which should be mentioned to obtain a useful and practical approach is that how companies can identify and define their responsibilities toward stakeholders. companies cannot perform their obligations and take on their responsibilities unless they know exactly to whom are responsible. it is true for stakeholder’s responsibility toward corporation and toward each other. but how companies can gain knowledge about stakeholders to fulfill their obligations to them? the next important question is that how stakeholders take on responsibility toward corporation and toward each other? these two questions indicate the relationship between stakeholders and corporation which is discussed in next parts. 4. research method we used qualitative study, using a semi-structured interview protocol. we selected the participants from experienced professional and experts in the field of marketing and policy making in the field of organic fruit juice manufacturing by purposive sampling, its sampling was continued to adequate extent or theoretical saturation and eventually 20 people were interviewed in industry side. in customer end we interviewed with 15 consumers with same method. finally, nvivo software was used to codify and analyze the data. 5. developing of the model: responsible business model we live in a world which people, companies, governments, and even nations are related to each other much more than in the past. people work for companies and earn money, buy other companies products and give their own money to them. companies pay tax and government build new roads, schools, hospitals. “selfinterest is not the only source of innovation or progress, rather working with others and for others can be a stronger motivation to enhance the pace of progress and creation value” (freeman et al., 2010. p. 283). porter and kramer (2006) explain that successful companies need a healthy society…, at the same time, a healthy society needs successful companies. it is true for all stakeholders which are involved in a business. a firm is responsible to its employees to create good conditions of work (including safety and health, hours of work, wages); to its customer to satisfy them and adherence to principles of fair competition; to society for environmental stewardship, human rights (including core labor rights), sustainable development.... (hohnen, 2007. p. 4). when a company creates an appropriate environment for its workers, they should be honorable and work effectively. this standpoint can lead to managers regard csr as a concept which can bring about value creation and value capturing. managers should know that csr can be much more than a cost, a constraint or a charitable act; it can be a source of opportunity, innovation, and competitive advantage (porter and kramer, 2006). by gaining a clear understanding of csr, stakeholders and business model, which are discussed widely but separately by various researchers, we integrate these concepts to create responsible business model. we first reviewed csr literature. then we did this for stakeholders and business model as well. by analyzing the literature of csr and stakeholders, we discussed about missing parts in most researchers work and propose stakeholder-based csr which focuses on a bilateral relationship between stakeholders and corporations. afterward, we go in the responsible business model part which is the main goal of this paper. in responsible business model, we talk about the relationship between stakeholders and corporation through three attributes ansari and javaherian: responsible business model: a corporate social responsibilitiy aprproach to business model international review of management and marketing | vol 8 • issue 2 • 20184 of stakeholders including interest, engagement and expectation and three building blocks of a business model including concept, capabilities and value. finally, we present our main conclusions and proposals for future research. we live in a world which people, companies, governments, and even nations are related to each other much more than in the past. people work for companies and earn money, buy other companies products and give their own money to them. companies pay tax and government build new roads, schools, hospitals. “selfinterest is not the only source of innovation or progress, rather working with others and for others can be a stronger motivation to enhance the pace of progress and creation value” (freeman et al., 2010. p. 283). porter and kramer (2006) explain that successful companies need a healthy society…, at the same time, a healthy society needs successful companies. it is true for all stakeholders which are involved in a business. a firm is responsible to its employees to create good conditions of work (including safety and health, hours of work, wages); to its customer to satisfy them and adherence to principles of fair competition; to society for environmental stewardship, human rights (including core labor rights), sustainable development.... (hohnen, 2007. p. 4). when a company creates an appropriate environment for its workers, they should be honorable and work effectively. this standpoint can lead to managers regard csr as a concept which can bring about value creation and value capture. managers should know that csr can be much more than a cost, a constraint or a charitable act; it can be a source of opportunity, innovation, and competitive advantage (porter and kramer, 2006). by gaining a clear understanding of csr, stakeholders and business model, which are discussed widely but separately by various researchers, we integrate these concepts to create responsible business model. we first review csr literature. then we do this for stakeholders and business model as well. by analyzing the literature of csr and stakeholders, we discuss missing parts in most researchers work and propose stakeholder-based csr which focuses on a bilateral relationship between stakeholders and corporations. afterward, we go in the responsible business model part which is the main goal of this paper. in a responsible business model, we talk about the relationship between stakeholders and corporation through three attributes of stakeholders including interest, engagement and expectation and three building blocks of a business model including concept, capabilities, and value. finally, we present our main conclusions and proposals for future research. as you review the business model framework, it is important to recognize that the components and relationships depicted here are not new; what is new are the business rules and assumptions that form the mental models that guide how we make decisions and take actions” (applegate et al., 2009. p. 44). each building block of applegate’s business model can represent one of these elements: decisions, actions, and consequences. in other words, the concept represents decisions, capabilities represent actions and value represents consequences. in this view, it is important to consider that who makes decisions, who takes actions and who benefits or be harmed by consequences? although it may seem that top managers or shareholders make decisions; employees, suppliers, managers and some of the other stakeholders take actions and all these players would be affected by the consequences but we believe that all stakeholders (customers, employees, shareholders, society…) should make decisions and take actions and in this regard would benefits (or be harmed) by consequences. but how stakeholders can play their role (as decision makers, actors, and ones who are affected by the result) and integrate to business model components? in this part, we first discuss why we choose “responsible business model” while we could use “social business model.” “enderle (2006. p. 118) critically analyses various formulations of the concept of csr and recommends “drop[ping] the term ‘csr’ entirely and us[ing] instead ‘corporate responsibility’ including economic, social, and environmental tasks” (freeman et al., 2010. p. 261). to focus on social responsibility, some stakeholders like shareholders may be disregarded or trifled but “corporate responsibility” without the term “social” is a wider concept and can be implied all stakeholders including shareholders and society. vaaland defines csr as the “management of stakeholder concern for responsible and irresponsible acts related to environmental, ethical and social phenomena in a way that creates corporate benefit” (vaaland et al., 2008. p. 931; powell, 2011). accordingly, we don’t talk about the socially responsible business model and nominate responsible business model. in the responsible business model, we don’t separate customer, shareholders, stakeholders, and society. by stakeholders, we consider all parties involved in the business including customers, shareholders, suppliers, employees, managers, partners, ngos, society, governments, environment. as we discussed stakeholders’ role in corporate responsibility and the importance of this role, we cannot disregard them from the framework and put them in the centre of it due to their importance and as a common part in the business model and csr. since the fundamental purpose of the business model is to expand economic profit which is the shareholders’ primary expectation and the main purpose of csr is to attain social welfare and create value for other stakeholders, integrating business model and csr can provide both shareholders’ and other stakeholders’ (including society) benefits. as discussed previously and according to recent debate, by responsible business model, which is the output of integrating business model and stakeholder-based csr, we meant to create value for all stakeholders. in this regard, the responsible business model has three major components in context: stakeholders, business model and csr and six minor parts: stakeholders’ interests, stakeholders’ engagements, stakeholders’ expectations, concept, capabilities, and value (figure 1). as illustrated in figure 1, stakeholders are at the centre of responsible business model and stakeholder’s interests, engagements and expectations connect stakeholders and business model components. according to wood and jones (1995), stakeholders’ interests, engagements, and expectations represent the relationship between stakeholders and company. stakeholders ansari and javaherian: responsible business model: a corporate social responsibilitiy aprproach to business model international review of management and marketing | vol 8 • issue 2 • 2018 5 are the players of the business model so they should connect with its parts appropriately. as we discuss previously, stakeholders and corporation have obligations and responsibilities toward each other and as a result, the connection between stakeholders and business model should be in a way that they exercise their responsibilities. 6. management implication and propositions 6.1. stakeholders’ interests to concept interests determine factors and methods to act and create value. stakeholders express their concerns and points of view about corporate actions, behavior, value creation processes and methods and all subjects and issues which companies should make a decision or choice about them (including the decisions about other stakeholders) through their interests. some of these concerns are for example, in which areas shall we invest? which product and services shall we offer to satisfy our customers? what customer shall we serve? what strategies shall we use to reach our goals or deal with the problems? what relationships shall we have with different players in our business networks to execute the strategy? the answers to these questions (and a lot more) must depend on stakeholders’ approaches and interests. as discussed previously, the concept represents decisions and it is stakeholders’ right to involve in the decision making processes. when stakeholders’ interests are integrated with the concept, it means that strategies and other decisions are defined according to stakeholders’ interests (for example shareholder or society). nasi (1995) states that an understanding of each stakeholder’s interests is essential for determining corporate moral obligations to its stakeholders. it is clear that there are some conflicts among shareholders’, customers’, suppliers’, employees’ and other stakeholders’ interests (marcoux, 2003). “these conflicts must be resolved so that stakeholders do not exit the deal or worse use the political process to appropriate value for themselves or regulate the value created for others” (freeman et al., 2004. p. 365-366). it is not always easy to find a way that meets all stakeholders’ interests and to trade off one versus another is easier for most managers (freeman, 2010). it does not mean that all stakeholders should be treated equally since they do not have equal effects on the corporation. alpaslan (2009. p. 47) states that “the interests of all stakeholders have intrinsic value, and no set of interests is assumed to dominate the others’ (clarkson, 1995; donaldson and preston, 1995; jones and wicks, 1999. p. 207) but this does not mean that stakeholders’ interests are equally legitimate (donaldson and preston, 1995. p. 67; phillips, 1997. p. 63).” what is important is that no stakeholder should be neglected and the value created for stakeholders should be in harmony with their interests. as freeman discusses “managing for stakeholder is about creating as much value as possible for stakeholders, without resorting to trade-offs” and it is “the primary responsibility of the executive (freeman, 2010. p. 9). when managers involve stakeholders in decision-making processes and make relationships with them, they understand other stakeholders’ interests and the reasons and logic of these interests. in addition, managers should try to reframe the questions and focus on innovation and find ways to create new products or services that signify the joint interests of all key stakeholders (freeman, 2010). one important thing which should be regarded is that all stakeholders and corporation are responsible for each other and in this regard, each stakeholder should consider others when it comes to express any interest. this multilateral view to responsibility resolves conflicts among stakeholders’ interest because, in this approach, some stakeholders are not the only players and the others audiences or observers. all stakeholders are responsible to satisfy others’ interests and no stakeholder can rely on self-interests. 6.2. stakeholders’ engagements in capabilities each decision needs some actions to execute and reach its aims. since stakeholders’ interests have been recognized and business concept (especially strategic choices) has been determined (based on stakeholders’ interests), companies need stakeholders’ engagements (actions) to execute their strategies. as discuss earlier, stakeholders have some duties and responsibility toward corporation and can exercise their responsibility by providing resources and processes. stakeholders’ engagements can be defined “as the process of involving individuals and groups that either affect or are affected by the activities of the company” (sloan, 2009. p. 26). greenwood (2007) explains it as practices the companies undertake to involve stakeholders in a positive manner in corporate activities and believes that the more a company engages with its stakeholders, the more accountable and responsible that company is toward these stakeholders. we define stakeholders’ engagements as the activities and processes in which stakeholders engage or to be engaged based on their interests and in relation and cooperation with corporation and other stakeholders to create value. “sam and the dow jones sustainability index assert that stakeholder engagement provides the means to gain acceptance and build the trust of a wide group of different stakeholders. they draw a further link to performance, arguing that trust-building aids in securing current and future corporate growth” (sloan, 2009. p. 27). figure 1: responsible business model framework ansari and javaherian: responsible business model: a corporate social responsibilitiy aprproach to business model international review of management and marketing | vol 8 • issue 2 • 20186 mark parker, nike, inc. president and ceo, in fy07-09 corporate responsibility report states that: “we have ambitious goals around scaling environmental, social and labour-related change. but we know we can’t do everything, and we can’t do it alone. so we decided to focus on a few key areas where we know we can mobilize awareness and commitment – with our employees, our consumers, policy makers, civil society and among members inside and outside of our industry. and that has made all the difference.” as mentioned previously, capabilities define resources and enable a company to execute its strategies. the key question is that who provide resources and capabilities? the answer is clear: stakeholders. if stakeholders do not involve in the activities and processes, no corporation can afford its needed resources and capabilities. some stakeholders are resources in their own like leaders, managers and employees and some stakeholders provide resources like suppliers, shareholders and customers and companies need all stakeholders participation. the next question which should be asked is that what motivate stakeholders to engage in corporate activities and provide resources and capabilities? we suggest that stakeholders’ involvements are directly depend on stakeholders’ interests, the integration of their interests to concept, and their expectation. the more stakeholders’ interests integrate to business concept, the more stakeholders engage in corporate activities and processes and provide capabilities and the more they (stakeholders and corporation) take on responsibilities toward each other because they know that they create value for owns and other stakeholders who create value for them. proposition 1: there is a positive relationship between the level of stakeholders’ interests integrated to business concept and the level of stakeholders’ engagements. rynning-tønnesen, the ceo of statkraft, in an interview with mit sloan management review (august, 2011) states that: if i have a good strategy, good communication and good managers, i can get the capital needed. today, you cannot have the capital first and the story afterwards. the investor story is all important. if it is good enough, you get the capital. microsoft is a good example in this case. one of a social innovation strategy at microsoft is transforming education. to reach the goals, microsoft’s “opportunity divide” mission has also revitalized the corporate culture. in addition to volunteering over 383,000 hours and raising over $100.5 million for good causes in 2011, microsoft employees are also responsible for the ideas behind some of the company’s signature education programs. 6.3. stakeholders’ expectations from value most researchers give the same consideration to expectation and interest and they are not defined separately. expectations are what you think or hope to happen based on your interests. when a manager takes an interest in a new market (for example) and enters it, he/she expects to boost sales and generate more profits. stakeholders’ expectations can be considered to determine the values which are the outcome of interests and engagements in corporate activities. “stakeholders may establish expectations (which may be explicit or implicit, and which may or may not be communicated) about corporate performance based on their particular interests and levels of involvement in a company” (wood and jones, 1995. p. 243). proposition 2: there is a positive relationship between the level of stakeholders’ interests integrated to business concept and the level of stakeholders’ expectations; proposition 3: there is a positive relationship between the level of stakeholders’ engagements in capabilities and the level of stakeholders’ expectations. as discussed, values are the consequences of decisions and actions (which are made and taken by stakeholders). when stakeholders’ interests determine concept (decisions) and then their engagements (actions) provide resources and capabilities to execute strategies, stakeholders anticipate creating value (consequences) be consistent with their expectations. when all things proceed appropriately, the desired value will be achieved. we change the customer value proposition term explained by johnson et al. (2008. p. 52) which state that: “a successful company is one that has found a way to create value for customers ….” to “a successful company is one that has found a way to create value for stakeholders (according to their interests and contribution to business).” few companies appear to consider value proposition in the context of a broader set of stakeholders (frow and payne, 2011). “stakeholders’ value proposition could act as a value alignment mechanism that may help companies move toward achieving a more informed balance across stakeholders” (frow and payne, 2011). when companies integrate stakeholders’ interests and engagements to concept and capabilities, their value proposition will not oppose to society because society has been considered as a stakeholder in advance and creating value will be adjusted to corporate responsibility. 7. conclusion the proposed model, ‘responsible business model’, which is the outcome of integrating csr into business model, is a framework to reconcile stakeholders and shareholders theorists. business model can be defined as a framework that allows firms to create value for customer as well as shareholders. what is disregarded in this definition is the effect of this progress toward stakeholders including society, environment and so forth. to obtain the framework we have first talked about csr and stakeholders concept in literature and then business model framework which consists of three building blocks: concept, capabilities and value. each of these building blocks consists of some elements that explain how a firm creates value. as we reviewed the literature, we have been resulted that stakeholders are the main and influential part to accomplish csr and create shared value. in this regard, we discussed about companies and stakeholders mutual responsibility and stakeholder-based csr. accordingly, we have paid considerable attention to stakeholders in our framework and discussed about their interests, engagements and expectation. when firms consider ansari and javaherian: responsible business model: a corporate social responsibilitiy aprproach to business model international review of management and marketing | vol 8 • issue 2 • 2018 7 stakeholders’ interests and participation to corporate activities, concept and capabilities transformation to new assumptions and rules based on csr is unavoidable. firms cannot incorporate csr into their business without considering these elements entirely. without responsible mission, responsible people, responsible supplier, responsible shareholder, responsible strategy…, no firm can be a responsible corporation. we end our paper with mark parker statement: the challenges we face are huge, but the opportunity is even greater if we act now – new business models, new markets, new services and products – all based on our commitment to innovation. 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(2011), the business model: recent developments and future research. journal of management, 37(4), 1019-1042. 508 resource limit is reached resource limit is reached the website is temporarily unable to service your request as it exceeded resource limit. please try again later. . international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2020, 10(2), 56-67. international review of management and marketing | vol 10 • issue 2 • 202056 effect of institutional pillars on small and micro enterprises firm performance in ethiopia endres ahmed mohammed1,2* 1department of management, bule hora university, ethiopia, 2department of management, college of business and economics, jigjiga university, ethiopia. *email: ruminesra24@gmail.com received: 19 december 2019 accepted: 15 february 2020 doi: https://doi.org/10.32479/irmm.9131 abstract though much research had been conducted examining the role of institutions on the practice of micro and small enterprise, it is now the effect of institutional pillars on organization performance is to be assessed in ethiopian case. examining the 200 small and micro enterprises, we had tested a model of institutional variables to explain performance of firms. to cater the variance of firm performance due to the effect of institutional environment, we used structural equation modeling nesting polychoric correlation to measure firm performance measured in ordinal data variables. we found that the normative and cognitive institutional pillars positively correlated to firm performance, while the regulative pillar is negative but insignificant affecting performance. thus, we showed that entrepreneurs’ interpretation of the value system within the society regarding innovation and their perception about innovation practice determines firm performance keeping the quality of idea and their resource endowment constant, in micro and small enterprise in ethiopia. keywords: institutional theory, regulative, normative, cognitive pillar, firm performance jel classifications: l3, l25, l26 1. introduction according to the global entrepreneurship development index or gedi (acs, et al, 2018) report the world needs billions of new jobs to keep stable civil society and maintain a prosperous world economy. a three percent improvement in global entrepreneurship index during 2017 had resulted more than seven trillion usd towards the world growth domestic product. the report had outlined two factors behind this overwhelming result; one that institution support entrepreneur’s efforts exploiting available opportunities from around their living circles and institutions have positive impact towards global economy (pp. 15). institutions drive and influence individuals regarding opportunity recognition and exploitation, on their choice of venture organizing, and advance organizations economic efficiency across countries (tolbert et al., 2011; delmar and shane, 2004; north, 1990). moreover, variation between countries regarding entrepreneurial practice, among other things, stems from difference in institutional arrangement which makes certain start-ups successful while business with similar nature fail to succeed though both are business of similar character given the nature of human capital and individual experience constant (busenitz et al., 2000). evidences from literatures accounted that world countries vary one another in their innovation practice due to the influence stems from regulative, cognitive and normative institutions is different posing different impact on entrepreneurs that may enable or prohibit their firms from success. however, the effect of institutional factors towards performance across firms, in micro and small enterprise in ethiopia has been neglected so far, though verifying relationship between these constructs have both practical and theoretical contribution. it is clear that the phenomenon of entrepreneurship has been studied from various perspectives as an individual characteristics this journal is licensed under a creative commons attribution 4.0 international license mohammed: effect of institutional pillars on small and micro enterprises firm performance in ethiopia international review of management and marketing | vol 10 • issue 2 • 2020 57 and organizing activity to predict the future entrepreneurs. for instance, individual with special characteristics such as need for achievement, self-efficacy and entrepreneurial passion assumed more likely to exploit profitable opportunities than others who lack these attributes (mcclelland, 1960; brockhaus and horowitz, 1986; cardona et al., 2013). this said, entrepreneurship also defined from the perspectives of firm establishment and organizing which states entrepreneurs perform such activities as resources mobilization, forming venture organizing teams; and identify markets gaps than those looking for employment. the latest advancement in the field identified the phenomenon with the discovery and exploitation of profitable opportunities never existed before either by an alert individual or established firms (shane and venkataraman, 2000), guided by individual’s idiosyncratic information possession and prior knowledge enable some not others to recognize and exploit entrepreneurial opportunity. the emerging institutional perspective however argued the difference in entrepreneurial practice across countries amenable to the functional association between institutional platform immersing new and established firms (busenitz et al., 2000). tolbert et al. (2011) noted that, institutional factors poses greater influence than technological breakthrough in some context to proliferate the numbers of new establishments. similarly, reviewing literatures from developing countries, acs and virgil (2010) asserted that institutional environment dominate other factors in curbing firms’ growth potential and as result private entrepreneurs are affected severely despite governments in these countries have strong intention for small business to advance impetus of development of their nations. cultural factors like preference for occupation than innovation, social resistance for new and innovative outputs, lack of established formal institutions and related factors combined limit private entrepreneurs in developing countries not to pursue market opportunities. similarly, boris (2013) uncovered the effect of institutions on social establishments taking sample from social entrepreneurs engaged different kind of activities and asserted that institutional framework essentially explain social innovation practice in developing countries. extant literatures in ethiopia have uncovered the interaction between formal institutions and entrepreneurial practice in line with linkages in input supply and output relation contexts (hadis and ali, 2018). others have considered socio-cultural factors and its impact towards innovation taking women entrepreneurs from different sites as samples (abdurrahman, 2016; jemal, 2014). the regulatory framework is also assessed from business development aspects and its effect towards organization performance akin to micro and small enterprise evidence from businesses in the capital city (haile and batra, 2016). however, the evidences from previous researches have appeared with conflicting result implying different meaning. thus, these researchers strongly convinced that better outcome can be obtained employing institutional approach regarding entrepreneurship practice and specify institutions effect on organization performance. the general objective of this study is to undertake the empirical test of the effect of institutions on entrepreneurship practice and firm performance, with particular interest of small and micro enterprises (sme) operating business in somali region. to achieve this objective, the following specific objectives were raised: • to investigate the effects of regulative institutions towards entrepreneurship practice and firm performance. • to investigate the normative institution and its effect on entrepreneurship practice and firm performance. • to investigate effects of cognitive institution on entrepreneurship practice and firm performance. • to assess the general institutional environment framework and its linkage with firm entrepreneurship practice and firm performance. this paper aimed to use structural equation modeling, which is a statistical technique important to measure the relationship between underlying latent variables, henceforth, first we conducted confirmatory factor analysis separately for two constructs, i.e. the institutional variables adopted from (busenitz et al., 2000) and organization performance designed from various empirical findings hence regression analysis to measure the effect of institutions on firm performance using data from randomly drawn 200 enterprises from two major cities found in somali regional state, ethiopia. henceforth the paper proceeds as follows: the next section develops theoretical and conceptual framework with subsequent hypotheses; the third section describes research methodology and fourth section deal data analysis results and its discussion. the final part gives conclusion and recommendation for future research. 2. review of literature 2.1. theoretical development the extant literatures informed that people from individualistic culture are more likely pursuing innovative behavior compared to individuals from the collective culture, the latter who are supposedly prefer employment choice (shane, 1992). moreover, the taste in uncertainty avoiding culture and individuals from such group are expected to manifest employment carrier choice than immerse them under innovation practice since the risk with innovation is high, or innovation championing fills such gap and invoke individuals towards innovative thinking (macmillan, shane, and venkataraman, 1995). according to these scholars that individualism and risk taking cultures and individuals from such group are more likely than their counterparts pursuing innovative behavior. moreover, masculine culture poses insignificant effect towards innovation, which is evident in a study that take sample from employees working under subsidiary company. however, institutional theory and scholars criticized this perspective and argued that the cultural dimension alone is insufficient to characterize prevalent entrepreneurship practice across countries which most assessment reveals that additional factors are needed clarifying the underlying reasons that create difference between countries and among regions the varying level of innovation proliferation (busenitz et al., 2000; kostovo, 1997). this occurs as a result of two reasons according to the evidences from empirical literatures. one, conflicting result among researches nesting the four cultural dimensions and innovation practice evident in cross-countries assessment (acs, 1992). second, most researchers tend to focus individualism and mohammed: effect of institutional pillars on small and micro enterprises firm performance in ethiopia international review of management and marketing | vol 10 • issue 2 • 202058 uncertainty cultures than collectivism and masculine cultures through their evaluation whilst measuring innovation practice (busenitz et al., 2000) since the former attributes have positive association with innovation behavior while the latter two have mixed result (davidson, 2003). boris et al. (2018) asserted that economic freedom increases individual’s self-efficacy reduce fear of failure, alertness to opportunities. from the evidence in a large data from across world countries (45 countries and 721,581 individuals were inquired) they found that a pro-market institution which is measured by economic freedom positively affects opportunity entrepreneurship. cognizant of this trend therefore researchers in entrepreneurship field proposed three institutional pillars which are equally important and that extend the traditional cultural factors distinctly affect the entrepreneurship practice and facilitate objective comparison between countries in their level of entrepreneurship proliferation (kostovo, 1997; busenitz et al., 2000; alfonso et al., 2014). following the path settled by institutional theorists in seeking the impact of institutions towards organization legitimacy (scott, 1987), thus entrepreneurship researchers proposed three institutional pillars with particular importance to entrepreneurship research to portray difference in innovation practice between countries that encompass regulative, normative and cognitive elements, conceptually distinct and plausible for new and established firms. another empirical research from ghana (adams et al., 2019) a research treated access to financial services, training in employee and other technicalities precedent drivers of firm growth in ghana context. the outcome revealed that, access to training and business sustenance are antecedents for business growth. the researchers approached informal businesses in ghana in rural and semi-rural areas asserting access to technical training is possible through institutional establishments, however, informal businesses rarely on the government packages lists, especially in developing countries case, and may be ignored by formal institutions. informal businesses are less sensitive for access to information and property right protection, since one of the reason towards their establishment is tax avoidance. thus, the institutional framework is succinct, though the above researchers measured intended objectives succinctly. similarly, the researchers failed to address the quality of business development services and advisory services affect or moderate the interaction between institutions and performance. for instance, haile and batra (2016) identified lack of proper knowledge and skill hamper success of business development service package in ethiopia despite ambition of service providers, there is no importance of the skill to the firms operation. similarly, most business development service is provided for formally established and registered firms than informal businesses. so, the regulative framework provides commensurate result cater the difference between firms in micro and small enterprises. the general implication of the above research is that growth is affected by internal factors such as entrepreneurs and firm characteristics as well as the external institutional characteristics following the resource based approach. however, the linkage between institutional approach and resource endowment is unclear in the research. we argue institutional profile framework is still important to measure the underlying entrepreneurial practices and the corresponding firm success in the smes sector. 2.2. the regulative institutions the regulatory environment is concerned with various laws and regulations, government support to new firms given in the form of assistances such as business counseling and consultancy, development services and mechanisms for risk management mainly designed by the government and other formal institutions intended to enhance startup capability in the country (busenitz et al., 2000). government support for start-up increases access to resources and wider market in addition to securing firm legitimacy which is phenomenal especially for new firms, thus it is strategic issue for all organization to adhere to the accepted behavior settled within the larger societal landscape. for instance, industrial cluster development in ethiopia found important for firms to boost performance and regain a market which was once lost to the low cost international competitors, i.e. throat cutting competition sourced from chinese firms (sonobe and otsuka, 2006). similarly they also asserted the business development service is positively correlated to firm performance for small enterprises evidenced from urban business (haile and batra, 2015). however, the current critics from institutional theorist (jennings et al., 2013) questioned the plausibility of regulative framework that claims the perspective abandoned the essence of classical institutional theory that seeks meaning for organizations and their march towards legitimacy. the ideational perspective (scott, 1987; scott, 1995) construed premises for firm to conformance with stakeholders in external environment beyond formal regulation and enactments. formal laws and regulations rarely overlooked and unnoticed by the business community. it is rare that formal laws can be neglected by any rational organizations because from the start firms are established conforming to certain codes of conduct and acceptable business behavior (jennings, et al., 2013). however, the institutional profile instrument developed by entrepreneurship researchers sufficient to explain the regulatory framework and the corresponding entrepreneurial practice. the evaluation and assessment of the framework conducted by (alfonso et al., 2014) illuminates the validity of the institutional variables to preface the underlying entrepreneurship constructs. haile and batra (2016) found moderate relationship between business development and firm performance. thus, it is empirically plausible to hold the three constructs developed by entrepreneurship scholars and employ it in this context. edri (2018) research reported that the government support is given in the form of training for entrepreneurs regarding business operation and techniques like kaizen, market linkage, business premises, and assistance packages intended to bolster firm growth. though the government takes the dominant position undertaking the support given for micro enterprises, however lack of practical importance of the workers’ skill assigned for this task and lack of entrepreneur’s initiation absorbing the support constrained the package not to achieve the intended result (haile and batra, 2016) and enhance firm performance. moreover the study showed that only six percent of enterprises had engaged subcontracting mohammed: effect of institutional pillars on small and micro enterprises firm performance in ethiopia international review of management and marketing | vol 10 • issue 2 • 2020 59 business with the government. random decision regarding access to the working and selling premises negatively affect enterprises under the host of industrial cluster, though shoe producing micro and small enterprises are benefitted from such conglomeration (ali et al., 2016). the linkage between formal institutions is ill crafted regarding raw materials and output relations given for businesses in the manufacturing sector, according to the evidence from a descriptive study (hadis and ali, 2018). regarding access to finance, more than 80% of start-ups are established by own finance and finance from conventional sources (edri, 2018). similar observations also accounted that credit access from microfinance institutions is multi-criteria, thereby more than 90% of the applications rejected due to lack of collateral and other bureaucratic restrictions such as track record and current financial capital that disfavors startups. thus the following two hypotheses are proposed: h1: there is a significant relationship between regulative pillar and entrepreneurial practice. h2: the regulative environment has insignificant influence on performance in micro and small enterprise sector. 2.3. normative institutions the normative institutions measures the degree to which value system in the population uphold innovative behavior within members and admiration for entrepreneurial activity. the positive behaviors, prevailed across the community for innovation eminently increases the number of entrepreneurs and their ability to create new products and induce innovative thinking to settle across the population, especially within the younger section of the population (busenitz et al., 2000). the normative institution can be considered as an extension to hofstede cultural dimensions. for example, in the extreme case, an empirical finding by (abdurrahman, 2016) illuminates the existence of positive cultural support for women entrepreneurs contrary to the assumption held in prior researches regarding women entrepreneurs. for instance, edri (2018) speculated culture limit the number of women entrepreneurs in the region, however contrary result found in the research mentioned above and this particular research also see the speculation in suspicion, because evidences from international empirical researches and local investigations appear that the ethiopian culture is not hostile towards innovation in general and women in particular. international research meant for investigating the health of entrepreneurial ecosystem gedi (2018) reported that positive cultural support exist for entrepreneurial effort and their innovation practice, thereby put cultural support amongst the top factors that is positively related to entrepreneurs in medium enterprises. and it is the second important factor next to individual ability for opportunity recognition from around their circles relatively better to manifest the health of entrepreneurial environment. thus, the following two hypotheses are proposed; h3: there is significant relationship between normative pillar and entrepreneurship practice. h4: the normative institution is positively related to organization performance in micro and small enterprises. 2.4. cognitive institutions ahlstrom et al. (2010) suggested cognitive domain to institutional pillar represents individual interpretation of societal norms and values prevailed within the larger societal landscape. businetiz et al. (2000) countries institutional pillars associate individual cognitive domain with their awareness about property right protection, perceptions of risk and find solution when risk encountered, other factors that lead entrepreneurs to assess and evaluate the viability of their business idea with these factors. moreover perception about seeking professional assistance and counseling service during time of difficulty, knowing where to access market information and forming collaboration with stakeholders constitutes cognitive domain (alfonso et al., 2014). most micro enterprise in ethiopia lacks risk mitigation system, and poor access to market information (haile and batra, 2016; hadis and ali, 2018; edri, 2018). with exception of medium enterprises, because most are better educated and relatively longer years of experience, most micro and small enterprise owners barely aware the importance of property right protection and risk management and their know how about environmental uncertainty is not something better than none (edri, 2018; haile and batra, 2016; mesfin, 2015). similarly, gedi (2018) report put ethiopian entrepreneurs among one of the lowest rank in risk taking tendencies in the world and the lowest compared to the regional index based on standardized parameters. thus the following two hypotheses are developed; h5: there is significant relationship between cognitive domain and entrepreneurship practice. h6: there is a negative relationship between entrepreneurs’ cognitive domain and organization performance. 3. methodology to test the proposed hypotheses, we collected data from 200 enterprises from two cities at two different times with 3 months intervals between april and july 2019. the data collection was followed the next two stages. first we prepared instrument based on extant empirical literatures and undertake psychometric validation procedures to characterize the underlying entrepreneurial behavior of small business owners. to start with performance measurement, we had considered operational and financial indicators in our pilot study (venkataraman and ramanujam, 1986). the output from pilot study shows that most owners in micro enterprises run their business with no accounting information system and evaluate their business operation based on experience and judgment than preparing financial analysis from financial statements, thus unable to get financial information for analysis. amongst three hundred preliminary samples drawn, only 45 firms were kept documented financial information and ten respondents willing to give this information. in our second session, financial indicators was reduced and retain indicators (process improvement, growth in the number of employees measured by the number of current employees compared to the corresponding number at business formation, and owners satisfaction in their sales and return on assets all measured in five point likert scales (cardona et al., 2013). from 300 questionnaires that were distributed to owners, 220 instruments were returned in the first data collection. assessing the result from first session, then the reduced questionnaire was developed and were distributed for respondents so that to capture, if variation exist in case. ten cases were dropped mohammed: effect of institutional pillars on small and micro enterprises firm performance in ethiopia international review of management and marketing | vol 10 • issue 2 • 202060 because five instruments contain response in pattern and five questionnaires contain missing categories more than twice in a single questionnaire. the remaining 210 cases were retained with no missing values and then using data collectors including the research team, second round data was collected from similar cases. finally, repeating similar procedure we used in the first round, the second round data collection provides 200 complete and usable instruments ready for analysis. the background information about our respondents found from the authors up on request. the sampling procedure employed reduces the potential sampling bias through two mechanisms, first we had selected respondents based on the research system we employed. according to hair et al., 2014 the number of respondent in scientific study depends on number of indicators pointed at single latent variables and degree of error needed to specify in the study. our pilot test contain total of 21 indicators, amongst them thirteen indicators are pointing on endogenous variables and seven indicators towards exogenous variable; then 10 times the number of indicators is equal to 210 sample requirements. afterward, we anticipated minimum potential return rate, 400 sample respondents drawn randomly using information from the agency. based on the information from regional micro and small enterprise agency, locate 300 respondents particularly important to our research and were willing to fill the questionnaires. 3rd year regular students were solicited with better cgpa rank and communication skills for data enumeration. the data collectors informed and trained about the way their supervision and elaboration the concepts appear in the instrument if needed. for instance, the regulative construct contains indicators that unclear for the owners. for instance, government supports to other governmental organizations that entrepreneur unable to understand, especially new starters because they may be not in a position to understand such higher form modalities. as per the response from students we understand that owners associate governmental and other formal organizations support with micro finance institutions provisions. the descriptive statistics about characteristics of respondents is found in analysis part. 3.1. dependent variable the dependent variable, in or case the operating outcome measurement is interesting to measure firm performance related to institutional variables. according to venkataraman and ramanujam (1986) probably the popular and the appropriate indicator to measure an organization outcomes is profitability; universal performance indicator. it needs reliable and established information both from owners and from an external source like from established database. cross checking both are important to get reliable information. similarly, this requires respondent’s willingness let the necessary information. in our case we find only ten owners were willing to give financial information of their business. the remaining majority lacks willingness. in such cases similar to ours operating performance such as market share, product improvement, and growth in number of customers, retaining key employees and growth in employee number, process improvement as measured by indicators are important as suggested by (venkataraman and ramanujam, 1986). similarly, the market share is the most dependable modality for comparison from the non-financial indicators according to the above scholars. however, in getting data for market share is difficult, since established database is unavailable in developing countries (bernard et al., 2019; edri, 2018). thus, proxy performance measurement indicators such as growth in number of employees and owners satisfaction with their sales and return will serve similar purpose (bernard et al., 2019; cardona et al., 2013). in another line of an argument, measuring performance stands for strategic management concern, entrepreneurship research should focus on innovation practice such as introduction of new goods and finding new market than measure organizations relative performance advantage (schumpeter, 1934; shane and venkataraman, 2000). therefore, we took process improvement, growth in number of employees and owners satisfaction with their sales and satisfaction in level of annual return as performance indicators (cardona et al., 2013; lingsya, 2015). 3.2. the independent variables institutional variables are the independent variable. as recommended by busenitz et al. (2000) the confirmatory factor analysis provides sufficient information about entrepreneurship practice in given country. the framework institutional pillars are developed to capture the entrepreneurial outcome. for instance, regulative pillar measure the extent of government in supporting towards innovative practice and market opportunity both directly through product purchase or providing necessary venture inputs for entrepreneurs. according to bernard (2019) financial access and access to other resources are precursors for organization growth. the institutional variables and human capital are treated external determinants of firm performance. the institutional variables are listed as access to financial services, access to training and advisory from formal establishments. though, these factors are important, it is not sufficient, since firm accessing market information and internationalization determine firm performance (edri, 2018, gedi, 20180. the gedi considered the economic freedom primary manifestation of entrepreneurship practice (2018). though it is important to consider economic freedom addressing entrepreneurship, however, there are literatures with regard to entrepreneurship practice developing countries taken place contrary to this approach (leff, 1978). entrepreneurship in developing countries take raw material sales and factor mobilization and can be performed by governments (including associations) and private entrepreneurs with the absence of economic freedom (178). similarly, peng (2003) similarly paints creative destruction process to take place in transition and underdeveloped countries as destructing monopoly market or centralized system and replace by innovation and entrepreneurial institutions. thus, economic freedom alone is not enough to measure the regulative institutional environment. moreover (alfonso et al., 2014) found the framework developed by busenitz et al. (2000) somewhat appropriate and robust entrepreneurial proliferations. boris (2016) nesting social entrepreneurship in developing countries employed the institutional framework confirm statistical relevance of the model. thus the regulative, cognitive, and normative pillars selected as our independent variables. mohammed: effect of institutional pillars on small and micro enterprises firm performance in ethiopia international review of management and marketing | vol 10 • issue 2 • 2020 61 4. data analysis and interpretation our analysis followed structural equation modeling relevant for our study. structural equation modeling helps researcher to undertake factor analysis and regression simultaneously (hair et al., 2014). since latent variables are measured in ordinal scale, thus polychoric correlation calculated following the method as proposed by jöreskog (2002) to specify coefficients of the equations and fitting the data to hypothesized model. ordinal variables are treated by their response categories that people choose for one category has more of characteristics than if he chooses otherwise. but not measure how much. organization outcome ɀ (in our case measures performance) assumed underlying continuous variables ɀ*. the underlying performance and institutional factors treated continuous variables ɀ* represent respondents attitude to the underlying ordered responses to ɀ and are assumed to range from ∞ to −∞. ˆ πi =φ(ˆτi)−φ(ˆτi−1)=pi this informed us the algorithm follows monotonic distribution, which is the case for continuous and ordinal data with density and distribution functions (jöreskog, 2002). using the polychoric correlation, we can determine the underlying bivariate normality of the transformed monotonic distribution using chi-square likelihood ratio and the goodness of fit statistics. fit model holds the same chi-square likelihood ratio and goodness of fit statistics (jöreskog, 2002). figure 1 (number of male and female entrepreneurs across age groups. i write here because the caption taken from spss is difficult to right at the top of the caption), present the descriptive statistics regarding the number of respondents included in our study. the cross tab result reveals that across age categories, the number of male entrepreneurs is greater than their female counterpart. the result figures as it was predicted by prior researchers. the second table provides information about firm age and sex distribution. the percentages of males dominate as the age of firms increase; firms incepted within the past 5 years and above 5 years mark are dominantly owned by male entrepreneurs. it is difficult to argue at this point the rationale behind this difference, however as had earlier researchers implied perhaps lack of financial support and historical uneven distribution experienced over the past years and women tendencies for employment choice account the rationale (jemal, 2014). edri (2018) had anticipated culture and religion have influenced for insignificant women entrepreneurs located across the region. however, evidences regarding women entrepreneur’s shows that culture is supportive for entrepreneurs irrespective of sex difference, despite all entrepreneurs faces lack of startup capital and informal relationship with authorities preclude disfavored some from pursue opportunities from their surroundings, though the effect is posed similar for men and women entrepreneurs (abdurrahman, 2016). some of these factors include financial shortage, administrative problem and lack of market. however we present next that cultural factors account different than what the earlier studies had predicted. the empirical relationship between age of firms and entrepreneur’s age is what future investigation will specify that it is beyond the scope of this paper. however, we are convinced with the argument entrepreneurship research can be more fruitful if researchers have focus institutional factors and opportunity recognition (shane and venkataraman, 2000; tolbert et al., 2011). the correlation matrix in figure 2 shows some important relationship between three institutional variables and performance indicators. from the table 1 we can deduce that the indicators regulative dimension is negatively correlated with performance indicators and some of the items bear an insignificant effect towards firm performance. generally, all the indicators under the regulative variable were correlated either negative or insignificant with the performance indicators. before running confirmatory factor analysis first, we first conduct cross-validation data collected two occasions. the factor analysis result nesting strictest promax criteria provide two indicators with zero loading with other indicators. however, the third item loads 0.3 and we retained figure 1: age of respondents mohammed: effect of institutional pillars on small and micro enterprises firm performance in ethiopia international review of management and marketing | vol 10 • issue 2 • 202062 figure 2: age of firms and the number of male and female distribution figure 3: the path diagram of the structural equation model the three items from the regulative construct from five items suggestion from busenitz et al. (2000). using the promax criterion we conducted factor analysis and run confirmatory factor analysis. figure 3 depicts the path diagram of our research model shows coefficients for endogenous and exogenous variables. we run first polychoric correlations and asymptotic covariance for the 13 indicators for independent variable. the corresponding result shows roots mean square error approximation (rmsea 0.11 for reg1 and reg2 added variables inflating the root mean square error of approximation of the overall model. as argued by jöreskog, bivariate normality is not an issue if the value of correlation rmsea is not more than 10%) and since our case did not met this moderate criterion we conduct ordinal factor analysis using promax criterion to reduce the items that load poorly with other variables. henceforth suiting corresponding result from the factor analysis that two items from five indicators of the regulative domain were omitted, the resultant outcome holds bivariate normality and with rmsea 0.049) and the cross validation result found sufficient to accept the hypothesized model. the corresponding indices reveals (gfi = 0.98, agfi = 0.97, nfi = 0.92, nnfi = 0.98, cfi = 0.98, ifi = 0.98) all beyond the requirement, since value >0.9 is considered for the acceptable model. table 2 presents the result of structural equation model table 1: correlation matrix in 1 2 3 4 5 6 7 8 9 10 11 12 13 14 reg1 reg2 0.674 reg3 0.468 0.476 nor1 0.099 0.050 0.025 nor2 0.058 0.083 0.134 0.592 nor3 0.152 0.195 0.240 0.390 0.588 nor4 0.095 0.090 0.184 0.524 0.403 0.551 cog1 0.178 0.198 0.009 0.074 0.010 0.139 0.107 cog2 0.003 0.059 0.058 0.095 0.044 0.163 0.156 0.544 cog3 0.074 0.136 0.112 0.138 0.146 0.208 0.151 0.431 0.672 cog4 0.035 0.087 0.137 0.051 0.047 0.279 0.142 0.465 0.508 0.619 sales 0.030n 0.000 0.066 0.214 0.155 0.188 0.151 0.154 0.225 0.135 0.224 nue 0.059n 0.001 0.043n 0.169 0.068 0.143 0.116 0.211 0.215 0.260 0.227 0.216 pi 0.021 0.106 0.028n 0.007 0.083 0.168 0.162 0.194 0.285 0.287 0.228 0.120 0.248 roa 0.014n 0.071 0.051n 0.065 0.036 0.214 0.198 0.353 0.390 0.163 0.249 0.235 0.178 0.39 n: negative correlation. all correlation results with >0.09 are significant at p<0.05. the polychoric correlation result is available with the author and the html format is attached in the appendix mohammed: effect of institutional pillars on small and micro enterprises firm performance in ethiopia international review of management and marketing | vol 10 • issue 2 • 2020 63 summery statistics. by all measurement, the model fits the data well and our prediction regarding organization performance and institutional variables met. figure 4 shows the confirmatory factor analysis and the path diagram of model. as the results seen from the path diagram, entrepreneurial practice can captured though institutional approach. the three factor model is better to illuminate entrepreneurship practice across micro and small enterprises under the case we had examined. the covariance result show distinctiveness of each construct. entrepreneurship practice from cross sectional data confirm the effect of institutions invariably affect individual effort pursuing profitable opportunities from around their circles. table 3 the effect of institutions on organization entrepreneurial outcome (the analysis followed without reducing indicators with poor factor loading with other variables, to show the general effect that we reduced for confirmatory factor analysis shown earlier). the table 3 shows organization performance successfully predicted nesting institutional factors. the coefficient, measured diagonally weighted parameterization based on scholars recommendation shows entrepreneurs cognitive domain bear a positive influence on organization performance in small and micro organization. followed by the normative environment in which 23 and 11% change in organization performance predicted by the cognitive and normative environment respectively. however, the table 2: summary of structural equation modela model χ2 (df) ecvi cfi nfi nnfi rmr rmsea gfi agfi ifi 1 103.99* 1.21 0.98 0.92 0.98 0.056 0.035 0.98 0.97 0.98 athe chi-square test measures the overall fit of the model to the data. fit model rejects the null hypothesis. of course, with large sample size the value of chi-square appear obviously shows significant, however the smaller the value and nearer value to the degree of freedom, the better is the significance of the statistical model. the chi-square divided by its degree of freedom with <2 shows the better fit the data to the model. the cfi measure the proportion of total variance explained by the model with acceptable 0.90 and better if >0.95. the nfi and others incremental fit indices (nnfi and rfi) measures the incremental index comparing the model with restricted baseline model. the acceptable level is 0.9. the root-mean-square residual is standardized summery statistics for residual, and 0.05-0.06 is acceptable. the root mean square error approximation now seems a universal indicator for fit indices in structural equation modeling. 0.05 is acceptable and 0 appear perfect fit. it measures the test of the null hypothesis of close fit. rmsea value with >0.08 is bad fit that show separation between the data and specified model. the gfi indicates how well the data fits the model. the parsimonious model adjusted for saturated data measured by (agfi) 0.9 and above is acceptable value. in all the indicators for fitness indices, we can reject the null hypothesis that our data is predicted by the statistical model we nested. our model is statistical fit. **p<0.01. cfi: comparative fit index, nfi: normed fit index, gfi: goodness of fit figure 4: confirmatory factor analysis of institutional factors mohammed: effect of institutional pillars on small and micro enterprises firm performance in ethiopia international review of management and marketing | vol 10 • issue 2 • 202064 regulative domain is insignificant to determine performance and a fleeting negative impact. the magnitude of relationship between institutional factors and firm performance is strong significant except the regulative environment, though the effect is significant negative when two factors are reduced from the five indicators. the chi-square test provides significant value for null hypothesis to hold in all the three factors. as seen from the above path diagram that the effect of institutions on the firm performance succinctly predicted using institutional framework. 5. conclusion, findings, and suggestions structural equation modeling is powerful technique to measure relationships in unobserved variables from observed indicators across complex research setting (jöreskog, 1973). as observed from the data analysis that institutional variables affect sme performance what been under emphasized by previous researchers. prior fragmented efforts had measured regulative environment in line with measuring performance in small business arena. for instance, the assessment network between institutions and identified factors that inhibit success so, argued that entrepreneurs get minimum support from institutions due to the loose interaction between formal institutions, thus their performance is highly affected. however as our finding make apparent that individual’s interpretation of norms and their attitude towards innovation is more important than support from formal institutions for firms to succeed. here, it is not to deny the importance of formal institutions support for firm’s success, rather to remind caution in our interpretation about the importance of formal institutions, since it is only one thread of the full picture and there are important two dimensions equally important determinant for firms success under the institutions umbrella so that the regulative dimension alone is not enough to claim its significance for sme performance. as we successfully showed that the underlying driver regarding firm performance is found in the normative and cognitive dimensions, the regulative environment including the five indicators is negative and insignificant affecting organization performance in micro and small enterprise in the study site. even more important relationship than what one can assume is emerged from normative and cognitive institutional domain than what is traditionally expected the influence to source from regulative domain, that illuminate a lot of important implications. this was argued from the business development point of view, as prior researchers able to identified that business development support for the business fail to achieve the intended result due to lack of appropriate skills among workers assigned for this particular service, even though most of them are eager and committed to serve the business community in delivering the service. however, most owners replied that what the business really needs and what the employee can offer is mismatched. while they are seeking for market information and require marketing training, the workers may offer kaizen training or cost administration training. the gedi (2018) report shows the importance of economic freedom and its institutional milestone underpinning for economic freedom to prevail, however direct government involvement beyond liberalize economic environment has given little focus. moreover, the research approached only medium enterprises with de novo entrepreneurial quality. the comparison neglects the background realities of countries which may fail to portray the full entrepreneurship faces, since countries historically are different one another in their institutional buildup and various disposition at different time period or different factors (acemoglu et al., 2001) however, the institutional profile perspective considers both the macro level and individual factors immersing innovation practices plausible for various contexts. for instance, (oliver, 1997) proposed three level institutional factors that confounds resource usage and firm strategy in established organization. the conceptual framework above shows interplay between institutional factors and resource usage includes both the individual, organizational, and formal rules that all equally important to assess institutions. boris (2016) had extended the institution phenomenon to social entrepreneurship practice across the developing countries and shows the significance of the model. most entrepreneurship researches in ethiopia have focused potential challenges and opportunities facing small enterprises. studying entrepreneurship seems studying the practice of micro and small enterprises in the country for the past many years, as is the case in this research too. most studies directed their attention towards micro finance institutions and government support available for business owners (edri, 2018; haile and batra, 2015). however, the study of entrepreneurship should nest from different perspective. the importance of this research stems from this concern. as argued well by busenitz et al. (2000) the variation between countries’ entrepreneurial practices captured enticing the institutional framework prevailed in the business arena. empirical findings from research summery conducted in developing countries regarding entrepreneurship entailed challenges practice in developing countries stems from institutional obstacles. the later statement implies that those countries exposure towards different development strategies subsequently implemented to resolve poor development status of the regions. volume of researches had illustrated; export promotion development strategy promulgated by the then governments to harness economic development and secure competitive advantage. the result shows investment decisions are twisted towards government agenda rather than alleviating socioeconomic problems. accesses to finance and allocation was not based on project feasibility criterion, rather was determined by the government intention and development agendas. conglomeration was advocated to secure organization efficiency ignoring small business growth potential (acs and virgil, 2010) the result is that export promotion failed and most countries exposed to stringent bureaucracy that frustrated private entrepreneurs with the daily administrative routines. following end of colonial period, most developing countries adopted import substitution strategy following endorsement by scholars for substitution for local produces. factors like lack of technological advancement and difficulty table 3: the ordinal regression result unstandardized standard error z‑value regulative β=−0.088 0.284 −0.313 normative β=0.106** 0.041 2.58 cognitive β=0.234** 0.0461 5.08 p<0.01 0.754 0.010 0.001 mohammed: effect of institutional pillars on small and micro enterprises firm performance in ethiopia international review of management and marketing | vol 10 • issue 2 • 2020 65 in production efficiency levied investments to unbearable difficulties to achieve the intended result. however, not only developing countries, but in the industrialized nations too, small businesses surmounts the high-techs in job creation and contribution to the economic growth as was observed by birch (1979). henceforth most countries adopted small business strategy as their top priority to mitigate unemployment and fostering innovation. at this juncture, studying entrepreneurship equated to the study of small business and most countries private entrepreneurs as engine for growth (storey, 1994). following this trend, most developing countries also considered small business strategy for economic growth and job opportunity particularly for young population. it was observed that entrepreneurial development agenda outperformed its predecessors export promotion and import substitution (acs and virgil, 2010). for instance, in factor productivity and export earning, the later entrepreneurship strategy had more than triple advantage over import substitution and export promotion strategies. however, the prolonged negative effect from both export promotion and import substitution, like bureaucratic red tapes, corruption, and mal administration shrugged from entrepreneurial thrive. therefore, the importance of institutional problem related to private entrepreneurship emanated from this points view as argued by the researchers. similar to the above argument, most studies in ethiopia regarding entrepreneurship practice focused on institutional caveats though implicit in evaluation. the pioneer empirical study (eshetu, 1994) assesses privatization process in the country and corresponding institutional platform after the downfall of military regime in 1991. the finding stated private businesses face financial shortages, limited resource and lack of managerial skills. despite these problems, private oriented economic policy relatively observed efficient compared to state owned business and promising pathway was commenced at the beginning of the new regime. for most part of the subsequent studies, the focus remains on identifying potential challenges and opportunities small business and private entrepreneurs had squeezed with. the edri (2018) summarized possible factors mentioned in the foregoing researches using sample from large data. the finding reveals that financial, problem, market information; poor infrastructures are hampering entrepreneurial endeavors in most part of the country. institutional problems however get minimal attention so far. the first result confirmatory factor analysis shows that the entrepreneurial practice across micro and small firm employing institutional theory. the covariance between regulative environment and normative (0.22) confirmed that variables are measure different attributes of the domain. similarly the normative indicators are covariates to the cognitive pillar (0.23). moreover, the regulative factors are covariates to cognitive institution variables (0.16). thus, the result shows that entrepreneurial practice is positively correlated to institutional variables and institution construct measures same behavior but distinctive domains. the main implication of this relationship between these variables is that an isolated effort extoled support for startups and an independent treatment leads to futile result. since, the meaning of normative implied seek understanding societal norms, it is an input for formal institutions to guide owners manufacture products needed by the society than what they believe is important. it is because that culture bears influence about organizations legitimacy and if societal values are positive for innovation practice, thus beyond acquiring support from formal institutions, sme’s ability about understanding normative values are important for success. this finding is consistent with the finding evident in busenitz et al. (2000) and abdurrahman (2016), as we successfully posits cultural facets is positively related with innovativeness across the region which is not the case in prior findings. the cultural value and prevailing societal norm is not prohibitive for entrepreneurship practice, and the societal admiration is back entrepreneurs to start their business and is also backing them to succeed. one entrepreneur responds to our question of how creativity is seen within the society “the society because of my creation of mobile cafeteria, whatever problem they had faced, they come to me, even the older ages, the seek my advice as if i know everything else in this world. they tell to their children to be me when they grow up.” we had also observed children imitate at their play driving false motor cycles and serve their fellow playmates. the variance explained by the model data analysis is sufficient to claim that most entrepreneurs positively perceive norms and use as input for innovation. thus, understanding societal value make entrepreneurs who aspire to pursue innovation across the sme sector should develop positive impression towards the society they emerged from. this result is also that cultural support towards innovation exist sme entrepreneurs in ethiopia. the assertion is that culture is not stand against innovation, rather evidences table 4: research result, evidence from survey, 2019 hypotheses accept/reject implication h1 there is a significant relationship between regulative pillar and entrepreneurial practice h2 the regulative environment has insignificant influence on performance in micro and small enterprise sector h1 accepted h2 accepted the regulative institution explains entrepreneurship practice however, the interaction that regulative environment with firm performance is negative and insignificant h3 there is significant relationship between normative pillar and entrepreneurship practice indulge h4 the normative institution is positively related to organization performance in micro and small enterprises h3 accepted h4 accepted the normative institutions including values, cultural factors, and societal perception towards innovation among ethiopian positive and supportive for entrepreneurs to advance their firm growth h5 there is significant relationship between cognitive domain and entrepreneurship practice h6 there is negative relationship between entrepreneurs’ cognitive domain and organization performance h5 accept h6 rejected from empirical literatures conducted in ethiopian context and the research anticipated that among most ethiopian entrepreneurs there lacks mindset and preparedness for success. however, the empirical evidence shows, most entrepreneurs in ethiopia developed a mindset and preparedness impetus for the firm success mohammed: effect of institutional pillars on small and micro enterprises firm performance in ethiopia international review of management and marketing | vol 10 • issue 2 • 202066 shows admiration for innovation practice existed within society and most entrepreneurs before engaging in to the business, they develop positive attitude towards norms and values inherited within the society. in similar notation, the value system assessment (reynolds, 2014) similarly contemplates ethiopia as consistent as ours which shows positive value system for innovation prevailed within the society as it is peculiar to entrepreneurship thrive. the paucity is found in regulative environment, the norm or the cognitive aspect of entrepreneurship (table 4). 6. suggestion for future research this paper showed that two of the three institutional pillars positively affect firm performance; however regulative pillar has insignificant effect across sme. enterprise owners need know the norm and values persist within the social under which they operate their business because important for legitimacy, is detrimental for better performance. similarly, most researches had focused government support and financial capacity as primary driver for firm performance; however our empirical research showed that support from formal institutions and governmental establishments is insignificant for firm performance though is important for entrepreneurs to start their business. hopefully, future research will show the interaction between institutions and resource endowment and their impact towards performance through a longitudinal research or via using financial information from secondary sources as performance measurement. moreover, future research will benefit from the research insight and employ this approach in a cross-sectional study. 7. acknowledgements the author would like to thank jigjiga university for financial support and sponsor this research project, otherwise would be difficult to realize it. last but not least, the author give hearth felt gratitude for habtamu girma, mamo terefe, and remedan kenedid and abdisalan adil for their comments and assistance during the whole research process. references abdurrahman, m. 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(1986), measurement of business performance in strategy research: a comparison of approaches. the academy of management review, 11, 801-814. international review of management and marketing vol. 2, no. 1, 2012, pp.52-58 issn: 2146-4405 www.econjournals.com human resource management practices and employees’ satisfaction towards private banking sector in bangladesh md. tofael hossain majumder department of accounting and information systems, comilla university, comilla, bangladesh. phone: +8801816436176. email: tofael_cou@yahoo.com abstract: dramatic advances of information and communication technology (ict), changing mix and personal values of the workforce, emergence of the knowledge economy and increasing global competition have created enormous challenges on organizations. to cope with the challenges efficiently, human resource has been considered as one of the most important factors in today’s hypercompetitive market place. the focus of this study is to gain an insight into the current hrm practices and its impact on employee’s satisfaction on the private banking sector in bangladesh. for conducting this research, 100 bank employees are selected from the chosen banks and out of this 88 employees responses properly, the response rate is 88 percent. the questionnaire consists of different questions on nine hrm dimensions such as recruitment and selection systems, compensation package, job security, career growth, training and development, management style, job design and responsibilities, reward and motivation and working environment. the questionnaire was developed by using a five point likert scale. in this study, some statistical measures such as z-test, mean and proportion analysis is used to examine employee’s satisfaction. the study reveals that all hrm dimensions exercised in the private banking sector of bangladesh does not satisfied to the employees equally. most of the employees are dissatisfied with compensation package followed by reward and motivation, career growth, training and development, management style, and job design and responsibilities. so, these hrm dimensions quality should be improved for the betterment of the bank’s success. keywords: human resource management; employees satisfaction; private bank; z-test. jel classifications: m10; m12; m19 1. introduction dramatic advances of information and communication technology (ict), changing mix and personal values of the workforce, emergence of the knowledge economy and increasing global competition have created enormous challenges on organizations. to cope with the challenges efficiently, human resource has been considered as one of the most important factors in today’s hypercompetitive market place. in the context of a developing economy like bangladesh, where the need for formation of capital is pressing, where developments in the field of industrial and bank management are dynamic, and where financial crises accompanying pangs of economic growth are frequent, the challenges posed by hrm are great importance; and, as a sequel, exploring the possibilities of the application of hrm becomes a very relevant field of enquiry and research. beerdwell et. al. (1984) defined hrm as a strategic approach to the management of human resources that involves all management decisions and actions that affect the relationship between the organization and employees. beardwell et al., (2004) regard hrm as the philosophy, policies, procedures, and practices related to the management of people within an organization. senyucel’s (2009) sees hrm as a combination of people-centered management practices that recognizes employees as assets and geared to creating and maintaining skilful and committed workforce for achieving organizational goals. hrm is a distinctive approach to employment management which seeks to achieve competitive advantage through the strategic development of a highly committed and capable workforce using an integrated human resource management (hrm) practices and employees’ satisfaction towards private banking sector in bangladesh 53 array of cultural, structural and personnel techniques (storey, 2001). human resource measurement is about valuing the contribution people make to the success of an organization, and the term ‘human capital’ describes the contribution made by human skills and knowledge to the production of goods and services (becker, 1993). from these definitions, it is clear that efficient hrm practices are inevitable factor in determining the growth and prospects of any organization. human resource is the most precious asset and delicate factor of production. in this global competitive world, it is necessary to retain skilled workers in the organization by efficient hrm practices. every organization operates its activities with the support of human resource which includes top level managers, executives, supervisors and other employees. the overall performance of any organization depends upon the extent to which human resource is effectively utilized. highlighting the importance of people in organization, khera (1999) opined that today when most business houses are obsessed with total quality management (tqm) in order to stay ahead of competition, very few organizations realize that their most precious assets are their employees. due to lack of efficient hrm practices reduces employee’s satisfaction towards their organization and ultimately that affects their commitment to the organization. 2. objectives of the study the objectives of the study are to measure employees’ satisfaction on the hrm practices of private banking sector in bangladesh. to that end, the specific objectives are:  to provide an overview and analysis of hrm practices;  to focus the dimensions of hrm practices;  to propose a test for measuring employee’s satisfaction by hrm practices;  to examine weak points of hrm practices which affects employees’ satisfaction;  to provide some suggestions for improving hrm practices and employee’s satisfaction. 3. literature review human resource management (hrm) is considered a critical organizational resource that helps an organization sustain its effectiveness. it is one important area that influences a number of employees' attitudes and behavior such as intent to leave, levels of job satisfaction, and organizational commitment (lee & heard, 2000). pfeffer (1998) suggested that soft or high commitment human resource management practices are those that generate trust in employees and these practices include giving employees empowerment and involvement in decision making; extensive communication about functioning and performance of the employees service; designing training for skills and personal development of employees; selective hiring; team-working where idea are pooled and creative solutions are encouraged; rewards system that commensurate with effort; reduction of status between the management and staff and all workers are valued regardless of their role. according to macky & boxall (2007), the scientific literature assumes a causal link flowing from hrm practices to organizational performance via the responses of employees. organizations that do not pay equitably compared to others may lose their employee’s because of the non-competitive compensation package (adams, 1965). according to lawler (2005), society has entered a new era in the relationship between organizations and their employees. in this new era, people are the primary source for a company’s competitive advantage and organizational prosperity and survival depends on how employees are treated. the ‘human’ aspect of hrm is concerned with the relationship between employer and employee and it associated with the human relations movement and the concept of high commitment work practices developed by (walton, 1985). the best human resource practices areas are recruitment and selection, socialization, job design, training, communication/participation, career development, performance management, employee reward and job security (huselid, 1995). it is plausible that when employees judge the organization to be fair and supportive in their treatment particularly with regards to the availability and frequency of promotional opportunities, adequacy of pay and good supervision, positive feelings of well being will be created, which is likely to stimulate that to reciprocate by increasing their loyalty to the organization and reducing turnover (nasurdin et. al., 2001). the motivation and opportunity focused bundles of human resource practices positively related to affective commitment and negatively related to turnover (gardner et. al., 2007). wayne et. al. (1997) suggested that hrm practices that signaled the organization's intentions to invest in employees (such as developmental international review of management and marketing, vol. 2, no.1, 2012, pp.52-58 54 experiences and training) produced higher levels of affective organizational commitment. hr practices such as pay, benefits and training are negatively related to turnover because they motivate employees and "lock" them to their jobs (lazear, 1986; madrian, 1994; gruber & madrian, 1994). shaw et al. (1998) indicate that involuntary turnover is affected by staffing practices (recruitment and selection process) and employee monitoring (performance appraisal). decenzo and robbins (1996) opine that employee training has become increasingly important as job have become more sophisticated and influenced by technological changes. bernardin and russel (1993) opine that over the years, training has become increasingly popular as hr tool for improving employee and managerial performance in organization. buck and watson’s (2002) indicated nine important hrm practices such as decentralization, compensation, participation, training, development, employment security, social interactions, management style, communications, and performance appraisal. according to klaus et al. (2003), through better job assignment or work design, employees may display greater commitment, leading to better job performance. on the basis of the above literature review, the study consider the following dimensions of hrm practices have impacts on employees’ satisfaction towards organization such as recruitment and selection systems, compensation package, job security, career growth, training and development, management style, job design and responsibilities, reward and motivation, and working environment. 4. methodology of the study this paper is based on both primary and secondary data. primary data were collected through a structured questionnaire which was administered personally to the bank employees. convenient sample technique has been used to interview the employees. the target population of this study was employees in dhaka city who are serving as a banker of different private banks. among various banks, this study only considered 20 private commercial banks. for conducting this research, 100 bank employees are selected from the chosen banks and out of this 88 employees responses properly, the response rate is 88 percent. the questionnaire consists of different questions on nine hrm dimensions such as recruitment and selection systems, compensation package, job security, career growth, training and development, management style, job design and responsibilities, reward and motivation and working environment. the questionnaire was developed by using a five point likert scale, whereas 1 = dissatisfied, 2 = some how satisfied, 3 = satisfied, 4 = moderately satisfied, 5 = highly satisfied. but some secondary data have been used in the study. the secondary data used in the study have been collected from related journals, books, newspapers and internet, etc. in this study, some statistical measures such as z-test, mean and proportion analysis is used to examine employee’s satisfaction. 5. hypotheses development on the basis of the various factors affecting on hrm practices, the following hypotheses are developed for the study: h1: employees’ are satisfied on “recruitment and selection systems”. h2: employees’ are satisfied on “compensation package”. h3: employees’ are satisfied on “job security”. h4: employees’ are satisfied on “career growth”. h5: employees’ are satisfied on “training and development”. h6: employees’ are satisfied on “management style”. h7: employees’ are satisfied on “job design and responsibilities”. h8: employees’ are satisfied on “reward and motivation”. h9: employees’ are satisfied on “working environment”. human resource management (hrm) practices and employees’ satisfaction towards private banking sector in bangladesh 55 6. analysis and findings 6.1 h1: employees’ are satisfied on “recruitment and selection systems”: it is assumed from the hypothesis that employees are satisfied on the current recruitment and selection systems of their bank i.e. the recruitment system is fair and appropriate for the appointment to the job. table 1 shows that at 0.05 level of significance (two tailed test), table value (1.96) is greater than calculated value (z = 0.55). so, the null hypothesis is accepted and hence, we conclude that employees are satisfied on recruitment and selection systems of their bank. table 1. computation of z value employees satisfaction dimensions n mean standard deviation standard error z value (calculated value) mean rank recruitment and selection systems 88 3.06 0.99 0.11 0.55 01 compensation package 88 2.03 0.99 0.11 8.82 09 job security 88 3.03 1.17 0.12 0.25 02 career growth 88 2.13 0.98 0.10 8.7 07 training and development 88 2.30 1.03 0.11 6.36 06 management style 88 2.49 1.03 0.11 4.64 05 job design and responsibilities 88 2.54 1.00 0.11 4.18 04 reward and motivation 88 2.10 1.03 0.11 8.18 08 working environment 88 3.02 1.13 0.12 0.17 03 6.2 h2: employees’ are satisfied on “compensation package”: this hypothesis indicates that employees are satisfied with present salary, increment allocation method and other compensation packages. table 1 shows that at 0.05 level of significance (two tailed test), table value (1.96) is less than calculated value (z =8.82). so, the null hypothesis is rejected and hence, we conclude that employees are not satisfied on compensation package of their bank. 6.3 h3: employees’ are satisfied on “job security”. it is assumed from this hypothesis that employees are satisfied with security to their job. table 1 shows that at 0.05 level of significance (two tailed test), table value (1.96) is greater than calculated value (z =0.25). so, the null hypothesis is accepted and hence, we conclude that employees are satisfied on job security of their bank. 6.4 h4: employees’ are satisfied on “career growth”. this hypothesis indicates that employees are enjoy enough space for his/her career growth.table 1 shows that at 0.05 level of significance (two tailed test), table value (1.96) is less than calculated value (z =8.7). so, the null hypothesis is rejected and hence, we conclude that employees are not satisfied on career growth of their bank. 6.5 h5: employees’ are satisfied on “training and development”. this hypothesis indicates that training and development program are available in the bank and employees are satisfied on that program. table 1 shows that at 0.05 level of significance (two tailed test), table value (1.96) is less than calculated value (z =6.36). so, the null hypothesis is rejected and hence, we conclude that employees are not satisfied on training and development of their bank. 6.6 h6: employees’ are satisfied on “management style”. this hypothesis indicates that management style is very flexible for employees and they involved with the managerial decision making. table 1 shows that at 0.05 level of significance (two tailed test), table value (1.96) is less than calculated value (z =4.64). so, the null hypothesis is rejected and hence, we conclude that employees are not satisfied on management style of their bank. international review of management and marketing, vol. 2, no.1, 2012, pp.52-58 56 6.7 h7: employees’ are satisfied on “job design and responsibilities”. the hypothesis indicates that job is properly designed and employees are easily performed their task. employees receive fair treatment, recognition and overall quality supervision from boss. table 1 shows that at 0.05 level of significance (two tailed test), table value (1.96) is less than calculated value (z =4.18). so, the null hypothesis is rejected and hence, we conclude that employees are not satisfied on job design and responsibilities of their bank. 6.8 h8: employees’ are satisfied on “reward and motivation”. the hypothesis indicates that various financial and non-financial reward and motivation system is present in their bank, employees are satisfied on that system. table 1 shows that at 0.05 level of significance (two tailed test), table value (1.96) is less than calculated value (z =8.18). so, the null hypothesis is rejected and hence, we conclude that employees are not satisfied on reward and motivation of their bank. 6.9 h9: employees’ are satisfied on “working environment”. this hypothesis indicates that the physical working environment is very conducive for satisfaction at large. table 1 shows that at 0.05 level of significance (two tailed test), table value (1.96) is greater than calculated value (z =0.17). so, the null hypothesis is accepted and hence, we conclude that employees are satisfied on working environment of their bank. from the above hypotheses testing it shows that employees are satisfied on some dimensions of hrm practices such as recruitment and selection systems (mean rank-01), job security (mean rank02) and working environment (mean rank-03).the hypotheses test also shows that employees are not satisfied on some dimensions such as job design and responsibilities (mean rank-04), management style (mean rank-05), training and development (mean rank-06), career growth (mean rank-07), reward and motivation (mean rank-08) and compensation package (mean rank-09).therefore, it is clear that all dimensions are not equally satisfied to employees. it is also very clear from the table 2 which dimensions highly satisfied or dissatisfied to employees. table 2. percentage of employees on different levels of satisfaction of hrm dimensions rss1 cp2 js3 cg4 td5 ms6 jdr7 rm8 we9 1 = dissatisfied 7.95 32.95 9.09 30.68 22.73 13.64 11.36 31.82 9.09 2 = some how satisfied 17.05 40.91 19.32 37.5 42.05 45.45 43.18 38.64 22.73 3 = satisfied 43.18 19.32 39.77 22.73 22.73 25 29.55 20.45 36.36 4 = moderately satisfied 25 3.41 22.73 6.82 7.95 10.23 11.36 5.68 20.45 5 = highly satisfied 6.82 3.41 9.09 2.27 4.55 5.68 4.55 3.41 11.36 totals 100 100 100 100 100 100 100 100 100 rss1 = recruitment and selection systems cp2 = compensation package js3= job security cg4= career growth td5= training and development ms6= management style jdr7= job design and responsibilities human resource management (hrm) practices and employees’ satisfaction towards private banking sector in bangladesh 57 rm8= reward and motivation we9= working environment table 2 shows percentage of employees on different levels of satisfaction of hrm dimensions. the table indicates that the highest 43.18 per cent employees are satisfied on recruitment and selection systems followed by 39.77 per cent on job security, 36.36 per cent on working environment, 29.55 per cent on job design and responsibilities, 25 per cent on management style, 22.73 per cent on career growth as well as training and development, 20.45 per cent on reward and motivation and the lowest 19.32 per cent on compensation package. table 2 also shows that the highest 11.36 per cent employees are highly satisfied on working environment and the lowest 2.27 percent on career growth. the study also indicates that the highest 32.95 per cent of employees are dissatisfied on compensation package followed by 31.82 percent on reward and motivation, 30.68 percent on career growth, 22.73 per cent on training and development, 13.64 per cent on management style, 11.36 percent on job design and responsibilities, 9.09 per cent on job security as well as working environment and the lowest 7.95 per cent on recruitment and selection systems. therefore, the analysis shows that employees are not fully satisfied on any hrm dimensions of their bank. so, the hrm dimensions quality should be improved for the betterment of the bank’s success. 7. conclusion and recommendations the study disclosed the relationship between employees’ satisfaction and various dimensions of hrm practices. in this study, we considered nine major factors which represented most of the human resources management practices followed by different private banks. the study reveals that all hrm dimensions exercised in the private banking sector of bangladesh does not satisfied to the employees equally. most of the employees are dissatisfied with compensation package followed by reward and motivation, career growth, training and development, management style, and job design and responsibilities. it is obvious that hrm practices in the private banking sector of bangladesh has not been fully developed and there is the urgent need to employ the services of hr professionals, consultants and researchers to help shape and develop new directional focus that will ensure an efficient and effective human resource practices. we suggest the following recommendations for doing perfect hrm practices in the private banking sector of bangladesh: bank should give various financial and non-financial benefits to employees according to their performance. this will make them more devoted to the work and their satisfaction will be definitely high.  bangladeshi’s economy allows the importation of new technologies to enhance hrm, but training is still a bit slow, thus employment of expatriates to handle such is still encouraged.  the cooperation and coordination between management and employee should be developed because it is crucial for effective and efficient functioning of an organization.  attractive compensation package should be given to the employees.  management should make a clear cut career advancement path. finally, this paper suggest that bank should review existing pay practices so as to offer fair pay, provide challenging and meaningful work tasks, and foster positive co-worker relationships in order to create a good working environment. references adams, j.s. 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(1997). perceived organizational support and leader-member exchange: a social exchange perspective. academy of management journal, 40, 82–111. . international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2020, 10(2), 50-55. international review of management and marketing | vol 10 • issue 2 • 202050 the relationship between religious tourism and international christians visitor’s perceptions: a case study of a mount nebo holy site in the hashemite kingdom of jordan mohammad ibrahim al-zoubi1*, yahaya ibrahim2 1department of tourism, faculty of applied social sciences, universiti sultan zainal abidin, malaysia, 2faculty of applied social sciences, universiti sultan zainal abidin, malaysia. *email: mohammed_zoubi@yahoo.co.uk received: 30 january 2020 accepted: 01 march 2020 doi: https://doi.org/10.32479/irmm.9321 abstract throughout the world, the tourism industry is developing at an astonishing rate and contributing to the economy. since the past decade, it has been continuously evolving by diversifying itself. within the tourism sector, religious tourism is considered a vital aspect where tourists are motivated due to religious aspects. considering this aspect, jordan must be analyzed for its business activities since religious tourism contributes significantly to the economy. within the current research, the association amongst religious tourism and the perception of the christian visitor towards the holy site of mount nebo would be analyzed. the empirical research would be carried out using the likert scales which is part of the survey method. the data gathered would be helpful in extracting information regarding the association of religious tourism at the holy site of mount nebo and the perception of christian visitors. the dimensions used to measure the perception of the visitors are accessibility; security and safety; hospitality and local people; social life at the holy site area and; prices. according to the results, the perception of christian visitors towards the five dimensions was significant. within a statistical sense, these dimensions and religious tourism maintain a positive relationship. keywords: jordan, religious tourism, mount nebo, visitor’s perception, holy land, christians tourists jel classifications: z32, z31, z33, z39, n95, z12 1. introduction religious tourism is significantly motivated by religious an aspect which is why it is considered a special tourism form and is one of the most ancient kinds (fatima et al., 2016). as part of religious tourism, travelers visit holy places and perform their religious practices. the pilgrims are from all over the world which is why the holy sites are developed based on universal requirements (ibrahim et al., 2020). judaism, buddhism, hinduism, islam, and christianity are the most noticeable world religions which is why their tourism areas are of much importance. the pilgrims have their own level of significance for their specific religious sites (fatima et al., 2016). each year, nearly 200 million pilgrims are traveling where christians are 150 million and approximately 40 million comprise muslims, jews, buddhists and hindus (ibrahim et al., 2020). within the modern era, as compared to their predecessors, religious tourists are presented with better opportunities to visit their holy sites throughout the world. there is an increase in the visits made to places like the holy land and mecca. the visits are made by the people to gratify their religious obligations (fatima et al., 2016). within the sphere of christianity, there is a strong tourism foundation for science, culture, and history. hence, the christian tradition believes in tourism and traveling quite strongly. there has been significant growth in religious tourism since the beginning of the new millennium (ibrahim et al., 2020). globally, and in the year of 2018 there are approximately this journal is licensed under a creative commons attribution 4.0 international license al-zoubi and ibrahim: the relationship between religious tourism and international christians visitor’s perceptions: a case study of a mount nebo holysite in the hashemite kingdom of jordan international review of management and marketing | vol 10 • issue 2 • 2020 51 300 million travelers generating around $18 billion in revenue (ibrahim et al., 2020). 1.1. jordan’s product during the year 2017, approximately 4.2 million visitors were found in jordan and the target is that by the year 2022, this number would increase to 7 million and nearly 10-12% of gdp is contributed by these tourists and the share is expected to double (morris, 2018). the data presented by the international monetary fund suggests that during the year 2017, $40.49 billion ($5,680 per capita) was the gdp of jordan (morris, 2018). there were several destinations within the archaeological, cultural and religious context presented by jordan (bader, 2012; harahsheh, 2009a). religious tourism has been observed to be a significant niche market aspect according to the jordan national tourism strategy (nts). the biblical sites are over fifty and the primary pilgrimage sites, as stated by the vatican, are nearly six destinations (ibrahim et al., 2020). mount nebo is one of these sites. islam, christianity, and judaism are three religions that meet in jordan. additionally, it is the place, specifically petra and mount nebo, where moses and aaron passed away. the decapitation of john took place in makawir (arabic) or macharius and baptizing of jesus occurred (al-louzi, 2013; ibrahim et al., 2020). furthermore, in jordan, there are several islamic shrines of the companions of the prophet muhammad (bader, 2012; harahsheh, 2009a; ibrahim et al., 2020; mustafa, 2014). in jordan, the industry for religious tourism has developed in a significant manner since 1903 when the hijaz railway was built in amman. during the 1950s and 1960s, it had been formed in a dynamic manner keeping in mind the main destination which is jerusalem (bader, 2012; ibrahim et al., 2020). the papal pilgrimages grants much respect to jordan as in 1964; pope paul vi paid a primary visit. furthermore, in 2000, pope john paul ii visits and in 2009, there was a visit by pope benedict xvi (harahsheh et al., 2007; ibrahim et al., 2020). the jordanian financial and political economics developed in a significant manner due to the visits made by the pope. “the jordanian religious tourism is established as well as developed considering it as a holy land feature. for the government, the jordanian christian and biblical religious holy places maintain a unique level of excitement” (ibrahim et al., 2020. p. 74). 1.2. visitor’s perceptions it is vital to recognize the importance of perceptions since the behavior and patterns of the tourists is based on this perception towards reality and not the actual reality. various factors which affect perceptions have been presented by researchers such as (kartal et al., 2015; kumar and singh, 2015; olsen, 2013; rinschede, 1992). these factors are perceiver factors, situation factors, and target factors. religious tourism and perception maintain a strong association along with expectations, experiences, requirements, interests, and attitudes (collins-kreiner, 2018; govers et al., 2007; kumar and singh, 2015). hence, there are several methods available to measure the perceptions of visitors. within the current research, the perceptions of the visitors would be measured using five dimensions which are accessibility, security and safety, hospitality and local people, social life at the holy site area and prices. the holy site of mount nebo visitors usually observe these aspects when developing their perceptions. 1.3. mount nebo mount nebo located ten kilometres from the roman-byzantine town of (madaba). the jordan valley is observed from mount nebo as it is 800m above sea level and the dead sea. it was mount nebo where moses saw the holy land and took his last breath (bader, 2012; harahsheh, 2009b). it is referred to as siyagha, an aramaic word used for a monastery. the area was created as a religious site a year after it was purchased from the holy land by the franciscans. during the day, the dome of rock can be seen by the visitor along with the church towers present in jerusalem. furthermore, it is believed that the burial of moses took place in mount nebo (figure 1). in arabic, mount nebo is referred to as jabal al-siyyagha and can also be found in the bible (in deuteronomy 34:1-4). “then moses climbed mount nebo from the plains of moab to the top of pisgah, across from jericho. there the lord showed him the whole land – from gilead to dan.” (testaments et al., n.d.) mount nebo used to be visited since 1564. in 1963, it was purchased by franciscan monastic. it was from this time that archaeology started or a long term project initiated that is seen till date (bader, 2012). a church was also rebuilt after the purchase (harahsheh, 2009a). under the franciscans, the mountain was to be changed into a refuge. within the middle east, the most significant historical site for the christians is mount nebo (bader, 2012). from the year 2000, it was the most visited pilgrim destination. in table 1, the mount nebo tourist arrival number can be observed along with the 2014-2019 relative changes. source: (mota, 2019) figure 1: mount nebo table 1: number of international tourist arrivals to (mount nebo) 2014-2019 site 2014 2015 2016 2017 2018 2019* % change 18/19 mount nebo 167,904 106,316 110,590 191,036 480,565 445,037 45.6% *until the month of june 2019. source: ministry of tourism and antiquities (ministry of tourism and antiquities, 2019) al-zoubi and ibrahim: the relationship between religious tourism and international christians visitor’s perceptions: a case study of a mount nebo holy site in the hashemite kingdom of jordan international review of management and marketing | vol 10 • issue 2 • 202052 1.4. research objectives • to examine whether accessibility, security and safety, hospitality and local people, social life at the site and prices at mount nebo holy site encourage visitors to visit the location more frequently • to provide a base for researchers in the religious tourism field, and • to explore the relationship between visitors’ perceptions and religious tourism. 1.5. research significance the main objective of this empirical research is to explore the relationship between religious tourism and the visitor’s perception at mount nebo holy site. the research undertook for various reasons: • to tool up knowledge on the relationship between religious tourism and visitor’s perceptions at mount nebo, and • to provide some insights into the interactions between christianity and religious tourism, which are of value to the site management, interested academics and local community around the location, and • this research also provides a guide to the authorities of the tourism industry to take proper measures to promote religious tourism in jordan • to provides a guideline for researchers who, interest to explore the relationship between visitors’ perceptions and other dimensions at different holy sites of different religions. 1.6. research hypothesis “visitors’ perceptions measured in terms of (accessibility, security and safety, hospitality and local people, social life and prices) have a positive impact on religious tourism.” h0: there is no significant correlation between dimensions and religious tourism (p-value > 0.05). h1: there is a significant correlation between dimensions and religious tourism (p-value ≤ 0.05). 2. methodology and empirical framework the research contained a questionnaire survey at mount nebo site in jordan; primary data were collected from international christian tourists and supplemented including the data from the site management. the questionnaire consisted of two sections: • the first section comprised demographic questions related to visitors such as gender, age, nationality, education, etc • the second section includes questions related to five dimensions namely: accessibility, security and safety, hospitality and local people, social life and prices) in the holy site based on a 5-point likert rating scale. to check the validity of the questionnaire, experts and academics suggested a few changes. moreover, to check the reliability, a pilot study managed by distributing fifty-two questionnaires. the reliability related to the dimensions performance is 0.88 which is measured by cronbach’s alpha table 2: respondents‟ socio-demographic profile whole sample n % gender male 220 57.3 female 164 42.7 age (years) 18-30 10 2.6 31-40 144 37.5 41-50 130 33.9 51-60 70 18.2 61+ 30 7.8 marital status single 66 17.2 married/with partner 318 82.8 education secondary education 55 14.3 diploma/advanced diploma 128 33.3 masters/doctorate degree 50 13.0 bachelor degree 147 38.3 still studying 4 1.0 occupation higher management/professional 98 25.5 student 4 1.0 retired 26 6.8 middle/junior management 110 28.6 skilled manual worker 57 14.8 unemployed 8 2.1 self employed/own business 71 18.5 semi-skilled/unskilled worker 10 2.6 household income us $ below 10000 24 6.3 10000-30000 101 26.3 30000-50000 190 49.5 50000-70000 55 14.3 70000-100000 9 2.3 100000 or more 5 1.3 nationality europe 137 35.7 north america 72 18.8 southeast asia 8 2.1 arab countries 20 5.2 east asia 12 3.1 south africa 15 3.9 canada 14 3.6 australia 23 6.0 russia 83 21.6 total 348 100.0 source: primary research test. by employed spss software 20, the researcher measured the relationship between visitor’s perception and religious tourism. 2.1. data collection the total number of international tourists to mount nebo was 480565 in 2018; hence, a random sample was chosen using sample calculator techniques. consequently, 411 questionnaires distributed of which 384 questionnaires returned and found fully completed for the analysis. 2.2. research design descriptive statistics tests were utilized in the demographic analysis, while the five dimensions rated using 5-point likert scales. where: 5=very high, 1=very low. the data from these answers then used to measure the relationship between these al-zoubi and ibrahim: the relationship between religious tourism and international christians visitor’s perceptions: a case study of a mount nebo holysite in the hashemite kingdom of jordan international review of management and marketing | vol 10 • issue 2 • 2020 53 table 3: descriptive statistics of all dimensions dimensions very low low good high very high freq. % freq. % freq. % freq. % freq. % accessibility 11 2.9 45 11.7 157 40.9 152 39.6 19 4.9 security and safety 1 0.3 8 2.1 12 3.1 96 25.0 267 69.5 hospitality and local people 2 0.5 16 4.2 140 36.5 72 18.8 154 40.1 social life at the holy site area 2 0.5 11 2.9 21 5.5 143 37.2 207 53.9 prices 13 3.4 78 20.3 204 53.1 71 18.5 18 4.7 source: primary research table 4: dimensions performance attributes mean* rank** security and safety 4.61 1 social life at the holy site area 4.41 2 hospitality and local people 3.94 3 accessibility 3.32 4 prices 3.01 5 overall means (total) 3.85 5 source: primary research. *means more than 3.0 represent the positive rate of holy site, **results presented in mean rank order rather than the order appeared in the questionnaire dimensions and religious tourism, while the relationship of perception measured by using pearson’s correlation. 3. results and discussion the visitors of mount nebo in the survey were all international christian’s visitors as they have been inquired as to whether they are christians so they can complete the questionnaire. 3.1. demographic factors the general distribution of gender in the sample was 57.3% males and (42%) females, while those who are 31-50 years old were the majority with a 71.4% of the whole survey, this contrast with past researches that indicated the old ages more concerned in religious tourism (table 2). a great number of visitors were married or with a partner consisted of (82%). is confirming the results of previous researches about jordan that concluded tourism in jordan is a well-known destination for families. it’s obvious that most of the visitors are europeans (35.7%) and followed by russians (21.6%), there are more than half of the sample are well-educated (51.3%) holding bachelor’s degrees and above. on the other hand, a (54.1%) hold a position of higher management and middle management while the other occupations only (45.8%), nearly two-thirds of the respondents were considered to be upper middle class, with (63.8%) having an income of 30000-70000 us$. 3.2. descriptive studies the analyses of dimensions of the visitor’s perceptions that relate to religious tourism are discussed below. the frequency and percentages of each dimension are derived from a 5-point likert scale. table 3 represents the descriptive analysis related to the five dimensions of visitor’s perceptions by frequency and percentage. regarding accessibility, 85.4% of respondents have rated it positively (good, high and very high), the majority feel the security and safety in the site with 97.6%, while hospitality and local people 95.4%. on the other hand, social life at the holy site area and prices recorded 96.6% and 76.3% respectively. the research shows that visitors are satisfied with the security issues, which consider strength to the tourism industry in jordan, but it’s clear that they are not satisfied with the prices of the accommodation and items sold over there which will cause in the future a decrease in the number of visitors to the holy site, and here the action should be taken regarding this serious matter, the other case is the accessibility, the need of increasing and facilitating the accessibility to the site is a must. it seems that jordanians are friendly and welcoming hosts as the majority of respondents have linked between local people’s attitude and the social life in the holy site. 3.3. dimensions performance the respondents were required to rate each of the five dimensions on a scale of one to five (where 1=very low, 2=low, 3=good. 4=high and 5=very high). therefore, (table 4) describes how international christian tourists rated these dimensions. mean and ranks above shows that the holy site is in a very positive image where security and safety and social life at the holy site area more than 4.0 <5.0, while hospitality and local people and accessibility in a positive image more than 3.0 <4.0. on the other hand, prices rated the lowest overall the dimensions. the overall image was 3.85 of the whole survey that rated the dimensions. 3.4. relationship between visitors perception and religious tourism the relationship between visitor’s perceptions and religious tourism is measured through correlation. the results are given in table 5. the mean of each dimension of visitor’s perception is measured `and then analyzed by bivariate pearson correlation. where each dimension is given a code: • ac=accessibility • ss=security and safety • hl=hospitality and local people • sl=social life at the holy site area • pr=prices. the results show that accessibility, security, and safety, the hospitality of local people and social life in the site has significant relationships (sig. is ≤0.050) with each other at a 1% level of confidence. this means that the (h0) is rejected and the (h1) is accepted. prices, accessibility, security and safety and hospitality al-zoubi and ibrahim: the relationship between religious tourism and international christians visitor’s perceptions: a case study of a mount nebo holy site in the hashemite kingdom of jordan international review of management and marketing | vol 10 • issue 2 • 202054 of local people have an insignificant relationship (sig. is >0.05) with each other. which means the (h1) is rejected and the (h0) is accepted. while social life at the holy site area has a significant relationship with all the dimensions at a 1% level of confidence. 4. conclusion the research employs descriptive statistics and correlation analysis. the demographic profile shows that male visitors responded to the survey more than female, the majority of the visitors who visited the holy site are well-educated, middleaged, married with upper-middle income level. providing good reasonable prices should result in an increase in the number of visitors to the site. however, the study shows that visitors feel fully satisfied with the security issues of the holy site and with the hospitality of local people as well. accessibility would facilitate visitors, but some of the respondents believe that this aspect is not properly provided for the mount nebo holy site. social life in the site seems to be good and this may because of friendly local people around the site. the empirical analysis shows that security and safety, hospitality and local people and social life at the holy site area are all important elements for participants, and statistically, these features have a significant relationship with accessibility to the site. prices have an insignificant relationship with accessibility and other dimensions except for social life in the site. 5. recommendation after thoroughly assessing the research implications, there are several recommendations that have been brought forward: • the literature review suggests that christians consider jordan as a culturally and religiously significant land. hence, it is essential to invest within a holistic tourism strategy keeping in mind these extensive tourists • there is limited monitoring of the items sold at the holy site and accommodation prices. several respondents’ part of the research complained about the price being charged. hence, a price list should be formed regarding the accommodation and it should be available to the visitors for their ease. the small shops should also be limited so that the serious problems can be resolved • more research and studies are needed in order to provide an understanding of the different forms and dimensions of religious tourism as well as its management and effects on holy sites, locations, and territories. talking about jordan, urgent need related to religious tourism this could be performed with supporting researchers, and academics in the field of religious tourism • the role of government bodies regarding the maintenance of different holy sites is limited. perhaps the government could consider reforming or even privatizing mota and its provincial arms like jordan tourism board. this should enhance the management of the holy sites around jordan and independently maintain the whole system of the holy land sites. if these institutions were privatized, in theory, they should perform better in the provision of a professional level of religious tourism. references al-louzi, b. (2013), the effect of the demographic characteristics of tourists on tourism sector in jordan. merit research journal of accounting, auditing economics and finance, 1(3), 33-42. bader, m. (2012), religious tourism in jordan. 206. available from: http://www.opus4.kobv.de/opus4-ku-eichstaett/files/61/ dissertation_12.4.13.pdf. collins-kreiner, n. (2018). pilgrimage-tourism: common themes in different religions. international journal of religious tourism and pilgrimage, 6(1), 8-17. fatima, u., naeem, s., rasool, f. (2016), the relationship between religious tourism and individual’s perceptions (a case study of hazrat data ghanj bakhsh’s shrine). international journal of religious tourism and pilgrimage, 4(1), 59-69. govers, r., go, f.m., kumar, k. (2007), virtual destination image a new measurement approach. annals of tourism research, 34(4), 977-997. harahsheh, s., morgan, m., edwards, j. (2007), the influence of religious belief on destination image the case of the hashemite kingdom of jordan. international journal of management cases, 9(3), 63-73. harahsheh, s.s. (2009a), an evaluation of the image of the hashemite kingdom of jordan in the british and swedish markets and the implications for marketing the country as a tourism destination. 367. available from: http://www.eprints.bournemouth.ac.uk/16481. harahsheh, s.s. (2009b), an evaluation of the image of the hashemite kingdom of jordan in the british and swedish markets and the implications for marketing the country as a tourism destination. united kingdom: bournemouth university. p367. ibrahim, m., zoubi, a., ibrahim, y. (2020), tourists or pilgrims : classification of the visitors at the baptism site of jesus christ in jordan. international review of management and marketing, 10(1), 72-78. table 5: relationship between visitors’ perception and religious tourism mean ac mean ss mean pr mean hl mean sl mean ac pearson correlation 1 0.297** −0.014 0.256** 0.222** sig. (2-tailed) 0.000 0.779 0.000 0.000 mean ss pearson correlation 0.297** 1 −0.013 0.507** 0.383** sig. (2-tailed) 0.000 0.779 0.000 0.000 mean pr pearson correlation −0.014 -0.013 1 −0.040 0.156** sig. (2-tailed) 0.779 0.799 0.434 0.002 mean hl pearson correlation 0.256** 0.507** -0.040 1 0.241** sig. (2-tailed) 0.000 000 0.434 0.000 mean sl pearson correlation 0.222** 0.383** .0.156** 0.241** 1 sig. (2-tailed) 0.000 000 .0.002 0.000 **correlation is significant at the 0.01 level (2-tailed). source: primary research al-zoubi and ibrahim: the relationship between religious tourism and international christians visitor’s perceptions: a case study of a mount nebo holysite in the hashemite kingdom of jordan international review of management and marketing | vol 10 • issue 2 • 2020 55 kartal, b., tepeci, m., atlı, h. (2015), examining the religious tourism potential of manisa, turkey with a marketing perspective. tourism review, 70(3), 214-231. kumar, r.b., singh, l. (2015), the expectations and satisfaction of hindu pilgrims in north-west india-the case of the naina devi shrine. african journal of hospitality tourism and leisure, 4(2), 1-18. ministry of tourism and antiquities. (2019), available from: http://www. tourism.jo/inside/main.asp. morris, j. (2018), number of tourists in jordan finally increasing. tourism reveiw. available from: https://www.tourism-review.com/ jordan-number-of-tourists-is-going-up-news10579. mustafa, m.h. (2014), tourism development at the baptism site of jesus christ, jordan : residents’ perspectives. journal of heritage tourism, 9(1), 66-31. olsen, d.h. (2013), a scalar comparison of motivations and expectations of experience within the religious tourism market. international journal of religious tourism and pilgrimage, 1(1), 41-61. rinschede, g. (1992), forms of religious tourism. annals of tourism research, 19(1), 51-67. testaments, n., translations, f., compared, d., version, k.j. (2007), the new oxford annotated bible. in: coogan, m.d., editor. oxford, uk: oxford university press. . international review of management and marketing | vol 6 • special issue (s4) • 2016150 international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2016, 6(s4) 150-154. special issue for “asia international conference (aic 2015), 5-6 december 2015, universiti teknologi malaysia, kuala lumpur, malaysia” the mediating effect of employee well-being in relation to role stressors and turnover intention: a conceptual study naseebullah langove1*, ahmad shahrul nizam b. isha2, muhammad umair javaid3 1department of management and humanities, universiti teknologi petronas, bandar seri iskandar, 31750 tronoh, perak, malaysia, 2department of management and humanities, universiti teknologi petronas, bandar seri iskandar, 31750 tronoh, perak, malaysia, 3department of management and humanities, universiti teknologi petronas, bandar seri iskandar, 31750 tronoh, perak, malaysia. *email: naseeb_lango@yahoo.com abstract the technological revolution has escorted diverse roles with deleterious effects, which in turn triggers stress. role stressors are comprehensively conceptualized as two distinctive variables, role conflict and role ambiguity. in literature, studies have shown a positive relationship of role conflict and role ambiguity with turnover intention while a negative relationship of employee well-being and turnover intention. however, very limited studies have attempted to examine the indirect effect of employee well-being between role stressors and turnover intention. the main objective of this conceptual study is to propose a framework whereby examining the relationship between role stressors and turnover intention with the mediating role of employee well-being. simple random sampling will be used for data collection from it executives of software companies of malaysia in order to examine the relationship between role stressors, employee well-being and turnover intention with the help of structure equation modeling. this study emphasizes the considerable importance of employee well-being interventions at the workplace to enhance the retention strategy. keywords: role stressors, employee well-being, turnover intention, structure equation modeling jel classification: j52 1. introduction over the decades, organizations are encountering with globalization, tough competition, and technology innovation which reorganizes the structure of the workforce (dewe and kompier, 2008; van der vaart et al., 2013). through prompt technological reform and higher customer demand for products and services have affected the organization of work-design and the position of employees (vanhala and tuomi, 2003). as an outcome of this restructuring of work-design and position, employees are continuously more exposed to mental work demands (howard, 1995; paoli and merllié, 2000). due to mental work demands and stress, 51% of workers report being less productive in the workplace (american psychological association, 2009), work-related stress assumed to cost over $300 billion per annum among american companies, which persuades to absenteeism and turnover (rosch, 2001; schultz et al., 2014). physical science defines stress as “the force placed upon an object to cause breaking, straining or bending” (ahmadi and alireza, 2007). however, the human being perception and psychology are considered as a threatening at the workplace in terms of favorable or unfavorable demands, when demands exceed than our ability, then human observes stress (hussain and lei, 2015). observing all these threatening demands triggers stress, which is called stressors (hussain and lei, 2015). stressors are the critical factors that ultimately trigger the role of employees at the workplace. role stressors are generally conceptualized as two distinctive constructs, which are role conflict and role ambiguity (rizzo et al., 1970). role conflict arises based on job demands while role ambiguity arises based on undefined information (larson, 2004). in malaysia since independence period, economic development has been changed into the conclusive of a cardinal framework with industrialization programs. the primary goal of the malaysian plan langove, et al.: the mediating effect of employee well-being in relation to role stressors and turnover intention: a conceptual study international review of management and marketing | vol 6 • special issue (s4) • 2016 151 and vision is for the setting up of a highly progressive, prosperous, firmly united nation via significant accomplishment through an energetic as well as a sustainable rate of economic development (ramlan et al., 2007). malaysia it industry is confronting with the challenges of turnover issue malaysian employer federation (mef report, 2012). moreover, it’s one of the global phenomena, and asian countries are significantly affected, while malaysia is positioned sixth in asia pacific countries for employee turnover with a 15.9% attrition rate in 2011 (hewitt, 2009-2011). malaysia it industry, turnover rate is more than 75% (nasyira et al., 2014), which is deeply more affected than other service industries. to date, a number of researchers have explored the direct relationship of role stressors and turnover intention. as for indirect relationship, various studies found out the mediating relationship of role stressors and turnover intention. however, according to the best knowledge of a researcher, we could fail to identify the research which has examined the relationship of employee wellbeing as a mediating between role stressors and turnover intention. a study which has been conducted by firth et al. (2004) where they found different results of direct and indirect effects on the antecedents of turnover intention. this is worth evaluating the job stressors on turnover intention based on direct and indirect effects (van der vaart et al., 2013). according to kaplan et al. (2014) there is a need of employee well-being intervention, which is the best interest of employers and employees to promote the well-being at the workplace (schultz et al., 2014). according to the wright (2006) employee well-being may ultimately prove to be a more robust predictor for employee’s retention. this paper is proposing one of the mediating variables “employee well-being” to minimize the turnover intention among it executives of malaysia. a very little attention has been given to employee well-being as a mediator, and it can be safely assumed that it will be helpful for employers to retain their employees for a longer period of time. 2. literature review 2.1. role stressors, turnover intention, and employee well-being relationship while thoroughly looked into literature many authors have come up with different definitions of role stressors. according to hussain and lei (2015) role stressors are factors that affect the role of employees in an organization. role conflict and role ambiguity are two of the widely discussed constructs of role stressors (rizzo et al., 1970). it was in 1964 when the origin of the role conflicts and role ambiguity was actually initiated by (kahn et al., 1964). according to kahn et al., role conflict and role ambiguity are the potential psychosocial stressors that can trigger to physiological, behavioral and psychological consequences (kahn et al., 1964; schmidt et al., 2014). role conflict arises when there is an uncertainty between the assigned tasks i.e., facing more than one conflicting role expectations and consistently role demands of others, whereas ambiguous information results in role ambiguity i.e., resulted in a scarcity of information as well as unexplained job position (kahn et al., 1964). this uncertainty and ambiguity put employees away from the expected roles and further prompted to a purely psychological conflict in which they are not only uncertain about the roles of the job but also about job objectives (schmidt et al., 2014). role conflict arises due to a number of different job demands being demanded by the employers that further results into role strain, where individuals experience burden, exhaustion, and tension (gordon et al., 2012). various studies found the positive consequences of role stressors (role conflict and ambiguity) in terms of lower job satisfaction, absenteeism, work-family conflict, low-level commitment and turnover intention (floyd and wooldridge, 2000; good et al., 1988; memili et al., 2015; schmidt et al., 2014; tubre and collins, 2000) which are costly for organizations (memili et al., 2015). work-related stress triggers due to conflicting and ambiguous assigned tasks affects the well-being of the employees which has been discussed by different authors in their studies (cooper et al., 2001; siu, 2002; vander elst et al., 2014). a study of wright and bonett (1992) found that employees with poor well-being hardly stay on their job and always look into varied job opportunities. similarly, (wright, 2006) suggested that improved employee wellbeing decreased the turnover in an organization. 2.2. the mediating effect of employee well-being between the role stressors and turnover intention employee well-being is more than just people’s health at workplace and can extensively be described as “the overall quality of an employee’s experience and functioning at work” (warr, 1987). generally speaking, employee well-being has been categorized into three-dimensions related to happiness (appelbaum, 2000; gould-williams, 2003; whitener, 2001), health (appelbaum, 2000; ramsay et al., 2000) and relationships (bartel, 2004; gelade and ivery, 2003; tzafrir, 2005). a study of grant et al. (2007) deliberate employee well-being as encompassing happiness, health as well as relationship oriented elements. boxall and macky (2014) in their study enlightened happiness, health and relationship into three different ways. they enclose happiness with global job satisfaction, health-related with the concepts of fatigue/stress and finally relationship-oriented with work-life balance. the effect of independent variables on dependent variables can be best explained by the help of mediation analysis to explore psychological processes (rucker et al., 2011). employee well-being is regard as a personal resource in conservation of resource (cor) theory. according to the cor theory (hobfoll, 1989; 2001), employee’s experience of a resource loss or its threat that contributes to perceive stress. employees then attempt to retain, defend and develop those things they value (i.e., resource) (hobfoll and shirom, 2001). vander elst et al. (2014) employees who feel emotionally exhausted to have little energy and hence reduced resources. whenever employees experience the threat of resource loss, they might devote less energy to the existing job to avoid additional resource losses (cheng et al., 2014). this resource loss put the concerns of experiencing psychological stress that might lead to negative psychological or behavioral outcomes (e.g., burnout, absenteeism) (chiu et al., 2015) and makes them perceive more stressors (vander elst et al., 2014). langove, et al.: the mediating effect of employee well-being in relation to role stressors and turnover intention: a conceptual study international review of management and marketing | vol 6 • special issue (s4) • 2016152 firth et al. (2004) found no direct association of job stressors with turnover intention, rather an indirect association was found by perceived supervisor support, job satisfaction and job commitment. various studies of armstrong-stassen et al. (1994), igbaria and greenhaus (1992) did not find direct association of job stressors with turnover intention, while found indirect association (van der vaart et al., 2013). to the best of researchers’ knowledge there were only two studies where authors discussed employee wellbeing as a mediating variable. the first was done by mcguire and mclaren (2009) where they found the impact of physical environment on employee commitment in call centers with the mediating role of employee well-being. this study of analysis confirms that employee well-being mediates the relationship between physical environment and employee commitment. another study of (van der vaart et al., 2013) demonstrated that employee well-being mediates the relationship between the state of the psychological contract and an employee’s intention to leave the organization. another study of chumg et al., 2015) results showed that employees’ sense of well-being played a positively and pivotally mediating role in the relationship between social capital and employees’ tacit and explicit knowledge-sharing behavior in the virtual organization. 3. proposed conceptual framework based on a comprehensive literature review, a conceptual framework has been developed to examine the relationship between role stressors and turnover intention whilst employee well-being imitates as a mediating. figure 1 depicts the proposed conceptual framework of the study. this is hypothesized that role stressors have a positive relationship with turnover intention and employee well-being mediates the relationship between role stressors and turnover intention. 4. scale measurement measurement scales of this study have been given below to test the scale and its relationship. 4.1. role stressors role stressors have been categorized with two main distinct factors of role conflict and role ambiguity. role conflict and role ambiguity measured adopted from the scale of (rizzo et al., 1970) with seven and five items respectively through likert scale ranging from (1 strongly disagree to 5 strongly agree). the example of a role conflict item is “i work under incompatible policies and guidelines,” whereas the example of a role ambiguity item is “explanation is clear of what has to be done.” 4.2. employee well-being employee well-being will be measured on two scales, likewise, job satisfaction, work-life balance and fatigue. 4.2.1. job satisfaction job satisfaction will be measured by four items from (macdonald and maclntyre, 1997) adopted. as an example, the items include as “feel good about working at this company,” “on the whole, i believe work is good for my physical health.” the items are scored on a five-point likert scale ranging from (1 strongly disagree to 5 strongly agree). 4.2.2. work-life balance work-life balance will be measured by five items from (boxall and macky, 2014) adopted. as for the item is concerned, it will be “after work, i come home too tired to do some of the things i’d like to do,” “my family or friends dislike how often i am preoccupied with my work while i am at home.” the items will be ranging from (1 never to 5 very often). 4.2.3. fatigue fatigue will be measured based on eight items, which have been adopted from (fisk and doble, 2002). the examples of fatigue items are “because of fatigue, i feel less alert,” “because of fatigue, i am less motivated to do anything that requires physical effort.” responses will be scored on five scales (1 no problem) to (5 extreme problem). 4.3. turnover intention the turnover intention measure is based on five items from (ganesan and weitz, 1996) adopted. it included items related to the three cognitions of the thought of quitting, search, and the intention to quit. for instance, the items will be “i do not think i will spend my entire career with this organization.” the items based on five likert scale ranging from (1 strongly disagree to 5 strongly agree). 5. conclusion in current era of globalization, the tendency of rivalry instigates worldwide and executing government as well as organizations to uphold a competitive advantage domestically and internationally. in this consideration, all the organizations rely on human capital to accomplish their goals whilst neglecting the concern and wellbeing of employees, which in turn prompts stress and excels to turnover intention. according to the mef executive director, the critical factor behind turnover in malaysia is work-life balance. additionally, this study intensifies the empirical literature by amalgamating role stressors and employee well-being with the turnover intention. this conceptual framework will be tested among the executives of it software industries. as for analysis and relationship of job satisfaction work-life balance fatigue role conflict role ambiguity role stressors employee well-being turnover intention figure 1: proposed conceptual framework langove, et al.: the mediating effect of employee well-being in relation to role stressors and 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(1992), the effect of turnover on work satisfaction and mental health: support for a situational perspective. journal of organizational behavior, 13(6), 603-616. tx_1~at/tx_2~at international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2017, 7(5), 1-8. international review of management and marketing | vol 7 • issue 5 • 2017 1 researches benchmarking for identifying the relationship between innovation and entrepreneurship in e-commerce amir ali alahverdi* phd student of international entrepreneurship, faculty of accounting and management, islamic azad university, qazvin, iran. *email: amiralialahverdi95@gmail.com abstract the unique features of e-commerce and communications resulted in the development of business and employment to cause the promotion of entrepreneurship in the aspect of training the personality traits of entrepreneurship and entrepreneurial idea making. in addition, there is a mutual interactive relationship between entrepreneurship and e-commerce. in this base, governments must develop and reinforce the platform of entrepreneurship in the area of e-commerce which is the same as communication and information networks. the purpose of this research is to analyze researches’ benchmarking for identifying the relationship between innovation and entrepreneurship in e-commerce. in purpose aspect, this study is practical and in data collection aspect is descriptive and survey. results indicated that the improvement of customer relationship in e-commerce and business causes sustainable competitive advantage and it reduces the costs of organizations. unemployment can also be reduced with a low capital. moreover, introducing a practical framework to help organizations achieve their purposes causes entrepreneurship to thrive, and organizations to gain a correct and timely perception of market situation. keywords: e-commerce, entrepreneurship, innovation, benchmarking, information technology jel classifications: l26, l81, o3 1. introduction in the first half of the 90s, the internet highly developed and gradually exited from university and military areas and found many users from any community. different e-commerce models have been formed and used in this age. e-commerce gradually developed and e-commerce models introduced as a category of the models of the business world. the reasons for the rapid growth of e-commerce in this age were forming cheap and appropriate platforms for e-commerce and the development of users of these platforms. the growth of competitive pressures among firms was another reason for firms’ attention to e-commerce models. nowadays, entrepreneurship and entrepreneurs are highly utilized and depended on the provided platforms by information technology. entrepreneurial activities, in fact, cause the knowledge of needs, the creation of ideas, and production of technologies and information technology is the motor of entrepreneurship development and economic growth. activities, jobs, cultures, and so on, all of them are changed and affected by information technology. success lies in entrepreneurship and new investments in different affairs such as information technology. the main reason for the application of information and communications technology (ict) in business is that in the aspect of costs, it was required that some activities and business processes implement professionally and separated from other processes. at the same time, in customer orientation aspect, it was required to form the required integration among these processes for systematically providing customer satisfaction. therefore, the specialization of business processes conflicted with the required integration for customer orientation. in this regard, ict provided this potentiality for commercial organizations and firms to provide required integration among processes for supporting customer orientation philosophy, while specializing the affairs and sparing the costs. e-commerce provides different advantages for both seller and consumer. using e-commerce, sellers can sellers can access to small sections of the market that are highly scattered. buyers can also profit from different sellers with lower costs through alahverdi: researches benchmarking for identifying the relationship between innovation and entrepreneurship in e-commerce international review of management and marketing | vol 7 • issue 5 • 20172 accessing international markets and the preparation of goods. studies conducted in this field that will be briefly mentioned. in this regard, the current study is conducted with the purpose of analyzing researches benchmarking for identifying the relationship between innovation and entrepreneurship in e-commerce. 2. entrepreneurship the primary concepts of entrepreneurship must be attributed to economy science. the climax of the relationship between economy and entrepreneurship in the had been in the twentieth century especially from the 1940s onwards because efforts for conceptualizing entrepreneurship started from economic schools, especially in 1970s. economists focused on entrepreneurship for preventing continuous inflation in this decade, after observing the defeat of consumer demand management. economists realized the 2 or 3 percent annual proficiency the years of the 1950s and 1960s reduced to almost zero in 1970s. this issue caused providing goods and services that are in the area of entrepreneurship to be more regarded than demand management (walzack, 2016). entrepreneurship is the process of identifying, evaluating, and optimizing opportunities in order to introduce products and services, methods for organizing markets, new primary material and processes, through organized efforts that have not done before. so entrepreneurship is a nature and an appropriate sample style for better living. entrepreneurship is a principle that exists as a belief in people. entrepreneurship is to think differently and it causes a collection of different traits to form and reinforce in people. if opportunism is added in this belief and if these opportunities managed correctly, it brings value creation. as a result, the entrepreneur person is privileged other people and his/her success will be definite (eskandari et al., 2016). 2.1. entrepreneurship approaches • macro level: this approach is based on environmentalism and it focused on the conducted studies in the field of the organizational life cycle. this approach emphasizes in determinants factors of organizational growth in the long term and analyzes what entrepreneurs should do to create wealth. • micro level: this approach analyzes entrepreneurship in psychological and sociological aspect at the micro level. • median level: this approach focused on a growth-oriented organization in which the collection, storage, and distribution of resources are emphasized. 2.2. entrepreneurship anti-motivational factors the most important anti-motivational factors of entrepreneurship include fear of losing personal assets, fear of failure on financing for setting up a business, concerns about failing to provide the legal requirements, concern about the lack of social security, administrative corruption, fear of not having adequate skills and experience and so on (al-qirim, 2017). 2.3. legal barriers for entrepreneurship development the most important barriers to entrepreneurship development include banking regulation, tax law, commercial law, labor law, the existence of state monopoly derived from laws and regulations, customs laws and regulations, municipal laws and so on (khalili, 2016). 2.4. entrepreneurship types: entrepreneurship is divided into two basic types personal and organizational entrepreneurship. if the person’s yield is innovating and manufacturing a new product or service due to the market, it is personal entrepreneurship. if the yield that is from a team in an organization, this is organizational entrepreneurship (sepehri, 2014). 2.5. effective characteristics of it in entrepreneurship it could show a considerable flexibility in entrepreneurship field with having different features and potentialities. these features caused the increase of the efficiency of these technologies in entrepreneurship and creating jobs. some of these features are as follow: • increasing speed: fast calculation and processing of information reduce the time of the work and consequently increase the efficiency. it also provides fast search and access to information. • increasing accuracy: in human-based jobs, the accuracy of work is changeable, while it provides and guarantees high accuracy. in different types of calculation and processing activities, the accuracy of the computer is much better than human. • reducing the physical size of the storage of information: with the development of it and its usage, there is no longer need to carry and maintain a large volume of specialized reference books. the information of many books can be easily saved in any compressed disk and/or the required resources can be received through computer networks. • fix some administrative corruptions: the use of it increases the transparency in affairs and eliminate most of the mediators. these two key advantages cause some of the administrative corruptions especially at low levels to solve (sardari, 2015). 2.6. electronic entrepreneurship electronic entrepreneurship connects the whole entrepreneurship elements including risk propensity, activism, innovation in manufacturing, set up and management of e-business. electronic entrepreneurship is not limited only in e-business, but this concept is also the electronic infrastructures for large businesses in large organizations. so e-entrepreneurship is a factor for e-commerce development because it caused the more extension of economic relations (sohrabi and khanlori, 2016). 2.7. entrepreneurial vision entrepreneurs are the people who understand the opportunities and see the gaps. the understanding of opportunities by these people may result from marketing or relationship with people or watching tv, media, internet network etc. and this is called entrepreneurial vision. market gaps are seen well through the entrepreneurial vision and it creates a motivation to take an action and set up a business. in other words, people who tend alahverdi: researches benchmarking for identifying the relationship between innovation and entrepreneurship in e-commerce international review of management and marketing | vol 7 • issue 5 • 2017 3 to set up a business should reinforce this vision in themselves. development and propagation of this vision in families, schools etc. will help the reinforcement of this vision and it generally caused innovation and setting up business (shahabadi and rahmani, 2016). 3. innovation innovation is to use intellectual abilities to create a new thought or concept. innovation is the process of gaining a creative thought and turn it into a product or service and/or a useful operating procedure. innovation as an objectified creativity: in this type of definition, innovation has the concept of the operation and implementation of new ideas. from this view, innovation can be considered as objective creativity and also as the implemented and realized form of subjective creativity (emadzadeh et al., 2016). 3.1. innovation types there are four main types of innovation: product innovation: it results in new products and services or the promotion of products and services. process innovation: it results in improved processes in organizations. this innovation emphasizes in efficiency and performance. marketing innovation: this innovation is related to marketing functions, advertisement, distribution, and other functions of the product, except product development. management innovation: i t improves organizations’ management method. joseph schumpeter has also represented four types of innovations in his studies including (1) introducing a new product or changing the quality of existing product (2) forming a new market (3) new resources, providing primary material, and other inputs (4) changing industrial organizing (geraeli and valavi, 2014). 3.2. organizational innovation successful organizations are the organizations that can confront and adapt the changes and constantly implement new ideas and thoughts in the organization. organizational innovation includes belief or behavior that is new to the public industry, market or environment of the organization. organizational innovation components include administrative, productive, and process innovation (vali, 2015). 3.2.1. productive innovation this innovation is the provider of a tool for producing and refers to the development and presentation of new and improved productions and services. in fact, it can be said that the meaning of productive innovation is in what extent the organization is leading in presenting new services, allocating financial resources to research and development and so forth. 3.2.2. process innovation this innovation provides a tool for maintaining and improving quality and sparing costs and it includes adopting new or improved methods for producing, distributing, or delivering the service. in fact, the meaning of process innovation is that to what extent the organization utilizes new technologies and experiments new methods. 2.2.3. administrative innovation this innovation refers to organizational procedures, policies, and forms. in fact, the meaning of administrative innovation is that to what extent new management systems are used in administration (chen et al., 2015). 3.3. culture of innovation and its dimensions in innovation culture field, innovation refers to a complex process which its purpose is to form, transfer, change, and react to new ideas. successful organizations have this ability to institute innovation in organizational culture and the process of organization management because culture comes into play through different ways such as socialization and sociability process, policies, plans, and procedures in an organization. in this culture, the executive base includes the ability of the organization to form the ideas that can create additional value. this category also includes the ability of quick adjustment of the systems and processes with the changes in competition environment (christel and michael, 2013). 3.4. barriers for extending creativity and innovation • over-emphasizing in bureaucracy • emphasizing the fact that every decision must be decided by the usual and conventional people inside the organization. • continuous emphasizing in the implementation of any affairs in a certain and standard framework. • affecting the people who try to be creative. • weakness of communication systems within the organization and thus preventing new ideas to flow. • hard monitoring systems that make the environment unfavorable for creativity (drnovsek et al., 2013). 4. e-commerce e-commerce includes the buying and selling and trade of goods, services, and information through computer networks including the internet. this type of trade is based on processing and electronic transfer of the data including text, audio, and video. e-commerce also includes different activities including fast delivery of digital content, electronic transfer of funds, electronic trade of stocks, electronic bills of loading, commercial and engineering plans, and after sales service. the main feature of this type of trade is facilitating commercial processes, eliminating additional and unnecessary processes in implementing commercial affairs, reducing costs through the increase and improvement of cooperation, reducing administrative costs especially correspondence costs, and also improving the access to market and increasing variety for customers. meanwhile, new communicative technologies such as the internet, extranet, electronic post, and mobiles have a significant impact on the development of e-commerce (howorth et al., 2016). 4.1. e-commerce framework e-commerce frameworks have 3 levels they are required for having a successful e-commerce. infrastructure: the first section of required e-commerce framework includes hardware, software, databases and communication that are used on worldwide web services alahverdi: researches benchmarking for identifying the relationship between innovation and entrepreneurship in e-commerce international review of management and marketing | vol 7 • issue 5 • 20174 on the internet and other methods for sending and receiving messages methods on the internet and other networks. services: the second section of the frameworks include a wide range of services that allow to find and present information and include searching for trading partners and also negotiate and agree on commercial trades. products and structures of e-commerce: this section of e-commerce frameworks includes anticipating and directly providing commercial products and services dependent on information for customers and commercial partners, cooperating and participating in the information inside and outside the organization, and organizing the environment of e-market and supply and support chain (kuan and chau, 2014). 4.2. e-commerce stages e-commerce growth and development stages can be divided into 5 sections. as we get closer to the final stages, we actually got close to the real e-commerce. organizations and companies that are looking for an electronic market for their products and services are endeavoring to reach the final stages of this cycle. in the first stage of the fivefold stages, the applicant company or organization of e-commerce tries to form a simple website including its production and services in order to deliver this information to customers by the internet. in fact, the first stage is meant to create a showcase on the worldwide web for visitors to receive their considered information through these pages. the second stage includes developing the first stage. in this stage, company website turns into a strong database and uses for maintaining the information. in this stage, the information of the whole products and services and their full description is uploaded in information bank and users will be able to send a purchase order through this website. but yet, the required infrastructures for online payment are not provided and payments are done as the traditional ways (howorth et al., 2016). providing the possibility to interact is one the main points of the third stage. in this stage, users are able to interact with the admin. this interaction is through email, chat, and voice. also, users receive their answer in a very short period from the admin and this is possible for the seller and buyer to question and answer online and to exchange information about the product or the services asked. in the fourth stage, this is possible for users to purchase online. after sending the purchase order and receipt of goods forms, customers pay the considered and agreed fund through the sales terminals of banks and financial institutions of contracted party. this transaction is provided for customers very safely and by the internet. in the fifth stage, which is the last stage of the five stages is the stage of integration. in this stage, intermediate systems between the seller and buyer will completely integrate into the existing systems in the organization or company. it means that if a product sold, the inventory of the sold product will be subtracted from the physical inventory at the purchased amount and at the same time the order of new purchase will be sent to the warehouse for replacing the products sold and it will be immediately presented in the next purchases for the warehouse. this stage from the collection of e-commerce stages is the most complete stage in e-commerce in which the result of the whole trade operation is reflected in all the systems of the organization (sohrabi and khanlori, 2016). 4.3. e-commerce types in the aspect of transactions, e-commerce can be divided into different types and some of them are as follow: business to business relationship: it is a pattern of e-commerce that the transaction parties are businesses. business to consumer relationship: it is a pattern of e-commerce that is very common and is the direct commercial relationship between companies and consumers. consumer to business relationship: in this case, natural people sell their products or services to companies using the internet. consumer to consumer relationship: in this case, the selling and buying relationship is among consumers. business to state agency relationship: it includes all the commercial interactions between companies and state agencies. the payment of taxes and duties are such transactions. government to customer relationship: it is a pattern between the government and people which include economic agencies, state institutes, and the whole customers. this pattern is one of the components of electronic government. government to government relationship: this pattern includes commercial relationship among the governments in the cases like imports and exports. but it should be said that the types above are not completely separated and sometimes they come in the form of e-business when they do not emphasize in sell and buy (vali, 2015). 4.4. e-commerce advantages e-commerce advantages are briefly as follow: globalization of trade, eliminating barriers in time and place to do transactions and advertisement, helping to defeat monopolies, lower prices, increased sales, increased consumer and social welfare, easy access to required information, significant reduction of the transaction, information, advertising, and transportation costs, speed up the transactions, reinforced competitive positions of the countries in the world, utilizing the fleeting opportunities in the field of exports, elimination of bureaucracy costs, elimination of intermediaries, the increase new job opportunities, the possibility to present products and services, reduced social costs derived from the produced environmental pollutions in vehicles traffic for doing face to face transactions etc. (emadzadeh et al., 2016). 4.5. legal dimensions of e-commerce the prediction and approval of laws and provisions that support e-commerce is one of the basic issues in the field of its development. thus, unlike traditional trade which is based on paper documents, handy sign, and physical presence of transaction parties, e-commerce is done in a virtual space and without physical presence and previous identification of people. therefore, there are other mechanisms for obtaining people’s identification and documents authenticity in virtual space and alahverdi: researches benchmarking for identifying the relationship between innovation and entrepreneurship in e-commerce international review of management and marketing | vol 7 • issue 5 • 2017 5 there are also other facilities there instead of offices and official documents. so according to the mechanisms in this type od trade, laws, and regulations need to be approved in accordance with different stages of e-commerce process. the approval of laws and provisions relevant to this type of trade in iran has begun in the framework of e-commerce law in article 81 and with the subjects such as definitions, message data orders, supporting commercial secrets, computer fraud, computer forgery, compensation etc. but it expected from the defects and deficiencies of these rules to be solved by the development and growth of e-commerce and its implementation in the real world (christel and michael, 2013). 4.6. barriers for developing e-commerce • inadequacy of the required legal fields for using e-commerce such as lack of acceptance of documents and electronic signs in iran’s current laws and regulations. • the shortage of credit cards and the possibility of funds electronic transfer. • the lack of the main network of e-commerce and its relevant software and hardware in iran. • the relatively high primary cost for using e-commerce in private and state companies especially for small institutes and the lack of the required motivations for doing this method in them. • the shortage of knowledge and culture of using e-commerce and internet network. • providing the required security for implementing electronic transactions and the privacy of the related information. • the lack of conformity of domestic debit cards with international debit cards in order to buy from foreign websites (lack of acceptance of domestic debit cards to foreign sellers) (walzack, 2016). 5. benchmarking and its methods benchmarking or sampling is used for identifying the successful experiences and achievements of business and in order to improve and develop the performance of the organization. benchmarking methods include comparing with the bests of consortium, benchmarking using information bank method, benchmarking using survey, benchmarking using self-assessment, and benchmarking using one to one method. 5.1. benchmarking benefits • preventing useless reworking (reinvention) • overcome inertia and resistances and the feeling of necessity with the visibility of gaps • leading the organization out of the solid frameworks, with the observation of improvement ways in other organizations, industries, and technologies • forcing the organizations to test and review the existing processes that usually result in the improvement • increasing the knowledge of costs and its performance with other rivals • facilitating the development of successful strategies with assigning logical and tested methods. • helping to understand and develop the critical attitude to your business processes • promoting organizational learning process and facilitating the change and improvement • finding improvement fields and new ways to do affairs out of the organization • presenting a refrence for evaluating the performance of organization • forming a better knowledge to business environment • forming the sense of necessity of improvement and the need to improve integrately and consistently (sardari, 2015). 5.2. benchmarking barriers • fear of reworking • fear of losing competitive advantages due to sharing of information • pride for the ease of the process of benchmarking and feeling no need to a systematic approach for benchmarking • benchmarking the things that can be analyzed easily but are unimportant • forgetting the planning phase in benchmarking process which result in its conversion to recreation visit and general familiarity (eskandari et al., 2016). 5.3. benchmarking types • internal benchmarking: it is usually used in large companies where different units evaluated and compared to each other. if a unit had a better performance than other units, the operation and experiences of that unit can be internally transferred in order to reform and improve other units. • competitive benchmarking: it is the development of the analysis of the competitor so that the best competitors are focused. according to the issues related to sharing of significant information among competitors and legal and moral restrictions relevant to this type of benchmarking, it is observed that competitive benchmarking is often trivial, superficial, and focused on key statistics. • functional benchmarking: benchmarking partners can be customers, providers, and/or other companies within the same industry or technologic field. keeping in touch with these companies is often easy and the issues and these companies confront are usually similar. • public benchmarking: an exercise of creativity, finding companies that have similar processes with their own company processes in unrelevent industries usually required creativity. this matter applies in transferring information from one industry to another. the ability to determine new and commercial technologies that will lead us in passing the barriers is the most important subject in public benchmarking (baker and thomas, 2014). 5.4. the circumstance of benchmarking benchmarking is the comparison of organization performance with the executive methods of the best samples of the industry for improving organization performance. benchmarking is finding the best method that probably ends up the better performance in some business activities. this method can enable the efforts for improving quality to achieve the top place by presenting information about other organizations, performance levels, and its used methods. benchmarking is also supervising the activities alahverdi: researches benchmarking for identifying the relationship between innovation and entrepreneurship in e-commerce international review of management and marketing | vol 7 • issue 5 • 20176 from the outside, specialized tasks, and internal operations for continuous reform and improvement. benchmarking should not be mistaken with industrial espionage or mere imitation. in fact, similar, unsimilar, and even competitors can be used in benchmarking and in contrast, they can be participated in improving the similar business methods. also at the national level, benchmarking centers must form and work in order to explore and expand the best methods. thereupon, companies are trained and encouraged in the comparative analysis and learning of processes and business methods in order to plan and operate in the direction of achieving the highest industrial standards (lee, 2015). 5.5. benchmarking advantages using benchmarking in organizations has advantages that are as follow: it forms a deep knowledge of processes and methods in the organization; it reduces reluctance to change; it helps the targeting and planning of improvement (management development); it causes the knowledge top operations at global and national level; it improves the understanding of the current situation; and it encourages to innovate (christel and michael, 2013). 5.6. benchmarking methods benchmarking has different methods based on what is compared to it and these methods are as follow: • internal method: in this method, we are looking for identifying the best function within our organization. in some organizations, similar functions implement in organization’s units and finding the best function withing the organization is the lowest cost and the simplest way of benchmarking. the advantage of this method is that it is low cost and simple and also its results are accepted more easily. the disadvantage of this method is that it is limited in the methods within the organization and the selection of the appropriate function is affected by cultural norms and organization’s bias. • competitive method: in this type of benchmarking, the methods of competitor organizations are sampled with similar processes such as the comparison between apple and international business machines corporation ibm. the advantage of this method is the comparison between organization’s operation and its competitors but on the other hand obtaining information about the competitor makes it difficult (morshedloo et al., 2013) • functional method: in this method, the benchmarking partner of the organization is a non-competitor company, a company which is leading in the similar industry but its process or a part of its process is similar to the organization. in this method, the comparison is done with the organizations that have some of the specific technological and functional features. for instance, a newspaper publisher can study the processes of a television channel. the advantage of this method is the reliability of the obtained information. also in this method, finding an eager partner is easier. the disadvantage of this method is that it is more time-consuming and more costly and in a hand, the identified methods cannot be easily localized. • public method: in this method, the performance, and processes of organizations that are irrelevant are compared. for instance, an insurance company may model the application process for loans before its insurance demand process. these processes are not apparently similar to each other but both of them need the timely and continuous verdict issuance. the advantage of this method is its effectiveness because it selects the best method among the good methods and also the obtained information has an acceptable validity. this method has a high cost and some of the activities of the organization cannot be compared to other industries (vali, 2015). 5.7. benchmarking models based on what it is compared to, benchmarking include the following models: • process model: the organization focused on the observation and analysis of business processes of one or more companies with the purpose of identifying and observing the best methods. • financial model: financial analysis and the comparison of the obtained results for assessing the efficiency and the general competitiveness or organization. • product: this model is used for designing the new product or improving the existing product. in this model, the engineering may be done reversely in order to identify the strengths and weaknesses of the competitive product. • functional model: an organization may focus its benchmarking on a function for improving that specific function. it seems it is unlikely that complicated functions such as human, financial, accounting, and ict resources are comparable in terms of cost and efficiency and it is required that these resources are divided into smaller processes to be comparable. • strategic model: it analyzes the type of others’ competition and it usually used for improving strategic programs and promoting the position of organization (geraeli and alavi, 2014) (figure 1). 5.8. domestic background 1. in 2013, morshedloo et al. studied the approaches of promoting the product innovation in a manufacturing business (case study: melli agro chemical company). in this research, it is endeavored to analyze the approaches of innovating product in a new perspective in a business agency. the method of this research was descriptive-survey. the researcher studied the whole statistical population, 53 people including the managers and staff of melli agro chemical company. but 48 questionnaires among the whole questionnaires were returned to the author. the data collection tool was a questionnaire which designed by the author and the author obtained its validity with the guidance of advisors and supervisors. quality management activities, organizational learning ability, utilizing the tools of it and process innovation have a positive and significant correlation with product innovation in melli agro chemical company. 2. in 2013, kianpour studied entrepreneurship in iran compared to development vision countries. its method was descriptivepractical. the author concluded that entrepreneurship development has become one of the basic and important approaches of the most developed and developing countries. but the truth is that one of the basic actions in developing entrepreneurship is to assess it. entrepreneurship assessment alahverdi: researches benchmarking for identifying the relationship between innovation and entrepreneurship in e-commerce international review of management and marketing | vol 7 • issue 5 • 2017 7 must be implemented based on international indices and standards in order not only to present a clear vision of entrepreneurship at the national level, but it also makes it possible to benchmark and compare with successful countries in the field of entrepreneurship. 3. in 2016, khalili shahanaghi conducted a research with the purpose of identifying and prioritizing the barriers of utilizing e-commerce in tehran’s social institutions. in research has studied in order to identify and prioritize the barriers of utilizing e-commerce in tehran’s social institutions. the range of the research includes executive managers and active employees in the field of information technology of social institutions including charity or active non-profit institutions in the social area. the research method that used in this study is quantitive, descriptive-survey. according to the results, about the barriers of using e-commerce in social institutions, cognitive barriers have the highest rank and behavioral barriers have the lowest rank. these findings are aligned with the previous studies. 5.9. foreign background 1. in 2017, al-qirim conducted a research with the purpose of identifying the effective factors on successfully using e-commerce in small and medium companies in the us. for this purpose, first, the effective indices were extracted and scientific experts in this field in los angeles and the managers of small and medium companies in los angeles’ industrial towns were asked in the form of a questionnaire. based on formula calculations, according to the unlimitedness of statistical population, the statistical sample of this study include 150 people from which 102 of them are asked the questionnaire. the results indicated that the evolution of the markets on the line and infrastructure of the company technology has the most effectiveness and correlation. 2. in 2014, baker and thomas conducted a research with the purpose of analyzing the role of in women entrepreneurship and innovation development in small commercial institutions. in the analysis of ten institutions, they concluded that the institutions under the study used electronic calls and the it under the network well for collecting information and also attracting customers and developed this type of technology well in the direction of their profession. 3. in 2015, lee concluded in his study about using the internet for developing business in scotland that 28 percent of their study cases were effectively used the internet for introducing and developing their services. moreover, some of these businesses were successfully used the internet for marketing and online selling. 6. conclusion the strategies and support by senior management affect the utilization of e-commerce in small and medium agencies. it and e-commerce can create many changes in different dimensions in entrepreneurship. so it may not be an exaggeration if it is considered as the most important tool of modern entrepreneurship. entrepreneurs have special personality traits. these traits are the main factors to determine the person who should become an entrepreneur. risk-propensity, innovation and creativity, idealization, accountability and internal control center are part of the traits of these individuals. every entrepreneur may have a number of these traits and entrepreneur with their unique personality. in this regard, it and e-commerce will cause the improvement and success of these traits. references al-qirim, n.a.y. (2017), an empirical investigation of an e-commerce adoption-capability model in small businesses in new zealand. electronic markets, 15(4), 418-437. baker, t. (2014), the essential elements of innovation. journal of being competitive, 18(3), 408-452. chen, y., liu, y., zhang, j. (2015), when do third-party product reviews affect firm value and what can firms do? journal of marketing, 76(2), 116-134. christel, k., michael, h. (2013), entrepreneurship and immigrant wages in us labor markets: algorithm multi-level approach. journal homepage. available from: http://www.elsevier.com/locate/ ssresearch. drnovsek, m., cardon, m.s., murnieks, c.y. (2013), collective passion in entrepreneurial teams. in: carsrud, a., brannback, m., editors. the entrepreneurial mind. new york: springer publishing. emadzadeh, m., koochakzadeh, m., asghari, a. (2016), e-commerce and e-money in the new global economy. isfahan, iran: faculty of economics and administrative sciences, university of isfahan. figure 1: the conceptual model of the research alahverdi: researches benchmarking for identifying the relationship between innovation and entrepreneurship in e-commerce international review of management and marketing | vol 7 • issue 5 • 20178 eskandari, m., khaljani, j., aaribi, s.m. (2016), coordination pattern of product nad process innovation strategies based on competitor values framework. journal of management improvement, 35(11), 9-17. geraeli, s.r., valavi, p. (2014), the role of ict in promoting entrepreneurship. sanandaj, iran: islamic azad university of nain. howorth, c., tempest, s., coupland, c. (2016), rethinking entrepreneurship methodology and definitions of the entrepreneur. journal of small business and enterprise development, 12(1), 24-40. khalili, s.n. (2016), the identification and prioritization of barriers and using e-commerce in tehran’s social institutions. the social, economic, scientific, and cultural journal of labor and society, 149, 57-68. kianpour, s. (2013), analyzing the growth of entrepreneurship in iran in comparison with development vision countries. the specialized journal of parks and incubators, 9(34), 60-81. kuan, k., chau, p. (2014), a perception-based model of edi adoption in small businesses using technology-organization-environment framework. information and management, 38, 507-521. lee, j. (2015), discriminant analysis of technology adoption behavior: algorithm case of internet technology in small business. journal of computer information systems, 44(4), 57-66. morshedloo, e., alipour, m., abedi, z. (2013), discuss strategies to promote product innovation in a manufacturing firm (case study: melli agro chemical company). journal of economics and business, 11, 63-76. sardari, a. (2015), it and its role in entrepreneurship development. tehran: semat publication. sepehri, m. (2014), benchmarking in business re-engineering. journal of sharif, 17(8), 51-57. shahabadi, a., rahmani, o. (2016), examining the role of r and d productivity on iran’s manufacturing sector. journal of technology growth, 25, 18-28. sohrabi, b., khanlori, a. (2016), factors affecting the use of e-commerce in iran’s small and medium enterprises. entrepreneurship development journal, 7, 11-34. vali, m. (2015), evaluation of methods and patterns of benchmarking in the book industry. analytic research journal of ketabe mehr, 5, 1-8. walzack, s. (2016), organizational knowledge management structure. the learning organization, 12(4), 330-339. . international review of management and marketing | vol 6 • special issue (s4) • 2016120 international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2016, 6(s4) 120-124. special issue for “asia international conference (aic 2015), 5-6 december 2015, universiti teknologi malaysia, kuala lumpur, malaysia” an integrated conceptual framework for proactive improvement of safety culture shahid ali1*, azmi mohd shariff2 1department of chemical engineering, centre of advanced process safety, universiti teknologi petronas, 32610 bandar seri iskandar, perak, malaysia, 2department of chemical engineering, centre of advanced process safety, universiti teknologi petronas, 32610 bandar seri iskandar, perak, malaysia. *email: lacimek@gmail.com abstract over the past three decades safety culture studies have bridged many gaps by developing specific existing culture models to workplace environment. but there is still no consensus over the core factors of safety culture, methods and improvement strategies. this conceptual work proposes a different approach by integrating the present general and workplace models to develop a new integrated framework of proactive assessment model for safety culture. in doing so, an summary of the current general and workplace literatures will be provided as well as their homogeneities and differences emphasized. this conceptual framework can be the basis for further research in order to provide a comprehensive picture of the safety culture assessment process. lastly, implications for specific interventions to develop targeted safety culture assessment practices and work towards achieving sustainable safety culture will be discussed. keywords: safety culture, proactive, reactive, benchmarking jel classification: m1 1. introduction early review of incident causation were strictly linearly viewed, accident prevention and safety management in the previous ages were based on contemporary approaches involving technical and mechanical faults, reducing human errors and adoption of safe behaviors, and ergonomic design of equipment and work activities. it was from the initial analysis report of the 1986 chernobyl nuclear power plant accident, where the term “safety culture” emerged and gained its first official (iaea, 1986). this report introduced the concept, which can be regarded as an advanced way of managing safety, to look beyond the immediate engineering and technical failures by moving towards a standard industrial practice of inquiring more deeply into the underlying factors of accidents. safety culture has been defined in many ways with different hypothetical constructs, research paradigms and represents interpretations of different finding which are most of the times very global and therefore highly implicit. the most explicit definition of safety culture outlining most of the assumed contents is by health and safety executive (hse) (2005) as: “organizations with positive safety culture are characterised by communications founded on mutual trust, by shared perceptions of the importance of safety, and by the confidence in the efficacy of preventive measures” (hse, 2005). the identification and development of factors for safety culture depend highly on the different type of methodological facets such as, different analysis tools (clarke, 2006), on sample size and composition (seo et al., 2004), strictly depends on environment (flin et al., 2000), and the labeling of factors (clarke, 2006), method of selection (weigmann et al., 2002). such type of dependencies has resulted in a considerable number of disparities and is probably the reason for having not a proper agreement on a reliable set of safety factors (farrington-darby et al., 2005), ali and shariff: an integrated conceptual framework for proactive improvement of safety culture international review of management and marketing | vol 6 • special issue (s4) • 2016 121 (nardo et al., 2005), (clarke, 2006). literature can be found on application of selected factors or single factor, as well as on application of framework methods of performance measurement and as well as their effect on safety improvement such as, frequency of accidents or other safety outcomes. furthermore, methods of assessment methods lack theoretical framework, holistic features, flexibility, and motivation for improvement (sgouru et al., 2010). also, what makes it even more disappointing is that, despite the plethora of different initiatives, we don’t seem to be able to overcome the problem that almost all major injuries in our industry are foreseeable and preventable (alteren, 1999). these are telling signs that contemporary approaches for improving safety culture are failing to meet its mark, and new approaches are required. with this drawback, it calls for a simplified process to develop a conceptual integrated framework of proactive assessment model for safety culture. in this work, only three areas that have significant impact on safety culture will be discussed, that are the process of selecting factors of safety culture, methods of assessment and proactive versus reactive approach to safety culture. 1.1. common factors of safety culture clarke (2006), analyzed 16 studies that performed factor analysis and extracted the dominant themes common across the studies and ended up with five main categories (clarke, 2006). a review conducted suggests that there are five main factors of safety culture (seo et al., 2004). a similar analysis was conducted analyzing 18 studies and identified the five most common themes (flin et al., 2000). another literature review of 10 studies identified five indicators of safety culture (weigmann et al., 2002), farringtondarby et al. (2005), after reviewing 15 studies, identified some common factors (farrington-darby et al., 2005), and the report prepared for the hse identified five core dimensions (hse, 2005). table 1 provides the names of the factors identified for every review paper. this summary shows that there is no consistency in the structure and no definitive set of factors exits. however, some of the common factor identified in all these reviews, was leadership and its different aspects (management attitudes and actions, commitment, involvement, supervisory support and relationship). the second most common factor was employee involvement/empowerment. four out of six review studies identified it as common to most of the research papers they reviewed. 1.2. selection of factors selection process of factors are strictly dependant on the type of analysis tools (i.e., principal component analysis, factor analysis) depends on environment, i.e., such as type of industry and country. some factors might be of importance in one organizational setup while others will be at different. it depends on the sample size, i.e., number of respondents and its composition. selection of factors can be performed by aggregate method such as by linear or arithmetic mean but only if the unit of measurement in the hierarchy the same. other means like geometric aggregation can also be applied without compromising on the units, but the condition is it cannot be a negative value (nardo et al., 2005). furthermore, selection of factors based on aggregate mean, requires collecting of data on a large number of factors. therefore, these methods do not have the potential to simplify the system or reduce the burden of carrying out large amount of measurements process. 1.3. methods of assessment many reports can be found literature regarding application of framework methods on the application of selected factors or single factor and their effect on frequency of accidents or other safety outcomes. some of them are being listed as: 1. universal assessment instrument 2. safety element method 3. self-diagnostic ohs tool 4. safety climate assessment questionnaires. sgouru et al. (2010), assessed the first three methods on the following criteria: (1) theoretical framework, (2) holistic features, table 1: comparison of safety culture dimensions identified in meta‑analysis studies factors identified in the meta‑analysis of studies that used factor analysis factors identified in the literature reviews clarke (2006) flin et al. (2000) seo et al. (2004) wiegman (2002) farrington-darby et al. (2005) hse (2005) work task/work environment work pressure co-worker safety support reporting systems reporting system two-way communication management attitudes management/ supervision management commitment to safety management involvement management commitment leadership management actions risk supervisor safety support reward systems immediate and supervisors supervisor subordinate relationships involvement of staff individual responsibility and involvement competence competence level with regard to safety employee empowerment involvement, competency, training, attitude, behaviour rules and procedures existence of learning culture safety management system safety system employee participation in safety-related activities organizational commitment communication existence of just culture hse: health and safety executive ali and shariff: an integrated conceptual framework for proactive improvement of safety culture international review of management and marketing | vol 6 • special issue (s4) • 2016122 (3) validation of the method, (4) required expertise, (5) flexibility, and (6) motivation for improvement. the results showed that none of the analyzed methods satisfactorily fulfills all the mentioned criteria. the essential features of these methods are tabulated as follow in table 2. 1.4. proactive versus reactive approach to safety accidents and incidents are confined by multiple barriers or controls, these barriers and controls are the system’s defences, i.e., management systems, physically engineered containment, or other layers of protection designed to protect an incident (iogp, 2011), (reason, 1997). many authors agree that the general approach to safety within the industries in general is one that is mostly “reactive.” the reactive measures tend to be limited to realistic data and lack other vital information such as environmental conditions, task factors and behavioral factor. incidents and accidents reporting and error analyzing, in itself, cannot improve safety to a higher level in complex systems and hazardous environment. the key differentiating feature between proactive and reactive method is that these objectives are achieved before the potential harm or after the potential harm (iogp, 2011). proactive method looks vigorously for weak spots in the system and provide essential feedback on performance before injury or incidents occur and involve compliance with performance standards and objectives, active participation of all levels of management. with proactive measures, assessment is constantly carried out such that they are recommended as a sensitive and reliable safety measures. with these shortcomings the objective of the current paper is to develop an integrated conceptual framework for proactively improving safety culture by utilizing models and concepts from the three main areas discussed above in the literature. 2. methodology building upon the gaps and similarities highlighted in the previous sections the current section will create a new framework from both literature sources (general and workplace). the data analysis was done in three stages. the features and uses of these stages are explained below: i. first stage: the process of selecting and identifying factors and models of assessment from the analysis of existing literature. it is the initial stage which describes the process and phenomenon involved in identification and selection of key factors. ii. second stage: the data is put together in new ways. this is achieved by seeking to identify relationships between selected models. the aim is to make explicit connections between categories and sub-categories know-as the “paradigm model.” it involves explaining and understanding relationships between categories in order to understand the phenomenon to which they relate. iii. third stage: the last stage involves the process of selecting and identifying the core category and systematically relating it to other categories. it involves validating those relationships, filling in, and refining and developing those categories. data from various sources provides different perspectives and increases the validity of the conceptual integrative framework by bringing together evidence from different disciplines, including occupational health and safety management system, general workplace safety culture, and benchmarking studies on road safety were included to ensure generalizability. the search found a total of three models of literature explaining general or workplace safety culture which met the above criteria. different stages of the process are described in table 3. 3. discussion 3.1. conceptualizing the integrated framework for safety culture based on these findings, a conceptual framework for proactive improvement of safety culture assessment was formulated. figure 1 table 2: safety performance related methods method author objective number of elements safety outcome sem (alteren, 1999) evaluation and improvement of osh management performance six key elements: management, feedback systems and learning, safety culture, documentation, results, goals and ambitions lost time injuries frequency, and a severity rate of injuries uai (redinger, 1998) evaluate the performance of osh management system consists of 27 sections, 118 osh ms principles, and 486 measurement criteria n/r self-diagnostic ohs tool (roy et al., 2004) subjective self-evaluation of osh ms performance nine subject areas namely: organizational systems, management commitment, employee responsibility, norms and behaviors, continuous improvement, prevention-oriented activities, organizational structures, communication, and workplace compliance the need for alteration to attain a satisfactory validation level (cadieux and desmarais, 2006) safety climate assessment questionnaire (zohar, 1980) correlation btw the safety culture and the results in terms of reduced accident rates this method shows both “leading” and “lagging” features at the same time positive results in terms of safety management (zohar, 2010) sem: safety element method, uai: universal assessment instrument ali and shariff: an integrated conceptual framework for proactive improvement of safety culture international review of management and marketing | vol 6 • special issue (s4) • 2016 123 is the finalized conceptual framework that is being derived by utilizing various stages involved in developing culture assessment model. figure 1 is not intended to be rigid structure but is rather meant to provide a guidance for discussion and further research. further, the assessment framework is divided into three main stages. those are being discussed as follow. 3.1.1. criteria based selection taking into account the aforementioned shortcomings of the aggregation method the other approach should be considered figure 1: conceptualizing the integrated framework table 3: models of assessment number andersen (1995) iogp (2011) ilo (2001) 1 plan establish implementation team policy 2 find assess performance organizing 3 collect confirm critical process and barriers planning and implementation 4 analyze monitor weaknesses evaluation 5 improve set improvement actions and regular monitoring action for improvement ali and shariff: an integrated conceptual framework for proactive improvement of safety culture international review of management and marketing | vol 6 • special issue (s4) • 2016124 and deliberated on, namely the selection of the most significant and representative indicators out of the relatively large number of initially defined factors. a definitive criteria can be found in literature for the evaluation and selection of most representative factors from a given set of factors, or how to prioritize these indicators by employing a relevant method in the domain of multicriteria decision making analysis. 3.1.2. assessment process i. phase 1: review and select the safety factors of safety culture to be compared and thoroughly understand how the process to be conducted for the assessment in the company. ii. phase 2: find organizational partners, and obtain acceptance for their participation in the study or identify interorganizational departments for improvements and learning process. iii. phase 3: conduct the inter-organizational or intraorganizational safety culture assessment. iv. phase 4: analyze the prioritized factors and confirm critical weak areas for improvement. 3.1.3. improvement process plan improvements based on the analysis and findings. implement improvements based on the findings from the observation and analysis of the benchmarking partners. it can be a basis for learning and speeding up positive developments and can be considered a promising step in improving safety culture. such a process interorganizational and intra-organizational has the potential to evaluate various aspects of safety culture and safety performance in relation to others that are best in practice. the outcomes can be used for the next assessment study with the purpose of continuous improvement and to learn from others as a basis for developing measures and programmes which are aimed at increasing their own performance. 4. conclusion despite the fact that safety culture measurment systems have been implemented and maintained in numerous enterprises all over the world for more than three decades, there has so far been no agreement on what factors make up the culture and what methods can be used to improve the safety culture. since the the strength of a company’s safety performance lies within the strength of its safety culture, identification of the most representative factors is critical to safety performance and measurement system. understanding the safety factors of organization performing well in process safety culture helps other companies to plan for necessary improvements in order to achieve safety goals. this conceptual framework shows and confirms a simplified integrated model for proactive improvement of safety culture by helping identify crtical areas of improvement and integrates a mutual learning and improvement process. lastly, this paper shows that synthesizing the current literature from different fields of research is a useful tool for theory generation and synthesis research. for future research, the various steps involved can be used identify criteria for selection of factors and proactively improving safety culture. references anderson, e. (1995), value in ethics and economics. chicago: harvard university press. alteren, b. (1999), implementation and evaluation of the safety element method at four mining sites. safety science, 31(3), 231-264. cadieux, j., desmarais, l. (2006), a preliminary validation of a new measure of occupational health and safety. journal of safety research, 37(4), 413-419. clarke, s. (2006), the relationship between safety climate and safety performance: a meta-analytic review. journal of occupational health psychology, 11(4), 315-327. farrington-darby, t., pickup, l., wilson, j.r. (2005), safety culture in railway maintenance. safety science, 43, 39-60. hse. (2005), a review of safety culture and safety climate literature for the development of the safety culture inspection toolkit. hse books. sudbury, suffolk: health and safety executive. iaea. (1986), summary report on the post accident review meeting on the chernobyl accident. vienna: international atomic energy agency. iogp. (2011), process safety recommended practices on key performance indicators. england, wales: international association of oil and gas producers. ilo. (2001), facts on safety at work. geneva, switzerland: international labor organization. nardo, m., saisana, m., saltelli, a., tarantola, s., hoffman, a., giovannini, e. (2005), handbook on constructing composite indicators: methodology and user guide. paris, france: oecd publishing. flin, r., mearns, k., o’connor, p., bryden, r. (2000), measuring safety climeate: identifying the common features. safety science, 34, 177-192. reason, j. (1997), managing the risks of organizational accidents. united kingdom: taylor and francis ltd. redinger, c.l.s. (1998), development and evaluation of the michigan occupational health and safety management system assessment instrument: a universal ohsms performance measurement tool. american industrial hygiene association journal, 59(8), 572-581. roy, m., bergeron, s., fortier, l. (2004), développement d’instruments demesure de performance en santé and sécurité du travail à l’intention desentreprises manufacturières organisées en équipes semi-autonomes detravail. institut de recherche robert sauvé en santé and sécurité dutravail (irsst). seo, d.c., torabi, m.r., blair, e.h., ellis, n.t. (2004), a cross-validation of safety climate scale using confirmatory factor analytic approach. journal of safety research, 35(4), 427-445. sgouru, e., katsakiori, p., goutsos, s., manatakis, e. (2010), assessment of selected safety performance evaluation methods in regards to their conceptual, methodological and practical characteristics. safety science, 48(8), 1019-1025. weigmann, d.a., hui, z., terry von, t. (2002), a synthesis of safety culture and safety climate research. aviation research laboratory, technical report arl-02-3/faa-02-2. available from: http:// www.aviation.illinois.edu/avimain/papers/research/pub_pdfs/ techreports/02-03.pdf. [last accessed on 2015 aug 15]. zohar, d. (1980), safety climate in industrial organizations: theoretical and applied implications. journal of applied psychology, 65, 96-102. zohar, d. (2010), thirty years of safety climate research: reflections and future directions. accident analysis and prevention, 42, 1517-1522. microsoft word 2 24-79-1-rv dilek.doc international review of management and marketing vol. 1, no. 2, 2011, pp. 19-24 issn: 2146-4405 www.econjournals.com development of communication technologies in turkey: a general overview dilek penpece cag university, faculty of economics and administrative sciences, mersin, turkey. email: dilekpenpece@cag.edu.tr ozlem ozturk cukurova university, faculty of economics and administrative sciences, adana, turkey. email: oozturk@cu.edu.tr abstract: communication is a system that senders have possibility to send message to receiver in general meaning. it is considered that as a modern turkish economy should use communication systems largely. it is critically important to show turkey’s usage of communication technologies as a country that keeps up with new developments in the world. communication tools that examined in this study are postal services, newspaper and magazines, fixed-line telephone and mobile phone, internet. according to examined period it is resulted that the usage of communication tools increased. it is observed that some communication tools usage decreased caused by different factors in some terms. key words: communication, communication technologies, turkey. 1. introduction it has long been recognized that communications might have a central role in development (grace et al., 2004: 1). the crucial role of communication technologies in stimulating development is two-tailed. on the one hand, it allows countries increasing effect of economic growth by being able to modernize their production systems and increase their competitiveness. on the other hand, the detention of economies which are unable to adapt the new technological system becomes cumulative (castells, 1999: 3). turkey as a developing country shouldn’t overlook the importance of communication systems. access to information and the ability to use information effectively enables individuals to seize life’s opportunities. work is characterized by the effective use of information to solve important problems within a globally competitive economy (leu et al., 2004: 1575). communication have crucial role in today’s environment not only in working experience but also in individuals life. it is generally agreed that the percentage of communication technologies usage is an indicator of development. 2. communication technologies communications technologies have pivotal role for modern economies (falk and abler, 1985: 24). communication is a structural system that allows people to sharing important symbols with mutual activities in broad sense (birdwhistell, 1970: 95). a communications system must interconnect all important centers of social, industrial, commercial, and bureaucratic activity to be effective (falk and abler, 1985:22). today turkey is considered to be one of the most important ‘emerging markets’ in the world (burnham, 2007: 197). in this respect it is considered that as a modern economy turkey should use communication systems largely. media that are component of traditional postal, telegraph, and telephone services are being further hybridized with high-capacity computer based systems (falk and abler, 1985: 24). the media typologies reveal that the media differ many different sections, for example, channel characteristics, social presence, and uses and gratifications (hoffman and novak, 1995: 57). we examined some of international review of management and marketing, vol. 1, no. 2, 2011, pp.19-24 20 2 0 the tools that containing mass media, interpersonal communication, and computer mediated communication in this study. communication tools that examined in this study are postal services, newspaper and magazines, fixed-line telephone and mobile phone, internet. many developing countries began to take an interest in strengthening their communication capabilities in the 1950s, particularly in the fields of printing and broadcasting, telephone and telex. it is agreed that the technologies which had lifted the advanced industrial countries to heights of material wealth can accomplish the same results in the developing world (hamelink, 1997: 2). the diffusion of information technologies to all areas of human activity is accelerating change in economies and societies (bedia, 1999: 1). this view may not be entirely accurate because of double effect. on the other hand changing economies can accelerate the communication technologies diffusion. the flexibility of global economy allows the overall system to link up everything (castells, 1999: 5). as a global economy’s actor turkey in the 1980s undertook both major structural reforms of its economy and the restoration of democracy (öniş and webb, 1992: 1). major steps have been applied to encourage the distribution of a modern telecommunications structure (burnham, 2007: 198). the reforms succeeded in making the turkish economy more efficient and much more outward oriented (öniş and webb, 1992: 1). with this context, turkey that is relatively closed economy until 1980s began to follow open economy policies after these years. turgut ozal was a critical figure in turkey’s transition to a neo-liberal development model (öniş, 2004: 113). he played a leading role first as prime minister from 1983 to 89, then as president from 1989 to 1993 (aral, 2010:72). ozal emphasized three fundamental freedoms: freedom of expression, freedom of religion, and freedom of enterprise (aral, 2010: 72). the programs crafted by ozal placed high value on expansion of telecommunications services (wolcott and cagiltay, 2001: 136). in consequence all of these freedoms have provided more effective use of communication technologies. in sum, globalization is a new historical reality and enacted through the powerful medium of new information and communication technologies (castells, 1999: 5). period that becomes from based on open economy started with ozal (1983) to present examined in this study. newspapers and magazines newspaper as a mass media is a publication that appears regularly and frequently, and carries news about a wide variety of current events. the oldest structure of the modern newspaper appears to have been the handwritten news sheets that circulated widely in venice in the sixteenth century (www.nyu.edu). difficulties about political unrest in turkey until 1983 sharply effected the printed media. but turkey that seriously integrated to world in 1983 attached importance to freedom of the press. so the total number of newspapers and magazines increased. the change of related numbers can be seen in chart 1. chart 1. the number of newspapers and magazines according to subjects published by years (www.tuik.gov.tr). development of communication technologies in turkey: a general overview 21 the data obtained from tuik ended in 2005. therefore the data until 2005 take place in chart 1. the number of newspapers and magazines followed a constant trend until 2000s. it is considered that the total number of print media increased by providing economic stability after 2000s. postal services postal services were established in the 1620s in france and normally government monopolies from the outset (falk and abler, 1985: 21). post office that founded in 1840 as official post office was privatized in 2005 in turkey. the total number of postal services can be seen in chart 2. chart 2. the number of domestic and international mail services by years (www. tuik.gov.tr). according to chart 2 increasing number of postal services started to decline in first quarter of 1990’s. the cause of decline supposed that the new technologies introduced in turkey for example mobile phones and internet. postal services become up-warded trend after 2001. it is supposed that the reason of this situation is the presenting diversify services by ptt (the general directorate of post and telegraph organization). fixed-line telephones and mobile phones telephone has a long history demonstrating their utility in developing countries (kenny, 2002: 141). recent econometric studies also suggest that the quantity of telecommunications infrastructure may be connected to growth (grace et al., 2004: 13). the first telephone exchange in turkey was implemented in 1909. but the expansion of telecommunications infrastructure proceeded slowly (wolcott and cagiltay, 2001: 135). the concept of mobile phones as they are also known was born in the late 1940s, in the united kingdom and the u.s.a (www.miah-telecom.co.uk). today's mobile phones are small enough to slip in to your pocket but also powerful enough to surf the internet, send emails (www.miahtelecom.co.uk). so this situation makes the mobile phones more appropriate for widespread. the technology of mobile phones has been adopted not only by the affluent, but also more quickly by the middle and lower-middle classes in turkey (celik, 2011: 147). rapid growth of mobile phone subscribers began, effectively, in the late 1990s (burnham, 2007: 201). gsm based mobile communication began with turkcell in turkey which was the first gsm operator that founded 1994. but the available data about gsm usage in turkey was founded starting from 1996. the change of fixed-line telephone and mobile phone subscribers can be seen in chart 3 and 4. international review of management and marketing, vol. 1, no. 2, 2011, pp.19-24 22 2 2 chart 3. the number of fixed-line telephone subscribers by years (www. tuik.gov.tr). total number of related items increased from 1983 to 2009 as shown in chart 3. it is assumed that items were stagnant between 1999 and 2004 by reason of the widespread usage of mobile phones. the increasing competitions in mobile phone sector and decreasing price resulted with decline in fixed-line telephone subscriber. turk telekom was reluctant about competition with private sector. we supposed that the decline is accelerated by alternatives that enable to use with non-fixed telephones. chart 4. the number of mobil phone subscribers by years (www.tuik.gov.tr). according to chart 4 the usage of mobile phone in turkey tend to rise continuously until 2009. the number of gsm subscribers decreased in 2009. although the fall that was not significant according to numeric data was scotched the continuous increase. it is supposed that the reason why the decline was existed is the transition of number portability system in gsm sector. some individuals that have many gsm cards is canceled the subscription and started to use only one card. another reason for subscription cancellations is the usage of affordable tariff in all directions presented by gsm operators. development of communication technologies in turkey: a general overview 23 internet the global economy is entering a “digital age” and information has become the primary resource for economic development (grace et al., 2004: 1). in this age, the critical organizational form is networking. a network is simply a set of interconnected nodes and has no centre. relationships between nodes are necessary for the functioning of the network for the circulation of money, information, technology, images, goods, services, or people throughout the network (castells, 1999: 6). over the course of the 1950s, computer and telecommunications technologies were integrated, and networks were created that linked computers among each other and to terminals. these networks found wide application as a number of technological advances increased the capacity, accessibility and compatibility of both computing and telecommunication facilities (hamelink, 1997: 2). the first microprocessor was manufactured by intel in 1971, and only four years later the first computer based upon the microprocessor was marketed. this has often been identified as the beginning of the digital age (hamelink, 1997: 2). internet is a worldwide network of computers that makes vast amounts of information available (www.unctad.org). the world wide web, sometimes referred to as www, w3, or simply the "web," is an internet-based global information initiative begun at the european laboratory for particle physics (cern) in geneva, switzerland (hoffman and novak, 1995: 52). the existence of the internet is not a spontaneous and arbitrary event. it has appeared and become a central part of our lives because of the nature of the workplace and other social institutions (leu et al., 2004: 1577). these new information and communication tool allow us to identify important problems, quickly gather information, and evaluate the information we locate, synthesize that information into a solution, and then communicate the solution to others (leu et al., 2004: 1577). internet provides lots of facilities that other communication tolls have for example sending mail, calling, reading newspapers etc. it also involved advanced communication facilities for instance video conversation before 3g technology in gsm sector. because of the fact that the video conversation in gsm sector is relatively expensive in turkey, internet is used for video conversation widespread. the first connection in turkey bitnet was established between ege university in izmir and the european academic and research network (earn) via pisa, italy in 1986 (wolcott and cagiltay, 2001: 138). while turkey had the dial-up connection until 2002 the adsl that means asymmetric digital subscriber line began in the same year. therefore data used in this study was initiated from 2002 to 2010. the total numbers of related item is shown chart 5. chart 5. the number of adsl subscribers by years (www.tk.gov.tr). the total number of related items was continuously increased from 2002 to 2007 as shown chart 5. the relative decrease in was seen in 2008. it is considered that the reason of this fall caused international review of management and marketing, vol. 1, no. 2, 2011, pp.19-24 24 2 4 by economic crises existed in 2008. the other reason can be originate from new technologies like connection the internet via gsm operators. 3. conclusion with the regulations includes the passage of a telecommunications liberalization law in 2000 which was intended to open up markets to competition and which established an independent regulator for the telecommunications sector the communication tools become more effective (burnham, 2007: 198). examined data in this study that consist of newspapers and magazines, postal services, fixed-line telephone and mobile phone, internet are resulted the fact that the communication tools increased related periods. it should not ignore that economic crises effect the use of all communication tools in 2008. the cause of observed decline would be the crises. we considered that all examined communication tools effects the diffusion of each other. references aral berdal (2010) “dispensing with tradition? turkish politics and international society during the özal decade, 1983-93”, 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(2004) "turgut özal and his economic legacy, turkish neoliberalism in critical perspective", middle eastern studies, vol.40, no.4, pp.113-134. wolcott peter and cagiltay kursat (2001) “political economy of policy reform in turkey in the 1980s”, the information society, vol.17, pp.133-141. http://www.unctad.org/en/docs//iteipc20031_en.pdf (19.05.2011). http://www.miah-telecom.co.uk/ (19.05.2011). http://www.nyu.edu/classes/stephens/collier's%20page.htm (19.05.2011). http://www.tuik.gov.tr/kitap.do?metod=kitapdetay&kt_id=0&kitap_id=158 (09.05.2011). http://www.tuik.gov.tr/veribilgi.do?tb_id=54&ust_id=15 (09.05.2011). http://www.btk.gov.tr/yayin/istatistikler/istatistikler.htm (09.05.2011). . international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2017, 7(2), 340-346. international review of management and marketing | vol 7 • issue 2 • 2017340 cyber security in the nigerian banking sector: an appraisal of audit committee effectiveness stephen a. ojeka1*, egbide ben-caleb2, edara-obong inyang ekpe3 1department of accounting, covenant university, ota, ogun state, nigeria, 2department of accounting, covenant university, ota, ogun state, nigeria, 3department of accounting, covenant university, ota, ogun state, nigeria. *email: stephen.ojeka@covenantuniversity.edu.ng abstract this study appraises the relationship that exists between cyber security and audit committee effectiveness using audit committee independence, audit committee technological expertise and audit committee financial expertise characteristics as independent variables. the variable used to measure the dependent variable is cyber security compliance. 13 banks listed on the nigerian stock exchange were selected. empirical analysis was carried out using product moment correlation and ordinary least square regression analysis methods. the result showed that audit committee characteristics as measure by independence, financial expertise and technological expertise all have non-significant negative relationship to cyber security in the nigerian banking sector. the implication is that, the audit committee as presently constituted in nigeria would be unable to provide controls and oversight functions over cyber security in the banking sector which is the most sensitive sector in the economy. it was therefore recommended that the composition of the audit committee in nigeria should be worked on to deliberately incorporate needed technological and financial experts that can ask probing questions and offer their wealth of experience in safeguarding the shareholders wealth and lastly, the committee members should be seen to be independent. keywords: audit committee, banking sector, cyber security, financial expertise, independence, nigeria jel classification: m4 1. introduction technological development has improved daily life in areas such as online banking and shopping. the digital domain has become an important factor in the world and information and communication technology has proved to be a very vital factor in productivity, growth and innovation (rosewarne, 2014). in recent years, the world has greatly developed technologically and the development has also affected accounting practices (ernst and young, 2013). however, the growth of the information and communication technology environment is accompanied by new and serious threats. cyber-attacks now have the ability to greatly harm the society in new and critical ways. online fraud and cyber-attacks are just a few examples of computer related crimes that are committed on an extremely large scale every day (gercke, 2006). for a long time, cyber-crime has tarnished nigerian international reputation and greatly discouraged foreign investors. the phenomenal rise of mobile communication and the drive from the central bank of nigeria towards a cashless economy has contributed to the growth of cyber-crime. odunfa (2014) opines that the financial damages incurred by cyber-attacks are reported to be very high and rapidly increasing. according to report by nigeria inter-banks settlement systems, nigerian banks have lost ngn 159 billion between 2000 and 2013 to cyber-crime and according to nigeria-based information and communications technology company new horizons limited, ngn 413 billion (usd 2.5 billion) is being lost annually to cybercrime. although these financial cost can be measured, cost in human misery and tragedy is incalculable and now it is costing more than physical crime (ali et al., 2014). the need to improve cyber security and protect critical and delicate information is extremely necessary for every nation’s security and economic well-being. these developments have highlighted the need to protect stakeholder’s interest and audit committee significance. kpmg (2013) states that most audit committee members are financially shrewd to a certain degree but lack an in-depth knowledge of technological issues. this makes the audit committee members rely ojeka, et al.: cyber security in the nigerian banking sector: an appraisal of audit committee effectiveness international review of management and marketing | vol 7 • issue 2 • 2017 341 greatly on the technology officials within the company to provide them with whatever perspective and opinion on information technology. in as much as these technology officials can provide data, it can prove to be difficult to convert the data into meaningful information that could possibly be useful to the board members and the audit committee in helping to give a better understanding of the possible risk the entity is facing. also, the audit committee may not know how to evaluate the information they receive and will possibly not know the right follow-up questions to ask. the uncertainty can lead to hesitation and if not properly addressed, inaction can damage a company’s reputation and possibly brand, disrupt business continuity and possibly lead to a great deal of financial and legal complications (ernst and young, 2013). the audit committee has oversight responsibility on the activities of the board concerning the issue of cyber security to protect the best interest of the stakeholder (adeyemi et al., 2012). there is the need for the audit committee to gain better information about the company’s processes, and the information should be used as an advantage to understand whether management has put the right people, processes and generally the best possible strategy. the action plan of the audit committee will depend greatly on the maturity level of the company to manage security risks and will require more time and attention in particular sectors. various studies have looked at the audit committee responsibility on cyber security (ernst and young, 2013; lewis, 2013), their influence on the board for better performance, the economic impact of cybercrime and cyber espionage. ernst and young (2013) found that an audit committee that will influence the board of directors on cyber risk and cyber security must possess certain attributes such as financial expertise, technological expertise, independence, leadership, commitment and the capacity to act. recently, cybercrime has turned into a growing threat to all companies worldwide and there is a need to address the issue for the protection of the company and their stakeholder. the effect of the breach on financial performance ultimately reduced earnings per share and overall market value of the affected companies (ernst and young, 2013). as a result of cyber-attacks, public trust and investors’ confidence has been reduced towards companies, their directors, managers and auditors. the main objective of this research is to look into the activities and oversight function of the audit committee concerning the growing issue of cybercrime and the cyber security procedures being adopted by board of directors to tackle the growing threat to the nigerian banking sector. specificall , the study is to ascertain the relationship between audit committee independence (acind) and cyber security in nigerian banks; and to examine the influ nce of audit committee technological expertise (actech ex) and audit committee financial expertise (acfin ex) on cyber security in nigerian banks. 2. literature review and hypotheses development 2.1. the place of audit committee in cyber security in nigerian banks the genesis of audit committees as part of corporate governance structure is rooted in the reactions to the abuse of power by corporate management as a result of financial scandals, manipulation of policies and misstatements of accounts (kalber and fogarty, 1998). although fin ncial reporting and internal control risk continue to be top priority with regulatory compliance issues, bank audit committee attention continues to broaden considerably. the most recent issue vying for audit committee attention is technology concerns particularly issues involving cyber security risks, growth through mobile banking applications, and upgrading information technology are gaining high profile the audit committee, aside from focusing on their crowded agenda, there is a broader concern about having the needed expertise to oversee management activities concerning cyber security. it is the duty of the audit committee to collaborate with management to increase efforts about threat awareness, timely discovery of incidents, risk assessments, and closer coordination with regulators about how cyber security risks are being identifie and managed. the audit committee is a standing committee of the board of directors established to assist the board in fulfilling its oversight responsibilities relating to the accounting and financial reporting policies and practices, compliance programmes, internal controls and general compliance with applicable laws and regulations. cyber security for financial institutions such as banks in nigeria has been grossly affected by various factors involving the audit committee, some of which include independence, financial expertise and advancement of cyber security of the audit committee. the independence of the audit committee is to ensure that management is held accountable to shareholders (adeyemi et al., 2012). the code of corporate governance states that the majority of audit committee member must be independent and the chairman should be an independent non-executive director. it is posited that the more independent the audit committee, the higher the degree of oversight and the more likely that members act objectively in evaluating the propensity of the company internal control and reporting practices. internet cyber criminals keep perfecting their fraud methods, leading to losses adding up to billions of naira yearly. to this end, there is a need for the audit committee to gain technological expertise as the crime artist constantly get more powers and better technical facilities to carry out the act. for the best interest of banks, it is necessary for the audit committee to gain technological expertise so as to keep with the growing trend of the global community. with respect to financial expertise on cyber security, song and windram (2000), opine that a high degree of financia literacy is necessary for an audit committee to effectively oversee a company’s financial control and reporting. the role of an audit committee in overseeing accountability of the management covers a wide scope to include the overall process of risk management. this requires the audit committee to have accounting knowledge in order to acquire an in-depth understanding of financial implications of cybercrime. financial literacy can reduce fraud in corporate financial reporting. a formal recognition of this requirement was recently made in the u.s. with the passing of the sarbanes-oxley act (2002) which requires each public listed company to disclose whether or not it has a financial expert in the audit committee. ojeka, et al.: cyber security in the nigerian banking sector: an appraisal of audit committee effectiveness international review of management and marketing | vol 7 • issue 2 • 2017342 2.2. acind and cyber security it is an essential factor for an audit committee to ensure that management is held accountable to shareholders (adeyemi et al., 2012). the code of corporate governance states that the majority of audit committee member must be independent and the chairman should be an independent non-executive director. it enhances the effectiveness of monitoring functions. it is posited that the more independent the audit committee, the higher the degree of oversight and the more likely that members act objectively in evaluating the propensity of the company internal control and reporting practices. this indicates that an independent audit committee is able to help companies sustain the continuity of business although when they are faced with financial difficult es, they are expected to propose certain action plans to mitigate the problem. an independent audit committee is highly useful to both the company and its shareholders. this independence will cause the board to work effectively on their respective duties. 2.3. actech ex and cyber security internet cyber criminals keep perfecting their fraud methods, leading to losses adding up to billions of naira yearly. therefore, specialized departments and structures are created to combat this type of crime. the audit committee has risk management duties to its stakeholders and due to the complexity of the cyber world, there is a need for the audit committee to gain technological expertise as the crime artist constantly get more powers and better technical facilities to carry out the act. for the best interest of banks, it is necessary for the audit committee to gain technological expertise as well to be able to keep with the growing trend of the global community. 2.4. acfin ex and cyber security song and windram (2000) maintained that a high degree of financial literacy is necessary for an audit committee to effectively oversee a company’s financial control and reporting. the role of an audit committee in overseeing accountability of the management covers a wide scope to include the overall process of risk management. this requires the audit committee to have accounting knowledge in order to acquire an in-depth understanding of fi ancial implications of cybercrime on the banks performance, share price, and other aspects that could affect the banks reputation or possibly lead to financial complication. the need to comprehend the overall financial and non-financial contents of corporate reports is greater considering that business activities are advancing beyond minor accounting practices and therefore, there is a need for presenting technically advanced financial reporting contents to keep stakeholders updated on both financial and non-financial activities. financial literacy can reduce fraud in corporate fin ncial reporting. a formal recognition of this requirement was recently made in the u.s. with the passing of the sarbanes-oxley act (2002) which requires each public listed company to disclose whether or not it has a financial expert in the audit committee. 2.5. audit committee size (acsize) and cyber security the stock exchange of various countries requires that the audit committee of their listed companies be made up of at least three members (al-sa’eed and al-mahamid, 2011). research suggests that a large audit committee tends to enhance the audit committee’s status and power within the organization (kalbers and forgarty, 1993), to receive more resources, and to lower the cost of debt financing (anderson et al., 2004). it is therefore expected that a larger audit committee is more likely to have effective control and also possess effectual influence because increased resources and enhanced status in the bank will make an audit committee to be more effective in fulfilling its core monitoring role in the organization. however, yermack (1996) found that a board with a smaller size is related to a higher quality of monitoring. the study also showed that a smaller audit committee can easily forge the ceo to be more disciplined in cases of poor performance and also they can easily exchange information and relate efficiently within their members but in support of the former, a large audit committee may be more efficient in spotting problems in financial reporting. 2.6. routine updates on risk and advancement in cyber security there is a need for bank audit committee to seek routine updates to the growing risk of cybercrime. as a result of the fact that cybercrime is a developing and fast changing risk as hackers create new software spamming back doors every day, there is a need for the audit committee to also stay updated on the risk. an anti-cybercrime strategy should be an integral element of cyber security strategy. anti-cybercrime strategies developed in industrialized countries could be introduced in developing countries especially in nigeria, offering advantages of reduced cost and time for development. the implementation of existing strategies could enable developing countries to benefit from existing insights and experience. 2.7. audit committee effectiveness on cyber security audit committee is a corporate governance mechanism and effectiveness in financial reporting processes has been a cause of concern to the regulators and investors. given the number of high profile fraud cases experienced in previous years in cases such as enron, worldcom, parmalat, the consequence of these high profi e frauds have led to investors lack of confidence in financial reports and activities of companies (garcía-sanchez, jose and garcía -rubio, 2012). over the past years, the audit committee has been greatly criticized for not being effective enough to in ensuring that external auditors are independent so as to issue effective financial reports (levitt, 2006b). due to this criticism, regulators have intensified the watch over the activities of the committee. the code of corporate governance for banks in nigeria requires the audit committee members to possess financial and accounting knowledge and also have a high level of independence. due to the change in the nature of financial activities technological expertise can also be added to necessary knowledge needed by the audit committee members. lee and stone cited in mohuiddin and karbhari (2010) noted that actual effectiveness is hard to observe. this then makes it a vague concept that can be approached in various ways. various literatures have described audit committee’s effectiveness as being able to carry out oversight functions (raghunandan, read and rama, et al., 2001). multiple studies have used its duties to ojeka, et al.: cyber security in the nigerian banking sector: an appraisal of audit committee effectiveness international review of management and marketing | vol 7 • issue 2 • 2017 343 define its effectiveness (mohuiddin and karbhari, 2010). kalber and forgatry (1993) defined audit committee effectiveness as the competency with which the audit committee carries out its specified oversight responsibility. also, dezoort et al. (2002) defined and effective audit committee as one that has qualified members with the authority and resources to protect shareholders interest by ensuring reliable internal controls, risk management and financial reporting through its diligent oversight e forts. due to the fact that the audit committee is a sub-unit (committee) of the board of directors; various literature has put forth arguments that the effectiveness of the audit committee of one company cannot be assessed by just comparing it to the audit committee of other companies (mohuiddin and karbhari, 2010). other studies have related audit committee effectiveness to its characteristics such as size, independence, expertise, and frequency of meeting. this can be further identified through four various components as identifie by dezoort et al. (2002) which are; composition (independence and expertise of the members), authority (responsibility and influence), resources (size and access to government parties) and diligence (incentives, motivation and perseverance). in contrast to this, wu (2012) had a suggestion that if effectiveness represents an ability to accomplish, then the effectiveness of the audit committee should be explained as ability and not as an association between the characteristics and output of an audit committee. rainsbury et al. (2008) found membership of audit committee as one of the key factors to improve audit committees effectiveness. mohuidin and karbhari (2010) posited that audit committees effectiveness depends mainly on how successfully they can carry out its roles and objectives no matter how they are composed. the above and prior findings with regard to cyber security and audit committee effectiveness in nigerian banks lead to the following hypotheses: hypotheses statement: h1: there is no significant relationship between acind and cyber security in the nigerian banking sector. h2: actech ex has no significant impact on cyber security of the nigerian banking sector. h3: acfin ex has no significant impact on cyber security of the nigerian banking sector. 3. research methods this study adopted a survey research design method to guarantee that the researchers reach a larger population; and aimed at establishing a relationship between acind and cyber security in the nigerian banking sector. the secondary method of data collection for both quantitative and qualitative analysis was also adopted to gather information from the 21 listed banks on the nigerian stock exchange for the year 2014 that constitute the population of study. in obtaining the sample technique for this study, a judgmental sampling technique was used in order to ensure representativeness from the listed banks. the researcher acknowledged the possibility of inconsistencies in the analysis and result, but according to kyereoah-coleman (2007) the differences that occur are very small. a sample size of 21 listed banks was selected based on the availability and accessibility of the audit committee report of the chosen companies. for the purpose of data analysis, a product moment correlation and ordinary least square regression analysis, based on computer programs known as microsoft office excel 2010 and s ata 11, were used. 3.1. model specificatio for the purpose of measuring the relationship between dependent and independent variables, a mathematical model is hereby specified y=β0+βx1+ε (1) where, y=cyber security (dependent variable) x=audit committee effectiveness (independent variable) β=coefficien ε=error term equation 1 can be clearly defined as cyber security=f (audit committee effectiveness)+c (2) hence, the equation below is formulated with the inclusion of control variables (acsize). this is to enhance better predictability of the relationship existing between the two constructs (audit committee effectiveness and cyber security). cscom=audit committee independence+audit committee technological expertise+audit committee financial expertise+audit committee size (3a) the above can be deduced to; cscom=acind+actech ex+acfin ex+acs (4a) based on regression, the model specification is cscom=β0+β1aindit+β2actech exit+β3acfinexit+β4acsit+εit (5a) where, cscom = cyber security compliance; measured by the banks that are in full compliance of cyber security policies and laws as given by the central bank of nigeria. acind = audit committee independence; measured as the percentage of non-executive directors on the committee. actech ex = audit committee technological expertise; measured as the number of individuals on the committee who are experienced in information technology. acfin ex = audit committee financial expertise; measured as the number of individuals on the committee who are experienced in financial knowledge acs = audit committee size; measured as the amount of people on the committee as at the day of year or period end. ojeka, et al.: cyber security in the nigerian banking sector: an appraisal of audit committee effectiveness international review of management and marketing | vol 7 • issue 2 • 2017344 ε = error term, which captures other explanatory variables that are not explicitly included in the model. it = the time coefficient 4. data analysis and results this section describes the analysis of data and the use of product moment correlation and ordinary least square regression analysis to measure or test hypotheses and the objectives already stated in previous sections. the result of each of the hypothesis was also explicitly explained. 4.1. descriptive analysis this presents the descriptive statistics of all the variables employed in the study of the banks as a whole. the results obtained from the descriptive statistics shows that the average cyber security compliance for the whole sample at 1.7818%, a minimum of 1 and a maximum of 2 with a standard deviation of 0.4168%. this shows on the average that there is a high level of compliance to cyber security policies (table 1). the table 2 shows the association between the dependent and independent variables of this research work. multicollinearity between the variables is low as it shows that there is no violation of the assumption of multicollinearity since it is less than 0.7 and 0.8 which means the researcher can continue with all the independent variables. 4.2. regression analysis the table 3 clearly demonstrates the relationship and the effect of audit committee characteristics on cyber security in the nigerian listed firms. from the table 3, it showed that acind with a co-efficient of −0.0019 and a p value of 0.987 has a negative though not significant effect on cyber security. in the same vein, actech ex also has insignificant negative impact with a coefficient of −0.088 and p value of 0.474 on cyber security in the banking sector. in addition, acfin ex has a negative coefficient of −0.103 while the p value was 0.349. however, acsize was positively sign 0.084 with a p value of 0.001. 5. discussion of result and implication of study the implication of the results as stated above is that, audit committee characteristics in term of acind, acfin ex, actech ex have negative infl ence on the issue of cyber security in nigeria listed banks. for example, in terms of acind borrowed from the assertions of pwc (2014), the report submitted that in order to maintain and improve the level of cyber security, audit committee members needed to maintain their independent perspective. similarly, edosa et al. (2013), stated that audit committee members that are independent of the executive directors are more likely to keep in track with their oversight functions (walker, 2004). however, in nigeria, the audit committee has been seen not to be fully independent of the management (ojeka et al., 2015), hence the inability to fully provide oversight function effectively as required by the sec code (2011) as regard cyber security concern. furthermore, in term of audit committee technical expertise and cyber security, the result was also negatively signed which mean that, the level of technical expertise expected in the audit committee is lacking. audit committee members with needed technological expertise that could ask probing questions as regard cyber security and measures that have been put in place to curb incessant attacks on the system are almost none existence (ojeka et al., 2013). this could however mean that, before now, the issue of technological expertise among the audit committee members has not been given attention to from the management and the authority. in addition, in term of acfin ex, the implication of the result showed that, the level of financial expertise among the audit committee members cannot alone enforce compliance to cyber security policies if not coupled with technical expertise. the impact was also negative to mean, there is more to what a fi ancial expert should know in order to effectively provide oversight function and monitor the development in the cyber world in order to assist the firm to reduce such attack(s). ernst and young (2014) stated this concerning the audit committee in nigeria that “audit committee members are financially savvy but lack deep knowledge on technological issues”. however, the audit size was positively signed which indicate the number specified by cama (2004) that at least the audit committee must consist six members would be able to improve on cyber security. majority (if not all) of the firms in nigeria mostly comply with this provision. anderson et al. (2004) posited that large audit committee can perform its oversight function more effectively that a smaller number by controlling and protecting the interest of the company. this means, a six member audit committee is sufficient to provide adequate oversight function and ensuring cyber security and related issues are managed effectively. 6. conclusion and recommendations the purpose of the research work was to study the impact of audit committee effectiveness on cyber security of listed banks table 1: descriptive statistics of all the variables used in the study variable obs mean±sd min max cscom 55 1.781818±0.4168182 1 2 acind 55 0.6727273±0.4735424 0 1 actech ex 55 0.2909091±0.4583678 0 1 acfin ex 55 0.6±0.4944132 0 1 acsize 55 5.363636±2.171905 1 8 source: computed output (stata, 2015) table 2: test of correlation and multicollinearity between the independent variables and cscom acind actech ex acfin ex acsize acind 1.0000 actech ex −0.3211 1.0000 acfin ex −0.1740 0.0327 1.0000 acsize −0.0982 0.1150 0.1207 1.0000 ojeka, et al.: cyber security in the nigerian banking sector: an appraisal of audit committee effectiveness international review of management and marketing | vol 7 • issue 2 • 2017 345 in nigeria by appraising the current status of the same. this paper therefore, concludes that, the presently constituted audit committee in term of its characteristics is seen not to be effective enough to provide oversight functions on cyber security in the nigerian listed firms. their influence is negative though not significant but for the fact that the issue of cyber security is at a front burner not just affecting firms in nigeria, but globally. there is therefore need for the audit committee to be properly constituted and well equipped to provide oversight function over cyber issues in the sector. there is also need for training or deliberate efforts to intentionally incorporate persons with strong background in it or in cyber issues into the committee. this can also be incorporated into the sec governance code which is being reviewed presently so as to make it necessary for public firms to adopt more attention should be paid to the make-up of the audit committee in term of capacity and expertise. the audit committee should be fully independent by ensuring that half of the members are independent directors as against the present non-executive directors and the remaining half which is made up of shareholders are indeed person with knowledge and expertise in information technology and cybercrime in addition to the financial expertise. the members should be sound enough to provide controls over the firm s cyber security. the reason for this is that, presently, cybercrime is the greatest threat to shareholders fund in today’s world of business and especially the financial sector, there is need to protect the interest of all stakeholders, continue to create jobs opportunities, giving back to the community in term of social responsibility and of course, safeguarding the going concern of the firm this paper has numerous advantages which can be seen from its findings. however, the study has its limitations and these are considered as opportunities for further studies. therefore, caution should be taken when drawing conclusions from its find ngs. this paper focused on the listed bank in nigeria and in a particular period, further studies can consider other sectors of the economy and also consider other african countries. the number of year observations could also be increased. references adeyemi, s.b., okpala, o., dabor, l. 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(2013), the audit committee’s oversight role on financial reporting 2013. are the numbers too good to be true? available f r o m : h t t p s : / / w w w. a s s e t s . k p m g . c o m / c o n t e n t / d a m / k p m g / pdf/2016/03/20140701_aci-oversight-2013.pdf. table 3: multiple regression analysis using ordinary least square source ss df ms model 1.85575765 4 0.463939413 residual 7.52606053 50 0.150521211 total 9.38181818 54 0.173737374 number of obs 55 f (4, 50) 3.08 p>f 0.0241 r2 0.1978 adjusted r2 0.1336 root mse 0.38797 mse: mean-square error cscom coef. std. err. t p>t 95% confidence interva acind −0.0019081 0.1196485 −0.02 0.987 −0.2422292-0.2384131 actech ex −0.0881117 0.1221761 −0.72 0.474 −0.3335095-0.1572861 acfin ex −0.1032651 0.1091164 −0.95 0.349 −0.3224319-0.1159016 acsize 0.0848781 0.0246685 3.44 0.001 0.0353301-0.1344262 _cons 1.415438 0.1849944 7.65 0.000 1.043866-1.78701 source: computed (stata, 2015). mse: mean-square error ojeka, et al.: cyber security in the nigerian banking sector: an appraisal of audit committee effectiveness international review of management and marketing | vol 7 • issue 2 • 2017346 kyereboah-coleman, a. 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(1996), higher valuation of companies with a small board of directors. journal of financial economics, 40(2), 185-211. . international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2018, 8(4), 24-31. international review of management and marketing | vol 8 • issue 4 • 201824 determinants customer satisfaction and implications of interest in buying repeated types of buyers in food vendors street vendors (pmkl) in tangerang selatan-banten rahayu lestari1*, lisa amelia2, alvin hizrian3 1faculty of economics, universitas nasional, jakarta, indonesia, 2faculty of economics and business, universitas persada indonesia y.a.i, jakarta, indonesia, 3faculty of economics and business, universitas persada indonesia y.a.i, jakarta, indonesia. *email: rahayulestari22@yahoo.com abstract this research to test determinan customer satisfaction and implications of interest in buying repeated types of buyers in food vendors street vendors (pmkl) in the tangerang selatan. the study is done at 200 people consumers who makes a purchase food in food vendors street vendors (pmkl) in tangerang selatan-banten. research test determinan customer satisfaction and implications of interest in buying repeated types of buyers in food vendors street vendors (pmkl) in tangerang selatan-banten. data analyzed to research this in a partial least square and used tools smartpls3. the research results show that all three variable the product quality, and in location of economic activities significant to customer satisfaction, while variable perception price has not been affecting the customer satisfaction. variable customer satisfaction significant to interest in buying repeated consumers the food vendors the street vendors in the tangerang selatan-banten. keywords: product quality, perception of price, location of business, customer satisfaction, i̇nterest to buying repeated, food trader sidewalk (pmkl) jel classifications: m31, m21, m10 1. introduction notes in the history of names street vendors in fact taken from the era of colonialism dutch colonial. government regulations that time determined that every highway built should provides a means of pedestrians. wide to pedestrian field is 5 ft or about one and a half meters. forty years after it and when indonesia has independent, roads to pedestrians commonly used by traders to sell. before his name is a overhang road, now become vendors (abdurahman et al., 2016). on his journey the development in the street vendors have turned the government on the condition of being dilematis, its existence side to create jobs, while on the other hand the existence of street vendors are not taken into account in landscape planning has to be a burden to the city. street vendors do again their activities in public spaces city without concerning the public interest, so that the occurrence of distortion room was a function of. this condition in the end would have required the arrangement of conformity its existence so that it will create the harmony of a city that is appropriate and deserved in line with what has been planned local government and the people aspirations (sun, 2011). the street vendors from economic terms that where a request there offer. it means street vendors is going to last and developing because the community membutuhkanya. for all time traders times five potentially to thrive. street vendors is going to last, because the demand there always. the street vendors from the perspective of location, that during is no place to street vendors which can be used to trade, then street vendors is going to last (andrés-martínez et al., 2013). choice of location for strategic business is one factor the success of in an undertaking. many considerations that must be a decision has been made a business players to choose a spot of the business to which staregis as the determinants of the success of their business lestari, et al.: determinants customer satisfaction and implications of interest in buying repeated types of buyers in food vendors street vendors (pmkl) in tangerang selatan-banten international review of management and marketing | vol 8 • issue 4 • 2018 25 among other: (1) a population density of living in areas a business, (2) the people purchasing power for a product (3) an accessible with various transportation, (4) location is the establishment of an establishment that is densely inhabited various kinds of businesses, (5) the location of place of business standing have that environmentalists who support good the security aspect, comfort the environment (el-adly and eid, 2016). aside from the issue of mentioned above the dominant choice for in choosing its location was that is dipusat city and the center of commerce. because the region that has the density of a having a greater opportunity consumer attention to attract them to look and finally arising desire membeli (hjort et al., 2013). business food street vendors transformed into one of the trend that develops peoples especially the the middle class down. uniqueness of the place to which it is offered by street vendors (street vendors) grown became a means or the media the interaction between the societies of the party supporters will use above the other in layers the companions (cordell et al., 2009). services raised the concept of equality (equality) or similarity services to every buyers is the main force for this business. but moreover that, the trend is not able to overcome the threat to the existence of street vendors. it is because, negative image of instead the strengthen on street vendors because some the problem generated. the problem generated street vendors instead ever diseminarkan in international seminar initiated international development, about hawkers and vendor (mcnally et al., 2011). the quality of service have a close relation with satisfaction of service consumers. increase the quality of services is that the whole of the characteristics of as well as of the nature of a product or the services of who is influential in its ability to satisfying the needs of of those who did not (wah yap et al., 2012) in faiz et al. by the presence of the service that condemns the baiktentunya to increase the size of the satisfaction as accepted from the product which is have been sold out. to compete and survive and developing so company are required to meet the needs and consumer advocacy by a gracious a better service for those so by itself consumers feel esteemed and will willing to become consumers fixed. good governance which will put a value competitive for sustainability a business. competitive value of a venture can mengambarkan a these obtained the organization of a business in an effort. value competitive also was described as through performance business with an indicator sales growth, growth capital, growth labor, growth the market and profit growth. sustainability a business with competitiveness good is a concept multi dimensional. the relationship between orientation business and competitiveness can be hung on values competitive used to access business. it is expected that companies will search for locations that increase revenues and reduce costs because high revenue and low cost will result in high profit (wang et al., 2012). competition in an endeavor perceived greenback street vendors is challenges for them. to keep sustainability in its undertakings street vendors, need to an undertaking that hard in maintaining competitive values that they have. a mistake in taking a step in expand their business them through street vendors governance fatal consequences for expansion in the economic activities they (matsa, 2011). the study results indicate that both consumer inertia and satisfaction positively influence repeat-purchase intention, and that consumer inertia is more influential than satisfaction; moreover, positive word-of-mouth negatively moderates the relationship between consumer inertia and repeat-purchase intention, but positively moderates that between satisfaction and repeat-purchase intention; finally, alternative attraction does not moderate any of the above relationships significantly (palma et al., 2011). tangerang selatan-banten is one of area that have the potential to pmkl is a good enough. spread equally pmkl in line tangerang selatan-banten. central pmkl area is the most advanced rapidly at a lodge with pondok aren, ciputat pamulang, bintaro and ciputat. as for the characteristics of street vendors (seton-rogers, 2011): 1. business activities, not organized good 2. do not have a business permit 3. irregular in business activities, in terms of their place and working hours business 4. congregate together in bunches on the sidewalk, or ditepitepi the way of protocol, dipusat-pusat where banyaj people crowded. 5. their goods while screaming, sometimes running closer to consumers. the research confirms close relations between customers’ quality perception, their satisfaction and the level of fulfilment of their demands (ali and ndubisi, 2011). these customers will not only buy the product again later (in case that their expectations concerning the satisfaction with the product are met) but will also recom-mend other (prospective) customers to buy it (agnihotri et al., 2016). the result showed that overall food quality attributes affect significantly towards customer satisfaction (limakrisna and ali, 2016). 1.1. hypothesis research hypotheses of the study is based on research conceptual model presented in figure 1. from the above mentioned model the following hypotheses are developed: h1: product quality influences customer satisfaction infood trader sidewalk (pmkl) in tangerang selatan-banten h2: perception price influences customer satisfaction in food trader sidewalk (pmkl) in tangerang selatan-banten h3: location business influences customer satisfaction in food trader sidewalk (pmkl) in tangerang selatan-banten h4: customer satisfaction influences interest in buying repeated consumers in food trader sidewalk (pmkl) in tangerang selatan-banten. lestari, et al.: determinants customer satisfaction and implications of interest in buying repeated types of buyers in food vendors street vendors (pmkl) in tangerang selatan-banten international review of management and marketing | vol 8 • issue 4 • 201826 2. literature review 2.1. marketing the management of distribution is analysis, the implementation of the, and supervision but was later program-program which is aimed for something meaningful such as exchange in market wild price swings that gain at hand or with a view to reach organizational goals (ashley et al., 2011). it is like this very well past a starting bid depending on volatile food prices of organization in meet the needs and desire and suffering and rebirth of the markets are as well as to determine the price of, tried to communicate, and distribution of who was the effective ruler to tell, encourage as well as served the market. marketing is a social process for individuals and group get what they need and want to create, offers and freely interchanging products worth on the other hand (sofiati and limakrisna, 2017). 2.2. marketing mix marketing mix is a collection of tools marketing products tactical under control, the price of the place and promotion that make up the company to produce a response of that which is desirable in the market target (cengiz, 2010). 2.3. street vendors street vendors defined as someone who offers barangbarangnya for sale to public without having a place permanent to sell (andrés-martínez et al., 2013). hamblen (2011) added that street vendors are selling occupied sidewalk or area other public, and they will often berpindah-pindah place. associated with it, street vendors is a kind of retail sales sells goods and services in the public as gang-gang and fringes main road (heard et al., 2012). 2.4. culinary tourism culinary tourism is satau part of resources culture of the people. in other words in the culinary tourism is tourist activities that accentuates the culinary or a dish his mom used/food intake as various attractions such as tourism. food or a dish his mom used it is important for various types of history and ancient of tourism (nature, culture, and my special area of interest) because it is gonna need to eat (cabiddu et al., 2013). 2.5. product quality the quality of the product is products and services which already meet or surpass customers had been predicted to increase. based on definition according to the experts, it can be concluded that the quality of the product is a form of goods or services are measured in related to the reliability of the quality standard, additional features, the level of, a sense of, as well as the performance of function of these products can meet the expansion customers (wagner, 2013). indicators of the quality of the product quality according to (mcnally et al., 2011): 1. the fitur 2. the diversity of product 3. product durability 4. the quality of the raw material 5. the technologies used. 2.6. perception price “price perception concern how price information is comprehended by consumers and made meaningful to them” (jung et al., 2014). that means that how information is price can be understood by customers and make mean for customers. indicators of the quality of the price of that will be used in this research according to munnukka (2008): 1. affordability of the price 2. competitiion of the price 3. the consistency of the the price of with facilities 4. the consistency of the the price of with the services provided. 2.7. location business the shop affected the profitability business and success in the long run (mcnally et al., 2011). retailing are accustomed to saying that the three keys to success are location, location, and location (wang et al., 2012). the location is the physical structure of a venture that constitutes the principal component that is visible in forming the impression a venture undertaken company in conducting the deployment of activity in their business and provide with a channel services needed by the consumer (johnson, 2015). the location relating to the decision made by the company about where the operation will placed. location of a business should not be confused with the localization of a business. they are two different concepts. the location of a business simply refers to where a business is located. that is, where it carries out its operation (eiselt and marianov, 2015). indicators of the quality of the location of (wang et al., 2012): 1. the or position effort. should in choosing the or position business, business people must could assess the situation about. because this opportunity affected consumers, most consumers in addition to relax also want to enjoyed surrounding. 2. access transport access they also affect for consumers, because consumers who come usually driving so access of transportation have to support. 3. facilities in providing facilities must also be able to support, ranging from the toilet, parking lot, and lain-lain. 4. security for this important that since the security of into consideration the beginning of consumers in determining the location of to be going. products quality perception price location businesss buying repeat customer sa�sfac�on figure 1: research conceptual framework lestari, et al.: determinants customer satisfaction and implications of interest in buying repeated types of buyers in food vendors street vendors (pmkl) in tangerang selatan-banten international review of management and marketing | vol 8 • issue 4 • 2018 27 2.8. customer satisfaction customer satisfaction is one of the success of indicators of an effort. this have been credibly in general because consumers by satisfactory, so the organization can increase the rate of market shares the gaining of it is and get more all-embracing (terpstra and verbeeten, 2014; thakur and workman, 2016; wah yap et al., 2012). defined satisfaction as “an evaluation rendered that the consumption experience was at least as good as it was supposed to be” (bodur et al., 2014). based on previous theo-retical and empirical evidence, conceptualized satisfaction as “an evaluation that the chosen alternative is consistent with prior beliefs with respect to that alternative” (wah yap et al., 2012). these conceptualizations all suggest that customer satisfaction is an overall judgment process of the perceived discrepancy between prior expectation and actual consumption (jung and yoon, 2013). customer satisfaction has been defined in various ways, but the conceptualization, which appears to have achieved the widest acceptance, is that satisfaction is a post-choice evaluative judgment of a specific transaction (terpstra and verbeeten, 2014). customer satisfaction is the result of a customer’s perception of the value received in a transaction or relationship –where value equals perceived service quality relative to price and customer acquisition costs (thakur and workman, 2016). the customer satisfaction expressed by ren et al. (2016): 1. consumers according to the quality of the services provided 2. performance on the quality of the services provided 3. responding to the quality of the services provided. 2.9. interest in buying repeated interest in buying repeated is part of behavior its purchase consumers, who will form the act in consumers. in addition, customers are committed generally more receptive expansion of new products offered by the company. so customers who are committed will participation in developing a certain brand (palma et al., 2011). according to ashley et al. (2011), cannot be identified through interest in buying indicators as follows: 1. transactional interest, namely person predisposition to purchase products 2. refrensial interest, namely person predisposition to refers products to others 3. a preferential interest, namely interests that describing the behavior of someone who has the main prefrensi of these products. preference could only be returned if anything happens to the product of prefrensinya 4. explorative interest, such interest has describing the behavior of someone who always looking for information on diminatinya products and to find information to support the properties of positive from that product. 3. research methods the method of analysis of the data used which is a method of descriptive analysis and partial least square (pls). this analysis used to describe the results of the spread of such so that it can be served an illustration of the factors that can affect loyalty respondents through descriptive statistics. descriptive statistics is a help statistics to described that was collected in research. analysis done with transform the raw data into the form of data that easily understandable and interpreted to then arranged, manipulated, and served in a form of information. in addition the data were analyzed using a method of pls and used tools smartpls3. sample size used in the study is done using several particular consideration to (wah yap et al., 2012), found that to model of shem, sample size appropriate is between 200. the total sample used in this research is 200 people visit. the technique of the sample used in this research is the method of sampling in terms of this is the accidental. consumers who makes a purchase food in the areas surrounding the tangerang selatan-banten. 4. results was used in the study analysis structural equation modelling with software smartpls3 (pls). the value of pls path modeling there are 2 model that is much outer the model and the model of shrm (2016). 4.1. evaluation outer model 4.1.1. convergent validity convergent validity of measurement model with indicators reflexive can be seen from the correlation between score items/ the indicator with the score construct. indicators an individual regarded reliable if it has value correlation above 0.70. however to research into stage scale development, loading 0.50 until 0.60 is still could be accepted (u.s. department of education, 2014). as for the result of the correlation between the indicator with kontruknya as seen in ouput loading factor as on a table 1. based on table 1 and figure 2, it was discovered that the of each block an indicator having loading higher for every variable latent measured than with an indicator for latent other variables. it means, the following indicators are used in research that it already a good discriminant validity in preparing variabelnya each man for every other indicators having the value of the above 0.5. these results strengthened by the analysis average variance extracted (ave) in table 2 the following. 4.1.2. average variance extracted (ave) from the table 2, note that the ave > 0.5 there are four variable the product quality, satisfaction, interest in buying repeated, and perception prices, the meantime there are > 0.5. there are locations business. t means, the result is that every variable has discriminant validity good. 4.1.3. composite reliability composite reliability, used to measure konstruk or internal consistency and the values must be above 0.70 (u.s. department of lestari, et al.: determinants customer satisfaction and implications of interest in buying repeated types of buyers in food vendors street vendors (pmkl) in tangerang selatan-banten international review of management and marketing | vol 8 • issue 4 • 201828 education, 2014). the following the list view 3. about composite reliability. based on table 3, known that the total amount of composite reliability research all the variables >0.7. these results show that all variable have met composite reliability so that it can be concluded that overall having internal variable level consistency reliability high. it means, in composite all variable having the consistency of internal are insufficient in measuring variable latent/ construct measured so they could be used in the following analysis. 4.2. evaluation inner model based on table 4, the following, for the evaluation of onto inner the model used in this research will be explained and those obtained from on the results of the path, goodness-of-fit test, and the hypothesis. 4.3. the path of the the fit and proper test coefficient the evaluation of the results of the path coefficient used to indicate how strong effects or influence to the independent variable dependent variable. the path coefficient more details are listed in the table 4. based on table 4, it can be explained above that: (1) the quality of the product (x1) had a positive impact on satisfaction (y) path to the value of 0.637 and those obtained from as much as. (2) location of business (x2) had a positive impact on with a value of up the path of the as much as 0.237 coefficient. (3) perception of the price of (x3) has not been affecting the with a value of up the path of the as much as 0.046 coefficient. (4) satisfaction against and inciting racial hatred by interest in buying (y1) with a value of up the path of the as much as 0.737 coefficient. the path of the biggest value coefficient reflected the bank sound assets, traffics and consequently the price satisfaction of service consumers, the more one is improving the interest they would have to re encouraged traders to purchase the world largest from consumers. 4.4. goodnes-of-fit test based on ouput smartpls3, testing goodnes-offit r-square value in terms of change. these changes can be used to judging of the influences of certain independent latent variable dependent on variables latent do have an substantive. based on table 5, can be analyzed r-square for variables that the total amount of the product quality on variables non-competitive purchase will be 0.405 satisfaction. it means, the contribution given by the product quality variable on variables satisfaction as much as 40.5%. the value of r2 for variables in location of economic activities on variables non-competitive purchase will be 0.056 satisfaction. it means, the contribution given by variable in location of economic activities in clarifying the changes that have occurred on the table 1: loading factor variable indicators loading factor product quality characteristics 0.722 the diversity of products 0.558 product durability 0.903 quality of raw materials 0.578 technologies used 0.873 perception price affordability of the price 0.575 kompetition the price 0.739 conformity prices 0.857 conformity the price of service 0.925 location the business business position 0.743 transportation acess 0.576 infrastructure 0.688 security 0.723 a source of primary: data processed 2018 table 2: average variance extracted construct average variance extracted product quality 0.549 customer satisfaction 0.703 location business 0.470 interest in buying repeated 0.590 price perception 0.616 a source of primary: data processed 2018 figure 2: outer model lestari, et al.: determinants customer satisfaction and implications of interest in buying repeated types of buyers in food vendors street vendors (pmkl) in tangerang selatan-banten international review of management and marketing | vol 8 • issue 4 • 2018 29 variables of satisfaction as much as the 5.6%. next to value r2 for the price perception on variables satisfaction was in 0.002. it means, the contribution given variable variable perception the price in clarifying the changes that have occurred on the variables of satisfaction 0.2%. the value of r2 for variables satisfaction on variables 0.543 interest in buying non-competitive purchase will be repeated. it means, the contribution given by variable satisfaction in clarifying the changes that have occurred on the variables of repeated 5.43% interest in buying as much as. the assessment of goodness of fit making these things known from the value of square. the value of q2 having the same meaning as the coefficients of determination (r2) to an analysis in the regression, where is the higher q2, so a model it can be said that more and more fit with the data. as for the result of calculation of the value of the value of q2 is as follows: q2= 1 – [(1−0.405) × (1−0.056) × (1−0.002) × (1−0.543)] = 1 − (0.595 × 0.944 × 0.998 × 0.457) = 1−0.256 = 0.744 the calculation of the value of q2 over with value 0.744, this shows that the predict interest in buying repeated consumers through satisfaction, quality products, perception price, and in location of economic activities food vendors feet five is of 74.4%. based on these results, so modeled on this research can be expressed have goodness of fit good because capable of producing the ability been predicted from in the model more than 50%. 5. discussion based on table 6, it can be explained as follows: 1. quality products have a positive influence and significantly to satisfaction with the value of t count of 3.775 and value of 0.000 p value, where the value of p value is under 0.05. with the conclusion that hypothesis h1 rejected. it means product quality affect customer satisfaction 2. perception prices have no influence of satisfaction with the value of t count of 0.229 and value of 0.765 p value, where the value of p value mentioned above 0.05. with the conclusion that hypothesis h2 accepted. this means that perception prices are not affect customer satisfaction 3. in location of economic activities have a positive influence and significant impact on satisfaction with the value of t count as much as 2.379 p value 0.018 and that the value of as much as, where the value of p value under 0.05. by inference that hypothesis h3 rejected. it means in location of economic activities affect customer satisfaction 4. the satisfaction of service consumers have a positive influence and significant impact on repeated interest in buying customers with the value of t count as much as 15.879 p value 0.000 and that the value of as much as, where the value of p value under 0.05. by inference that hypothesis h4 rejected. it means the satisfaction of service consumers affect repeated consumers interest in buying. the results of research conducted to the consumers who makes a purchase bar at food vendors of street vendors on tangerang selatan, pondok aren, bintaro, and as many as 100 people ciputat pamulang consumers of the product quality they have an average point between 4.49% and 4.83%. the highest score in the diversity of products and the technologies used in relation to equipment used, that means that consumers decided to buy food in the area food vendors a foot of five for reasons of diversity or variation on the menu many cooking and technology used in conformity with expectation/the consumer advocacy. the results of research conducted to the consumers who makes a purchase bar at food vendors of street vendors on tangerang selatan region, pondok aren, bintaro, pamulang ciputat and as many as 100 people visit into perception of the price they have an average point between the exam is 4.75–4.95%. the highest score in kompetitifan it is always traders food sidewalk had made consumers are satisfied that the/food what is happening to them in conformity with expectation/their desire to make they want to come back to buy the food. the research conducted by to consumers which purchase dilokasi food trader sidewalk in the tangerang selatan, bintaro, ciputat and pamulang as many as 100 people consumers of the an effort from table 3: composite reliability variable composite reliability product quality 0.854 customer satisfaction 0.877 location business 0.779 interest in buying repeated 0.848 price perception 0.862 a source of primary: data processed 2018 table 4: path coefficient variable path coefficient significant product quality (x1)→ customer satisfaction (y) 0.637 0.000 location business (x2)→ customer satisfaction (y) 0.237 0.018 price perception (x3)→ customer satisfaction (y) 0.046 0.765 customer satisfaction (y)→ interest in buying repeated (y1) 0.737 0.000 a source of primary: data processed 2018 table 5: path coefficient variable path coefficient (r2) r2 product quality (x1)→ customer satisfaction (y) 0.637 0.405 location business (x2)→ customer satisfaction (y) 0.237 0.056 price perception (x3)→ customer satisfaction (y) 0.046 0.002 customer satisfaction (y)→ interest in buying repeated (y1) 0.737 0.543 a source of primary: data processed 2018 lestari, et al.: determinants customer satisfaction and implications of interest in buying repeated types of buyers in food vendors street vendors (pmkl) in tangerang selatan-banten international review of management and marketing | vol 8 • issue 4 • 201830 hold food on the sidewalk has rata-rata value of 4.61–5.10%. the highest score in facilities the provision of facilities must also be able to support, ranging from the toilet, parking lot, and lain-lain that should be provided the sword managers sidewalk was not make a hitch them to continue to buy repeated pproduk the food. the results of research conducted to the consumers who makes a purchase bar at food vendors of street vendors on tangerang selatan, pondok aren, bintaro, and as many as 100 people ciputat pamulang consumers of customer satisfaction as the provision of services the food vendors in the area of street vendors have an average point between the 4.55–4.97%. the highest score in the hope of consumers according to quality for a value 4.97%. this means that consumers take pleasure so it was always want to buy the food products because the in conformity with expectation/ tastes what they want. the research conducted by to consumers which purchase dilokasi food trader sidewalk in the tangerang selatan, bintaro, ciputat and pamulang as many as 100 people consumers of interest in buying them done consumer of food on the sidewalk has avarage value of 4.49–4.95%. the highest score in the interest of explorative, where interest it shows a person behavior this those who always looking for information on products diminatinya worth 4.95%. this means that consumers feel always wanted to buy repeated day for food sold street vendors because the in conformity with expectation/tastes what they want. based on the results of the product quality pengujiann hypothesis to have a positive influence and significant impact on satisfaction. the quality of a product at ranch market pondok indah, but there are still several things must be be increased again such as the preparation of products at a rack posted an interesting and easy to find showed variable testing shows the product quality have had a positive impact significantly to konsumen. ricky interest in buying. the perception of the price is not having the effect on satisfaction and what that means is consumers to consume of certain kinds of food are not related with evaluation will also be food prices are offered by reason can give satisfaction more so as to keep on will do purchases in online stores to the same food arising. the perception of the price can have negative effects of the decision of the buying and customer satisfaction. in location of economic activities have a positive influence and significantly to customer satisfaction have a positive influence and significantly to repeated interest in buying consumers. the influential positively and significantly to customer satisfaction customers restaurants ayam geprek djogjakarta semarang. the significant against satisfaction customer. customer satisfaction have a positive influence and significant impact on interest in buying repeated consumers. customer satisfaction influential positively and significant impact on customer loyalty because with increasing customer satisfaction then consumers who survives is increased. 6. conclusion based on the formulation problems and research, and drawing conclusions or research is as follows: 1. quality products it has some positive effects significantly to customer satisfaction who buy food at the sidewalk. 2. 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(2012), l2p2: locationaware location privacy protection for location-based services. in proceedings ieee infocom. p1996-2004. . international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2017, 7(3), 134-137. international review of management and marketing | vol 7 • issue 3 • 2017134 evolution of management theory within 20 century: a systemic overview of paradigm shifts in management sasan torabzadeh khorasani1*, maryam almasifard2 1texas tech university, united states, 2texas tech university, united states. *email: sasan.torabzadeh@gmail.com abstract significant progress in civilization of human being has been made over 20 century. advance technology; globalization and revolution of communication are the main outcomes of this development. however, it is obvious that these achievements have been significantly influenced by evolution of management theories. the paradigm shift from classical management to modern management can be clustered into several phases. this paper presents an overview of evolution of management theory within 20 century, and provides an analogy of the notion of kuhn’s scientific paradigm in terms of management theory evolution. moreover, the intersections of management with other sciences or medici effect that have been occurred in this area (johansson, 2004) will be discussed in this article. keywords: management theory, paradigm shift, kuhn, medici effect jel classification: b15 1. introduction since late 19th century, management has been shifted to different paradigms. for better understanding those changes in management philosophy, i introduce the paradigm definition according to thomas kuhn’s paradigm explanation. a paradigm defines the global view of a scientific community (lauden, 1977; suppe, 1974). paradigm is the main concept of kuhnian argument. paradigm shift is done by leaders, which causes innovation and create new eras. the paradigm consists numbers of specific rules and beliefs of the community (kuhn, 1970). kuhn believes that each scientist’s decision to follow a new paradigm must be created on future promise faith (kuhn 1970. p. 158). in addition, he said that science develops through paradigm shifts, but we cannot be sure that it progresses toward anything (kuhn 1970. p. 170). evolution of management science can be clustered into 5 main paradigm shifts. main clustering’s criteria is based on paradigm definition of thomas kuhn. in this case, each theory has determined new specific laws and created new believes in management science within 20 century. on the other hand, they have significant influences in organization science. it means that each of these theories represents a paradigm shift. i also introduce the pioneers of each paradigm in this paper. the five main paradigm shifts of management theory is shown in figure 1. early management theories involve number of attempts at finding possible ways to improve industrial life at the end of the 19th century: • scientific management • administrative management theory • behavioral management science. scientific management (1910s): described management as a science with workers having specific but different responsibilities. scientific management is the first remarkable paradigm shift in early 20 century. the pioneer of this shift was taylor. he published the book, principle of management science in 1909. in this book, he described how he formalized the principles of scientific management and how new paradigm was established. khorasani: evolution of management theory within 20 century: a systemic overview of paradigm shifts in management international review of management and marketing | vol 7 • issue 3 • 2017 135 moreover, the fact-finding approach put forward and largely adopted. it was a replacement for what had been the old rule of thumb (tunstall,1992). taylor stated that increasing specialization and division of worker reduce the time which worker expends to produce a unit of production. consequently, the efficiency of production process will be improved. taylor’s principles: 1. workers performance study, job knowledge collection, and find out improvement ways of doing task. 2. the performing task methods codification into standard procedures. 3. worker allocation based on their skills and abilities and held training for enable them to perform better. 4. define a level of acceptance for each task, and set a payment system with reward for the performance above acceptable level. taylor’s introduction of scientific management caused paradigm shift from the division of labor and the significant of machinery to facilitate labor. taylor said management should see labors having different skills and tasks; provoke the scientific choices, training, and labor’s development and the same division of job between labors and management. that is a complete mental change on the part of the workers’ section and an equally complete revolution on the management’s side. in other words, scientific management requires complete revolution on both sides (ratnayake, 2009). taylor’s paradigm is known as one of the first systematically study of human behavior at work which consists breaking down each task to its smallest unit as possible and to find out the best way to do each task. a paradigm moves a group into a profession or, at least, a discipline (kuhn, 1970. p. 19). 2. limitations of scientific management theory workers and unions began to oppose his approach because they feared that working harder or faster would exhaust whatever work was available causing layoffs (ratnayake, 2009). 2.1. administrative management theory in almost same time that taylor published his scientific management, fayol and weber were attempting to describe a new management theory’s paradigm, which is known as administrative management theory. administrative management based on how an organization must be structured and it emphasizes on effective management. 2.2. fayol perspective in spite of his background in engineering, he understood the managerial skills. he found out that management is more than increasing throughput methodology and devising the system. he began to develop his managerial idea as he works as general manager (waren, 1995). then, he defined his management theory as a collection of principles, rules, methods, and procedures (fayol, 2013). 2.3. fayol management’s principle 1. division of work, 2. authority, 3. discipline, 4. unity of command, 5. interrelation between individual interests and organizational objectives, 6. unity of direction remuneration, 8. centralization, 9. scalar chains, 10. order, 11. equity, 12. job guarantee, 13. initiatives, 14. team-spirit (waren and bedian, 2009). beside fayol, bureaucracy theory of max weber is another major work of administrative management theory. weber’s bureaucracy theory is identified by hierarchical organization, describe authority in a specific area of activity, action on the basis of rules, training for bureaucratic official experts, rules are applied by neutral officials (allan, 2005). administrative management is considered as a paradigm because it introduced new approach of management and present disciplinary rules for organization. in other words, it reveals hierarchy and bureaucratic structure for organization. 2.4. behavioral management theory one decade before second world war, pioneers like mary parker follet developed humanistic perspective of management. mary parker follet emphasized on interactions of management and labor. she defined management, as doing tasks through people. direct communication should take place between all managers from different department follet stressed on labor participation in work development process. she is also well known as mother of conflict resolution. she believed in knowledgebased authority. after follet behavioral theory progressed by hawthorn, maslow and mcgregor between 1940 to 1970. the main cores of humanistic perspective are: human relations movement, human resources perspectives, and behavioral sciences approach. behavioral management theory is an intersection between management theory and behavioral science. it highlights the importance of workers’ motivation as a main goal of organization. it discussed about how psychology is important in organization study. this intersection results a new paradigm in management science in mid 20. maslow’s hierarchy of needs and mcgregor’s theory x/y are classified as 2 outcomes of humanistic approach of management. figure 1: evolution of management theory within 20 century khorasani: evolution of management theory within 20 century: a systemic overview of paradigm shifts in management international review of management and marketing | vol 7 • issue 3 • 2017136 2.5. management science theory management science theory was developed after second world war. using mathematics, statistic and quantitative techniques are main characters of this theory. operation research, quality control, inventory management, and information technology are emerged as major fields in terms of management. father of quality management, edward deming, introduced the most remarkable philosophy of management science. quality was known as the most important key success factor till 1990s. edward deming used statistical tools for quality control. the main key factors of quality management are: customer satisfaction, employee engagement and continuous improvement. undoubtedly, deming is a pioneer of quality management and statistical application in management. he introduced a new management paradigm, which led the huge development in quality management. 2.6. organization environment theory organizational environment study began in 1960s (kahn and katz, 1966). early works on open system’s nature of organization have influenced in further research (davis and powel, 1992). this theory describes that environment consists forces, conditions and influences from outside of organization. environment has an enormous impact on manager’s ability to use resources. even though some researcher have been studied organizational death (aldrich and marsden, 1988). according to this theory 2 system are defined: the open-system and closed system. open–systems view: external resources used for producing goods and serviced are defined as inputs of system. process of transforming the external resources to finish goods or services is called conversion. finish goods or services are provided to external environmental are the output of system. closed system: a system is not affected by external environment and looses its ability to control itself. organizational-environmental theory revealed numbers of interdisciplinary research in terms of management. relationship between organization study and ecology, demography sustainability and other environmental science provides new rules and beliefs in management science. nowadays, sustainability and ecological aspect of production is one of the big global concerns. 3. conclusion as it can be clearly seen that 20 century is faced to five main turning points in management sciences. these theories were emerged by pioneers who could understand the needs of industries and customers, problems and potential solutions. according to thomas kuhn definition, each paradigm defines new set of rules and creates new beliefs. by reviewing all five main major management’s paradigms, we can easily figure out the rules and beliefs that created each theory has created, and we can see their impact on work environment, quality of production and sociocultural changes. two first theories were introduced in the second decade of 20 century. taylor presented scientific management, which emphasized on experimental methodology in management. moreover, he focused on training of workers. his objective was faster work. at the same time, administrative theory emerged by fayol and weber. 14 principles of fayol and bureaucracy theory of weber that is shown in figure 2 are two first organization approach of management. their works have significant impact on hierarchical and disciplinary structure of organization. one decade later, behavioral management theory was born. mary parker follet was disagreeing with taylor philosophy. she believed that motivation of workers plays an important role in management. she was against to pushing workers to perform faster. she said that pushing workers may causes of dissatisfaction. humanistic approach of management has been developed since 1940. intersection between management and behavioral science led the first medici effect took place in this paradigm shift (johansson, 2004). the well-known theories like theory x and y figure 2: bureaucracy theory of management. retrieved (2014) from http://www.slideshare.net/bsetm/chapter-2-the-evolution-ofmanagement-theory figure 3: maslow hierarchy of needs chart. maslow, a. h. theory of human motivation. journal of psychological review, 50, 370-396 khorasani: evolution of management theory within 20 century: a systemic overview of paradigm shifts in management international review of management and marketing | vol 7 • issue 3 • 2017 137 and maslow’s hierarchy of needs, which is shown in figure 3 are clustered in humanistic category. management science theory that represents the intersection between management and mathematics science led a huge revolution in quality management. deming principles and toyota lean thinking philosophy (liker, 2004), and developing knowledge management are the main outcomes of this paradigm. on the other hand, medici effect occurs here because intersection between western management and japanese system took place. organization-environment theory is new trend in management. it is the result of intersection between organization knowledge and environment science. research on this theory covers wide areas. relationship between management and science such as sustainability, ecology, and human health has been studied since 1960. according to what we can see over 100 years of management evolution, we can conclude that five main theories have been shifting management paradigms into another one. the first 2 theories are known as classical management. and the next 3 theories are the result of the intersections between management and other science disciplines. references aldrich, h.e., marsden, p.v. (1988), environments and organizations. beverely hills, ca: sage. allan, k.d. (2005), explorations in classical sociological theory seeing the social world. california: pine forge press. davis, g.f., powel, w.w. (1992), hand book of industrial and organizational psychology. 2nd ed., vol. 3. palo alto, ca: consulting psychologists press. fayol, h. (2013), general and industrial management. ney york: pittman. johansson, f. (2004), the medici effect: breakthrough insights at the intersection of ideas, conecpt, and cultures. boston, massachusetts: harward business school press. kahn, r.l., katz, s. (1966), the social psychology of organization. new york: willey. lauden, l. (1977), progress and its problems. berkeley: university of california press. liker, j. (2004), the toyota way: 14 management principles from world’s greate manufacturer. new york: mcgraw-hill. kuhn, t. s. (1970), book and film reviews: revolutionary view of the history of science: the structure of scientific revolutions. the physics teacher, 8(2), 96-98. suppe, f. (1970), the structure of scientific revolutions. chicago: ohio state. ratnayake, c. (2009), evolution of scientific management towards performance measurement and managing systems for sustainable performance in industrial assets: philosophical point of view. journal of technology management and innovation, 4(1), 152-161. tunstall, d. (1992), the growing importance of scientific rules of thumb in developing indicators of resource sustainability. in: prepared for the international conference on earth rights and responsibilities. waren, d. (1995), henri fayol: learning from experience. journal of managemnt history, 1, 5-12. waren, d., bedian, a.g. (2009), the evolution of management. new york: john wiley & sons. _goback . international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2017, 7(2), 372-377. international review of management and marketing | vol 7 • issue 2 • 2017372 the relationship between information literacy and knowledge management among students and faculty members of shiraz university mozhgan hemmati* school of paramedical, shiraz university of medical sciences, shiraz, iran. *email: piralibhemati@gmail.com abstract universities as the main knowledge creation centers in society need to strengthen their information literacy and knowledge management (km) skills in order to achieve their objectives. in this regard, the aim of this study is to investigate the relationship between information literacy and km in academic environments. the statistical population of the research includes students and faculty members of shiraz university. the stratified random sampling method is used and the sample size is determined 136 students and 54 faculty members by using morgan table. to collect the necessary data, two questionnaires of information literacy and km have been used. to assess the level of information literacy and km, descriptive statistics is used and to investigate the relationship between information literacy and components of km, nonparametric kolmogorov–smirnov test and spearman correlation coefficient are used. the findings show that the level of information literacy is estimated 3.30 for students and 3.60 for faculty members which are higher than average. the evaluation of the components of km showed that km is estimated an intermediate level (3.02) for students, and higher than the average (3.19) for faculty members. there is a significant relationship between students’ information literacy and components of knowledge creation and knowledge storing. there are significant relationships between information literacy of faculty members and the four components of km (creation, storage, sharing, and application). finally, recommendations are provided according to the results to promote information literacy. keywords: information literacy, knowledge management, students, members of faculty, shiraz university jel classification: d8 1. introduction universities are considered as the main knowledge creation and dissemination centers in society. creating innovations and consequently creating new knowledge has long been considered as the most important functions of academic institutions. in this regard, most efforts of the academic community are in enhancing knowledge and strengthening intellectual capital by taking advantage of existing resources. these resources include not only informatics resources, but also involve human resources and intellectual forces that are necessary to be applied and adopted through proper management methods (saunders, 2012; hawkins, 2000). educational institutes and universities are including organizations that have an inevitable link with knowledge creation and its dissemination. today, in the era of globalization, having information literacy, information sharing and knowledge management (km) and institutionalized networks have become an important issue for policy makers, managers, and citizens (hosseini and poorasadi, 2011). km is the process of creating, collecting organizing, disseminating and exploiting knowledge. km is based on the grounds that organizations have high volumes of data. these data include reports, financial data, tangible information and similar cases and organizations usually adopt different mechanisms to organize irregular data and changing it into information (baghi, 2002). km is the process of creating, collecting, organizing, disseminating and application of knowledge. these five factors in km provide the background, education, feedback, retraining or removing training, which is usually required to create, preserve and restore the organization’s capabilities (bhatt, 2001). the concept of information literacy is constantly changing and has been completed during different periods of human life. this hemmati: the relationship between information literacy and knowledge management among students and faculty members of shiraz university international review of management and marketing | vol 7 • issue 2 • 2017 373 process involves the simplest state of literacy; i.e., skills needed by any person with respect to his role in society, including reading and writing skills and an understanding of his language (bawden, 2001). information literacy is a set of abilities needed to identify the information whenever is needed, and the ability to determine the location, evaluation and effective implementation of needed information (feldman and feldmann, 2000). if anyone can identify his information needs, locate the needed information and use it for accessing the desired information and unraveling it to solve the problem and do something certain to be used effectively, he will be considered as information literate (hosseini and poorasadi, 2011). the main purpose and ultimate goal of information literacy are lifelong and independent learning (owusu-ansah, 2004). information literacy skills are the most important tool which teaches students the permanent learning process in addition to preparing them to study in higher educational levels and provides them the tools to promote knowledge and update knowledge after university (ghasemi, 2004). information literacy is not limited to university and enjoys a special status in research and activities after the university (nazari, 2005). literacy, reading and information literacy is important in today’s society and is one of the major indices of km, especially in explicit knowledge. to prepare and train and promote information literacy, several actions can be taken (gatchalk, 2009). in this regard, this study aims to investigate the relationship between km and information literacy among students and faculty members of shiraz university. this study seeks to evaluate and measure information literacy skills, and km components among students and faculty members and their comparisons among them, and then it discusses the relation between information literacy and km. the research hypotheses have been formulated as follows: 1. the level of information literacy among students and faculty members is above average. 2. the level of km among students and faculty members is above average. 3. there is a significant relationship between information literacy and km. here’s an overview of internal and external studies have been conducted in the field of information literacy and km. hooshmand et al. (2014) studied enabling factors in the development of km process including “human resources, information technology, education and culture” and have identified four sub-processes of km, “creating, storing, sharing and application of knowledge.” hashemi et al. (2012) evaluated the literacy level of faculty members of islamic azad university and had found that the information literacy of faculty members is at the intermediate level and above average. also, the knowledge and skills of faculty members in the use of scientific databases are less than average. zahedbabelan and rajabi (2011) in the assessment of students’ information literacy stated that the students’ information literacy in five information literacy standards has been above average. madhoushi and niazi (2011) concluded that the status of all selected universities, in terms of km index is not suitable and is less than the desired level. salehi and hajizadeh (2010), in the study of general computer literacy of staff at islamic azad university of mazandaran province, concluded that general computer literacy of staff is lower than average. pandpazir and cheshmeh (2010) investigated the senior students’ information literacy at kermanshah university of medical sciences based on eisenberg and berkowitz model and showed that students’ information literacy is above average. asgharnia (2009) assessed and explained the information literacy of students in the department of psychology and educational sciences. they stated that the information literacy of students is above average in any of the standards. hassanzadeh (2004) concluded that in both forms, information literacy (research-oriented and organization-oriented) is considered as one of the pillars of km in organizations. lwehabura (2016) have studied the information literacy skills of graduate students in tanzania and found that there is a lack of information literacy in information searching skills and use of information and there is a need for information literacy courses for students. kong (2014) assessed the development of information literacy skills in km process and stated that digital approaches in teaching and learning environment, can develop information literacy skills and km among students and professors. thirion and pochet (2009) assessed the level of information literacy of students of the french language in belgium and showed a poor level of students’ information literacy. perrin et al. (2008) concluded that the inclusion of information literacy education in the curriculum of students is a need to improve the quality of students. sparks and hirsh (2000) in evaluating the information literacy of teachers in schools in texas showed that higher information literacy skills are needed to have successful students and teachers. 2. materials and methods the present paper is applicable in terms of object and is descriptive-correlation in terms of the method. according to the hypotheses, research methodology consists of three parts: the first part includes the evaluation of information literacy level, the second part evaluates the components of km at the university and the third part investigates the relationship between information literacy and km. the population of the research includes graduate students and faculty members of shiraz university, respectively. the stratified random sampling method was adopted; so that four faculties of shiraz university had been selected and a random sampling of graduate students and faculty members has been conducted. morgan table was used to determine sample size. the sample size is determined 136 students and 54 faculty members by using morgan table. the sample size for each faculty is provided in table 1. table 1: sample size in faculties of shiraz university row faculty graduate students faculty members 1 sciences 25 12 2 agriculture 35 14 3 economics and management 28 10 4 literature and humanities 48 18 total 136 54 hemmati: the relationship between information literacy and knowledge management among students and faculty members of shiraz university international review of management and marketing | vol 7 • issue 2 • 2017374 to collect data, two questionnaires of information literacy and km have been used. information literacy questionnaire is based on six great skills of eisenberg and berkowitz model in a form of 22 questions to identify people’s information literacy capabilities (pandpazir and cheshmeh, 2010). km questionnaire is based on jashpara model which consists of four components of knowledge creation (12 items), stored knowledge (7 items), knowledge sharing (5 items) and application of knowledge (5 items) and has a total of 29 questions (ashok, 2004). the questionnaires were based on 5-point likert scale. likert scale is scored from 1 to 5. the “1” represents the lowest and “5” represents the highest score. items are distributed after a preliminary study and checking their validity and reliability. respondents are asked to score their agreement or disagreement with statements (salimi et al., 2008). in order to ensure the validity of the study, teachers and advisors and experts in this field were asked and necessary amendments were considered. cronbach’s alpha was used to assess the reliability of the questionnaire. cronbach’s alpha coefficient for information literacy questionnaire was 0.78 and for knowledge, management questionnaire was 0.81 which indicate a suitable reliability. descriptive statistics and the average likert points were used to assess the levels of information literacy and km. to examine the relationship between information literacy and km components, the kolmogorov–smirnov tests and spearman correlation coefficient are used. data analysis was done by spss software version 20. 3. findings according to research hypotheses, findings are proposed in three parts in accordance to hypotheses testing. the results are evaluated and presented for the two groups of students and faculty members. 3.1. the first hypothesis test the first hypothesis states that the level of information literacy among students and faculty are above average. the literacy level of students is tested, first. results of the assessment of students’ information literacy are given in table 2. six literacy skills were assessed using a likert scale and the average obtained scores is reported. among the six students’ information literacy skills, understanding the need for information is estimated with an average of 3.73 as the highest average and using information with an average of 3.08 was the lowest average. students’ information literacy score is estimated 3.30, which is above the average. in table 3, the information literacy level of faculty members is evaluated. among the six information literacy skills, combining new information with prior knowledge is estimated with an average of 3.95 as the highest average and assessment of searching process with an average of 3.13 was the lowest average. the information literacy score of faculty members is estimated 3.60, which is above the average. comparison of information literacy levels in both groups showed that the information literacy level of the faculty members is higher than students. thus, according to the assessment of information literacy level among students and faculty members, it can be stated that information literacy level was higher than average in both groups, and therefore the first hypothesis is confirmed. 3.2. the second hypothesis test the second hypothesis states that the level of km among students and faculty are above average. the km level of students is tested, first. results of the assessment of students’ km are given in table 4. km consists of four main components. knowledge storing is estimated with an average of 3.28 as the highest average and knowledge creating with an average of 2.83 was the lowest average. students’ km score is estimated 3.02, which is above the average. in table 5, the km level of faculty members is evaluated. among the components of km, knowledge storing is estimated with an average of 3.41 as the highest average and application of knowledge with an average of 3.02 was the lowest average. the table 2: assessing students’ information literacy level row skill average standard deviation min max 1 understanding the need for information 3.73 0.36 2 5 2 information searching strategies 3.12 0.41 1 5 3 locating and access to information 3.23 0.42 1 5 4 use of information 3.08 0.61 1 4 5 combining new information with prior knowledge 3.24 0.48 1 5 6 evaluation of searching process 3.41 0.27 1 5 information literacy 3.30 table 3: assessing faculty members’ information literacy level row skill average standard deviation min max 1 understanding the need for information 3.81 0.47 2 5 2 information searching strategies 3.75 0.55 1 5 3 locating and access to information 3.54 0.65 1 5 4 use of information 3.42 0.43 2 5 5 combining new information with prior knowledge 3.95 0.35 2 5 6 evaluation of searching process 3.13 0.39 1 5 information literacy 3.6 table 4: assessing students’ knowledge management level row component average standard deviation min max 1 knowledge creation 2.83 0.31 1 4 2 knowledge storing 3.28 0.47 1 5 3 knowledge sharing 3.08 0.52 1 5 4 application of knowledge 2.92 0.49 1 5 knowledge management 3.02 hemmati: the relationship between information literacy and knowledge management among students and faculty members of shiraz university international review of management and marketing | vol 7 • issue 2 • 2017 375 km score of faculty members is estimated 3.19, which is above the average. comparison of km levels in both groups showed that the km level of the faculty members is higher than students. thus, according to the assessment of km level among students and faculty members, it can be stated that km level was on average for students and was higher than average for faculty members; therefore, the second hypothesis is rejected. 3.3 the third hypothesis test the third hypothesis states that there is a significant relationship between information literacy and km. to investigate the relationship between the two variables, the kolmogorov–smirnov test for checking the normality of data distribution is done in table 6. the results of this test showed that the distribution of variables of information literacy and km in both students and faculty members was significant and the hypothesis of data distribution non-normality will be accepted. therefore, the nonparametric analysis is used to examine the relationship between the variables. to examine the relationship between information literacy and km, spearman correlation coefficient was used. in table 7, the results of this test on students of shiraz university is provided. the results showed that the correlation between information literacy and knowledge creation (p = 0.002) and knowledge storing (p = 0.008) was significant. and the highest correlation was between information literacy and knowledge storing by a coefficient of 0.41. there is no significant relationship between information literacy and the two components of knowledge sharing and application of knowledge among students (p ≥ 0.05). therefore, the third hypothesis which indicates a significant relationship between information literacy and km among students cannot be confirmed. in table 8, spearman correlation test results are given for faculty members of shiraz university. the results showed that the correlation between information literacy with all four components of km was significant (p ≤ 0.05). the highest correlation is between information literacy and knowledge creation (p = 0.004 and r = 0.56). the correlation coefficients of other components are estimated: application of knowledge (p = 0.005 and r = 0.48), knowledge storing (p = 0.014 and r = 0.37) and knowledge sharing (p = 0.021 and r = 0.31). as a result, the third hypothesis is approved and there is a significant relationship between information literacy and km. 4. conclusion this study aims to investigate the relationship between km and information literacy among students and faculty members of shiraz university. three main hypotheses were developed to evaluate the level of information literacy, km and the relationship between these two variables. the first hypothesis test results showed that the students’ information literacy is 3.30, respectively which is higher than the determined average. among the six skills of information literacy, students have a true understanding of their information needs. in terms of searching and combining new information with prior knowledge evaluation skills, the results are satisfactory. in the table 5: assessing faculty members’ knowledge management level row component average standard deviation min max 1 knowledge creation 3.23 0.25 2 5 2 knowledge storing 3.41 0.72 2 5 3 knowledge sharing 3.11 0.74 1 5 4 application of knowledge 3.02 0.72 2 5 knowledge management 3.19 table 6: kolmogorov–smirnov test variable sample average z kolmogorov– smirnov p information literacy students 3.3 0.793 0.021 information literacy faculty members 3.6 0.832 0.035 knowledge management students 3.2 0.651 0.004 knowledge management faculty members 3.19 0.452 0.009 table 7: the relationship between information literacy and km components among students component spearman correlation coefficient (r) sig. (p) knowledge creation 0.32 0.002 knowledge storing 0.41 0.008 knowledge sharing 0.12 0.064 application of knowledge 0.08 0.071 km: knowledge management table 8: the relationship between information literacy and knowledge management components among faculty members component spearman correlation coefficient (r) sig. (p) knowledge creation 0.56 0.004 knowledge storing 0.37 0.014 knowledge sharing 0.31 0.021 application of knowledge 48/0 005/0 two skills of searching information strategies (determining available information resources) and how to use gathered information (extract useful information), the students have shown poor performance. the first hypothesis test results showed that the level of information literacy for faculty members is estimated to be 3.60 which has been above the determined average. the skill of combining new information with prior knowledge has achieved the highest score. the faculty members’ understanding of their information needs was satisfactory and unlike students they are well aware of information strategies and have taken advantage of it. locating and finding appropriate and new information are also in a good state. among the six literacy skills, evaluating the result of the search process has won fewer scores. therefore, the first hypothesis has been accepted and the level of information literacy of students and faculty members of shiraz university has been above the average. hemmati: the relationship between information literacy and knowledge management among students and faculty members of shiraz university international review of management and marketing | vol 7 • issue 2 • 2017376 the second hypothesis test results showed that the level of km for students is at the intermediate level of 3.02. students have a good score in the component of knowledge storing. knowledge storing refers to storing and maintaining of current knowledge in university and beyond this area and research projects and the method of being addressed to knowledge. the three components of creating, sharing, and application of knowledge are evaluated at average, and below average level. the second hypothesis test results showed that the level of km for faculty members is estimated 3.19 which have been above average. faculty members have achieved the highest score in the category of knowledge storing. other components in order of average include knowledge creation, knowledge sharing, and application of knowledge. the level of all the components has been evaluated above average. the average level of km for students was average and for faculty members above average, and therefore the second hypothesis is rejected for the students and is accepted for the faculty members. the third hypothesis test results showed a significant relationship between students’ information literacy and knowledge creation and knowledge storing. the highest correlation was between information literacy and knowledge storing by a coefficient of 0.41. there is no significant relationship between information literacy and two components of knowledge sharing and application of knowledge. the results of the third hypothesis test for faculty members states that there is a relationship between information literacy with all four components of km. the highest correlation was between knowledge creation and information literacy (0.56), respectively. as a result, the third hypothesis is confirmed for faculty members indicating the existence of a significant relationship between information literacy and km. according to the obtained results, practical suggestions are presented. km is considered as one of the pillars of development in the country and this management requires the establishment of strong leadership system in an academic environment, knowledge friendly working and scientific environment, and the possibility to convert and apply knowledge and the development of information literacy skills. it is suggested that a systematic planning can be conducted in order to strengthen the information literacy skills of students and to promote information literacy level of the students. in this case, we can see progress in the students’ level of km. the method of using obtained information is including a skill that is required to be strengthened by the participation of teachers and students in courses and meetings. conducting more studies and applicable research can increase the level of information literacy, and given that information, literacy is introduced as one of the factors facilitating km programs, it will improve the km level among students. references asgharnia, f. (2009), the literacy level of students at the faculty of psychology and educational sciences of allameh tabatabai university based on (information literacy competency standards for higher education) approved by association of college and research libraries. thesis in the field of information sciences, faculty of psychology and educational sciences, allameh tabatabaei university. ashok, j. (2004), knowledge management: an integrated approach. london: pearson education limited. baghi, f. (2002), knowledge management. journal of electronics industries, 6, 17-25. bawden, d. (2001), information and digital literacies: a review of concepts. journal of documentation, 57(2), 218-259. bhatt, g.d. (2001), knowledge management in organizations: examining the interaction between technologies, techniques, and people. journal of knowledge management, 5(1), 68-75. feldmann, l., feldmann, j. (2000), developing information literacy skills in freshmen engineering technology students. in: frontiers in education conference, 2000. fie 2000. 30th annual. ieee. vol. 2. ps2e-1. gatchalk, p. (2009), knowledge management system in the police service. translation: nazari and norouzi. tehran: iran police organization studies. ghasemi, m. (2004), the importance and necessity of teaching information literacy in the development and strengthening of higher education. conference on the development of information literacy education in libraries, information centers, and museums. organization of libraries, museums, and documents center of astan quds razavi, mashhad. hashemi, a., hemmati, a., abbasi, a. (2013), a study on the information literacy of the faculty members of iau region one. information and communication technology in educational sciences, 3, 105-126. hassanzadeh, m. (2004), application of information literacy components in knowledge management of organizations. conference on the development of information literacy education in libraries, information centers, and museums, organization for libraries, museums and documents center of astan quds razavi, mashhad. hawkins, b. (2000), libraries, knowledge management, and higher education in an electronic environment. for full text. available from: http://www.alia.org. au/conferences/alia2000/proceedings/ bria n.hawkins.html. hooshmand, e., tourani, s., ravaghi, h., ebrahimipour, h. (2014), challenges in evaluating clinical governance systems in iran: a qualitative study. iranian red crescent medical journal, 16(4), e13421. hosseini, n., poorasadi, m. (2011), knowledge sharing and information literacy. journal of management studies, 6(1), 77-94. kong, s.c. (2014), developing information literacy and critical thinking skills through domain knowledge learning in digital classrooms: an experience of practicing flipped classroom strategy. computers and education, 78, 160-173. lwehabura, m.j. (2016), an assessment of information literacy skills among first-year postgraduate students at sokoine university of agriculture tanzania. journal of librarianship and information science. doi: 10.1177/0961000616667802. madhoushi, m., niazi, e. (2011), assessing the level of knowledge management in selected universities. research transformation management, 3(6), 116-137. nazari, m. (2005), information literacy. tehran: iranian information and documentation center. owusu-ansah, e.k. (2004), information literacy and higher education: placing the academic library in the center of a comprehensive solution. the journal of academic librarianship, 30(1), 3-16. pandpazir, m., cheshmeh, s.m. (2009), evaluation of students information literacy by eisenberg and berkowitz six big skills at faculty of medical sciences, kermanshah university. informing research and public libraries, 16(2), 115-137. hemmati: the relationship between information literacy and knowledge management among students and faculty members of shiraz university international review of management and marketing | vol 7 • issue 2 • 2017 377 perrin, c., hossain, d., cumming, k. (2008), nursing students’ information literacy skills prior to and after information literacy instruction. in: proceedings of the 5th international lifelong learning conference 2008. central queensland university. p311-316. salehi, m., hajizad, m. (2010), the study of general computer literacy among the employees of the islamic azad universities of mazandaran province. information and communication technology in educational sciences, 1(1), 39-53. salimi, m., shahbazmoradi, s., bamdad sufi, j. (2008), designing and construction of likert scale scores through research approach in the management. journal of knowledge management, 80, 60-41. saunders, l. (2012), faculty perspectives on information literacy as a student learning outcome. the journal of academic librarianship, 38(4), 226-236. sparks, d., hirsh, s. (2000), a national plan for improving professional development. oxford, oh: national staff development council. thirion, p., pochet, b. (2009), information literacy in students entering higher education in the french speaking community of belgium: lessons learned from an evaluation. ifla journal, 35(2), 152-170. zahedbabelan, a., rajabi, s. (2011), the literacy level of students. educational technology, 5(4), 309-317. . international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2018, 8(6), 78-92. international review of management and marketing | vol 8 • issue 6 • 201878 the nexus between types of innovation and marketing performance of small medium-sized enterprises in an emerging economy samuel afriyie*, jianguo duo, kingsley appiah, abdul-aziz ibn musah school of management, jiangsu university, zhenjiang 212013, pr china. *email: freshsam2000@yahoo.com received: 18 august 2018 accepted: 25 october 2018 doi: https://doi.org/10.32479/irmm.7042 abstract nowadays the practice in which businesses find themselves becomes unknown, innovation types have been seen as a critical element in an organizational growth of companies. this paper intends to cross examine the interrelation between innovation types and small medium-sized enterprises (sme) marketing performance (mp) in a growing economy of ghana. the research used quantitative methods, in which four research hypotheses were formulated and tested using partial least squares structural equation modelling. in all, 437 respondents of sme composed data through a questionnaires survey sight in the cities of kumasi and accra respectively in ghana. the study outcomes identified the usefulness of a strong and meaningful impact between the types of innovation namely product, process, marketing and organization and sme mp of a developing economy. the paper explores to add to the limited knowledge of sme in the perspective of innovation types literature relationship to the mp in a developing economy. studies conducted, consistently endeavor to determine the connection between the types of innovation and the firm performance and neglecting the mp viewpoint. hence, this research offers a specialized focus on the types of innovation and its relationship via sme mp in a developing economy. furtherance, executing critical issues to business managers/owners when devising approaches to organizational firm performance. keywords: marketing performance, small medium-sized enterprises, innovation types jel classifications: m31, o32 1. introduction in both the developed and developing countries of the world, policy-makers at local, regional and national level have come to realize the significant role that small medium-sized enterprises (sme) play in generating employment, wealth and innovation development (nyoni and bonga, 2018). this sector has been bedeviled with clear cut definition of sme. abor and quartey (2010) argued that smes can be traced through capital assets, use of skilled personnel, turnover level, legal status and number of permanent and casual laborers. further, some expounders also use the number of employees to define sme which differ in national statistical system. in ghana, sme are grouped into micro (<5 employees); small (5-29 employees); and medium (30-99 employees) (teal, 2002). according to craig et al. (2014) and kobe (2007) research, they also identified the strong relationship between sme and economic development especially in the space of employment and taxation to an economy. moreover, in developing economy like ghana, sme contribution cannot be de-emphasize in tenure of gdp and employment (abor and biekpe 2006) and (keskin, 2006). in ghana, sme have been recognized as an agent for the economic growth of the country as they make major input into the generation of employment and poverty reduction (agyapong, 2010); (abor and biekpe, 2006). the sector of sme therefore plays a major task in economic growth and enhancing the living standard of the ghanaian people (abor and quartey 2010). every business’s survival dwells on profit making and marketing centers on ensuring this intention. hence, marketing performance (mp) interrelationship to innovation this journal is licensed under a creative commons attribution 4.0 international license afriyie, et al.: the nexus between types of innovation and marketing performance of sme in an emerging economy international review of management and marketing | vol 8 • issue 6 • 2018 79 activities of organizations needs critical evaluation to ensure organizational growth. ghana and other growing economies in africa have been facing some difficulties in mp of smes. according to dalitso and peter (2000), 24.9% of malawian business owners denoted they had marketing constraints, whilst a study by aryeetey et al. (1994) also mentioned that 5% of respondents in ghanaian sme had marketing challenges. moreover, there is inadequate evidence and conceptual research on types of innovations and the firm mp among ghanaian sme. this may have adverse consequences on policy development and implementation in sme. consequentially, business owner/ managers of sme may not appreciate the relevance of mp in their operations. this study seeks to bridge this gap and contribute to the literature by focusing on nexus between types of innovation and the firm mp in developing economy. 2. literature review 2.1. innovation intense competition in the contemporary business in the global markets has given credence to the innovation and continues alteration in technology and fierce competition has eroded the value added of existing products and services. innovation culture has been descried as a pre-condition for enhancing organizational, marketing and managerial blue chip in a competitive market (aksoy, 2017). moreover, for the past two decades, researchers have tried to explain, group and examine innovativeness and performance relevance slated to its practicalities (gunday et al., 2011). innovations make firms to achieve defendable competitive advantage due to its strategic directions to overcome the challenges they face e.g. (drucker, 1985; hitt et al., 2001; kuratko, 2005). innovation can be characterized as freshness, new things being done, or old things being done in new ways to boost performance in terms of sales, profitability and market shares in an organization. innovation could be classified into various perspective (crossan and apaydin 2010; jiménez-jiménez and sanz-valle, 2011). innovation process is described as a procedure in which new ideas or practices within organization can do through generation, adoption and implementation (wan et al., 2005). tidd et al. (2005) consider innovation process as a favorable combination of situation into new thought and creating it wide usage applicable. the groupings that regard innovation as a process have some familiar perspectives. crossan and apaydin (2010) define the perspective as follows: driver, source, locus, view, and level damanpour (1991) opined that types of innovation might be radical, incremental, product, process, administrative, or technical. a referred outcome of innovation can be classified into different disciplines, namely referent, form, magnitude, type, and nature (crossan and apaydin, 2010). the preeminence between innovation as a process and outcome is occasionally complicated (crossan and apaydin 2010). therefore, in this paper, two definitions of innovation is used to describe innovation. damanpour (1991) employed a conjectural framework where innovation is the take up thought or action new to the adopting substance, which embraces all scopes of firm activities, such as a new product or service, a new production process technology, a new structure or administrative system, and a new plan or program within the firm. 2.2. innovation types innovation has several thoughtful and may be categorize into immeasurable perspectives especially in harmony to the substance of innovation, for example, innovation of socio-cultural systems, of ecosystems, of business models, of products, of services, of processes, of organizations, of institutional strategy, of the movers of innovation (technologies, markets, design, users, etc.), or to the fervency of innovation. again, incremental (continuous) and radical (discontinuous) innovations are widely familiar partitions of innovation types (bessant and tidd, 2009). wirtz et al. (2010) denote that innovation is the advancement and thriving enterprise of a technical, organizational, business analogous, institutional or social solution of a predicament, as regards introducing new ideas and methods, approved by appropriate users and followed by innovators in expectation of an accomplishment. in accord with the oslo manual (oecd, 2005), innovation types are classified into four distinctive types: product, process, marketing, and organizational innovation. these as follows: product innovation can be considered as the features or purposive use of the outset of a good or service that is novel or meaningfully enhanced. there are different typologies that are associate with innovativeness levels, such as extreme and progressive. process innovation is explained as the execution of a new or remarkably improved scheme of production, delivery method, or administrative process. marketing innovation (mi) is a new or distinctive difference in nonfunctional attributes such as product design or packaging, place, promotion, and pricing. for example, modification of a product design is akin to changing its semblance, not its function or user. organizational innovation is a situation whereby an organization enforces new styles or practices in conformity to the firm’s business pattern, workplace organization, or external associations. distinctively, enhancing work structures such as providing flexible work arrangements and cooperating with partners is the original concern of organizational innovation. in probing, innovation method would be centered on the innovation types as portrayed by oslo manual (oecd, 2005), in which innovation in smes business can be explained as a product, process, marketing and organization innovations in order to boost firm mp. smes involvement in innovation activities in an economy serves as a catalyst for economic growth that directs and improves fair development of nations. implementing the concept of innovation and its interrelation to the firm mp would ensure that smes activities are improved or increased drastically. 2.3. theoretical background barney (1991) posits the theory of resources based view. resource based views elucidate the organizations purpose for internal resources is able to produce and create competitive edge for business performance. in achieving the firm mp in the study, extant literature review is conducted about this theory, hence testing the model through four hypotheses (figure 1) has been advanced to consider the determinants of these variables of this study. 2.4. sme mp performance is the results acquired in meeting inward and outside goals of a business (lin and huang, 2012). performance has several names, including growth (wolff and pett, 2006). owen (2006) believes that organizational performance encompasses afriyie, et al.: the nexus between types of innovation and marketing performance of sme in an emerging economy international review of management and marketing | vol 8 • issue 6 • 201880 three specific areas of firm outcome: (a) financial performance; (profitability, assets turnover etc.,), (b) product/market performance; (sales, market share etc.) and (c) shareholders values etc. financial or nonfinancial is likewise performance indicators. return on asset, return on investment, return on equity, return on capital employed, net profit margin, cross profit margin, profit after tax, profit before tax and market share are all examples of financial performance indicators profit maximization through satisfying customers is ascribed to marketing (kotler and armstrong, 2003) hence the need to recognize, invest and generate more profit through customer’s satisfaction. undeniably, marketing has been perceived as a cost center and without any performance accountability. ambler (2003) opined that the investment in marketing is calculated as a waste of resource if its impacts cannot be appraised. in agreement to ambler (2003), mp through the utilization of marketing metrics inevitably to be estimated and this was enforced by the control theory which explains that managers endeavor to reduce performance outcome variances by identifying performance predictors. these interrelated predictors and performance can be diagnosed and observed. control theory as described by barwise and farley (2004) illustrate the integration of unexpected occurrence (both good and bad) and threating an assumed implementation that cause the eventualities to be outstanding than purposed. according to kotler and armstrong (2003), control theory mentioned the necessity for ex-post or retrospective intelligence on marketing approaches as an important section of the pattern of diagnosis, arrangement, execute sare controls of marketing, (ambler and roberts, 2008) refer to merchant (1998) who defines control as being both reactive and proactive in foretelling issues out of embracing performance, and explained that control of an organization’s objectives and strategies that are associated with people’s manners and opinions are through the deposition of managers. ambler (2003) general approach advocates the use of three financial and six brand equity measures to measure mp namely (romi, sales, brand equity etc.). marketing scholars have observed that the incapability of marketing to authenticate its assistance to firm performance has failed its impact within firms (ambler and roberts, 2008; stewart, 2009). the only concurrence that has been reached in both the strategic e.g. (chakravarthy, 1986; morgan and strong, 2003) and literature in marketing (clark and ambler, 2001; morgan, clark et al., 2002; vorhies and morgan, 2003) is that performance of marketing is multi-facets in disposition. homburg and pflesser (2000), defined mp as: “…the effectiveness and efficiency of an organization’s marketing strategy interrelated to market-related goals, such as earnings, advancement, and market share…” thereupon, given the best consideration to mp assessment which would assist marketing exponents to measure their portion to organization financial performance. 2.4.1. mp indicators katsikeas et al. (2016) categorically identified four ways of evaluating mp outcomes in 998 empirical studies published in the top 15 marketing journals from 1981 to 2014, namely; customer mindset, product-market performance, accounting performance and financial market performance. the inquest has revealed the performance resultant of marketing supremacy in accounting and product-market facets of performance. consequentially, accounting indicators of profit, sales revenue and market share are the most widely acceptable measures of mp. besides product-market measures, market share is widely admissible as a performance indicator as compared to the product-based on sales or brand related measures (farris, 2006). nonetheless, the inquisition also discloses market share has been less popular performance for the past decades. accounting measures related to profit and sales revenue are the mostly widely used performance indicator as compared to using return on profit and lastly, the financial market measures expose a speedy rise in the use of stock market-related measures of performance, driven largely by the top three marketing journals of the past decades. further, customer satisfaction is find as the dominant measures as compared to brand equity and others is used to customer based measures. the extant literature above gives an indicative prominence to use ultimate acceptable indexes to measure mp in coherent to innovation types of sme. this investigations would espouse the profitability as accounting measure, sales as a product market measure and lastly, customer satisfaction as customer based measures respectively. ismail (2012) suggested that profit, sales and customer growth are the realm to measure mp. in this study, we tend to aim to explore innovations types and their effects on firm mp. by examining product, process, marketing and organizational innovations and firm mp such profit, sales and customer satisfaction. so the most contribution of this study is that the comprehensive innovation types and mp analysis supported empirical knowledge that not solely disclosed the positive effects of innovation types on firm performance, however, conjointly yielded a path of relations among these variables using structural equation modeling (sem) partial least squares (pls) approach. this paper has five sections. following the introduction section 1, we tend to be in brief given, in section 2 the analysis background and our hypotheses. in section 3, the empirical knowledge and analysis methodology are given. the section 4 introduces the findings. finally, in section 5 the discussion of findings, conclusions and final remarks are given. 3. research model hypotheses the research architecture is put up following earlier important literature as depicted in figure 1. it exhibits all the variables in research structure, which investigates the correlation stuck h1 product innovation process innovation organization innovation marketing performance marketing innovation h2 h3 h4 figure 1: theoretical framework sources: author constructs afriyie, et al.: the nexus between types of innovation and marketing performance of sme in an emerging economy international review of management and marketing | vol 8 • issue 6 • 2018 81 between types of innovation and the firm mp. four research hypotheses of this inquest were generated to test the corporation among innovation types product, process, marketing and organization and firm mp. research framework of types of innovation (independent variables) and mp (dependent variables) i. product innovation and the sme mp h1: product innovation has positive influence on the sme mp ii. process innovation and sme mp h2: process innovation has positive influence on sme mp iii. mi and sme mp h3: mi has a positive influence on the sme mp iv. organization innovation and sme mp h4: organization innovation has a positive influence on the sme mp v. innovation types and the sme mp h5: innovation types has a positive influence on the sme mp 3.1. product innovation and sme mp product innovation can be distinguished through the commencement of a new product/service or breed consequential advancement in the existing products/services (polder et al., 2010). product innovation can likewise be revived or improve product in association to its features, intended use, software, user-friendly or constituents and substance. product innovation is associate with dissimilar perspectives. on the grounds, where the customers are new to the product. secondly, where the product is new to the firm, and lastly, the product modification through product distinctiveness in an existing product of the business (atuahene-gima, 1996). service organization competencies are triggered by innovation (polder et al., 2010). in contemporary business, service firms have to advance new products/services according to its customer’s needs (olson et al., 1995). moreover, attracting new customers is an essential summative in product innovation. the needs of customers’ tend to be of great importance to every firm introducing new products or modification of an existing product (adner and levinthal, 2001). shorter life span of products necessitate the innovativeness of business in relation to products (duranton and puga, 2001). product innovation also makes organizations to be highly competitive in the market. low competition faced at the introduction stage of product innovation ensures high profit for the firms (roberts, 1999). ettlie and reza (1992) stated that firms introduce product innovation to outweigh competitors in the markets. product innovation ensures customer satisfaction. moreover, in agreement with (hertog, 2000), service innovation is divided into four approaches expressly; service concept, client interface, service delivery system and technological which also delivers useful blueprint for different varieties of innovation of service. product innovation generates a competitive vantage to firms (camisón and villar-lópez, 2014). with an improved quality of service it tends to advance the performance of organizations leads to the creation of a business advantage (garvin, 1987; forker et al., 1996). markets’ threats from competitors is avoided through product innovation offerings (hult et al., 2004). consequently, product innovation is the assurance of functional performance of businesses (olson et al., 1995). the accomplishment of firms currently actualized on product innovation tends to rationalize the share of the market and organizational performance. ettlie and reza (1992) mentioned the positive correlation between new product development and the firm performance. bayus et al. (2003) conjectured that organizational performance has a robust effect on product innovation. product innovation is assumed as responsiveness to mp. in addition, alegre and chiva (2008) designated that the perspectives of product innovation i.e., (efficacy and efficiency) were unambiguous and expressive associated to the performance of firms. finally and importantly, (varis and littunen 2010) also said there exists a strong correlation between a newly introduced product and the firm performance. the expounders are of the assertion that product quality results in more customer satisfaction which in turn leads to organizational performance. the above literature review leads to following hypotheses; hypothesis 1: product innovation is positively associated with the smes mp 3.2. process innovation and sme mp foremost, successful execution of the production or delivery approach that is new or effectively enhanced can be ascribed to process innovation (oecd, 2005). process innovation includes bringing meaningful improvement in the equipment, technology and software of the production or delivery method. the peculiar technique should be reflected as an improvement to the firm and one that has never been executed. new processes, nonetheless, can be created by the firm itself or with the help of another firm (polder et al., 2010). developing innovative products and changes have made to procedures to introduce the new products are correlated to the firm innovation process (adner and levinthal, 2001). likewise, cost of the product is mirrored by the process innovation (olson et al., 1995). consequently, cost curtailment is virtually of compelling significance to business when it comes to process innovation. further, effectual inter-relation between the service provider and customer can be ascribed to service process innovation (bienstock et al., 2003). this proved that service product or process integrates on the association amongst it under service innovations. core service characteristics and attributes designing should not be visualized as the only value added to users but also through delivery of service processes beside new service evolution (papastathopoulou et al., 2001; randhawa and scerri, 2015). when service is being delivered, this makes employees gain opportunities to learn, innovate and co-create value with customers as argued by agarwal and selen (2011) and voss and zomerdijk (2007). service design and delivery has been recognized as the best option through customer interface and technology (sampson and spring, 2012; den hertog et al., 2010). synergistically, successful service innovation embraced all these critical variables. in general, the intrinsic worth of process innovation gives productivity gains, improvements in product quality, and cost and time savings (martínez‐ros and labeaga, 2009; un and afriyie, et al.: the nexus between types of innovation and marketing performance of sme in an emerging economy international review of management and marketing | vol 8 • issue 6 • 201882 asakawa, 2015). in agreement, scholars have established the interconnection of process innovation as critically weaved to financial benchmarks such as sales improvement (he and wong, 2004) and profitability (piening and salge, 2015). for instance, cost restrictions of operations of production and supply chain technologies from process innovation enable businesses to accumulate utmost profit margin and consumers benefiting from its price reduction, which ultimately is preeminent in raising market sales and shares respectively (dehning et al. 2007). firms adopt new processes to compete with other firms hence customer satisfaction. manufacturing abilities (e.g., productivity and speed of delivery) lead to an enhancement in a firm’s market performance of customers satisfaction and its customer relations improvement (li et al., 2005). varis and littunen (2010) exploration on sme in finland avouch the literature of the unarguable correlation between process innovation and the firm mp. the following hypothesis is shown below: hypothesis 2: process innovation is positively associated with the sme mp 3.3. marketing innovation and sme mp currently, value chain perspectives can comprehensively change through new ideas. innovation iceberg is just the tip of products and services innovations as mentioned by schaltegger and wagner (2011). utkun and atılgan (2010) define mi as the usage of a unique marketing blueprint embrace a refined distinction in exceedingly product’s evaluation, pricing, promotion, placement or packaging. chen (2006) also added that mi is the changing ways of collecting customer’s information. in consonance to hassan et al. (2013), mi is the mechanism of new marketing approach that embrace enhanced changes in the design, placement, packaging, product promotion and pricing strategy. to expounders, the existential of mi is to enhance sales, return on investment through profit, return on capital employed, return on asset, and return on equity, market share and new markets openings. competitive firms always reckoned in deepening their mi programs in order to be serviceable in their firms (polder et al., 2010). mi seeks to advance new techniques for marketing. in that cause, advancing new blueprint and mechanism for marketing has an influential capacity in the conquest of the organizations. mi ought to lessen the uncertainties, which are comprehensible to technology and market (o’connor and rice, 2013) occasioned by a firm to practice new partnership with prospective customers and to discern their actions and learning requirements through a lead consumer analysis (moreau et al., 2001; song and thieme, 2009). performance of businesses in relations to mi s is found to be real. bhaskaran (2006) research conducted on small and mediumsized enterprises that nexus on mi are profitable and capable to generate impressive competitive edge and as in contradictory to robust big businesses. robinson (1990) studies conducted initiated that there is gratuitous correlation between innovative performances and mp knit by the product innovation and market share. further, szymanski et al. (1993) opined that market share remarkably leads to an improved business performance. proportionately, studies have found that product delivery speed measuring production performance is robustly interlinked with market share measuring market performance of the firm. anderson et al. (1994) investigate the connection between product quality being provided and customer satisfaction. further, the correlation between organizations innovation programs and their marketing abilities is manifested to be productive in improving customer interfaced performance (ngo and o’cass, 2012). halpern (2010) consummated performance in the airport industry had a positive effect on mi. the following hypothesis is proposed; hypothesis 3: mi is positively associated with the sme mp 3.4. organization innovation and sme mp polder et al. (2010) defined organizational innovation as initiating new style of doing business, workplace organizing methods, decision making sequence and new artery of handling foreign relations. further, administering new forms of strategizing business practices, external relations and work place is alluded to organization innovation (oecd, 2005). organizational innovation is new ways of organizing routine activities. consequently, current businesses inevitably have to perpetually improve their style of organizing, which invariably enhances organizational performance to curtail the transaction and administrative cost respectively. efficiency in firms are also achieved through organizational innovation polder et al. (2010) postulated that organization itself or with the furtherance of third partaker can initiate new ways and methods in its new organizational approach. whereat, organization innovation amending the ways of organizing matters to compete intensely with competitors and customer satisfaction ettlie and reza (1992). extant literatures on the inter-relation between performance and organizational innovation have attested to the kindred amongst them. in consonance to jiménez-jiménez and sanz-valle (2011) inquest, there is an appreciative association between organizational learning, innovation and firm performance. gopalakrishnan (2000) study also identified two perspectives of innovations i.e. speed & magnitude with the organizational performance. the exploration ascertains that, the innovations of speed of adoption and firm performance are highly correlated. damanpour et al. (2009) supported the statement of an existential dependence between innovativeness and firm performance which is positively interrelated. bowen et al. (2010) mentioned the positive accord between innovativeness and future performance. cingöz and akdoğan (2011) also suggested the positive agreement of an expected positive performance effect with innovative behavior which is regarded as a weighty advantage that guides an organization in the attainment of dynamic business environment. it is surmised that there is a direct fitness of formalization and centralization with administrative innovation which in turn affirms positively with organizational efficiency. the following hypothesis is formulated: hypothesis 4: organization innovation is positively with the sme mp 3.5. innovation types and the sme mp in 1959, penrose forward the theory of resource based-view (garnsey, 1998), which alluded that organizational performance is dependent on the resources and capabilities which is the ultimate afriyie, et al.: the nexus between types of innovation and marketing performance of sme in an emerging economy international review of management and marketing | vol 8 • issue 6 • 2018 83 cause of acceptable competitive edge in the market (wernerfelt, 1984; mahoney, 2001). garnsey (1998) posited that for firms to grow, there is the necessity to siege, organize and release resources. organizational goals rest on the distinctive avenues that are always accustomed to determine organizational performance. these evaluative mechanisms are financial and non-financial tools (darroch, 2005; bagorogoza and de waal, 2010; bakar and ahmad, 2010). in addition, the significance of innovation to organizations are virtually due to competitive edge and profits maximization as announced by roberts and amit (2003). most businesses tend to apply financial indicators as an evaluative mechanism to performance (grant et al., 1988; rosli and sidek, 2013), whiles non-financial mechanism are widely used in order to adjust to the variations in the internal and external environments (kargar and parnell, 1996). as disclosed by many studies and scholars, innovation and firm performance have a positive affinity for examples (zahra and das, 1993; capon et al., 1990; calantone et al., 1995; han et al., 1998). anning-dorson (2016) explained that innovation is empirically linked with competitiveness and is an indispensable strategic instrument for service organizations accepting to secure competitiveness and be important. flexibility, conformation and responsiveness lead to performance of firms improvement through innovation as expounded by anning-dorson et al. (2015). the key argument made for innovation leading to firm performance is that, these firms are efficient in constantly getting ahead of competition. two cardinal items to ascertain the firm performance and organizational development are financial and non-financial performance (anning-dorson, 2016; jaworski and kohli, 1993). wherefore, mp is duplicated in the construct of profit, sales, customer satisfaction, and customer retention and market share being sufficient to firm’s measurement of performance. the following hypothesis is proposed: h5: innovation types is positively associated with the sme mp 4. methodology the study objectives intend to establish the nexus between innovation types and the mp of sme and to examine how the various dimensions of each innovation types predicate on the mp of sme. the inquest essentials are collected affix on business owners/managers where each respondent was asked to give data on his/her business and knowledgeable materials on innovation types and its correspondent with the mp of discrete firms. the study was done in greater accra (accra) and ashanti (kumasi) regions of ghana, which are, the capital and second largest city in ghana respectively, with the prominent concentration of sme. a convenient sample was used to select 500 business owners/ managers from smes. this approach is in consonance with a previous study by makanyeza and dzvuke (2015) in which only a person was selected to fill the questionnaires for the business. this, as a result of the resemblance of sme activities of an economy, a sample size of 500 is thought of being large and representative, since most businesses in this sector are deficient of official data about their activities. the structured questionnaires were tested and final adjustment was made to replicate the instruments trustworthiness before they were dispensed to the respondents. the questionnaires were compeer by a group of eight researchers from the area of centre of entrepreneurship and business owners/managers of sme. accordingly, five investigative assistants were engaged and cortege to assist in the administering of the study questionnaires to respondents. in all, 87.4% of the total questionnaires administered were returned representing 437 respondents. all the suitable types of innovation and the mp were conjugated in sequence to reduce the issue of common method variance (cmv). further the participants were promised of data secrecy and information provided. acquaah and agyapong (2015) and (acquaah et al. (2011) studies are coherent with reducing cmv problems. 4.1. measurement of constructs innovation types as an independent variable in this investigation was classified into product innovation, process innovation, mi and organizational innovation. this part includes 20 items divided into 4 subcategories (innovation types) to scale varied issues connected with the aspects of innovation. each of the independent variables will be measured by a likert-type scale of seven (7) levels (ranging from “1 strongly disagree” to “7 strongly agree”). 4.1.1. product innovation (si) embraced four elements, expressly introduction of new products, developing new product features, reposition of existing products and new products to penetrate markets as was used by i.d. prajogo, (2017) (vinarski-peretz, binyamin, & carmeli, 2011). a 7-point interval scale ranging from strongly agree =1 to strongly disagree=7 was used and the respondents were asked to distinguish their businesses’ innovation types and the mp comparative to competitors. item (reposition of existing products) were omitted of having an outer loading value >0.40 (hair et al., 2013). table 2 and 4 shows the cronbach’s alpha for pilot and actual studies respectively were found to be more than the minimum value of 0.70 and therefore justifies the construct inclusion in the analysis. 4.1.2. process innovation (pi) comprised four items namely increase speed of implementation, information accessibility, methods allowing work instruction and cut variable cost. all these items were adapted/ modified from (bilderbeek, hertog, marklund, & miles, 1998). a 7-point interval scale ranging from strongly agree =1 to strongly disagree=7 was used and the respondents were asked to show their businesses’ innovation types and the mp relation to competitors. table 2 and 4 shows the cronbach’s alpha for pilot and actual studies respectively were found to be more than the minimum value of 0.70 and therefore justifies the construct inclusion in the analysis. 4.1.3. marketing innovation (mi) cleaved seven items, i.e. innovating marketing programs to stay ahead of the market, find new ways to build and improve relationships with customers, sales techniques are always revised, and the new methods are tried to find, implement innovative marketing programs, look for ways to develop new business models, product design is constantly renewed according to customer’s needs and competitive products and look for ways afriyie, et al.: the nexus between types of innovation and marketing performance of sme in an emerging economy international review of management and marketing | vol 8 • issue 6 • 201884 to improve promotion methods and tools. all these items were adapted/ modified from (deshpandé, farley, & webster jr, 1993), (sok, o’cass, & sok, 2013) .a 7-point interval scale ranging from strongly agree =1 to strongly disagree=7 was used and the respondents were asked to identify their businesses’ innovation types in the relation to the firm mp approximate to competitors. item (the new methods are tried to find) were omitted of having an outer loading value >0.40 (hair et al., 2013)table 2 and 4 shows the cronbach’s alpha for pilot and actual studies respectively were found to be more than the minimum value of 0.70 and therefore justifies the construct inclusion in the analysis. 4.1.4. organization innovation (oi) measures four items, i.e. co-operation between units and departments, encouragement to disagree, encouragement to be multi-skilled, work well-being of employees and appreciation of employees all these items were adapted /modified from cf., (lampikoski & emden, 1999); (harborne & johne, 2003); (wan et al., 2005); (dobni, 2008); (van hemert, nijkamp, & masurel, 2013). a 7-point interval scale ranging from strongly agree =1 to strongly disagree=7 was used and the respondents were asked to identify their businesses’ innovation types in relation to the firm mp relative to competitors. item (encouragement to disagree) were omitted of having an outer loading value >0.40 (hair et al., 2013). table 2 and 4 shows the cronbach’s alpha for pilot and actual studies respectively were found to be more than the minimum value of 0.70 and therefore justifies the construct inclusion in the analysis. 4.1.5. marketing performance as a dependent variable measured by three (3) items namely profitability, customer satisfaction, and sales. all these items were adopted and modified from (vorhies & morgan, 2005), the literature review and other studies in such areas. these items are selected according to the appropriateness of each item and to maximize the construct’s reliability and validity. in this research, the subjective perceptions of owners or managers of sme were used to evaluate the mp. a 7-point interval scale ranging from strongly agree =1 to strongly disagree=7 was used and the respondents were asked to identify their businesses’ innovation types in interrelation to firm mp alike to competitors. table 2 and 4 shows the cronbach’s alpha for pilot and actual studies respectively were found to be more than the minimum value of 0.70 and therefore justifies the construct inclusion in the analysis. 4.2. control variables in accordance to studies conducted, the study controlled four characteristics of the firm – firm size (number of employees); firm age (number of years established); firm sector (measured as hospitality, beauty, transportation and banking service) and finally forms of business (classified as family owned, sole trader, private, partnership and public limited companies). 4.3. descriptive statistics table 1 shows the characteristics of the respondents and the sme participated in this study. the data collected for this study come from 437 business owners/managers from accra and kumasi respectively. 39.4% of the respondents are located in accra, whiles 60.6% were in kumasi, this might be due to high population of sme in kumasi. the background education of these respondents demonstrates 33.6% of them having professional/ training certificates, followed by hnd/bachelors with 29.1%, whiles 14.2%, 12.4%, 8.9% and 1.8% were high/secondary, no formal education, primary school and graduate and post graduate certificates respectively. the 53.1% of the respondents were managers/owners, 36.2% of them were marketing/sales managers and supervisors were 10.8%. classification of employees really reflect on the sme definition which identified 13.5% as micro, 67% as small, 16% as medium and 3.4% as large businesses. the sample is rich in four sectors including mainly from hospitality table 1: characteristics of respondents variables frequency valid percent gender male 236 54.0 female 201 46.0 age under 21 years 54 12.4 21–34 years 202 46.2 35–44 years 105 24.0 45–54 years 63 14.4 55–65 years 13 3.0 education no formal education 54 12.4 primary school 39 8.9 high/secondary 62 14.2 training/professional cert 147 33.6 hnd/bachelor 127 29.1 graduate and post graduate 8 1.8 establishment <2 years 12 2.7 3–5 years 102 23.3 6–8 years 69 15.8 9–11 years 152 34.8 12 years and above 102 23.3 location accra 172 39.4 kumasi 265 60.6 forms of business private limited company 111 25.4 partnership limited company 75 17.2 public limited company 43 9.8 sole proprietorship 168 38.4 family owned business 40 9.2 employees <5 (µ) 59 13.5 6–29 (small) 293 67.0 30–99 (medium) 70 16.0 100 and more (large) 15 3.4 role in the firm general manager/owner 232 53.1 marketing/sales manager 158 36.2 supervisor 47 10.8 current business existing 194 44.4 existing concept in ghana 147 33.6 never existed 96 22.0 sector hospitality 144 33.0 beauty 136 31.1 transportation 87 19.9 banking service 70 16.0 source: based on the sample survey afriyie, et al.: the nexus between types of innovation and marketing performance of sme in an emerging economy international review of management and marketing | vol 8 • issue 6 • 2018 85 (33%), beauty (31.1%), transportation (19.9%), and banking (16%). the business model of sme, 44.4% are existing, 33.6% existing concept in ghana and 22% were never existed. the ages of the respondents vary between under 21 years (12.4%), 22–34 years (46.2%), 35–44 (24.0%), 45–54 years (14.4%) and 55–65 years (3.0%). in terms of age, the survey depicts most of the respondents as predominantly as young adults. gender, 54% of the sample is male and the remaining part (46%) is female. types of business operated by the sme, sole proprietorship were 38.4%, 25.4% are private limited liability, 17.2% partnership limited liability, 9.8% were public limited liability and family owned business hold 9.2%. 5. results and discussion 5.1. pls-sem assessment foremost, the challenges in survey exploration is the designation of an apt statistical model for analysis. pls based sem is centered on the principal component concept (which is good for theory building) and uses the pls estimator (hair et al., 2011; lowry and gaskin, 2014; vinzi, et al., 2010). pls, variance-based sem is widely acceded in business management and operations management (carter et al., 2008; peng and lai, 2012; shah and goldstein, 2006); information systems management (urbach and ahlemann, 2010); marketing management (hair et al., 2012) and organizational behavior and human resource management (anderson and gerbing, 1988). pls-sem is selected in the inquiry due to the following accession: (1) it is fit for theory building studies (vinzi et al., 2010). (2) it is regarded as appropriate for investigating complex cause-effectrelationship models (henseler et al., 2016; lowry and gaskin, 2014). (3) it is a non-parametric method which limits handful restrictions on data distribution and sample size (vinzi et al., 2010). smart pls 3 software was accustomed to quiz the hypothesis of the research (henseler et al., 2016). figure 2 provides more details of our approach. 5.2. measurement model assessment in pls-sem, appraisement of the measurement model (also referred to as the outer model) includes composite reliability (cr) to evaluate internal consistency, individual indicator reliability and average variance extracted (ave) to adjudge convergent validity (hair et al., 2013). 5.2.1. multicollinearity amongst exogenous variables pallant (2007) imputed that tolerance values of below 10 and variable inflation factor (vif) values of above 10 precede multicollinearity among independent variables, thereby constructing the development of goo pls-sem models. the tolerance values ranging from (0.413) to (0.793) and vif values also ranging from (1.252) to (2.423), captured from this analysis, attained the infrequency of multicollinearity between the exogenous variables. table 3 recount the tolerance values as well as vif values for the aforementioned variables. 5.2.3. internal consistency reliability this is a configuration of reliability that is used to herald the consistency of results over items of the same variables (hair et al., 2013). it decides whether the items measuring a variable are comparable in their results (hair et al., 2006). internal consistency reliability is sieged by using cr. table 4 shows the cr values of all the latent variables used in this study. these values were contrived to be >0.70 (hair et al., 2006) which demonstrate internal consistency. 5.2.3. convergent reliability this pertains to limit in which an estimate harmonize positively with option instruments of the same variable (hair et al., 2013). ave was conjecture to scrutinize convergent validity. table 2 and 4 shows the ave values for pilot study and actual study respectively. these values were advance were more than the specified value of 0.50 (hair et al., 2006) and therefore attest to convergent validity. 5.2.4. discriminant reliability this is the range to which a variable is indeed distinct from other variables, in tenure of how much it complements with other variables, and how much the index interpret only a single variable (hair et al., 2013). the distinction and cross-loading score of (fornell and larcker, 1981) were used to certify discriminant validity. table 4 adduced that the square root of ave for all latent variables was prominent than the inter-construct appendage (fornell and larcker, 1981) and hence they validate discriminant validity. complementary, all index individual loadings were constituted to be higher than their distinctive cross-loadings (hair et al., 2013). this waived further attestation for discriminant validity (table 6). 5.3.5. indicator reliability this particularize how much of the difference in an item is translated by a variable (hair et al., 2013). the outer loadings are apt to appraise the indicator reliability as shown in table 5. a higher outer loading on a variable herald the interrelated benchmark has much in common, that is measured by the variable (hair et al., 2013). hair et al. (2013) intimated that items having a loading >0.70 should be withheld, items having an outer loading value >0.40 should be neglected and that its weight on the ave and cr of the variable should be scrutinized. 5.4. structural model assessment structural model is elicited to experiment the association between endogenous and exogenous variables. in pls-sem, path table 2: computed reliability coefficients for pilot study exogenous variable number of items sample size cr cronbach’s alpha marketing performance 3 30 0.869 0.759 product innovation 5 30 0.898 0.826 process innovation 4 30 0.821 0.795 marketing innovation 7 30 0.856 0.810 organizational innovation 5 30 0.8701 0.747 mi: marketing innovation afriyie, et al.: the nexus between types of innovation and marketing performance of sme in an emerging economy international review of management and marketing | vol 8 • issue 6 • 201886 coefficients to ascertain the weight and relevance of structural model relationships coerced through structural model assessment, q2 to estimate the model’s predictive relevance and f2 to pronounce on the influential weight of the exogenous variable on an endogenous variable (hair et al., 2013). 5.5. path – coefficient figure 2: partial least squares structural equation modelling output for the direct relationship between si, pi, mo, oi and mp 6. discussion si, pi, mo, and oi was positively associated with mp, which supports h1, h2, h3 and h4 respectively (figure 2). for which reason, it is very eminent for managers and business owners to embrace mp as an essential clue in ascertaining firm performance and its inclination, whereas mp has a direct and admiring influence on si, pi, mo and oi respectively. because si, pi, mo and oi, and mp have closed relationship in enhancing organizational performance through innovation activities. the outcomes of these direct relationships are consistent with those of augusto et al. (2014), (camisón and villar-lópez, 2014; gunday et al., 2011; mohamad and sidek, 2013) which established a complimentary affinity between innovation types and mp. the path coefficient value of the mi mp inter-relation is slightly higher than that of the other variables which denotes smes berth more worth on mi in relation to attainment of an enhanced mp. 6.1. hypothesis testing the pls-sem model was engaged to examine the correlation between the various constructs advanced by the investigation. in this cause, sem analysis was executed by pls version and analyses specific to goodness-of-fit indices. the outcome aided with goodness fit indices. for the whole model, statistical results show that chi-square/df =1.578, srmr =0.071 and nfi =0.926. hair et al. (2016) acknowledged that srmr and nfi are imperative to model fit analysis. congruence to the study, we hypothesized four paths using the sem to investigate the correlation of innovation types on the firm mp, results foretell that all the paths were significant (p < 0.05). a sem model affirms that the innovation types are directly having a gratuitous effect on the mp efforts. the plenary paths were significant at p < 0.000. the statistical findings revealed the following hypothesis. h1: product innovation positively influence the mp. the analysis of the data collected proved that product innovation (si) had a significant positive effect on mp (β = 0.5271, t = 9.0531 p < 0.05; table 7). the beta coefficient was in the right tide, as hypothesized. consequently, the hypothesis that “product innovation positively influences mp” was supported. hitherto, this infers that advancement in product innovation would give a boost to mp of sme. in harmony, sme that are capable to table 4: measurement model results constructs items loadings ave cr cronbach’s alpha marketing innovation (mi) m1 0.655 0.53 0.869 0.869 m2 0.618 m3 0.727 m4 0.853 m5 0.620 m7 0.851 organizational innovation (oi) o3 0.787 0.796 0.921 0.895 o4 0.959 o5 0.921 process innovation (pi) p1 0.903 0.733 0.916 0.900 p2 0.813 p3 0.711 p4 0.975 product innovation (si) s1 0.895 0.752 0.901 0.847 s2 0.791 s3 0.911 marketing performance (mp) mp1 0.919 0.747 0.898 0.826 mp2 0.913 mp3 0.750 ave: average variance extracted, cr: composite reliability. mi: marketing innovation, pi: process innovation, mp: marketing performance table 3: multicollinearity amongst exogenous variables exogenous variable colinearity tolerance vif product innovation 0.793 1.252 process innovation 0.456 2.195 marketing innovation 0.413 2.423 organization innovation 0.413 2.423 source: field work, 2018, mi: marketing innovation afriyie, et al.: the nexus between types of innovation and marketing performance of sme in an emerging economy international review of management and marketing | vol 8 • issue 6 • 2018 87 attain high levels of product innovation activities would correlate performance indicators of marketing. the results is congruence with some of the discovery in earlier studies, which recited expressive favorable connection between product innovation and firm performance. for example, augusto et al. (2014) found a positive relationship between product innovation and mp in their study of innovation and business performance in sme. other studies also supported a positive relationship between product innovation and organizational performance (hall and wagner, 2012; d’angelo, 2012; atalay et al., 2013). h2: process innovation positively influence the mp. the analysis of the data collected showed that process innovation had significant positive effect on mp (β = 0.4562, t = 5.2509, p < 0.05; table 7). the hypothesis; “process innovation positively influences mp” was supported and this was indicative in the beta coefficient which depicts the right direction of the path. this precept foretell that an efficiency in process innovation would result in an enhanced performance of sme. justification, sme that have high efficiency of process innovation activities would perfect well on mp indicators. the result is consonance with some of the judgment of (murat and baki, 2011), who opined that process innovations have a potent and positive affiliation with organizational performance as well as (mohamad and sidek 2013), who also effectuated on the hypothesis that process innovation entranced firm performance sententiously. h3: mi positively influence the mp. the analysis of the data collected showed that mi had significant positive influence on mp (β = 0.5840, t = 24.9573, p < 0.05; table 7). the hypothesis that “mi positively influences mp” was supported as the beta coefficient was in the right path. in furtherance, it alludes that an enrichment in process innovation would result in an advancement in the performance of smes. whereat, sme that have high levels of process innovation activities would perform well on mp indicators. the aftereffect is in agreement with some of the deductions in earlier studies, which reported significant positive relationship between process innovation and mp. for example, (varis and littunen, 2010) using an estimated model, avow a highly significant association between a market related innovative activity and firm performance. gunday et al. (2011) posited in their inquest of innovation, that organizational learning and performance bear out a positive relationship between process innovation and organizational performance. h4: organization innovation positively influence the mp. experiment of the data collected modelled that organizational innovation (oi) had significant positive influence on mp (β = 0.413, t = 5.8329, p < 0.05; table 7) as hypothesized; accordingly, that “organizational innovation positively influences mp” was supported, hence the beta coefficient given in the right path. this presupposed that an advancement in the activities of organization innovation would correlate its affinity of sme mp. the climax is in agreement with some scholars inquest which transcribed to the significant positive relationship between organization innovation and firm performance (dadfar et al., 2013; noruzy et al., 2013; camisón and villar-lópez, 2014). 6.1.1. predictive relevance blindfolding was used to cross-validate the model’s predictive relevance for each of the individual endogenous variables, the stone-geisser q2 value (geisser, 1974; stone, 1974). by performing the blindfolding technique (hair et al., 2013) with an exclusion distance of 7 yielded cross-validated redundancy q2 values of all the endogenous variables. in this inquisition, table 7 settled that the q2 coefficients for the predictive relevance associated with each latent variable block in the model, through the dependent latent variables, are all <0.35 which presage a medium predictive relevance of the model. 6.1.2. effects size (f2) of exogenous variables the effect size for each path model is envisioned by calculating cohen’s f2. the f2 is figured by noting where r included 2 and r excluded 2 are the r2 values of endogenous latent variables when a selected exogenous variable is included or excluded from the model (hair et al., 2014). f2 size effect narrates the effect of a peculiar predictor latent variable on a specific endogenous variable as shown in table 7. in this study, f2 size effect radiate from small to large for all the exogenous variables in elucidating the si, pi, mi, oi and mp. table 7 spot-on the effect sizes of the various structural paths in the model, where si/mp is medium, pi/mp is small, mi/mp is large and oi/mp is also medium. table 5: cross loadings between the measures items mi mp organization innovation pi product innovation m1 0.655 0.016 −0.052 0.106 0.055 m2 0.618 -0.002 −0.036 0.032 −0.030 m3 0.727 0.013 −0.044 0.042 0.051 m4 0.853 0.080 −0.021 0.114 0.047 m5 0.620 0.007 −0.086 0.033 0.021 m7 0.851 0.081 −0.054 0.099 0.120 mp1 0.120 0.919 −0.011 −0.022 −0.066 mp2 0.058 0.913 −0.054 −0.003 −0.089 mp3 0.032 0.750 −0.039 −0.053 −0.107 o3 −0.029 −0.005 0.787 −0.100 −0.001 o4 −0.052 −0.044 0.959 −0.081 0.003 o5 −0.043 −0.031 0.921 −0.051 0.015 p1 0.106 −0.021 −0.086 0.903 0.492 p2 0.110 −0.005 −0.052 0.813 0.313 p3 0.091 0.002 −0.050 0.711 0.478 p4 0.119 −0.033 −0.063 0.975 0.430 s1 0.038 −0.107 0.007 0.322 0.895 s2 0.080 −0.044 0.012 0.489 0.791 s3 0.142 −0.086 0.004 0.482 0.911 mi: marketing innovation, pi: process innovation, mp: marketing performance table 6: fornell larcker criterion for checking discriminant validity variables mi mp oi pi si mi 0.728 mp 0.584 0.865 oi 0.510 0.639 0.892 pi 0.421 0.529 0.675 0.856 si 0.495 0.506 0.538 0.566 0.867 diagonal elements in bold: square root of ave, off-diagonal elements: correlation between constructs afriyie, et al.: the nexus between types of innovation and marketing performance of sme in an emerging economy international review of management and marketing | vol 8 • issue 6 • 201888 7. research and discussion the table 3 demonstrates the statistical appendage between the innovation types (independent variables) which is modestly low, connoting the lack of multicollinearity exceptions and hence making way for regression analysis. the multicollinearity cluster were also assessed with the tolerance and vif. the tolerance values of the independent variables ranged between 0.413 and 0.793, which are not <0.10. for which reason, the vif values of the independent variables confined between 1.252 and 2.423, which are well below the cut-off 10. these indicate that the multicollinearity deductions are not breached and the regression outcome are not misinterpreted by this faction (pallant, 2007). peripheral important climax of this inquest is that innovation types have a positive and significant impact on mp of the sme. the aftereffect acknowledge that product, process, marketing and organizational innovations have a positive influence on sme mp. consequently, hypotheses h1, h2, h3 and h4 are supported, but the fate of marketing and product innovations were noticed to be highly significant. hence, they appearing to be observed as critical consideration for sme mp. this presage that improving innovation types will enhance sme mp and further place it into a strong bond between process and organization innovation as was identified in the examination. this suggests that an improvement in these activities will optimize mp. this espouses that sme managers or owners need to invest more in innovation activities which will boost the mp of sme. overall findings of the quest can be abridged as follows; to achieve mp of sme first need to advance innovation types that can motivate innovation behavior, internal coordination with employee to strengthen the innovation edge thinking that pulls off ideas, concepts into successful product/service, process, business model or system. the point of interest for smes is to develop innovation activities, motivate and empower individuals within an organization to encourage innovative mindset. delivering the better innovation outcomes and mp through organizational leverage of technology and marketing knowledge. finally and importantly, the illustrations from quest indicate that if sme have robust innovation types investment will advance mp. 8. conclusion and recommendations this exposition has established the nexus between innovation types on firm mp. for this purpose, a sample size of 437 was collected from sme in the hospitality, beauty, transportation, and banking service. the reflection of product innovation, process innovation, mi and organizational innovation on mp was assessed, and the major issues that emerged from the findings show that: product innovation positively influenced mp levels of the sme (β = 0.4562, t = 9.0531, p < 0.05), process innovation positively influenced mp levels of the sme (β = 0.4562, t = 5.2509, p < 0.05), mi positively influenced mp levels of the sme (β = 0.4562, t = 24.9573, p < 0.05) and organizational innovation positively influenced mp levels of the smes (β = 0.4562, t = 5.8329, p < 0.05). mi (=24.9573) had the highest innovation types, having the most impact on the firm mp, followed by product innovation (=9.0531), organization and process innovations having (=5.8329) and (= 5.2509) respectively. the composite effect of product innovation, process innovation, mi and organizational innovation on mp was also assessed, and the findings indicate that product innovation, process innovation, mi and organizational innovation collectively predicted the level of performance of the sme significantly (r2 = 0.3246; p ˂ 0.05), where innovation accounted for 32.5% of the difference in mp. it is experienced from the study that all the types of innovation had positive effect on mp, remonstrate for product innovation, the effects were descriptive of all the types of innovation. mi had the most impact on mp with product innovation acting as the least contributor to mp. the weight of mi on mp is largely improved by the exact of organizational innovation. also, the level of innovation implemented by the firm significantly impact its performance. the sequent further show that innovation accounts for more than thirty percent of the difference in mp. in summary, all the four types of innovation positively influence mp. sme managers and/ or owners should ensure that there is adequate investment in product, process, marketing as well as organizational innovation activities, thereby avoiding the risk of not being suitable to achieve their marketing objectives. based on the inquest and conclusions presented, it is recommended that owners/managers of sme should develop newness for current products, leading to improved ease for customer’s importance to strengthen customer satisfaction. this can be achieved by determining as well as avoiding nonvalue adding conditioning in delivery related procedures of their products and also renewing the blueprint of current and or new products through changes in areas such as appearance, packaging, shape and volume without changing their basic technical and functional features. also, owners/managers of sme should not only pay attention to activities geared towards renewing the routines, procedures and processes employed to execute firm activities in an innovative manner, but also invest in mi activities, as it has the largest influence on mp. furthermore, with regard to policy direction, results from the study imply that policy makers need to provide some form of training that would highlight the merits of table 7: structural model results for hypotheses 1, 2, 3 and 4 hypothesis beta standard error t-values p values q2 remarks f2 remarks h1: si -> mp 0.5271 0.0582 9.0531 0.0028 0.3246 medium 0.234 medium h2: pi -> mp 0.4562 0.0869 5.2509 0.0135 0.3246 medium 0.137 small h3: mi-> mp 0.5840 0.0234 24.9573 0.0001 0.3246 medium 0.452 large h4: oi -> mp 0.4103 0.0703 5.8329 0.0100 0.3246 medium 0.246 medium q2 decision rules small: 0.0<q2 effect size<0.15, medium: 0.15<q2 effect size<0.35, large: q2 effect size>0.35,f2 decision rules small: 0.0<f2 effect size<0.15; medium: 0.15<f2 effect size<0.35; large: f2 effect size>0.35 afriyie, et al.: the nexus between types of innovation and marketing performance of sme in an emerging economy international review of management and marketing | vol 8 • issue 6 • 2018 89 innovation in sme and how such innovation translates into improved performance especially in marketing. the government should also provide an empowering environment that would support the execution of this business strategy. the confinement of the population to sme operating in accra, the capital city of ghana and kumasi, the second largest city respectively renders the findings, conclusions and recommendations applicable mainly to this group of sme. the second limitation of this analysis is qualitative information of the mp. we tend to used qualitative information to measure the firm mp due to the firm restriction for giving original data. thus we have got to limit with subjective information. but subjective information is wide utilized in the organizational research (azaranga et al., 1998; 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(1993), innovation strategy and financial performance in manufacturing companies: an empirical study. production and operations management, 2(1), 15-37. ole_link1 . international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2017, 7(1), 492-498. international review of management and marketing | vol 7 • issue 1 • 2017492 can price sway children preference? preliminary experiment among malay children zainurin bin dahari1*, husam a. kokash2, fadilah sulaiman3 1department of marketing, prince sultan university, riyadh, saudi arabia, 2department of marketing, prince sultan university, riyadh, saudi arabia, 3international islamic university malaysia *email: zainurin@psu.edu.sa abstract this study deals with young malay children’s behavior concerning money. the objectives are to determine the children knowledge of money value, source of their money knowledge and whether price can sway their preference. the literature on children socialization and information processing theory in consumer behavior suggests that most young children under 8 are not cognitively skilled about pricing and to use price in decision making. an interview has been conducted to gain the children insight about their money value and the source of money knowledge. in order to test for the effects of price, an experiment has been conducted to determine their preference. the study has found that children didn’t have strong knowledge of money value and pricing of products not dependably influence their preference. in order to conclude for a better generalization, this preliminary finding could be used as a initial point for a larger scale of research in term of sample size, range of aged group and ethnicity. keywords: price, children, preference jel classifications: m31, m39 1. introduction most children in primary school bring some money to spend during morning recess and lunchtime. children view the break time as part of their socialization. they will buy food at the canteen with their peers. in most cases, that experience is their first attempt to independently purchase a food without the supervision of parents. many factors will influence their decision making choice, such as peer pressure, existing brand promotion, knowledge of the value of money and price of the food items. the authors have identified that school can play important roles to educate children about price knowledge. we hope with that education, children will learn and take responsibility on what they purchase. but there is a question about their ability to be influenced by price. can price be used to influence children preference to combat obesity? it is significant to know whether the price factor has been considered effectively in children’s decision making. the findings will open up a new dimension on the possibility of influencing children to purchase healthier food as obesity among children has become a serious problem in malaysia. previous studies have provided inadequate evidence that price could influence children’s decision making. however, a few studies have supported the view that young children do have money knowledge, and are aware about price and its role in the decision making process. many relevant bodies have taken a lot of action to combat obesity problem among young children. this includes health and education departments. despite of those efforts being taken, marketers have targeted these vulnerable children as their potential consumer. these young children were exposed to significant levels of advertisement and premiums in order to influence them to buy the marketers products. in addition, “pester power” is alleged to put parents in a dilemma. therefore, it will be important to identify if we can use price to sway children preference towards healthier food. if it does, price can be used systematically on children to improve their purchasing behavior in many aspect of their life, especially in choosing a balanced diet in their food dahari and kokash: can price sway children preference? preliminary experiment among malay children international review of management and marketing | vol 7 • issue 1 • 2017 493 intake. hopefully, these initiatives with children will carry those attitudes and behavior through adulthood. not many studies have used variables, such as price, to curb childhood obesity, even though they are salient factors in adult decision making. therefore, it is vital to use young children as our sample in determining if they can be influenced by price in their preference. 2. literature review 2.1. the effects of food marketing television advertising has reported to be associated with choosing low nutritional food, and increasing their probability of becoming overweight and obese (hammond et al., 1999). although there is some literature on how promotion can influence children’s preference, there is lack of reported research on the use of price in changing young children’s food preference to healthier options. in order to overcome such problems a lot of suggestions are being made by governments, educators, policy makers and health education departments. before reviewing the effect of price on children preference, it is necessary to cover the area of children’s cognitive development and information processing. this knowledge will provide insight into when children develop their cognitive and information processing abilities. these abilities are often assumed when young children make preference and purchases by themselves. 2.2. piaget’s theory of children’s cognitive development piaget’s theory of cognitive development is one of the most cited theories that characterize changes in basic cognitive ability. piaget (1960) conceptualized children’s development as relating to a series of cognitive stages, with each successive stage being categorized by further sophisticated thinking and reasoning capabilities. according to roedder (1999) and ginsburg and opper (1988), this theory proposed four main stages of cognitive development; sensorimotor, preoperational, concrete operational, and formal operational. the stages are said to possess the following characteristics: • the stages imply distinct or qualitative differences in children’s modes of thinking or of solving the same problem at different ages. • these different modes of thought form an invariant sequence, order or succession in individual development. • each of these different stages and sequential modes of thought form a structural whole. 2.3. information processing theory and children information processing theories of childhood development provide other explanations to the cognitive development of children as they mature (john, 1999). (roedder et al., 1983) has characterized children as belonging into one of three segments; strategic processors, cued processor, and limited processors. these segments are based on the information processing skills children possess at different ages as shown in table 1. 2.4. consumer socialization theory and children consumer socialization (ward, 1974), or its earlier label of consumer development (mcneal, 1964), is the process by which children are said to learn their consumer-related skills, knowledge, and attitudes through their interaction with various social agents (e.g., parents, teachers) in specific social settings. (john, 1999) has provided insight into the changes that take place as children become socialized in their roles as consumers. according to her, these changes occur as children move through the three stages of consumer socialization. these stages indicate important shifts in knowledge development, decision-making skills, and purchase influence strategies (john, 1999). 2.5. children’s purchasing behavior mcneal (1992) anecdotally suggested that children start to purchase independently by the age of 4, but purchase independently regularly about the age of 8. mcneal (1992) labeled children that purchase independently as “tweens.” their ages were between 8 and 12 years old. these children have been categorized as the “independent stage” of the children consumer behaviour development theory indicated by mcneal (1992). he did note that young children occasionally buy things on their own but are fairly naïve and trusting and understood that money can be exchanged for food. based on the children development theories covered earlier, these children are in the “independent” age group as described by mcneal (1992), the “concrete operational” stage described by piaget (1960), the “analytical” stage described by roedder (1999) and are “cued processors” described by john (1999). this below 8 years old group has significant cognitive and social change knowledge and skill. the children at this stage are able to consider several dimensions of a stimulus at a time, and can connect the dimensions in a thoughtful and meaningful manner. based on theories by piaget (1960), roedder (1999) and mcneal (1992), on children’s development skill as a potential buyer, it would be expected that some young children have the cognitive abilities to purchase products by themselves. it appears to many table 1: information processing development stage processing skill development limited processors 7 years of age and below. skill not fully developed or utilized in learning situations. frequently having difficulty using memory cued processors age ranges from 7 to 11 years. able to use a similar set of strategies to improve information storage and recovery, but they usually need to be assisted by precise cues strategic processors 12 years and above. use a range of strategies for storing and recovery information such as verbal labeling, practice, and use of recovery cues to guide memory exploration source: roedder et al., 1983 dahari and kokash: can price sway children preference? preliminary experiment among malay children international review of management and marketing | vol 7 • issue 1 • 2017494 researchers that some of the earliest experiences for children purchasing independently is for food items at their school canteen. 2.6. price definition in traditional economics, price has been defined (simon, 1989) as the cost of the good or services that the consumer willing to pay. zeithaml (1988) defined price as being “what the consumer has given up or sacrificed to obtain a product.” assuncao and meyer (1993) indicate that the traditional literature on pricing starts from a simple assumption that when faced with a buying decision for a product, the buyer observes a price, takes into account their current inventory position in the category, and makes the brand/quantity decision that maximizes ultimate utility. one of the important skills that people need to function effectively as a buyer is the capability to understand money and the value of an item. it has been assumed that this information and the skill to use it are acquired during childhood. yet, there have been only a few studies that have investigated how and when children acquire the knowledge of money and the ability to buy based on some reasonable criterion. 2.7. assumptions of the effects of price largely based on classical economics, most buyers are assumed to have good knowledge about the price of the goods that they are going to buy (dickson and sawyer, 1990). marketing science based models of choice behaviour assume that buyers are aware of, and sensitive to the item’s price (guadagni and little, 1983, winer, 1986). psychology theories of consumer information processing (monroe, 1971) assume that price information before purchase will be determined, evaluated and incorporated into their decision-making. piche and garcia (2001) collected data using a self-administered seven items postcard style questionnaire. they found the top three highest rated variables affecting food choice were price, freshness and health consideration. price was reported to be the top attribute that buyer had taken into account. past studies have found that at most, 50% of buyers know the correct price of the product they purchased (allen et al., 1976; connover, 1986; progressive grocer, 1964). these findings consistently show that the general knowledge of price is low among buyers. for example, zeithaml (1988) suggested that buyers’ price knowledge appears to be “considerably lower than necessary for consumers to have accurate internal reference prices for many products.” 2.8. young children’s knowledge of money marshall and macgruder (1960) looked at the relationship between parental money education practices and children’s knowledge and use of money. they used an interview methodology using six pages of questionnaires. children were interviewed individually at school during school hours in a small room or office. each interview took from 15 to 30 min to complete. the samples used were 64 boys and 64 girls, ages of 7, 8, 11, and 12 years old. there were a total of 512 children surveyed. they found that if children are given exposure to the use of money, they will have more knowledge of money and its use, compared with children lacking such various experience. however, those finding contradict another study that found that both children with and without exposure to money have a similar knowledge about it (marshall, 1964). marshall conducted a study to test the hypothesis that no difference in money knowledge exists between children given an allowance, and those not given an allowance. the subjects were 180 children aged 10, 11 and 12 years old. 90 children were given allowances, whilst another 90 were not. there were 15 boys and 15 girls in each allowance classification at each of the ages. marshall used a multiple question survey, and an individual interview, to collect the data. she found no evidence that there was a difference in financial knowledge and responsibility between the two cohorts. both allowance and non-allowance groups of children failed to significantly differ on any of the ten measures of financial knowledge and responsibility. marshall concluded that regardless of whether children have experience with money or not, that experience does not determine their financial knowledge. 2.9. young children’s awareness of price according to mcneal and mcdaniel (1981), children become familiar with product prices, looking for price information and know about the price variations among products and stores when they reach 8-9 years old. their data appears to be primarily based on in-depth interviews. stephens and moore (1975) used self-administered questionnaires that were completed by 132 students between the ages of 11 and 13 years old and 180 students between the ages of 14 and 17 years old. the relative gender proportions were almost equal in all grades, with a total of 157 males and 155 females in their samples. respondents were provided with a list of twelve consumer products (durable and non-durable) and were asked to indicate how much each item cost, and to name the specific brand they would purchase. items included were a half gallon of milk, a table model am-fm radio, ten gallons of regular gas, a two-door intermediate size sedan and a 25-inch color tv. age was positively associated with the use of price. so that the older the child, the more they appeared to use price in their decision-making. however, it is not clear how many young children under 11 years old use, or are sensitive to price in their decisions. 2.10. how children view the effects of price on preference? it appears that very young children often assume that the bigger the product, the more expensive the product. berti and bombi (1988) found that younger children perceived price as a tangible physical attribute of products. in their study, the children were asked to explain the reason for the different prices of goods. for example, when asked why the price of a plane is more than a car, a child responded, “it is because the plane is bigger than the car.” it appeared that young children largely use the criterion of a goods relative size to determine the relative price of items. dahari and kokash: can price sway children preference? preliminary experiment among malay children international review of management and marketing | vol 7 • issue 1 • 2017 495 a study by fox and kehret-ward (1985) demonstrated how children develop their skill in reasoning about price during their experiences of buying. they used a cross sectional research design so cohort effects could not be accounted for. respondents were interviewed individually and also probed with structured questions in a focus group format. children aged 4, 5 and 9 years old were asked to talk about their shopping experiences, and were then asked questions, such as: • “when you go shopping, how do you decide what to buy?” (p.80) • “why do we have to give money when we buy things in a store?” (p. 81) • “who decides what the price of something will be?” (p. 81). this study’s authors suggested there were three levels in the development of children’s reasoning about price. the first is level 0 (age four). at this level, children do not have any idea of what price means or how money is used to pay for an item. the second level is level 1 (age five). children at this level know that prices tend to be consistent overtime, and usually nonnegotiable. this latter fact may be influenced by its us based sample. the third level is level 2 (age nine) when most children have the ability to understand that price will often be positively associated with the levels of favourable non sized based attributes for a product. a later focus group study by fox and trudy (1990) studied how ideas about price and value expand from the age of four through to adulthood. the price interview began with a story about how a group of friends decided to open a bicycle shop and needed to set a price for each bicycle. each of the friends had a different idea how to price the bicycles such as price based on physical size (larger bike should cost more), amount of labour required for manufacturing, or preference (popular bikes should cost more). after presenting these suggestions, children and adults in the sample were asked whether each pricing scheme was a good idea, and why. they found that children from 4 to 10 years old often used a product’s features, especially size, as the foundation for pricing. children at 13 years old often cited price as an indicator of the quality of the product. 2.11. conceptual framework the conceptual framework has been developed as shown in figure 1. 3. methodology 3.1. sample this study comprised of 98 respondents from one of the montessori in kuala lumpur, malaysia. the entire respondents aged between children 5 and 6 year old. 3.2. interview the objectives of this study are to determine the children knowledge of money value, source of their money knowledge and whether price can sway their preference. an interview has been conducted to gain the children insight about their money value and the source of money knowledge. in order to test for the effects of price, an experiment has been conducted to determine their choice. children aged 4 to 6 years old at one of the montessori in kuala lumpur have been chosen as the sample. structured questions and dialogs have been designed for the interview and experiment. the questions have been divided into three different parts. part one is to determine the knowledge on money value of young malay children. part two is to determine information sources of money value among young malay children. part three is an experiment to determine whether price can sway young malay children preference. the methodologies have been divided as such due to the following reasons: too many number and lengthy of questions may deviate the children’s focus from responding to the questions and may discourage them from giving full cooperation during the interview session. thus, this will cause a failure to the interview session, as it will decline the interest of the children to volunteer them in giving feedback to this survey. a rational number of three parts of questions will motivate children to answer it instinctively, promptly and sincerely from their heart. as a result, it will help researcher to collect full, complete and accurate information which is needed on the spot. hence, based on the above reasons, the researcher felt that these three parts of questions are sufficient and most effective to support this study by using the following two methods. a random selection of 98 respondents was chosen by researcher and a brief explanation on the objective of the interview session was described before the children started answering the questions. children were reminded that the questions needed to be answered sincerely and spontaneously. at the same time, the chosen respondents have been requested to give their full support and cooperation during the survey by completing the interview session from the beginning till the end of session. only children who were willing to give their full cooperation to involve in the interview session were selected. as mentioned earlier, all chosen children have been requested to give their figure 1: conceptual framework dahari and kokash: can price sway children preference? preliminary experiment among malay children international review of management and marketing | vol 7 • issue 1 • 2017496 feedbacks immediately. most of the children had given their full support and cooperation as small presents were given away to them as a token of appreciation. the following is the dialogues that were used in the interview session. 3.3. interview dialogue the following is the dialogue used in the interview. interviewer: good morning children. how are you today? children: wait for the reply. interviewer: my name is miss a. i am here to ask what you know about price. can you share your opinion with me? is it ok? children: wait for the reply. (1st objective: to determine the knowledge of money value). interviewer: have you seen this before? (shown the 50 cent, 20 cent and 10 cent coins). children: wait for the reply. tick the answer. interviewer: can you tell me what the value of this coin is? (show the 50 cent coin). children: wait the reply. tick the answer. interviewer: what about this one? (show the 20 cent coin). children: wait the reply. tick the answer. interviewer: and this one? (show the 10 cent coin). children: wait the reply. tick the answer. interviewer: you have done a good job. (2nd objective: to determine the source of money knowledge). interviewer: who teach you about money/price? is it from your parents, teacher or your friends? children: wait the reply. tick the answer. 3.4. second method: experiment the experiment has been conducted by exposing the children into two different scenarios. in this experiment, the children have given good responses and feedbacks to the researcher. the researcher has found that children need price information before they made a decision to choose. the following is the dialogue that has been used in the experiment. (3rd objective: to determine whether price can sway malay children preference). 3.4.1. scenario 1 (control group) in scenario 1, the researcher has shown to the children two pictures of chicken nugget (nuggets a and nuggets b). the price of nugget a and nugget b is rm 1.00 dollar. interviewer: can you see this picture (picture of nuggets with similar price). children: yes. interviewer: which one would you like to purchase? nugget a or nugget b? children: wait for the reply. (tick the answer). 3.4.2. scenario 2 in scenario 2, the researcher has given an explanation to the children on what was the different between both of the pictures (picture nuggets a and b). the price for nuggets a is rm1.00 dollar and nuggets b is 50 cent. interviewer: the price for nuggets a is rm1.00 dollar and nuggets b is 50 cent. these nuggets taste similar. do you understand? children: wait for the reply. interviewer: the difference is only on price. which one you would like to buy? nuggets a or nuggets b? children: wait the reply. tick the answer. 3.5. data analysis statistics package for the social science has been used to analyze the data. the data has been examined using frequency analysis. 4. findings table 2 shown the demographics characteristics of respondents according to the age group and gender. in term of gender, about 51% were boys and 49% were girls. from the total of 98 respondents, 50% were 5 years old while another 50% were 6 years old respondents. 4.1. first objective: to determine the knowledge of money value table 3 shown that about 56% of the respondents knew about money value and 44% did not know of it. table 4 shown the frequency knowledge of money value by gender. it has shown that boys have better knowledge of money value than the girls. 4.2. second objective: to determine source of money knowledge table 5 shown that 72% learnt about money knowledge from parents, teacher and friends. meanwhile about 28% did not know dahari and kokash: can price sway children preference? preliminary experiment among malay children international review of management and marketing | vol 7 • issue 1 • 2017 497 the source of their money knowledge. parents have played a very important roles in educating their children on money knowledge. table 6 shown the source of money knowledge by gender. parents and teachers have been the main source of money knowledge by boys and girls. there is no significance different in term of gender. 4.3. third objective: to determine whether price can sway malay children 4.3.1. preference in scenario 1, nuggets a is priced similar with nuggets b. the purpose is to allow the children to make decision without any other factors influencing their decision making. table 7 result has shown that 55% children have chosen nuggets a (rm1.00) and about 55% children have chosen nuggets b (rm1.00). in scenario 2, nuggets b has been priced cheaper than nuggets a. the purpose is to allow the children to make decision with the price different as the factor influencing their decision. table 8 result has shown that about 46% children have chosen nuggets a and slightly higher of 54% have chosen nuggets b. it seemed that cheaper price of nuggets b has swayed the preference of children. however the impact was not strong (table 8). 5. conclusion the results of the interview have shown that young children have some knowledge about money value and the source of money value knowledge mostly educated by parents and teachers. these findings shown that children as early as 5 and 6 years old are possible to be nurtured in term of money knowledge. the results of the experiments that used price changes, showed price could swayed the young children’s preference. however, price was not strongly influence the young children’s decisions. the cheaper options of nuggets would often garner more choices if they were priced cheaper than the other expensive options. these findings are similar with strauss (1952), marshall and macgruder (1960) and marshall (1964). they found that children as young as 4 year have knowledge about money and as children grow older, they gain better understanding on the role of money. this preliminary study found that price may be an effective device to shift food preferences, but doing that may play on their possible ignorance of the young buyers. we know very young (2 to 3 years old) children use size as an early surrogate indicator of price, and these findings suggests early (5 to 8 years old) child purchasers may use food price as an indicator of value. this issue of price reflecting quality can be seen in adult purchasing as well, and may suggest that a lack of information, not necessarily experience, is involved in their decision making. 6. limitations the very limited sample, in number of subjects and factors controlled, make generalizations speculative at present. as there is no significant socio economic differences in the demographics of the respondents make comparisons difficult to interpret because of the many factors that need to be controlled or accounted for in this task. future research needs more representative samples that can account for potentially significant factors such social class. because the experiment was conducted in the classroom as part of the children’s normal group activities, the children viewed the experiment as a group, not individually. although personal interactions were discouraged, some interaction may have occurred. the purpose of this study was to test the intervention on a small scale before a broader range of experiments could be done. as this table 3: knowledge of money value description percent (%) know the money value 56 did not know the money value 44 table 4: knowledge of money value by gender description boy (frequency) girl (frequency) know the money value 30 25 not knowing the money value 20 23 total 50 48 table 5: source on money knowledge description percent (%) sources (parents, teacher and friends) 72 did not know 28 table 6: source of money knowledge by gender description boys (frequency) girls (frequency) parents 19 21 teacher 15 15 friends 10 8 no sources 6 4 total 50 48 table 7: scenario 1 (control group) scenario 1 percent (%) nuggets a (rm 1.00) 55 nuggets b (rm 1.00) 44 table 8: scenario 2 (experiment group) scenario 2 percent (%) nuggets a (rm 1.00) 46 nuggets b (50 cents) 54 table 2: demographic profile of respondents description frequency n=98 (%) gender boy 50 (51) girl 48 (49) age 5 years 49 (50) 6 years 49 (50) dahari and kokash: can price sway children preference? preliminary experiment among malay children international review of management and marketing | vol 7 • issue 1 • 2017498 first study forms a base for such research on children, researchers may use these findings and broaden them by using different categories of products. they need to be familiar among young children, and the experiments should be conducted at different settings. for example, sample after they sample the items. future research should recognize these young buyers and their decisionmaking to better understand the effects of marketing on young children. 7. acknowledgment the authors wish to thank montessori of international islamic university malaysia contribution and assistance in this research. references allen, j.l., harrell, g.d., hutt, m.d. 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(1988), consumer perceptions of price, quality, and value a: a meansend model and synthesis of evidence. journal of marketing, 52(3), 2-22. . international review of management and marketing | vol 6 • special issue (s4) • 2016 161 international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2016, 6(s4) 161-167. special issue for “asia international conference (aic 2015), 5-6 december 2015, universiti teknologi malaysia, kuala lumpur, malaysia” international students destination loyalty behavior: conceptual framework for emerging destinations ndanusa mohammed manzuma-ndaaba1, yoshifumi harada2, abd rahim romle3, abdul shukor shamsudin4 1school of business innovation and technoprenuership, university malaysia perlis, perlis, malaysia, 2school of business innovation and technoprenuership, university malaysia perlis, perlis, malaysia, 3college of law, government and international studies, universiti utara malaysia, perlis, malaysia, 4school of business management, cob, universiti utara malaysia, perlis, malaysia. *email: mnzuma1@gmail.com abstract the encroachment of marketing theories in to education services through up some research challenges resulted in different models. however, previous focuses were more on student’s satisfaction, leaving out retention which has been adjourned to save cost, energy and time than recruitment. therefore, this study conceptualized an integrated frame work for loyalty study in international higher education from marketing perspective. the objective is to integrate variables applicable to situation of developing country sourcing international students from developing countries. the liberalization of education sector encouraged by globalization resulting from reduced government finances and economic gains attached to international education services gave rise to emerging education destinations. this study contributes to theory by proposing an integrated model for loyalty behavior in international education. also contributes to practice by identifying variables that will encourage students to continue their study, re-enroll for next degree, recommend the country and speak well of the destination. malaysia stands to gain from the prepositions and variables in this study. the study is limited by its very nature of being a conceptual study, thus empirical study is recommended. keywords: loyalty, student destination, tertiary education jel classifications: j10, m10 1. introduction education services all over the world used to be government responsibility until recently (altbach and knight, 2007). the conviction that education provide needed human resources required to galvanize other sectors of the economy is the premise for massive government involvement. however, the reduction in government investment in education sector is in line with the realities of the new millennium (arambewela and hall, 2009). these realities span from the need to improve quality, provide varieties, liberalize the market and step up competitions which are the basis for private driven economic policies (thomas, 2011). interestingly, the theories from marketing perspective had to be smuggled into education services to realize the full benefits of increased private participation (hemsely-brown and oplatka, 2006). malaysia is one of the fast growing emerging destinations and witnessing increasing influx of international students mostly from developing countries within and outside asia (biodun et al., 2012). in order to provide enabling environment, malaysia government laid solid foundation for education sector liberalization by passing three important legislations and amended relevant laws to accommodate establishment of local and foreign higher education institutions (akiba, 2008). these are: (1) national council on higher education act, (2) private higher education institutions act and (3) national accreditation board act. in addition, the laws provide for partnership, twining and wholly set up of foreign campuses in malaysia while supporting home grown private institutions (moe, 2010). some levels of management and financial autonomy were granted to a few public universities to enable them compete favorably with other institutions in or manzuma-ndaaba, et al.: international students destination loyalty behavior: conceptual framework for emerging destinations international review of management and marketing | vol 6 • special issue (s4) • 2016162 outside malaysia (fernandez, 2010). this singular measure accelerated transformation from state control to market driven higher education sector in the country. thus, malaysia has since joined the league of education exporting countries. however, the fee charging system and international students’ recruitment efforts may result into consumerist behavior in terms of demand for value of money by students (maringe and carter, 2007). in order to create an effective marketing plan, there is need to understand student’s behavior under intensive competition in a liberalized education market. malaysia as an emerging educational destination is strategically positioned to dominate the market share within the south east asia (moe, 2014). presently, it occupied 2% global share of international education market and set a target of recruiting not fewer than 200,000 international students to the country by the year 2020 (emgs, 2015). if the target is met, the country will be ahead of singapore, china, india, thailand, indonesia, vietnam and other countries within the region threatening its market share. it will also increase global share to about 5%. to achieve this, unique feature of differentiation which obviously promotes loyalty is the market strategy. hemsely-brown and oplatka (2006) note that there are other marketing strategies to be explore in education sector using theories of consumer behavior in marketing. loyalty from destination perspective of international students is under research (mazzarol and soutar, 2012). students’ loyalty to destination has the potential to increase overall country education performance by retaining existing students and attract new students to the destination (keiningham et al., 2008). as the international competition in higher education is increasing due to growing demand for foreign studies, there is need to investigate the potential competitive advantages inherent in various countries. thus, the needs to understand international student’s loyalty behavior from the experience of an emerging destination like malaysia. this research aims to identify different attributes that encourage international students not only to choose a country but also to remain loyal to the country by continuing their studies and recommend the country to potential students. 2. literature review in other to fully apply marketing theories in education services, there is need to understand three parameters: first the consumer decision making process under competitive market; second the nature and peculiarities of education services; and finally the variables that triggers loyalty behavior. since this study is conceptual, the chosen variables were from previous literature and theoretical models. extant literature identified student’s experience, country image, education value, student’s satisfaction and destination brand loyalty. 2.1. decision making process the model for consumer decision making process used in marketing theories is the five stage process by famous marketing researcher kotler (2003). according to him, the first stage is the problem recognition, follow by information search, then evaluation of alternatives, purchase decision and finally postpurchase appraisal. since loyalty is a consumer behavior, these five stages can be applied to international student’s destination loyalty decision. however, previous researchers that applied the model in higher education focused institutions and selection process (maringe and carter, 2007; moogan, 2003) rather than the country and decision to be loyal examine in this study. thus, this study conceptualized the applicability of this ground theory in post-purchase decision making like loyalty (figure 1). from the model above, loyalty decision start from motivation or recognition of issues based on previous experiences, then search for information by comparing and contrasting situations at other destinations, then critically evaluate alternatives rationally or irrationally, a purchase decision is made afterward, finally a reassessment of the decision is done (kotler, 2003). there are however, two other factors recognized by ajzen and fishbin (1991) to mediate between purchase intention and purchase decision in consumer theory. the subjective norm (attitude of significant others) and perceived behavioral control (unanticipated situational factors). integration of attitude with these two factors is the thrust of theory of planned behavior (tpb). this study focuses on the last stage which is post-purchase decision but intention does not necessarily translate to decision, hence the need to understand various aspects of loyalty behavior (cubillo et al., 2006). ajzen and fishbein (1991) tpb characterized the attributes of decision influencer to be three: attitude, subjective norm and perceived behavioral control. this stage is in-between evaluation of alternatives and purchase decision in the consumer decision process model (figure 2). as stated earlier, these factors intervene between loyalty intention and loyalty decision. interdependency nature of human creature allowed for action or inaction of others to interfere with our intention or decision. this is great if the person is placed on high pedestal as significant others (ajzen, 2002) see figure 3. similarly, the easy or difficulty at discharging prior task influences future decision, for instance sudden death of student sponsor or denial of visa could pose a challenge. once our attitude is positively disposed, significant others like our mentors, teachers, friends or family approve of it and little or no difficulty was encountered in previous action, then the intention will be favorable. ajzen and fishbein (1978) empirically justified the measurement of behavior through intention. relying on this argument, decision to be loyal to the study destination will be positive. figure 1: five stages model of consumer decision making process (kotler, 2003) manzuma-ndaaba, et al.: international students destination loyalty behavior: conceptual framework for emerging destinations international review of management and marketing | vol 6 • special issue (s4) • 2016 163 however, the focus is not on consumer behavior alone but also the marketing strategies involved in making a decision. therefore, the parameters of marketing used in transactional and relationship marketing are being tested in various segment of education consumption including loyalty behavior (hemsely-brown and oplatka, 2006). to achieve this, the peculiarities in the nature of education services need to be enumerated. 2.2. nature of education services service is generally human support endeavors carried in various aspect of life. a service could mean an industry, a performance, an output, an offering or a process depending on the service industry in question. the changes resulting from globalization and internationalization of higher education put pressure on education service providers (institutions and countries) to imbibed marketing theories for recruitment and retention. however, famous marketing researchers zeithaml et al. (1985) came up with certain characteristics of services in marketing. they are; intangibility, heterogeneity, perishability and inseparability of production and consumption. these unique characteristics of service marketing are applicable to educational services but require some strategic marketing skills (keller, 2008). the intangible aspect of service implies that it cannot be seen, touched, tasted or possessed, however it can be perceived (zeithaml et al., 1985). the perception could be from country image, institution image or people image (cubillo et al., 2006). perception is the base line for consumer pre-consumption judgment (kotler, 2003). the intangible nature of services gives room for varying assumptions by the customers and set expectations standard. if the customer now consumed the service and feel greater than his/her expectation, customer become delighted and if below expectation dissatisfaction occurred (parasuraman et al., 1988). no student can touched, smelled or taste education services, hence there is need to design measurement of student’s perception of the services rendered by institutions (mazzarol, 1998). in addition, intangibility limits communication between services and consumer. the issue of appropriate price in service industry is a challenge emanating from intangibility. the heterogeneity nature is a great challenge, no service can be perform by two individual and expect same result (zeithaml et al., 1985). even for a single person, he could record varying result at different time, day or situation. therefore, the quality of service could vary from producer to producer, consumer to consumer, and from day to day (zeithaml et al., 1985). this is the more reason why student assessments of institutions are often different despite government efforts at maintaining uniform standard across board. more so, service assessment in education vary according to circumstances such as year to year, class to class, student to student, lecturer to lecturer (owlia and spindwall, 1996). the inability of storing or saving service posed synchronization challenges between supply and demand in service industries. this is referred to as perishability (zeithaml et al., 1985). unlike products, services cannot be preserved or store in a retriever form, hence it is assessed immediately. the last on the list of four characteristics is the simultaneous production and consumption of services. this is particular to education services where lecturer and student interact closely at the point of impacting knowledge and assimilating knowledge (mazzarol, 1998). the multilevel interaction at higher education institutions to generate services make the assessment complicated thereby giving room for different service judgment by the students (owlia and spindwall, 1996). apart from the general characteristics above, services are also consumed in two-fold; the core service and the auxiliary services. while the core is the target and main service purchased, the auxiliary in most cases are either complementary or jointly acquired (cubillo et al., 2006). for instance, establishing an institution without providing accommodation will pose challenges to the students. in some cases, core services are difficult to alter, providers resolve to changing auxiliary services to differentiate them from their competitors (keller, 2008). in international education destination like malaysia, students receive pack of core educational services at their respective institutions but the periphery services related to their stay in malaysia are provided by the country. these include security, infrastructure, socials, sports and recreations. all these macroeconomic variables influences student loyalty decision making (cubillo et al., 2006). once the experience is impressive, student will not only continue study but also recommend the country to potential students. figure 2: theory of planned behavior figure 3: contemporary education-tourism destination loyalty model manzuma-ndaaba, et al.: international students destination loyalty behavior: conceptual framework for emerging destinations international review of management and marketing | vol 6 • special issue (s4) • 2016164 2.3. education destination the search for international studies has open up many countries in recent years because of its significant economic contributions to the financial health of these destinations. the traditional destinations are english speaking native countries of usa, uk, canada and a few french and german speaking countries respectively (oecd, 2012). the global market shares of these major countries are usa 19%, uk 10%, australia 7%, france 7%, germany 7%, canada 5.5% (oecd, 2012). the major source countries feeding these destinations are new zealand, korea, japan, china, indian, indonesia, middle east and african countries (arambewela and hall, 2009). however, the pattern of movement is changing and tilting towards the asia and pacific as emerging destinations (unesco, 2013). the hitherto source countries are now host countries to international students from within and outside asia continent. leading in this category are singapore, china, malaysia, indian, thailand, vietnam and indonesia. the volume of movement to western countries declined significantly after the september 11 incidence (morshidi, 2008). this created a market opportunity for multi-cultural and muslim dominated countries like malaysia to take advantage of large international students from arab nations in search of study destination. though, the global demand for higher education is not likely to decline in the nearest future, the emerging destinations are no doubt reducing the global market share of the major exporting countries (arambewela and hall, 2009). 2.4. positioning malaysia as education destination malaysia used to send students to study at major education destinations prior to implementation of liberalization policy in 90s that heralded the expanded infrastructure and massive international students’ recruitment (baharun et al., 2011). the country spent millions of ringgit malaysia to train her citizens in professional fields like medicine, engineering and management in countries like usa, uk, australia, germany and egypt (padlee and yaakop, 2010). however, the asia financial crisis which prompted the need for prudent resource management crystalizes the adoption of market driven higher education system in the country (akiba, 2008). the massive infrastructural development and expansion of tourism product was an attraction strategy couple with peaceful and secured environment (weather, security, multi-religion, multicultural) facilitated the implementation (akiba, 2008). the table 1 shows top 10 countries malaysians studied and top 10 countries in malaysia for study. 2.5. international students’ loyalty behavior in marketing, customer loyalty has been studied in wide range of products and services (chen and tsai, 2007; suhartanto, 2011; hashim et al., 2015; fornell et al., 1996; oliver, 1999). however, the nature of higher education services and the characteristics of international students restricted the application of loyalty behaviors into education market. the concept of students as customer propelled by market driven educational services made it inevitable to experiment in theory and practice of higher education (brookes, 2003; hill, 1995). to this extend, both attitudinal and behavioral loyalty has been studied in higher education (sheu, 2011; helgesen, and nesset, 2007; hashim et al., 2015). while the attitudinal loyalty is expressed by actions of students such as word of mouth, intentions and recommendation to potential students, the behavioral loyalty is expressed by re-enrolment, continuous study and faithfulness of students to the destination (oliver, 1999). in this study, the concept is to propose a model for international student’s loyalty behavior to malaysia as a study destination. oliver (1999) viewed a truly loyal customer to be both attitudinal and behaviorally loyal to the brand, thus composite loyalty which consisted of the characteristics of both is being considered in this study. loyalty of international students to malaysia will be gauge based on the demonstration of attitudes and repeat purchase behavior. sheu (2011) study of loyalty viewed international student’s behavior from the point of favorable and unfavorable behavior. while former include positive words of mouth, recommendation, and re-enrolment, the latter exhibited complaint behavior, negative word of mouth and in some cases attrition. the real and imaginary post-purchase decision from the perception of students from third world country undertaking a study at a developing country is the concept of the proposed drivers, relationship and model in this study. 2.6. drivers of student’s loyalty behavior the decision to be loyal is considered as high involvement decision because many attributes will be evaluated to arrive at the final decision. extant literature identified student’s experience, country image, education value, and student satisfaction to influence international student destination loyalty behavior (hanaysha et al., 2012; sheu, 2011; hashim et al., 2015). these variables were selected based on the situation of education destination under investigation (from emerging countries to emerging country). however, previous studies concentrated on recruitment perspective (mazzarol and soutar, 2002), but retention has been found to trigger business performance in marketing (keiningham et al., 2008). therefore, this study proposed relationship for the factors from retention angle. 2.7. student’s experience the general saying that experience is the best teacher used in social psychology is applicable to loyalty decision making process. loyalty to education destination is a post-consumption decision (firdaus, 2006). previous encounter by the student of both table 1: top 10 source and host countries for malaysia top 10 source countries top 10 destination countries source countries number of students destination countries number of students iran 11,823 australia 20,494 china 10,214 united kingdom 13,796 indonesia 9889 egypt 8611 yemen 5866 usa 6100 nigeria 5817 indonesia 5588 libya 3930 taiwan 5133 sudan 2837 china 2792 saudi arabia 2252 russia 2521 bangladesh 2041 new zealand 2305 botswana 1911 india 2175 source: mohe, malaysia (2010) manzuma-ndaaba, et al.: international students destination loyalty behavior: conceptual framework for emerging destinations international review of management and marketing | vol 6 • special issue (s4) • 2016 165 education and non-education services provided by the country will influence international students loyalty decision (thomas, 2011). significant percentage of international students in malaysia is from developing countries within and outside asia (baharun et al., 2011). therefore, the experience of these students with both micro and macro facilities provided by the country and their perception of it will determine their decision to continue their studies, register for next degree in the country and recommending the country to other potential students (thomas, 2011). a worthwhile experience will promote positive loyalty while a bitter experience trigger attrition and negative words of mouth. thus, this study proposed a positive relationship between students’ experience and destination loyalty (abdullah, 2006). satisfaction is one of the frequently studied variables in marketing. this is because satisfied customers have tendencies to increase business performance by remaining loyal and also become official marketing agent of the product or service thereby reducing the communication cost of the provider (yoo and park, 2007; chitty et al., 2007). studies have found positive relationship between satisfaction and loyalty in b2b and b2c businesses (clemes et al., 2007; rohaizat, 2004; biodun et al., 2012; hanaysha et al., 2012). studies have also empirically validated mediating effects of satisfaction on loyalty studies (sheu, 2011; wilkins et al., 2011). however, little studies have been conducted on the moderating effect of satisfaction in service marketing particularly education services (chen, 2008). this study therefore, proposed a moderating effect of satisfaction between student’s experience and destination loyalty. thus, the follow hypotheses are developed: h1: student’s experience is positively related to destination loyalty. h2: satisfaction moderate the relationship between experience and loyalty. 2.8. perceived image of the country the perception of image is a significant differentiation strategy in marketing (kotler, 2003). however, perceived image play dual roles in student’s decision making process. pre-consumption and post-consumption influences (brown and mazzarole, 2009). the former is sourced from advertisements, promotion materials and words of mouth, while the latter is from student’s experience. aaker and joachimsthäier, (1999) contend that customer experience with the products or services is the most important. post-consumption image of a country focuses the general impression or opinion held about the people and how the services are delivered at the host country (hakala et al., 2013). in this study, international students with favorable image perception will like to remain and recommend the country in line with loyalty theory (nguyen and leblanc, 2001). therefore, we propose a positive relationship between country image and destination loyalty. similarly, student can hold good image of the country without necessarily being satisfy with the services received. this lead to postulation that a satisfied student will perceived better image of the country and its services (nguyen and leblanc, 2001). otherwise, complaining behavior or negative words of mouth will follow if the student is not satisfied irrespective of the image impression (fornell et al., 1996). therefore, destination countries must be conscious of student’s satisfaction level when creating impression in their minds. cubillo et al. (2006) proposed three images of service provider in international education market; the image of the country, city where the student will consume the service, and the higher education institution. they suggested an integrated model of international students’ behavior in selection of study destination. however, the same parameter is valid in making loyalty decision. this study proposed the following hypotheses: h3: perceived image is positively related to destination loyalty. h4: satisfaction influences the relationship between image and loyalty. 2.9. educational value in marketing theories, value played significant role in decision making process of consumers because of its evaluative comparison between what is let go and what is acquired (zeithaml et al., 2008). when a transaction or relationship marketing occurred, the parties involved take stock of the transaction viz. all associated costs and relate it to the product or services obtained. if what is gained supersede what is lost, customer become excited. similarly, if the lost is higher than the gain, customer felt shortchanged and rate the value of such services to be low. chen and tsai (2007) emphasized the contribution of value in tourism activities particularly the revisit tourist. they confirmed that there exist a clear difference between the behavior of first time visitor and a repeat visitor, and that repeater considered the value for what is let go (money, time and energy) before making decision (chen and tsai, 2007). in an emerging education destination like malaysia, international students are particularly concern about what they spend and what they learn. this is because when students’ ventured into foreign studies, they are not only buying the degree but the benefits that come with acquiring the degree such as employment and status (binsardi and ekwulugo, 2003). the country will profit more by making students spend less and gain more. the competition within the region and global education market generally called for strategic differentiation including providing competitive price. one of the strength of malaysia as education destination is affordability compared to other destinations (emgs, 2015). like other service marketing, international students will be loyal to malaysia if they constantly enjoyed services commensurate to the total cost incurred. however, individual interpretation of value posed a challenge. this is where issue of student’s satisfaction intervened between value and loyalty. international students will be better off in making loyalty decision if they are satisfied with the services offered at the study destination (sheu, 2011). therefore, satisfaction is significant determinant of loyalty in international education marketing. but, switching cost also moderated the relationship between satisfaction and loyalty if the perceived value is above average (yang and peterson, 2004). this implies that switching cost will be perceived high if the student felt good value for their investment in education. this study thus, proposed the manzuma-ndaaba, et al.: international students destination loyalty behavior: conceptual framework for emerging destinations international review of management and marketing | vol 6 • special issue (s4) • 2016166 following hypotheses in relation to educational value perceived by international students. h5: perceived value is positively related to destination loyalty. h6: satisfaction moderate the relationship between value and loyalty. 3. conclusion hemsely-brown and oplatka (2006) recommendation after extensively reviewing studies on education marketing over two decades was that researches in higher education marketing is still at infant stage. they suggested strategic marketing into higher education market such as satisfaction and student loyalty. previous researches concentrated on studying student’s behavior from the perception of third world to developed nations which used to be the traditional movement. the effect of globalization and internationalization policy has expand the horizon to accommodate different pattern of movement; developing to developed; developed to developed; developing to developing and developed to developing. the identified drivers of loyalty are by no means exhaustive, other variables used in service marketing such as service quality; commitment; personal reasons; attitude also can be tested in another model or integrated into this proposal. the authors strongly recommended empirical studies based on the proposed model to justify the weight and direction of the prepositions. references abdullah, f. 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(2008), services marketing: integrating customer focus across the firm. 5th ed. boston, ma: mcgraw-hill. . international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2017, 7(5), 124-130. international review of management and marketing | vol 7 • issue 5 • 2017124 investigation and selection of overseas suppliers with emphasis on risk indicators in iran ehsan ajamhasani1*, vahid sanavi garousian2 1department of international business management, neyshabur branch, islamic azad university, neyshabur, iran, 2faculty of management, bojnourd branch, islamic azad university, bojnourd, iran. *email: mimertal@yahoo.com abstract the present study was done with aimed to investigate and select overseas suppliers with emphasis on risk indicators in iran’s manufacturing companies in khorasan province. this research was applied in terms of its purpose and is also part of descriptive-analytical research. a questionnaire was used to collect information. given that contracting or contracting by low-cost overseas suppliers is an attractive topic in the global economy, unfortunately, these decisions are made without due consideration to the requirements, market demand and proper delivery system, which usually results in bad results. determining the risk factors affecting the supply chain of a manufacturing company, determining the decision making options for adopting its purchasing or manufacturing policies, and how to interact with the company’s experts can help companies make better decisions about making or purchasing final products or parts. by reviewing the literature of research and using expert opinions, a list of effective criteria for the assessment and selection of overseas suppliers was identified in five general categories (demand, supply, infrastructure, regulatory, environmental, and catastrophic risks). according to the results of this study, among the main criteria, the risk of supply has the highest weight, so it is more important than other major criteria. keywords: risk indicators, demand risks, supply risk, infrastructure risk, regulatory and environmental risks jel classifications: m30, m31 1. introduction almost since the 1980s, many reputable companies have left some or all of their activities outsourced to foreign countries. due to access to raw materials and lower wage costs, they can profit from its competitive advantage (schoenherr et al., 2008). following the successful operation of this type of outsourcing, other companies, including manufacturing or services, are encouraged to do this kind of activity and the scope of this outsourcing has been unearthed over the next few years. transmission of production or service operations of a company to a company abroad is leading to the creation of a complex network, which can result in a higher risk, especially the risks in the supply chain. these risks may include poor product quality or service performance, less reliability, supply disruptions, disasters, and communication problems. in other words, the benefits of transferring activities abroad must be so high that they can offset these risks so that this kind of activity is affordable (schoenherr et al., 2008). although today, most companies are considering manufacturing or purchasing decisions both inside the country and abroad, little research has been done on the risks involved in this process. given that almost all companies face some kind of such risks, the risk assessment in the chain has become one of the most important issues. in this research, a coherent approach and structure is presented to assess the supply chain risks associated with external outsourcing decisions. in this research, it is not simply about making decisions about making or purchasing from other countries, but rather by expressing the risks associated with these types of decisions, and then paying attention to outsourcing. if the decision is to divest the operation abroad, then the question should be asked which country should be chosen to face less risks. identifying the risk factors affecting the supply chain of a manufacturing company, determining the choices for making purchasing policies or the production of that company and how it interacts with the company’s experts, suggests the application of the proposed method, generally, the suggestions given by the research to this company can help the company make better decisions about making or purchasing final products or parts of it, thanks to questions like “how to decide ajamhasani and garousian: investigation and selection of overseas suppliers with emphasis on risk indicators in iran international review of management and marketing | vol 7 • issue 5 • 2017 125 on external sources of funding?” risks should be considered, and how can a decent decision be made according to the nature of the multi-criteria nature of the problem? 2. research background in his 2015 study gligor et al., “effective consequences of agile supply chain,” chief strategic management of supply chain affects corporate performance. if companies use their agility strategy in their supply chains, customer productivity will increase, and cost-efficiency will increase if they use lean strategy in the supply chain. in addition to investigating the effect of supply chain agility on customer performance, this study attempts to measure the impact of agility on cost efficiency and ultimately how these factors affect corporate performance. in 2006, coronel and treader, in their study “supply chain strategies and their impact on supply chain performance and corporate performance,” they point out that supply chain strategies include agility and purity, as well as information systems strategies in the supply chain, affect company performance. this study, using the flexibility of information systems as a moderator, evaluates the effect of supply chain agility on supply chain performance and company performance. in 2014, jabbour et al. reviewed the quality management, maturity of environmental management, green supply chain implementation practices and performance in brazilian small and medium-sized enterprises at the presence of iso 14001. the research was conducted in 95 companies from green supply chain groups that have an iso 14001 certificate in brazil. the results show that comprehensive quality management has a positive and significant impact on the activities and performance of the green supply chain and improves it. therefore, it is suggested to chain managers to prioritize the implementation of quality related activities and their management in organizations and if possible, extend it to all sections and chain members to increase its impact. also, the success of the green supply chain will improve the company’s performance. nassiri and pour, in their 1394 research paper entitled “an integrated model for choosing suppliers and assigning supply in the supply chain,” stated that suppliers have a clear role in the proper operation of a supply chain and their proper choice is of particular importance. in this research, an integrated model of multi-criteria decision making and mathematical programming for selecting suppliers and order allocation in the supply chain is presented. the proposed structure consists of two sub-models of qualitative and quantitative. under the qualitative model, using the prioritization fan based on the similarity of the ideal solution (topsis) to the qualitative assessment of the suppliers. then, in the sub-model, the volume of ordering is determined by the suppliers based on the priorities defined in the qualitative stage using multi-dimensional mathematical programming. the solving method in this research is the multi-objective fuzzy approach, which is widely used because of the ability to calculate the degree of supply of various objective functions in the model in solving multi-objective problems. one of the most prominent features of the model is the attention to the different levels of quality and the rate of failure associated with it, as well as the assumption of the supplier’s change in detail. finally, to show the validity of the model and the efficiency of the solution method, a number of sample problems are presented and solved. mantian et al. in his article in 2015 titled “developing a strategic model for choosing suppliers.” using structural equation modeling and fuzzy logic modeling approaches, we have designed and developed a model to select the appropriate supplier by using structural equation modeling and fuzzy logic model approaches in khuzestan steel company. the statistical population of this study consists of all staff related to the evaluation and selection of suppliers in the steel company, which was 200 people. sampling method of this sampling study is available. data collection tools are questionnaire form; two questionnaires are provided for two levels of supplier selection. a comprehensive method a two-level method is proposed for a structural equation modeling approach and a fuzzy logic approach. in order to analyze the data, lisrel, spss and matlab software were used. after reviewing the literature, and according to the opinions of the experts of khuzestan steel plant, 8 criteria include high level of quality, supplier delivery performance, service level level, cost and price level, high level of management and organization benchmark, financial position, technology level and technical capabilities and supplier’s credentials and history were identified for the supplier’s assessment and selection. after analyzing the results, the indicated eight criteria significantly affect the supplier’s choice. also, according to the findings, after confirmation of fitness and appropriateness of the supplier’s choice of measurement model and determining the weight and relative importance of the research criteria at the first level, and determine the location of choices for choosing a steel company in khuzestan to determine the supplier of alloy components in the second level and confirm the consistency and accuracy of these decisions. combining the results and final output of the proposed research model showed that supplier a has the highest significance and highest rank due to the calculated scores and thus the best option for the khouzestan steel company to supply the alloy components. subsequently, suppliers of d, c, and b are ranked next. 3. research method based on the purpose of the research, fundamental and applied research is divided. the present research can be considered based on the purpose of applied research. this research can also be considered as part of descriptive-analytic research. in this type of research, the researcher, in addition to illustrating what is described, explains why and why the situation and its dimensions are discussed. the statistical population of this study consists of all industry and academic experts with at least 5 years of specialized research experience and their field of study related to the subject matter of the research. in this research, a targeted sampling method will be used and at least 12 interviews and paired comparison questionnaires will be distributed among the research experts. the library method (books, articles, and dissertations in english and persian) is used to collect information in the theoretical and research topics, and a questionnaire is used to collect information in the main part of the research. for this purpose, the first step is to use books, essays, dissertations, and internet scrolling. in the ajamhasani and garousian: investigation and selection of overseas suppliers with emphasis on risk indicators in iran international review of management and marketing | vol 7 • issue 5 • 2017126 second step, a questionnaire is used to measure the relationship of variables. the questionnaire is a pairwise comparison questionnaire based on the criteria and sub-criteria that experts are asked to complete by comparing the questionnaire with their knowledge. these comparisons are the inputs of the hierarchical analysis process. to obtain weights, data is entered into the model. in this research, the hierarchical analysis technique (ahp) was used to analyze the data. in this technique, the relationship between down-and-down criteria and sub-criteria is examined. in ahp, target levels, benchmarks, sub-criteria, and options are independent of each other at each level. on the basis of a one-way relationship or linear one-way top-down linear weighting in the hierarchical process with subtractive pairwise matrices, and in the end, multiplied from bottom to top in matrices, the final weight of the options was determined and the ranking also ends. 4. data analysis 4.1. describe the research model and used components the first step in the process of hierarchical analysis is to form a hierarchical structure or hierarchical tree. to form the hierarchical structure of the problem, first, the research model factors, namely, the purpose of research, criteria, sub criteria and research options, should be identified. by reviewing the research literature and using expert opinions, a list of effective criteria for assessing and selecting overseas suppliers was identified in five general categories. in this study, three suppliers were identified and selected as research options. table 1 shows lists the criteria and research options along with the codes used for it. at this stage, by identifying the criteria, the sub criteria and the research options can be the hierarchical structure of the problem. figure 1 shows the hierarchical structure of research. 4.2. calculate relative weight of main research criteria after identifying the hierarchical structure of the research, it is necessary to calculate and evaluate the weight of the research criteria towards the target. in order to calculate the weight of the research criteria toward the goal, a paired questionnaire of criteria was developed for the purpose. after making a paired questionnaire, the criteria for research were compared with the goal of the decision makers to complete them. by completing the questionnaires, we collect the collected data into the expert table 1: list of research criteria numbercriteriasymbolsubcategoriessymbol 1risk of demandc1seasonal imbalancesc11 risk of competitorsc12 market riskc13 2supply risksc2operational and manufacturing riskc21 risk of raw materialsc22 quality riskc23 risk of capacity limitc24 3infrastructure risksc3shipping riskc31 risk of machineryc32 information riskc33 4regulatory and environmental risks c4government riskc41 international risk (sanctions and .)c42 environmental riskc43 5catastrophic risksc5risk of natural eventsc51 the risk of terrorist attacksc52 socio-cultural risk (strike and .)c53 figure 1: hierarchical structure of research ajamhasani and garousian: investigation and selection of overseas suppliers with emphasis on risk indicators in iran international review of management and marketing | vol 7 • issue 5 • 2017 127 quiz software to evaluate and weigh the main criteria of the research towards the goal. if the level of incompatibility of the matrix is equal to the maturity criterion is acceptable (<0.1), then the paired questionnaire should be returned to the experts to be reviewed. the figure 2 and table 2 gives the matched pair matrix of the main criteria relative to the target, along with its incompatible rate. the figure numbers and, respectively, the relative weight of the main criteria and the order of their importance. as it is seen, among the main criteria of the c2 criterion, that is, the highest supply risks, so it is more important than other major criteria. demand and infrastructure risks also rank second and third respectively (figure 3 and table 3). 4.3. calculation of relative weight of research sub criteria in the previous section, the weight of the main criteria was obtained using the paired comparison questionnaire and excelent chuis software. in this section, we try to use a paired questionnaire to calculate the relative weight of the sub-criteria of each of the main criteria. to this end, the data collected by the paired peer review questionnaire from the experts was introduced into the excel software, in order to obtain the relative weight of each of the following criteria in relation to its original criterion. subsequently, the calculations relating to the sub-criteria of each of the major criteria are presented separately. 4.4. calculations of sub-criteria of demand risk table 4 presents the paired comparison questionnaire for the subcriteria of demand risk, along with its incompatibility rate. the figure 4 also shows the importance and weight of each subscale of the risk of demand. 4.5. calculation of sub-risk factors the table 5 shows the subcategory of the subcriteria of supply risk, along with its incompatibility rate. the figure 5 also shows the weight and ordering for each sub-risk of supply. 4.6. calculation of sub-criteria for infrastructure risk the table 6 shows the subcategory of the sub-criteria of infrastructure risk with its incompatibility rate. the figure 6 also shows the weight and arrangement for each of the sub-criteria of infrastructure risk. 4.7. calculation of regulatory and environmental risk sub-criteria table 7 of the paired t-test shows the sub-criteria of regulatory and environmental risk, along with the amount of incompatibility rate. figure 7 also shows the weight and arrangement for each of the sub-criteria of regulatory and environmental risk. 4.8. calculation of catastrophic risk sub-criteria table 8 of the paired comparison questionnaire shows the disadvantaged risk sub-criteria, along with the amount of incompatibility rate. figure 8 also shows the weight and sequence for each of the disadvantaged risk sub-criteria. figure 2: relative weight of the main criteria figure 3: arrange the importance of each of the major criteria according to their weight table 5: comparison paired matrix sub-risk factors c21 c22 c23 c24 c21 1.81712 1.90637 2.5698 c22 2.62074 2.80397 c23 1.81712 c24 incon: 0.02 table 4: comparison matrix of sub-criteria of demand risk c11 c12 c13 c11 1.90637 2.44949 c12 2.5698 c13 incon: 0.04 figure 4: weight and order of importance of each of the sub-criteria of demand risk table 2: list of research options numbersymboloptions 1a1supplier company 1 2a2manufacturer company 2 3a3manufacturer company 3 table 3: comparison of the matrix of the main criteria relative to the target c1 c2 c3 c4 c5 c1 1.90637 2.44949 3.30193 2.74946 c2 1.51309 3.4641 2.62074 c3 2.0 2.13983 c4 1.5874 c5 incon: 0.03 ajamhasani and garousian: investigation and selection of overseas suppliers with emphasis on risk indicators in iran international review of management and marketing | vol 7 • issue 5 • 2017128 4.9. evaluate and prioritize research options after calculating the weight of the main criteria and the sub criteria of the research, we must calculate the weight of the research options in relation to each of the sub-criteria. at this stage, the relative weight of options was calculated in relation to each of the research sub criteria and then the final weight of the research options was calculated. in order to calculate the weight of the options, in comparison with the sub criteria of each of the main criteria, the paired comparison matrix must be firstly established and sub-criteria are given to the decision makers. if the paired comparison questionnaire is compatible, the results will be presented. in the following, the relative weight of research options is presented separately from the sub-criteria of each of the main criteria. 4.10. calculate the weight of the research options in the previous sections, the relative weight of the main research criteria was calculated relative to the target and the relative weight of the sub-criteria was compared to the main criteria. at this stage, the relative weight of the options was calculated in relation to each of the sub-criteria of the research. in this step, having the relative weight of all the main factors of the research structure, we can calculate the final weight of the options. the table 9 shows the final weight of the research options. the figure 9 also shows the options based on their weight and rank. as you can see, among the research options, the a2 option, the second-largest supplier, has gained the highest and so ranked no. 1. options 1 and 3 respectively have won the next rank. 5. analysis and interpretation of research results in this research, by reviewing the literature of research and using expert opinions, a list of effective criteria for the assessment and selection of overseas suppliers was identified in five general categories (demand, supply, infrastructure, regulatory, environmental and catastrophic risks). also, three suppliers were identified and selected as research options, and the hierarchical structure of the problem was formed. after identifying the hierarchical structure of the research, we calculated and evaluated the main criteria of the research and their sub-categories. in this regard, a paired questionnaire of criteria was developed for the purpose. by completing the questionnaires by decision makers, the collected data entered the expert quiz software to evaluate and calculate their weight (figure 10). as it is seen, among the main criteria of the c2 criterion, the highest-possible supply risks, therefore, are more important than other major criteria. after calculating the weight of the figure 5: weight and order the importance of each sub-risk of supply figure 6: weight and order of importance of each of the sub-criteria of infrastructure risk figure 7: weight and arrangement of the importance of each of the sub-criteria of regulatory and environmental risk figure 8: weight and arrangement of the importance of each of the sub-criteria of regulatory and environmental risk table 6: paired comparison matrix of sub-criteria for infrastructure risk c31 c32 c33 c31 2.44949 2.28943 c32 1.5874 c33 incon: 0.03 table 7: paired comparison matrix of regulatory and environmental risk sub-criteria c41 c42 c43 c41 2.0 2.03965 c42 2.62074 c43 incon: 0.02 table 8: paired comparison matrix of disastrous risk sub-criteria c51 c52 c53 c51 2.28943 1.69838 c52 2.74946 c53 incon: 0.01 table 9: weight of each of the research options the final weight options 0.391 a1 0.428 a2 0.181 a3 ajamhasani and garousian: investigation and selection of overseas suppliers with emphasis on risk indicators in iran international review of management and marketing | vol 7 • issue 5 • 2017 129 main criteria and sub criteria of the research, we calculated the weight of the research options in relation to each of the sub-criteria. for this purpose, the matrix of paired comparison matrix is made up of sub-criteria and is available to decision makers. in the following, the relative weight of the research options is presented separately from the sub-criteria of each of the main criteria. the results of the supplier assessment are shown in table 10. as you can see from the research options, the a2 option, the second supplier, has the highest weight, and thus ranked no. 1. options 1 and 3 respectively have won the next rank. 6. theoretical applications here are some theoretical uses of the research, including: 1. according to the results of this research, the supply of risks in the field of overseas suppliers’ selection and selection is at the top of the list. therefore, it is suggested to managers of organizations to pay close attention to this issue with regard to supplying their customers and to reduce the risk of supply. 2. considering the results of this study, it is suggested to managers of organizations to be careful when choosing their suppliers and to ensure the necessary reliability by researching the raw material and operational risks. 3. according to the results of this study, demand risks for the selection and selection of overseas suppliers is in the second priority. therefore, it is suggested to managers of these organizations to minimize these risks by choosing the right strategies for marketing. 7. management applications in this section, the applications of the research to its management applications are addressed to the managers of the organizations according to the results of the hypotheses. here are some examples. 1. awareness and understanding of managers of effective measures in the assessment and selection of overseas suppliers will make it more effective to reduce the risks of selecting suppliers. 2. considering that the ultimate goal of most organizations is to earn profits, have a larger market share and gain competitive advantage and ultimately improve the organization’s performance, and reducing the risks of supplier selection will also improve the overall performance of the organization. the results of this research managers will help reduce their vendor choices by paying attention to supply risks as their first priority and sub-criteria. 3. the optimal allocation of organizational resources is always considered as one of the main concerns of managers. using the results presented in this study, managers will have a better view of different dimensions and will be able to invest and allocate resources from inefficient or low-impact sectors to invest in dimensions that will greatly reduce the risk of choice vendors. 8. proposals for future research in the last section of this research, here are some suggestions for future research for researchers interested in this field, so that the road of research into sales performance is clear and flammable. 1. first, it is suggested that research be carried out in a number of different periods and intervals, in order to better assess different criteria for the selection of overseas suppliers and to have more sustainability results. 2. in this research, we tried to determine the indices defined independently of each other. however, the method employed could, depending on the values of the objective function for maximization and minimization problems, show the degree of dependency between the options, but the dependence the indicators should also be considered. to this end, one aspect of future research for this study is to examine the supply chain risk assessment with theories such as the analytical network process (anp) that can take these kinds of dependencies into decision making or the anp process can also be used to combine hierarchical analytic methods (in a non-deterministic or fuzzy manner) with multi-objective decision-making methods such as ideal planning, which could be a very interesting research topic for these types of decisions. 3. certainly, the researcher was not able to identify all the factors affecting the selection of overseas suppliers, and there have been factors that are beyond the reach of the researcher. investigating uncertain factors can help reduce the risks of selecting suppliers. 4. in the future, we can also add more factors to the selection of overseas suppliers, such as the environmental conditions of the country in question, or the culture of that country, to produce more comprehensive results. figure 9: the final weight of the research options in order of importance figure 10: arranges the importance of each major criterion according to their weight table 10: weight of each research option priority options the final weight first a2 0.428 second a1 0.391 third a3 0.181 ajamhasani and garousian: investigation and selection of overseas suppliers with emphasis on risk indicators in iran international review of management and marketing | vol 7 • issue 5 • 2017130 5. to ensure the accuracy of the results, these relationships can also be tested in other organizations. 6. it may be that the industry under study is a factor influencing research. therefore, it is suggested that this research be carried out in other industries and its results should be compared with the results of this study. references gligor, d.m., esmark, c.l., holcomb, m.c. (2015), performance outcomes of supply chain agility: when should you be agile? journal of operations management, 33-34, 71-82. jabbour, a.b.l., jabbour, c.j.c., latan, h., teixeira, a.a., de oliveira, j.h.c. (2014), quality management, environmental management maturity, green supply chain practices and green performance of brazilian companies with iso 14001 certification: direct and indirect effects. transportation research part e: logistics and transportation review, 67, 39-51. mantian, m., knife, y., adibi, s., mohammad, h. (2015), develop a strategic model for selecting suppliers using structural equation modeling and fuzzy logic modeling approaches. strategic management research, 4(1), 60-120. nassiri, m.m., pour, m.n. (2015), an integrated model for selecting suppliers and supply allocation in the supply chain. industrial engineering journal, 49(1), 117-128. schoenherr, t., rao, t.v.m., harrison, t.p. (2008), assessing supply chain risks with the analytic hierarchy process: providing decision support for the off shoring decision by a us manufacturing company. journal of purchasing and supply management, 14(1), 100-111. . international review of management and marketing | vol 6 • special issue (s4) • 2016132 international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2016, 6(s4) 132-137. special issue for “asia international conference (aic 2015), 5-6 december 2015, universiti teknologi malaysia, kuala lumpur, malaysia” framework for effective cross-border knowledge transfer chong mahn ling1*, yuen yee yen2, wendy teoh ming yen3 1faculty of business, multimedia university, jalan ayer keroh lama, 75450 melaka, malaysia, 2faculty of business, multimedia university, jalan ayer keroh lama, 75450 melaka, malaysia, 3faculty of business, multimedia university, jalan ayer keroh lama, 75450 melaka, malaysia. *email: pabo_mahn91@hotmail.com abstract effective cross-border knowledge transfer can help to improve the competitiveness of the multinational companies, improve production process or product development, lower the operation cost, reduce errors, and improve profitability. however, cross-border knowledge transfer has always been a challenge for most of the companies especially when it involves communication and trust among a group of local and employees from different cultural background. cultural diversity always causes the failure of knowledge transfer in actual implementation. therefore, this study intends to propose a framework for managing cultural diversity and trust of cross-border knowledge transfer in iskandar development region. the objective of this study is to propose a comprehensive framework to examine the key factors that affect employee’s participation in cross-border knowledge transfer. based on focus group study with management of selected multinational companies in iskandar development region, a comprehensive research framework is developed with ten independent variables (individualism/collectivism, power distance, uncertainty avoidance, affective/neutral, achievement/ascription, and monochronic/polychromic, trust, attitude, social support, and facilitating conditions), and a dependent variable (participation in cross-border knowledge transfer). apart from contributing to the literature of knowledge management, the findings of the study also serve as a strong foundation for academics and future researchers to conduct future study in related industry and region. keywords: cross-border, knowledge transfer, framework, key factors jel classifications: o1, o2, o4 1. introduction as malaysian government plans to transform the country into a knowledge-based economy by the year 2020, it is extremely important for multinational companies to understand how to transfer knowledge between geographically dispersed individuals and companies, and across cultural and national boundaries (duan et al., 2010). according to argote and ingram (2000), there is a higher chance of success if a multinational company can effectively transfer knowledge to their counterparts in another country who are less effective and experienced. employees who are lack of understanding on knowledge transfer are less likely to participate in transferring their knowledge to their counterparts in subsidiaries (szulanski, 1996) due to high degree of complexity in the process of knowledge transfer (yee et al., 2015). culture and trust are key issue in the cross-border knowledge transfer of multinational companies. culture is commonly refers as common beliefs that influence what people consider and believe to be meaningful and valuable, which will significantly influence the trust and communication between employees in headquarters and (yoo and torrey, 2002). the primary issue of cross-border knowledge transfer within multinational companies is the cultural diversity between the knowledge source and recipient (yoo and torrey, 2002). according to qin et al. (2011), culture and trust affects the success of cross-border knowledge transfer not only in malaysia, but a worldwide context. it is believed that cultural differences and lack of trust among employees might lead to unsuccessful negotiations, communication difficulties, and time-consuming problem solving (anh et al., 2006). these barriers can significantly affect knowledge transfer process between headquarters and subsidiaries (anh et al., 2006). if culture diversity and trust are managed well in a multinational organization, it is believed that the knowledge transfer process will become more efficient and effective (almeida et al., 2002; gold et al., 2001). ling, et al.: framework for effective cross-border knowledge transfer international review of management and marketing | vol 6 • special issue (s4) • 2016 133 previous literature such as khamseh and jolly (2013) measured the impact of inter-firm knowledge transfers in strategic alliances and frank et al. (2013) examined the emergent and the engineering approaches of knowledge transfer within local companies, without taking into consideration the cross-border knowledge transfer. filatotchev et al. (2011) focused on the contribution of skilled returnees towards new knowledge creation in a multinational organization without measuring the cultural impact on effective cross-border knowledge transfer. boh et al. (2013) examined the knowledge transfer between the headquarters of a multinational company in norway and its vietnamese subsidiaries but the survey was administered to only 70 employees in the vietnamese subsidiaries. finestone and snyman (2005) discovered a difference in the employee intention to share knowledge in the organization without investigating their participation in effective cross-border knowledge transfer. voel and han (2005) discovered that respondents from china were more willing to share their knowledge compared with respondents from the united states without including cross-border knowledge transfer in their studies. none of the above studies has examined ways to manage the cultural diversity and trust of cross-border knowledge transfer in iskandar development region, an important business hub in malaysia. therefore, there is a need for the development of a comprehensive framework which captures how cultural diversity and trust can affect the cross-border knowledge transfer in iskandar development region. this study is therefore conducted to propose a research framework that could be used to manage cultural diversity and trust of cross-border knowledge transfer in iskandar development region. the findings of this study will help malaysian government to achieve the key objectives of economic transformation programme, which is to create an information rich, high income and intelligent nation by recommending ways to attract more local and foreign employees to jointly participate in the cross-border knowledge transfer to contribute innovative ideas towards the creation of a k-economy (economic planning unit, 2015). besides, as economic transformation programme focuses on private sector-led growth and designed to drive malaysia towards a high income economy nation that is both inclusive and sustainable by the year 2020. this study will also encourage more entrepreneurs and business men to invest in iskandar development region and contributes to the development of the region. iskandar development region has been positioned as “international city” to attract more foreign companies to invest. according to iskandar regional development authority (2015), this region is estimated to have 3 million population sizes with the initiatives provide by government malaysia by the year 2025. the labour force is also predicted to increase to 1.46 million by the year 2025. according to malaysia investment development authority (mida, 2015), johor still remains as the top investment destination for manufacturing sectors in malaysia. it continues to attract domestic and foreign investors to invest in the state. johor has a strategic location where the state is close with singapore and it brings advantages to attract foreign investors from all over the world to set up operations in iskandar development region. this study provides a deeper understanding on dimensions that would affect success of knowledge transfer for multinational companies so that effective knowledge management and transfer can be carried out in these multinational companies. 2. literature review 2.1. participation in cross-border knowledge transfer cross-border knowledge transfer is defined as a process to introduce and adopt knowledge through one experience entity to another (darr and kurtzberg, 2000; joshi et al., 2007; argote and miron-spektor, 2011). it focuses on learning at workplace through the process of knowledge creation and application, knowledge exchange, information search and transformation (awang et al., 2009). in multinational companies, transmission of knowledge occurs from the parent company to the subsidiary company. participation in cross-border knowledge transfer involves employees in headquarters and subsidiaries in the communication of a particular company procedure or problem (darr and kurtzberg, 2000). participation in cross-border knowledge transfer is believed to be influenced by the following factors. 2.2. individualism/collectivism the first factor, individualism and collectivism refers to the degree to which an individual concerns his/her own well-being against the well-being of others (lucas, 2006). individualism refers to the condition where one’s personal interests exceed the interests of the groups (hofstede and hofstede, 2001) and it is an important element that will hinder knowledge transfer (hansen and løvås, 2004). individualism weakens the bonds between individuals and each and everyone is assumed to be able to take care of their own self (amir et al., 2009). collectivism refers to the condition where the overall importance of interests and demands in groups supersedes the personal interests of an individual (hofstede and hofstede, 2001). it also refers to the situation where an employees in a multinational company acts primarily for the good of all employees and willing to transfer knowledge to their counterparts in the subsidiaries (amir et al., 2009). hypothesis 1: there is a relationship between individualism and collectivism and participation in cross-border knowledge transfer. 2.3. high power distance/low power distance power distance is also one of the cultural dimensions that influence the success of cross-border knowledge transfer. power distance refers to inequalities in the distribution of power and authority (hofstede and hofstede, 2001). hofstede and hofstede (2001) presented that collectivism is related to high power distance whereas individualism is related to lower power distance (hofstede and hofstede, 2001). employees from low power distance culture are expected to be more motivated in cross-border knowledge transfer as they are more willing to share knowledge with others when needed (thomas, 2015). power distance is often associated with the hierarchy and status has affected knowledge transfer especially in masculine societies (bengoa et al., 2015). therefore, the following hypothesis is formed: hypothesis 2: there is a relationship between power distance and participation in cross-border knowledge transfer. ling, et al.: framework for effective cross-border knowledge transfer international review of management and marketing | vol 6 • special issue (s4) • 2016134 2.4. high uncertainty avoidance/low uncertainty avoidance uncertainty avoidance can be defined as the degree a culture (hofstede and hofstede, 2001) or the members of a society accustomed to the acceptance of ambiguity and vague prospects (rallapalli and montgomery, 2015). uncertainty avoidance can be fearful because it is a change that lead to an individual or organization or even country to take a leap of faith into the unknown, and will often prompt a general feeling of being cautious towards new approaches or new things (laukkanen, 2015). although the new approaches or new things have the potential to increase efficiency, the general feeling of feeling unsecure and cautious towards something new can be seen because it involves taking risks and have the chance for a potential disaster, and the best way to deal with it is to avoid these new approaches (laukkanen, 2015). therefore, in order for people to embrace the unknown and leaving their old patterns behind, it is vital that both partners create a trustful atmosphere to minimize the fear of change and insecurity behaviours, and focus more on the potential to willing to change, transferring knowledge and adapt new approaches of thinking and doing things (bengoa et al., 2015). therefore, the following hypothesis is formed: hypothesis 3: there is a relationship between uncertainty avoidance and participation in cross-border knowledge transfer. 2.5. affective/neutral employees from affective culture dislike to hide their feelings (trompenaars and hampden-turner, 1998) but employees from neutral culture feel that it is improper to show their feelings obviously and they accept, aware and in good controls of feelings (trompenaars and hampden-turner, 1998). both neutrality and affectiveness represents the nature of interactions. affectiveness is defined as an emotional approach that accepts and generally supports different points of view, whereas neutrality strives to bring an agreement, to reduce and control the differences between opinions (de bliek and burger, 2015). hypothesis 4: there is a relationship between affective/neutral and participation in cross-border knowledge transfer. 2.6. achievement/ascription employees from achievement-oriented culture will gain more respect based on their accomplishment (ardichvili et al., 2006). people respect their colleagues based on past achievements and knowledge demonstration, and show job titles only when relevant (trompenaars and hampden-turner, 1998). meanwhile, employees from a scriptive culture believe that achievement is not so important compared to family background or wealth in determining his/her success and they are not so keen to participate in knowledge creation and transfer (trompenaars and hampdenturner, 1998). hypothesis 5: there is a relationship between achievement/ ascription and participation in cross-border knowledge transfer. 2.7. monochronic/polychronic in monochronic culture, individuals make sure they do task at a time without interruptions (yahyagil and otken, 2011). employees in this culture tend to focus on the time compartmentalization, schedule their tasks one at a time, and meet every deadlines and appointments on time (frei et al., 1999). hall (1984) introduced that this kind of people see time as an organization system in setting priorities, and do not like any interruption from surrounding. employees from monochronic culture strongly prefer planning (trompenaars and hampden-turner, 1998). they stay on schedule and make sure that a task can be completed within the stipulated period (trompenaars and hampden-turner, 1998). hypothesis 6: there is a relationship between monochronic/ polychronic and participation in cross-border knowledge transfer. 2.8. trust trust can be defined as the willingness for a person to put oneself in a situation where they are vulnerable (edelenbos and klijn, 2007; huang and van de vliert, 2006) to the actions of someone else based on the belief that the other person will perform a certain action significant to that person (mayer et al., 1995). according to abrams et al. (2003), trust will lead to an increase in the chances for knowledge to be effectively understood and applied by a person, increase in overall knowledge exchange and lastly makes knowledge exchanges process a little less expensive. hypothesis 7: there is a relationship between trust and participation in cross-border knowledge transfer. 2.9. attitude towards cross-border knowledge transfer when it comes to knowledge transfer of employees with other colleagues during the daily work, it is most likely to depend on the attitude of the employees hold towards the behavior on knowledge sharing (kwok and gao, 2005). researchers believed that employee’s attitude toward a certain behavior can affect the actual work performance and employee intention to perform this sharing behavior (ajzen and fishbein, 1980). hypothesis 8: there is a relationship between attitude and participation in cross-border knowledge transfer. 2.10. social support social support measures the encouragement of top management and co-workers towards the participation in cross-border knowledge transfer (taylor and todd, 1995). kelloway and barling (2000) discovered that leadership commitment and support towards cross-border knowledge transfer is important to encourage participation in cross-border knowledge transfer. social support in an organization must be encouraging rather than coercive so that employees are free to decide on what and how much information to share with their colleagues (davenport, 1994). hypothesis 9: there is a relationship between social support and participation in cross-border knowledge transfer. 2.11. facilitating conditions facilitating conditions are the next indicator which may play an important role in cross-border knowledge transfer. facilitating conditions is defined as the level to which an individual believes ling, et al.: framework for effective cross-border knowledge transfer international review of management and marketing | vol 6 • special issue (s4) • 2016 135 that an organizational and technical infrastructure presents to aid the use of the system (venkatesh et al., 2003). facilitating conditions refer to the availability of resources such as written documents and technological infrastructure in supporting of the practices of knowledge acquisition and transmission (ajzen and driver, 1992; dignum and dignum, 2003; riege, 2005). the availability of facilitating conditions determines the likelihood of participation in cross-border knowledge transfer (ajzen and driver, 1992; riege, 2005; syed-ikhsan and rowland, 2004). hypothesis 10: there is a relationship between facilitating conditions and participation in cross-border knowledge transfer. 3. proposed research framework development the proposed research framework in figure 1 is developed after intensive literature reviews and focus group study administrated to senior managers in 9 randomly selected multinational companies in iskandar development region malaysia. the results of the review of past studies and survey questionnaires indicated that individualism/collectivism, power distance, uncertainty avoidance, affective/neutral, achievement/ascription, and monochronic/polychromic, trust, attitude, social support, and facilitating conditions are ten most important factors affecting participation in cross-border knowledge transfer, from the perspective of managers in multinational companies in iskandar development region malaysia. therefore, the ten important constructs are listed as important independent variables affecting participation in cross-border knowledge transfer, the dependent variable of this study. 3.1. literature reviews this study adopts keyword literature reviews searching to identify and select the most relevant past literature in cross-border knowledge transfer (wijk et al., 2008: qureshi et al., 2014). detailed search in online databases such as science direct, pro quest and web of science had been carried out by using the search strings in such as (cross-border knowledge transfer and multinational companies) or (knowledge transfer success and multinational companies) or (knowledge transfer participation and success). based on the literature reviews, the researchers managed to identify a list of 15 possible factors, which might affect cross-border knowledge transfer in multinational companies in iskandar development region. the 15 factors are individualism/ collectivism, power distance, uncertainty avoidance, affective/ neutral, achievement/ascription, and monochronic/polychromic, trust, attitude, social support, and facilitating conditions, knowledge characteristics, recipient characteristics, relationship quality, network characteristics, source characteristics, and reward system. 3.2. focus group study 3.2.1. focus group participants after intensive literature reviews, focus group study was conducted to determine the most important and relevant factors affecting participation in cross-border knowledge transfer in multinational companies in iskandar development region. target companies in this study were identified using the 2015 mida directory, which incorporating computer hardware, environmental, manufacturing and software industries. target multinational companies in this study need to fulfill two criteria, (a) have a minimum of 100 employees and (b) have at least 10% in international sales in 2015. a total of 9 multinational companies in iskandar development region fulfill the above criteria and was selected as target respondents in the focus group study. managers of the 9 selected companies were required to rank the most important factors affecting cross-border knowledge transfer from a list of 15 possible factors identified from literature reviews such as individualism/collectivism, power distance, uncertainty avoidance, affective/neutral, achievement/ascription, and monochronic/ polychromic, trust, attitude, social support, and facilitating conditions, knowledge characteristics, recipient characteristics, relationship quality, network characteristics, source characteristics, and reward system. 3.2.2. focus group results focus group study is conducted in this study as it gives the researchers an opportunity to build rapport with target respondents and clarify target respondent’s doubts through direct communication (sekaran, 2003). the focus group study results show that ten factors (individualism/collectivism, power distance, uncertainty avoidance, affective/neutral, achievement/ascription, and monochronic/polychromic, trust, attitude, social support, and facilitating conditions) are perceived as critical determinants of participation in cross-border knowledge transfer, from the perspective of managers in multinational companies in iskandar development region malaysia. 4. future research this paper develops a research framework to examine participation in cross-border knowledge transfer in multinational companies in iskandar development region malaysia based on literature reviews and focus group study. in future, 300 questionnaires will be distributed to randomly selected employees of the 9 targeted multinational companies to test the hypotheses formed in section 2 of this paper. results will be published in the forthcoming publications of the researchers. figure 1: proposed research framework ling, et al.: framework for effective cross-border knowledge transfer international review of management and marketing | vol 6 • special issue (s4) • 2016136 references abrams, l.c., cross, r., lesser, e., levin, d.z. 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(2002), national culture and knowledge management in a global learning organization. oxford, england: oxford university press. p421-434. . international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2018, 8(5), 1-8. international review of management and marketing | vol 8 • issue 5 • 2018 1 the role of customer value and customer pride as variable mediation on customer engagement relationship with corporate image hotman panjaitan1*, ana komari2 1faculty of economics university of 17 august 1945 surabaya, indonesia, 2faculty of economics kadiri university, kediri, indonesia. *email: hotman_pp@yahoo.com abstract the purpose of this research is to find clarity about the role of customer value and customer pride as mediation variable on customer relationship engagement with corporate image, by designing and forming one research model. the research approach is quantitative, explanatory. the population of this research is the student at 5 best private universities in surabaya. the sample of research was 250 respondents determined by using non-probability and purposive sampling method. analytical technique using structural equation model with amos analysis tool. the results showed that the research model was accepted with the coefficient of determinant (r2) of 80.6%. the research also shows the clarity that: customer engagement positively affect customer value, customer pride, and positively insignificant effect on corporate image. customer value positively influences corporate image. customer pride positively affect the corporate image. the results also explain that: customer value acts as a positive mediation on customer engagement relationship with corporate image, and customer pride acts as a positive mediation on customer engagement relationship with corporate image keywords: customer engagement, customer value, customer pride, corporate image jel classifications: m1, m3 1. introduction in line with the law on national education system no 20/2003 which explicitly states, the quality control and evaluation of education should be conducted both on study programs and on educational institutions on an ongoing basis. private universities in surabaya are now conducting quality assurance in their respective institutions. it shows the increasingly heavy tasks of private universities, and the increase of competitors for private higher education providers, because public universities open an independent pathway that admits the students are the same as the private universities. where this is enough to affect the interest of the community to continue education to private universities, although it is known that the number of private college students is still larger than the public college students, because private universities are more numerous than the state universities. in addition to competing for new prospective students, the task is no less important is to keep the existence of active and non active students from the college concerned, so they do not drop out half way because they feel dissatisfied with the service received compared to the desired expectations. therefore, a proper pattern is needed to achieve the purpose and objectives. a study of “why consumers move” found the fact that most consumers shifted due to “indifference to the company” (kotler, 2014). so also of course with private university rankings, which also became one of the good indicators of bad college management. today the focus of the company changes from product orientation to marketing orientation (engel et al., 2014). this means that the company seeks to create good relationships with sustainable customers, by understanding what customers really want. likewise with college, since accepted as a student then follow the learning process and finally graduated as a bachelor, good relationship between alumni with alma mater is expected to remain well established, so that the name of the alma mater will remain awake. the role of alumni to recruit prospective students is also very important, as the research results show that “they are panjaitan and komari: the role of customer value and customer pride as variable mediation on customer engagement relationship with corporate image international review of management and marketing | vol 8 • issue 5 • 20182 most effective with prospective parents” (morris, 1977; alma, 2014). similarly, expressed by kotler (2014) that universities that achieve strong alumni support are indeed lucky. they collect more money, recruit better students, and give many other benefits. vie et al. (2016) also stated that student engagement is valuable to assist in the design, development and review of transnational college programs. the city of surabaya is known as the city of heroes. there are many colleges that can be found in this hero city. according to http://miner.com, the top 10 best university rankings in surabaya are shown in table 1. there are five private universities, in the top ten rankings of universities in surabaya, as follows. petra christian university is one of the most popular private campuses in surabaya. petra christian university was ranked 3rd in surabaya, ranked 15th in indonesia and 2510th in the world. the university of surabaya is ranked 4th in surabaya, ranked 28th in indonesia and 3164th in the world. narotama university also became one of the most favorite private campus in surabaya. narotama university was ranked 5th in surabaya, ranked 39th in indonesia and 3596 in the world. stikom surabaya is ranked 9th in surabaya ranked 109th in indonesia, and has a ranking of 6939 in the world. stie perbanas surabaya is a campus run by national and general banks association in surabaya city. stie perbanas is ranked 10th in surabaya, ranked 132+ in indonesia and 8779th in the world. table 1 provides information that private universities in the city of surabaya is a college that has been calculated both domestically and internationally. along with the high ranking of this college will cause the rise of the image of college and the rising interest of prospective students to be a student in five private universities. some studies say, that the image was born and developed in the minds of the community is due to the good value obtained by customers, as well as what happens at colleges (kwon and chung, 2018). realize and panjaitan (2017) proves that the image of a college can raise the competitive advantage of the college. while the results of research prasetya and ibrahim (2017); eva and jose (2005), proving that the image of the company affect the value of customers. while jaeyoon and taerin (2018) show that corporate social responsibility and attitude have a positive effect on the company image. as a marketing strategy whose purpose is to create value for customers, the company must determine the criteria that are considered important by the customer accurately and in accordance with customer expectations. thus, the level of customer satisfaction about the service and the criteria offered must continue to be measured. it is best to create benefits for customers, services and criteria to satisfy customers and be important to customers as well as add value and customer loyalty (özlem, 2009). heri (2017) proves that customer satisfaction will increase customer trust and customer value. heri (2017) also proves that customer satisfaction mediates well on the corporate image relationship with customer trust; corporate image and customer value; and corporate image with customer trust. while leslier and francisco (2016), pointing out that customer value orientation, brand value is an important variable for developing long-term relationships with customers. one way that can be done in building a good relationship to consumers is to enlarge consumer involvement based on the value obtained by consumers. the results of eman’s (2018) study show that customer engagement and customer loyalty can improve the ability to build more effective customer service. eman (2018) also found that customer engagement and customer loyalty can improve the ability to build more effective customer service. altje (2014) found that consumer involvement, trust, and value have a positive and significant impact on customer satisfaction. engagement has a sense in relationship with a person both emotionally and cognitively (kusuma, 2015; mingli et al., 2017). cognitively, included in the engagement is knowledge of the important consequences caused by the use of the product. includes evaluation of a product. if a product’s involvement is high, a person will experience stronger influence responses such as strong emotions and feelings. most marketers see consumer engagement only high or low, but actual engagement can range from low to moderate to high levels. customer engagement has three variables: cognitive attachment, emotional attachment, and behavioral attachment. naomi (2015) showed that cognitive attachment and emotional attachment variables significantly influence consumer engagement, while behavioral attachment variable has no significant effect. however, all three contributed simultaneously to consumer confidence. while chrissy (2015) shows that customer engagement variables together have a significant positive effect on brand trust.table 1: best higher education rating in surabaya city name of higher education status higher education rating surabaya indonesia world airlangga university public 1 8 1906 institute of technology november 10th public 2 12 2169 petra christian university private 3 15 2510 university of surabaya private 4 28 3164 narotama university private 5 39 3596 sunan ampel islamic university public 6 44 3833 surabaya state university public 7 53 4214 surabaya electronics polytechnic public 8 60 4642 stikom surabaya private 9 109 6339 stie perbanas surabaya private 10 132 8779 source: http://miner.com/id/20049 accessed 05 05 2018 panjaitan and komari: the role of customer value and customer pride as variable mediation on customer engagement relationship with corporate image international review of management and marketing | vol 8 • issue 5 • 2018 3 as a strategy to win the competition, the concept of customer pride needs to be done. customer pride is important to the service provider, because the customer will spread his or her pleasure to the prospect, and will generate trust, which will further enhance the image of the service provider. kusuma (2015) shows that customer pride positively affects the trust and buying interest. the buy-back interest is strongly influenced by trust and customer pride. the results of kusuma’s (2015) study confirm the findings of walker et al., (2012) and fazal et al. (2013) which show that customer confidence, and customer pride influence the buying interest. while verbeke and belschak (2004) show that salespeople are able to regulate these emotions’ self-expression differently to colleagues and customers through anticipation of feelings of fear, shame, and regret. from several previous studies that have been discussed there is still no research that explains about the role of customer value and customer pride as a mediation variable on customer relationship engagement with corporate image. therefore, this research is conducted to get a better understanding of the role of customer value and customer pride as a variable of mediation, especially at private universities in surabaya. 2. literature review and hypotheses 2.1. customer engagement customer engagement is about building interaction and intimacy between a company and its consumers greenberg (2010); panjaitan (2017). engagement has a sense in relationship with a person both emotionally and cognitively (kusuma, 2015). customer engagement has three concept variables: 2.1.1. cognitive attachment cognitive attachment refers to the cognitive stages of the consumer, such as sharing information and experiences with other consumers. this variable deals with how consumers receive, perceive, learn, reason, remember, and think about an information about a company or brand. this variable consists of 2 indicators, namely: (a) contingency interactivity is to measure consumer interest in reading post-post in news media promotional company and measure consumer interest in interact in news media promotion company. indicators that can be used are consumers interested in reading, downloading, viewing information on the news media promotional company, as well as consumer interest to provide reviews, ratings, and recommendations to other consumers about the content of digital content provided by the company through social media. (b) self company connection is refers to the ability of the company to do the consumer well and refers to the treatment to the consumer in a respectful, proud feeling of being a corporate consumer. the indicator in this dimension refers to the consumer’s feeling that the company is able to treat them appropriately, both in sharing information and using the company’s products. 2.1.2. attitudinal attachment attitudinal attachment refers to the attitude of being one of the customer engagement measurement variables because it encompasses positive affective stages, opens with new experience experiences, and social and interpersonal involvement related to consumer attitude taking that can enhance personal growth. the indicators used to measure these variables are: (a). extraversion is social assertiveness, strong activity, and positive effects. this extraversion can be obtained if consumers get various variations of the resulting sensation affecting their attitudes. (b). openness the experience is related to creative, imaginative and open attitude to change and new idea. 2.1.3. behavioral attachment behavorial attachment refers to the behavior or customer participation in an enterprise engagement effort or brand is the highest expectation that is able to bring behavior change and motivate other customer behavior. this strategy is a form of effort to create strong relationship between customer and brand by drawing them into two way communication dialog and cooperative interaction (cook, 2011). this involvement should be able to provide social support to the brand. the behavorial attachment indicator is: (a) company behavior refers to the company’s attitude that refers to the company’s ability to provide digital content that is able to motivate consumers to participate in interacting with the news of corporate promotional media, such as giving comments, exchanging information, exchanging experiences and supporting news campaign media. indicators that can be used are the company’s ability to deliver the message reliably and consistently, the company’s ability to create interactive content content, the company’s ability to get responses and positive attitude of consumers. (b) customer behavior is the last indicator of size that is a form of corporate participation or involvement when they voluntarily promote or recommend and say positive things to a product to family, friends, clerical consumers, or others who ask about their opinions on using a company’s product. based on the theoretical and discussion studies above, what is meant by consumer involvement is consumer involvement about how to build interaction and intimacy between a company and its customers. 2.2. customer value customer value is customer’s perceived choice and evaluation of product and service attributes, attribute performance and consequences arising from the use of the product to achieve the purpose and intent of the consumer when using the product. costumer value is the customer’s perception of the desired consequences of using a product. the costumer value can be defined by the preferences that the customer feels toward the product characteristics, the performance and the extent to which it has fulfilled what it wants (woodruff, 2006). customer value is the difference between total customer value and total customer cost where, the total customer value is a set of benefits expected by the customer of a particular product or service and the total customer cost is the set of costs expected by the consumer to evaluate, obtain, use and dispose of the product or services. while woodall (2003), the value for the customer reflects the customer value itself, which explains what the customer receives and what the company can provide (kotler, 2014). perceived product performance is equal to or greater than expected, which is considered to be valuable to satisfaction. the attribute value panjaitan and komari: the role of customer value and customer pride as variable mediation on customer engagement relationship with corporate image international review of management and marketing | vol 8 • issue 5 • 20184 is the characteristics of the product that existed and explained by the customer. the value of the consequence is the subjective judgment of the customer as a consequence of the use and utilization of the service product. there are 4 sources of value that can be obtained and perceived by the customers are: (a) process: optimizing business processes and viewing time as a valuable customer resource. (b) people: employees are authorized and able to respond to customers. (c) products/services/technologies: the features and benefits of competitive products and services, reducing productivity disruptions. (d). support: ready to help customers who need help (barnes, 2003; leslier and francisco, 2016). based on the theoretical and discussion studies above, the customer value is the emotional bond that exists between the student as the customer and the college as a producer after the customer uses the products and services of the company and finds that the product or service is adding value. 2.3. customer pride customer pride is a pleasure that customers feel when using a product that can provide an atmosphere of joy. customers are people who receive the work of a person or organization, then those who can determine what quality and they can convey what and how their needs. everyone in the company must work with internal and external customers to determine their needs and work with internal and external suppliers (fazal, 2013). currently customer pride is the focus of attention by almost all parties, both government, business people, customers and so on. the better understanding of the concept of customer pride as a strategy to win the competition in the business world. customer pride is an important thing for the service provider, because the customer will disseminate his or her sense of fun to the prospect, thereby increasing the reputation of the service provider. customer pride oriented to people oriented, customer pride is formed when the consumer feels comfortable with the company and gets the surprised feeling. the provision of accurate information, and benefits commensurate with prices are offset by good service with the familiar atmosphere provided by consumers (fazal, 2013). customer pride has five kinds of impacts in the consumption process as follows: (a) positive word of mouth. is a proud consumer of a product, organization, or brand is likely to tell positive things about the product, organization or brand to others. (b) display of affiliation is a proud consumer of a product, organization, or brand, tending to show their affiliation with the product, organization, or brand through tangible objects or virtual media. (c) customer acquisition is a proud consumer of a product, organization, or brand is likely to recruit other consumers to buy and consume products from the same organization or brand. (d) pro-organization self-actualization is a proud consumer of a product, organization, or brand, likely to actualize themselves as individuals in certain ways that consciously or unconsciously benefit the organization or brand. (e) brand loyalty. is a proud consumer of a product, organization, or brand, will tend to consume products other than the organization or brand in question. based on the theoretical and discussion studies above, the meaning of customer involvement is a pleasure that customers feel when using a product that can provide an atmosphere of excitement. 2.4. corporate image corporate image is the public perception of the identity presented. corporate image is how people in this case buyers, suppliers, consumers, or society as a whole perceive the company. such perceptions can be made by the public from various information presented by the company and translated by the community. such information may be in the form of information provided by the company’s products, advertisements about the company, articles mated, tabloids and newspapers, sales or public relations teams representing the company, or anything that becomes the contact between the consumer and the company, and from that contact an image of the company is formed (stephen et al., 2007). image company is not fixed, depending on the times, the development of technology and the development of information. even also depends on the development of the company. information and impressions that companies convey to the public sometimes not as expected by the company or even often not paid attention at all by the community. based on the theoretical and discussion studies above, the definition of corporate image in this paper is the impression, knowledge experienced by the students towards private universities in surabaya. 2.5. research framework and hypotheses based on the literature review and discussion that has been described previously, then can be developed a research framework that explains the relationship between research variables. figure 1 illustrates the relationship of customer engagement, customer value, and customer pride to corporate image of private universities in surabaya. in this research the proposed hypothesis is as follows: 1. there is a significant positive relationship between customer engagement with customer value. 2. there is a significant positive relationship between customer engagement with customer pride. 3. there is a significant positive relationship between customer engagement and corporate image. figure 1: research framework panjaitan and komari: the role of customer value and customer pride as variable mediation on customer engagement relationship with corporate image international review of management and marketing | vol 8 • issue 5 • 2018 5 4. there is a significant positive relationship between customer value and corporate image. 5. there is a significant positive relationship between customer pride and corporate image. 6. customer value acts as a positive mediation on customer engagement relationship with corporate image. 7. customer pride acts as a positive mediation on customer engagement relationship with corporate image. 3. research methodes this research is a causal research that will prove the causal relationship between independent variables (customer engagement, customer value, customer pride) and non-free variable (corporate image). the study population is a student at the top five private universities in 2017, located in surabaya. the analysis technique used structural equation model analysis with amos analysis tool. the number of samples studied was 250 respondents, each of which received 50 respondents for each college, in accordance with the provisions of sem (hair et al., 2013). while the sampling method using purposive sampling. while the criteria of the respondent is a minimum of students in the fifth semester. 4. data analysis this study uses a questionnaire instrument with likert scale. the customer engagement variable uses three indicators adopted from naomi (2015); kusuma (2015), namely: cognitive attachment, attitudinal attachment, and behavorial attachment. customer value uses four indicators adopted from sweeney and soutar (2001); eva and jose (2007) are: emotional value, social value, quality/ performance value and price/value of money. customer pride uses five indicators adopted from fazal (2013): positive word of mouth, display of affiliation, customer acquisition, pro-organization selfactualization and brand loyalty. corporate image uses four indicators adopted from kotler (2014); alma (2014) namely: academic reputation, campus appearance, and future career (table 2). descriptive data analysis of 250 respondents showed that: characteristics of respondents by sex is predominantly male is 56.8% compared to women 43.2%. characteristics of respondents by age, it can be seen that at the age of 15–20 years of 10.8% of respondents, and dominant in the age range 21–25 years of 72.4%. the semester level of majority of respondents are students in the 7–9 semester which reaches 61.6%, while the rest in semester >9 is 32.8% and the semester 4–6 is 5.6%. 5. result and discussion 5.1. test of research instruments 5.1.1. validity test from the result of pearson product moment correlation, it is known that all question items in the questionnaire have a significant correlation at the error rate of 5%, so it can be said all the question items are valid (table 3). 5.1.2. reliability test with cronbach alpha test (α) in this research indicate that all research variables are reliable, because all of alpha coefficient value from each research variable is bigger than standardized (0.6), so that each question item in measurement instrument can used. the value of corrected total correlation items of all question items is > 0.3 (table 4). 5.2. confirmatory factor analysis table 5 shows the overall confirmatory factor analysis/construct validity of the measurement model of the study. the validity and table 2: characteristics of respondents (n=250) characteristics frequency (%) gender men 142 (56.8) women 108 (43.2) usia responden age (years) 15–20 27 (10.8) 21–25 181 (72.4) >25 42 (16.8) semester responden 4–6 14 (05.6) 7–9 154 (61.6) >9 82 (32.8) table 3: the validity test using pearson correlation research variables indicator question number pearson correlation customer engagement engage 1 01–03 0.609** engage 2 04–06 0.711** engage 3 07–09 0.840** customer value value 1 10-12 0.670** value 2 13-15 0.806** value 3 16-18 0.676** value 4 19-21 0.793** customer pride pride 1 22-24 0.742** pride 2 25-27 0.704** pride 3 28-30 0.711** pride 4 31-33 0.657** pride 5 34-36 0.877** corporate image image 1 37–39 0.776** image 2 40–42 0.846** image 3 43–45 0.796** **correlation is significant at the 0.01 level (2-tailed) panjaitan and komari: the role of customer value and customer pride as variable mediation on customer engagement relationship with corporate image international review of management and marketing | vol 8 • issue 5 • 20186 reliability of the constructs are two tests to evaluate the ability of the measured variables (manifest) in forming latent variables, in table under all manifests having a loading factor with probabilities of <0.05, meaning significant in forming latent variables. also, each latent variable has a construct critical ratio of more than 0.2, which means it comes from one dimension (unidimensional). 5.3. goodness of fit test results of data processing using a sample of 250 shows chi-square is 177.462 with a probability of 0.064. meanwhile, from gfi, agfi, tli, cfi, rmsea and cmin/df 0.937, 0.921, 0.953, 0.967, 0.964 and 0.063 respectively are in an acceptable range range. the results are shown in table 6 and figure 2. 5.4. analisis koefisien determinasi (r2) analysis of the influence between latent variables is done to test how much contribution influence between latent variables formed or percentage of variance among variables in this research can be explained as seen in table 7. that 80.6 variance on corporate image variable can be explained by customer engagement variable factor, customer value and customer pride. while the rest (19.4%) described other variables outside this study. 5.5. hypothesis testing hypothesis testing is done based on the value of estimation significance of research model parameters shown in table 8. there is a ce effect on cv of 0.443, with cr value of 5.284 and p value = 0.000. this indicates that h1 is accepted. there is a ce effect to cp of 0.062, with cr value of 1.745 and p = 0.069. this indicates that h2 is rejected. there is a ce effect on ci of 0.564, with cr value of 6.742 and p = 0.000. this indicates that h3 is accepted. (table 9) there is a cv effect on ci of 0.264, with cr value of 2.566 and p = 0.000. there is a cv effect on ci of 0.483, with cr value of 5.668 and p = 0.000. this indicates that h4, and h5 are accepted. testing that has been done on h1, proved that ce has a significant influence on the cv, while testing against h4 proved that cv has a significant effect on ci. the significance of these two lines proves that there is a significant indirect correlation of ce to ci through cv with path coefficient of = (0.443 × 0.264) = 0.117. this indicates that h6 is accepted. testing has been done on h2, proved that ce has a significant effect on cp, while testing against h5 proved that cp has significant effect on ci. with the significance of these two lines table 4: the reliability test using cronbach’s alpha research variables number of questions coefficient alpha (α) customer engagement 9 0.812 customer value 12 0.751 customer pride 15 0.792 corporate image 9 0.729 table 5: confirmatory factor analysis research variables relationship cr loading factor (λ) probability customer engagement ce→engage1 ce→engage2 ce→engage3 7.134 6.126 0.725 0.916 0.747 0.000 0.000 0.000 customer value cv→value1 cv→value2 cv→value3 cv→value4 6.243 6.857 5.454 0.733 0.748 0.876 0.699 0.000 0.000 0.000 0.000 customer pride cp→pride1 cp→pride2 cp→pride3 cp→pride4 cp→pride5 5.815 6.847 6.910 7.892 0.746 0.699 0.627 0.884 0.895 0.000 0.000 0.000 0.000 0.000 corporate image ci→image1 ci→image2 ci→image3 7.892 9.569 0.759 0.763 0.699 0.000 0.000 0.000 ce: customer engagement, cv: customer value, cp: customer pride, ci: corporate image figure 2: coefficient of research model path panjaitan and komari: the role of customer value and customer pride as variable mediation on customer engagement relationship with corporate image international review of management and marketing | vol 8 • issue 5 • 2018 7 proves that there is a significant indirect correlation of ce to ci through cp with path coefficient of = (0.443 × 0.483) = 0.214. this indicates that h7 is accepted. 6. conclusions, limitations and recommendations from the results of testing on the model in this study, able to explain the role of customer value and customer pride as a mediation variable on the relationship between customer engagement with corporate image of private universities in surabaya. the result of this research is a significant contribution especially in the management of marketing strategy, which is related to corporate image of private universities in surabaya. research conclusions are: customer engagement positively affect the customer value, this proves that with the involvement of consumers who participate in building interaction and familiarity with private universities in surabaya will be able to raise the customer value of universities, where with the customer engagement then the consumer will are very interested in following the news about private universities, and will feel that the private hunters are able to prepare the consumer science needs for a better future. customer engagement positively insignificant to customer pride, this proves that with good customer engagement, which has been done private college consumer, cannot raise customer pride to college. this can happen because consumers feel uncomfortable with college and the absence of feelings surprised. consumers also feel not getting accurate information. this can be overcome by providing benefits that are commensurate with the price paid by consumers, and by providing good service with a familiar atmosphere. also provide surprises to consumers by giving congratulations when consumers birthday and also in other forms. and no less important also always provide accurate information regularly to college consumers. thus it is expected that customer pride will rise, in the case of display of affiliation that the consumer will show that he is a student at a private college, every time the consumer is wearing the college’s attributes, and showing the good of the college. customer engagement positively affects corporate image of private universities in surabaya, it shows that the involvement of consumers who participate in building interaction and familiarity with universities will be able to raise the image of universities. this can happen because with the involvement of consumers then the consumer will feel the college has a presence so that the image of college will rise. the image of a college can also be increased by involving consumers in every activity run by universities. customer value positively affects corporate image private universities in surabaya, this proves that the customer value that already exist in every college consumer will be able to raise the corporate image, where with the customer value then the emotional value of the consumer will like the program offered private universities, consumers will also advise their friends to enter private universities, and consumers also feel that private universities have courses that are not less than the state universities. acceptance of h6, can be interpreted that customer value also gives additional strengthening to the achievement of corporate image of private universities. this means that with good customer engagement, expressed in three relationships are: cognitive attachment, attitudinal attachment and behavorial attachment will encourage the rise of corporate image of private universities through customer value. this proves that customer value is a good mediation variable among customer engagement and corporate image variables. acceptance of h7, can be interpreted that customer pride also provide additional strengthening to the achievement of corporate image of private universities. this means that with good customer engagement will encourage the rise of corporate image of private universities through customer pride. this proves that customer pride is a good mediation variable among customer engagement and corporate image variables. it is recommended for private university management in surabaya should pay attention and improve customer engagement which until now has not maximized its impact to customer pride. this can be done by building a good and intimate interaction with college table 6: evaluation the fit indices indices amounts reported chi-square p value gfi (goodness of fit index) agfi (adjusted goodness of fit index) ifi (incremental fit index) tli (tucker lewis index) cfi (comparative fit index) rmsea (root mean square error of approximation) 177.462 0.064 0.937 0.921 0.953 0.967 0.964 0.063 table 7: coefficient of determination (r2) research variables square multiple correlation (r2) information corporate image 0.806 kontribusi pengaruh ce, cv, dan cp secara bersama terhadap ci sebesar 80.6% ce: customer engagement, cv: customer value, cp: customer pride, ci: corporate image table 8: hypothesis testing (direct effects) h relationship standardized coefficient se cr p decision h1 ce→cv 0.443 0.156 5.284 0.000 accepted h2 ce→cp 0.062 0.482 1.745 0.069 reject h3 ce→ci 0.564 0.128 6.742 0.000 accepted h4 cv→ci 0.264 0.272 2.566 0.000 accepted h5 cp→ci 0.483 0.147 5.668 0.000 accepted ce: customer engagement, cv: customer value, cp: customer pride, ci: corporate image, se: standard error, cr: critcal ratio, p: probability panjaitan and komari: the role of customer value and customer pride as variable mediation on customer engagement relationship with corporate image international review of management and marketing | vol 8 • issue 5 • 20188 consumers. provide information about each activity performed, treat students well, open the insight of students’ thinking more broadly, so that consumers will feel very attention. the result of research has proved that customer value, and customer pride is good mediation variable on customer relationship relationship with corporate image. the result of the research also proves that customer engagement is the dominant variable of its influence on corporate image of private universities in surabaya. this research is only conducted on five private universities with the best private high-profile honors in 2017 in surabaya, so the results cannot be generalized. therefore further research is suggested that the model in this research is applied on a wider scale. the model in this study is only able to explain 80.6% corporate image colleges, so testing the next research model needs to be done for a wider scope. refernces altje, l.t. 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(2016), effect of selfesteem on customer citizenship behaviors among international university branch campus students. international review of management and marketing, 6(3), 467-475. woodall, t. (2003),conceptualising “value for the customer”: an attributional, structural and dispositional analysis. academy of marketing science review, 2003, 12. available from: http://www. amsreview.org/articles/. woodruff, r.b., sarah, f.g. (2006), know your customer, new approach to understanding customer value and satisfaction. 1st ed. massachusetts: blackwell publishers inc. table 9: hypothesis testing (mediating effects) h relationship coefficient decision h6 ce→cv→ci 0.443*0.264=0.117 accepted h7 ce→cp→ci 0.443*0.483=0.214 accepted ce: customer engagement, cv: customer value, cp: customer pride, ci: corporate image . international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2018, 8(4), 14-23. international review of management and marketing | vol 8 • issue 4 • 201814 determinant of lecturers work satisfaction and implication on lecturers performance at maritime higher education in dki jakarta april gunawan1*, larsen barasa2, hotman tua3 1sekolah tinggi ilmu pelayaran, jakarta, indonesia, 2sekolah tinggi ilmu pelayaran, jakarta, indonesia, 3sekolah tinggi ilmu pelayaran, jakarta, indonesia. *email: correspondent.author@gmail.com abstract this study aimed to examine the determinants of lecturers job satisfaction and their implication on the lecturers performance in conducting research at maritime higher education in dki jakarta. the sample data is 286 people and the retrieval for instrument test is 30 people so the research population is 316 people. to prove the hypothesis of this study using data collected by statistics, both descriptive and inferential, i.e. structural equation modeling (sem), consisting of sub-structures: perceived organizational support (pos), work-life balance, and career development as exogenous variables and job satisfaction and performance as an endogenous variable. the main structure consists of pos, work-life balance and career development as exogenous variables and job satisfaction as intervening variables and performance as endogenous variables. through sem analysis can be taken policy and priority related to improving the lecturers performance at maritime higher education in dki jakarta. the results showed: (1) partially influences positive and significant pos to the job satisfaction (2) partially, there are positive and significant impact of work life balance (wlb) on job satisfaction. (3) partially there is a positive and significant influence of career development on job satisfaction. (4) simultaneously there is positive and significant influence pos, wlb and career development together to the job satisfaction. (5) partially there is positive and significant influence pos to lecturers performance. (6) partially, there are positive and significant impact of wlb on lecturers performance. (7) partially there is a positive and significant influence of career developers on the lecturers performance. (8) partially influences positive and significant satisfaction on the lecturers performance. (9) simultaneously there are positive and significant influence pos, wlb, career development and job satisfaction together to the lecturers performance at maritime higher education in dki jakarta. keywords: perceived organizational support, work life balance, career development, job satisfaction, lecturers performance jel classifications: m12, m54, n75 1. introduction the success of universities is determined by the high accountability of the lecturers and the ability to perform the duties of tri dharma university. three functions of lecturers in tri dharma university include teaching, research, and community development. recognizing the importance of research conducted by lecturers, the maritime higher education makes research an important agenda in its work program. implementation of tri dharma university on the implementation of research conducted lecturer as mentioned above shows a very low amount. so it can be said that the determined target can not reach 1/3 of the number of lecturers as determined. in the opinion of anggraeni (2014) states that the lecturers who carry out the main task of tri dharma university is through the publication of scientific work done internally by the lecturers themselves and externally from the environment will improve the lecturers performance. the lecturers who conduct research through the publication of scientific papers is one of the efforts in improving the lecturers (sukirno and siengthai, 2011). maritime higher education always strives for continuous improvement of internal quality. one of the efforts that has been done is to assess the lecturers performance. the assessment is done at the end of each semester by distributing the lecturer’s performance appraisal questionnaire. the lecturers should always gunawan, et al.: determinant of lecturers work satisfaction and implication on lecturers performance at maritime higher education in dki jakarta international review of management and marketing | vol 8 • issue 4 • 2018 15 uphold t tri dharma university, which includes education, research, and community service. the inadequate lecturers performance in carrying out their duties as mentioned above, one of them is caused by the low satisfaction of the lecturer. the satisfaction of lecturer work according to samian and noor, 2012 is the emotional response of positive and negative attitudes affecting the feeling, the thought of a pleasant attitude and loving his work so will also create the lecturers performance which is the ability of lecturers in carrying out duties in the field of education and teaching, research, community service. in maritime higher education, there is dissatisfaction among the lecturers, such as: not yet maximal in research and community service, lack of enthusiasm and freedom in issuing ideas/ideas owned, related to allowance of lecturer in producing low scientific work and found frequent submission of syllabus not in accordance with schedule specified, and so on. the dissatisfaction of the lecturers causes things that are not desirable and can harm the maritime higher education. in relation to the satisfaction and improvement of lecturer’s performance in maritime higher education, it is necessary to provide support to lecturers. the support of an organization in this regard including universities is often referred to as “perceived organizational support (pos).” based on the survey results of lecturers of maritime universities in may 2016, found information and opinions or perceptions of lecturers stated that the low training of lecturers in improving lecturers competence and costing in education and doing research in order to develop themselves, the college is less responsive on opinion and complaints of lecturers, and others. lack of attention and support given by maritime university to lecturers resulted in low satisfaction during do teaching and learning tasks that impact on satisfaction and implicate the lecturers performance who are not optimal. another factor that can affect the satisfaction of lecturers of maritime higher education and impact on performance is the existence of worklife balance. work-life balances in the maritime higher education are not practiced in practice. based on the results of preliminary interviews conducted on the lecturer found a lack of balance in the life of the lecturer, such as: the balance of energy on the pressure of work and family pressure, work balance with the role in the family, time spent in teaching and community service compared to personal time for family, and others. lack of conformity between duties and family or personal life of lecturers mirror the emergence of conflicts that can impact satisfaction in performing tasks. another factor that can affect a lecturer’s satisfaction and impact on the lecturers performance is the development of career for lecturers as teaching staff. the career development of lecturers are lecturer career information system (si-pkd) which is a system that integrates career development of lecturers starting as lecturer candidates to lecturers with the highest academic position of professors. found career lecturer development system at maritime higher education has not run optimally. given through career development lecturer can be made in assessing lecturer performance accountability. 2. theoretical background 2.1. effect of pos on job satisfaction job satisfaction is a positive feeling about a person who is the result of a characteristic evaluation (bin shmailan, 2016). according to a study conducted earlier by hanaysha and tahir (2016) states that one of the most important issues in the management of the source of the entrepreneurship in the organization, the creation of satisfaction in the work of the employee. according to eisenberger and stinglhamber (2011) pos/pos is the degree to which employees believe organizations appreciate their contribution and care about their well-being. research shows that individuals feel their organization is supportive when rewards are considered fairly, employees have a voice in decisionmaking and their supervisors are considered supportive. if positive organizational support and strong organizational commitment are likely to provide high job satisfaction. based on the above description, it is suspected that there is influence of pos on job satisfaction of lecturer in conducting research at maritime college in dki jakarta. in the sense that the higher pos the lecturers will gain the higher their job satisfaction. 2.2. the influence of work life balance (wlb) against satisfaction work according to sanborn, 2013 work-life balance is defined as the ability of an individual to meet work and commitment they raise a family, and responsibilities other non-job the objective is to employees received the opportunity to able to balance the demands of work by personal responsibility. according to delecta, 2011 one of the functions of work-life balance in the plane of the job or career work is satisfaction. satisfaction employment was important things that owned individual in in working. every individual workers having different characteristics, so the level of satisfaction it works is also different. the low level of satisfaction high such work can really impact is not the same. to be more clearly we need to know about what it means to that this job satisfaction. according to chen et al. (2016) work satisfaction of employee closely related to the employee performance. a satisfied in his work will have motivation, commitment to organizations and participation work high, which would eventually improving their performance. job satisfaction itself is a reflection of a clerk with their projections revealed through award, chance, responsibility, development, involvement and cooperation. hence, when work-life balance at lecturer improved and level of satisfaction of its performance also will increase, so based on it, therefore it can be predicted that work-life balance influential positive on satisfaction work. many research proved that work-life balance related to work satisfaction. an employee whose high work-life balance also has the high work satisfaction. research of chen et al. (2016) said that the teacher’s quality of work life is the important problem gunawan, et al.: determinant of lecturers work satisfaction and implication on lecturers performance at maritime higher education in dki jakarta international review of management and marketing | vol 8 • issue 4 • 201816 from teacher’s perspective because it will influence the work satisfaction level. another research (singh, 2013) with the result of the research shows that a meaningful and positive relation between quality of work life’s dimension of sport teacher’s work satisfaction at education department from urania-iran. it’s a big hope by applying this work-life balance program, the employees don’t only spend their time just for work, but also they have another life out of the work’s world, such as in the family, social life, so that it created a balance, which will make then happy and satisfied in work. based on the statement above, it’s estimated that there is an influence of work-life balance to a lecturer’s work satisfaction in holding a research at maritime higher institute in dki jakarta it means higher wlb for the lectures in task while doing the observation will also satisfy that we’re going to feel. 2.3. the effect of career development to work satisfaction based on kao and tsai (2016) competency has basic characteristic such as: knowledge’s, creativity, characteristic and the concept it self. each of the characteristic can explain about: 1. knowledge, is an information that someone has in specific aspect. 2. creativity, is an ability to do physic task or mental. 3. character, is physic characteristic and consistent respon for information or situation. 4. self concept, is all about character, perception or image from someone. based on siahaan et al. (2016), career is an position that focused on someone’s occupation as long as they live. people reach out they career to fill up the individual equipment’s deeply. based on siahaan et al. (2016) career development is a process to increase someone’s ability in working hat will be reached as their willing career. as the definition career is selected by the individual it self. it’s as long as the individual can compete to the other people. beside, dabkowski et al. (2011) explained the basic meaning of career is about occupation/position of lecture in their history of occupation or life. the purpose of career is position in the future will be reached as the part of career by the lecture. so, the flow of career means the arrange of position of worker to shape the career. it’s consist of position from the lowest until the highest one. the implementation of working will be better and increase, also effected directly to give a chance for someone to get what they hoped. work satisfaction is an important thing that the individual has in working. every individual has characteristic that way different, so the range of satisfy in working actually different. high and low satisfaction in working can give different effect. from knowing more, we have to know about work satisfaction itself. based on bendapudi and berry (1997) with his works will have motivation. commitment in organization and high participation work in the end it will keep improve their ability. satisfied on the basic have individual characteristic, satisfied is like a taste, but its point on someone’s character based on their works. someone showed character and high motivation to the work that usually has don’t by higher works satisfaction. the previous observation that has been done by joo and ready (2012), create new perception that career development can be effected to work satisfaction. so, the previous observation support and based on the concept of thinking that can explain about career development can be effected to work satisfaction based on the explanation, it can be predicted that the effect of career development to lecture’s work satisfaction in merchant marine higher education in dki jakarta. it means, if it gets more attention in career development for the lecture. it will also increase the work satisfaction. 2.4. influence of pos, wlb and career development together to job satisfaction lecturer organizational support or pos, states that to meet socio-emotional needs and to assess the benefits of increased business in work, employees form a general perception of the extent to which the organization respect for the contribution and care to be glorious (support perception organization. the action of employee’s caring to the organization and reached out the purpose of the organization can be shown by showing up positive character and they work on what they’re expected by the organization. the positive effect will prove our satisfaction feeling. employees who were supported by the organization will give a “feedback” and good action. if the perception that was shaped by the big organization support, employee will do good action for replying what the organization had done to them. work satisfaction can be seen form the employee who can be attended by character, action, opinion and situation. if the employee feel happy and satisfied conditionally, it will make themselves to do benefits for organization. work-life balance means that an employee can use as free as they working time that was flexible to complete the working or the creation by be commitment like family, hobby, art, study and it’s not only focus on working the balance timing is a way that you can do to manage your tome to doing some activities like study (work, have fun, relaxing and feeling the rest effectively. if we can balance the time, so it expected the result will increase the concentration, your time organization will be better, productivity will increase and the most important is your stress will be decreased. based on national career development association (u.s.) (2012) – the career development is an action the employee to do reach their career’s planning this action can be sponsored by human resource department, manager or the other. so career is chosen by individual’s self and supported by management for the place where the employee work. bin shmailan (2016) said work satisfaction is a feeling that support or not supporting the employee that has a relation with occupation or the condition itself. the previous observation that has been done by rife et al. (2015) and the result showed that the employee perception from work-life support (between the chief and his members) related with worklife balance, work satisfaction. gunawan, et al.: determinant of lecturers work satisfaction and implication on lecturers performance at maritime higher education in dki jakarta international review of management and marketing | vol 8 • issue 4 • 2018 17 based on definition, it predicted that it can influence pos, work-life balance and career development together for work satisfaction in doing observation in merchant marine higher education in dki jakarta. so, if pos will be high, work-life balance and it focused in career development for lecture will be high as the work satisfaction. 2.5. the effect of pos for lecture’s work as a basic, the good work is a work that followed by the steps or procedures based on standard that has been applied. but, working has some criteria’s for increasing the productivity so the willing of the company can run as their wish. here, the function of employee is needed to secure and give the way for employee to feel guarantee so they can be easy to work. without feeling burden and the connection between management with the member will be strong. so, the employee can give their best work to organization or company. as the basic, good working is the work that follow the rules or procedures based on standard that was applied. but, working has some criteria’s to improve productivity so the company’s expectation can run as their willingness. company is used to sue and give the way to the employee for feeling good and the employee can work without feeling under pressure and the relation between management and his ratings will be stronger so the employee can give his best performance to the organization or company. based on gupta and sharma (2016) the definition of the performance of the employee as a skill of the employee for doing some abilities. the performance of the employee is a must, because it will show how far the skill of the employee to have the responsibility that was given to him. so it needs the clear criteria and counted and fixed together as the motivation. organization or company must be handled by human resource that fill up the quality or quantity in reaching the purpose or organization or company. employees learn, remind and care about the organization or company where they work. employees want to feel that their contribution will make the company success. so, it will make a perception or a view from the employee about the good or not the support of organization or company that will influence the work that they how given. pos according to maertz et al. (2007) aim at employees’ perception about how far the organization evaluates their contribution and care to their prosperous. if the employee recognized that the organization’s support whish he received is high, then that employee will unite the membranes as an organization member into their identity and then improve the relation and perception which more positive to that organization. the organizational support to the employees can be shown by, it’s the justice for the employee, the support from supervisor to the employee’s prosperous, the achievement from the organization to the employee and the condition of work environment that comfortable and safe for the employee. the employee’s perception about a support which is given by the company or organization of the place he work will influence to how their performance to the company or organization. beside of pos, a work satisfaction from the employee is the important factor which is noticed by managers that the effect will disposed to influence the performance (gupta and sharma, 2016). the research from (eisenberger & stinglhamber, 2011) which check pos to the performance, show that the result of pos influence to the performance. based on the statement above, it’s estimated that there is an influence of pos to lecturer’s performance in holding a research at maritime higher institute in dki jakarta. in the meaning the bigger pos that given to the lecturers then the performance will increase more. 2.6. the influence of work-life balance to the lecturer’s performance the well work-life balance is defined as the situation when a worker feels able to balance between work and personal life or another commitment (singh, 2013). the work-life balance can help the entrepreneur an employee to be healthy and productive in personal life and professional. a big part of organizations now has considered some issues that related to the work and their employee’s life, and try to keep the employee more by separating the work from personal life in order they can increase the work result or performance. gruman and saks, (2011) said that the performance is a synergy result from some factors, they are factor of organization’s internal environment, factor of external environment and internal factor of employee. according to chen et al. (2016) work-life balance has some profits such as more economizing employee’s time, retention to employee, increasing motivation and productivity, decreasing the absents of employees, decreasing the healthy cost. so, not only the employee’s side who are benefited but company will feel the profits from work-life balance in the employees. the organization which do the concept of wlb definitely purpose in order the employees are really healthy and full of positive energy in doing the tasks and daily responsible. the organization’s awareness to create the smart human resource is improving the integrity power and accountability from own awareness, will make the organization has the worker and has enthusiasm and work’s desire which can give the contribution and dedication of the well work. the previous research which has been done by, with the result shows that the high quality of wlb will increase the performance effectivity. another same research which is done by rothbard and dumas (2013), with the result of the research that work-life balance has the positive relation with the teacher’s work satisfaction. based on the statement above, it’s estimated that there is an influence of work-life balance to lecturer’s performance in holding a research at maritime higher institute in dki jakarta. in the meaning, the higher lecturer’s work balance then the performance will be higher too. 2.7. the influence of career development to the lecturer’s performance national career development association (u.s.) (2012) said that career is a position order that related to a work which occupied gunawan, et al.: determinant of lecturers work satisfaction and implication on lecturers performance at maritime higher education in dki jakarta international review of management and marketing | vol 8 • issue 4 • 201818 by someone along his life. people chase the career to fulfil some single person’s necessaries deeply. hurst and good (2009) said that career is all jobs or positions that owned or handled along someone’s work life. according to deemer et al. (2014) career is position which is owned by someone for years. whereas career management is a process to make the employee can understand and improve as well the skill and their career interest and to use this skill and interest with the most effective way. besides, the career development is some activity series along the life which contribute to an exploration, stabilization, successes. and someone’s career achievement. also with career preparation is a process that full of consideration when someone has an understanding about skill, knowledge, motivation, and another own characteristic and establish an action plan to reach specific goals. gupta and sharma (2016) said that the performance is a synergy result from some factors, they are factor of organization’s internal environment, factor of external environment and internal factor of employee. grant (2012) said: a work result which is reached by someone in doing the tasks that charged to him that based on skill, experience, sincerity and time. this work achievement is a combination from three important factors, they are: (1) the ability and someone’s work interest, (2) the ability and reception of explanation of task delegation, and (3) participation of motivation level of a worker. the higher that factor, then the bigger work achievement of a worker who included. the previous research which is done by al ariss (2010) that finding result is the career development influence to the performance. it’s matched and it reinforces the research framework which tell that there is an influence of career development to the performance. based on the statement above, it’s estimated that there is an influence of career development to lecturer’s performance in holding a research at maritime higher institute in dki jakarta. in the meaning, the more noticed the lecturer’s career development, then the performance will be higher too. 2.8. the influence of work satisfaction to the lecturer’s performance hanaysha and tahir (2016), that work satisfaction is also important for self-actualization. an employee who doesn’t get the work satisfaction will never reach psychological maturity, and his turn will be frustration. according to jiang and rosenbloom (2005) work satisfaction can be classified shortly is an estimation or reflection from a worker’s feeling to his job. wah yap et al. (2012) describe that work satisfaction as positive or negative attitude which is done by single personal to their job, beside that also work satisfaction as the thinking, feeling, and trending of someone’s act which is someone’s attitude to the work.” bentley et al. (2013) said work satisfaction as a combination of psychological, physiological and environment condition that causes someone to be honest to say i satisfy with my job. whereas according to siahaan et al. (2016) a performance is real behaviour that is shown by everyone as a work achievement which is produced by an employee whose his role is in the company with efforts to achieve goals. the view is also reinforced by samian and noor (2012) that performance can be optimized through the determination of clear job descriptions and measure for every officer (employee) so they understand what their functions and responsibilities. grant (2012) said: a work result which is reached by someone in doing the tasks that charged to him that based on skill, experience, sincerity and time. this work achievement is a combination from three important factors, they are: (1) the ability and someone’s work interest, (2) the ability and reception of explanation of task delegation, and (3) participation of motivation level of a worker. the higher that factor, then the bigger work achievement of a worker who included. the previous research conducted by chung (2011), where the findings are work satisfaction affect the performance. this is appropriate and reinforces the research framework that states that there is an influence of work satisfaction to the performance. based on the statement above, it’s estimated that there is an influence of work satisfaction to lecturer’s performance in conducting research at maritime higher institute in dki jakarta. in the meaning, the higher the lecturer’s work satisfaction, the performance will be higher too. 2.9. the influence of pos, work-life balance, career development and work satisfaction together on the lecturer’s performance according to zagenczyk et al. (2010) the perception of organizational support is the employee’s perception of organizational concern for their wheel-being and the extent to which the organization assesses their contribution to perceptions related to a condition in which employees feel that the organization is compensating fairly for their business or performance, helping employees meet the needs, giving interesting job and motivating also creating conductive working condition. perceptions of organizational support influence the relation between employee’s emotion that will impact to the positive perception of the employees to the organisation so it can increase the work of the employs o achieving the goals. the employee’s have a courage to be the best when they seal they got support form the organisation. lent, (2013) said that the employee will involved they self to fake the decision inside the organisation if they found they self got support form the organisation to propagate to career. support form the organisation also bring the good from promotion. this is causing the support form the organisation make the employee feel related to the other stuff, and will be responsible for their job. these all are the source of making the employee competent. observation that has been done by delecta (2011) respect the quality of work life in the important perspective form teacher because it effect the storey of work. mather and seifert (2011) the result of observation shows that carrier effect to the teacher job’s that the satisfied of job can be explained by the carrier variable. form the explanations above, there are effects of perceived organization support, wlb, worker ability, and work’s satiated gunawan, et al.: determinant of lecturers work satisfaction and implication on lecturers performance at maritime higher education in dki jakarta international review of management and marketing | vol 8 • issue 4 • 2018 19 to lecture’s job to do the observation in maritime collage at dki jakarta. which is means the higher pos, wlb, growing of obvious carrier and job satisfaction of high lecturers will be higher the performance of the lecturers. 3. methodology observation method is survey that has been observed in the field that has been done for the sample member from population that collecting data is done by using questioner. approaching observation that used is by deductive approaching is started by hypothesis. then hypothesis is tested by analyze the data used structural equation model or sem. population that used in this observation is lecture in maritime higher education in jakarta. since 2013 until 2015 that was consist of 5 university. the method that used for its saturation sampling or census. the definition based on sugiyono’s opinion is a technique for choosing sample if a population is used as sample. based on the definition, so it can be conclude that saturation sampling or census technique by using a population. so, observer will take amount of sample will be equal with amount of population that consist of 286 people. the method that used in taking the sample is saturation sampling or census, by using all of population members. so the observer will take amount of sample will be equal with amount of population that consist of 286 people. in the structural equation model using sem, the empirical assumption that should not be violated is if the data has multicollinearity. the presence of multicollinearity of data can give a fatal effect that the model becomes non-identified which means the parameters in the model can not be estimated and the output in the form of the path diagram can not be shown or if the parameter is successfully estimated and the output of the path diagram is successfully displayed, but the result can be biased. this can be demonstrated by the amount of standardized loading factor estimation results that are greater than one, or very high determination coefficient (r2), but individually the model parameter estimation results are not statistically significant. 4. results data analysis using sem, to be able to analyze the research hypothesis (figures 1 and 2). structural equation: kk = 0.52*pos + 0.38*wlb + 0.67*pk, errorvar.= 0.012, r² = 0.86 (0.018) (0.022) (0.023) (0.017) 3.29 2.75 5.31 3.31 kd = 0.29*pos+0.23*wlb+0.56*pk+0.68*kk, (0.071) (0.017) (0.034) (0.022) 2.15 2.11 4.43 6.27 errorvar.=0.004, r²= 0.,91 (0.020) 3.21 kk = job satisfaction kd = lecturer performance pos = perceived organizational support wlb = work life balance pk = career development 4.1. effect of pos on job satisfaction of lecturers pos proved to have a positive and significant effect on job satisfaction with the acquisition of t-value value 3.29> t table 1, 960. obtained pos estimate of job satisfaction of 0.52, the value of determinant coefficient is 0.2704 which shows that pos contributes 27.04% to job satisfaction. based on the above statement it can be said that pos will be able to create satisfaction on the individual. research shows pos has a significant and positive influence on job satisfaction of lecturers at maritime universities especially dominant in the support of justice in every policy issued by the college. the existence of justice support in the policy indicated by the many support given by the campus to lecturers such as the number of lecturers who are given the opportunity to improve the ability or competence and opportunities to develop themselves become the dominant factor affecting the lecturer’s job satisfaction. in addition, the support provided by the leadership include the provision of various facilities and infrastructure which is a facility received by lecturers and resulted in the ease obtained by lecturers such as improving the quality of teaching facilities and infrastructure that are not behind the times, and and welfare support as part of the dimension pos and support that provides many facilities received by lecturers, including for example obtaining credit loans on campus cooperatives, etc. are various forms of support that can create job satisfaction lecturers. so that can be said the various support given to the lecturer, especially the support of justice and the policy given either quantity or quantity or quality to be an effort made by universities so that lecturers feel satisfaction by providing comfort during their duties in maritime universities. 4.2. pengaruh wlb to work satisfaction wlb proved to have a positive and significant impact on job satisfaction with the acquisition of t-value value 2.75> t table 1, 960 and obtained wlb estimation on job satisfaction is 0.38. determination coefficient value is 0.1444 which shows that the wlb contribute 14.44% to job satisfaction. this study shows that the balance in terms of time, role and target tasks in teaching as well as making a teaching report requires balance or wlb. work. the existence of life balance in the results of this study can cause a personal satisfaction in carrying out duties or role as a teacher. the balance of roles becomes the dominant factor affecting the satisfaction of the lecturers. the balance of the lecturer’s work in the family and with the high burden of the task can lead to the satisfaction of its own that impact on satisfaction in work. in addition other balance also needs to get attention, such as energy balance such as tension that may occur and the pressure suffered. the existence of this balance can be achieved requires a lot of energy. so that if unbalanced will be able to drain the energy because of stress and can interfere with comfort and reduce rest gunawan, et al.: determinant of lecturers work satisfaction and implication on lecturers performance at maritime higher education in dki jakarta international review of management and marketing | vol 8 • issue 4 • 201820 time. another balance is to note that the balance between the award given on the task or the work with awards given to the lecturer. various forms of balance that exist in work-life balance in this study cause satisfaction for lecturers. 4.3. effect of career development on job satisfaction career development proved to have a positive and significant impact on job satisfaction with the value of t-value 5.31> t table 1, 960. obtained career development estimate of job satisfaction is equal to 0.67 value coefficient of determinacy is 0.4489 which shows that career development contributes 44.89% to job satisfaction. the career development of lecturers is known as lecturer career information system (si-pkd) which is a system that integrates career development of lecturers starting as lecturer candidates to lecturers with the highest academic position of professors. si-pkd handbook published is intended to provide guidance to lecturers to develop their career, so as to improve the professionalism of lecturers in carrying out tasks, improve process and educational outcomes, and others. through career development lecturers can then be made in assessing the lecturer’s performance accountability. another career development that is able to generate satisfaction is the opportunity for growth opportunities as one dimension in this research by taking indicator: training, course, continuing education/study, is an element in self-development of lecturer. figure 1: t values measurement model analysis figure 2: analysis of standard solution measurement model table 1: sub-structural direct influence causal direct influence causal direct influence pos→kk 0.52 wlb→kk 0.38 pk→kk 0.67 source: appendix output lisrel 8.80 gunawan, et al.: determinant of lecturers work satisfaction and implication on lecturers performance at maritime higher education in dki jakarta international review of management and marketing | vol 8 • issue 4 • 2018 21 the expansion of networks and relationships with others is a form of career development. with the establishment of relationships with other parties who expand the relationship is part of career development that can lead to lecturer satisfaction. the guidance given by the leadership of universities such as in providing input and guidance in quality learning activities, is a form of lecturer’s ability to be developed further in a career that is owned. 4.4. effect of competence, wlb and career development on job satisfaction competence, pos, wlb and career development together have a positive and significant effect on job satisfaction with f-value 41.24> f-table value is 2.28. value the coefficient of determination is 0.86 indicating that pos, wlb and career development together contributes 86% to the job satisfaction of lecturers. the results of this study also indicate that pos or support given by the university in meeting socio emotional needs and other support in work make lecturers have positive perceptions and feel supportive from the college that appreciate their contribution and have support such as dimension of support in this research include: support in the form of concern for the welfare of lecturers, justice in the policy applied by universities and the attitude of high management in giving qualified guidance in teaching and learning responses given by the leadership of lecturers difficulties and the number of opinions and complaints lecturers become factors of the emergence of satisfaction self lecturer of maritime higher education. with the support provided by the university to make lecturers show positive attitude and work behavior in accordance with what is expected. this positive attitude shows the satisfaction of the lecturer. 4.5. effect of pos on performance of maritime lecturer of higher education pos proved to have a positive and significant effect on the performance of lecturer of maritime universities with the acquisition of t-value value 2.15> t table 1, 960. the estimated pos for the performance of lecturers of maritime universities is 0.29. determination coefficient value is 0.0841 indicating that pos contribute as much to the performance of lecturer maritime higher education. the results of this study also indicate that pos or support which is given by the university in meeting the socio emotional needs and other support in the work, make lecturers have a positive perception and feel the support of support from universities who appreciate its contribution and have support such as the dimensions of support in this study include: support in the form of concern for the welfare of lecturers, justice in the policy applied by university and the attitude of high management in giving qualified guidance in teaching learning and the response given by the leadership on the difficulties of lecturers as well as the many opinions and complaints of lecturers become the factor of self-satisfaction of the lecturer of maritime higher education. with the support provided by the university to make lecturers show positive attitude and work behavior in accordance with what is expected. this positive attitude shows the satisfaction of the lecturer. 4.6. effect of wlb on the performance of maritime university lecturers wlb proved to have positive and significant significant effect on the performance of lecturer of maritime university with the acquisition of t-value value 2.11> t table 1, 960. the estimated value of wlb on lecturer performance of maritime college is 0.23. determination coefficient value is 0.0529 which shows that the wlb contributes 5.29% to the performance of lecturer maritime higher education. this research indicates a significant influence on the performance of lecturers. maritime college that runs the concept of wlb by maintaining work time balance with work and work time with activities outside the workplace can impact the performance of lecturers of maritime higher education. the balance of the lecturer such as job position with the role in the family, the balance between work responsibilities with the family, and the balance of work activities and personal activities/interests will be able to make the lecturer has a performance because it has the ability to maintain the element has a good balance. 4.7. effect of career development on the performance of maritime lecturer career development proved to have a positive and significant impact on the performance of maritime college lecturer with the acquisition of t-value value 4.43> t table 1, 960. and obtained career development estimate on the performance of lecturer maritime higher education is equal to 0.56. value the coefficient of determination is 0.3136 which shows that career development contributes 31.36% to the performance of lecturer maritime higher education. 4.8. the influence of job satisfaction to the performance of the lecturer of maritime higher education job satisfaction proved to have a positive and significant impact on the performance of maritime lecturer of higher education with the acquisition of t-value value 6.27 > t table 1, 960. and the estimation of job satisfaction on the performance of lecturer of maritime college is 0.68. determination coefficient value is 0.4624 which shows that job satisfaction contributes 46.24% to the performance of lecturer maritime higher education. job satisfaction of university lecturers. maritime with the policy of university research (tridharma college), supervision in research, opportunity from the leadership to carry out research. issuing ideas/ ideas can improve the performance of lecturers. furthermore, the existence of scientific work produced by lecturers, awards/ recognition received by lecturers, doing the writing of books and journals imliah is a manifestation of the creation of lecturer performance. 4.9. effect of pos, wlb, career development and job satisfaction toward performance of maritime lecturer pos, wlb, career development, and job satisfaction together have a positive and significant effect on the performance of lecturer of maritime universities with f-value 19,960> f-table gunawan, et al.: determinant of lecturers work satisfaction and implication on lecturers performance at maritime higher education in dki jakarta international review of management and marketing | vol 8 • issue 4 • 201822 value is 2.28. if f-value is higher than f-table indicates the influence of independent variable to dependent variable. so it can be stated that there is influence pos, wlb, career development, and job satisfaction together to the performance of lecturer maritime higher education. the determinant coefficient value is 0.91 indicating that pos, wlb, career development, and job satisfaction together contribute 91% to the performance of lecturer of maritime university. this study shows that high lecturer performance is influenced by many factors. one of them is organizational support or pos in this case the maritime university. the existence of support in the form of justice support in the policy provides an opportunity to increase lecturer competence and develop themselves become an important factor in creating satisfaction in order to time with activities outside the work of lecturers related to the performance of lecturers because of the factors of satisfaction in the lecturer. other balance balances are also found in the balance of work tasks with family tasks, attention to work with family attention will be related to the performance of lecturers with the existence of job satisfaction factors. the results of this study also indicate that the development of career lecturers such as trainings, courses, continuing education/ study can bring its own satisfaction for lecturers who impact on the performance of lecturers. the effectiveness of work, and work efficiency, as an indicator of career development can have an impact on the performance of lecturers will eventually be better. thus the pos, wlb and career development become factors in the lecturer’s job satisfaction and bring the lecturer to achieve performance. achieve the performance of lecturers. beside that there is another support that is from the leaders of maritime universities by receiving any complaints or opinions of lecturers as well as quick response in solving any problems lecturers will make lecturers feel appreciated and able to cause satisfaction alone. welfare factors for lecturers both in terms of financial and physical interest such as teaching environment that is available with felt comfortable will cause satisfaction for lecturers. lecturers who feel satisfaction and various needs and expectations are met will be able to generate a sense of satisfaction and will be realized by the lecturer by giving the achievement or the work as a manifestation of the perceived satisfaction. the existence of balance in this study both the balance of time related to work and also the balance of time with activities outside the work of lecturers related to the performance of lecturers due to the factors of satisfaction in the lecturer. other balance balances are also found in the balance of work tasks with family duties, attention to work with family attention will be related to the performance of lecturers with the existence of job satisfaction factors. the results of this study also indicate that the development of career lecturers such as trainings, courses, continuing education/ study can bring its own satisfaction for lecturers who impact on the performance of lecturers. the effectiveness of work, and work efficiency, as an indicator of career development can have an impact on the ultimate performance of lecturers will be better. the balance in this study is both a balance of time related to work and also balance. 4.10. direct, indirect effect in the sub-structural equation, and the table 1 it can be seen that career development (pk) is more directly dominant than pos, wlb to job satisfaction (kk.). the immediate effect of career development of 0.67 is higher when compared with the acquisition of other influences with the value held indicates that the maritime college of dki jakarta in an effort to increase job satisfaction of lecturers will be more successful and lecturers will prefer if dki jakarta maritime college where he performs duties there is a policy on career development of lecturers (table 2). in structural equation, it can be seen that job satisfaction has a dominant direct effect on lecturer performance when compared with pos, wlb and career development (pk). the direct effect of job satisfaction on lecturer’s performance (kd) is 0.68 higher and dominant when compared with other variables. this indicates that in jakarta maritime college related to the improvement of lecturer’s performance, the job satisfaction of lecturers needs to be improved. in this table 3 shows that the indirect effect of career development is more dominant on performance with a value of 0.45 compared with other indirect effects. this means that the lecturers prefer and prefer to be improved career or there is a career development when compared with others. the research results show that performance lecturers to achieve with the satisfaction labour as mediation. satisfaction work be intermediate in achieving performance lecturers. with any chance and opportunities given to lecturers to develop his career will have an impact on the emergence of satisfaction work lecturers. lecturer are satisfied the presence of career development, resulting in lecturers will trying to provide reciprocal to can maximally to implement a task charged can be expressed that performance lecturers to achieve through the satisfaction labour as variable mediation on the career development lecturers. 5. concusions 1. this study found that there is a positive and significant influence pos, wlb and career development together towards the satisfaction of lecturer work at maritime dki jakarta. the development of career is a dominant factor affecting job table 2: direct structural effect causal direct influence causal direct influence pos→kd 0.29 wlb→kd 0.23 pk→kd 0.56 kk→kd 0.68 source: appendix output lisrel 8.80 (processed) table 3: indirect influence causal indirect influence pos→kk→kd 0.35 wlb→kk→kd 0.25 pk→kk→kd 0.45 source: appendix output lisrel 8.80 gunawan, et al.: determinant of lecturers work satisfaction and implication on lecturers performance at maritime higher education in dki jakarta international review of management and marketing | vol 8 • issue 4 • 2018 23 satisfaction this matter implication that to increase job satisfaction of lecturer hence maritime university and related management, need to focus more on effort to improve lecturer career without neglect effort give support or pos and create balance of life work or wlb of lecturers in maritime college in dki jakarta. 2. this research found that there is positive and significant influence pos, wlb, career development and job satisfaction of lecturers together to the performance of lecturer of maritime universities in dki jakarta. the lecturer’s job satisfaction factor is a dominant factor affecting the performance of lecturers in the environment maritime college in dki jakarta. job satisfaction variable is a full-mediating variable to improve lecturer’s performance, it has consequence that improving performance of lecturer of maritime universities in dki jakarta and related management need to focus more on effort to improve lecturer’s job satisfaction without neglecting effort to increase organizational support or pos, creating a balance of work life or wlb, and career development so that the lecturers feel the high satisfaction and ultimately will improve the performance of lecturers in the work. references al ariss, a. 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(2010), social influence and perceived organizational support: a social networks analysis. organizational behavior and human decision processes, 111(2), 127-138. . international review of management and marketing | vol 6 • special issue (s7) • 2016 95 international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2016, 6(s7) 95-100. special issue for "international soft science conference (issc 2016), 11-13 april 2016, universiti utara malaysia, malaysia" impact of entrepreneurial orientation on small business performance: moderating role of government intervention haitham alhnity1*, armanurah mohamad2, awanis ku ishak3 1collage of business, universiti utara malaysia, kedah, malaysia, 2collage of business, universiti utara malaysia, kedah, malaysia, 3collage of business, universiti utara malaysia, kedah, malaysia. *email: haithmalhunity@yahoo.com abstract this study aims to examine and observe the connections between the global entrepreneurial orientation (eo), the influence of jordanian government’s eo intervention towards the performance of the local small business industry as well as the impact of the intervention. a survey was conducted using questionnaires. the questionnaires were distributed to 384 entrepreneurs from a jordanian entrepreneurial body known as erada. questionnaire survey results indicate that jordanian small business owners are in need to adopt eo to realize better business performance. questionnaire survey result also suggested a check on the influence of jordanian government’s intervention on the relationship between eo and business performance keywords: entrepreneurial orientation, government intervention, small business performance jel classifications: l25, l26 1. introduction entrepreneurship is a new term in jordan. nonetheless, jordanian business owners or entrepreneurs are aware of their role as a contributor to jordan’s economic success. number of institutions and centers aiming at promoting entrepreneurial spirit, improving activities and practices are increasing. the researcher begins this study by introducing the entrepreneurship concept of small businesses in jordan and the government’s intervention to promote entrepreneurship to realize better business performance. small business industry in jordan plays a significant role in contributing to jordanian’s social and economic development. it is a major source of employment and income, whereby about 98% of all businesses in jordan are categorized as small medium enterprises (smes), two-third of which have less than 19 employees (jedco, 2010). however, the approximate size of the total funding provided by institutions who invest in projects is nearly half a billion jordanian dinars this goes to financing, construction and development of 134,000 projects, which opened up more than 200, 000 jobs (economic and social council, 2015). jordan’s private sector comprises 196, 954 employees out of which 43, 609 employees are employed by the smes. more importantly, 60 percent of the private sector comprises of the smes, which employ 37% of the total employment (und jordan human development report, 2011). in relation to this, studies have been conducted to determine the primary hindrances the small industries are facing in jordan (alhyari, 2013). result shows that the small businesses owners in jordan depends mainly on traditional skills, old school technology in business management and marketing processes to promote their products and services (magableh and abuyageh, 2012). on top of that, the small business owners are also under pressure to compete with the foreign companies within the country who are running their business using latest technology and method. the lack of information support and communication networks resulted in poor result findings. it is challenging to put the findings together to provide a clear and complete picture (al-mahrouq, 2010) despite the many studies being carried out by different agencies. magableh and kharabsheh (2011a) also raised an argument about the lack of specialized studies and data to fill the gap in report writings, the lack of coordination between institutions relating to the facilities and the challenges and primary obstacles alhnity, et al.: impact of entrepreneurial orientation on small business performance: moderating role of government intervention international review of management and marketing | vol 6 • special issue (s7) • 201696 faced by jordanian small business owners. small businesses’ long-term success is crucial to the jordanian economy but dependable information addressing the justification of the failures is lacking (mgableh and aboyaghy, 2012). in connection with that, mohammed rifai, a member of board of directors of amman chamber industry indicated that 1.550 enterprise, comprises of 8.000 workers did not renew its membership in 2015 (alrai newspaper, 2015). in short, there is no development strategy and industrial policies that has evolved for the small businesses to improve their current status in jordan even after many rounds of governments’ change. public and private agencies in advanced and developing countries adopted eo in order to enhance small business performance. eo emphasizes the importance of being innovative and proactive as well as risk taking (rauch et al., 2008). due to the inconsistencies between concept and reality in entrepreneurial-performance relationship, an investigation to reassess the understanding the term eo within the small business industry in jordan must be conducted. the investigation is conducted due to two reasons. firstly, a better understanding on the eo among the business owners is needed. firms adopting an innovation must know in what way their activities are impacting their relationship with different customers’ needs and requirements. entrepreneurs who adopt this idea should have a heightened ability and awareness to recognize and confidently develop business opportunities. a robust entrepreneurial direction will ultimately lead to increase entrepreneurship, competitive advantage and global competitiveness (cachon and cotton (2008). secondly, based on those conceptual arguments, most studies conducted by quantitative research companies from various industries have confirmed positive results of eo (wiklund and shepherd, 2005). present research also indicates that the strength of the eo-performance relationship depends very much on contextual moderators. therefore in an effort to clarify the eo-performance relationship, we would like to determine the magnitude of this relationship at the national level. saeed et al., 2014 emphasized that forward-looking investigation of the potential contributing factor of the eo-performance relationship is necessary. the prior studies’ findings inspired the researcher to carry out the study to examine whether there is satisfaction among small business owners from the entrepreneurial program in jordan. 2. small business performance reports on the performance reveal that there is no consensus among the researchers on a suitable method of business performance indicators. as a result, a varied performance measures, such as objective and subjective measures as well as financial and nonfinancial measures were used across studies and resulted in a variety in eo-performance relationship (murphy et al., 1996; combs and crook, 2005). unbiased data is very difficult to obtain as respondents are reluctant to release sensitive information to the outsiders (dess and priem, 1995). on the other hand, owners and managers are generally inclined towards providing a personal evaluation of their firm performance, which lacks reliability (wiklund, 1999; wiklund and shepherd, 2005). alternatively, performance can be viewed to be multidimensional in nature and therefore it is beneficial to integrate various subjective and objective measures of performance for accurate measurement of performance (lumpkin and dess, 1996; murphy et al., 1996; wiklund and shepherd, 2005). 3. entrepreneurial orientation (eo) firms adopting eo demonstrate greater performance to those who do not. thus eo embodies the policies in addition practices that give a premise to entrepreneurial choices and activities (mason et al., 2015). entrepreneurial activity is defined by carree and thurik, 2005 as a behaviour concentrating on opportunities. according to covin et al., 2006 eo has turned into an important notion within business enterprises and has become a significant measure of hypothetical and experimental consideration. the dimensions of eo have been distinguished and utilized reliably in literature of previous study. based on miller’s and friesen (1983) conceptualization, three dimensions of eo have been identified and used consistently in the literature namely innovativeness, risk taking and proactiveness. innovativeness is the predisposition to engage in creativity and experimentation by introducing new products and services as well as technological leadership via r and d in new processes. risk taking involves taking bold actions by venturing into the unknown, borrowing heavily, and/or committing significant resources to venture into uncertain environments. proactiveness is opportunity-seeking, forward-looking perspective characterized by the introduction of new products and services ahead of the competition and acting in anticipation of future demand (rauch et al., 2008). additionally, in their meta-analysis, rauch et al. (2004) also discovers that the relationship between eo and performance varies substantially according to national culture. wiklund and shepherd (2005) describe eo by using three dimensions namely innovativeness, proactiveness and risk-taking. based on their study, there is a positive relationship between eo and business performance. meaning, business performance will be better if eo is being completely practiced. however, the other dimensions of eo such as innovativeness, risk-taking and proactiveness are proven to be equally important in explaining business performance according to an earlier empirical research (rauch et al., 2009. p 778). the eo-firm performance relationship adopted covin and slevin’s (1989) scale measure for capturing the extent to which a firm is proactive, innovative and risk-taking. the three dimensions of eo demonstrate independent variance (lumpkin and dess, 1996). the principle of eo depends on how entrepreneurs implement entrepreneurship in the course of realizing their business ambition. alternatively, entrepreneurship focuses on new entry namely new market, new goods or services. lumpkin and dess (1996) considered eo as a process construct, which is related with the methods, practices, and decision-making styles used by the managers. despite the arguments around the dimensional of the eo concept (lumpkin and dess, 1996), eo unidimensional concept has been alhnity, et al.: impact of entrepreneurial orientation on small business performance: moderating role of government intervention international review of management and marketing | vol 6 • special issue (s7) • 2016 97 conceptualized by a majority of eo field studies (covin et al., 2006; rauch et al., 2009). however, there are various outlooks to the matter whether different dimensions of eo are independent of each other or not. covin and slevin (1989) argued that eo is greatest seen as a unidimensional concept. on the other hand, lumpkin and dess (1996) asserted that various dimensions of eo possibly will occur in different integration and therefore it will appear as a multidimensional construct. the fundamental reason of these arguments is due to the fact that there is a distinct relationship between each of these sub-dimensions of eo with entrepreneurial outcomes. risk-taking for an instance has revealed a curved relationship with performance, while a positive and direct relationship occurred between innovation and proactiveness with performance (kreiser and davis, 2010). 4. eo and performance the relationship between entrepreneurship and firm performance has received considerable attention in the organizational and entrepreneurial literature over the last two decades. however, the magnitude of this relationship seems to vary across studies. some studies reveal that businesses adopting eo perform better than those who do not adopt eo (wales et al., 2011; wiklund and shepherd, 2003). most studies find a positive performance relationship; the strength of this relationship varies significantly across various studies and contexts (wales et al., 2011). on the contrary, there are also studies reporting lower correlations between eo and performance (dimitratos et al., 2004; william and sinkula, 2009). some studies failed to find a significant relationship between eo and performance (george et al., 2001; tang and koveos, 2004). there are also studies indicating the relationship between eo and performance which is not that straightforward and shaped like an inverted u (tang et al., 2008). inverted u denotes that a high degree of eo is not always looked-for in certain market and structural conditions (bhuian et al., 2005). thus there is a considerable variation in the reported relationships between eo and business performance. the reasons for variation in results can be attributed to factors like difference in the scales of eo being used, difference in methodology being adopted, opinion regarding moderating variables and different indicator components of performance being measured. therefore, we postulated the following hypotheses for the three entrepreneurial dimensions: h1a: innovativeness positively affects small business performance. h1b: risk taking positively affects small business performance. h1c: proactiveness positively affects small business performance. literature suggests that the relationship between eo and performance is not that straightforward, rather it is influenced by the interference of various elements of organizational and industrial environment. venkatraman (1989b) suggested the moderating effects, mediating effects, independent effects and interaction effects models to be used to investigate the impact of third variables as a means of exploring contingency relationships. 5. government intervention although small businesses have shown significant growth since 1970’s, the entrepreneurial activity rate in the context of jordan remained moderate in comparison to other countries. this is the reason behind the jordanian government’s adoption of steps to address entrepreneurship barriers in the economic, political, legal and cultural aspects. the small business performance in the jordanian context lies the question “what is the government intervention mechanism?” in other words, the study aims to determine whether entrepreneurs’ backgrounds and infrastructure have an impact to entrepreneurial processes and activities in creating successful performance, which will eventually lead to national economic improvement. government plays a critical role in shaping the success of local entrepreneurs. studies conducted on eo have demonstrated that government’s intervention particularly in legislation and regulations is essential to promote entrepreneurship (vossenberg, 2013). studies on how regional environment has the influence on entrepreneurial actions have revealed some key factors comprising societal rules, culture, economic conditions and government procedure (shapero and sokol, 1982). davis and paul (2012) stated that government’s administration enactments and legitimizations are part of the foundation to significant inspirations for eo promotion. in inspecting exterior factors influencing entrepreneurial adoption flow decision among small business in jordan, aulbach and linowes (2013) stated that government interventions in term of regulations are among the reasons that may influence smes to adopt the new entrepreneurship concept. song et al., 2015 findings similarly mentioned that government interventions and support will encourage the local smes to superior performance. government’s intervention has a big influence on the entrepreneurs’ adoption or course of action. government interventions such as subsidies and reduction taxes are introduced with an aim to accelerate and help performance of small businesses. intervention denotes to the influence of governmental institutions (jones, 2006). so far, an intervention on entrepreneurship adoption has not been done in jordanian context. nonetheless, some studies were carried out around the topic of moderating effects of government interventions (shariff et al., 2009; ruslan et al., 2014). empirical studies investigating the relationship between institutional contextual factors and entrepreneurial activities are still few and far between. this study responds to this gap in literature by focusing on government interventions in jordan. relevant studies who are of the same caliber but different contexts include shapero and sokol, (1982) who focused on the regulatory measurement focusing on laws, regulations and policies, and related them to entrepreneurial activities, after which they were publicized by the government within an area. interventions from the government affect the outcomes of businesses and the uncertainties over the availability of capital, alhnity, et al.: impact of entrepreneurial orientation on small business performance: moderating role of government intervention international review of management and marketing | vol 6 • special issue (s7) • 201698 government-backed investments and financial guarantee programs influence businesses. aside from providing direct funds, fiscal measures such as tax reductions or exemptions also play a role. positive government intervention shows a consensus throughout the region concerning the best practices of entrepreneurial activities implementation – in other words, entrepreneurs who know how to employ strategies that are not as risky are able to cope with competitiveness in the market. as for operational uncertainty, good government intervention indicates that if entrepreneurs within an area views entrepreneurial activities as a positive thing, they will be more inclined towards them and are more likely to receive support. moreover, vij and bedi (2012) stressed that organizational and environmental factors should be examined for their moderating effects on the relationship between eo and performance. therefore, in this study, government intervention was selected to be examined for its moderating impact to shed deeper insight into the eo-performance relationship. building on this argument, twoway interactions of eo and government intervention are examined, and government intervention is hypothesized to moderate the eoperformance relationship. based on these hypothesized two-way interaction, the following hypotheses are proposed; h2a: government’s intervention moderated the relationship between innovativeness and small business performance. h2b: government’s intervention moderated the relationship between risk taking and small business performance. h2c: government’s intervention moderated the relationship between proactiveness and small business performance. 6. proposed conceptual framework building on wiklund and shepherd, 2005; ireland et al., 2009, kreiser and davis, 2010; grande et al., 2011 studies. the eoperformance linkage model is adopted in this study. this includes multivariate relationship by seeing government’s intervention as moderating variables associated with external environment and/ or organizational environment. the connection between eo and performance variables as well as the interaction outcome with moderating variables will be examined. contingency theory holds that the relationship between two variables depends on the level of a third variable. introducing moderators into bivariate relationships helps reduce the potential for misleading inferences and permits a “more precise and specific understanding” (rosenberg, 1968. p. 100) of contingency relationships. because of its concern with performance implications, contingency theory has been fundamental to furthering the development of the management sciences (venkatraman, 1989b). therefore, to understand differences in findings across studies, we investigated potential moderators of the relationship between eo and performance (rauch, 2008). as discussed in previous section, determinants of eo such as innovativeness, risk taking, and proactiveness show consistent result to influence of performance. however, this paper suggested future research on eo-performance to study the influence of the government’s intervention towards the relationship of the eo dimensions and small business performance. this is for the reason that the aim of the government’s intervention is actually to promote entrepreneurship, not just to influence small business performance. as a result, we proposed conceptual framework as in figure 1. 7. methodology we are not able to trace a suitable list of small business population for small businesses in jordan. alternatively, we use erada (enhancement of production center) data. the sampling frame for this study was obtained from erada database which manages a portfolio of 4906 entrepreneurial business. erada is recognized as one of the leading training consultants and feasibility studies service provider for the small business sector in jordan. the sample contains characteristics within the scope of sociodemographic. population of the study comprised of 2.571 small businesses in jordan’s central region encompassing three provinces namely amman, albalqa, and azarqa. the central/middle region has been chosen because 45% of the small manufacturing business’ population from erada database is located there. only 384 sample data from a total 2.571 is suitable to be used. the data will be analyzed using spss. self-administrated questionnaire will be used for this study. respondent will be asked to indicate the extent of their agreement or disagreement to each statement based on a five-point numerical scale ranging from 1 (“strongly disagree”) to 5 (“strongly agree”). the questions in this questionnaire were adapted and adopted from literature. 8. expected findings this study believes that all hypotheses for eo will be acknowledged and recognized by the government. the government’s interventions such as subsidies, taxes and monitoring are in need of promotion, adoption and innovation. the study is also confident to getting positive acceptance on the moderating effects of government interventions effort. 9. conclusion this study attempts to suggest a conceptual framework for future study on small business performance. this is important since literature on small business performance in jordan is still scarce. this framework will help future researcher to understand figure 1: the research framework alhnity, et al.: impact of entrepreneurial orientation on small business performance: moderating role of government intervention international review of management and marketing | vol 6 • special issue (s7) • 2016 99 eo adoption. this will also assist us to understand the impact of government’s interventions toward small business’ performance as well as eo dimensions. references alhyari, k. 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(2009), the complementary effects of market orientation and entrepreneurial orientation on profitability in small businesses. journal of small business management, 47(4), 443-464. . international review of management and marketing | vol 6 • special issue (s4) • 2016176 international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2016, 6(s4) 176-184. special issue for “asia international conference (aic 2015), 5-6 december 2015, universiti teknologi malaysia, kuala lumpur, malaysia” effectiveness of supply chain management with reference to apparel industry: a case study in india sanil s. hishan*1, suresh ramakrishnan2, mohammed alwethainani3, abdul ghafoor kazi4, muhammad siddique5 1faculty of management, universiti teknologi malaysia, johor, malaysia, 2faculty of management, universiti teknologi malaysia, johor, malaysia, 3faculty of economics and management, universiti putra malaysia, selangor, malaysia. 4faculty of science technology and human development, universiti tun hussein onn malaysia, johor, malaysia, 5faculty of management, universiti teknologi malaysia, johor, malaysia.*email: hishanssanil@gmail.com abstract the study considered the apparel companies based in india to determine the supply chain management (scm) techniques applied by these businesses as well as the benefits and difficulties encountered with its application thereby analyzing the effectiveness of the scm in apparel industry. a questionnaire was used as a research instrument for this study to describe and assess the scm systems of the selected apparel company executives. a well-structured questionnaire was distributed to the selected company executives involved in the supply chain activities. the questionnaire which evaluates seven different dimensions of scm systems was given to the respondents and the effectiveness of the scm practices of the apparel companies were measured in order to determine whether its systems are beneficial to the industry or not. based on the findings it can be concluded that the apparel companies obtained a number of advantages out of scm application with reference to the efficacy and responsiveness in delivering the goods or services to the customers. in spite of the beneficial effects of scm application to the apparel industry, the companies are having certain difficulties with respect to the resistance to change and implementation of latest technologies. in spite of these difficulties with scm, various alternatives are made available for them to enhance their systems like going for the third party logistics which help counter these problems. considering that even expensive tools for scm application have their downsides, difficulties in scm is inevitable. however, companies using this can be resourceful in coming up with ways on how their systems can be improved. keywords: supply chain management, apparel industry, india jel classification: r4 1. introduction the indian textile and apparel industry is an integrated sector and occupy a significant position in global trade. it not only processes high value products such as fabrics, garments and made-ups but also grows its own raw materials (cotton, jute, silk and wool). the textile industry is served by the organized, modern and mechanized mill sector, the small scale largely unorganized power loom sector and the highly fragmented handloom (hand spinning and hand weaving) sector. india is one of the few countries that has presence across the entire value chain of the textiles and clothing business starting from raw material (fiber), spinning, weaving/ knitting, processing to highest value added products – garments and made ups. the management of supply chains is one of the significant strategic aspects of business organizations. managing the production of the company’s goods and services, monitoring storage inventories, contacting suppliers and ensuring timely distribution of goods are some of the major activities covered by supply chain management (scm). among the business sectors applying scm practices, the apparel industry is one of those who have been applying this strategy. this is particularly evident in countries where the apparel, clothing and textile industry serve as essential economic hishan, et al.: effectiveness of supply chain management with reference to apparel industry: a case study in india international review of management and marketing | vol 6 • special issue (s4) • 2016 177 contributors. in india, the apparel industry is one of its important and highly contributory economic sectors; thus, various local apparel manufacturers and businesses are employing various innovations so as to operate successfully, both in the local and international setting. this study was conducted in order to determine the apparel business operators in the country are using scm practices and to find out the scm techniques used in these companies. the impact as well as the difficulties encountered by these companies with scm application was also identified. the apparel industry is a business sector which includes companies producing and distributing clothing merchandise. the market of the clothing industry is mainly influenced by economic issues; in particular, as consumers are into more prosperous economic conditions, the demand for more luxurious clothing increases. while this industry is affected by common business issues such as economic factors and competition, this industry is also greatly affected by consumer trends, such as seasonality and fashion. with these affective factors, the apparel industry typically encounters problems such as demand uncertainty; this problem on the other hand, is addressed by apparel companies through product variety. the apparel industry is an important business sector in india. for this reason, companies operating within this industry must then be able to apply business strategies that would help sustain the growth of the clothing sector. this means that by modifying some of the existing business procedures of the apparel companies, such as their scm systems, continuous progress and development in the industry may be observed. the development of the scm in india business sector can also likely strengthen its connection with the international market. to save on logistics and procurement costs, large global buyers are actively going in for vendor consolidation; thus integration, scale of operations, efficiencies and a capability to satisfy demanding customers with large volume orders on time have become the key differentiators in the textile industry today. on the domestic front, notwithstanding the current economic slowdown, india’s population of more than 1.1 billion people continues to offer an important market for consumer goods. typically, domestic textile demand has grown in line with the growth in gross domestic product and the large number of middle-class households offer considerable potential for manufacturers and retailers. also, according to economic indicators, the asian economies (with china and india leading) are likely to recover faster from the downturn; the first signs are already being witnessed. hence, for the textile industry in india, the growth potential remains encouraging. 2. literature review among the business sectors applying scm practices, the apparel industry is one of those who have been applying this strategy. this is particularly evident in countries where the apparel, clothing and textile industry serve as essential economic contributors. in india, the apparel industry is one of its important and highly contributory economic sectors; thus, various local apparel manufacturers and businesses are employing various innovations so as to operate successfully, both in the local and international setting. this study was conducted to determine how apparel business operators in the country are using scm practices and what scm techniques are being used in these companies. the impact as well as the difficulties encountered by these companies with scm application was also identified. in the last 5 years, the apparel industry has faced ever-decreasing margins and currently <5% net margins. with only a few notable exceptions, their traditional focus on consumer preferences and marketing has been insufficient to address this dismal performance. in fact, these poor financial results have occurred during a period when unit volumes and prices have increased. in order to recapture its profit potential, the apparel industry must immediately bring appropriate technology to bear on its supply chain challenge. the costs of inadequate management of apparel sourcing and supply chains are especially onerous since price and demand for an individual fashion garment are largely time-dependent. when the product is delayed beyond the beginning of a season, the margins for fashion apparel “perish” even if the garment does not. for example, a seasonal garment for the holiday season or bathing suit for summer might sell at full price for 2 weeks or even less, a 30-40% markdown or zero margin for another 2 weeks, and then have to be sold to another channel for 10% of the original price at a large loss. lack of knowledge on effectiveness of scm practices and difficulty to recognize the specific areas to be developed for improving these practices, collectively form the basic dilemma, which should be solved in order to overcome the barriers against effective implementation of scm, which has been restricted over many decades in india’s apparel manufacturing firms, keeping most of them far behind in the global competition. therefore, this research finds the effectiveness of scm practices and recognizes the areas to be developed to improve the practices, especially for apparel manufacturing & service firms in india. identifying the impact of a firm’s main factors effecting on scm practices will provide a start to comprehensive scm feasibility assessment. the data were collected through a questionnaire from 12 randomly selected apparel manufacturing & service firms in india. 3. operational definitions and concepts managing the movement of the goods and the flow of information between an organization and its suppliers, suppliers and its customers to achieve strategic advantage is called scm. scm covers the processes of materials management, logistics, physical distribution management, purchasing, and information management. a supply chain is the stream of processes of moving goods from the customer order through the raw materials stage, supply, production, and distribution of products to the customer. all organizations have supply chains of varying degrees, depending upon the size hishan, et al.: effectiveness of supply chain management with reference to apparel industry: a case study in india international review of management and marketing | vol 6 • special issue (s4) • 2016178 of the organization and the type of product manufactured. these networks obtain supplies and components, change these materials into finished products and then distribute them to the customer. scm is the management of a network of interconnected businesses involved in the ultimate provision of product and service packages required by end customers (harland, 1996). scm spans all movement and storage of raw materials, work-in-process inventory, and finished goods from point of origin to point of consumption (supply chain). another definition is provided by the apics dictionary when it defines scm as the “design, planning, execution, control, and monitoring of supply chain activities with the objective of creating net value, building a competitive infrastructure, leveraging worldwide logistics, synchronizing supply with demand, and measuring performance globally.” 4. research objectives the aim of this research is to describe and analyze the current scm system applied by business operators within india. this research was conducted to achieve the following objectives: 1. to identify the techniques used by some apparel business operators in india 2. to determine whether these practices are able to benefit the selected companies 3. to cite possible problem areas or difficulties encountered by these companies with scm 4. to come out with suggestions to the apparel operations in the country. 5. methodology 5.1. sources of data 5.1.1. primary data primary data refers to the data that is fresh and collected for the first time. it refers to the data collected by the researcher himself and original in character. the primary data were derived from the answers respondents gave in the structured questionnaire prepared by the researcher. a personal interview was conducted with the help of a questionnaire. the questionnaire has contained 40 questions with both open ended and closed ended questions. the respondents were asked to give their frank opinion regarding the concerned matter and respondents have given valuable information. in order to gather pertinent information regarding scm techniques and effects, the participation of apparel companies is necessary. thus, for this study, the researcher opted to gather helpful information from 12 apparel companies. due to various research constraints such as time and budget, the researcher decided to use a smaller sample size. within these selected companies some of respondents were asked to participate. all the staff employees considered for the study work in the supply chain sector of the selected companies; this criterion helped in limiting the size of the population as well as in ensuring that selected participants are knowledgeable on the research topic. all in all, this study made use of 84 respondents. 5.1.2. secondary data the secondary data, on the other hand, is those which have already been collected by someone else and which have already been passed through statistical processes. secondary data is the information that already exists. for collecting secondary data researcher used internet, magazines, newspapers and various books. researcher also consulted faculties for getting valuable information. 5.2. sampling plan sampling techniques may be classified as non-probability and probability techniques. non-probability sampling techniques rely on researcher’s judgment. consequently they don’t permit an objective evaluation of the precision of the sample results, and estimates obtained are not statistically able to project the population. the commonly used non-probability sampling techniques convenience sampling, judgment sampling, quota sampling, and snow ball sampling. in probability sampling techniques, sampling units are selected by chance. each sampling unit has a non-zero chance of being selected and the researchers can pre-specify every potential sample of a given size that could be drawn from the population. probability sampling techniques include simple random sampling, systematic sampling, stratified sampling, sequential sampling and double sampling. the choice between probability and nonprobability sampling should be based on the nature, degree of error tolerance, relative magnitude of sampling and non-sampling errors, variability in population and statistical and operational conditions. in the present research the judgment sampling under nonprobability sampling is used. the sample size of 84 respondents spread across india was taken for the study. the respondents were chosen randomly from each of this market. 5.3. field work the field work was done in this project adopting personal interview method with the help of structured disguised (alamer et al., 2015; qureshi et al., 2014, 2015, 2016; sanil & ramakrishnan, 2015) questionnaire. the questionnaire was filled in personally by some of the respondents whereas some of the respondents were asked the content of the questionnaire through the telephone interview. the survey was conducted in silvasa, vapi, bengaluru, rajasthan and gurgoan. the survey questionnaires were coded and then tabulated. the analysis and interpretation was given based on the results of the tabulation. 5.4. tools and techniques of data collection for this study, questionnaire was used as the research instrument to describe and assess the scm systems of the selected apparel companies. the questionnaire given to the participants aimed to evaluate the effectiveness of their respective firms’ scm systems. the evaluation factors were developed under 7 headings. in general, the effects of the scm practices of the apparel companies hishan, et al.: effectiveness of supply chain management with reference to apparel industry: a case study in india international review of management and marketing | vol 6 • special issue (s4) • 2016 179 were evaluated for this study in order to determine whether its systems are beneficial to the industry or not. the questionnaire was structured in such a way that respondents will be able to answer it easily. thus, the survey was structured using the likert’s scale with five-point response choices. a likert’s scale is a rating scale that requires the subject to indicate his or her degree of agreement or disagreement to a statement. in this type of questionnaire, the respondents were given five response choices. these options served as the quantification of the participants’ agreement or disagreement on each question item. the designated quantifications used in the questionnaire are as follows, 5 points for strongly agree, 4 points for agree, 3 points for uncertainty, 2 points for disagree and 1 point for strongly disagree. 5.5. data analysis procedure the likert survey has been selected. questions in the questionnaire have enabled the respondents to answer the survey easily. in addition, this research instrument allowed the researcher to carry out the quantitative approach effectively with the use of statistics for data interpretation. once all the answers of the respondents have been gathered, the researcher computed the weighted mean value for each survey item. the mean was then compared to the likert scale to interpret the results. the weighted mean was used in order to obtain the average values that represented the sample’s response to each question in the survey. this helped the researcher identify the general response of the participants to the question given. in order to analyze the data gathered from the survey, the weighted mean for each question item was computed. weighted mean is the average wherein every quantity to be averaged has a corresponding weight. these weights represent the significance of each quantity to the average. to compute for the weighted mean, each value must be multiplied by its weight. products should then be added to obtain the total value. the total weight should also be computed by adding all the weights. the total value is then divided by the total weight. statistically, the weighted mean is calculated using the following formula: weighted mean y1 5 y2 4 y3 3 y4 2 = ×( ) + ×( ) + ×( ) + ×( ) + yy5 1×( ) 84 where, y1, y2, y3, y4, y5 are the number of respondents that selected the given likert choices. the computed mean was then compared to the scale for interpretation as given below: range interpretation 4.50-5.00 strongly agree 3.50-4.49 agree 2.50-3.49 uncertain 1.50-2.49 disagree 0.00-1.49 strongly disagree 6. results based on the analysis of the responses given to the questionnaire it is clear that most of the respondents have agreed that scm is helpful in determining the needs of the consumers/clients and part 1 general questions on scm 4.33 4.02 4.57 4.36 3.70 3.80 3.90 4.00 4.10 4.20 4.30 4.40 4.50 4.60 4.70 statements w ie gh te d m ea n s co re scm is helpful in determining the needs of consumers/clients and achieving their satis-faction. scm allows the reduction of response time within the supply chain. scm is useful in integrating the activities within the supply chain. scm makes communication among supply chain members faster, easier with more frequency. figure 1: general questions on supply chain management 0 5 10 15 20 25 30 35 40 45 50 >20% 16% -20% 11% -15% 6% -10% 0 % -5 % percentagerange p e r c e n t a g e figure 2: share of logistic figure 3: supply chain management planning part 2 scm planning 4.36 4.40 4.43 4.32 4.34 4.36 4.38 4.40 4.42 4.44 statements w ie g h te d m ea n s co re use of it for planning has improved the efficiency of scm planning transportation management has to be taken into account while planning for an order. the role of scm planning has gained more importance as buyers are looking for orders to be executed at shorter lead time. figure 4: business strategy of the organization pure cost strategy primary empahasis on cost primary emphasis on differentiation pure differentaition strategy hishan, et al.: effectiveness of supply chain management with reference to apparel industry: a case study in india international review of management and marketing | vol 6 • special issue (s4) • 2016180 achieving their satisfaction. figure 1-18 shows the results of the study they also agreed that scm allows the reduction of response time within the supply chain as it integrates the activities within the supply chain in turn making the communication amongst supply chain members faster and easier. it was also noted that 46% of the respondents opined that approximately 16-20% of their total annual expenditure was on logistic related activities. this emphasizes the need for having figure 5: strategic priorities of the organization cost quality flexibility innovation figure 6: supply chain management design p ar t 3 s c m d es ig n 3.43 3.64 4.21 0.00 0.50 1.00 1.50 2.00 2.50 3.00 3.50 4.00 4.50 statements w ie g h te d m ea n s co re supply chain processes are documented and defined. supply chain organisation structure can be described as entirely process based the company’s efficiency depends on its ability to re-arrange production process mod-ules so that customization can be carried out later at distribution centers figure 7: initiatives by the management i control charts process capability chart d s nitiatives taken by the organisation esign experiments ix sigma figure 8: manufacturing practices implemented tqm tpm bpr gt jit sds amh ems others figure 9: demand management processing and customer service part 4 demand management processing & customer service 4.12 4.12 3.88 4.07 3.75 3.80 3.85 3.90 3.95 4.00 4.05 4.10 4.15 statements w ie gh te d m ea n s co re global sourcing complexities has made the demand management processing very important “made-to-order” or project/job shop manuf acturing challenge has made scm key to success of an organisation the company f requently interacts w ith customers to set reliability, responsiveness, and other standards f or the company the company can manage demand ef f iciently by using a “pull” production system figure 10: information system, it and networking in supply chain management part 5 information system, it & networkingin scm 3.74 3.69 3.90 3.55 3.60 3.65 3.70 3.75 3.80 3.85 3.90 3.95 statement w ie gh te d m ea n s co re the current information systemofthecompanysupportsthesupplychainprocesses scm implementation has been difficult as advanced information systems arenot available. therewasaresistancetochangefromyouremployeesduringyourscmsoftware implementation. figure 11: software implemented in the organization yes no im plem entation of qms yes no figure 12: implementation of quality management system hishan, et al.: effectiveness of supply chain management with reference to apparel industry: a case study in india international review of management and marketing | vol 6 • special issue (s4) • 2016 181 an efficient logistic management which is one of the major components of the scm. it can be inferred from the responses that planning plays an vital role in having a efficient supply chain. use of it has improved the efficiency of scm planning. also the respondents agreed that transportation management has to be taken into account while planning for an order. the role of scm has been vital in today’s business as the buyers are looking for orders to be executed at very short lead times. the results also showed that 64% of the respondents emphasized on the fact that their organization used the pure cost strategy. whereas only 6% of the respondents opined that their organization followed the pure differentiation strategy. this gives an idea on figure 13: demand management processing and customer service part 6 demand management processing & customer service 4.02 4.19 3.95 3.95 3.86 3.60 3.70 3.80 3.90 4.00 4.10 4.20 4.30 statements w ie gh te d m ea n s co re scm enables the sharing of information both through informal and formal means scm allows the company to build closer and stronger relations with the clients/customers. the company found scm implementation difficult as some suppliers lack interest to participate in the system. the implementation of scm has been challenging as customers are not showing interest to the system. the implementation of scm had been problematic due to the geographical distance of the suppliers or customers of the supply chain. figure 14: effectiveness of supply chain management part 7 effectiveness of scm 3.4 3.8 3.7 4.0 4.0 4.0 3.1 3.2 3.3 3.4 3.5 3.6 3.7 3.8 3.9 4.0 4.1 1 w ie gh te d m ea n s co re how satisfied are you with scm system in your company? how successful do you think is your company in managing its supply chain? the company lacks the ability to control the supply chain, making it hard to apply scm. scm system has facilitated the creation of trust amongst supply chain members. scm has increased the just-in-time (jit) capability of the company and the suppliers. scm helps in obtaining useful feedback from the suppliers. figure 15: role of supply chain management in cost reduction scm role in cost reduction yes no figure 16: organizations emphasis on integration of supply chain management across functional department organisation emphasises on integration of scm across department yes no figure 17: managerial designation for supply chain management managerial designation yes no hishan, et al.: effectiveness of supply chain management with reference to apparel industry: a case study in india international review of management and marketing | vol 6 • special issue (s4) • 2016182 how the cost plays a vital role during the company’s strategy formulation. hence, supply chain decision is very important part of the organizations strategy. it is one of the key areas where cost can be reduced. it was noted that considering that the company operates at a smaller scale, competition with similar companies as well as with larger apparel businesses can be cutthroat. for this reason, the companies must adapt strategies that would allow them to have a more organized production and distribution system, which would promote higher levels of customer satisfaction. the survey results shows that 42% of the respondents felt that quality is one of the major priority and 38% of the respondents felt that flexibility is one of the major priority during the organizations strategy formulation. so it is evident that reducing lead time has become one of the main criteria for retaining the existing buyers and acquiring new customers. it can be inferred that there was an uncertainty about the documentation of the supply chain processes. the respondents agreed that the supply chain organization structure can be described entirely as process based. the respondents also agreed that company’s efficiency depends on its ability to rearrange its production process modules so that customization can be carried out later at the distribution centers. 70% of the respondents said that the organization used control charts as an initiative to improve the process management of the organization. but none of the respondents used the advanced techniques like six sigma which is still not thought by the management of the apparel industry. it was also observed that 42% of the respondents have said that they have implemented total quality management (tqm) for efficiency in the supply chain. similarly around 55% of the respondents have implemented business process reengineering in their organization. so we can understand from the above that most of the apparel manufacturers have understood the importance of supply chain efficiency and have implemented some these manufacturing practices to achieve the organizational success. it can be inferred that most of the respondents agreed that the global sourcing has made the demand management processing very important. the main reason that is motivating the companies to implement an scm system is to adapt to the new trends within the industry. the respondents also cited that the application of scm is geared towards the enhancement of the relations among the supply chain members. respondents agreed that the company frequently interacts with customers to set reliability, responsiveness and other standards for the company. one of the major problems encountered by apparel businesses is communicating with different suppliers and retailers’. so the respondent agreed that the company can manage demand efficiently by using a “pull” production system. the respondents agreed that the emergence of “made-to-order” or project/job shop manufacturing challenge has made scm key to the success of the organization. as the manufacturers greatly depend on the timely deliveries of both supply chain participants, inefficient information exchange can then result to delayed production and services. this benefit however, is still a challenge to attain despite the use of an scm system. the respondent explained that this is because communication problems can still happen brought about by various factors like wrong information, misunderstanding, power outage or natural disruptions. without much other means to communicate, the channel shared by the supply chain members can be disrupted easily, resulting to supply chain problems. the respondents agreed that the current information system of the company supports the supply chain processes. the respondents also agreed that the scm implementation has been difficult as advanced information systems are not available. among the tested difficulties of scm implementation, the unavailability of advanced information systems indicating that majority of the respondents agree that scm application is challenging without the access to modern technology. the implementation of software systems in the organization is very vital as the latest technology will help in the faster and easier information flow. this will reduce the cost as well as the lead time. however as per the response received from the respondents around 50% of the surveyed company were having some software related to scm. the general software is the erp software and some planning software like fast react. so it gives us an idea on how important is the information flow for achieving efficient scm. 50% of the respondents opined that their company has not yet implemented any advanced quality system. so it is evident that the company has to implement the necessary quality systems to stay competitive in the business. the respondents agree to most of the beneficial factors that can be gained out of scm implementation. the results indicated that scm is beneficial to four aspects of the apparel companies. these include the customers, suppliers, the company itself and the supply chain in general. majority of the respondents agree that the application of scm in their company helped in developing their knowledge with their respective customers. among the suppliers and the companies, scm is also believed to be beneficial as it improves the timely delivery as well as the information exchange capabilities of both parties. the selected companies also agreed that scm promotes continuous improvement of the existing system. the overall supply chain of the companies also acquires significant benefits through scm. high scores for instance had been obtained from scm aspect such as response time, communication and feedback acquisition; these high scores indicate that majority of figure 18: performance monitoring system yes no hishan, et al.: effectiveness of supply chain management with reference to apparel industry: a case study in india international review of management and marketing | vol 6 • special issue (s4) • 2016 183 the selected respondents agree that these scm factors have been attained by their respective companies. the supply chain of the companies also benefit from scm as it helps in creating trust and building stronger relations among the members. an uncertain score however, had been obtained in the activity integration aspect of scm, implying the difficulty of achieving this scm benefit. the same impression had also been obtained in terms of the control the company has on the supply chain. on the other hand, the issue of geographical distance and the interest of the suppliers to participate in the scm system did not seem to be major concerns among the selected companies. the interest of the customers in participating in the scm received an uncertain score, suggesting that this difficulty factor may not be experienced in the same level as other apparel companies. through scm, the activities of the supply chain members then become more coordinated. it is very clear that the respondents were satisfied with the existing scm system in the company. they also agreed that the company was successful in managing its supply chain. however the company still lacks the ability to control the supply chain, making it hard to apply scm. the respondents agreed that the scm system has facilitated the creation of trust amongst supply chain members. the survey also suggested that scm has increased the just-in-time capability of the company and the suppliers. an efficient scm also helps in obtaining useful feedback from the suppliers. 76.2% of the respondents opined that effective scm can help reduce the cost in the times of recession. some of the reasons given for this by the respondents were as follows: • implementation of efficient scm reduces waste and in turn reducing the cost • implementation of scm also helps in better planning • it helps in reducing the lead time • it reduces inventory cost • reduces cost on transportation • it acts as the driver to increase productivity • implementation of scm helps in getting the right information at the right time • it helps in developing the business standards related to quality and delivery • it improves the flexibility with reference to the product variety and the order quantities. the survey reveals that almost 60% of the respondents opined that their organization did not emphasize the integrated scm across various functions. this gives us an understanding that the organization has a wide scope for improvement in the area of integrated scm. also, 57% of the respondents said that there was no managerial designation reflecting the emphasis on supply chain integration between various functional departments. overall 69% of the respondents said that there was no performance monitoring system reflecting the integration of the supply chain between various functional departments. scm has long been considered an important aspect of most business operations, particularly those who deal with multiple suppliers, retailers and customers. this type of business setting is very much evident in the apparel industry; however, there had been limited researches investigating on what scm techniques are used by apparel companies. moreover, the effects of this strategy and difficulties apparel companies encounter with its implementation have not been researched as much as other business industries. the survey shows most of the respondents agreed that scm is helpful in determining the needs of the consumers/client and achieving their satisfaction. also it is clear from the data that logistic plays a vital role in the success of the scm. the survey has revealed that use of information technology has improved the efficiency of the supply chain as most of the respondents agreed that use of it has improved the efficiency of the scm planning. the main reason for scm to gain importance is due to buyers demand on executing the orders at a shorter lead time. the survey also showed that supply chain decision is very important part of the organizations strategy as it is one of the areas where cost can be reduced. the respondents also felt that the company’s efficiency depends on its ability to rearrange its production process modules so that customization can be carried out later at the distribution centers. however in terms of systems the apparel companies have not yet thought of advanced systems like six sigma, so there is a need for advanced system implementation. it was also observed that 42% of the respondents have said that they have implemented tqm for efficient management of the supply chain. so we can understand that apparel manufacturers have understood the importance of supply chain efficiency. the respondents also agreed that the emergence of “made-to-order” or project/job shop manufacturing challenge has made scm key to success of an organization. 7. conclusion based from the data gathered, a number of important conclusions have been drawn out. the same have been given as hereunder: 1. the selected apparel companies apply similar scm techniques to handle their supply chains. these techniques include the use of multiple communication systems such as the internet and telephone in order to transmit valuable real-time business information to other supply chain members. the investigated apparel companies also utilized the expertise and assistance of scm experts in designing and implementing their existing scm systems. the respondents also ensured the effective application of their chosen systems by means of careful and extensive project planning. 2. in terms of benefits, the apparel companies obtained a number of advantages out of scm application. among several companies, majority of the respondents agree that communication benefits are one of the most significant advantages gained from scm. this is then followed by the improvement of the relations among supply chain members and the enhancement of different business abilities of the manufacturers, retailers and suppliers. in turn, these significant hishan, et al.: effectiveness of supply chain management with reference to apparel industry: a case study in india international review of management and marketing | vol 6 • special issue (s4) • 2016184 developments benefited the companies as sales improved and customer satisfaction increased. 3. in spite of the beneficial effects of scm application to the apparel industry, certain difficulties have been encountered by the companies in line with its application. among several problems, the small-scale companies appear to be most affected by the technology and cost factors. with limited resources, the selected companies were unable to upgrade their scm systems to more modern programs. this in turn, has affected their opportunity to acquire greater market shares and higher customer satisfaction as well as overcome intense levels of competition. 4. though the selected companies encounter some difficulties with scm, various alternatives are made available for them to enhance their systems. considering that even expensive tools for scm application had their downsides as well, difficulties in scm is inevitable. however, companies using this can be resourceful in coming up with ways on how their systems can be improved. 8. suggestions based on the summary of findings, certain recommendations can be of use to apparel companies, especially smaller one, in order to maintain and improve their scm systems: 1. apparel companies may consider trying out the services offered by third-party technology providers in order to transmit supply chain information via electronic means. developing and implementing scm really do require considerable investments; however, there are less costly alternatives whose functions are similar to customized systems. problems like data inaccuracies due to human error can be remedied through efficient human resource delegation. to address the data inaccuracies caused by unexpected events, companies may consider implementing multiple communication systems (e.g., fax, telephone) so as to overcome this problem. 2. in order to prevent the accumulation of problems brought about by scm implementation, companies applying it should also design a performance assessment program and monitor the outcomes of these systems. immediate response to problem areas identified through regular monitoring can help smaller companies to overcome business issues such as intense competition or decreasing market share. the ability of the companies to overcome business challenges is not only reliant on technology and innovation but also on the speed of their reaction to problematic issues. 3. in making scm-related decisions, companies should not focus on the latest technologies or systems rather they should consider if the resources are available and accessible to them. this recommendation is geared towards the effective implementation of scm. this will help in preventing the wasteful plans, ineffective designs and impractical systems. thus, in making scm plans, it is essential that the requirements for effective implementation are taken into account. this would enable companies applying scm to ensure that all essentials have been accounted for and that decision are based on what resources they have. 9. limitation of the study in order to achieve more specific findings, the researcher opted to integrate some limitations in the research process. in particular, this study only focuses on the scm practices or techniques within the apparel industry. in this research work, the apparel industry mainly refers to only garment manufacturing industry. the benefits of scm as well as the problems involved in its application are also part of the study. in the data-gathering procedure, due to time and budget constraints as well as proximity reasons, the researcher considered it appropriate to concentrate the research using the indian setting. references alamer, a.r.a., salamon, h.b., qureshi, m.i., rasli, a.m. (2015), how do we measure corporate social responsibility of islamic banks through their business processes and oriented outcomes? international journal of economics and financial issues, 5(1s), 190-197. harland, c.m. (1996), supply chain management, purchasing and supply management, logistics, vertical integration, materials management and supply chain dynamics. in: slack, n., editor. blackwell encyclopedic dictionary of operations management. uk: blackwell. meindl, p., chopra, s., kalra, d.v. (2009), supply chain management. 3rd ed. new delhi: india pvt., ltd., dorling kindersley. p1-50. qureshi, m.i., rasli, a.m., jusoh, a., kowang, t.o. (2015), sustainability: a new manufacturing paradigm. journal teknologi, 77(22), 47-53. qureshi, m.i., rasli, a.m., zaman, k. (2014), a new trilogy to understand the relationship among organizational climate, workplace bullying and employee health. arab economic and business journal, 9(2), 133-146. qureshi, m.i., rasli, a.m., zaman, k. (2016), energy crisis, greenhouse gas emissions and sectoral growth reforms: repairing the fabricated mosaic. journal of cleaner production, 112, 3657-3666. seagrave, w., ceo, fasturn. (2002), the apparel world: lagging behind the supply chain curve. fasturn january. p1-6. sanil, h.s., ramakrishnan, s. (2015), communicating the corporate social responsibility on the company website: a study conducted on wrap certified apparel manufacturers in india. international journal of economics and financial issues, 5(1s), 52-56. william, g.z. (2003), business research methods. 7th ed. mason, oh: south western cengage learning, oklahoma state university. p187-491. . international review of management and marketing | vol 6 • issue 4 • 20161094 international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2016, 6(4), 1094-1102. determinates of demand on purchasing insurance policies: case of jordan firas al-rawashdeh* department of risk management and insurance, faculty of management and finance, the university of jordan, jordan. *email: f_rawashdeh@ju.edu.jo abstract this study investigates the determinates of demand on purchasing insurance policies in jordan to provide empirical evident which would assist insurance companies and policymakers by using these findings to design future insurance services and policies that can be geared to promote insurance market development. the study sample consists of 331 individual and 331 institutions. total distributed questionnaires were 662, and total of 552 valid questionnaires were returned and included in the analysis. descriptive statistics and stepwise logistic regression have been used to investigate whether the variables (promotion and advertisements, cost, social safety, comparative advantage, quality and income) are able to explain the demand on insurance policies in jordan. the results show that the variables (promotion and advertisements, social safety, comparative advantage and quality) have a significant effect on the demand of insurance policies while the variables (cost and income) were statistically insignificant and have no effect on the demand. based on the findings it is recommended that the insurance companies should promote their insurance services through advertisement campaigns, and innovate their services in order to compete effectively, gain competitive advantage, and increase the service quality. keywords: insurance companies, demand, cost, quality jel classifications: g220, l840, l150 1. introduction insurance industry plays a significant role in modern economies. the insurance business started a long time ago, approximately in 1840. the industrial revolution and the first auto insurance had risen in 1898 (tunde, 2015). the insurance industry has developed to be one of the most important drivers of economic growth. due to continuous technological advancements and the move towards globalization, the insurance industry became more important and the value proposition and nature of the insurance business have adapted these changes. the increases of uncertainty and complexity in business environments was a cause for insurance to become a key component since it has the ability to cover such risks related to businesses, social groups and individuals. the insurance sector helps societies and the economic growth in many ways as, managing the risk, encouraging loss mitigation, enhancing peace of mind, promoting financial stability, providing all services of social protection, and providing safety and security. furthermore, the insurance is pooling of fortuitous by transfer of such risks to insurer, and it helps to reduce worry and fear in societies (rejda and mcnamara, 2014). the insurance sector is usually affected by many factors. therefore the research work should cover all aspects related to the demand of purchasing insurance policies (al-rawashdeh and smadi, 2012). the insurance industry in jordan is concentrated at one side and fragmented at the other. around 53.6% of total market share of premiums written in 2015 related to the only five companies. the jordanian insurance industry has low penetration rate of 2.13% compared to a global average of 6.23%, despite the rising population, buoyed by the influx of refugees from syria and iraq, as well as mandatory insurance in the motor insurance segment, and potential implementation of a universal coverage system for jordanians under the health insurance umbrella (mit.gov.jo, 2015). the insurance industry in jordan consists of 25 companies that provide insurance services in a mix of prices, specialization, and al-rawashdeh: determinates of demand on purchasing insurance policies: case of jordan international review of management and marketing | vol 6 • issue 4 • 2016 1095 quality. these companies are competing over a small market, the average market share is 3.57% per company, which makes the competition in the market very severe and somehow unclear in direction; also the insurance industry is protected from international competition to a certain extent, for example jordanian properties must be insured with local insurance companies (jordan national competitiveness observatory, jnco.gov.jo.2016). based on above argument this study is aiming to investigate the determinants of demand on the insurance policies in jordan, by studying the different possible factors that might be affecting the demand of insurance by individuals and institutions. in order to achieve the purpose of this study, the following questions will be addressed: • what is the impact of the insurers’ effort in promoting and advertising there services? • what is the impact of cost of the insurance policy on the demand on insurance policies? • what is the impact of social safety on the demand on insurance policies? • what is the impact of comparative advantage of insurers on the demand on insurance policies? • what is the impact of quality of the insurance services on the demand on insurance policies? • what is the impact of insured party’s income on the demand on insurance policies? this study is considered as importance study due to the necessity of understanding the nature of insurance industry in jordan and identifying the main factors that drive the demand on the insurance policies. furthermore, previous studies focused on developed countries; it was rare to find studies that covered a developing country like jordan. the outcome of this study expected to add value to the society and main players in the industry. this study also will pave the way for more study work about this important discipline in developing countries, especially in jordan. therefore it will try to achieve the following objectives: • to examine the impact of the quality of insurance services, cost of insurance policy, social safety, efforts in promoting and advertising, comparative advantage of insurers, and insured party’s income on the demand on insurance policies. • to suggest valuable recommendations for jordanian insurance companies that could help the decision makers in enhancing the development of the industry and services provided. 2. literature review several disciplines dealt with the concept of insurance like law, economics, history, actuarial science, risk theory, and sociology. insurance is the pooling of fortuitous losses by the transfer of such risks to insurers, who agree to compensate insured party for such losses, to provide other pecuniary benefits on their occurrence, or to render services connected with the risk. the aforementioned definition is useful for analyzing the common elements of a true insurance plan. an insurance plan should include the following characteristics, that are: pooling of losses, payment of fortuitous losses, risk transfer and indemnification (rejda and mcnamara, 2014. p. 20). according to us department of labor hand book (2008), insurance is considered as a mean of protection from financial loss. the company which provides insurance is known as an insurer, and a person or an institution who buys insurance is known as an insured or policyholder. the policyholder receives a contract, called the insurance policy, which details the conditions and circumstances under which the policy holder will be financially compensated for any possible losses. the amount of money charged by the insurer to the policy holder for the coverage set forth in the insurance policy is called the premium. according to robins et al. (2000), when the policy holder experiences a loss which is potentially covered by the insurance policy, the insured submits a claim to the insurer for processing by a claims adjuster. insurers generally provide three principal services; risk-pooling and risk-bearing, intermediation, and real financial services relating to insured losses. insurers provide a mechanism for individuals and businesses exposed to insurable risks to engage in reducing risk through risk-pooling. insurers collect premiums from their customers and redistribute most of the funds to those who sustain losses. policyholders receive a discount in the premiums they pay to compensate for the opportunity cost of the funds held by the insurance companies. insurers also provide a variety of real services for policyholders. these services include risk surveys, the design of coverage programs, recommendations regarding deductibles and policy limits, and loss prevention services. since insurance outputs consist primarily of services, many of which are intangible, it is necessary to find suitable proxies for the volume of services provided by insurers (cummins et al., 1999). there are many previous studies tackled specific factors that affect the demand for insurance policies like the quality of insurance services provided, cost of insurance policy incurred by insurer, comparative advantage of insurers, and insured party’s income (irulappan and bincy, 2014; kuldeep et al., 2014; pashaie et al., 2013; poor et al., 2013; curac et al., 2013; vikash, 2012; negi and singh, 2012; selvavinayagam and mathivanan, 2010; lavanya, 2008; keerthi and vijayalakshmi, 2009; dhar and dhar, 2003; arunachalam, 2011). insurance demand theory, which is based on the expected utility paradigm, suggests that the purchase of insurance depends on a number of different factors (showers and shotick, 1994) studied the impact of household characteristics on demand on different types of insurance services (health, life, auto and homeowners insurance) using data from 1723 households from the 1987 consumer expenditure survey. they found that income and number of earners are positively correlated with household’s demand for insurance. however, the marginal effect of the increase of income is greater for single-earner households than for multiearner households. in addition, the marginal increase in insurance expenditure of the increase of income decreases as either family size or age increases. browne and kim (1993) examined the factors that lead to variations in the demand for life insurance in 1987 based on a sample of countries spread throughout the world and find that the dependency ratio, national income, government spending on social security, inflation, and the price of insurance are important factors that affect the demand for life insurance. al-rawashdeh: determinates of demand on purchasing insurance policies: case of jordan international review of management and marketing | vol 6 • issue 4 • 20161096 the dependency ratio, national income, and social insurance are positively correlated with life insurance demand whereas inflation and the price of insurance are negatively related with life insurance demand. outreville (1996) studied the life insurance markets in developing countries, using cross-section data for 48 developing countries in 1986, and found that life insurance is affected by income, the anticipated rate of inflation, life expectancy at birth, the level of financial development, and the presence of a monopolistic market. demand for life insurance is negatively affected by anticipated rate of inflation and presence of a monopolistic market but is positively associated with income, life expectancy at birth, and level of financial development. babbel (1985) studied the price sensitivity of consumer demand for whole life insurance based on whole life insurance sold in the us during the period of 1953-1979 and found that new purchases of whole life insurance are inversely related to changes in a real price index. browne et al. (2000) studied the demand for automobile and general liability insurance consumption across oecd members over the period 1987-1993 and found that income, wealth, the percent of a country’s insurance market controlled by foreign firms, and the form of the country’s legal system are related to demand for both types of insurance. furthermore, outreville (1996) studied the property-liability insurance at the international level. based on cross-section data of 55 developing countries in 1982, he found that the demand for property liability insurance is related to the personal disposable income and to the country’s level of financial development. the income elasticity is greater than one, and the demand for insurance increases significantly as the level of financial development increases. sherden (1984) studied the demand for three major automobile insurance coverages (bodily injury, comprehensive, and collision) based on cross-section data of 39 towns and cities in massachusetts in 1979 and found that the demand for these three coverages is related to the population density and is inelastic in respect to the price and income. 3. research methodology the design of this research was qualitative; based on literature review and a questionnaire used to measure the factors that might affect the demand on the insurance policies. a likert 5-point scale was used to investigate these factors. the questionnaire is structured to measure the six variables; it includes a total of 45 questions designed to evaluate the respondent’s opinions and/or their expectations about these variables. 3.1. hypotheses of the study main hypothesis: h0: there is no impact of insurers’ efforts in promoting and advertising, cost of the insurance policy, quality of the insurance services, cost of the insurance policy, comparative advantage of insurers and insured party’s income on the demand on insurance policies. sub-hypotheses: h01: there is no impact of the insurers’ efforts in promoting and advertising on the demand on insurance policies. h02: there is no impact of cost of the insurance policy on the demand on insurance policies. h03: there is no impact of social safety of the insurance policy on the demand on insurance policies. h04: there is no impact of comparative advantage of insurers on the demand on insurance policies. h05: there is no impact of quality of the insurance services on the demand on insurance policies. h06: there is no impact of insured party’s income on the demand on insurance policies. 3.2. the sample of the study the sample of the study consists of insurers who are the beneficiaries of insurance policies; both individuals and institutions, the sample included 331 individuals and 331 institutions, the total distributed questionnaires were 662, and a total of 552 valid questionnaires were returned and included in the analysis. 3.3. study’s variables 3.3.1. promotion and advertisement the efforts to promote insurance services by insurers through advertisement campaigns would increase the level of awareness to the benefit of purchasing insurance policies by attracting more insurance buyers and enhancing the demand for purchasing insurance policies. this fact has been supported by hakimi and heidari (2015), quchani et al. (2013), taghizade (2011), rostaie (2010). the lack of public knowledge about insurance services is one of the main factors of weak development in national insurance industry, since insurance services depend upon developing people knowledge and awareness (rostami, 2009). therefore insurance advertisement is effective in attracting customers (taghizade, 2011), also robinson (2009) particularly confirmed the effect of tv advertisement effectiveness on insurance customers. while, mavahebi (2009) argued that insurance industry advertisements are not effective nor enough for selling insurance services through the media and harati (2006) also claimed that the advertisement would not be adequate for promoting and encouraging people to buy insurance services. 3.3.2. cost of insurance’s policy for insurers, higher claims will increase the costs for insurers thereby eroding profitability, arunachalam (2011) claimed that there is a mismatch between willingness to pay and perceived high price of insurance products. petkovski and jordan (2014) confirmed that the inflation which means a higher cost has a negative relation to the demand on non-life insurance, also beck and webb (2003) found that the inflation (costs) are the most robust predictors of life insurance consumption, while income is only a weak predictor. babbel (1985) confirmed that there is a negative relation between the price of insurance services and the demand of insurance. raman and gayathri (2004) noted that the companies need to improve its services, and the price is major factor that effect the demand of the companies services. 3.3.3. social safety insurance is a way of managing risks; customers buy insurance policies to transfer the cost of potential loss to the insurance company in exchange for premium. cheng and yu (2015) have noticed that the level of income and social security mainly effected the demand for life insurance and inflation mainly effected al-rawashdeh: determinates of demand on purchasing insurance policies: case of jordan international review of management and marketing | vol 6 • issue 4 • 2016 1097 the demand of non-life insurance demand, and li et al. (2007) confirmed that the purchasing of insurance increase with higher level of social security, ward and zurbruegg (2002) noted of the existence of a positive relation between the social security and demand for insurance, lewis (1989) found an positive relation between social security and demand of insurance. while, browne and kim (1993) noticed that when social security expenditures increased the demand for life insurance decrease, and he confirmed that the negative effect of social security system on life insurance consumption. 3.3.4. comparative advantage competitive advantage is an organization’s ability to perform in one or more ways that competitors will not and cannot match (kotler, 2000) and is realized by the organization’s marketing strategy, the implementation of this strategy and the context in which competition unfolds. the target consumers will be the core and center of the organization’s marketing strategy (epetimehin, 2011). insurance companies should innovate their services in order to compete effectively, meet consumer needs, and adapt changing in regulatory requirements (lavanya, 2008). vikash claimed in his study to the importance of on-line business for the insurance companies, that the on-line self-services are more effected because it will influence customers purchasing decisions which promotes companies competitiveness (vikash, 2012). also keerthi and vijayalakshmi (2009) confirmed that the purchasing of the services decision of the consumer depends upon quality, accessibility, company commutative advantages, and promptness of service. additionally, selvavinayagam and mathivanan (2010) confirmed that competition between insurance companies has changed dramatically, in addition to changing in the expectations of policyholders, therefore the companies should always work on developing new products in order to gain competitive advantage. 3.3.5. quality of services variable poor et al. studied the quality factor in insurance and explained the quality as the ability and validity of insurers in guaranteed of services provided. his study aimed to evaluate the quality of insurance services, and he found that insurance services quality and trust to staff has an impact on willingness of the insured to buy insurance policy (poor et al., 2013). negi and singh studied the factors which influence purchasing of life insurance policy. he measured the consumers’ perception and attitude towards insurance, and he found that after studying the five different factors, the product quality and branch image were significant factors effecting the demand on the purchasing of insurance policy (negi and singh, 2012). pashaie investigated the necessity that the insurer should gear up customer services and quality improvement, and he recommended that the insurance companies should bring innovative solutions to the client (pashaie et al., 2013). kuldeep found that the there is a negative significant of service quality received by customers from the company. so the insurance companies should think strategically to improve its customer services (kuldeep et al., 2014). dhar and dhar (2003) discussed the insurance companies consumers’ expectations about services and they found that these expectations tend to be strongly influenced by their prior experience of outcomes with a particular service provider. irulappan and bincy, in their study confirmed that the consumers have become more critical of the quality of service, and customers are aware of the services provided from the insurance companies which affect the demand of the insurance services (irulappan and bincy, 2014). 3.3.6. income variable buying insurance policies would affect the demand on insurance services, dragos studied the demand on life and non-life insurance and he has confirmed that income and its distribution are important factors of influence for insurance demand (dragos, 2014). beck and webb (2003) also explained that when the level of income get higher the demand for life insurance demand rises. similarly, ward and zurbruegg (2002) discovered a positive relationship between income and expenses for property liability insurance. furthermore feyen et al. (2011) found that individuals with higher education generally have higher incomes and tend to purchase life insurance policies. sharkodie and yousif (2015) treerattanapun (2011), lee et al. (2010), nesterova (2008) confirmed that there is a positive relation between the income and the demand on insurance policies. while, park and lemaire (2011) claimed that the long-term orientation and the demand for life insurance founded a negative relation between the income and the demand of insurance. income has a positive effect on insurance demand. been stock et al. (1988), also outreville (1996) found a positive relationship between property/liability insurance demand and the gross domestic product (gdp) per capita. furthermore, browne et al. (2000) found a positive relationship between income and demand for automobile insurance, while sherden (1984) found that automobile insurance is perceived as necessary to be purchased therefore it is insensitive to income. 4. insurance sector in jordan jordanian’s insurance sector is an important economic sector, the total insurance premium were 2.07% of total country gdp at the end of 2014. jordanian’s insurance sector consists of 25 insurance companies that are licensed to provide insurance services, including one company licensed to practice life insurance business, 9 companies licensed to practice general insurance business and 15 companies licensed to practice both types of insurance (general insurance and life insurance composite companies). additionally, two foreign insurance companies that are not working in jordan (regional company and representative office) are also subject to the supervision of the insurance administrative/ministry of industry and trade and supplies (2015). it is noteworthy in this regard that there are two companies practicing takaful insurance business; one licensed to practice general insurance business and the other licensed to practice both types of insurance together (general insurance and life insurance). the jordanian insurance sector includes branch for a foreign company licensed to practice life insurance business. the insurance sector also includes insurance supporting services providers totaling 931, as at the end of 2014, distributed as follows: 584 insurance agents, 149 insurance brokers, 23 reinsurance brokers, 58 loss adjusters al-rawashdeh: determinates of demand on purchasing insurance policies: case of jordan international review of management and marketing | vol 6 • issue 4 • 20161098 and surveyors, 31 insurance consultants, 19 actuaries, 1 cover holder, 16 companies administrating insurance business, and 11 banks licensed to practice banc assurance, in addition to the approval that has been granted to practice of reinsurance business broker within the kingdom for 39 re-insurance brokers residing outside the country (mit.gov.jo, 2015). 5. results of the study this section overviews and discusses the results of the study which include descriptive statistics like median, mean and standard deviations, in addition to the results of hypothesis testing through stepwise logistic regression. 5.1. descriptive statistics the results of descriptive statistics for the sample under study are shown in table 1. as appears in the table 1, approximately 53.3% of respondents are males, also 61.7% of the respondents hold a bachelor degree. regarding their occupied positions the results revealed that 69.8% are employees, 15% heads of departments and 6% are managers. notably, a higher percentage of respondents from the employee’s level would improve the study results as they are more involved in detailed daily operations than who occupy higher positions. regarding the respondents experiences, most of the respondents are considered highly experienced; 67.2% have approximately 11 years of experience and above and for insurance type, 91.2% of respondents are familiar with that provide none-life insurance services. 5.2. reliability testing cronbach’s alpha test was used to test the stability of the study’s tool. as shown in table 2, it is clear that all of variables’ coefficients are more than 0.8, which suggests that it is a valid tool for achieving the purpose of the study. 5.3. appropriateness of data to test the study’s hypotheses in order to ensure the suitability of the data to be used with regression analysis, it was ascertained that there’s no multicollinearity between independent variables. in table 3 it is noted that the variance inflation factor for each variable does not exceed the value of 10, and that all values for tolerance were >0.05. 5.4. importance of study’s variables a statistical package spss program was deployed and descriptive statistical techniques were used like (mean, standard deviation, and percentages, and the relative importance). likert 5 scale method was used to categorize the results of measuring the variables, based on following formula: t h e l e n g t h o f c a t e g o r y = h i g h e s t r a t e − m i n i m u m rate = (5−1)/3 = 1.33, therefore there should be 3 levels of importance as shown in table 4. from table 5, it is noted that the all study’s variables are important, and they obtained a high level of importance, except the variable “quality” got a medium level with a mean 3.58. also it is noted that the variable “income” got the highest degree with mean 4.09, and the mean of dependent variable. “the demand for insurance policies” is 3.9 which is related to a high level of importance. 5.5. test the hypotheses of the study main hypothesis: h0: there is no impact of promoting and advertising, cost of the insurance policy, social safety of the insurance policy, table 1: description of demographic variables variable n (%) gender male 298 (53.3) female 261 (46.7) age <30 93 (16.6) from 30 to 40 289 (51.7) more than 40 177 (31.7) educational secondary and below 37 (6.6) diploma 117 (20.9) bachelor 345 (61.7) postgraduate 60 (10.7) type of position manager 37 (6.6) head of department 84 (15.0) employee 390 (69.8) others 48 (8.6) experience <5 77 (13.8) from 5 to 10 159 (28.4) from 11 to 15 217 (38.8) more than 15 years 106 (19.0) insurance type none-life 510 (91.2) life 0 (0.0) both of them 49 (8.8) total 559 (100.0) table 2: cronbach’s alpha coefficients variable cronbach’s alpha quality 0.81 cost of policy 0.92 social safety 0.90 comparative advantage 0.96 income 0.88 promotional and advertisement 0.86 the demand for insurance policy with moderator 0.90 table 3: variation and tolerance test results model collinearity statistics tolerance vif quality 0.641 1.56 costs 0.454 2.203 social safety 0.542 1.846 comparative advantages for insurance companies 0.432 2.317 income 0.584 1.713 promotional and advertising campaigns 0.672 1.986 vif: variance inflation factor al-rawashdeh: determinates of demand on purchasing insurance policies: case of jordan international review of management and marketing | vol 6 • issue 4 • 2016 1099 comparative advantage of insurers, quality of the insurance services, insured party’s income, on the demand on insurance policies. sub-hypotheses: h01: there is no impact of the insurers’ efforts in promoting and advertising on the demand on insurance policies. h02: there is no impact of cost of the insurance policy on the demand on insurance policies. h03: there is no impact of social safety of the insurance policy on the demand on insurance policies. h04: there is no impact of comparative advantage of insurers on the demand on insurance policies. h05: there is no impact of quality of the insurance services on the demand on insurance policies. h06: there is no impact of insured party’s income on the demand on insurance policies. to test the main hypothesis and the related sub hypotheses, a stepwise logistic regression was used, through the statistical package for spss, and model summary shown in table 6. after running the analysis, five different models were produced. the most suitable mode of stepwise logistic regression is the highest adjusted r2: 48.8 when it includes the variables (promotional and advertising campaigns, social safety, comparative advantages for insurance companies, quality) are included while the variable cost is excluded, this can be explained through table 7 shown hereunder: from table 7, the stepwise regression confirms that we have some effective variables and other variables did not confirm to have any effect on the demand on the insurance policies in jordan, as follows: the analysis provided an evidence that the promotional and advertising campaigns have an effect on the demand on insurance policies with <5% a significant at 0.000 and high t value 19.302, this result confirms the previous study work like; hakimi and heidari (2015), quchani et al. (2013), taghizade (2011), rostaie (2010), who confirmed that promoting insurance services through advertisement campaigns would increase the level of purchasing insurance policies by attracting more insurance buyers and enhancing the demand for purchasing the policies. based on this we can reject the null sub h01 hypotheses and accept the alternate one. regarding the cost variable; it was insignificant at 0.068 which is more than 0.05, therefore it has no impact on the demand on insurance policies. this result contradicts the previous study work done by; arunachalam (2011), petkovski and jordan (2014), and beck and webb (2003), who claimed that higher cost has an negative relation to the demand on insurance, which proposes to accept the null sub hypothesis h02. regarding the variable social safety, the analysis provided an evidence that this variable has an effect on the demand on insurance policies with <5% a significant at 0.005 with an acceptable level of t value 2.831. this result supports the previous study work of cheng and yu (2015), li et al. (2007), ward and zurbruegg (2002), lewis (1989), who claimed that purchasing of insurance increases with higher level of social security, which suggests to reject the null sub hypothesis h0-3 and accept the alternate one. the result of the variable comparative advantages for insurance companies is significant at 0.025 with t value 2.252, this result is identical to the study work of lavanya (2008). vikash (2012), keerthi and vijayalakshmi (2009), selvavinayagam and mathivanan (2010), who concluded that insurance companies should innovate their services in order to compete effectively and meet consumer needs by deal with changing expectations of policyholders. therefore the companies should always work on developing new products to gain competitive advantage. this suggests to reject the null sub hypothesis h04 and to accept the alternate one. regarding the quality variable is statistically significant at 0.038) with t value 2.079 and has an effect on the demand on the insurance policies, this result goes with the work done by; poor et al. (2013), table 4: statistical criterion for interpreting means of the study variables level category low 1-2.33 medium 2.34-3.66 high more than 3.66 table 5: the statistics descriptive study’s variables variable mean±standard deviation level quality 3.58±0.606 medium costs 3.87±0.622 high social safety 4.06±0.592 high comparative advantages 3.91±0.671 high income 4.09±0.655 high the demand for insurance policies 3.90±0.483 high promotional and advertising campaigns 4.0936±0.57320 high table 6: model summary predictors: (constant), promotional and advertising campaigns, costs, social safety, comparative advantages for insurance companies, quality dependent variable: the demand on the insurance policies model r r2 adjusted r2 standard error of the estimate change statistics durbin–watson r2 change f change df1 df2 significant f change 0.698e 0.488 0.483 0.48309 0.004 4.324 1 553 0.038 1.591 al-rawashdeh: determinates of demand on purchasing insurance policies: case of jordan international review of management and marketing | vol 6 • issue 4 • 20161100 negi and singh (2012), pashaie et al. (2013), who confirmed that the quality of insurance services and the product quality and branch image were significant factors that are effecting the demand on the purchasing of insurance policies. based on this result we reject the sub hypotheses h05 and accept the alternate one. furthermore, other variables did not confirm of any effect on the demand on the insurance policies in jordan as follows: regarding the income variable was also statistically insignificant at 0.085 which is more than 0.05 and t value 0.086 and it shows no impact on the demand on insurance policies. this result contradicts with the findings of dragos (2014), beck and webb (2003), feyen et al. (2011), who confirmed that income and its distribution are important factors of influence for the insurance demand. this proposes to accept the null sub hypothesis h06. based on above analytical results, the main hypotheses is accepted. not all variables are able to interpret the demand on insurance policies in jordan therefore there is no impact of quality of the insurance services, cost of the insurance policy, comparative advantage of insurers, and insured party’s income all together on the demand on insurance policies. 6. conclusion jordanian’s insurance industry is an important economic industry in jordan, studying the determinates of demand on purchasing insurance policies would add value to insurance companies and all other stakeholders to promote insurance market development. insurance companies in jordan should promote insurance services through advertisement campaigns. in addition to that, they should innovate their services in order to compete effectively and meet consumer needs by deal with changing expectations of policyholders. the companies should always work on developing new products to gain competitive advantage and increase the quality of its services. references al-rawashdeh, f.m., smadi, z.m.a. 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(1993), an international analysis of life insurance demand. journal of risk and insurance, 60(4), 676-634. table 7: stepwise regression results model unstandardized coefficients standardized coefficients t significant b standard error beta 1 (constant) 0.718 0.15 4.775 0 promotional and advertising 0.799 0.036 0.681 21.971 0 2 (constant) 0.411 0.174 2.362 0.019 promotional and advertising 0.762 0.038 0.65 20.28 0 costs 0.118 0.035 0.11 3.417 0.001 3 (constant) 0.524 0.182 2.876 0.004 promotional and advertising 0.78 0.038 0.665 20.262 0 costs 0.165 0.041 0.153 3.971 0 social safety −0.090 0.045 −0.079 −2.020 0.044 4 (constant) 0.501 0.182 2.754 0.006 promotional and advertising 0.763 0.039 0.651 19.513 0 costs 0.132 0.044 0.123 3.02 0.003 social safety −0.123 0.047 −0.109 −2.631 0.009 comparative advantages 0.09 0.041 0.09 2.209 0.028 5 (constant) 0.419 0.186 2.256 0.024 promotional and advertising 0.756 0.039 0.645 19.302 0 costs 0.089 0.048 0.082 1.831 0.068 social safety −0.133 0.047 −0.117 −2.831 0.005 comparative advantages 0.092 0.041 0.092 2.252 0.025 quality 0.088 0.042 0.079 2.079 0.038 income 0.091 0.045 0.084 1.76 0.085 adependent variable: the demand on insurance policies al-rawashdeh: determinates of demand on purchasing insurance policies: case of jordan international review of management and marketing | vol 6 • issue 4 • 2016 1101 cheng, y., yu, j. 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(2002), law, politics and life insurance consumption in asia. geneva papers on risk and insurance, 27(3), 395-412. . international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2018, 8(2), 102-108. international review of management and marketing | vol 8 • issue 2 • 2018102 individual factors affecting research misconduct in iranian higher education system heydar choupani1, sayyed ali siadat2*, saeid rajaeepour3 1department of educational sciences, faculty of educational and psychology sciences, university of isfahan, isfahan, iran, 2department of educational sciences, faculty of educational and psychology sciences, university of isfahan, isfahan, iran, 3department of educational sciences, faculty of educational and psychology sciences, university of isfahan, isfahan, iran. *email: s.a.siadat@edu.ui.ac.ir abstract research misconduct is one of the problems that today’s academic community is involved in and must recognize its causes and roots in order to provide solutions. in this study, we examine the individual factors affecting the research misconduct. the research method is objective, applied and in terms of collecting data, is descriptive-causal. the statistical population of the study consisted of all faculty members, senior students and ph.d. students of isfahan university of isfahan (isfahan university, isfahan university of technology, art university and the university of medical sciences) were 20487 that 377 person were selected as the statistical sample using stratified sampling and through the cochran sampling formula. to collect data, a questionnaire extracted from the interview is used. to analyze the data, structural equation modeling was used. the software used is smart pls2. the results of structural equation model showed that negative attitudes, inability to creativity, personality traits, lack of motivation, religious beliefs and individual disqualification have a positive and significant effect on research misconduct. according to the findings of this study, individual injury to n research misconduct (negative attitude, inability to creativity, personality traits, lack of motivation, religious beliefs, and individual disqualification), can be identified by identifying these factors. it provides solutions to reduce these injuries. keywords: research, research misbehavior, ethics in research jel classification: i23 1. introduction research is a step any researcher takes to clarify an ambiguous issue to find an exact and logical response to solve it. ethical issues exist in all types of researches and it is inevitable to face them. sometimes, the researcher can control the ethical challenges but sometimes, it is not controlled due to the lack of prediction of such issues. indeed, the research process creates tension among the researchers to achieve the research purpose on one hand and keeps the rights of participants on the other hand. ethic refers to the true performance and avoidance of damage. damage can be avoided or reduced by applying suitable ethical issues (zadeh et al., 2015). in each society, its growth depends upon research and there is a direct relationship between scientific growth in each society and research in it. the comparative studies in research shows that the countries developing their fundamental, applied and development researches can prosper their society. one of the main functions of duties of universities is dedicated to research because if we accept that research in a country is based on three principles of research management, researcher and research tools, the universities in the position of the centers with three principles can use some activities including the determination of the required research issues of society, determination of research priorities, acceptance of required researches of other organizations, education of students with research skills in the labor market, organizing, supervision of research activities can manage knowledge and information in society (ishaqi and mohammadi, 2015). in an international society, research is an inseparable part of the life of people and this thought that each problem in society has an optimal solution is possible only via scientific research and this emphasizes on the significance of research and researcher more. the education of researcher labor mastering all research skills needs considerable materialistic and choupani, et al.: individual factors affecting research misconduct in iranian higher education system international review of management and marketing | vol 8 • issue 2 • 2018 103 spiritual investment. if the researchers and students are equipped with these skills in the universities, there is great saving from economic aspects (zamani and tabatabai, 2010). indeed, research is one of the necessities of development and it is the most important competitive advantage and survival condition in the current intense world. the global experience shows that there is a direct relationship between the economic, social and cultural development indices with the intellectual capital and knowledge capacity of the countries. indeed, the main key word of the era of knowledge is the research and production capability. knowledge can be produced, we can convert the produced knowledge and use it. the most important knowledge activity in the present world is production of new knowledge via research and innovation. thus, one of the most important policies of developed and developing countries is investment on the research infrastructures in which the researchers can produce knowledge well with the maximum efficiency and meet the knowledge demands of society. on one hand, the development of research capacity and knowledge production on one hand requires the education of the motivated researchers, workshop and laboratory advance equipment and also financial resources to pay the research costs and also on the other hand, it requires the observation of the principles and values that are much important than human and physical resources to promote the research. today, one of the most important issues in science production processes is observing the scientific norms as some of the theorists believe that without observing scientific norms, scientific communities are not formed and the science production process is also disturbed. great studies have been conducted regarding the scientific norms from different angles with different titles in the scientific references. for example, searching reality is one of the most important scientific norms. if we believe that the philosophy of research is production of new knowledge and innovation, we cannot translate or rewrite the work of others with the research title or we cannot publish the results of the work of others for ourselves. indeed, the researcher is committed to detect reality and publish the results honestly by relying on his own capability, strength, motivation and research morale and some of the systematic planning can be also used (dariani, 2009. p. 3). in a research, it is shown that about 40% of students have fabricated the data in writing the thesis. these theses with fabricated data can be used as a basis later due to the lack of information of researchers. thus, not considering this fact can impose unavoidable damage on the academic community. the findings achieved based on the manipulated data are a great threat to the scientific dignity and academic perfection. thus, to protect the scientific dignity and jobs in higher education system of iran, the universities should consider some rules to avoid fabrication and manipulation of scientific data and find a solution to internalize the ethical and professional values (amiri et al., 2009). although plagiarism and research misconducts are not dedicated to iran in scientific production, based on the evidences and the stress of promotion, insistence and obligation of authorities to publish papers as one of the indices of the evaluation of the performance of faculty members and management of universities, the lack of efficient and effective supervisory systems, easy access to most of the resources via internet acting as a cutting edge, it is expected that in case of not using preventive actions, the research misconducts trend is increased in future. to do this, we should identify the factors increasing research misconducts to present some solutions to prevent it. 2. literature review one of the important challenges in publishing the papers affecting the authenticity of the papers is research misconduct phenomenon or scientific misconduct (george, 2016; gross, 2015). indeed, scientific misconduct is not observing the scientific rules and it is defined as forgery and disturbance in education and science trend including fabrication, plagiarism and other non-ethical behaviors in research field (anderson and steneck, 2011). there are some phenomena disturbing the research and science trend in the society and they are considered as misconduct and can reduce motivation of research among the elites of society. misconduct in researches is not a new issue and it has not a long history in accordance to the researchers. some of the researchers consider its history as the history of science. misconduct has many different degrees and it is starting from its simple form such as observation, false analysis and interpretation and it leads gradually to plagiarism and forgery finally. indeed, scientific misconduct is defined as forgery and disturbance in education and science process and it includes fabrication, forgery and plagiarism and other non-ethical behaviors in scientific-professional researches (samadi et al., 2013). research misconduct is the opposite of the definition of research ethics but the general health institute of us has presented another definition: forgery, falsification, plagiarism in the patent of others or false report of the tests, the effect of giving subjective assumptions in conclusion, false report of the results and charts and emphasizing on some special items and generally, the lack of honesty, illogical influence in the order of the name of writers, etc. (sponholz, 2000). scientific misconducts are full definition of all violations occurred in research field and sometimes, some terms including academic falsification, scientific dishonesty and academic dishonesty are used for these violations. in different resources, these violations are divided into different types. the study of different researches shows that these three main types are scientific and research misconduct, plagiarism, fabrication and falsification (enjoo, 2011). indeed, the ethnicity of each paper is its main aspect (mohan et al., 2015). honesty is the main aspect of publication ethics. it is expected that the researchers observe ethical codes “good scientific practice” (masic, 2012). in other words, a good paper should be free from any non-ethics including the violation of copyright, bias in presenting the results, not expressing the conflict of benefits, fabrication, falsification, etc. (al lamki, 2013). boquiren et al. (2006) the editor in chief of psychosomatic researches likens the paper to a child, in which the authors of paper are the parents of that child to make the best for the correct education of the child and they should verify the ethnicity of all components of the paper. misconduct has different degrees and it starts from it’s the simplest form such as false observation, analysis and false interpretation choupani, et al.: individual factors affecting research misconduct in iranian higher education system international review of management and marketing | vol 8 • issue 2 • 2018104 and gradually, it leads to plagiarism and finally forgery. indeed, scientific misconduct is defined as forgery and disturbance in educational and scientific process and it includes fabrication, forgery, plagiarism and other non-ethical behaviors in scientific and professional researches (petrovecki and scheetz, 2001). 3. research accomplished 1. motallebifard et al. (2013) in a research (research ethics in higher education: individual features and professional responsibilities of researchers” among 37 lecturers and students of post-graduate students of state universities of tehran, found that improving the research ethics among the scientific community requires considering the required infrastructures and quality of research. in their study, they found that ethical responsibilities of researchers can be divided into two types: (1) individual features (e.g., commitment, honesty, motivation, strength and patience, collaboration morale and team work in the research), (2) professional responsibilities of researchers (e.g., responsibility to society, sponsors, co-workers, subjects, subject of research, other researchers, collection and analysis of data and publication of findings. 2. zamani et al. (2012) in a study “identification and prioritization of the effective factors on plagiarism of the students of isfahan university” found that degree orientation and considering the score is the first and the most important effective factor on plagiarism of students. other effective factors include the lack of self-efficacy among the students during the research and writing the scientific reports, the lack of suitable mechanisms to detect and punish the plagiarism agents, socio-cultural factors, inadequate previous teaching about the references and identification of different types of plagiarisms in high school or informal education, the lack of detection of plagiarism of students by the professors and not reacting to it, pressure factors, inadequate education in university to identify and prevention of plagiarism, the lack of fear of punishment and blame and the existence of cyber space. 3. nasab et al. (2016) in a research “evaluation of the barriers to research from the view of nurses and midwiferies working in educational hospitals of shiraz in 2009” showed that individual barriers (lack of time and lots of work, family responsibilities, lack of adequate advantage, not mastering english language, being far from the academic centers, social responsibilities, inadequate knowledge in research, unfamiliarity with statistical principles, inadequate motivation, inability in using computer, being useless for the patient, indifference to the research issue) can affect research process. 4. mark et al. (2007) in a study evaluated the effective factors on research misconducts and found that some factors including personal and professional stresses, organizational climate, job insecurity, personal limitations and personal attributes were effective on research misconduct of the researchers. 5. mitchell and carroll (2008) in a study “research misconduct in specified ph.d.: some issues for students and supervisors” found that the lack of knowledge and perception of transfer and special cultural issues are the factors affecting research misconduct. 6. dawson and overfeild (2006) considered the most important reason of plagiarism as inadequate information about the concept of plagiarism and the lack of ability in writing papers and researches. 7. taylor et al. (2009) in a research showed that financial problems and benefit attitudes were the main factor of copy right. 8. lawrence (2011) in a study “evaluation of the report of ethical principles and conscious satisfaction in the published papers” found that of 50 papers with human subjects in cairopectic as published in 2008, there was the ethical committee in 44 papers and in 28 papers, conscious satisfaction was observed. 9. chakraborti et al. (2012) in a study “identification of the barriers to do research from the view of medicine students” as conducted as temporary among 422 students, showed that individual, materialistic factors, the lack of supervision and a coordinating institute were considered as the barriers from the students. 10. guraya et al. (2014) in a research “ethics in medical researches” found that ethical committees in research should observe ethical issues in presentation, evaluation, results, application of findings, observations of patient, information of patient, conscious satisfaction form in order that the researchers can observe ethical issues in their research. 4. research hypothesis 1. lack of individual qualification have affect on research misconduct. 2. negative attitudes have affect on research misconduct. 3. inability to creativity have affect on research misconduct. 4. religious beliefs have affect on research misconduct. 5. personality traits have affect on research misconduct. 6. lack of motivation have affect on research misconduct. 5. method this research is applied in terms of purpose and descriptive and causal in terms of data collection. the statistical population includes all faculty members and phd and ma students of universities of isfahan (medical science university of isfahan, industrial university of isfahan, art university, isfahan university) and based on the latest statistics, it is 20487. of the mentioned statistical population, a sample of 377 is selected by using cochran’s formula and random sampling method. the applied measure of study is the questionnaire of individual factors effective on research misconduct including 25 close questions and it is evaluated based on a five-item likert scale (very low=1, low=2, average=3, much=4, very much=5). these factors include low scientific qualification, negative attitude, inability to creativity, religious beliefs, personality traits, lack of motivation. for the validity of questionnaire, the experts of management are used. to evaluate the reliability of questionnaire, cronbach’s alpha is used as 0.75, 0.83, 0.86, 0.91, 0.79 and 0.74. to analyze the data, descriptive statistics and inferential statistics such as structural equations modeling are applied. the applied software in this study is smart pls2. choupani, et al.: individual factors affecting research misconduct in iranian higher education system international review of management and marketing | vol 8 • issue 2 • 2018 105 6. results in responding the study hypotheses, the structural equations modeling is applied and the results are shown in table 1. as shown in the above table 1 and chart 1, study hypotheses regarding the effect of each of factors (low scientific qualification, negative attitude, inability to creativity, religious beliefs, personality traits, lack of motivation) on the research misconduct are significant with the probability 0.99. thus, h0 is rejected and h1 is supported. the highest effect is dedicated to personality traits and the lowest value of the effect is dedicated to inability to creativity. r2 test indicates us how much the independent variables predict the behavior of dependent variable. if the number of independent variables is higher than 5, this value is as follows: this value is 0.25 weak, 0.50 average and 0.75 strong. as the achieved r2 is 0.462, it is at average level. f2 test evaluates the effect size of each of variables alone. the standard of this value is as follows: this value is 0.02 weak, 0.15 average and 0.35 strong. based on the results of this study, the effect size of each of variables is weak. q2 test states whether the quality of prediction is high to support or reject the hypotheses or not. the standard of this value is as follows: this value is 0.2 weak, 0.15 average and 0.35 strong. based on the results of study, the prediction quality of study variables affecting the research misconduct is average. also, the prediction quality of study variables affecting the weak supervision is above average. to verify the quality of model, we go to geo test. the standard of this value is as follows: this value is 0.1 weak, 0.15 average and 0.35 strong. based on the results of study, the general quality of model is strong. 7. discussion the results showed that lack of scientific qualification had significant impact on research misconduct. the results of study were consistent with the previous results. here, the results of study are consistent with the findings of love and simmons (1998) and they showed that qualification in doing the scientific works was having the positive impact on plagiarism among the ma students. the results of study are also consistent with the findings of dawson and overfeild (2006) and in their study considered the most important reason of plagiarism as the lack of adequate information about the concept of plagiarism and the lack of required ability in writing the papers and research. the results of study are consistent with the findings of nasab et al. (2016) and they showed that individual barriers (lack of mastering english, inadequate knowledge in research, unfamiliarity with statistical principles) can affect the research process. the results showed that negative attitude had a significant impact on research misconduct. in other words, we can say the higher the negative attitude of the researchers, the higher their research misconduct. the results of study are consistent with the findings of love and simmons (1998) and they showed that personal attitudes (positive or negative attitude to plagiarism) were the factors having positive impact among ma students. the results were consistent with the findings of taylor et al. (2009) and they showed that benefit attitudes of people were the main factor of violation of copy right. the results are consistent with the findings of abbaszadeh et al. (2016) and in a study, it was shown that individual factors (happiness, instrumental attitude to research and religiosity of the researchers” were the enticement of not following the ethical criteria of research and normalization of scientific abnormalities was the main issue. we can say, when the researchers have negative attitude to the research, plagiarism and lack of ethics in research are common and negative attitude can cause that the researchers don’t take the research work as serious and they don’t many any efforts to improve their research. the results showed that inability to creativity had a significant impact on research misconduct. in other words, we can say table 2: the results of path coefficient and significance and quality of effect model and study variables on each other construct effect direct effect path coefficient t value significance level r2 f2 q2 geo negative attitude research misconduct 0.19 3.482 0.01 0.462 0.04 0.19 0.55 religious beliefs 0.132 2.193 0.05 0.02 lack of motivation 0.174 3.28 0.05 0.03 lack of scientific qualification 0.131 2.713 0.01 0.02 inability to creativity 0.116 2.453 0.05 0.01 personality traits 0.213 4.265 0.01 0.05 table 1: the validity and reliability of study variables construct ave cr cronbach’s alpha negative attitude 0.73 0.89 0.82 religious beliefs 0.72 0.89 0.81 lack of motivation 0.61 0.86 0.88 lack of scientific qualification 0.59 0.88 0.83 inability to creativity 0.65 0.85 0.73 personality traits 0.73 0.84 0.73 research misconduct 0.051 0.9 0.88 ave: average variance extracted, cr: composite reliability choupani, et al.: individual factors affecting research misconduct in iranian higher education system international review of management and marketing | vol 8 • issue 2 • 2018106 the higher the inability to creativity, the higher their research misconduct. the results are consistent with the finding of khosrowan et al. (2015) and in a research they showed that in the stage of selection of research subject, some factors such as the selection of repetitive subject, lack of consistency of research topic with the current policies, not mentioning the inconsistent information with the opinion of students are the factors affecting the ethics in the research. we can say, not taking the risk of doing new subjects, lack of curiosity, searching, hard working in research can lead to repetitious works and writing poor papers and this can avoid presenting creative items. indeed, one of the challenges of postgraduate students is the selection of research subject to write thesis. this selection is an important decision as the success of the students of this level depends upon this selection considerably. normally, they search new and authentic issues in their research and they are concerned about the repetitious nature of their study subject. this concern is increased when they encountered tens or hundreds of published papers about any searching subject. it seems that they have conducted researches about everything already and there is no new subject anymore. the supervisors are not intended to guide repetitious subjects and they are encouraged to propose new and authentic subjects. if a new issue comes to their mind, they are concerned about its method and the lack of existence of review of literature. this leads to weeks and months of wondering to select the subject as the student is involved in a wide spectrum of subjects in which repetitious issues with research background can be seen but new subjects are encountered with unpredicted difficulties. the results showed that religious beliefs had no significant impact on research misconduct. the results of study are not consistent with the results of previous study. the results are not consistent with the findings of froughi et al. (2016) and in a study, they showed that effective beliefs on nursing professional ethics were formed and it was based on the combination of two minor theme. the minor theme divided the general values based on five primary themes (belief in the inherent dignity of the patient, the love toward people, attitude and behavior with the patient as the family members, effective spiritual ethical beliefs on care, contentious and commitment of nurse) and minor theme divided the special values into three primary theme (recognition of supporting the rights of patient, the existing ethical challenges of the profession, avoiding the non-professional relations and misuse of the patient). abbaszadeh et al. (2016) in a research not consistent with the findings of this study showed that that individual factors (happiness, instrumental attitude to research and religiosity of the researchers” were the enticement of not following the ethical criteria of research and normalization of scientific abnormalities was the main issue. values are created inside a person as a value system and they can be the basis of judgment and decision making in different affairs. by creating attitude, values can lead to behavioral bias. on one hand, religious belief can affect the scientific belief. the scientific evidences that are produced are with the thought values of scientists and owners of knowledge. in our islamic community, there are basic assumptions as our belief and they form our values and now the values can determine the direction of our move and they form our behavioral models to avoid being out of the circle of values and ethics. the results showed that personality traits had significant impact on research misconduct. in other words, if the negative personality trait of a researcher, the higher his research misconduct. the results are consistent with the findings of mark et al. (2007) and in a research they showed that some factors as personal and professional stresses, organizational climate, job insecurity, and personal limitation and personality traits were effective on research misconduct of the researcher. we can say the results are consistent with the findings of motallebifard et al. (2013). in a research, they found that ethical responsibilities of researchers are divided into individual traits (e.g., commitment, honesty, motivation, strength and patience, collaboration and team work in research), 2) professional responsibilities of researchers (responsibility to society, sponsors, co-workers, subjects, research subject, other researchers, collection and analysis of data and publication of findings) and if there are not such responsibilities, people are intended to research misconducts. we can say that the people with psychopathic personality trait have much experience in some emotions as anxiety, anger or chart 1: the structural equations modeling at estimation of path coefficients choupani, et al.: individual factors affecting research misconduct in iranian higher education system international review of management and marketing | vol 8 • issue 2 • 2018 107 depression. these people have low emotional stability, they are worried, nervous, depressed, stressful, shy and hasty. they have negative attitude to work and research. indeed, they do plagiarism more. the researchers with extroversion, agreeableness and flexibility are those who believe in their success in future and they are interested in the development of their activity and work. they empathy with others, they love others and help them. all these factors cause that a person shows low research misconducts. the results showed that lack of motivation had significant impact on research misconduct. the results are consistent with the findings of nasab et al. (2016) and in a study, it was shown that the individual barriers (lack of adequate motivation) and organizational barriers (lack of motivation by authorities) were effective on performing research. those with inadequate motivation to perform research, don’t work with other researchers, they don’t consider the findings of thesis and research as applied and they feel that they waste their time in university. these factors can lead to the lack of adequate creativity and they search for repetitious issues for the subject of their papers. 8. conclusion based on the results of this study, all individual factors (low scientific qualification, negative attitude, inability to creativity, religious beliefs, personality traits, lack of motivation) have positive and significant impact on research misconduct and the highest effect is dedicated to personality traits and the lowest impact is dedicated to inability to creativity. we can say, the researchers without the required efforts in their research works, avoid the authentic research works and don’t accept the responsibility of their research works and they do research misconducts as these people are less responsive and don’t accept the decision of their decisions, they are not sensitive and ethic-based, honesty is not important form them, they don’t work hardly to do all their tasks and they are not good at their responsibilities. it is proposed that: • educational workshops are held for post-graduate students to be familiar with the different types of plagiarism. the papers should be accepted in scientific and research journals based on the correct report of all stages of research and observation of ethical issues in research. • legal ratification for the post-graduate students in which the students can attain the conscious consent from the participants and present a detailed explanation of this achievement in their study. • as ethical commitment is taken after the end of report for the thesis from the students, it is required to observe this issue before the final verification of the research proposal. • regarding all students, an ethical review of research ethics can be presented during the work. • the research centers and universities can improve the knowledge and skill of the researchers and sponsor organizations and consider the ethics in their research and improve the members of ethics committee and consider the required solutions regarding the implementation of relevant educational programs. holding educational workshops of ethics in research and planning to teach ethics electronically and this can be a good method to observe ethical issues in all behavioral sciences researches. 9. acknowledgment my gratitude goes to the managers and authorities of medical science universities of isfahan, isfahan university, art university and industrial university of isfahan who helped us in doing this research. references abbaszadeh, m., banifatemeh, h., alizadeh-aghdam, m.b., boudaghi a. 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(2012), comparison of factors affecting academic theft based on gender and field of study from students’ point of view. journal of ethics in science and technology, 7(3), 1-13. . international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2017, 7(4), 6-16. international review of management and marketing | vol 7 • issue 4 • 20176 perceptions of managers’ appraisal process and their relation to employees performance in a non-western culture: evidence from jordan mohammad qwaider alamro1, mohammed yasin ghadi2*, aymn sulieman al-qatawenh3, ayesha farooq4 1faculty of management studies and research, aligarh muslim university, india, 2faculty of business administration, mu’tah university, jordan, 3faculty of business administration, mu’tah university, jordan, 4faculty of management studies and research, aligarh muslim university, india. *email: mohammadghadi@mutah.edu.jo abstract the aim of this study was to test a hypothesized model to examine the impact of factors surrounding performance appraisal (rater characteristics, halo, personal bias, leniency and compassion and overstatement) on dimensions of subordinates’ performance (i.e., amount of work, discipline, completion of tasks and quality of work) within the water authority corporation in jordan. the population of the study consisted of employees working in full time in the staff selection commission. to recruit the sample a developed questionnaire was distributed randomly to 300 potential employees working in water authority. after careful examination, 270 responses were valid for data analysis, resulting in an overall response rate of 90%. an empirical research method was performed to extract relevant points. application of stepwise regression analysis and correlational tests lends support to the hypotheses of the study. the results showed that the perceptions of staff in the water authority of the factors surrounding the process of performance evaluation were high. also, the results revealed that perceptions of the staff at the water authority to the level of job performance were highly. the reported findings provide valuable insights to managers by corroborating and extending prior empirical findings in jordan. furthermore, the staff awareness of the effectiveness of the applied performance evaluation system in the water authority indicates that the presidents understand the staff problems. so they like to improve the daily relationship with the president. it also leads to enhance satisfaction with their relationship with their colleagues at work, their salaries and their relationship with the managers. so the availability of these dimensions will have a positive impact in improving the staff performance. further implications, potential limitations and recommendations for future research are discussed. keywords: performance appraisal, job performance, water authority, jordan jel classification: l25 introduction performance appraisal (pa) is a systematic approach, typically performed by a supervisor for a subordinate, of identifying, observing, measuring, and recording the strengths and weaknesses of subordinates (swanepoel et al., 2000). pa forms the core of performance management systems as it considered one of the main strategic approaches that integrate organizational policies and human resource activities (fletcher, 2001; bernardin et al., 1998). the importance of pa comes from its role in helping subordinates to understand their duties, expectations and performance success. results from pas can be used in human resource roles like promotions, transfers, reward management and termination of employees. the process of employee pa might also be affected by some factors such as rater characteristics, halo, leniency, personal bias and overstatement in the appraisal. it has been also noted that reactions and conflicts from the employee side are often inevitable in any pa system. dissatisfaction and feeling of unfairness in the process and inequality in appraisals can shadow the benefits therein (taylor et al., 1995). the performance is a regular work or an effort that is expected from an employee or a set of employees within a set time-frame. alamro, et al.: perceptions of managers’ appraisal process and their relation to employees performance in a non-western culture: evidence from jordan international review of management and marketing | vol 7 • issue 4 • 2017 7 the exertion expected from an employee is seen in terms of results, efforts, tasks and qualities. the measurement of performance and outlining the activities which are expected to be undertaken in a specified period is very crucial since it helps to fix accountability (rao and rao, 2004). the employees’ performance can be appraised daily, weekly, monthly, quarterly or annually depending on the nature of work. employee pas experience some shortfalls in the process which can result to the exercise adding little or no value to human resource management (hrm) activities. the purpose of employee pa has been misunderstood by some workers, everyone yearns to be rated as an excellent performer. it is misunderstood that being rated poor can point out to training needs in the area of challenge or better still lead to placement to rightful roles. additionally the appraisals have even been used as punitive measures by colleague workers (mondy and noel, 2005). for example if the relationship between the appraisee and the appraiser is sour, the pa will not be objective but rather subjective. on the other hand if the relationship of the appraiser and the appraisee is cordial the appraiser will seek to please the appraisee and even go to an extent of revealing the details. the purpose of this study was to expound the factors affecting the implementation of employee pas including lack of training in appraisals, unfair bias practices during appraisals, existing employee relationships and lack of monitoring of the appraisal exercise. employees are naturally concerned with the fairness of the process by which the pas are conducted (erdogan, 2002). people will value justice regardless of whether the results of the pa are appealing or not. the organizational set up and employee relationships can also affect the process of the appraisals if care is not taken (cawley, 1998). employee pas should be carried out accurately because they serve as resourceful records that can be used to support hrm decisions concerning employees. globally, conducting employee pas has been very challenging for both the managers and employees (brewster and suutari, 2005). for instance, looking at the difference between chinese and western employee pas, shen found out that the chinese appraisals are less transparent than the western appraisals. the chinese companies also do not provide training in order to improve appraisal skills and the appraisals are usually limited in feedback and communication (shen, 2004). such impediments can complicate the process making it difficult to obtain true and fair feedback of the employee’s performance. moreover many challenges for hrm, focus upon employee pas (steven et al., 2011). since employees need to have their work accurately reviewed so that they may be acknowledged and rewarded where appropriate (francis and brain, 1994). for the process to be effective, training and adequate preparation for both the appraisers and appraise is necessary. supervisors should also be prepared with skills on control, coaching, counseling, conflict resolution, setting performance standards, linking the system to pay and providing employee feedback (appelbaum, 2011). the importance of this study lies in the vitalrole that is played by an employee in the water authority, where the efficient performance of staff is necessary. the authority is the main criterion for the efficiency of its work. and this can be achieved through the proper use of scientific method in which they are applied proper standards for evaluating the performance of staff commensurate with the rapid developments faced by the authority. unexpectedly, no research, to authors’ knowledge, has focused on the relationship between both constructs in a collectivist cultural. this study tries to subject the factors and their application in the appraisal process gives a clear importance in the acquisition of knowledge and modern methods. therefore, the current study aims to contribute by addressing the following questions: • if there is an influence, what would be the type, direction and strength of influence of perceptions of manager pa dimensions on employees’ job performance perceptions among individuals within the water authority corporation? • what dimensions do contribute to the variation pa with employee performance among individuals within the water authority corporation? this study consists of five sections. section one presents an introduction about the study and its variables. section two develops the hypothesized model by reviewing the relevant literature. the methods and procedures of data collection are presented in the section three. section four deals with analyzing the data and testing the hypotheses of the study. finally some implications and recommendations for future research are presented in the discussion section. 2. variables of the study and proposed model the section reviews the variables of interest and its dimensions, proposed hypotheses and hypothesized model. 2.1. the independent variable (perceptions of managers’ appraisal process) 1. rater characteristics: means the characteristicsof the individual acting appraisal directly or indirectly, as the manager’s newborn experience in administrative work may be inclined to cruelty and rigor, unlike administrative experienced managers and higher cognition. this preferred when choosing from the appraisal process that is characterized by the experience and perception and emotional stability and self-efficacy and the ability to social interaction (hiti, 2005). 2. halo: it means that the effects of one side of the aspects of the employee’s performance on other aspects, if the employee’s performance is excellent in one side he will be evaluated by being an excellent employee as a standard for all aspects, and vice versa if one side of the employee’s performance is unsatisfactory he will be evaluated incorrectly and so on (hassouna, 2008). 3. personal bias: means the tendency of some raters to gravitate towards certain personal qualities, or may have unwillingly to groups of people who have certain qualities, such as similarities in color, creed or gender, and these biases affect their assessment of the performance of their staff (sabbagh and durra, 2003). alamro, et al.: perceptions of managers’ appraisal process and their relation to employees performance in a non-western culture: evidence from jordan international review of management and marketing | vol 7 • issue 4 • 20178 4. leniency and compassion: means the tendency of some raters to give all workers the high estimates, despite the fact that some of them have poor performance and medium estimates, and gives the rest of the staff high appraisal (durra, 2003). 5. overstatement: means the tendency of some raters to the trend towards exaggeration in the appraisal process, it comes assessment of some presidents of all individuals high while comes from others is low, and this is due to the impression of presidents to employees under their supervision extremist view both high estimates or low estimates (mustafa, 2008). 2.2. the dependent variable (job performance) the concept of performance relates to all of the behavior of the individual and the organization and occupies a special place within the organization as a final product of the proceeds of all activities, and on the level of the individual and the organization. it also refers to the outcomes of human behavior in the light of the procedures and techniques that directs towards achieving the desired objectives. they appear through the following headings (figure 1). 1. the amount of work: this refers to the keenness of employees to perform their duties and responsibilities without difficulty and accept any additional responsibilities on the required work of them, considering that it should fit with their performance. 2. discipline: it means the desired functional behaviors of employees and their commitment to the rules and policies, regulations and procedures of the organization in which they work. 3. accomplishing tasks: the tasks must be accomplished within time bounds and they must be clear, specific, and measurable. 4. quality of work: achieving the goals of individuals and the goals of the organization by exploiting opportunities that require proactive and focus on the main objectives and efforts are not distracting. based on the discussion above the hypotheses are formulated as follows. 2.3. main hypothesis there is no statistically significant effect at the level of significance (α ≤ 0.05) for the factors of pa process (rater characteristics, halo, personal bias, leniency and compassion, overstatement) on job performance among employees in water authority. based on the above discussion, we contribute to existing literature by drawing the following sub-hypotheses. 2.3.1. first sub-hypotheses there is no statistically significant effect for the factors surrounding the pa process (rater characteristics, halo, personal bias, leniency and compassion, overstatement) on the amount of work among employees in the water authority. 2.3.2. second sub-hypotheses there is no statistically significant effect for the factors surrounding the pa process (rater characteristics, halo, personal bias, leniency and compassion, overstatement) on discipline among employees in the water authority. 2.3.3. third sub-hypotheses there is no statistically significant effect for the factors surrounding the pa process (rater characteristics, halo, personal bias, leniency and compassion, overstatement) on completing tasks among employees in the water authority. 2.3.4. fourth sub-hypotheses there is no statistically significant effect of the factors surrounding the pa process (rater characteristics, halo, personal bias, leniency and compassion, overstatement) on quality of work among employees in the water authority. 3. methods 3.1. sample and procedures of data collection the study population is all the staff in the water authority in karak governorate; where there are (600) male and female employees. (300) employees were chosen from karak governorate for the completion of this study which consists of three directorates, adding to them the employees who work in the center office (table 1). we used the following equation 2 n n = 1 + ne to extract the number of employees in this study. an adequate number of employees in the water authority of jordan were taken in this study, (290) copies of questionnaire were distributed to them with 270 questionnaires which were done completely that means 93% of the study sample while 7 questionnaires were invalid because they are not appropriate for the investigation and studying. 263 questionaire are valid forming 87% of the study sample, and this is a sufficient percentage for figure 1: hypothesized model proposing the direct relationships between dimensions of pa process and dimensions of job performance table 1: the distribution of the population and sample of the study (frequencies) work place number of employees number of distributed questionnaire completely done valid for analysis center office 300 145 135 130 al-qaser directorate 80 75 70 69 al-mazar directorate 120 70 65 64 as-safi directorate 100 0 0 0 total 600 290 270 263 alamro, et al.: perceptions of managers’ appraisal process and their relation to employees performance in a non-western culture: evidence from jordan international review of management and marketing | vol 7 • issue 4 • 2017 9 scientific study. the following table 2 shows the characteristics of this sample. 3.2. measures the study questionnaire was developed based on the theoretical framework of previous studies on the subject; the questionnaire consisted of three parts: part i: includes the expressive information of the study sample characteristics, according to demographic variables (educational qualification, age, job experience, and gender). part ii: this part includes parts which are covering the independent study variable (factors that are surrounding the process of performance) the estimation has been used in the construction of the questionnaire through the study of abu and ahmad, 2005; al-hawamdeh, 2004; al-karasneh, 2003 and conducted by the necessary adjustments in order to fit the objectives of the study, and these dimensions are: rater characteristics and are represented by the questions (1-6), the halo which is signified by the questions (7-11), the personal bias is indicated by the questions (12-17), facilitation and humanity are pointed out by the questions (18-23), exaggerating the appraisal is signified by the questions (24-28). part iii: this part contains the points of the study that covers the variable (job performance) which was guided in the construction of the items of this variable by studying both: pearce and porter, 1986; zammuto, 1982; yassin 2010; al-mutairi 2011 and these dimensions are: the amount of work and the questions formed by (29-33), discipline and posed questions (34-38), the completion of tasks and questions posed by (39-42), quality of work and posed questions (43-47). i have been using the five-likert scale to measure the answers of respondents, which calculated the items weights as follows: strongly agree 5 points, agree 4 points, partially agree 3 points, disagree 2 points, strongly disagree. the stability of study tool was extracted using cronbach’s alpha coefficient of internal consistency in its final form and for each variable in all its dimensions. the results were as shown in table 3 as follows. 3.3. procedures of data analysis statistical package for social sciences (spss. 16) was used in data processing to answer paragraphs of study tool and test hypotheses, according to statistical treatments of the following: 1. calculate the frequencies and percentages to describe the characteristics of the study sample, and calculate averages, standard deviations, and to answer questions of the study. 2. calculation multiple regression analysis to test the validity of the study model, and the effect of the independent variable and the dimensions on the dependent variable and its dimensions. 3. stepwise multiple regression analysis to test the entry of independent variables in the equation to predict the dependent variable. 4. analysis of variance to test for differences in demographic variables of the respondents’ perceptions about the dependent variable. 5. test variance inflation factor (vif), and test the tolerance to make sure there is no high correlation between the independent variables. 6. skewness test to make sure that the data follow a normal distribution. 7. cronbach’s alpha to measure the internal consistency of the dimensions of the study. 4. data analysis and hypothesis testing 4.1. descriptive analysis a descriptive analysis was performed for all the variables of the study, according to the answers of the members of the study population according to the calculated averages and standard deviations, and it ranked in descending order according to their table 2: the distribution of the study sample by variables (educational qualification, age, job experience, gender) variable level number (%) educational qualification secondary education and less 100 (38) diploma 80 (30) bachelor 53 (20) graduate studies 30 (12) total 263 (100) age <30 39 (14) 31-40 110 (42) 41-50 60 (23) >51 54 (21) total 263 (100) job experience <5 37 (14) 6-11 131 (50) >11 95 (36) total 263 (100) gender male 191 (73) female 72 (37) total 263 (100) table 3: cronbach’s alpha coefficient value of the internal consistency of each dimension of the study variables variables dimensions reliability coefficient (cronbach’s alpha) factors surrounding the process of performance rater characteristics 0.88 halo 0.86 personal bias 0.89 facilitation and humanity 0.81 exaggerating 0.83 job performance amount of work 0.89 discipline 0.90 completion of tasks 0.87 quality of work 0.83 total 0.90 alamro, et al.: perceptions of managers’ appraisal process and their relation to employees performance in a non-western culture: evidence from jordan international review of management and marketing | vol 7 • issue 4 • 201710 relative importance based on the value. the overall average, taking into account the scale used included in the study, based on this calculation, the averages reached by the study values, adopted. next to the standard interpretation of the data: 3.5 and above = high; 3.5-2.49 = average and 2.49-1: low. based on this standard, if the average is larger than (3.5) this means that the level of the investigative community is high, but if the average value is between 2.5 and 3.49 so it’s moderate. but if the average is (2.49) and below so it’s low. the following is a presentation of the results, according to the sequence of hypotheses. table 4 shows that the overall average of the factors surrounding the process of pa in water authority was (3.59) and a standard deviation (0.54), and this means that perceptions of staff in the water authority of the factors surrounding the process of pa degree is high, it is clear that the evaluative characteristics comes first with an average (3.65), and the standard deviation is (0.55), followed by the personal bias it is with an average of (3.60), and the standard deviation is (0.57), then it followed by post exaggeration in the assessment which is (3.58), and the standard deviation is (0.59), next we have facilitation and humanity the average is (3.57), and the standard deviation is (0.61), and in last place came halo with an average of (3.55), and a standard deviation is (0.62). table 5 shows that the average of the perceptions of staff in water authority to the level of job performance came highly and reached. the overall average level is (3.65) and the standard deviation is (0.51), and the quality of work is the highest with an average that reached (3.73), and the standard deviation is (0.52), in the second place we have task completion with an average of (3.65) and the standard deviation is (0.54), the amount of work comes in the third place with an average of (3.64), and the standard deviation is (0.56), while in fourth and last place is the discipline with and the average is (3.59), and the standard deviation is (0.59). so this much high level of performance among the staff in the water authority is considered as a positive indicator because the good performance is a quality of the successful organizations where there is a kind of consensus and harmony among the staffs and the organizations they work in as the good performance provides many benefits such as commitment, motivation and performance and organizational citizenship, and increasing degrees of commitment, cooperation and loyalty to the organization. in addition to the important role in the decision making process. so the workers are doing their best and there is a constant sense of loyalty to the place they work in, and there will be warm feelings among them since it’s a source of livelihood for them. 4.2. hypothesis testing before applying regression analysis to test hypotheses, some tests have been applied in order to ensure that the data is matching assumptions of regression analysis in the following way. in terms of that assumption which indicates that there should be no high correlation between independent variables “multicollinearity” the researcher conducted a vif and a tolerance test for each single independent variable. table 5 indicates that if vif exceeds 10 and the value of the allowable variation is <0.05, this indicates that this variable has a high correlation with other independent variables and thus it will lead to a problem in the regression analysis. researcher relied on this rule to test multicollinearity between the independent variables. table 5 also contains the independent variables, vif, and tolerance value for each variable. it is noted that the value of vif for all variables were <10 and ranging from 2.789 to 5.102. it is also noted that the value of tolerance for all variables were >0.05 and between 0.287and 0.395. based on what previously mentioned, it can be said that there is no real problem concerning the existence of a high correlation among independent variables. in order to verify the assumption of normal distribution of the data, it has been relied on calculating the value of the skewness for the variables. as table 6 indicates the value of the skewness coefficiency for all variables of the study were <1 therefore, it can be concluded that there is no real problem with the normal distribution of study data. and will be sure of the validity of the model for each hypothesis. table 7 shows the validity of the sample of the study hypotheses test, and it is wellnoted that the calculated value of f is higher than table 4: the averages and the standard deviations of the factors surrounding the process of pa in the water authority the sequence of paragraphs factors surrounding the eva process average standard deviations rank level according to the average 1-6 rater characteristics 3.65 0.55 1 high 7-11 halo 3.55 0.62 5 high 12-17 personal bias 3.60 0.57 2 high 18-23 facilitation and humanity 3.57 0.61 4 high 23-28 exaggerating 3.58 0.59 3 high 1-28 total average 3.59 0.54 high table 5: the averages and the standard deviations of the level of job performance in the water authority the sequence of paragraphs factors surrounding the eva process average standard deviations rank level according to the average 29-33 amount of work 3.64 0.56 3 high 34-38 discipline 3.59 0.59 4 high 39-42 completion of tasks 3.65 0.54 2 high 43-47 quality of work 3.73 0.52 1 high 29-47 total average 3.65 0.51 high alamro, et al.: perceptions of managers’ appraisal process and their relation to employees performance in a non-western culture: evidence from jordan international review of management and marketing | vol 7 • issue 4 • 2017 11 the tabulated value is at the level of significance (α ≤ 0.05). the factors surrounding the process of performance evaluation could interpret (58.1%) of the variance out of the total dependent variable (job performance), (45.6%) of the variance of (the amount of work) dimension, (43.2%) of the variance of the (discipline) dimension, (39.2%) of the variance of (the completion of tasks) dimension, finally the factors surrounding the process of performance evaluation interpreted (53.1%) of the variance of (quality of work) dimension, all previously mentioned data confirms the role and the significant impact of the factors surrounding the process of performance evaluation on the interpretation of the job performance dimensions. consequently, we can test the hypotheses of the study. main hypothesis: there is no statistically significant effect of the level of significance (α ≤ 0.05) on the factors surrounding performance evaluation process (evaluator properties, halo, personal bias, leniency and compassion, overestimation) on job performance among employees in water authority. evidently, the statistical results contained in the table 8, and by following t-test values that the following sub-variables (resident characteristics, personal bias, facilitation and humanity, overestimation) have an impact on job performance. the value of the t is (9.530, 6.425, 5.582, 5.559) respectively. those are moral values at the level of significance (α ≤ 0.05). results indicated that the sub-variable (halo) has no impact on job performance, as the calculated value of t is (0.398). this indicates that this is not statistically significant at the level of significance (α ≤ 0.05). the previous findings require the following actions; namely, the rejection of the null hypothesis which states that there is no significant impact in terms of statistical variables on the specific factors that surround the process of performance evaluation (resident characteristics, personal bias, facilitation and humanity, overestimation) on job performance. on the other hand, it is required to accept the null hypothesis which states that there is no significant impact in terms of the statistical variable (halo) on job performance. a stepwise multiple regression analysis, which represents the impact of the factors surrounding the process of performance evaluation (resident, halo characteristics, personal bias, leniency, facilitation and humanity, overestimation) on job performance, as shown in table 9, has been conducted. it was used to determine the table 7: result of analysis of variance to ensure to make sure of the validity of the model to test hypotheses of the study dependent variance independent variance degrees of freedom the coefficient of determination r2 calculated value of f level of significance of f job performance factors surrounding the eva process (5, 257) 0.581 136.56* 0.000 amount of work (5, 257) 0.456 89.38* 0.000 discipline (5, 257) 0.432 81.75* 0.000 completion of tasks (5, 257) 0.392 75.84* 0.000 quality of work (5, 257) 0.531 126.45* 0.000 *statistically significant at the level of (α≤0.05) table 8: the results of multiple regression analysis to test the effect of the factors surrounding the process performance evaluation in various dimensions of job performance factors surrounding the process performance evaluation b the standard error beta calculated value of t the level of significance of t rater characteristics 0.451 0.047 0.444 9.530* 0.000 halo 0.019 0.047 0.018 0.398** 0.691 personal bias 0.251 0.039 0.263 6.425* 0.000 facilitation and humanity 0.168 0.030 0.095 5.582* 0.000 exaggerating 0.257 0.046 0.254 5.559* 0.000 *statistically significant at the level of (α≤0.05). **it is not statistically significant at the level (α≤0.05) table 6: testing of vif, tolerance and skewness variables tolerance vif skewness rater characteristics 0.395 3.119 0.211 halo 0.374 3.491 0.209 personal bias 0.287 5.102 0.129 facilitation and humanity 0.381 2.789 0.347 exaggerating 0.326 3.891 0.259 vif: variance inflation factor table 9: the results of stepwise multiple regression analysis to predict job performance by factors surrounding the process of performance evaluation as independent variables order entry of independent elements in the equation to predict the coefficient of determination r2 = 0.34 calculated value of t= 2.21 *the level of significance of t = 0.000 rater characteristics 0.496 10.852* 0.000 personal bias 0.559 7.762* 0.000 facilitation and humanity 0.571 6.631* 0.000 exaggerating 0.579 6.030* 0.000 * statistically significant at the level of α≤0.05. variable (halo) exit of the multi-regression equation alamro, et al.: perceptions of managers’ appraisal process and their relation to employees performance in a non-western culture: evidence from jordan international review of management and marketing | vol 7 • issue 4 • 201712 importance of each independent variable separately in contribution to the mathematical sample, which shows the order of entry of independent variables in the regression equation, the resident properties explains the amount (49.6%) of the variance in the dependent variable. the personal bias variable explains (55.9%) of the variance in the dependent variable. the third variable, leniency, interpreted with former two variables, explains (57.1%) of the variance in the dependent variable. and finally the variable exaggeration in the assessment, interpreted with previous variants, amounted to (57.9%) of the variance in job performance as the dependent variable. the first sub-hypotheses: there is no statistically significant effect of the level of significance (α≤0.05) on the factors surrounding the performance evaluation process (evaluator properties, halo, personal bias, leniency and compassion, overestimation) on the amount of work as one of the dimensions of job performance among employees in the water authority. the statistical results contained in the table 10, and by following t-test values that the following sub-variables (resident characteristics, personal bias, facilitation and humanity, exaggerating) evidently shows an impact on amount of work. the value of the t is (4.958, 2.213, 2.280, 4.802, 2.834), respectively; which are moral values at the level of significance (α ≤ 0.05). the previous findings require the following actions; namely, the rejection of the null hypothesis which states that there is no significant impact in terms of statistical variables to factors surrounding the process of performance evaluation (resident characteristics, personal bias, facilitation and humanity, exaggerating) on amount of work. a stepwise multiple regression analysis, which represents the impact of the factors surrounding the process of performance evaluation (resident, halo characteristics, personal bias, leniency, facilitation and humanity, exaggerating) on amount of work, as shown in table 11, was conducted to determine the importance of each independent variable separately in contributing to the mathematical model. this analysis shows the order of entry of independent variables in the regression equation. the resident properties explains what amount (39.1%) of the variance in the dependent variable. the leniency variable explains (42.7%) of the variance in the dependent variable, the third variable exaggeration in the assessment interpreted, with former two variables, (44.2%) of the variance in the dependent variable. and finally the variable personal bias interpreted (45.3%) with previous variants amounted of the variance in the amount of work as the dependent variable. the second sub-hypotheses: there is a statistically significant effect of the factors surrounding the performance evaluation process (evaluator properties, halo, personal bias, leniency and compassion, overstatement) on the discipline as one of the dimensions of job performance among employees in the water authority. the statistical results contained in table 12, and by following t-test values that the following sub-variables (resident characteristics, personal bias, facilitation and humanity, exaggerating) evidently shows an impact on discipline. the value of the t is (5.010, 2.011, 2.583, 4.197, 2.558), respectively, which are the moral values at the level of significance (α ≤ 0.05). the previous findings require the following actions; namely, the rejection of the null hypothesis which states that there is no significant impact in terms of statistical variables to factors surrounding the process of performance evaluation (resident characteristics, personal bias, facilitation and humanity, exaggerating) on discipline. when a stepwise multiple regression analysis, which represents the impact of the factors surrounding the process of performance evaluation (resident, halo characteristics, personal bias, leniency, facilitation and humanity, exaggerating) on discipline, as shown table 10: the results of multiple regression analysis to test the effect of the factors surrounding the process performance evaluation in various dimensions of amount of work factors surrounding the process performance evaluation b the standard error beta calculated value of t the level of significance of t rater characteristics 0.397 0.080 0.178 4.958* 0.000 halo 0.272 0.123 0.212 2.213* 0.027 personal bias 0.237 0.104 0.196 2.280* 0.023 facilitation and humanity 0.599 0.125 0.468 4.802* 0.000 exaggerating 0.356 0.126 0.277 2.834* 0.005 * statistically significant at the level of α≤0.05 table 11: the results of stepwise multiple regression analysis to predict amount of work by factors surrounding the process of performance evaluation as independent variables order entry of independent elements in the equation to predict the coefficient of determination r2 = 0.55 calculated value of t = 1.35 *the level of significance of t = 0.000 rater characteristics 0.391 6.189* 0.000 personal bias 0.427 5.802* 0.000 facilitation and humanity 0.442 3.834* 0.000 exaggerating 0.453 3.280* 0.000 *statistically significant at the level of α≤0.05. variable (halo) exit of stepwise multiple regression equation alamro, et al.: perceptions of managers’ appraisal process and their relation to employees performance in a non-western culture: evidence from jordan international review of management and marketing | vol 7 • issue 4 • 2017 13 in table 13, was conducted to determine the importance of each independent variable separately in contribution to the mathematical model. this shows the order of the independent variables in the regression equation, the resident properties explains the amount (36.9%) of the variance in the dependent variable, leniency variable explains where (41%) of the variance in the dependent variable. the third variable is the personal bias which interpreted, with former two variables, (42.2%) of the variance in the dependent variable. the fourth variable exaggeration in the assessment income interpreted, with the previous variables, (42.8%). and finally the “halo” interpreted, with previous variants, (43.2%) of the variance in the amount of work as the dependent variable. third sub-hypotheses: there is a statistically significant effect for the factors surrounding the performance evaluation process (evaluator properties, halo, personal bias, leniency and compassion, overstatement) on achieving tasks as one of the dimensions of job performance among employees in the water authority. evidently, the statistical results contained in the table 14, and by following t-test values that the following sub-variables (resident characteristics, personal bias, facilitation and humanity, exaggerating) has an impact on task achievement as the value of t is (4.702, 2.115, 2.769, 3.825, 2.584), respectively. t values are moral values at the level of significance (α ≤ 0.05). the previous findings require the following actions; namely, the rejection of the null hypothesis which states that there is no significant impact in terms of statistical variables to factors surrounding the process of performance evaluation (resident characteristics, personal bias, facilitation and humanity, exaggerating) on task achievement. a stepwise multiple regression analysis, which represents the impact of the factors surrounding the process of performance evaluation (resident, halo characteristics, personal bias, leniency, facilitation and humanity, overestimation) on task achievement, as shown in table 15, was conducted to determine the importance of each independent variable separately in contribution to the mathematical model, which shows the order of entry of independent variables in the regression equation, the resident properties explains (33.2%) of the variance in the dependent variable. the leniency variable explains (36.1%) of the variance in the dependent variable. the third variable, the personal bias, interpreted, with former two variables (37.4%) of the variance in the dependent variable. the fourth variable, overestimation, in the assessment income interpreted, with the previous variables, (38.6%). and finally the variable halo has interpreted, with previous variants, (39.2%) of the variance in task achievement as the dependent variable. the third sub-hypotheses: there is a statistically significant effect of the factors surrounding the performance evaluation table 12: the results of multiple regression analysis to test the effect of the factors surrounding the process performance evaluation in various dimensions of discipline factors surrounding the process performance evaluation b the standard error beta calculated value of t the level of significance of t rater characteristics 0.413 0.082 0.183 5.010* 0.000 halo 0.254 0.127 0.196 2.011* 0.045 personal bias 0.276 0.107 0.226 2.583* 0.010 facilitation and humanity 0.539 0.128 0.416 4.197* 0.000 exaggerating 0.331 0.129 0.254 2.558* 0.011 *statistically significant at the level of α≤0.05 table 13: the results of stepwise multiple regression analysis to predict discipline by factors surrounding the process of performance evaluation as independent variables order entry of independent elements in the equation to predict the coefficient of determination r2 calculated value of t *the level of significance of t rater characteristics 0.369 5.986* 0.000 facilitation and humanity 0.410 4.986* 0.000 personal bias 0.422 3.152* 0.000 exaggerating 0.428 2.998* 0.004 halo 0.432 2.659* 0.012 *statistically significant at the level of α≤0.05 table 14: the results of multiple regression analysis to test the effect of the factors surrounding the process performance evaluation in various dimensions of completing tasks factors surrounding the process performance evaluation b the standard error beta calculated value of t the level of significance of t rater characteristics 0.397 0.084 0.173 4.702* 0.000 halo 0.274 0.130 0.208 2.115* 0.035 personal bias 0.304 0.110 0.245 2.769* 0.006 facilitation and humanity 0.503 0.132 0.383 3.825* 0.000 exaggerating 0.342 0.133 0.260 2.584* 0.010 *statistically significant at the level of α≤0.05 alamro, et al.: perceptions of managers’ appraisal process and their relation to employees performance in a non-western culture: evidence from jordan international review of management and marketing | vol 7 • issue 4 • 201714 process (evaluator properties, halo, personal bias, leniency and compassion, overstatement) on work quality as one of the dimensions of job performance among employees in the water authority. evidently, the statistical results contained in table 16, and t-test values that the following sub-variables (resident characteristics, personal bias, facilitation and humanity, exaggerating) have an impact on work quality as the value of t is (4.552, 2.667, 3.910, 4.423), respectively. t-values are moral values at the level of significance (α ≤ 0.05). results indicated that the sub-variable (overestimation) has no effect on work quality. the calculated value of t has no statistical significance on the level of significance (α ≤ 0.05). the previous findings require the following actions; namely, the rejection of the null hypothesis which states that there is no significant impact in terms of statistical variables on factors surrounding the process of performance evaluation (resident characteristics, personal bias, facilitation and humanity) on work quality. on the other hand, it is considered to accept the null hypothesis which states that there is no significant impact in terms of the statistical variable (exaggerating) in work quality. a stepwise multiple regression analysis, which represents the impact of the factors surrounding the process of performance evaluation (resident, halo characteristics, personal bias, leniency, facilitation and humanity, exaggerating) on quality of work, as shown in table 17, was conducted to determine the importance of each independent variable separately in contributing to the mathematical model. this analysis shows the order of entry of independent variables in the regression equation, the resident properties explains (47.3%) of the variance in the dependent variable. the leniency variable explains (51.2%) of the variance in the dependent variable. the third variable, personal bias, interpreted, with former two variables, (52.4%) of the variance in the dependent variable. and finally the variable halo interpreted with previous variants (53%) of the variance in the work quality as the dependent variable. the overestimation variable got exit from the stepwise multiple regression equation as it is neither grounded nor statistically significant. 5. discussion 5.1. results 1. the results showed that the perceptions of staff in the water authority of the factors surrounding the process of performance evaluation was high, it is clear that the dimension of rater characteristics ranked first, followed by personal bias dimension, then exaggeration dimension, finally by dimension of leniency, and in last place came the halo dimension. this means that the more staff awareness of the system performance applied in the water authority evaluation led to an increased table 15: the results of stepwise multiple regression analysis to predict completing tasks by factors surrounding the process of performance evaluation as independent variables order entry of independent elements in the equation to predict the coefficient of determination r2 calculated value of t *the level of significance of t rater characteristics 0.332 5.892* 0.000 facilitation and humanity 0.361 4.298* 0.000 personal bias 0.374 3.269* 0.000 exaggerating 0.386 2.894* 0.001 halo 0.392 2.743* 0.013 *statistically significant at the level of α≤0.05 table 16: the results of multiple regression analysis to test the effect of the factors surrounding the process performance evaluation in various dimensions of quality of work factors surrounding the process performance evaluation b the standard error beta calculated value of t the level of significance of t rater characteristics 0.296 0.065 0.148 4.552* 0.000 halo 0.268 0.100 0.232 2.667* 0.008 personal bias 0.271 0.085 0.249 3.190* 0.002 facilitation and humanity 0.450 0.102 0.391 4.423* 0.000 exaggerating 0.200 0.103 0.174 1.953** 0.051 *statistically significant at the level of α≤0.05. **it is not statistically significant at the level (α≤0.05 table 17: the results of stepwise multiple regression analysis to predict quality of the work by factors surrounding the process of performance evaluation as independent variables order entry of independent elements in the equation to predict the coefficient of determination r2 = 0.47 calculated value of t = 3.25 *the level of significance of t = 0.000 rater characteristics 0.473 6.794 0.000 facilitation and humanity 0.512 5.340 0.000 personal bias 0.524 3.673 0.000 halo 0.530 2.963 0.000 *statistically significant at the level of α≤0.05. variable (exaggerating) exit of the multi-regression equation alamro, et al.: perceptions of managers’ appraisal process and their relation to employees performance in a non-western culture: evidence from jordan international review of management and marketing | vol 7 • issue 4 • 2017 15 level of motivation to work and improve the performance they have. 2. the results showed that perceptions of the staff at the water authority to the level of job performance were highly. quality of the work dimension was occupied the first rank, followed by the dimension of task completion, and in the third place the amount of work dimension, while dimension of discipline came in fourth and last place. perhaps the emergence of this high level of performance level of the staff in the water authority is a positive indication, because the good performance is a feature of successful organizations. 3. the results indicated that the factors surrounding the process of performance evaluation explain (58.1%) of the variation in the total dependent variable (job performance), as it also explains (45.6%) of the variation in dimension (the amount of work), and also explains (43.2%) of the variation in dimension (discipline), and the factors surrounding the process of performance evaluation interpreted (39.2%) of the variation in the dimension (complete assignments), and finally interpreted (53.1%) of the variation in the dimension (quality of work), this result can be explained that the performance evaluation system that practice in the water authority gives the staff a chance to be creative and thus increases motivation and improves the performance of the staff. 4. the results showed that the independent variable dimensions (rater characteristics, personal bias, leniency, exaggeration) have strong impact on job performance, though rater characteristics explains what amount (49.6%) of the variance in the dependent variable, and entered the personal bias variable where explains with the rater characteristics (55.9%) of the variance in the dependent variable, and entered the third leniency variable where interpreted with former two variables (57.1%) of the variance in the dependent variable, and finally entered the exaggeration where interpreted with previous variable (57.9%) of the variance in job performance as the dependent variable. this result explains that the perception of employees of the foundations of performance evaluation affects positively and significantly on the employees’ performance level. 5. the results showed that the independent variable dimensions (rater characteristics, halo, personal bias, leniency, exaggeration) have an effective impact on the amount of work, though rater characteristics explains what amount (39.1%) of the variance in the dependent variable, and the variable of leniency explains with rater characteristics (42.7%) of the variance in the dependent variable, and entered the third exaggeration variable where interpreted with former two variables (44.2%) of the variance in the dependent variable, and entered finally personal bias variable where interpreted with previous variants amounted to (45.3%) of the variance in the amount of work as the dependent variable. this result can be explained by that performance evaluation is influenced by the amount of work and judging the performance by looking at the functional behavior and personal relationships with others, in order to develop their abilities and skills to work. 6. the results indicated that the independent variable dimensions (rater characteristics, halo, personal bias, leniency, exaggeration) have an impact on the discipline, though rater characteristics variable explains what amount (36.9%) of the variance in the dependent variable, and income leniency, variable where explains with the rater characteristics (41%) of the variance in the dependent variable, and income thirdly personal bias variable where interpreted with former two variables (42.2%) of the variance in the dependent variable, and entered the fourth exaggeration where interpreted with former variables variable (42.8%) of the variance in the dependent variable, and finally entered the halo variable interpreted as with the previous variables (43.2%) of the variance in the discipline as the dependent variable. this result can be explained by that the greater the awareness of staff of the effectiveness of the applied performance evaluation system in the water authority indicates to the presidents understand of the staff problems and to improve the daily direct relationship with the president. 7. the results indicated that the independent variable dimensions (rater characteristics, halo, personal bias, tolerance, exaggeration) have an impact on the completion of tasks, though rater characteristics variable explains what amount (33.2%) of the variance in the dependent variable, and income variable leniency, where explains with the rater characteristics (36.1%) of the variance in the dependent variable, and income thirdly personal bias variable where interpreted with former two variables (37.4%) of the variance in the dependent variable, and entered the fourth exaggeration variable where interpreted with previous variables (38.6%) of the variance in the variable of, and finally entered the halo variable where interpreted with previous variants amounted to 39.2% of the variance in completing tasks as the dependent variable. this result can be explained by that: taking into account the criteria to be used in the performance evaluation and proficiency to judge the performance assessment fairly and without external pressure, without discrimination or taking into account the relationships and personal favoritism and nepotism, contributes to increase and improve the mechanisms of the tasks completion of the staff. 8. the results indicated that the independent variable dimensions (rater characteristics, halo, personal bias, leniency) is very impressive in the quality of work, and that the rater characteristics variable explains the amount to (47.3%) of the variance in the dependent variable, and income leniency variable where explains with the rater characteristics (51.2%) of the variance in the dependent variable, thirdly income personal bias variable where interpreted with former two variables (52.4%) of the variance in the dependent variable, finally income the halo variable where interpreted with previous variants amounted to (53%) of the variance in the quality of work as the dependent variable. and went out of progressive multiple regression equation variable (exaggerated) on the grounds that it is weak variable and not significant statistically. 5.2. recommendations the results of the study showed that there is a strong impact of the factors surroundings the process of performance evaluation on performance improving; therefore the study recommends the following: alamro, et al.: perceptions of managers’ appraisal process and their relation to employees performance in a non-western culture: evidence from jordan international review of management and marketing | vol 7 • issue 4 • 201716 • hold training courses (professional developments) for those who are in charge of the pa system, in order to train them to do their best to apply it fairly, effectively and objectively on the staff because of its positive impact on the performance of the organization, and on the development of human resources in general. • the importance of encouraging the participation of subordinates in the evaluation of their performance by the presidents, in order to determine the level of their performance, so that employees can do their best to accomplish their work, regardless of the difficulties they might face. • expand the scope of the study to include other variables study to evaluate the performance and the inclusion of other sectors, and the use of different methods to collect information such as content analysis and interview method, and other methods. 5.3. implications • the staff awareness of the effectiveness of the applied performance evaluation system in the water authority indicates that the presidents understand the staff problems. so they like to improve the daily relationship with the president. it also lead to enlarge satisfaction with their relationship with their colleagues at work, their salaries and their relationship with the president. so the availability of these dimensions will have a positive impact in improving the staff performance. • all this confirms that the perception of the staff to the effectiveness of performance evaluation system is very important in terms of its influence on the behavior within organizations, since the effectiveness of the pa system variable, has a powerful incentive to assert givens with administrative officer in general. references abu, s., ahmad, n. (2005), staff awareness of the objectivity of appraisal system of their performance and its relationship to some personal and functional characteristics. public administration journal, 4, 639-708. al-hawamdeh, n.s. (2004), the relationship between the level of awareness and effectiveness of the justice system and all the performance evaluation of job performance, job satisfaction, and organizational loyalty, and regulatory confidence in the jordanian service ministries. journal of king saud university, 1, 61-99. al-karasneh, n.a. (2003), the effectiveness of performance evaluation in jordanian civil service statute, field study from the employees perspective in the ministry of health. jordan, irbid: yarmoukuniversity. al-mutairi, m. (2011), the effect of time-management on employee performance, applied study in saudi telecom company. master unpublished. jordan, karak: mutah university. appelbaum, s.h. (2011), globalization of performance appraisals: theory and applications. management decision, 49(4), 570-585. bernardin, h.j., hagan, c.m., kane, j.s., villanova, p. (1998), effective performance management: a focus on precision, customer and situational contraints. in:smither j.w., editor. performance appraisal; state of the art in practice. san francisco, cananda: jossey bass. p3-48. brewster, c., suutari, v. (2005), guest editorial. global hrm: aspects of a research agenda. personnel review, 34(1), 5-21. cawley, b.d. (1998), participation in the performance appraisal process and employee reactions. journal of applied psychology, 83(4), 615-633. durra, a.b.i. (2003), human performance technology in organizations. cairo: arab organization for administrative development. erdogan, b. (2002), antecedents and consequences of justice perceptions in performance appraisals. human resource management review, 12(4),555-578. fletcher, c. (2001), peformanceappraisal and management: the developing research agenda. journal of occupational and organizational psychology, 74(4), 473-487. francis, x.g., brain, h.k. (1994), factors that bias employee performance appraisals. work study, 43(3), 10-13. hassouna, f. (2008), human resources management. amman, jordan: osama publishing and distribution. hiti, k. (2005), human resources management: astrategic entrance.1sted. jordan, amman: dar al-hamed for publication and distribution. mondy, r.w., noel, r.m. (2005), human resource management. upper saddle river, ny: prentice hall. mustafa, s.a. (2008), organizational behavior management: a contemporary look to the people behavior. egypt, cairo. auditor ahmad sayeed mustafa. pearce, j.l., porter, l.w. (1986), employee responses to formal performance appraisal feedback. journal of applied psychology, 71, 211-218. rao, t.v., rao, t.v. (2004), performance management and appraisal systems: hr tools for global competitiveness.4th ed. new delhi: response books publications. sabbagh, z.n., durra, a.b.i. (2008), human resources management. 1sted. amman, jordan: dar wael for publication and distribution. shen, j. (2004), international performance appraisals: policies, practices and determinants in the case of chinese multinational companies. international journal of manpower, 25(6), 547-563. steven, a.h., michel, r., terry, g.(2011), globalization of performance appraisals: theory and applications. management decision, 49(4),570-585. swanepoel, b., erasmus, b., van, w.m., schenk, h. (2000), south african human resource management: theory and practice. cape town: juta and company. taylor, s.m., tracy, k.b., renard, m.k., harrison, j.k., carroll, s.j. (1995), due process in performance appraisal: a quasi-experiment in procedural justice. administrative science quarterly, 40, 495-523. yassin, n. (2010), the impact of legal knowledge on workers performance in financial circles in the jordanian ministries. master unpublished. jordan, karak: mutahuniversity. zammuto, r.f. (1982), bibliography on decline and retrenchment. boulder, co: national center for higher education management system. international review of management and marketing vol. 1, no. 1, 2011, pp. 14-18 www.econjournals.com the use of information and communication technologies from the students of elbasan university bederiana shyti department of mathematic, university “a. xhuvani”, elbasan, albania. email: bertashyti@yahoo.com abstract: this article analyses the use of information and communication technologies from the students of elbasan university, which is one of the biggest and the most important universities in albania. the data was collected through a questionnaire designed specifically for this study during two time periods: the first period was december 2004june 2005 and the second one was during the year 2010. the analysis makes a comparison of the data for these two periods, which indicates that information and communication technologies are part of the students and their family’s life. while some of them, such as mobile phones, are already widely used from the students, others like the internet are still far. therefore, this paper suggests that it is necessary to develop several specific policies in order to improve the actual situation. keywords: information and communication technologies 1. introduction an information and communication technology (ict) is advancing very rapidly, and is one of the factors that give impact in the development of a country. “its impact covers the structures of the state and civil society institutions, economic and social sectors, science and education, culture and people’s whole way of living” (the report of national ict strategy for the development of azerbaijan 2003-2012)6. it’s important to mention that each country is different regarding the development of ict. during the last years, science and technologies are developing very fast. the application of ict is one of the indicators that show the intellectual and scientific level of a country. the use of ict is the possibility of each country to solve its socio-economic problems. according to newton5, information technology (it) is “a fancy name for data processing”. “ict includes hardware, processes, and systems that are used for storing, managing, communicating and sharing information. information and communication technologies (ict) are now widely accepted by developing countries as a critical tool in their efforts to eradicate poverty and to give part the development”. (“ict policy formulation and e-strategy development” – a comprehensive guidebook)1. with regard to ict use, sein and harindranath (2004)3 draw at least four different conceptualizations of the use of ict in national development from the literature: as a commodity, as supporting development activities, as a driver of the economy, and directed at specific development activities. although ict is considered as very important in albania during the last years, there is not a wide correct assessment for its different aspects of the situation. on the other hand, there is not a systematic assessment for its performance in time. therefore, the main aim of this study is to analyze this situation with focus to the university of elbasan. 2. methodology for both phases of the study, the survey relied on certain principals: firstly, a correct representation of the student university environment; secondly, the survey of successive waves spread in a six-month period and thirdly, a content that reflects better the actual situation. mailto:bertashyti@yahoo.com international review of management and marketing, vol. 1, no. 1, 2011, pp.14-18 1 a total of 235 students were surveyed in the university of elbasan. the representation maintained the proportionality: the dates for the number of students were taken in the university secretary. in university level, the representation was realized based on study programmers and years of study. the data was collected for each person individually and indicates the role and the recognition of ict by each person in everyday life. furthermore, data was gathered on knowledge and equipping them with a computer in their home as well as a mobile phone, television, land line phone, scanner, printer, cd-writer, etc. the students were asked for the recognition and use of the internet, purposes of use, proposals for the internet connection at home, assessments of central and local policies for the state and development of the internet. overall this content was discussed in 87 variables (indicators). 3. analysis of results 3.1 ict, knowledge, estimation ict (information and communication technology) in albanian is translated “teknologjia e informimit dhe komunikimit” and its acronym is tik. during the year 2005, only 25 % of the students in the university of elbasan are aware about the meaning of the acronym tik. 35 % of the students declared that they have seen it somewhere, but they do not pretend to understand it. so, we can consider that 60 % of the students are aware about this acronym or have seen somewhere it. approximately, 72 % of the students consider them as a necessity, while 24 % consider them important but not necessary, only 3 % of them stand on the idea that they are of second hand. comparing with these results, the students of our university in 2010 are almost 100% aware about the mining of ict and the students are conscious about the role and the importance of ict into their daily lives. 3.2 computer the survey carried out in 2005 shows that only 30 % of the students have a computer at home. this indicator is lower than the respective one of the country for this group. on the other hand, those having a computer, in most cases, have no internet access. the use of computer continues to be considered as difficult or very complicated by a considerably number of students. approximately, 40 % of the students think this way. the computer is a new device in their home. most of the students have a computer in their homes for a period of less than one year. for those having no computer in their homes, the main problem is the computer price: 82% of students do not have a computer in their home, the reason being that it is very expensive. considerations are insignificant to those who declared the complexity of use as a reason. figure 1. the use of computer however, in 2010, 75.2 % of the students have a computer in their homes, and 31.7% of them have an internet line in their homes. only 4% of them think that the use of computer continues to be considered complicated and 23% of them having no computer because of the high expense. the differences of the results are given in the diagrams below: 3.3 mobile phones mobile telephony has a high level of use by the students. about 93% of them use a cell phone; this level of use is high in the university of elbasan, although it is lower than the index of all the country. meanwhile, most of them have a telephone with card and those who do not have it declared to 2005 43,8 56,2 ■yes, i have a computer ■no, i haven’t a computer 2010 75,2 24,8 the use of information and communication technologies from the students of elbasan university 1 have a big desire to have it. the monthly cost of a mobile phone for a student is about 1,600 leeks in average. sending messages is a significant activity. about 18 % of the students send at least one message almost every day. mobile phone is also significantly spread in their families. only a few members of their families have not a mobile phone. comparing these results, figure 2 gives the results for one of the questions in the questionnaire regarding the use of mobile phones in 2010. so, during this year, 100% of them use a mobile phone and 41% of the students send at least one message every day. 2005 1,9 1,3 4,5 29,6 62,7 ■yes, i have a mobile phone with amc card ■yes, i have a mobile phone with vodafone card ■yes, i have a mobile phone subscription amc ■yes, i have a mobile phone subscription vodafone ■yes, i have a cell phone but not .... 2010 2 3 5,9 27,7 61,4 figure 2. the use of mobile phones 3.4 other equipments all students, or almost all of them, have a tv at home. the majority have only usual tv antennas. during the year 2005, about 24 % have a parabolic antenna. some new alternatives, such as the cable tv with or without payment is widely used. the fix telephony has a good distribution as well. the situation for some other equipment, such as fax, scanner, printer, and cd-writer is different. one cannot say that the fax is home equipment. printer has a wider dissemination: about 15 % of the student families have a printer in their homes. the same thing is observed regarding the cd-writer, where, about 14 % of the student families have this. the scanner is less present. regarding digital cameras, although these are new equipments in the market, more than 29 % of the student families and the students themselves use them, which is higher than the above mentioned equipments. dvd is present in their families in the same percentage. the digital tv is also present. the students receive in their families’ one of these signals: digitalb or sat+ offered in albania (8 % have digitalb and 12% receive signals from sat+). the charts below give the situation of these indicators for the year 2010: tv 98 2 ■yes ■no ■no, i don’t know scanner 1 24,8 74,2 cd-writer 7,9 58,433,7 printer 0 41,6 58,4 figure 3. use of other equipments international review of management and marketing, vol. 1, no. 1, 2011, pp.14-18 1 3.5 internet the internet is known but, in 2005, it is used by 69 % of the students only. the students are not frequent internet users: 14% claim to use it every day; 24 % use it several times in a week. 2005 18,2 74,2 7,6 ■yes, i know it and actually i use it ■yes, i know but i use it sometimes ■no, i do not know and has never happened to use internet 2010 0 96 4 figure 4. use of internet we can tell that, for the year 2010, 96% of the students use the internet, and 62.4% of them use it every day. internet-café is the place where the students go more often to use the internet. the second place is the school. other places like the home and friends are far to be considered. the environment of the school that should offer the internet to the students is also far. in the year 2005, the home internet has a low proportion: only 9 % of the university students have internet in their homes. about 57 % of the students have a personal e-mail address, while 14 % of them use the e-mail of their friends. however, the situation is different during the year 2010: 53. 5% of the students have the internet in their homes and 89.1% of them have a personal e-mail address. yahoo and google are the most available programs for online navigation. the albanian websites are visited rarely by them. more frequently, they visit shqiperia.com and albania.com as well as the web-sites of the daily newspapers. 3.6 the future personal use of internet the results show that in general the students are interested to have internet in their home. according to about 68 % of the students declared that the main obstacles are the lack of home computer and internet high tariffs. other alternatives like: not covered, don’t need, do not have a fixed phone, do not know how to use the internet, don’t know english, and don’t know computers, etc. are not an important reason. meanwhile, some students do not know how to have internet at home. the students have confidence in the future use of the internet: 65 % of them believe that they will use the internet more than ever. the portion of those who think that they would use internet less than now is insignificant. indeed, in the year 2010, 96% of the students use the internet and 100% of them believe in the use of the internet in the future more than ever. 3.7 the purposes of the use of internet the main use of the internet in the university of elbasan is for e-mails messages. also, it is used for searching purposes of information and materials. ranking of these goals is the opposite at the national level. the third important goal is the use for fun, relaxation and downloading music, movies and chat. these are followed by the personal sites and use for news. participation in forums of discussions and on-line games is the last use. 3.8 internet in the future, e-governing and e-university the internet sites and local or central bodies are not in the attention of students. about 71 % of them declared that they have never visited sites of central or local governments. if we add these and the rest of those who do not use the internet, the results show that about 84% of students do not ever visit any site local or central government. there are about 10 % of the students who open such sites very rarely, and 4 % more often. only 1 % declares that they open often such sites. the majority of the students do not know if the university has a web site or not, this part covers about 65 %. for the year 2010 these results are given from the chart below: the use of information and communication technologies from the students of elbasan university 1 e-governing 29,7 15,8 20,8 33,7 ■yes, often ■yes, sometimes ■rarely ■never e-university 22,6 18,8 19,7 38,9 figure 5. e-governing and e-university the university web site is not a site where the students can search and find information; it does not serve as a communication instrument. generally, the students don’t know what to say if the university leaders and the academic staff pay attention to ict or not. about 64 % of the students do not reply. about 30 % of them think that they are concerned about the development of ict in university. the rest thinks that the interest is lacking, or they show interest because of the task hung on them. irrespective of that, about 89 % of the students consider ict is a necessity or as important but not a necessity. by the way, the students during the year 2010 positively estimate the efforts of the university regarding the development of ict, and they think that it is an advantage for the university policies. the part of those being not aware or are not interested in or have opposite opinions, consists of about 23 %. in the year 2005, about 75 % thinks that the university tries a lot working for ict, while 23 % think that the university is working but not so much, while compared with those, in the year 2010, only 85% of the students believe in working for ict university, and 13% of them not have this faith. 4. conclusions and recommendations the level of itc application is one of the main indicators of every country’s intellectual and scientific potential. global experience shows that wide use of ict serves the overall development of the country, and these technologies are effective means in reducing poverty and solving socioeconomic problems of the population. the results of this paper show that the information and communication technologies have already made their first steps in the university environment. comparing the results for the two study periods, it is obvious that the private use of mobile phones is more developed than the computer use. one of the most important reasons regards the price, which seems to be too high for the latter. the development of technologies for family intention is still insignificant. although many students use internet, we cannot say that it is a massive communication tool. the school itself offers few possibilities for its use compared to the market. the students usually use internet in places like internet-café. the majority of students do not have internet access at home. finally, the students appreciate the role of these technologies for the future and ask for local or national government assistance by making greater investments on their introduction and rapid use. references 1. “ict policy formulation and e-strategy development” – a comprehensive guidebook. 2. heeks, r. (2001). understanding e-governance for development. paper no. 11, igovernment working paper series, institute for development policy and management, university of manchester. http://www.sed.manchester.ac.uk/idpm/publications/wp/igov/igov_wp11.htm (accessed 11 november, 2006). 3. sein, m.k. and harindranath, g. (2004). conceptualising the ict artefact: towards understanding the role of ict in national development'. the information society 20: 15-24. 4. sein, m.k. (2005). paradigms of ict-in-development. proceedings of ifip9.4 conference, abuja nigeria, may 5. newton, h. newton’s telecom dictionary, 18th edition, new york, 2002. 6. the report of national ict strategy for the development of azerbaijan 2003-2012. http://www.sed.manchester.ac.uk/idpm/publications/wp/igov/igov_wp11.htm . international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2018, 8(4), 7-13. international review of management and marketing | vol 8 • issue 4 • 2018 7 effects of brand love and brand equity on repurchase intentions of young consumers maría cristina otero gómez1*, wilson giraldo pérez2 1grupo de investigación dinámicas de consumo, facultad de ciencias económicas, universidad de los llanos, villavicencio, colombia, 2grupo de investigación dinámicas de consumo, facultad de ciencias económicas, universidad de los llanos, villavicencio, colombia. *email: motero@unillanos.edu.co abstract this article aims to validate a measurement of the effects that brand love has on brand equity in order to verify if brand equity influences repurchase intentions from the perspective of young consumers. the contrast of hypotheses was made from a sample of 306 university students aged between 16 and 24. the results indicate that there is a positive relationship between brand love and brand equity and that consumers perceive the general impressions of the brand in a favorable manner, which increases the chances of repeating the purchase. keywords: brand equity, brand love, repurchase intention jel classifications: m30, m31 1. introduction in both real and virtual economic scenarios, brands occupy a fundamental position in the creation of value. brand equity has been identified as a well-researched marketing concept widely discussed by several scholars and business professionals over the prior decades (hanaysha, 2016). this concept does not only include the tangible product-related features, differentiation by name, color or any other visible characteristic, but also intangible characteristics such as consumer subjectivism (davcik et al., 2015). in this regard, klein (2001) says that “companies may manufacture products, but what consumers buy are brands,” therefore, it is worth considering other aspects related to brand equity from the perspective of the consumer. value does not refer exclusively to financial and commercial aspects, but to the symbolic character it represents. hence, to create satisfaction and positive attitudes in the consumer towards a certain brand is no longer sufficient, it is necessary to link the consumer with the brand in a more emotional and affective way (grisaffe and nguyen, 2011). since brands are also conceived as intangible structures, the consumer may experience an emotional attachment to certain brands and feel what carroll and ahuvia (2006) called brand love or emotional bond with a specific brand name. additionally, the components of brand equity have been proven to be fundamental to stimulate repurchase intentions, which increases the profits of a company and its sustainable growth (chinomona and tafadzwa, 2017). according to the preceding claims, this paper proposes the empirical verification of a conceptual model of brand equity and its relationships with brand love and repurchase intentions. the choice of the brand under study is supported by a report presented by the semana magazine (2016) in its article “these are the most loved brands by colombians,” which highlights totto among the most cherished brands by national consumers, especially, children and young people from lower and middle strata (la patria, 2014). totto is a colombian company that manufactures and exports backpacks, bags, suitcases, duffel bags, handbags, clothes, and accessories. the objective of this work is to validate a measurement of the effects that brand love has on brand equity in order to verify if brand equity influences repurchase intentions from the perspective of young consumers. the target audience are students aged between 16 and 24, who buy totto products. the data under gómez and pérez: effects of brand love and brand equity on repurchase intentions of young consumers international review of management and marketing | vol 8 • issue 4 • 20188 analysis come from a study carried out in villavicencio -colombia. the sample size is 306 young people. to achieve the objective, this research work is structured as follows: a first stage that frames the conceptual content focused on the literature review, together with the hypothesis statement; a second stage that explains the methodology of the empirical study and describes the main results; and a final stage that examines the conclusions, the implications of the findings, the limitations of the study and the suggestions for future lines of research. 2. literature review 2.1. brand love consumers can experience feelings of love towards a brand (carroll and ahuvia, 2006; batra et al., 2012) and, consequently, value it more (roberts, 2005). but even if brand love has emerged as an important building of consumer-brand relationship, little is known about what generates a loving relationship and its consequences (noel and merunka, 2013). brand love is a fairly new construct in the literature on consumer behavior, so more development is needed to understand it (yasin and shamim, 2013). among the few studies that link brand love with brand equity, the works of sallam (2015) and cho et al. (2015) maintain that brand love influences loyalty and, therefore, the final result of brand equity. gonçalves et al. (2010) reveal that the most passionate and emotional evaluations (brand love) seem to be the natural source of cognitive valuation (brand equity). similarly, the study by andré (2015) explains the existence of a positive correlation between love and brand equity, because when a consumer loves a brand, he tends to prefer that brand over the competition and this affects brand equity. thus, the following contrast hypothesis is proposed: h1: brand love directly and positively influences brand equity. 2.2. brand equity the brand equity concept became stronger since the 1980s; currently its construction and definition are being developed by different studies. from an integral vision, brand equity is the added value that a brand endows on a product and it can be viewed from the perspective of the firm, the trade, or the consumer (leuthesser, 1988; farquhar, 1989). from the marketing perspective, it is defined as the differential effect between brand knowledge and the consumer response to the marketing of the brand (keller, 1993). from the viewpoint of yoo et al. (2000), consider that brand equity is the difference in consumer choice between a branded and an unbranded product, given the same level of characteristics. despite the extensive research and significant advances in the understanding of brand equity conceptualization (aaker, 1996) and its measurement (pappu et al., 2005; keller, 2007), literature on brand equity, although substantial, is very fragmented, inconclusive, and evolving (christodoulides and de chernatony 2010; mohan and sequeira, 2016). 2.2.1 dimensions of brand equity the brand equity concept has been studied in a large number of research works and its measurement has been based mainly on the following dimensions: loyalty, perceived quality, association/ differentiation, and notoriety (aaker, 1996; bianchi et al., 2014; norazah, 2015; su, 2016). consequently, in view of the importance of the brand equity dimensions, it is necessary to delve deeper into the analysis of these dimensions and their relationship with the consumer perceptions. 2.2.1.1. loyalty loyalty is a promise of the individual concerning his behavior; it entails the likelihood of future purchases or reduces the likelihood of switching to another previously purchased, consumed or used brand, service or product (berne, 1977). some studies show that loyalty is an effective element to reach company competitiveness, customer retention and profitability in the long term (kiyani et al., 2012; nguyen and liem, 2013). 2.2.1.2. perceived quality perceived quality can be understood as the judgement of the consumer about excellence or superiority of a product/service (zeithaml, 1988) or as the global impression of consumers about the relative superiority or inferiority of an organization and its services (bitner and hubber, 1994). authors such as castleberry and mcintyre (2011) argue that it is a belief about the degree of excellence of a goods or service. in this respect, marakanon and panjakajornsak (2017) maintain that the quality perceived by the consumer depends on personal sense and own experience about the use of different products. 2.2.1.3. association/differentiation measurement of association/differentiation, according to aaker (1996), is done according to three brand dimensions: a. perceived value: this perspective focuses on the value proposal of brands and it can be measured by the good quality-price ratio and the reasons to buy this brand over the competitors (aaker, 1996). b. brand personality: it is a set of attributes that define a particular brand and give it a unique personality that differentiates it from other brands of products with similar characteristics (lee and oh, 2006). c. organizational associations: according to aaker (1996), this dimension regards the organization as a set of people, values, and programs behind the brand. this dimension suggests a general positive attitude of consumers towards firms associated with causes that benefit society (ricks, 2005; tingchi et al., 2014). 2.2.1.4. notoriety brand notoriety refers to the strength of a brand’s presence in consumers’ minds (hutter et al., 2013). it is related to the likelihood that a brand name will come to the consumer’s mind and the ease with which it does (keller, 1993). consumers have been shown to take into account brand awareness as a rule of purchase decision or purchase intention (seyed, 2014; lin et al., 2015). 2.3. repurchase intention repurchase intention is the individual’s judgement about buying again from the same company, based on his previous gómez and pérez: effects of brand love and brand equity on repurchase intentions of young consumers international review of management and marketing | vol 8 • issue 4 • 2018 9 experience (hellier et al., 2003). repurchase intention refers to the probability of using a brand again in the future (sahin et al., 2012). in this respect, reichheld and sasser (1990) argue that improving the repurchase intentions of existing customers is economically more profitable than it is to constantly seek new ones. previous studies have shown positive relationship between brand equity and repurchase intentions, although empirical evidence is still scarce. the works of bojei and hoo (2012) and vahdati et al. (2014) are noteworthy since they proved that brand equity has significant impact on repurchase intentions. such finding was adapted to the context of this study and, as a result, the following hypothesis is proposed: h2. brand equity influences repurchase intentions directly and positively. 3. methodology in order to achieve the objectives of this work of research and to test the hypotheses proposed, a correlational quantitative approach was used; accordingly, an intentional non-probabilistic sample as well as a structured questionnaire, designed from other studies, were used. 3.1. data collection and description of the sample the target audience was university students aged between 16 and 24, buyers of totto products. the source of the data analyzed is a study carried out in villavicencio-colombia. a total of 321 questionnaires were collected, 15 of them were discarded because they were incomplete or incorrectly filled out. the recommendations of the bioethics committee of the university of the llanos were followed and, in the case of minors, parental consent was obtained. a convenience sampling technique was implemented. the questionnaire was completed by undergraduate university students who were asked about their knowledge and use of the totto brand products before collecting the data; then, the survey was taken only by those students who had used that brand. all the questionnaires were administered personally and filled out in the presence of the researcher and the professor. the socio-demographic profile of the participants shows that most of them are women (54.2%). a high percentage of the sample is in the age range between 18 and 22 (75.2%), followed by the age range between 16 and 17 (14.4%) and, finally, by the age range between 23 and 24 (10.4%). most of the individuals belong to the lower and middle strata of the social ladder in colombia. 3.2. measurement of the variables the measurement of the brand equity concept has been addressed through a scale made up by a set of 22 attributes based on the work of lassar et al. (1995); aaker (1996); yoo et al. (2000). it should be noted that brand equity was conceived as a multidimensional construct with a first-order reflective character and a second-order formative character. thus, the loyalty, perceived quality, association/differentiation, and notoriety dimensions were considered to have a reflective relation with its items and a formative relation with the brand equity variable. the scale corresponding to brand love is made up of 9 items and it comes from the work of carroll and ahuvia (2006); ismail and spinelli (2012) and bagozzi et al. (2017). to measure the repurchase intention, 3 items were used based on the work of wang et al. (2013); alavi et al. (2016). in all cases, the items were measured using a 5 point likert scale from (1) “totally in disagreement” to (5) “totally in agreement.” 3.3. data analysis before contrasting the research hypothesis, the quality of the measurement instrument of the structural model proposed by the partial least squares regression technique was evaluated. this technique was chosen mainly because it is especially suitable when the measurement model contains reflective and formative constructs, and when the study seeks to predict dependent variables (hair et al., 2013). the analysis was done in two stages: the assessment of the reliability and validity of the measurement model and the estimation of the structural model. the smartpls 2.0 m3 software was used (ringle et al., 2008). 4. results and analysis 4.1. measurement model first, the validity and reliability of the reflective constructs was verified. the criteria for analyzing the validity of each item loads are supported on the values recommended by bagozzi and yi (1988) who proposed that a load factor must be >0.6. table 1 shows that all the loads obtained have been higher than the recommended values, therefore, no item had to be eliminated. table 1 also shows that cronbach’s value for reliability is >0.7 in all cases, as proposed by nunnally (1978). internal consistency was calculated through the composite reliability coefficient (fc) and indexes >0.6 were considered appropriate (chin, 1998) and higher than cronbach’s alpha values for each of the proposed constructs (fornell and lacker 1981). all values complied with the recommended cutoff value of 0.50 for the average variance extracted (fornell and larcker, 1981; hair et al., 2006). hence, the reliability and convergent validity of the measuring instrument were guaranteed. the weights for the formative constructs of the brand equity variable were checked to be above 0.1, adopting the recommendation of sellin and keeves (1994). likewise, to avoid multicollinearity problems among formative constructs, the variance inflation factor (vif) was used and the empirical criterion proposed by belsley (1990), who affirms that when vif <5 such multicollinearity does not exist, was reviewed. table 2 shows the results of the second step and table 3 shows the results of the third step. gómez and pérez: effects of brand love and brand equity on repurchase intentions of young consumers international review of management and marketing | vol 8 • issue 4 • 201810 the analysis of the discriminant validity showed the shared variance between each pair of factors (square correlation), which must be lower than their corresponding extracted variance indexes (fornell and larcker, 1981). the heterotrait-monotrait (htmt) criterion proposed by henseler, ringle and sarstedt (2015), which verified that a value of the htmt below the predefined threshold of 0.85 allowed to conclude the existence of such validity, was also used. the results shown in table 4 allow to affirm that the model has discriminant validity and, therefore, the structural model was used afterwards. table 1: evaluation of the measurement model factor indicator factor loading bootstrap t-value p value cr ave ca brand love bl1 0.754 16.181 0.000 0.949 0.673 0.939 bl2 0.833 18.998 0.000 bl3 0.855 21.872 0.000 bl4 0.849 20.862 0.000 bl5 0.856 21.482 0.000 bl6 0.794 16.727 0.000 bl7 0.847 18.168 0.000 bl8 0.808 14.115 0.000 bl9 0.782 17.464 0.000 brand equity ba_oa1 0.915 39.442 0.000 ba_oa2 0.913 50.276 0.000 ba_oa3 0.913 41.813 0.000 ba_bp1 0.886 31.429 0.000 ba_bp2 0.892 31.729 0.000 ba_bp3 0.816 24.553 0.000 ba_bp4 0.925 37.014 0.000 ba_pv1 0.945 53.218 0.000 0.852 0.592 0.773 ba_pv2 0.968 56.123 0.000 ba_pv3 0.968 72.614 0.000 pq1 0.874 30.781 0.000 pq2 0.876 29.734 0.000 pq3 0.896 33.201 0.000 pq4 0.806 25.565 0.000 l1 0.848 18.228 0.000 l2 0.875 16.516 0.000 l3 0.818 14.849 0.000 n1 0.779 17.150 0.000 n2 0.785 14.085 0.000 n3 0.841 20.584 0.000 n4 0.793 15.128 0.000 n5 0.803 18.083 0.000 repurchase intention ri1 0.932 27.678 0.000 0.941 0.842 0.906 ri2 0.928 32.992 0.000 ri3 0.893 23.471 0.000 own elaboration table 2: formative construct brand associations formative construct formative indicators weights statistics t p value vif brand associations perceived value 0.389 23.660 0.000 1.454 brand personality 0.388 23.810 0.000 1.638 organization 0.428 25.016 0.000 1.801 own elaboration. vif: variance inflation factor table 3: formative construct brand equity formative construct formative indicators weights statistics t p value vif brand equity brand associations 0.366 20.002 0.000 1.853 perceived quality 0.322 18.316 0.000 2.025 loyalty 0.395 15.283 0.000 1.280 notoriety 0.207 8.939 0.000 1.553 own elaboration. vif: variance inflation factor table 4: discriminant validity criterion fornell-larcker and htmt brand love brand equity repurchase intention brand love 0.673 0.674 0.701 brand equity 0.753 0.592 0.769 repurchase intention 0.760 0.731 0.842 the main diagonal ave; in the upper boxes variance shared by each pair of factors; in the lower boxes heterotrait-monotrait values. own elaboration. htmt: heterotrait-monotrait gómez and pérez: effects of brand love and brand equity on repurchase intentions of young consumers international review of management and marketing | vol 8 • issue 4 • 2018 11 4.2. structural model once the measuring instrument was proven to fulfill the psychometric properties established in the literature, the proposed structural model was estimated from the standardized path coefficients (β) with the observed t values and the significance obtained from the bootstrap test with 500 subsamples (hair et al., 2011). additionally, the predictive goodness of the model-dependent constructs was measured using the stone-geisser procedure. this test is calculated by means of the blindfolding technique, which must be greater than zero (q2 > 0) to consider that the model has a predictive significance (sellin, 1995). the explained variance (r2) was also calculated through the bootstrapping technique, an indicator that must comply with the equal to or >0.1 criterion (falk and miller, 1992). the results show that all the values obtained from both q2 and r2 are adequate. figure 1 shows the results of the evaluation of the proposed model. figure 1 shows how the hypotheses proposed in the theoretical model are confirmed. thus, brand love and brand equity have a positive relationship with each other (β = 0.674), which confirms the first of the hypotheses (h1). this result coincides with the findings of andré (2015), which proves that brand love does not only influence loyalty, but it also influences perceived quality, notoriety, and association/differentiation. this relationship proves to have an important influence on consumer perceptions, which leads to a possible motivation among young people to continue using the totto brand products. in relation to brand equity and repurchase intentions, h2 is confirmed (β = 0,638); it proves that consumers perceived general brand impressions such as characteristics, attributes, and benefits in a favorable manner, which increases the chances of repeating the purchase. this result is also consistent with the findings of huang et al. (2014) and of lin et al. (2015). the results for brand equity have revealed that its dimensions have different impacts: in hierarchical order it is evident that loyalty has positive effects on brand equity with a weight of 0.395, brand associations with 0.366, perceived quality with 0.322 and notoriety with 0.207. 5. conclusions this study highlights the importance of studying the emotions of the consumer; brand love shows a positive effect and a favorable load of the consumers’ emotional attitude component to each of the brand equity dimensions. accordingly, it was possible to infer that notoriety is not the strongest element in the general construction of brand equity for young people; in contrast, loyalty showed the highest values. these findings have implications for totto because it is proven that the brand has been able to obtain a stake in the market by strengthening loyalty. in this way, loyalty is a dimension supported in the emotional component of the consumer, where the emergence of affection becomes a feeling that motivates repurchases in the future. this explains the reason why totto is one of the most loved brands by colombians. regarding commercial management, it is necessary to continue implementing strategies that lead to proper clients’ loyalty management since this dimension allows repurchase. likewise, the study suggests that totto could optimize the favorable perception of the brand image since the associations with the organization dimension also obtained a high value. young people perceive totto as a brand that transmits trust, credibility, and admiration, and it is from these elements that the brand must communicate messages with more emotional, than rational connections. this study also has several limitations that provide possibilities for the development of future lines of research. this study considered the analysis of a specific brand related to a functional product, so it would be worthwhile to extend the analysis to other brands that are associated with products that represent the hedonism of the consumer. this research did not consider external aspects that influence the creation of emotions by the consumer, such as the comments and opinions of other consumers; in this sense, topics such as wom (word of mouth) could be addressed together with ewom (electronic word of mouth) since, according to severi et al. 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(1988), consumer perceptions of price, quality, and value: a means-end model and synthesis of evidence. journal of marketing, 52, 2-22. international review of management and marketing vol. 2, no. 1, 2012, pp.22-42 issn: 2146-4405 www.econjournals.com inclusive business – what it is all about? managing inclusive companies tea golja juraj dobrila university of pula, department of economics and tourism, croatia. email: tgolja@efpu.hr samanta požega juraj dobrila university of pula, department of economics and tourism, croatia. email: spozega@efpu.hr abstract: following the challenges we face today, the inclusive business models are future business models through which the millennium development goals can be fostered and strengthen. these are the models which, through their strategic orientation on inclusivity, include low income communities in their value chain. this can be done through combining variety of strategies which all have two common points – recognition of stakeholders and adjustment of the product to the target market. the paper presents the analysis of inclusive markets. hence, the research results show the dispersion of inclusive businesses worldwide, type of the organization, sector coverage, and contribution to mdgs as well as the particular way of inclusion of low income communities in their value chain. the aim is to present how inclusive business benefits not only the low income societies, but the companies that operate in this way as well. keywords: inclusive business organizations; mdgs, inclusive business models; base of the pyramid strategy jel classifications: m14; d23; l20; a13 1. introduction as the businesses grow, consequently their demand for supplies is increasing, and thus their need to include other parts of the world's economy is needed. in this way they can create business opportunities for the world’s population in lower income societies (or the base of the pyramid bop). the private sector is thus, pursuing growth and sustainable inclusion of almost 4 billion people leaving at the base of the pyramid. they can be included in the value chain as suppliers – producers, customers or entrepreneurs. in this way they can escape poverty and improve their lives. the usual business services the private sector can provide in lower income communities include: health care (hospitals, supply of pharmaceutical products), telecommunication, electrical power, clean water, education (schools, universities), financial services (micro credits, loans) etc. inclusion of low income communities in the business value chain pays-off due to their penetration on the untapped markets and profits gained from the business that is done there. companies that are running their business in such a way are called inclusive businesses. but, in order to be successful, companies should be innovative, and creative. their managers should overcome traditional stereotypes with regards to bop societies, be opened-minded, proactive, and ready for fighting new challenges. on the other side, apart from corporate economic benefits, the social inequality is reduced. companies should adapt their product and processes. while other innovation strategies entail filling market gaps or engaging other stakeholders, adapting products or processes can allow a business to circumvent constraints by acting on its own. so, this strategy is often used to deal with constraints that are very difficult to remove, an ineffective regulatory environment or inadequate physical infrastructure. (undp, 2008:45) authors conducted a research in order to find out and locate what companies are conducting the business following the inclusive model. the research was enriched by defining the sector where they operate, the role of the poor in their business model as well as their contribution to the defined millennium development goals. the results are presented separately using regional separation as the main criteria. inclusive business – what it is all about? managing inclusive companies 23 the aim is to present how inclusive business benefits not only the low income societies, but the companies that operate in this way as well. thus, we shed some light on the concept of inclusive business, its micro and macro benefits, and its effective implementation in the ordinary business practice (management practices). the purpose of the paper is to present how and where in the world inclusive businesses operate and how they are contributing to millennium development goals. we started with the main hypothesis that inclusive business is long-run profitable business that helps low income societies (base of the pyramid) to overcome poverty and ensures long-term business profitability if effectively implemented. 2. literature review inclusive business models expand access to goods, services and livelihood opportunities for those at the base of the pyramid in commercially viable, scalable ways. inclusive business models are helping companies turn underserved populations into dynamic consumer markets and diverse new sources of supply. in the process, companies are developing product, service and business model innovations with the potential to tip the scales of competitive advantage in more established markets as well. (jenkins et. al., 2011: 2) the notion of inclusive business calls for additional focus and innovation in the way companies do business. it involves creating new forms of employment, new markets, and affordable products and services. this spurs economic growth and encourages entrepreneurship. (bonnell and veglio, 2011) inclusive business is the one which seeks to contribute to poverty alleviation by including lower-income communities within its value chain while not losing sight of the ultimate goal of business, which is to generate profits. (wbcsd and snv, 2006: 2) inclusive businesses are entrepreneurial initiatives that are economically profitable and environmentally and socially responsible. underpinned by a philosophy of creating mutual value, inclusive businesses contribute to improving the quality of life of low income communities by integrating them in the business value chain: as suppliers of services and/or raw material, as distributors of goods and/or services and as consumers, by offering goods and services to fullfill their essential needs at prices they can afford. (wbcsd and snv, 2011: 10) doing the business in the inclusive way is originally based on the social responsibility of the company. without being socially responsible, the company could not follow the inclusive business model. corporate social responsibility integrates the economic, ecological and social dimension of the business operations. corporate social responsibility refers to ane ver-widening agenda of voluntary initiatives various forms of private regulations in which non-state actors play a key role in setting standards related to the workplace, the environment and human rights, and promoting and overseeing their implementation. the csr initiatives typically relate to working conditions, eco-efficiency, community support and anti-corruption. (united nations research institute for social development, 2010: 234) inclusive models are one step further because they operate within the low income communities helping them overcome poverty and enabling them access to information, and furthermore to goods and services they need at the price they can pay. people with scarce economic resources are targets for inclusive businesses. they are integrated within the value chain as customers, suppliers or distributors. this is shown in the following picture (chart 1). there are reasons why companies should include almost 4 billion people in their value chain. in general, there are economic and social benefits for the companies and for the society they operate (chart 2). if generalized, they can be spit into two categories: macro and micro benefits. inclusive business leads to: (wbcsd and snv, 2006: 2). 1) increased profitability for the company as a result of lower supply costs, market expansion through the inclusion of low-income sectors, and greater sustainability of the business activity 2) improving living conditions for poor populations as a result of increased incomes and/or greater access to goods, services or infrastructure. international review of management and marketing, vol. 2, no.1, 2012, pp.22-42 24 chart 1. the integration of the low-income communities in the value chain source: wbcsd and snv, 2006: 3 chart 2. economic and social benefits of inclusive business source: wbcsd and snv, 2006: 2 benefits of inclusive business are presented in the following table 1. when focusing exclusivelly on the micro benefits, the motive for doing business with the poor is not always immediate profitability. sometimes it is longer-term growth and competitiveness through fostering innovation a must for companies to compete and grow (good for multinationals). the products, services and business models that result can be successfully transfered to developed markets, attracting consumers there. expanding into poor markets allows firms to capture market share in a growing economy. and it allows them to build brand recognition and loyalty with a growing customer base (undp, 2008: 17-18). there is a question how inclusive business can be done or what practices should be followed or supported. herewith, the models featured in accelerating inclusive business opportunities developed by ifc1 are presented. 1 ifc – a member of the world bank group invests in the private sector. in the past five years, ifc has invested over $5 billion in more than 200 companies in nearly 80 countries around the world. inclusive business – what it is all about? managing inclusive companies 25 table 1. benefits of inclusive business with partners, suppliers and distributors for the company for the low income community secure supply of raw materials. fair prices and conditions. traceability and quality control of raw materials. assured sales. lower transaction costs. employment creation and expansion. shared risks. training and technical assistance. access to knowledge and local networks. technology and knowledge transfer. better relations with government. access to financing. strategic positioning in new fair trade markets. participation in a business and investment environment. with consumers for the company for the low income community access to new markets. greater access to quality products and services. increased income. lower and more affordable prices. transfer of product innovations to existing markets. better quality of life. increased brand value and positioning in order to capture new markets. increased productivity. source: snv and wbcsd, 2008: 13 table 2. business models in the ifc’s portfolio business model explanation micro distribution and retail reaches base of the pyramid (bop) end consumers who tend to make small, frequent purchases close to home by leveraging and effectively serving existing retail outlets in the neighbourhoods where those consumers live. such outlets are often small, with little space for excess inventory, and run by staff with little business training, scarce working capital, and no access to finance. they need small, frequent deliveries and the ability to buy on credit. they may need custom assortments and/or small-sized products (e.g., airtime cards in small denominations) or pay-per-use services (e.g., minutes of shared mobile phone use) that match bop consumers’ limited, sporadic cash-flows. many companies using the micro distribution and retail model also provide business skills training and other forms of support to help such retail outlets increase sales, recognizing the link between the outlet’s business success and the company’s own experiencebased customer credit generates additional revenue in the form of interest income through lending to customers the company knows are credit-worthy through experience doing business with them in the past—rather than formal credit histories. the model is generally employed by companies outside the financial sector, though some may have credit arms or subsidiaries. some companies focus on their direct customers. one company lends to its customers’ customers as well, based on the experience its customers have had with those people in the past (and leveraging their existing relationships to help incentivize repayment).the model is predicated upon limited access to other sources of credit at similar rates or for similar purposes. last-mile grid utilities extends grid coverage to more distant and often lower-income neighbourhoods through a combination of financing, technology, and customer service innovations that help cover capital expenditures, minimize technical and commercial losses, and ensure customers pay on time. the model is based on a clear value proposition to the consumer: greater quality, reliability, convenience, and in many cases, lower cost compared to previously available, often informal utility options international review of management and marketing, vol. 2, no.1, 2012, pp.22-42 26 smallholder procurement turning geographically dispersed smallholder farmers into reliable sources of quality supply through efficient aggregation methods and customized packages of support services that build capacity and loyalty. common support services include agricultural extension, business development, access to agricultural inputs, and credit. sometimes, buyers choose to focus on higher value crops capable of earning a premium in the marketplace to help cover the cost of such support value-formoney degrees makes university education accessible to all through a combination of innovations that increase affordability and value for lower-income students. to increase affordability, these universities use standardized curricula that can be taught by part-time instructors, accessible physical and virtual campuses that reduce students’ transportation costs, modular programming that matches cash flows and access to student loan financing. to create value, they offer course content and career services tailored to the job market. value-formoney housing makes home ownership possible for lower-income buyers through a combination of high value for money and facilitated access to mortgage financing. a home is the biggest investment most people ever make and they have to be convinced it is worth the commitment, which can feel risky. value-for-money housing balances aspiration (with a focus on quality, special features, and the community environment) and affordability (with home sizes and layouts in different price ranges, and features that reduce the ongoing cost of ownership). because the model hinges upon access to financing, it often involves helping homebuyers—often the first in their families—navigate the mortgage application process. e-transaction platforms many low-income people lack access to financial services as a result of the high transaction costs and complex logistics involved in reaching them. technology companies are beginning to address these challenges through electronic transaction platforms, creating opportunities to serve low-income customers and bringing them benefits spanning convenience, efficiency, security, market access, and integration into the formal financial system. ifc is investing in a diverse set of technology companies that are helping o create the complex infrastructure for a cashless society to function. these companies have different business models. however, at a fundamental level, they display some interesting similarities—like leveraging existing retail outlets and networks, building outlets’ business and technology skills, raising consumer awareness and helping them understand the value proposition behind cashless transactions source: jenkins, ishikawa, gean eot es, ba pt i st a an d ma suoka , 2011: 2 – 3. 3. the base of the pyramid – who these people are? it is important to familiarize with the concept of bop society. within the bop group, income levels vary. about 1.1 billion earn us$ 2-8 per day and – while still considered poor – are beginning to generate significant discretionary income. in the mid-range, 1.6 billion earn between us$ 1-2 per day, spending largely on essentials. one billion people live in extreme poverty, earning under us$ 1 per day, and often struggle to meet basic needs (all figures in ppp$). people at these income levels are found worldwide, largely in asia (68%), africa (16%) and latin america (10%). this makes a total of 94%. central and eastern europe and russia count for 6%. 60% of the bop is concentrated in india and china. the majority of bop leave in rural areas (68 % globally). (world economic forum and boston consultin group, 2009) the base of the pyramid societies can be segmented based on their income. the following chart shows the segmentation. what can be noted from the chart 3 is that 1.1 billion people are expected to emerge as the future middle class. for the multinational companies, that is, again, good indicator which could force them to engage more with this communities and help them escape poverty thus making them integrated in their value chain. this is a huge market and could benefit companies’ profits in the long run and vice versa, multinationals can offer these people new employment opportunities and make them more independent of external help in terms of loans etc. inclusive business – what it is all about? managing inclusive companies 27 chart 3. segmentation of the base of the pyramid based on income source: world economic forum and the boston consulting group, 2009:10 the main salient characteristics of the bop society are (world economic forum and boston consulting group, 2009:5): (1) financial constrains low and fluctuating incomes, and limited access to credit or insurance, drive the bop to be smart shoppers and risk-averse investors; (2) life challenges domestic constraints, difficult living conditions, and high prices for often substandard products or services are among the daily challenges at the bop; (3) new customers bop consumers lack information on many commercial products, and therefore rely more heavily on trusted sources or demonstrations to make buying decisions; (4) quality standards bop consumers and workers conduct their lives with dignity and demand both respect and quality from service providers and employers. 4. managing inclusive business – effective strategy implementation businesses that want to become inclusive have to transform their business strategies in order to include the 4 billion people that live at the base of the pyramid. as such, they will have to think out of the box asking themselves questions such: “who can use the product we make?” rather than “who can buy the product we make?”. (world economic forum and the boston consulting group, 2009: 14) so, companies should rather be focused on the possibilities of different people, rather than on the selling of the product regardless of the possibilities and needs of the targeted communities. it is better to research the market first and create the product which is suitable for the target market, and the product they need. first, they should get acquainted with main characteristics of the bop societies mentioned above. they should be aware that these people are struggling with low income, lack of information and at the same time they have a strong desire for products and services which suit their needs but leave in remote rural areas making it even more difficult for them to acquire proper information on products and services offered on distant markets. thus, diversity management skills will come in the foreground. especially cross-national diversity management due to managing workforce composed of citizens in different countries. this presents different challenges and dilemmas, and requires a different set of policies and programs, as well as it should take into account the legislative cultural context in other countries. (mor barak, 2011: 236) second, they should follow the principles of success which are structured along four parts of a typical business model: product innovation, supply chains, marketing and partnership. these are: (world economic forum and the boston consulting group, 2009: 24) 1) create life-enhancing offerings – companies need to adapt their products and prices to the specific needs of this society 2) reconfigure the product supply chain – source from local producers, leverage local distribution channels, finding ways to overcome infrastructure constrains 3) educate through marketing and communication – educate about the product benefits, create word-of-mouth advocacy, aim for trust and identity in branding international review of management and marketing, vol. 2, no.1, 2012, pp.22-42 28 4) collaborate to form non-traditional partnerships – partner with communities, create incentives that encourage self governance, collaboration with unconventional partners (civil society and competitors), share products and assets, capabilities and knowledge, make partnership work 5) unshackle the organization – senior level commitment, create focus and accountability, provide decision rights and authonomy, create lean and agile structures, provide access to capabilities and knowledge. following the above mentioned, the undp (2008: 46) distinguishes similar strategies to overcome the constrains such as lack of market information and regulatory environment as well as physical infrastructure, knowledge and skills and access to financial services. the strategies are: 1) adapt products and processes, 2) invest in removing market constrains, 3) leverage the strenghts of the poor, combine resources and capabilities with others and 4) engage in policy dialogue with government. the new strategy is a so called bop (base of the pyramid) strategy. there are several ways this can be done. the most important is efficient implementation of the defined strategy with the aim of becoming inclusive. however, businesses have to bear in mind that their business operations should be economically, ecologically and socially sustainable. hence, they are at the same time supporting corporate social responsibility. consequently, the second important issue is stakeholder participation and partnership. shifting their business in low income world, companies, in order to be inclusive and hence, socially responsible have to take into consideration the societies they will start to work with and the community where they will operate. the collaboration with non-traditional partners was already mentioned. the recognition of the community means making partnership with local actors such as civil society organizations (csos), local entrepreneurs and community members in order to accurately develop products and services for the poor. these partners provide local market knowledge, potential distribution channels and local legitimacy to help big business successfully engage bop communities. companies are also advised to work with csos, the government and other businesses to "combine their capacities" to effectively include the poor in their business strategy. (mahmoud, 2009) governments can strengthen policy and tax incentives for bop business engagement companies can collaborate across industries and among stakeholders to leverage shared resources and capabilities. partnering with ngos, donors and governments can combine organizational capacities in ways that benefit all. all stakeholders can work to identify viable business models, monitor and evaluate their impacts, and share learnings to accelerate momentum. raising the visibility of successful bop business initiatives can catalyze learning and broader adoption by companies. (world economic forum and the boston consulting group, 2009: 7) to sumarize, it is important to manage and understand relationships within and around the activity. the stakeholder circle could be a good method. this methodology is based on the concept that an activity can only exist with the informed consent of its stakeholder community, and that managing the relationships between the community and the activity will increase the chances of success. it is based on five crucial steps: 1) identification of all stakeholders, 2) prioritisation to determine who is important, 3) visualisation to understand the overall stakeholder community, 4) engagement through effective communication and 5) monitoring the effect of engagement. (bourne, 2009: 43 – 44) when organisations' decisions and actions have important implications for others, the stakeholder thinking process of always reasoning in stakeholder terms throughout the management process should be taken prioritized. (carroll and buchholtz, 2011: 94) however, relationship between corporations and their stakeholders vary from issue to issue and from time to time as concerns and priorities change over time: new classes and configuration of stakeholders appear. (post, preston, and sauter-sachs, 2002: 24) key publicly-available tools and resources that support the initiation, development and scaling of inclusive business models are particularly important for enabling the success of inclusive business initiatives, supporting a range of key commercial and developmental outcomes: (wbcsd, 2010: 1) 1. identifying appropriate business models and reducing risk by learning from the successes and issues faced by others; 2. reducing search, initiation, development and transaction costs; 3. facilitating partnership initiation, development, management and evaluation; 4. enhancing access to finance; 5. measuring and evaluating commercial and developmental benefits; and inclusive business – what it is all about? managing inclusive companies 29 6. maximizing the commercial and social value of business models through effective advocacy and communications. there are many developed tools and resources to specifically support these outcomes. however, we can split them into two main categories: 1) resources for action and 2) supporting resources. (wbcsd, 2010: 2–5) the “action category has been divided into three basic stages to assist practitioners find resources that are appropriate to their stage of inclusive business model development: 1. concept development – developing an initial inclusive business concept that can be taken forward for piloting and/or implementation, and building internal support for the concept where necessary.2 2. implementation – implementing successful inclusive business models in real-world markets.3 3. measurement and evaluation – evaluating and measuring the commercial and social performance of inclusive business models, as a key platform for enhancing performance and for business model replication and/or scaling.4 in the inclusive business space there are a range of resources and information platforms which further facilitate and magnify the efforts being made by practitioners. these resources include: • case studies & data – data sources that inform inclusive business model design and implementation, through documenting the experiences of others and providing useful commercial and social data.5 • networking – enabling like-minded individuals and organizations to engage in innovative dialogues on inclusive business and make connections for mutual advantage.6 • visibility – platforms, information channels, and events that maximize the value of outreach activities of organizations engaged in inclusive business.7 • advocacy – organizations and platforms that seek to influence public and corporate policy to enhance the enabling environment for the expansion and scaling of inclusive business.8 2 (i.e. wbcsd inclusive business challenge, iblf: a guide to inclusive business, wbcsd/snv alliance for inclusive business: inclusive business profitable business for successful development, undp: the mdg's: everyone's business – building awareness and internal support, undp growing inclusive market strategy matrix, monitor group: emerging markets, emerging models, endeva: inclusive business model guide – business model development, massachusetts institute of technology d-lab, tu delft bop initiative, stanford entrepreneurial design for extreeme affordability – product design, odi: supply and distribution chains of multinationals: harnessing their potential for development, harvard/ifc/iblf: business linkages: lessons, opportunities and challenges, global compact: supply chain sustainability – supply chain). 3 (i.e. iblf – a framework for practical action in inclusive business, base of the pyramid protocol, business innovation facility practitioner hub – general guidance, wbcsd/iblf business guide to development actors, the partnering toolbook – partnering, ifc/harvard: scaling up inclusive business – scaling, asian development bank – technical assistance project on inclusive business at the base of the pyramid, interamerican development bank: opportunities for the majority, african enterprise challenge fund, usaid’s global development alliance, international finance corporation, acumen fund – finance and funding, undp inclusive market development, business innovation facility, netherland development organization (snv), idb corporate leaders program for success in majority markets, ifc advisory services, ashoka full economic citizenship initiative, technoserve, avina, reciprocity – advisory support). 4 (i.e. wbcsd measuring impact framework, unep: towards triple impact – toolbox for analyzing sustainable ventures in developing countries, impact reporting & investment standards, oxfam poverty footprint, base of the pyramid impact assessment framework, bcta result reporting framework). 5 (i.e. wbcsd case study library, undp growing inclusive markets case studies, iblf inclusive business sourcebook, business fights poverty case study ‘clickable map’, harvard economic opportunity series papers, ifc/harvard: scaling up inclusive business, ifc: telling our story: base of the pyramid investments – case studies, undp heat maps, ifc, world bank and wri: the next 4 billion: market size and business strategy at the base of the pyramid, world bank data, millennium development goals statistics – market data) 6 (i.e. business fights poverty, business call to action, base of the pyramid knowledge network – global, business action for africa, african facility for inclusive markets, mapping finance work for africa, african platform for development effectiveness – regional: africa, majoritymarkets.org, reni-wbcsd.org – regional. latin america). 7 (i.e. inclusivebusiness.org, business fights poverty, nextbillion.net – websites, world business and development awards – awards). international review of management and marketing, vol. 2, no.1, 2012, pp.22-42 30 5. empirical research – inclusive companies around the world in this chapter we are presenting the results of the research we conducted in september 2010 using the web site http://www.growinginclusivemarkets.org/ as the main source of information. this web site is based on the initiative of the “growing inclusive markets” (gim). that is a undp-led global multi-stakeholder research and advocacy initiative that seeks to understand, enable and inspire the development of more inclusive business models around the globe that will help to create new opportunities and better lives for many of the world’s poor. by doing so, gim contributes to human development and the millennium development goals (mdgs). (http://www.growinginclusivemarkets.org/). we decided to choose this site as a starting point in research since we found that “gim initiative involves a broad range of partners from developed and developing countries, has produced global, regional and national reports, action-oriented research tools, a web-based knowledge management platform, and generates capacity building, network building and knowledge sharing at the local level.” the results are presented separately. the region where companies operate was taken as the main criteria. this was based on the notion that the lower income communities are mostly found there. thus, the following regions were taken into consideration: eastern europe, sub-saharan africa, middle east and north africa, east and south-east asia, south asia, latin america and caribbean. furthermore, to enlighten the real situation in inclusive business development, the sectors where companies operate was defined, the type of organization is stated, the role the poor people have, as well as the company’s contribution to millennium development goals. under type of organization authors distinguished the following in table 3. table 3. description of the types of inclusive organization type of organization description msme micro, small and medium enterprises which are classified like a manufacturing enterprises the enterprises engaged in the manufacture or production of goods pertaining to any industry specified in the first schedule to the industries. they are defined in terms of investment in plant & machinery. and like a service enterprises the enterprises engaged in providing or rendering of services and are defined in terms of investment in equipment (development commissioner (msme) ministry of micro, small & medium enterprises, 2011) large domestic company a company that conducts its affairs in its home country. she is is often taxed differently than a foreign corporation, and may be required to pay duties or fees on the importation of its products. typically, a domestic company is able to conduct business in other states or other parts of the country where it has filed its articles of incorporation. (investopedia, 2011a) foreign mnc a corporation which is incorporated under the laws of a different state or nation. a "foreign" corporation must file a notice of doing business in any state in which it does substantial regular business. it must name an "agent for acceptance of service" in that state, or the secretary of state in some jurisdictions will automatically be that agent so people doing business with a foreign corporation will be able brings legal actions locally if necessary. (the free dictionary by farlex, 2011a) foreign company/mnc a company which is doing business in a state other than the one in which it is incorporated. she is also called out-of-state corporation; opposite of domestic corporation. (investor words, 2011a) developing country/mnc mnc that operates in a country that is poor and whose citizens are mostly agricultural workers but that wants to become more advanced socially and economically (word web online, 2011) mnc a corporation that has its facilities and other assets in at least one country other than its home country. such companies have offices and/or factories in different countries and usually have a centralized head office where they co-ordinate global management. very large multinationals have budgets that exceed those of many small countries (investopedia, 2011b) 8 (i.e. business call to action, wbcsd, iblf, the partnering initiative, business action for africa – business advocacy organizations & platforms) inclusive business – what it is all about? managing inclusive companies 31 government initiative a government ownership of lands, streets, public buildings, utilities, and other business enterprises. the theory that all land and its resources belong ultimately to the people and therefore to the government are very ancient. from it comes the doctrine of eminent domain, asserting that the state has ultimate control over lands and buildings within its borders. many developing countries also have large-scale public ownership, especially of vital industries and resources. public ownership is to be distinguished from government control of private enterprises in utilities, business, and agriculture. (the free dictionary by farlex, 2011b) non-profit organization (excluding ingo) an incorporated organization which exists for educational or charitable reasons, and from which its shareholders or trustees do not benefit financially. any money earned must be retained by the organization, and used for its own expenses, operations, and programs. many non-profit organizations also seek tax exempt status, and may also be exempt from local taxes including sales taxes or property taxes (investor words, 2011b) ingo international non-governmental organization is any international organization that is not founded by an international treaty (answers.com, 2011) cooperative a jointly owned commercial enterprise (usually organized by farmers or consumers) that produces and distributes goods and services and is run for the benefit of its owners (the free dictionary by farlex, 2011c) the results are presented hereafter. in the table 4, authors are showing the distribution of inclusive businesses in the eastern europe. analyzing the table 3 one can conclude that the inclusive market expanded throughout europe. it is present in many of the business sectors. the most common's agricultural. eastern european countries are trying to combat poverty, ensure environmental sustainability, business operations, etc. these countries are trying to help to achieve the millennium development goals as well, particularly in the area of poverty and the preservation of environmental sustainability. the poor are engaged in business as producers, consumers, entrepreneurs and employees. this is followed with the graphical presentation where the types of inclusive businesses in eastern europe are shown more precisely in chart 4. chart 4. type of organizations in the eastern europe eastern europe msme large domestic company foreign mnc foreign company/mnc developing country/mnc government initiative non profit (excl ingo) ingo cooperative source: authors’ research international review of management and marketing, vol. 2, no.1, 2012, pp.22-42 32 table 4. inclusive business in the eastern europe inclusive business in the eastern europe country organization business sector mdg type of organization role of the poor albania edipack consumer products, waste management 1,7 msme employee, entrepreneur armenia tufenkian hotels tourism 1,7 large domestic company producer, employee azerbaijan gadim guba artisanal goods, consumer products 1,3,7 msme employee belarus mobiletelesystems (mts) health care, ict 1,6 large domestic company consumer bih industrijski otpad d.o.o. waste management 1,7 msme producer, employee croatia eco farm mavrović ltd. agriculture 1,7 msme producer georgia begeli d.o.o. agriculture 1,7 msme employee, producer kazakhstan tengizchevroil energy (excl renewable energy) 1 large domestic company entrepreneur kyrgyzstan cbt kochkor artisanal goods, tourism 1,7 msme entrepreneur macedonia fyr tinex consumer products 1 large domestic company employee moldova rural finance corporation (rfs) micro-credit 1 large domestic company entrepreneur montenegro čistoća waste management 1,7 government initiative employee, entrepreneur poland pec luban biofuels/biomass, utilities 7,8 msme producer dtc tyczyn utilities, ict 8 cooperative consumer danone food & beverage 4,8 foreign mnc consumer russia forus bank basic accounts, microcredit, savings 1,3,8 msme consumer voronezh oblast state fund for small business support micro-credit 1 government initiative consumer serbia temerin telecottage ict 1,2,8 msme consumer tajikistan tojiksodirotbonk (tsb) agriculture, micro-credit 1 large domestic company consumer turkey hey textile consumer products 1,3 large domestic company employee turkmenista n dbs artisanal goods, consumer products 1 msme employee ukraine vitmark agriculture, food & bevarage 1 large domestic company producer, consumer, employee uzbekistan marap gmbh agriculture, food & bevarage, forestry 1,7 foreign company/mnc producer source: authors’ research various types of organizations within an inclusive model exist. the most common of which are msmes (43,47 % or 10 out of 23) followed by and large domestic companies (34,78% or 8 out of 23). the following table 5 is concentrated on the region of south africa. inclusive business – what it is all about? managing inclusive companies 33 table 5. inclusive business in the sub saharan africa inclusive business in the sub saharan africa country organization business sector mdg type of organization role of the poor burkina faso idr agriculture 1,3,7 large domestic company employee democratic republic of kongo celtel ict 1,3,8 developing country/mnc consumer ghana barclays savings 1,3,8 foreign mnc consumer itfc agriculture, food & beverage 1,7,8 msme producer toyola fuel efficient stoves, consumer products 1,7 msme consumer asti agriculture 1 non-profit (excl ingo) producer manufacturing industry manufacturing 1 msme entrepreneur esoko agriculture, ict 1 msme consumer guinea kraft foods agriculture, food & beverage 1,7,8 foreign mnc producer kenya kace agriculture, ict 1 msme consumer ecotact sanitation 1,4,7 msme consumer safaricom ict 8 developing country/mnc consumer the healthstore foundation health care 1,3,4,6 non-profit (excl ingo) consumer k-rep bank basic accounts, micro-credit, insurance, savings 1,3,8 msme consumer mali edf solar power 7,8 foreign mnc consumer armor-lux agriculture 1,2,7,8 foreign country/mnc producer pésinet health care, ict 4,6,8 non-profit (excl ingo) consumer mauritania tivisky dairy food & beverage 1,7,8 msme producer mozambique vidagas energy (excl renewable energy), health care 4,5,6,7,8 msme consumer nigeria mobah rural horizons agriculture, consumer products 1 msme consumer olam agriculture, consumer products, food & beverage 1 developing country/mnc consumer tetrapak agriculture, food & beverage, consumer products, health care 1,8 foreign country/mnc consumer sub saharan africa (ssa) sanofi-aventis health care, consumer products 6,8 foreign mnc consumer senegal chaka group remittances 1,8 msme consumer vev water, wind 1,7 msme consumer, entrepreneur pésinet health care, ict 4,6,8 non-profit (excl ingo) consumer adina food & beverage, consumer products, agriculture 1,3,7 large domestic company producer južna afrika aspen health care, consumer products 4,5,6 developing country/mnc consumer amanz' abantu water 1,5,6,8 msme consumer mondi waste management 1,7 foreign country/mnc consumer tedcor waste management 1,7 msme employee, international review of management and marketing, vol. 2, no.1, 2012, pp.22-42 34 entrepreneur edu-loan micro-credit, education 8 msme consumer kuyasa solar power, housing & construction 7 non profit (excl ingo) consumer nedbank & rmb micro-credit, housing & construction 8 developing country/mnc consumer moladi housing & construction 1,7 msme employee, consumer uganda association of private water operators water 3,4,6,8 msme consumer map international basic accounts 1 msme consumer source: authors’ research according to table 5, one can see that the number of inclusive organization of sub saharan africa is certainly the largest (37 companies). the business sector covers many areas of agricultural, food and beverage, health care, ict, etc. they tend to greatly assist the achievement of mdgs, particularly in combating poverty, gender equality, combating different diseases, and ensuring environmental sustainability. poor people often participate as consumers. the following chart 5 presents the distribution of inclusive businesses in south africa. chart 5. type of organizations in the sub saharan africa sub saharan africa msme large domestic company foreign mnc foreign company/mnc developing country/mnc government initiative non prof it (excl ingo) ingo cooperative source: authors’ research looking at chart 5, msmes are again dominated form of inclusive business (48,64% or 18 companies), followed by developing country/mnc (13,51 % or 5 companies). the table 6 follows presents the inclusive businesses in the middle east and north africa. inclusive business – what it is all about? managing inclusive companies 35 table 6. inclusive business in the middle east and north africa inclusive business in the middle east and in north africa country organization business sector mdg type of organization role of the poor egypt mansour group consumer products 1 large domestic company producer sekem consumer products, agriculture 1,2,7,8 large domestic company producer gironil basic accounts 8 foreign company/mnc consumer orascom housing & construction 1 large domestic company consumer siwa tourism, housing & construction 1,3,7,8 large domestic company producer adapt housing & construction 1,3,7 msme producer iran saraman housing & construction 1,7 msme consumer, labour kandelous group agriculture, tourism, consumer products 1,7 msme producer morocco lydec utilities, energy (excl renewable energy), water 1,2,7,8 large domestic company consumer maison energie (me) solar power 1,7,8 government initiative entrepreneur temasol solar power 1,7,8 foreign mnc consumer zakoura foundation energy (excl renewable energy), micro-credit 1,3,7,8 non-profit (excl ingo) entrepreneur promasol solar power 1,7,8 government initiative consumer sudan blacksmith artisanal goods, consumer products, agriculture 1 cooperative entrepreneur source: authors’ research middle east and north africa are composed of four key countries egypt, iran, morocco and sudan, which business sector is mainly concentrated on solar power, housing and construction, and energy. they seek to reduce poverty and implement a global collaboration with the world. poor people in these organizations are involved as producers, consumers and suppliers. chart 6. type of organizations in the middle east and in north africa middle east & north africa msme large domestic company foreign mnc foreign company/mnc developing country/mnc government initiative non profit (excl ingo) ingo cooperative source: authors’ research international review of management and marketing, vol. 2, no.1, 2012, pp.22-42 36 according to the chart 6, one can conclude that large domestic companies (35,71% or 5 out of 14), followed by msmes (21,42% or 3 out of 14). inclusive businesses in east and south asia are presented in the following table 7 and further down in the chart no. 7. table 7. inclusive business in the east and south east asia inclusive business in the east and south east asia country organization business sector mdg type of organization role of the poor china lin'an taihuyan agriculture, forestry 7 cooperative producer bejing shengchang biofuels/biomass, manufacturing 1,7 msme producer huatai forestry 7,8 large domestic company producer tsinghua tongfang ict 2,7,8 large domestic company consumer fairfield enterprise artisanal goods, consumer products 3 cooperative producer mycro-hydro hydropower 7 cooperative consumer, producer fiji anz bank savings, basic accounts, insurance, micro-credit 1,3 foreign mnc consumer indonesia lafarge cement, housing & construction 8 foreign mnc consumer rajawali transportation, micro-credit 1,8 large domestic company entrepreneur ppkt biofuels/biomass, fuel efficient stoves, consumer products 1,3,7 msme producer key coffee agriculture 1 foreign company/mnc employee, producer vietnam truong thanh furniture manufacturing, forestry 7 msme producer mai vietnamese handicrafts artisanal goods, consumer products 1,3 msme producer procter & gamble consumer products, water 4,6 foreign mnc consumer mekong bamboo consortium agriculture, forestry 1,3,7 non profit (excl ingo) producer mdi agriculture, food & beverage 1,7 large domestic company producer source: authors’ research analyzing table 7, one can see that inclusive business in east and south east asia; include companies in china, fuji, indonesia and vietnam. a variety of business sectors is dispersed such as biofuels/biomass, agriculture, artisanal goods, etc. companies are trying to foster global collaboration, reduce poverty and achieve the mdgs. poor populations are mostly involved as producers. from the chart we can note the distribution of organizations. inclusive business – what it is all about? managing inclusive companies 37 chart 7. type of organizations in the east and south east asia east & south east asia msme large domestic company foreign mnc foreign company/mnc developing country/mnc government initiative non profit (excl ingo) ingo cooperative source: authors’ research based on data one can note that msmes (25% or 4 out of 16) and large domestic companies (25% or 4 out of 16), followed by foreign mncs (18,75% or 3 out of 16) and cooperatives that are equally represented (18,75% or 3 out of 16). the situation in south asia is presented in the table 8 and chart 8. table 8. inclusive business in the south asia inclusive business in the south asia country organization business sector mdg type of organization role of the poor afghanistan agmc education 3 non-profit (excl ingo) consumer bangladesh waste concern waste management, biogas 1,3,7 non-profit (excl ingo) entrepreneur hathay bunano artisanal goods 1,3 msme employee india new tirupur area development corporation utilities, water 1,6,7 large domestic company consumer basix financial services 1,3 large domestic company consumer vaatsalya hospitals health care 4,5,6 msme consumer reuters market light agriculture, ict 1,8 foreign mnc consumer a little world ict 8 msme consumer sulabh sanitation 1,3,6,8 non-profit (excl ingo) consumer narayana hrudayalaya health care, ict 1,6,8 msme consumer selco solar power 1,7 msme consumer nepal ide nepal agriculture 1,7 ingo consumer philippines manila water company utilities, water 6,7 developing country/mnc consumer smart ict, remittances 1,8 developing country/mnc consumer cocotech agriculture, artisanal goods 1,3,7 msme producer unilab health care, consumer products 6,8 developing country/mnc consumer source: authors’ research international review of management and marketing, vol. 2, no.1, 2012, pp.22-42 38 according to the facts presented in table 8, one can notice that india is ahead of other countries. the ict and health care are the sectors where inclusive businesses dominate. poor people in south asia often participate as consumers, and the countries tend to reduce poverty, to maintain equality between the sexes, preserve the environment, etc. the following chart presents the distribution of organizations in south asia. chart 8: type of organizations in the south asia south asia msme large domestic company foreign mnc foreign company/mnc developing country/mnc government initiative non profit (excl ingo) ingo cooperative source: authors’ research the most common type of inclusive organizations are still msmes – 37,5% or 6 out of 16 organizations, and in this area the developing country/mnc (18,75% of 3 of 16 organizations) and non-profit organizations (excluding the ingo) are equally represented (18,75% or 3 out of 16 organizations). at the end, the situation in latin america and on the caribbean is presented. analyzing the table 9, one can conclude that latin america and the caribbean cover large business and inclusive markets, particularly colombia, where many businesses operate. with a diverse and numerous business sectors, most prevalent is agricultural. companies are trying to combat poverty and achieve environmental sustainability, and foster global cooperation with the world. the poor are involved in the business as producers, consumers, entrepreneurs and employees. chart 9. type of organizations in the latin america and on the caribbean latin america & caribbean msme large domestic company foreign mnc foreign company/mnc developing country/mnc government initiative non profit (excl ingo) ingo cooperative source: authors’ research inclusive business – what it is all about? managing inclusive companies 39 table 9. inclusive business in the latin america and on the caribbean inclusive business in the latin america and on the caribbean country organization business sector mdg type of organization role of the poor bolivia sintesis micro-credit, ict 1,2,8 msme consumer brazil votorantim celulose e papel (vcp) micro-credit, forestry 1,7 large domestic company producer sadia biomass, agriculture 1,7,8 developing country/mnc producer natura's ekos consumer products, agriculture 7,8 developing country/mnc producer columbia juan valdez coffee shops food & beverage, agriculture 1,3,8 developing country/mnc producer carulla foundation education 2 large domestic company consumer amichoco mining 1,7 non-profit (excl ingo) producer cemex housing & construction, microcredit 1,7 developing country/mnc consumer pavco s.a.colpozos agriculture, water 1,7 msme consumer indupalma agriculture 1,7 large domestic company entrepreneur peldar waste management 1,7 msme entrepreneur compañía nacional de chocolates agriculture 1 large domestic company producer hugo restrepo y cia agriculture 1 msme producer natura colombia consumer products 1,3,7 developing country/mnc entrepreneur empresa publica de medellin (epm) energy (excl renewable energy), utilities 1 large domestic company consumer guyana denmor garment manufacturers manufacturing, consumer products 1,3 msme employee mexico construmex housing & construction, remittances 1,8 developing country/mnc consumer amanco agriculture, water 1,7 large domestic company consumer petstar waste management 1,3,7,8 large domestic company producer peru mibanco micro-credit, basic accounts, savings, remittances 1,3 large domestic company consumer aguaytía energy biofuels/biomass, biogas 1,3,8 msme producer, consumer perhusa agriculture, food & beverage 1,3,7,8 cooperative producer, employee, consumer central america dinant agriculture, food & beverage 1,7,8 cooperative producer, consumer wal-mart agriculture, consumer products, food & beverage 1,3,7,8 msme employee, producer, consumer trinidad and tobago mt. plaisir estate hotel tourism 1,7 msme producer ecuador colineal manufacturing, 1,7,8 large domestic producer, international review of management and marketing, vol. 2, no.1, 2012, pp.22-42 40 artisanal goods company entrepreneut pronanca food & beverage, agriculture 1,7,8 large domestic company producer, consumer toni sa food & beverage 1,3,8 cooperative producer, consumer, source: authors’ research as seen from the table and accompanying chart 9, this area is dominated by large domestic companies (35,71% or 10 out of 28), msmes (28,57% or 8 out of 28) and developing country/mncs (21,42% or 6 out of 28). to bring the curtain down, authors decided to present a holistic picture within which the global distribution of different types of inclusive business organizations will be shown (table 10). table 10. inclusive markets in the world by type of organization type of organization eastern europe sub saharan africa middle east & north africa east & south east asia south asia latin america & carebbean total msme 10 18 3 4 6 8 49 large domestic company 8 2 4 4 2 10 30 foreign mnc 1 4 1 3 1 10 foreign company/mnc 1 3 1 1 6 developing country/mnc 5 3 6 14 government initiative 2 2 4 non-profit (excl ingo) 4 1 3 1 9 ingo 1 1 1 3 cooperative 1 3 3 7 source: authors’ research chart 10. type of inclusive organizations in the world 0 2 4 6 8 10 12 14 16 18 20 m sm e la rg e d om es tic c om pa ny fo re ign m nc fo re ign c om pa ny /m nc de ve lop ing c ou nt ry/ mn c go ve rn m en t in itia tiv e no n pro fit (e xc l in go ) in go co op er ati ve eastern europe sub saharan africa middle east & north africa east & south east asia south asia latin america & caribbean source: authors’ research as presented in the table 10 and the chart 10 it is visible that the inclusive market is very widespread worldwide and is growing. at the same time on these markets various forms of inclusive organizations are running their business. msme are spread all over the world, and are the most common form of inclusive business organization. majority of them can be found in sub saharan africa (18 out of 49) and in eastern europe (10 out of 49). they are immediately followed by large domestic companies. 30 of these kinds of organizations can be found spread worldwide. latin inclusive business – what it is all about? managing inclusive companies 41 america and the caribbean (10) are the regions where majority of the mentioned companies operate but, they can also be found in eastern europe (8). developing country/mnc is also a common form of inclusive business organization which can mostly be found in latin america and caribbean (6) and in sub-saharan africa (5). other organizations are less spread in the world as for example non-profit (excluding ingo), foreign mnc and foreign companies/mnc. non profit (excluding ingo) organizations can mostly be found in sub-saharan africa and south asia. foreign mnc can be found in sub saharan africa. foreign company mnc are distributed mainly in sub-saharan africa. government initiatives exist in eastern europe and in the middle east as well as in north africa. most of the co-operatives are spread in latin america and the caribbean. international non-governmental organizations (ingo) are slightly distributed worldwide. only few of these organizations can be found in sub saharan africa, east and south east asia and south asia. generally, it can be concluded that the market for inclusive business is not small at all. in the world, we can find 132 inclusive business organizations operating through various models and in different sectors. majority of them are present in the sub saharan africa (37 companies), latin america and the caribbean (28 companies), and in eastern europe (22). 6. conclusion the challenge of inclusive business is spreading around the world. although the rate of growth of this business models is not huge, it is important to note that the number is not inconsiderable. inclusive business means doing the business in a new way through recognition and implementation of new inclusive business models. ifc proposed seven models, but that is not the final number. the organization can develop its own model of inclusivity as long as it follows the main principles and strategies of inclusive business operations. the bottom of the pyramid strategy is the most recognized strategy and the one proposed to organizations that want to become inclusive. the strategy highlights the need to: 1) adapt products and processes, 2) invest in removing market constrains, 3) leverage the strenghts of the poor, combine resources and capabilities with others and 4) engage in policy dialogue with government. there are several ways the strategy can be effectively implemented. organizations should: 1) familiarize themselves with 4 billion people living at the bottom oft he pyramid, 2) manage and understand relationships within and around the activity (the stakeholder cyrcle method), 3) bear in mind the stakeholder thinking process, 4) use different publicly-available tools and resources. according to the research results 132 organizations worldwide operate following some of the inclusive models. mainly, when talking about regional distribution of these organizations, majority of them operate in sub saharan africa (37 companies), latin america and the caribbean (28 companies), and in eastern europe (22). there are several types of organizations amongst which msme are widely spread, followed by large domestic companies and developing country/mnc. they have been running various projects worldwide with the aim of contributing to achievement of millennium development goals which were defined in 2000. in this way they are including low income communities in their value chain and firstly, do contribute to poverty alleviation. analyzing the existing inclusive organizations, it can be noted that their businesses cover various business sectors, of which the most notable is agricultural, followed by the ict, food and drinks, artisanal goods, health care, consumer products, energy, bio-fuels, housing and construction, micro-credit, etc.. various stakeholders included in the business in various sectors are contributing to the advancement of poor countries and populations, and also the alleviation of poverty, and ultimately the global collaboration. business sectors are those which are essential along with inclusive organizations in promotion and the realization of the millennium development goals as well as the improvement of the living conditions of populations around the world. references bonnell, v. and veglio, f. (2011), inclusive business for sustainable livelihoods, field actions science report. the journal of field actions, 5, 1–5. bourne, l. (2009), stakeholder relationship management: a maturity model for organisational implementation. surrey: gower publishing limited carroll, a.b. and buchholtz, a.k. (2011), business and society: ethics and stakeholder management. eight edition, mason, usa: south-western cengage learning international review of management and marketing, vol. 2, no.1, 2012, pp.22-42 42 jenkins, b. , ishikawa, j., gea neot es a. , ba ptis ta , p. a nd ma suoka t. (2011), accelerating inclusive business opportunities, business models that make a difference. washington, usa: ifc, available at: http://www.scribd.com/doc/65816678/accelerating-inclusivebusiness-opportunities-business-models-that-make-a-difference , retrieved on: 29/09/2011 mahmoud, alia (2009), how do we build the inclusive business partnership for the future? available at: http://www.nextbillion.net/blog/how-do-we-build-the-inclusive-businesspartnerships-for-the-futu, retrieved on: 30/09/2011 mor barak, m.e. (2011), managing diversity: toward a globally inclusive workplace. usa: sage publications post, e.j., preston, l.e. and sauter-sachs, s. (2002), redefining the corporation: stakeholder management and organizational wealth. stanford: stanford university press snv and wbcsd (2008), inclusive business. profitable business initiatives with impacts on development. the hague and geneve: snv and wbcsd united nations research institute for social development (2010), combating poverty and inequality, structural change, social policy and politics. france: unrisd undp (2008), gim report 2008: creating value for all: strategies for doing business with the poor. new york: undp, available at: http://www.undp.org/gimlaunch/docs/gim%20report%20final%20august%202008.pdf, , retrieved on: 30/09/2011 world economic forum and boston consulting group (2009), the next billions: unleashing business potential in untapped markets. geneva: world economic forum, available at: http://www3.weforum.org/docs/wef_fb_untappedmarkets_report_2009.pdf, retrieved on: 30/09/2011 wbcsd and snv (2006), inclusive business: profitable business for successful development. geneve and the hague: wbcsd and snv, available at: http://www.wbcsd.org/web/publications/inclbiz.pdf wbcsd and snv (2011), inclusive business: creating value in latin america. geneve and the hague: wbcsd and snv wbcsd (2010), inclusive business: mapping of tools and resources, available at: http://www.inclusivebusiness.org/wbcsd_inclusive_business_resources_tools.pdf, retrieved on: 28/09/2011 http://www.growinginclusivemarkets.org/ development commissioner (msme) ministry of micro, small & medium enterprises http://www.dcmsme.gov.in/ssiindia/defination_msme.html, retrieved on: 04/10/2011 investopedia (2011a) – http://www.investopedia.com /terms/d/domestic-corporation.asp#ixzz1zilvjymz, retrieved on: 04/10/2011 the free dictionary by farlex (2011) – http://legal-dictionary.thefreedictionary.com/foreign+corporation, retrieved on: 04/10/2011 investor words http://www.investorwords.com/2040/foreign_corporation.html# ixzz1ziobzq7u, retrieved on: 04/10/2011 word web online http://www.wordwebonline.com/en/developingcountry, retrieved on: 04/10/2011 investopedia (2011b) http://www.investopedia.com/terms/m/multinationalcorporation.asp# ixzz1zjkme23j, retrieved on: 04/10/2011 the free dictionary by farlex (2011b) http://encyclopedia2.thefreedictionary.com/government+organization, retrieved on: 04/10/2011 investor words (2011b) http://www.investorwords.com/3331/non_profit_organization.html#ixzz1 ziyuqw8y, retrieved on: 04/10/2011 answers.com (2011c) http://www.answers.com/topic/non-governmentalorganization#ixzz1zibab7ef, retrieved on: 04/10/2011 the free dictionary by farlex (2011c) http://www.thefreedictionary.com/cooperative . international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2018, 8(1), 58-63. international review of management and marketing | vol 8 • issue 1 • 201858 collectivism: interpreting the perception of the appearance of health service retribution in community health center in central lombok regency dewi masdiani1*, endar pituringsih2, i. nyoman nugraha ardana putra3 1masters program in accounting post graduate university of mataram, mataram west nusa tenggara indonesia, 2masters program in accounting post graduate university of mataram, mataram west nusa tenggara indonesia, 3masters program in accounting post graduate university of mataram, mataram west nusa tenggara indonesia. *email: dewimasdiani@yahoo.com abstract the purpose of this study is to measure perceptions or interpretation of health personnel retribution management officers to their activities. this study focused on exploring the meaning of the other side of levy of health service management. the research approach used in this research is qualitative approach with case study method and interpretive paradigm. data obtained from the results of in-depth interviews with informants. the results show that the actors who manage the levy feel what they do solely for the sense of humanity arising from togetherness in a community. in the narrow collectivist framework, actors feel that what they are doing is a form of solidarity or form of responsibility towards the other members of their group. according to the researchers the actors tend to take fraud action, viewed from the perspective of collectivity culture that lives within the organization of the community health center. keywords: perception of actors, levy of health services, collectivism jel classifications: h2, m4 1. introduction the decentralization policy in indonesia gives wider authorities to local governments to manage their regional finances. one of the characteristics of the decentralization policy is to increase local taxes aimed at optimizing regional revenues to support regional spending (mahi, 2011). law number 28 years 2009 on regional taxes and levies (pdrd) is one of the regulations supporting the implementation of decentralization in indonesia. the law regulates 11 types of taxes for district/municipal governments and 5 types of taxes for the provincial government. central lombok regency as an autonomous region, levies on local taxes and regional levies as a source of local revenue. based on research conducted by adipta (2014) contribution of local revenue to regional budget and expenditure year 2010–2013 in supporting the implementation of regional autonomy in central lombok regency is still small although there is an increase every year, so that the revenue of original revenue has not been able to cover all the existing expenditure of central lombok itself. research by the indonesian forum for budget transparency (fitra) on the 2016 district budget analysis of 70 districts/ municipalities including central lombok regency indicates that the financial independence of central lombok regency is at the level of 9% of local own revenue contribution to regional government budget. local own revenue management received a note from the regional house of representatives of central lombok regency. special committee provides recommendations to the accountability activities report (lkpj) regional head of central lombok regency fiscal year 2016. one of the recommendations of the special committee is the management of the local own revenue administration related to local levy has not been orderly. what is highlighted is the low performance of levy management, and the enforcement of law enforcement against taxpayers, mandatory retribution that causes negligence in payment. levy area is one sector that is optimized to increase the original income of central lombok regency. during the period 2011–2016 masdiani, et al.: collectivism: interpreting the perception of the appearance of health service retribution in communıty health center in central lombok regency international review of management and marketing | vol 8 • issue 1 • 2018 59 local levies accounted for 20, 53% of total pad. of the total retribution, health service charges are the largest contributor to total levies. the health service levy is the original revenue of the region, which is included in the public service levy which is managed under the dinas kesehatan and implemented by the technical implementation unit (upt) of the public health center. the levy on health service charges in central lombok regency is based on regional regulation of central lombok regency number 5 years 2011 on public service levies. based on the regional regulation, the object of health service fee is health service in health center, mobile health center, sub health center, village maternity post/village health post, medical center, and other similar health services owned and/or managed by local government. levies shall be levied on an individual or entity which, under the laws and regulations of retribusi, is required to make a payment of user charges, including the collection or withholding of health service charges. based on report of examination result (lhp) of supreme audit board of the republic of indonesia number 15.a/lhp-lkpd/ xix.mtr/05/2017 date 30 may 2017, to central government financial statement of central lombok regency for fiscal year 2016, in public health centers is not adequate, because there are some problems as follows: (1) retribution is not deposited; (2) used directly supported by proof of purchase; (3) used directly without supporting supporting evidence; (4) is used for additional services for civil servants; and (5) retribution is lost stolen. 1.1. research focus management of local finance in indonesia is still a problem. seen from the acfe chapter indonesia survey in 2016 shows that the many fraud found in indonesia is corruption, which is not only at the upper class level but touches down to the lower layers. in the report also mentioned that the government is considered an organization that is “absolute” disadvantaged for the occurrence of fraud. research conducted by transparency international (ti) in the year 2016 noted that the score of indonesia corruption perception index (gpa) 37, up 1 point from the previous year 36. indonesia is ranked 90 out of 176 countries surveyed. the rise in the corruption perception index indicates that corruption eradication is still running even slowly. news in the mass media also shows that financial management practices at both national and local levels are still in the shadow of fraud. based on the results of the examination of the state audit board of the republic of indonesia, the implementation of the collection of regional levies as part of the regional financial management in the community health center of central lombok regency is suspected to occur many problems. management of health service charges at community health centers of central lombok regency is indicated that problems are still occurring. the focus of this research is the views of the actors on the implementation of collection of health service charges at community health centers in central lombok district. 1.2. research questions based on the introduction and focus of the research, the research questions are as follows: how do the views of actors or health service charges actors on their activities in the central lombok community health center? 1.3. research objectives one reason research is held is to answer the phenomena that occur in certain situations and/or locations. the phenomenon arises because what is expected is not in accordance with the desired place in the field. in simple terms, research is done to find answers from problems faced by researchers. based on the research question (research question) put forward, the purpose of this study are: to analyze, understand, and assess the meaning of actors or actors of health service charges management of activities they do at the community health center in central lombok regency. 2. literature review 2.1. review of health service levy based on the law of the republic of indonesia number 28 of 2009 on regional tax and levy, it is stated that regional levies are regional levies as payment for certain services or licenses specifically provided and/or provided by the local government for the benefit of individuals or bodies. according yani (2002, p. 55) “the provinces, districts/municipalities are given the opportunity to explore the potential of their financial resources by determining the types of levies other than those already stipulated, as long as they meet the established criteria and in accordance with the aspirations of the community.” the characteristics of regional levies are as follows: 1. levies levied by the local government; 2. in the collection there is coercion economically; 3. the existence of a direct contractor may be appointed; 4. levies shall be levied on any person/entity that uses the services which the state prepares. the purpose of the regional retribution basically has the basic equation with the purpose of collecting taxes conducted by the state or local government. based on law number 28 years 2009 regarding regional tax and levy article 108 states that the object of levies are general services, business services and certain licensing levy of health service shall be regulated in regional regulation of central lombok regency. 5 years 2011 on public service levies. levies on health services are levied on individuals or entities which, according to the rules of retribution legislation, are required to make the payment of user charges, including collectors or levies of health service levies. object of levy of health service is health service at health center, public health center, sub health center, village maternity hospital/village health post, medical center, regional general hospital and other similar health service owned and/or managed by regional government. excluded from the object of health service levy is a health service registration service performed by the government, state-owned enterprises, enterprises and private parties. subjects levy of health services are individuals who use/enjoy health services. in addition to the types of health services at community health centers, village maternity huts/village health posts and other medical centers, health services at regional general hospital which may be subject to health service levies are as follows: a. by classification: 1. outpatient; 2. emergency care; masdiani, et al.: collectivism: interpreting the perception of the appearance of health service retribution in community health center in central lombok regency international review of management and marketing | vol 8 • issue 1 • 201860 3. hospitalization. b. by type of service: 1. medical services; 2. medical support services; 3. midwifery and gynecology services; 4. non-medical support services; 5. medical rehabilitation services; 6. dental and oral medical services; 7. special consultation services; 8. legal medico services; 9. nursing/maintenance. based on local regulation no. 5 of 2011 stated that the level of service usage on health service charges is calculated based on the type of service, materials/equipment used and the frequency of services provided. the principles and targets for the determination of the structure and size of the health service charges are based on the objective of covering part of the cost of providing health services by taking into account community capability and justice aspects. these costs include consumables, services and services. here are the targets and realization of health service charges in central lombok regency for the last 5 years. based on the table 1, the realization of health service charges in the last 5 years shows a significant decrease. in the year 2013 the realization of health service fees reached 86% far reduced from the year 2012 which reached 204%. the downward trend also occurred in 2014, which reached 67% and 61% in 2015. similarly, in 2016, the realization of health service charges only reached 54% of the target set. the potential of large health service levies requires that the puskemas as implementers to account for the management of these levies to internal and external stakeholders. the large potential of local revenues sourced from health service charges is not matched by proper management. according to the supreme audit agency, the management of health service fees in community health center of central lombok regency is not considered to be administrative and it is suspected that there are many problems in the management of retribution. 2.2. fraud issues research on fraud was done by cressey in 1950 which raises the question of why fraud can occur. the results of the study led to the factors that trigger cheating currently known as “fraud triangle.” one of the main objectives of cressey’s research concludes that any fraud committed by principals meets three important factors as a trigger for cheating: 1. pressure 2. rationalization 3. opportunity. pressure (unshareable pressure/incentive) is a person’s motivation to commit fraud. motivation to do fraud, including economic motivation, emotional reasons (jealousy, revenge, power, prestige), values (values) and there is also because of the encouragement of greed. according to sas no. 99, there are four types of conditions that commonly occur in pressure that can lead to cheating. these conditions are financial stability, external pressure, personal financial need, and financial targets. the existence of opportunity/ opportunity (perceived opportunity) is a condition or situation that allows a person to do or cover up dishonest acts. usually this can happen because of the company’s internal controls that lack a lack of supervision, and/or abuse of authority. among the 3 elements of fraud triangle, opportunity is the most feasible element to minimize through the application of processes, procedures, and controls and early detection of fraud. rationalization is an important element in the occurrence of fraud, in which the offender seeks justification before committing a crime, not after doing so. rationalization is needed so that the offender can digest his illegal behavior to keep his identity as a trusted person, but after the crime has been committed, this rationalization has been abandoned because it is no longer needed. 2.3. collective culture each organization is collective, consisting of a variety of people, their behavior, attitudes and relationships with each other. to complete a task, the organization will demand the collective efforts of its members. but the result depends on the individual’s effort and how well the organization has successfully integrated its member’s business (vadi et al., 2002). thus, organizational management depends heavily on people’s habits, values, attitudes, patterns and behaviors. collectivisme according to hofstede (1991) that a situation that shows the state of society where each member is integrated in strong and united group bonds throughout their life span to protect each other. in a country with a high degree of collectivism, the individual has a concern for other individuals in the group and expects others to care about themselves on a reciprocal basis. hofstede (1991) places indonesia as a nation with high collectivism value when compared to india, japan, malaysia, the philippines and arab countries. based on research conducted by schuetzendorf in ruky (2002) on collectivism in indonesia shows the tendency of group members to support each other where group members receive protection from other members to create harmony. collectivism is a view that assumes that groups are more important than individuals. instead, individualism has the opposite understanding. collectivism emphasizes collectivity, community, and sociality. a collectivist tends to preserve the dignity and feelings of each other. criticizing and embarrassing someone in the presence of others is unacceptable. respect, respect and table 1: target and realization of health service levy ın central lombok regency 2012–2016 no year target (indonesian rupiah) realization (indonesian rupiah) percentage 1 2012 18.233.650.370 37.229.744.473 204 2 2013 15.835.561.324 13.662.928.150 86 3 2014 28.749.925.311 19.460.354.311 67 4 2015 19.876.110.485 12.169.857.200 61 5 2016 14.293.946.985 7.718.293.100 54 source: regional revenue management board of central lombok regency year 2017, data is processed masdiani, et al.: collectivism: interpreting the perception of the appearance of health service retribution in communıty health center in central lombok regency international review of management and marketing | vol 8 • issue 1 • 2018 61 behavior are the most important values in collectivism. not only that, collectivism is also able to nourish congregational corruption. a collectivist tends to appoint a person with a hierarchical relationship to a position, even if the integrity and capacity of the person is questionable (annajih, 2014). 3. methodology this research uses a kind of qualitative research that seeks to understand the phenomenon of what is experienced by research subjects such as: behavior, perception, motivation, actions and others holistically and description in the form of words and language, in a special context that is natural and by utilizing various natural methods (moleong, 2009, p. 6), the basis of the development of qualitative research approaches are premises that believe social phenomena need to be understood in other ways through various means. the premises are: particular, subjective and non-predictive, always in contact with a particular social setting (particularic) and not applicable to any social (universal) background. the paradigm used in this research is interpretive paradigm. according to chua (1988) that the tradition of interpretivism emphasizes the effort of constructing and interpreting the actions of the people, either through the knowledge that has been previously owned or as reflected through their experience (actors or actors) involved in social action. the purpose of interpretive sociology is to discover the hidden meanings that lie behind social actions as understood by principals (actors under study) through a good understanding effort (djamhuri, 2011). science for this paradigm is not used to explain and predict but to understand. furthermore, djamhuri (2011) explains that social phenomena is believed to be a series of social processes that emerged instantly (emergent) as a result of the interaction (involvement) of the actors or the perpetrators. the interpretive paradigm is formed on the assumption that social reality is not concrete, but its existence is shaped from the individual’s individual subjective experiences. so the social reality is created from the interpretation and concepts of the individual as well as how he forms the meaning (meaning) of the interpretation. so that social reality is compound, can survive or change depending on the meaning of the individual (mulawarman, 2010; setiawan, 2011). the method used in this research is case study. case studies are used to find out in more depth and detail about a problem or phenomenon to be studied (yin, 2014). 3.1. sampling location of research at community health center in central lombok regency that manage health service retribution. availability of access and rapport (proximity) with informants is also very important because the themes in this study are ‘sensitive’ to some actors. informants of this research are the actors who are directly involved in the process of health service fee retribution. according to patton (2002) the selection of informants follows the principle of maximum variation and snowball. a number of informants were selected from various backgrounds as far as the phenomenon was concerned. they are expected to provide a variety of information. information obtained will increase from one informant to another informant. thus, the rich information will be obtained by researchers. the key informants are: pick collector, head of puskesmas, counter officer, nurse, and inpatient coordinator. data collection techniques in this study is by in-depth interviews to informants. interviews are an essential source of evidence for case study research (yin, 2014, p. 108). researchers can collect information from informants freely, more deeply and get advice about other sources of evidence that support research by interview. in addition, researchers also conducted participatory observations in which researchers were involved with the daily activities of people being observed or used as research data sources while making observations. participatory observation is done because the researcher wants to feel the activity done by the informant. researchers also perform documentation techniques on the administration, reporting and accountability ranging from registration to the deposit to the treasurer of acceptance at the department of health. 4. collectivism: perception of the appearance of health service manager levy the series of health service retribution management in central lombok regency is guided by the minister of home affairs regulation no. 113 of 2016 on regional financial management. the management of levies at central lombok regency community health center is divided into two, namely the reception and remittance from the counter officer, the room officer, to the treasurer receiving the maid. the process of administration of levies starts from the counter, where the general patient conducts registration which is subsequently done registration or recording. after the registration process, the patient will make payment according to the tariff set by regional regulation no. 5 years 2011. in the year 2016 healthy health center has been audited by the supreme audit board of the republic of indonesia and the results show that the management of health fees in central lombok public health center there are many irregularities. the deviations that occur are the use of retribution funds for the operation of the puskesmas and for the payment of employee services. there are interesting facts that researchers get during the research that started from the informant’s statement that the head of puskemas: “actually, all community health center are the same, depending on them” smart stealing “which was sampled by the financial audit board is unlucky.” this statement according to researchers is very interesting because on one side of the head of community health center the actions performed by actors or perpetrators. on the other hand such a statement implies that it is commonplace and is common knowledge. the acknowledgment of several actors also stated something more or less the same, as presented by the inpatient coordinator and former treasurer of the collector: “imagine why only our community health center is the findings of the financial audit board, compared with the community health center x in the other sub-district, which is masdiani, et al.: collectivism: interpreting the perception of the appearance of health service retribution in community health center in central lombok regency international review of management and marketing | vol 8 • issue 1 • 201862 larger than the our community health center, 1 year laboratory no deposit at all.” the opinion of the inpatient coordinator confirms the statement from the head of the community health center that actors agree on what they have done. a fraud triangle can explain one element of the cause of fraud, that actors rationalize their actions. rationalization itself is one form of human self-defense mechanism when experiencing psychic pressure by rationalizing its actions to be accepted and assume what has been done is true. another fact of using the retribution fee is used to pay the honorarium of health workers whose status is still apprenticeship. based on the results of the interview there are several reasons presented one of the inpatient coordinator said: “i oversee 18 nurses. i own a civil servant who is three employees. there are three there are three non-permanent employees, and have appointment letters as apprentices from the health office without any salary, he just get capitation 6,000 a month, the rest of which 14 people are apprentices and and given the highest honorarium is 53,000 rupiah per month. i pity the apprentice. so the retribution money we use to buy drinks, tea, coffee at the time of picket or guard. that’s all we can give.” when confirmed the levy collector said: ‘‘i received from the room where the room of deposit and recorded it that i report and deposit to the health service.” the expressions of the informants show the strong sense of togetherness in a collective cultural community. a collectivity culture is an effective way to achieve a particular goal. built from a sense of trust and cooperation among individuals, it evolves into small group collaboration that continues to a more solid group. collective culture can also be said ‘congregational culture. individuals in collective culture pay attention to the welfare of the in-group, putting the goals of the former group above personal interests and and their behavior governed by social norms rather than personal attitudes (hofstede, 2011). the actors managing levy interact in a group that has mutual dependence on each other. the statement by the head of the community health center further strengthens the sense of solidarity within the group: “what should i do with my apprentice? they work here need gasoline motorcycles.” a number of studies have shown that individuals living in collectivistic or collectivist cultures tend to be more easily trapped in fraud than people who uphold individualism (mazar and anggarwai, 2011). research conducted by mazar and anggarwai was conducted in 22 countries that engage in bribery in their business. the tendency is pegged to a certain standard of value which is then compared with the level of collectivity and the magnitude of the wealth of each country. the result reinforces the initial assumption that the greater wealth and collectivity of a country influence the growing bribery tradition to business partners. however, it does not mean that corruptors see that bribery and other corrupt acts are normal. in other sections of the study it is stated that they rate average what they do is actually disgusting and far from the guidance of morality. morality here also applies in all countries, all cultures. in other words, universally, bribery and corruption are categorized as moral perversions. in a culture of collectivism, the individual always considers himself as part of a larger group and feels interdependent or interdependent with the group. when the group performs an action, the individual feels the need to take part and has a shared responsibility in the group. likewise, if the group is doing the wrong thing, the individual will feel that the wrong action is a shared responsibility that should be borne by each member. therefore, the guilt of such actions also tends to “diminish” because the individual feels the action is not merely his own decision, but the collective action of his group. this is what happens in a case of “congregation” corruption or systemic corruption. because they feel interdependent with their group and consider acts of corruption as collective action, individuals will participate in corruption if other group members do it too. researchers confirm the use of retribution for interns. current condition, community health center can not make payment of honorarium or monthly salary to apprentice. the responses of the head of community health center and the inpatient and former retribution levers coordinator stated the following: the apprentice is not we who ask, it’s from “above us.” the statement confirms the findings of wated and sanchez (2005) that collectivist individuals are more vulnerable to dragging corrupt behaviors from outside influences. this external influence in the context of corruption in an organization comes from the people of one profession around it. the implications of the offender can justify and tolerate unethical behavior by blaming the external environment in which individuals work. fraud triangle theory donald cressey can explain the actions of the retribution manager, when faced with the conditions they face in their environment. one of the elements that causes the fraud is the pressure, the actors are forced to take action fraud because of the pressure they receive. as a state civil servant, the heads of public health centers and public health center employees can not deny the “policy” of their power. opportunity we can also find traces in this research, some of the retribution managers of the perpetrators can do engineering against the amount of deposit of retribution. a culture of trust also fosters an opportunity for fraud. 5. suggestion to solve the issue the main problem in the implementation of collection of health service charges is the use of retribution funds for interns and non-permanent employees. the apprenticeship at the community health center is very much needed, but on the other hand it imposes a burden on the public health center regarding the honorarium. some suggestions that could be considered for improving the implementation of retribution are by honorarium masdiani, et al.: collectivism: interpreting the perception of the appearance of health service retribution in communıty health center in central lombok regency international review of management and marketing | vol 8 • issue 1 • 2018 63 budgeting for interns and other non-permanent employees in accordance with the regional minimum wage of central lombok regency. besides that thing that can be done is equal distribution placement of health worker of civil servant, so that dependence to apprentice staff and non permanent employee will decrease. 6. conclusion there is a gray area in the management of health service charges at the central lombok district health center. based on the findings that researchers get, the tendency of fraud in the management of health service charges. the findings of the state audit board of the republic of indonesia on the process of levy management are confirmed in the results of field research. retribution actors feel what they are doing solely for the sense of humanity that comes from being together in a community. in the frame of collectivism, actors feel that what they are doing is a form of solidarity or a form of responsibility towards the members of their other groups. according to researchers, actors tend to take fraud action, viewed from the perspective of collectivity culture that lives in the society of indonesia. based on the regulation of the minister of home affairs number 113 of 2016. acceptance of agencies is prohibited to be used directly to finance expenditures, unless otherwise provided by laws and regulations. the fact that happened at community health center in central lombok regency that retribution fund used to finance personnel officer non permanent and is action that can not be justified. but the acts of fraud that actors can be explained by fraud triangle theory donald cressey that fraud occurs because of pressure, opportunity and rationalization. references adipta, m. 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[last accessed on 2017 may 30].. . international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2017, 7(1), 157-163. international review of management and marketing | vol 7 • issue 1 • 2017 157 flood risk mitigation: pressing issues and challenges ahmad shukri yazid1*, tengku faris fakhri tengku adnan2, adbullah aziz abdullah3, wan norhayate wan daud4, fauzilah salleh5, mohd rasid husin6 1faculty of economics and management sciences, universiti sultan zainal abidin, malaysia, 2research intitute for islamic products & civilisation, universiti sultan zainal abidin, malaysia, 3faculty of economics and management sciences, universiti sultan zainal abidin, malaysia, 4faculty of economics and management sciences, universiti sultan zainal abidin, malaysia, 5faculty of economics and management sciences, universiti sultan zainal abidin, malaysia, 6school of finance and banking, universiti utara malaysia, malaysia. *email: shukri@unisza.edu.my abstract the increase number of natural disasters that struck the world gives damaging impacts to the people and properties. this paper attempts to examine crucial pressing issues and challenges in mitigating flood losses and loss of lives in malaysia. only qualitative approach is used to address these pressing issues and challenges of natural disaster. kelantan is one the states in the east coast of malaysia that experienced the highest loss of properties and infrastructure in 2014 massive flood. semi-structured interview was designed and used to collect data from six government agencies in the state of kelantan. these agencies were, kelantan state education department, kelantan state department of rescue and fire brigade, kelantan state health department, local authority of kuala krai, kelantan state social and welfare department and kelantan state police contingent. the finding of the study revealed that were eight pressing issues and four challenges. the eight pressing issues are flood preparations, lack of rescuers, lack of awareness, communication difficulty, lack of assets for rescue, transportation issues, the absence of food supply, and other constraints. on the other hand, the challenges are lack of provisions, redevelopment, the social and economic situation, and trauma. these pressing issues and challenges need to be seriously addressed by the state and federal level of government of malaysia so that future natural disaster like the 2014 flood can be managed in a much more prepared way or manner. keywords: disaster risk reduction, natural disaster, flood, national security council directive 20, malaysia, pressing issues, challenges jel classifications: f52, h84, q54 1. introduction the word disaster was very familiar to us. this is because the world is always struck by this catastrophe. disaster can be described as catastrophe events that hit vulnerable area resulting destruction of properties, infrastructure and death. fischer (1998) defined disaster as actual or threatened accidental or uncontrollable events that cause serve danger to the social structure of the society and destruction to the properties. with a clear understanding of the meaning of disaster, the world needs the comprehensive approach and solution to overcome the impact of natural disaster. the world constantly hit by the disaster that caused immense loss of property and lives. the centre for research on the epidemiology of disasters has been maintaining an emergency events database (em-dat). the em-dat contains relevant core data on the effects and occurrence of over 18,000 disasters in the world from 1900 to present (http://www.emdat.be/). this database is compiled from various sources, including un agencies, non-governmental organizations, insurance companies, research institutes and press agencies (http://www.emdat.be/). table 1 indicates the statistic of natural disaster that occur in the world from the 2010 to 2015. based on these statistics there should be some ways to cope with natural disaster. malaysia is also affected by natural disaster. the most common natural disaster that is faced by the malaysian is flood. the largest history of flood that hit the east coast state of malaysia (kelantan, pahang and terengganu) was in november and december 2014 (thesundaily.my 29 december, 2014). in yazid, et al.: flood risk mitigation: pressing issues and challenges international review of management and marketing | vol 7 • issue 1 • 2017158 this flood, the state of kelantan recorded the most staggering lost of rm934.4 million, followed by the state of pahang, rm610 million, and the state of terengganu, rm304 million. the highest ever recorded of 160,000 people evacuated during the onset of the flood (reliefweb, 28th december, 2014). miraculously only 10 people lost their life. serious attention and measures should be taken by both federal and state government so that they are much more prepared for future natural disaster. during the world conference on disaster risk reduction (drr) held in kobe, hyogo, japan, it is agreed that drr as one of formula that can reduce the end effect of natural disaster. for this very reason, the united nation office for drr (unisdrr) which is the world organization that have good standard practice of drr which provides guidance to any country on eventuality of occurrence of natural disaster. malaysia is one of the country which uses drr framework in addressing natural disaster. this framework is adopted from hyogo framework. however, the malaysia government established its own framework in handling of natural disaster. this framework is popularly known as national security council (nsc) directive 20. although drr framework exists, there is still concern over the severity of loss and management of natural disaster. what is not discuss is on the pressing issues and challenges of using drr framework in the containment of loss (of life and infrastructure) and the management natural disaster itself. recent studies only focused on the factors of disaster risk management, flood management, community preparedness and community awareness (rahman, 2007; katuk et al. 2009; zainuddin et al. 2010; raman et al. 2014; zakaria and mustaffa, 2014). studies on the issues and challenges of drr application particularly in malaysia is still lacking. hence, this paper attempts to focus on the pressing issues and challenges in the adoption drr as a tool to prepare for natural disaster, specifically, flood. 2. literature review 2.1. drr drr can be define as the conceptual framework with elements to be considered on the possibilities of minimizing the vulnerabilities and disaster risks in the communities (the united nations office for drr website). drr further avoid (prevention) or limit (mitigation and preparedness) the adverse impacts of hazards, within the broader context of sustainable development (the united nations office for drr website). this definition can also be summarized as the concept and practice of reducing disaster risks through systematic efforts by analyzing and managing the causal factors of disasters which include through reduction of exposure to hazards, lessened the vulnerability of people and property, wise management of land and the environment, and improved preparedness for overcoming adverse events. drr can also can be defined as the combination of disaster analysis, disaster prevention and mitigation, and disaster preparedness (rottach, 2010). figure 1 shows what constitutes drr are the analysis, prevention and mitigation and preparedness of disaster (rottach, 2010). a disaster’s severity depends on how much impact a hazard has on both society and the environment. the scale of the impact in turn depends on the choices we can make for our lives and environment. these choices is related to on how we produce our food, where and how we build our homes, what kind of government we have, how our financial system works and even what we teach in schools and universities. each decision and action makes can either make us more vulnerable to disasters or more resilient to them. unisdrr also stated that drr is about choice. beside that not only the government must act to prevent it but also the community. as such drr is about the responsibility of all people living on earth, therefore everyone needs to instill a sense of awareness of natural disaster preparedness in order to live in. 2.2. drr framework in malaysia malaysia stills lags behind the adoption of disaster management system in handling natural disaster. there should be strong emphasis as malaysia is still new in the construction and implementation of disaster management. besides the 2014 unexpected floods where the water level reached beyond the normal has caused an estimated loss of rm1 billion (usd250 million) in kelantan alone (bh online, 1st january 2015). on the other hand, the 2015 earthquake in east malaysia also shock the country. this earthquake struck kota kinabalu with a death toll of 24 people (reliefweb, 28th december, 2014). it is crucial for the government to include all available parties in the management of disaster in malaysia. the national security division (nsd) in the prime minister’s department is responsible for the organization and management figure 1: disaster risk reduction components (rottach, 2010) table 1: statistic of world natural disaster (2010-2015) (em-dat) year event total death total affected (injured, affected, homeless) total damage (0.000 dollar) 2010 435 329,998 260,483,654 132,194.096 2011 316 34,143 212,769,425 364,093.168 2012 370 11,526 111,288,005 156,480.867 2013 355 22,225 96,829,928 119,446.189 2014 344 19,882 141,926,230 98,447.407 2015 153 15,460 11,519,215 14,609.197 total 2018 433,234 834,816,457 885,270.924 yazid, et al.: flood risk mitigation: pressing issues and challenges international review of management and marketing | vol 7 • issue 1 • 2017 159 of the activities related to disaster. the nsc directive 20 delivered guidelines includes the responsibilities and functions of the various agencies. this directive 20 is aims to outline the policy and a management mechanism comprehensively covers the stages of disaster before, during and after an event disaster on land. this directive also deliberate on the roles and government agency responsible, statutory bodies, private parties and bodies volunteer in disaster management (nsc, 1997). to carry out the responsibilities of the directive 20, nsc’s disaster management and relief committee (dmrc) will have to play a major role in coordinating disasters at the three different levels (nsc, 1997). first level is at the districts, second level is at the states and the third level is at the federal. when a catastrophic event occurs, the dmrc will take the responsibility to start the following actions such as; evaluate the situation and determining the disaster level and scope, formulate action plan for managing disaster, determine capability in disaster management, determine the types of assistance required from higher or outside authorities and to surrender or take over the disaster management based upon evaluation of event. based on the study conducted by zainuddin et al. (2010), it is identified that the level of disaster preparedness as one of the stand out issue that need to be addressed during any natural disaster. rahman (2007) discovered similar finding encounter by agencies in the dmrc. these agencies need to have full knowledge and good practice on the directive 20 as they are the only official body that take up total responsiblility to the help community when disaster occur. otherwise, the directive 20 framework whose main priority to assist the community in the stage prevention, preparedness, response and recovery will not achieve its objective. in malaysia, there were numerous researcher who have conducted study on drr. a recent study by islam et al. (2016) discuss flood disaster risk, pre-post disaster program, emergency response and recovery and flood risk mitigation. in malaysia, the role of nsc and various agencies such as education department, department of rescue and fire brigade, health department, local authority, social and welfare department and police contingent. raman et al. (2014) has proposed framework for vulnerability community. web-based community disaster management and awareness system (cemas) have been created also by raman et al. (2014). this paper presents the functions inherent in a prototype drr system that was developed for emergency management. what is interesting about this system is that the usefulness in creating awareness on emergency management was discovered. the system purpose of this created because of disaster in selangor such as flood and landslide have proven that loss of life and property is unavoidable. this is because of population are unprepared for disaster and not have an emergency plan in place. they lack of solution to enhance disaster readiness. the way cemas, the web-based information system works is that it enhance the aspects of disaster management for any organization. it can be placed to everyone quick information retrieval where solid structure and a clear of emergency information could be established. as such it can be one of solution to mitigate losses come from disaster. usually people are not prepared and do not have any idea of executing an emergency plan when disasters happen. like in the 2014 flood, social network community of the flood affected area is severely or total affected and disabled. the approach of web-based community disaster management can provide the community with awareness, good knowledge and information. thus, good planning and discussion between government and agencies through a perfected cemas will be addressed the issue of management of natural disaster. the architecture of a web-based support system for agencies and flood response operation is vital in the process and data management towards providing prompt and effective response. however is often disrupted when huge natural disasters occur. this system is expected to improve the overall aspect of flood response operation through electronic features which facilitate the flood response process and data management (katuk et al. 2009). this system also assist the flood management related agencies in managing and maintaining data related to floods by allowing them to monitor the current situation of flood-related matters. this kind of system offers better organization of data and allows faster data retrieval needed to make appropriate decisions (katuk et al. 2009). manual data recording process should not be used because it create problem such as error in documenting the data and delay in generating reports. cemas overcome this problem by giving more quick and well-organized during the flood response activities. besides that, it’s also providing effective and efficient relief to flood victims. zakaria and mustaffa (2014) highlighted that the understanding of relationships among source credibility, risk communication and well-being in disaster management context are the disaster management information. these information focus towards feeding warning message before a disaster that link between source and receiver in area in which is a person living at risk. good resources and communication are required to assist people in the risk area to obtain information and get response to disaster. source credibility is an important aspect in disaster because people need to learn to evaluate information received. it works by listening, understanding, trust, verify and respond to a warning message and the campaign environment (blanchard-boehm and cook, 2004). disaster management information impact on the well-being of the population. however, the impact of flood disasters on the people living in areas at risk can be reduced by having effective warning messages. these messages containing information that might harm the people can be conveyed through emergency and evacuation orders (fothergill and peek, 2004). on the other hand, billa et al. (2006) have come out with comprehensive planning and the role of spatial decision support system (sdss) in flood disaster management in malaysia. sdss was referred to sdss which are based on five main components. these components are database management systems, analysis procedure in model base management system, a display generator, a report generator and user interface. the information provided in the system information is about a proposed comprehensive disaster management program for malaysia which highlight the yazid, et al.: flood risk mitigation: pressing issues and challenges international review of management and marketing | vol 7 • issue 1 • 2017160 role of sdss in improving decision-making. it recognizes the strength sdss in the collection and processing of information to speed up communication between the supporters of the disaster management program. a well-designed sdss for flood disaster management should present a balance among capabilities of dialog, data and modeling. besides that, sdss is an interactive computer-based system designed to support the user or group of users in achieving a higher effectiveness of decision-making while solving a semi-structured spatial decision problem. it’s more focus in decision making and indirectly help in flood management and mitigation process. 2.3. approaches and challenges in flood mitigation this study employs qualitative approach. the data was collected through semi structured interview. kelantan, one of the east coast state of malaysia which accounted for almost billion ringgit loss of properties and infrastructures in 2014 flood was selected in the data collection (thesundaily.my 29th december, 2014). the dmrc are responsible to carried out the nsc’s directive 20 in case of natural disaster. the nsc that coordinated the natural disasters covers at the districts and state levels were handled by government agencies in the flood hit areas in that particular state. only six of these agencies were selected for the study. these agencies were, kelantan state education department, kelantan state department of rescue and fire brigade, kelantan state health department, local authority of kuala krai, kelantan state social and welfare department and kelantan state police contingent. the interviews were transcribed and analysed quantitatively using atlas-ti software version 7. the output of the interview thematically analysed according to the pressing issues and challenges faced during the 2014 massive flood that swept across kelantan, malaysia. 2.4. issues and challenges in mitigating flood losses the interview conducted during this study revealed crucial pressing issues and challenges encountered by both the stakeholders of flood and the communities of the flood. after analyzing thematically the interviews, there were various pressing issues and challenges were comprehensively addressed. the results of the analysis are divided into three parts. one analysis before disaster, the second is during disaster and the third part is after disaster. all issues and challenges faced by the six agencies were represented in figure 2 which is the output of atlas-ti. there are 8 key pressing issues are faced by the stakeholders of flood hit area in malaysia. these pressing issues are flood preparations, lack of staff and rescuers, lack of awareness of the flood, communication problems, lack of assets, transportation issues, the absence of food supplies, and other constraints. all the agency representatives did not specify the problems they had before the flood. there were a number of problems, pressing issues and challenges encountered during the floods. some of the pressing issues highlighted by the government agencies involved are. 2.4.1. flood preparations although the majority of agencies had made careful preparations before the flood, the preparation was insufficient to meet the current needs of a large and exceptional flood. p 2: o2.docx 2:13 (59:59) we did not make preparations for extraordinary flood last year. for example, in that particular year, we only prepared food for 150,000 victims but we received a total of 300,000 victims. when the number of victims beyond the original expectations, they have a problem where the food supply was insufficient. suppliers were hard to find in a short period of time, limited transport service where in some occasion almost none was available to be used to send food. the flood situation as it is unexpected of all agencies because water covered the whole area that lead all operations stranded. p 3: o3.docx 3:12 (53:53) although it had been prepared, the water that entered was out of expectation. preparations in terms of the evacuation area were also problematic because of the heavy flood causing many places to be flooded by water and many people were affected. therefore, the centers could not accommodate large numbers of victims. as a result, many victims were forced to go to other places that were not authorized as evacuation centers. p 5: o5.docx 5:8 (68:68) the hall provided as evacuation centers was too small and could not accommodate the large number of victims. for example, about 600 people had to stay in the sri gucil hall with an area <100 square feet. but some of them did not stay in the authorized evacuation center. 2.4.2. lack of rescuers during the flood of 2014, they were short of rescuers (staffs and committee) because of the floods affecting too many people. p 7: o7.docx 7:3 (52:52) our staffs were not enough and we had to move and work without sleep for 24 h. since the flood was unexpected, many officers who had been appointed as the committee could not do their jobs because they themselves were the victims of the flood. p 4: o4.docx 4:48 (57:57) staff who should be on duty could not do their job because they themselves were the victims of the flood. besides that, rescue team from outside cannot enter to the flood area and this make it worst because they need to work without any assistance. p 5: o5.docx 5:9 (70:70) there was no help from the outside. there were only armies and local agencies here, no assistance from outside. 2.4.3. lack of awareness the other pressing issues of the people in flood affected areas are the lack of awareness of the standard operating procedure that they need to abide to when natural disaster occurs. they were cases where people refused to move even though orders were given. this situation complicated the rescue mission and evacuation process became even more difficult. p 2: o2.docx 2:16 (65:65) they were too obsessed with the idea of historical floods that the older generation faced years ago for example the area they lived in was never flooded with water. p 6: o6.docx 6:8 (56:56) we also faced difficulties to order people to move. before the water reached dangerous level, we did go from house to house to give them command but we were ignored because they claimed that the water would not rise. p 6: o6.docx 6: 9 (58:58). indeed, we had informed the residents. we went from house to house to tell yazid, et al.: flood risk mitigation: pressing issues and challenges international review of management and marketing | vol 7 • issue 1 • 2017 161 them the water was rising. people here ignored and some treated it as it was a water festival. in addition, there were also cases where people who were not affected by the flood registered themselves as victims just because they wanted to receive food aid and consolation money from the government. this situation caused difficulty to the government authorities in ensuring the aid to be distributed to actual victims of the flood. p 6: o6.docx 6:9 (58:58) there were people who unaffected by floods but registered themselves at the evacuation centers because they wanted food aid and consolation money from the government. 2.4.4. communication difficulty one of the most obvious pressing issues during flood is communication difficulty. when this happened contact with between many parties was lost and situation became chaotic. therefore, matters related to flood management became more difficult and tedious. p 3: o3.docx 3:19 (67:67) we also had difficulty in getting reinforcements from other agencies. it was related to communication problems as we were unable to contact others to help us. p 3: o3.docx 3:22 (71:71) it was a bit chaotic at that time because we lost communication. communication was very important in viewing the coordination of all agencies involved. our agency could not work systematically because of communication problems. we can say that communication is the most important factor that without it any type rescue operation will be disabled. p 4: o4.docx 4:53 (68:68) the flood occurred was beyond our expectations, chaos and interrupted communication and there were many other reasons why it could not be implemented as planned. 2.4.5. lack of assets the fourth pressing issue is the lack of assets like boats and helicopters. the result is the delayed to be mobilized to help flood victims who got stuck in areas which were inaccessible to any road transport. the government agencies themselves also acknowledged that the assets were not enough to move the flood victims. even though preparations were made, some assets provided could not be used during the flood. p 6: o6.docx 6:6 (50:50) the boat that we had did not have a high-powered engine to get through the reckless current. if we still used it, it would jeopardizes safety of the rescue team members. besides that, p 6: o6.docx 6:11 (62:62) the capabilities of existing assets were so bad. the boats used for rescue were not in good condition and all assets were used to its maximum level without any maintenance done. 2.4.6. transportation problems the other key pressing issues is transportation. the agencies also expressed about the transportation problems that they faced. since there is lost in connection with the flood-affected areas, they were unable to request any back-up vehicles needed to to carry out rescue mission smoothly. p 6: o6.docx 6:10 (60:60) the need was already there but the process of sending it could not start. we lost contact with the target area, no helicopter landing pad to send food. we had to throw the food from air. the poor working condition of some of the available boats for example also did not allow them to continue their rescue efforts. p 7: o7.docx 7:6 (60:60) there were also boats at the agency that were not suitable for the rescue. i think these needs to be emphasized and there should be a specific boat for the rescue operation. this is very important because the boat and hovercraft are the needed transport when the road is closed. 2.4.7. the lack of the food supply the lack of food supply during needy time is the real pressing issues during the 2014 flood. the agencies stated that there are instances where the lack and sometimes the absence of food supply was one of the major problems they rescuers had to face during the flood. reason is although the food although was available, it could not be reached to flood victims as there is lost of communication and that there were no transport available to reach to the flood victims. p 5: o5.docx 5: 6 (66:66) the place where i stayed, there was indeed lack of food supply. we had to ration the food supply so that it would be enough for everyone. food aid from outside did not reach the place that i stayed. there have been cases where the flood victims who had to drink rain water and did not get any food supply for more than 2 days. p 5: o5.docx 5:8 (68:68) there figure 2: pressing issues and challenges of 2014 flood in malaysia yazid, et al.: flood risk mitigation: pressing issues and challenges international review of management and marketing | vol 7 • issue 1 • 2017162 were many victims and we could not get food supply for 2 days and only drink the rain water. 2.4.8. other constraints apart from the pressing issued mentioned earlier, some of agency stated that they were not familiar with the route to the flood affected villages. they had to go through a greater distance to get to the destination. as a result, they took some time to save the victims. p 6: o6.docx 6:7 (52:52) we did encounter a lot of difficulties to rescue as we were not so familiar with the route of the existing village and the water was too high and we were not able to make the correct estimation about the routes. time used to go for rescue was quite long. there some instances, the rescue team had a problem to deal with situations involving political differences in food and supplies distribution. thus, it make it difficult for them to manage the food supplies and clothing to the victim because of the difference in the political affiliation among the flood victims. the eight pressing issues raised and four major challenges raise by the agencies that need to be ironed out and attention of the drmc and the head of the national disaster council. below are the four challenges: 2.4.9. lack of provisions according the agencies, there would be no provision of equipment available for flood in the future. this is because all the provisions were used for restoration after the floods. even so, the costs incurred was very high, reached many millions of ringgit. p 4: o4.docx 4:52 (65:65) indeed, the effects that we suffer were very high, which covers all damages such as broken fans, doors, bathrooms, clogged and everything. if we were to follow the estimation that we made, it reached millions of ringgit. 2.4.10. redevelopment redevelopment of areas damaged or destroyed by the flood is a uphill battle. indeed, it is the biggest challenge for most agencies to rebuild and repair the damage caused by the floods. p 3: o3.docx 3:20 (69:69) what has been a challenge to us is to mend all the damage of the hospitals and clinics that were affected during the flood. for your information, some clinics are still operating in a tent because the new clinic is not completely ready. this is worrying particularly if flood happened again in the near future. although redevelopment or rebuilding project was given a large allocation, but the lack of time, difficulty in suitable location for development for flood affected victims have been a management problem resulting in delay in the redevelopment process. not only that, the cleaning process has also been another cause immense problem because of the lack of water. p 3: o3.docx 3:21 (69:69) we do not experience provision problem but we have lack of time and place to build new clinics. apart from the problems of reconstruction, we also have problems to do the cleaning process because the mud is very deep and we have no water to do the cleaning job. the lack water supply resulted in the difficulty in cleaning up flood affected areas. p 4: o4.docx 4:58 (74:74) the problem faced was to clean up the affected areas to its original state where many properties were damaged. the recovery period would be long it requires a lot of labor to clean up the place flooded with thick mud. in addition, difficulty of getting water are among the main obstacle to recovery process, p 7: o7.docx 7:11 (70:70) there was no water so the cleaning activity was delayed. there were many came to help, all the equipment were sufficient but there was no water. 2.4.11. the social and economic situation another issue that worries many people is the existence of opportunist who took advantage in the situation after flood. for example, traders increase the prices of goods, p 4: o4.docx 4:55 (72:72) many victims started to go to the store to buy groceries, but the grocers began to take advantage by raising the prices. besides that, all banks and facilities in kelantan were not working and could not be used at least for some time. p 4: o4.docx 4:56 (72:72) the situation became chaotic, victims started heading to the nearest town which was jerteh, besut to go to the bank because all facilities in kelantan were not working and could not be used. not only was that, robberies become rampant in flood affected areas. p 4: o4.docx 4:57 (72:72) even a warehouse had been robbed. it happened because some people were forced to do it and some were simply doing it. 2.4.12. trauma after the flood, many victims have been under unduly pressure or stress which cause them to be in a state of trauma. p 4: o4.docx 4:60 (78:78) recently, there were eighty seven percent of students in kuala krai were traumatized by the disaster. this is very high because they lost their homes, staying in a tent or hut, waiting for the proposed house to be ready yet the process to complete took quite some time. 3. conclusion there are various frameworks drr to address a pressing issues and challenges of natural disaster. the world has recognized that the best approach to achieve sustainable community in facing natural disaster is by adopting and executing the drr framework. however, to ensure the drr framework is successful implemented, the pressing issues and challenges need to be addressed correctly by the nation’s nsc. these issues and challenges emerged from the worst 2014 flood have to be studied seriously by the nsc so that they can be appropriately managed during future disaster. most importantly, unavoidable mistakes happen in the previous disaster should not to be repeated and that the nation and the communities should be well prepared in any kind of upcoming natural disaster. the finding of this study revealed that there are eight pressing issues and four challenges that need to be addressed. under no circumstances if and unless these issues and challenges is aptly managed, then disaster management team or the drcm will not be able to overcome future similar pressing issues and challenges. if we divide natural disaster by three phases, then the phase before the disaster stuck clearly shows we do not have any kind of issues and challenges. only then during and after disaster, many pressing issues and challenges crops up that need to be faced by the nation’s disaster management team. yazid, et al.: flood risk mitigation: pressing issues and challenges international review of management and marketing | vol 7 • issue 1 • 2017 163 the pressing issues and the challenges emerged from this study need to be given right and immediate attention by the government of malaysia’ s nsc so that the approach that is going to be adopted by the disaster management team can be continuously improved. thus, such pro-active action can prevent heavy loss of life and property during future natural disasters. the damage can be kept to the minimum and that the recovery of the stakeholders of natural disaster would be speeded up. the direction of further study is necessarily crucial in order to establish a comprehensive drr framework that fits in any type of natural disaster that might befall upon malaysia in the future. 4. acknowledgment this study was supported by the fundamental research grant scheme in the ministry of higher education malaysia. 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(2014), source credibility, risk communication and well-being: a conceptual framework. procedia social and behavioral sciences, 155, 178-183. . international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2017, 7(1), 222-229. international review of management and marketing | vol 7 • issue 1 • 2017222 the impact of enterprise risk management, strategic agility, and quality of internal audit function on firm performance ai ping teoh1*, kaih yeang lee2, rajendran muthuveloo3 1graduate school of business, universiti sains malaysia, penang, malaysia, 2graduate school of business, universiti sains malaysia, penang, malaysia, 3graduate school of business, universiti sains malaysia, penang, malaysia. *email: apteoh@usm.my abstract this paper examines the relationship of enterprise risk management (erm) implementation to firm performance, the mediating role of strategic agility and moderating role of quality of internal audit function (qiaf) in this relationship among malaysian public listed companies (plcs). erm implementation was conceptualized with the elements in coso (2004) erm integrated framework, and firm performance was measured by financial and non-financial indicators. a total of 137 responses were obtained through questionnaire from plcs in main market of bursa malaysia. the empirical findings of the study suggest that erm implementation has a significant relationship to firm performance and strategic agility significantly mediate the relationship. however, qiaf does not significantly moderate the relationship between erm implementation and firm performance. low response rate presents a challenge to generalize the content to all plcs in malaysia. due to time and cost constraints this study did not acquire any secondary data and interviews which may provide further in-depth findings related to the research. in this study erm framework as an integrative risk management has been recognized as the contributor to the firm performance of sample companies. plcs, securities commission and institute of internal auditors malaysia will benefit from the findings of this study. keywords: enterprise risk management, strategic agility, internal audit function, firm performance, malaysia jel classifications: m420, m190 1. introduction public listed companies (plcs) listed in bursa malaysia play a significant role in malaysia economy. world bank reported market capitalization of listed companies in malaysia towards the percentage of malaysia gross domestic product (gdp) was 156.66 in year 2012 and value at usd 476.34 billion. the contribution of the plcs to malaysia’s economy may be deteriorated due to globalization which exposed plcs to many challenges. companies are struggling in maintaining the profits that enjoyed in the past due to economic turndown and market uncertainties. asian financial crisis in 1997 caused many companies to experience deteriorated business performance and sustainability crisis. bank negara reported a sharp decline in gdp from 43.5% in year 1997 to only 28.1% in year 1998. in year 2007, malaysia economy once again impacted by global financial crisis due to housing bubble in united states. the klse has declined by 9.38% from the period of june 2008 to june 2009. during the economy downturn, series of scandals occurred in the malaysia business arena such as perwaja steel sdn bhd, technology resources industries berhad, sime darby group, and bank islam. the latest development of public listed firm’s failure is malaysia airline system bhd (mas). mas is the leading national airline in malaysia, operated with 160 aircrafts and provides service to 60 destinations worldwide across six continents. mas has been hampered by times of unprofitable period such as asian financial crisis in 1997, year 2005 and year 2011 due to failure in mitigating the risk of rising fuel costs, mismanagement and unprofitable routes. in year 2014, mas bas been impacted seriously by two aviation accidents where flight mh370 disappeared in an unknown incident and mh 17 crashed in ukraine. mas reported a loss of rm 750.4m for the first 6 months of 2014. the above examples has proven that failure in risk management is one of the main reasons for the collapse of plcs in malaysia and this supported by academic research. in recent year, the trend in corporate governance has evolved to the development of an integrated, enterprise-wide approach in assessing the risks teoh, et al.: the impact of enterprise risk management, strategic agility, and quality of internal audit function on firm performance international review of management and marketing | vol 7 • issue 1 • 2017 223 that possibly to impact a firm’s ability to achieve its corporate objectives and to develop system and programs to address those risks. this trending has caused the traditional risk management to be replaced by an enterprise-wide view of risk rapidly as board of directors (bods) and top management of the firm have begun to focus on the enterprise risk management (erm) function. many researchers have widely recognize the importance or benefits of erm in managing the portfolio of risks that face by the firms nowadays (liebenberg and hoyt, 2003; aabo and skimkins, 2005; nocco and stulz, 2006). mccg 2012 recommended bods to form an internal audit function that right reported to the audit committee and the compliance of this recommendation will be presented in the firm’s annual report. the code stated clearly, any non-observance of a recommendation the firm hold the responsibilities to give details on it. the importance of the part played by internal audit function is increasing and weighted over the years. internal audit function plays an expected and independent role within an erm governance model as it providing objective assurance and consulting role in evaluating and reviewing the erm implementation in the firm. in fact, in today dynamic and fast-paced business environment, strategic agility plays a vital role in firm performance. strategic agility is the ability to continuously adjust and sensitive the business environment. companies need to be able to turning fast and transform without losing any momentum to sustain in the business world. companies are required to taking advantage of the changes and distribution in the business environment. strategic agility is the fast strategy game where innovation and continuous development of new capabilities as the competitive advantage (doz, 2014). strategic agility helps the firm to adapt accordingly from the risk that identified through erm implementation and this directly help to improve the firm performance. this study intends to examine the relationship between erm implementation and firm performance of the plcs on main market of bursa in malaysia. in addition, this study also investigates the mediating effect of strategic agility and moderating effect of quality of internal audit function (qiaf) between erm implementation to firm performance. 2. literature review 2.1. theoretical background based on resource based view, competitive advantages were sustained through inimitable bundle of resources from the fundamental of the company based on the resource-based perspective (conner and prahalad, 1996). resources was perceived broadly as “anything that can be understood as a strength of a weakness” of the firm. dynamic capabilities will be discuss where it sees as the key for a firm on competitive advantage. teece et al. (1997) defines capacity as the competence to adapt to the fluctuating of business environment. erm can play a role in a resource-based view because of its framework, governance structure, standards and process that can be used to integrate, improve and help significant intra and inter-firm knowledge management. agency theory is a contract relationship where one party (the principal, e.g. the shareholders) engage with other party (the agent, e.g. the bods) to perform the task on their behalf with the delegation of authorization decision making (jensen and smith, 1984). erm is related to the agency theory. following the guidelines from committee of sponsoring organizations of the treadway commission (coso, 2004), top management’s commitment are required for erm implementation because they responsible to create and enhance the shareholders’ value. 2.2. erm coso (2004) defined erm as “a process, affected by an entity’s bods, management and other personnel, applied in strategy setting and across the enterprise, designed to identify potential events that may affect the entity, and manage risk to be within its risk appetite, to provide reasonable assurance regarding the achievement of entity objectives.” besides that, asian risk management institute explain erm as “a disciplined and cohesive approach to risk that support the configuration of strategy, process, people, and technology, and allow firms to categorize, rank, and effectively accomplish their serious risks.” erm compromised three-dimensions with eight components (internal environment, objective setting, event identification, risk assessment, risk response, control activities, information and communication, and monitoring), four different objectives that were strategic, operations, reporting and compliance and the third-dimension with entity’s units. hoyt and liebenberg (2011) found implementation of the erm had a positive value towards the firm value. significant relationship was found between the level of erm implementation and the firm’s value (waweru and kisaka, 2013). waweru and kisaka (2013) verified erm implementation has a significant effect towards the value of 22 companies that listed on the nairobi stock exchange with tobin’s q measurement. besides that, jalal-karim (2013) explained leveraging on erm will help to boost up the competitive business advantages in bahrain. additional to that, the erm also proven help in supply chains from the survey on 207 organizations (arnold et al., 2012). therefore, this study proposes the following hypothesis: h1: erm implementation has a significance relationship with firm performance. 2.3. strategic agility doz and kosonen (2008) defined agility as the capacity to constant adjust and familiarize decisions to the changing event of the external environment and thus nurture value creation. the concept of “agility” was origin from manufacturing sector and slowly applied to others field. zhang and sharifi (2000) explained agile manufacturing consists of agility drives, strategic abilities, agility provider and agility capabilities. these explained the relationship of responsiveness, competency, flexibility and speed. doz and kosones (2008) explained a combination of three major metacapabilities resulted strategic agility. the meta-capabilities consists of strategic sensitivity, leadership unity and resource fluidity. ofoegbu and akanbi (2012) reported strategic agility have a positive impact on the performance of manufacturing companies teoh, et al.: the impact of enterprise risk management, strategic agility, and quality of internal audit function on firm performance international review of management and marketing | vol 7 • issue 1 • 2017224 that measured by collect commitment, resource fluidity and strategic sensitivity. the data collected from 210 and sample of two manufacturing firms in oyo, nigeria. the findings from yang and liu (2012) also prove that firm’s agility is a critical source of competitive strategy on firm performance from 250 companies in taiwan’s glass industry. arnold et al. (2011) suggested erm supported organizational agility to conforming new governing control in uncertainty environment. the authors suggested by implementing erm, it helps the firm to increased strategic foresight and systemic insight in unpredictable environment. supported with wieland and wallenburg (2012) that risk management is significance for firm agility and agility directly important in improving firm performance. dynamic capabilities, an extension of resource based view theory explained capabilities as the key to adapt to uncertainty environment. thus, this study proposes the second hypothesis as below: h2: strategic agility mediates relationship between erm implementation and firm performance. 2.4. qiaf internal auditing as an independent, objective assurance and consulting activity designed to add value and improve an organization’s operations. it helps an organization accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control, and governance processes. quality assurance and improvement program is necessary to ensure regular quality in audit function and assurance on the internal audit function is in conformance with the definition of internal auditing, international standards for the professional practice of internal auditing (standards), and the code of ethics. academic researchers defined iaf quality as the gathering of characteristics such as internal auditors’ competence, educational level and certification, their hiring, reporting and termination relationship, and the quality of their work result that measure through capability of audit programs and range of work performance (johl et al. 2013). internal auditing is adding value to the firm by ensuring the effective risk, control and governance in place. this supported by khlif and samaha’s (2014) research on egyptian stock exchange. the authors found iaf quality represents a key determinants of timely disclosure which significantly reduce the delay of audit report. johl et al. (2013) shows iaf quality has a negative relationship with abnormal accruals in the financial reporting. accuracy of reporting play a vital role in firm’s value because it portrait the firm’s financial performance and to increase confidence of shareholder towards the firm. contradictory finding on the effect of erm implementation to firm performance (pagach and warr, 2007) and thus prompted consideration of factors that may be contingent to this relationship. this raised the following hypothesis. h3: qiaf moderates the relationship between erm implementation and firm performance. 2.5. research framework the research framework is illustrated in figure 1. 3. research methodology this study is to understand the impact of the erm implementation to the firm performance. besides that, this study try to examine the mediating effect of strategy agility and moderator effect of qiaf between erm implementation and firm performance. this study will constructed and proposed based on the resource-based view of the firm and coso erm integrated framework. 3.1. sample and data the target population of this study was 780 companies listed on the main board of bursa malaysia in august, 2014. various types of industries listed in the main market that include consumer product, industrial product, construction, hotels, plantation, properties, technology, trading and services, infrastructure project and closed-fund. website of bursa malaysia provided all the information of plcs in malaysia. sample size of 30-500 will be a recommendation for acceptable and effective data collection (sekaran and bougie, 2010). this statement align with hair et al. (2013) suggested that the sample size should be between 100 and 400. 3.2. measurement instrument the survey instrument is based on constructs validated in prior research, standardized and revised to the context in this study. questions were consists of erm, qiaf, strategic agility and firm performance for accurate analyzing results. mail questionnaire will be used to obtain data from the companies listed on main market in bursa malaysia except finance industry. the hard copies will sent to all targeted firms throughout malaysia via pos malaysia. the survey instrument is based on constructs validated in prior research, standardized and revised to the context in this study. the use of 5-point likert scale or 7-point likert scale or others will not show any difference in improving the reliability of the ratings as per sekaran (2010) as quoted from elmore and beggs (1975). 3.3. data analysis the data will be analyzed with structural equation modeling (sem) approach and partial least square (pls) algorithm and bootstrapping in smartpls software to determine the variables relationship. pls is the second generation multivariate technique which can be used as measurement model and structural model with minimizing error variance. besides that, data analysis will test the goodness of data in terms of validity and reliability (assessment of measurement model), and hypotheses testing (assessment of structural model). researcher think through two broad types of measurement specification; reflective and formative measurement models. in this study, reflective measurement model will be used with all the items in erm dimension are affected by the same construct. each items are highly correlated and the erm dimension will not change with a removal of one indicator due to its underlying nature. the model will be used to investigate the relationship between variables and their corresponding indicators. measurement model teoh, et al.: the impact of enterprise risk management, strategic agility, and quality of internal audit function on firm performance international review of management and marketing | vol 7 • issue 1 • 2017 225 included individual item’s reliability, internal consistency and discriminant validity (barclay et al., 1995). nunnally (1978) verified composite reliability (cr) be used to assess the reliability of reflective scales with all factor loadings are recommended to exceed 0.7. besides that, for exploratory study, the average variance extracted (ave) has to be above 0.5 threshold to indicate adequate convergent validity (fornell and larcker, 1981). to access the discriminant validity, all reflective inter-construct correlations and root square of ave has to be compared. lastly, all the square roots of ave should be larger than off-diagonal elements in the same column and row. the model to be used to measure the relationship among construct which includes estimates of the path coefficients that will demonstrate the strength of hypotheses relationship. the model examines the r² value that will predict the power of the model. the key target constricts’ level of r2 must be high enough for the model to achieve a minimum level of explanatory power due to the goal of the prediction-oriented pls-sem is to explain the endogenous latent variables’ variance. in the structural model, endogenous variables can be described as substantial, moderate or weak with r2 = 0.75, 0.50 and 0.25 (hair et al., 2011). hair et al. (2014) explained bootstrapping is a re-sampling technique that draws a large number of subsamples from the original data (with replacement) and estimate models for each subsample). there are two situations to confirm the hypothesis are significant (i) p-value below 0.01; t-value more than 2.33 or (ii) p-value below 0.05; t-value more than 1.645. third variables or construct intervenes between two other related constructs will caused mediating effects. in another words, the effects of a predictor constructs transmitted through mediator to a dependent constructs. hair et al. (2014) explained on the procedure of testing mediating effects with bootstrapping approach. bootstrapping perfectly suited for pls-sem due to no assumptions on the shape of distribution and easily applied to small samples size with higher confidence level. the moderator effect defined as the moderator changes the strength or the direction of a relationship between two constructs in the model (hair et al., 2014). predictor and moderator will be multiplied to make a construct called as interaction construct (predictor x*moderator m) to test the moderating effect. 4. research findings 4.1. respondents’ profile majority of the respondents’ are male (90.5%) and minority are female (9.5%). the respondents’ ethics were only two groups where malay (75.2%) and chinese (24.8). majority of the respondents are 41-year-old and above (67.2%) that imply the respondents have sufficient working experience and the capability to articulate the current business issue. in addition, more than 90% of the respondents have more than 6 years working experience with the current company that indicate huge understanding to the company’s structure and planning. lastly, majority of the respondents’ have master degree qualification (68.6%) and 67.2% of respondents were bods of the company. 4.2. firms’ profile majority of the respondents are from industrial product (37.2%) and follow by consumer product, trading and services (18.2%), properties (10.2%), technology (8.0%), construction (3.6%), plantation (2.9%) and others (1.5%). the findings shows majority of the companies established more than 11 years (72.3%) none of it established <5 years. additional to that, majority of the respondents’ firm have more than 100 employees (94.9%) and more than 1 segments/subsidiaries (76.6%). figure 1: research framework teoh, et al.: the impact of enterprise risk management, strategic agility, and quality of internal audit function on firm performance international review of management and marketing | vol 7 • issue 1 • 2017226 4.3. measurement model in this study, two measurement model been used. the reflective measurement model to reflect the dimension of erm implementation and formative measurement model to analyze the relationship of the erm implementation to firm performance. firstly, the reflective measurement model were assess with outer loading relevance testing. as indicated by hair et al. (2014), an indicator with loading below 0.50 deleted because the joint variance between the variable and its indicator is bigger than the measurement error variance. there are 12 items deleted from the latent variables; 12 items from exogenous (iv) constructs. before loading, the items used in the exogenous (iv) constructs is 35 items, after loading it become 23 items. table 1 shows the items in the latent variable after cross loadings have been accomplished. next, researcher evaluated the first criterion, internal consistency reliability. cr used to measure the internal consistency reliability in this model and value above 0.70 consider are acceptable (hair et al., 2014). table 2 show that cr’s value for all the first-order latent variables and dependent variables in the measurement model are above the recommended value of 0.70. thus, we concluded the measurement model has internal consistency and is reliable. degree of the multiple items measuring the same concepts were measured by convergent validity. in this model, ave is used as an evaluation criteria for convergent validity. chin (2010) explained total variance in a latent variable that contributed from its indicators was measured by ave. table 2 shows the ave for the variables ranging from 0.7091 to 0.9461 were well above the required minimum level of 0.50 (hair et al.,2014). thus, the measures of the instruments have high levels of convergent validity. the discriminant validity is the degree of a construct is truly distinctive from other constructs by experiential standards. fornell-larcker criterion is a more conventional method in considering discriminant validity with compare the square root of the ave values with the latent variables correlation. table 3 shows the discriminant validity for first order constructs. 4.4. formative measurement model the eight-dimensions of the erm in the first-order constructs used as indicator for erm implementation. all those valid items used to measure the constructed loaded into a single factor (erm implementation). the model evaluated for the collinearity of indicators (variance inflation factor [vif] value) with the spss linear regression analysis. the rule of thumb for vif value is below 5. others than event identification and internal environment, vif values for others indicators were below threshold value of 5. internal environment and event identification have vif value above 5 threshold, so researcher combining both indicators under one constructs. data re-run and all vif values below the threshold of 5 (table 4). next the model was assess for the outer weight and the t-value. as the t-statistic value for all the indicators were above 2.57 that indicate the significance of their outer loading (p < 0.01), we conclude the model is exhibit satisfactory levels of quality. 4.5. structural model bootstrapping been used to determine the t-values and allow us to quantify the statistical significance of the path coefficient. eightdimension of erm implementation was specify as first order and erm implementation as second order. results indicated the beta coefficient was positively and statistically significance at p < 0.01. erm implementation to financial performance shows the path table 1: removed indicators for the measurement model constructs before removal removal items after removal internal environment 8 ie1, ie2, ie3, ie6, ie8 3 objective setting 4 os4 3 event identification 6 ei1, ei3, ei5 3 risk assessment 4 ra1 3 risk response 4 rs2 3 control activities 4 ca4 3 information and communication 3 3 monitoring 2 2 firm performance 12 12 total 47 12 35 table 2: results of the measurement model for first‑order constructs constructs items factor loadings ave cr internal environment ie4 0.937 0.8541 0.9461 ie5 0.911 ie7 0.924 objective setting os1 0.843 0.5080 0.7519 os2 0.683 os3 0.590 event identification ei2 0.851 0.7214 0.8859 ei4 0.845 ei6 0.852 risk assessment ra2 0.879 0.5147 0.7555 ra3 0.610 ra4 0.631 risk response rs1 0.774 0.5113 0.7522 rs4 0.522 rs4 0.814 control activities ca1 0.829 0.5206 0.7627 ca2 0.627 ca3 0.694 information and communication ic1 0.775 0.5168 0.7617 ic2 0.710 ic3 0.668 monitoring m1 0.660 0.5520 0.7091 m2 0.818 firm performance fp1 0.749 0.5093 0.9251 fp2 0.627 fp3 0.673 fp4 0.638 fp5 0.700 fp6 0.689 fp7 0.685 fp8 0.867 fp9 0.714 fp10 0.784 fp11 0.743 fp12 0.661 ave: average variance extracted, cr: composite reliability teoh, et al.: the impact of enterprise risk management, strategic agility, and quality of internal audit function on firm performance international review of management and marketing | vol 7 • issue 1 • 2017 227 coefficient of 0.7730 with t-value of 12.77. the result support hypothesis h1 of the research. second, the model was evaluated from the coefficient determination (r2) value and as a rough rule of thumb, r2 = 0.75, 0.50, or 0.25 will be consider as substantial, moderate or weak. the r2 values for this study is 0.598 and be consider as moderate level. table 5 summarises the result. the structural model is shown in figure 2. 4.6. mediating effects mediation analysis was carried out to determine the variables that mediates the relationship between independent variable and dependent variable in this study. the results showed strategic agility mediated the relationship between erm implementation and firm performance. the t-value was 3.17 with p < 0.01 significance. the direct effect is 0.553 and indirect effect is 0.219, thus the vaf was 71.6% and consider as partial mediation. 4.7. moderating effects qiaf proposed as the moderator variable that will moderate or change the strength the relationship between erm implementation and firm performance. in order to test the moderating effects of qiaf on the relationship between erm implementation and firm performance, an interaction construct created with multiplying erm implementation (predictor) and qiaf to predict firm performance. result showed the qiaf to firm performance was not significance as the t-value is 1.2087 lower than 1.96. 4.8. summary of hypotheses overall results of data analysis for this study were presented in below table 6. 5. discussion and conclusions erm implementation affect the firm performance proposed in h1. the results after pls-sem analysis shows that h1 has β-value of 0.773 and p < 0.01. thus, in this research h1 is accepted and this implied a significant relationship between erm implementation to the firm performance. this results is reinforced by studies done by past researcher hoyt and lienberg (2011), lai et al. (2011), gordon et al. (2009), waweru and kisaka (2013). the benefits of erm implementation such as increase competitive advantage, lower b2b risk, lower exposed to global risk, better supply chain are helping the companies to sustain it business operation and agile to the business uncertainty. therefore, implementing erm within the firm is expected to benefit the firm in long run and increase the company’s performance. hypotheses 2 (h2) suggested that strategic agility mediates the relationship between erm implementation and firm performance. results of bootstrapping analysis in previous chapter conclude h2 has the t-value of 3.17 with p < 0.01 significance. the direct effect is 0.553 and indirect effect is 0.219, thus the vaf was 71.6% and consider as partial mediation in this study. thus, h2 is accepted and strategic agility has a significant mediates effect to the relationship between erm implementation and firm performance. as suggested by past research, strategic agility has a significant relationship on firm performance and as a critical source of competitive advantage for the firm (ofoegbu and akanbi, 2012; yang and liu, 2012). additional to that, erm helps firm’s agility in compliance to new regulator rules (arnold et al., 2012) and risk management has a significant relationship on firm agility (wieland and wallenburg, 2012). the hypotheses is further enhanced with dynamic capabilities theory, an extension from resource based view theory where erm implementation been conceptualized as a resources and strategic agility as a capabilities to adapt to volatitly environment to the firm performance. table 3: discriminant validity for first‑order construct constructs control activities event identification firm performance information and communication internal environment monitoring objective setting risk assessment risk response control activities 0.7215 event identification 0.6034 0.8494 firm performance 0.5708 0.7092 0.7137 information and communication 0.4049 0.6091 0.5489 0.7189 internal environment 0.3750 0.5593 0.4274 0.2897 0.9242 monitoring 0.3859 0.4252 0.3847 0.2738 0.2749 0.7430 objective setting 0.6723 0.6677 0.6405 0.5105 0.3575 0.4313 0.7127 risk assessment 0.4244 0.5277 0.5462 0.3910 0.2180 0.3289 0.4994 0.7174 risk response 0.2686 0.3101 0.3820 0.2350 0.0605 0.2060 0.3499 0.3748 0.7151 table 4: measurement model results for second order constructs after combining constructs second order constructs weight vif t-value control activities 0.7749 2.004 12.2641 event identification and internal environment 0.7934 1.929 15.3658 information and communication 0.6937 1.534 11.8809 monitoring 0.5799 1.307 5.9345 objective setting 0.8460 2.431 12.2541 risk assessment 0.7018 1.522 10.1301 risk response 0.4922 1.219 6.6554 vif: variance inflation factor teoh, et al.: the impact of enterprise risk management, strategic agility, and quality of internal audit function on firm performance international review of management and marketing | vol 7 • issue 1 • 2017228 hypotheses 3 has proposed that there is a positive relationship between qiaf and firm performance. after the pls-sem analysis, the results shows β-value of −0.1568 with p > 0.05 and the t-value is 1.2087. therefore, h3 is not supported after the moderating analysis qiaf did not moderate the relationship between erm implementation and firm performance. the insignificant relationship is due to relative new of internal audit function in malaysia context as part of the listing requirements paragraph 15.26. the maturity level of internal audit function may vary compare to others country as securities commission malaysia (sc) only imposed internal audit function as the recommendation in mccg 2012. this is supported by survey from ernst and young that majority of internal audit function label as assurance provider and many firm expect internal audit to play a bigger role such as advisory for the company. furthermore, there were past studies that showed internal audit function does not contributed to firm performance. internal audit function not significantly related to the reduction of discretionary accruals (davidson et al., 2005). internal audit function do not contributed to profit level, return on investment and return on equity for government linked companies in nigeria (kiabel, 2012). erm is the critical intangible resources of the firm due to its value and difficult to imitate will helps the firm to obtain competitive advantage in the long run. strategic agility is the capabilities of the firm to adapt to changing environment quickly. in this study, strategic agility justified as the mediator from dynamic capabilities theory perspective where capabilities to adapt to uncertainty is a key to obtain competitive advantage other than those critical resources. based on agency theory, this study found qiaf does not have any significant effect to the relationship of erm implementation and firm performance. lastly, this study contributed to the literature by using pls as the analytical tool where the combination of reflective and formative measurement models. the erm implementation been examined through its eight-dimensions with reflective second order model. in term of practical contribution, this study showed the value of erm in managing with the dynamic business environment within the various internal and external uncertainties translated by the significant improvement in the firm performance. this study confirm on a reasonable extent, that erm capable to mitigate the risk and increase the opportunities in business environment while the competiveness of the firm sustain and maximize the shareholders’ value. in addition, the findings on dynamic capabilities theory on strategic agility function as mediating effect serve as important points for the firm the importance of maintain agile in nowadays environment. low response rate presents a challenge to generalize the content to all plcs in malaysia. in addition, due to time and cost constraints this study did not acquire any secondary data and interviews which may provide further in-depth findings related to the research. future studies on similar topic may adopt other erm model such as is0 31000 components, australia and new zealand risk management framework and rims risk maturity model for erm to have a different perspective in conceptualizing the erm implementation. future studies should explore the other figure 2: structural model table 6: summary of hypotheses hypotheses results h1: erm implementation has a significance relationship with firm performance supported h2: strategic agility mediates the relationship between erm implementation and firm performance supported h3: qiaf has a significance relationship between erm implementation and firm performance not supported erm: enterprise risk management, qiaf: quality of internal audit function table 5: significant results of path diagram path standard beta standard error t-value p-value r2 decision erm→firm performance 0.7730 0.0605 12.77 p<0.01 0.598 supported erm: enterprise risk management teoh, et al.: the impact of enterprise risk management, strategic agility, and quality of internal audit function on firm performance international review of management and marketing | vol 7 • issue 1 • 2017 229 two-dimensions of erm coso (2004) which are four objective setting and its organizational units on the metrics. 6. acknowledgment this research is funded by universiti sains malaysia short term grant 304/ppamc/6312154. references aabo, t., fraser, j.r., simkins, b.j. 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(2000), a methodology for achieving agility in manufacturing organisations. international journal of operations and production management, 20(4), 496-513. microsoft word 1 ok sinem aydogdu2.doc international review of management and marketing vol. 1, no. 4, 2011, pp.65-73 issn: 2146-4405 www.econjournals.com the effect of transformational leadership behavior on organizational culture: an application in pharmaceutical industry sinem aydogdu okan university, institute of social sciences, istanbul, turkey. email: sinem.aydogdu@pharmavision.com.tr baris asikgil mimar sinan fine arts university, faculty of science and letter, istanbul, turkey. email: basikgil@msgsu.edu.tr abstract: in this study, conducted on 96 employees from production sector in a pharmaceutical company, the effect of transformational leadership behavior on organizational culture is investigated to determine statistically significant relations. the results of the study support the hypotheses. transformational leadership behavior has a positive and significant correlation between the components of organizational culture such as long / short term orientation, masculinity / feminity, power distance, individualism / collectivisim and uncertainity avoidance. keywords: transformational leadership; organizational culture jel classifications: l20, m19 1. introduction the term leadership has been very widely referred in the literature. political experts, business executives, social workers and scholars use it in their speeches and writings. although many theories and theoretical formulations of the leadership concept have been introduced throughout the years, there is still disagreement as to its meaning. leadership is defined as a behavior or a process by some scholars. for instance, bowers and seashore (1966) gave the concept as “an organizationally useful behavior by one member of an organizational family toward another member or members of that same organizational family”. tannenbaum and massrick (1957) treated leadership also as a process or function rather than as an exclusive attribute of a predetermined role. they suggested that the leadership role in this process often shift from one person to another. many researchers also look at leadership from the long / short term orientation point of view. mescon (1958) said that “true leadership can and must transform a group from a mere collection of individuals into a vital force, capable of goal attainment to a degree which will not be possible in case of an unstructured group of people”. some scholars contributed to this view by underlining the importance of the influence on the subordinates to attain the common goals. for instance, tannenbaum and massrick (1957) defined leadership as “an interpersonal influence, exercised in a situation and directed through the communication process, toward the attainment of a specific goal or goals”. parallel with this view, bennis (1959) also suggested that the only tool for a leader to become effective is his / her skill to influence others. dion (1968) defined leadership as “a relationship between one or more persons exercising influence and one or more persons submitting to that influence”. leadership is also seen as extraordinary personality characteristics. bass (1990) claimed that leaders are extraordinary people with specific and exceptional sanctity and heroism, who can set an example for their followers. on the other hand, jago (1982) defined leadership as both a process and property. according to him, leaders create a process by using noncoercive influence to direct and coordinate the activities of the members in an organization toward the accomplishment of group objectives. leadership does not involve the use of force, coercion or domination and is not necessarily implied by the use of such titles as manager, supervisor or superior. however , tannenbaum and international review of management and marketing, vol. 1, no.4, 2011, pp.65-73 66 massrick (1957) suggested that it also comes from internal resources such as flexibility and understanding. dion (1968) gave leadership as a multidimensional pattern and a reciprocal relationship revealing three components: leader, follower and the relationship between them. therefore, it is not only seen as a function of the leader’s personality, but also as a function of these two (leader and follower) interacting in specific situations. 2. literature review 2.1. transformational leadership researches on leadership are focused on how leaders create and strengthen the organizations during 1980’s. transformational leadership is created to be succesfull in reaching the goals of the organization, increasing the commitment to the organization and strenghten the process during these objectives of the organizations (yukl, 1994). transformational leadership integrates ideas from trait, style and contingency approaches of leadership (den hartog et al., 1997). in the light of findings throughout the years, some characteristics of transformational leaders can be stated as follows:  they change the core values of followers for the benefit of the common interest by committing people and seeing them as ends not as means,  they inspire followers to go beyond their own self-interests for the good of the organization with their vision (avolio and bass, 2004),  they are proactive, raise follower awareness for transcendent collective interests and motivate followers to achieve out of range goals (antonakis et al., 2003),  they are capable of having profound and extraordinary effects on people by causing shifts in the beliefs, the needs, and the values of followers, so followers can become leaders themselves (kuhnert and lewis, 1987),  they heighten the awareness of followers with vision they create and the strategies for reaching them (avolio and bass, 2004),  they create self-confidence in followers by empowering them,  they tend to direct specific activities as much as to alter moods, to evoke symbolic images and expectations, and to inspire desires and objectives (egri and herman, 2000),  they create fresh approaches to long-standing problems,  they transform the organization by defining the need for change, creating new visions, mobilizing commitment to these visions and by providing awareness of the organizational vision and goals (den hartog et al., 1997),  they develop higher level needs for followers such as achievement, autonomy, and affiliation, which can be both work and not work related (avolio and bass, 2004),  they work for developing higher level of autonomy, achievement and performance in followers. hence, they take the risk of being replaced by the followers they trained. components of transformational leadership throughout the years, avolio and bass (2004) defined a dimension called idealized influence, which also refers to charisma, but found to be exhibiting itself into two different dimensions: first, idealized influence behavior which has been referred as behaviorally-based charismatic leadership; second, idealized influence attributed which is an attributed charisma by the followers to the leaders (conger and kanungo, 1987). in this way, transformational leadership has 5 dimensions: idealized influence (behavior): this component refers to the charismatic actions of the leader that focuses on values, beliefs and a sense of mission (antonakis et al., 2003). these charismatic actions include talking about his / her most important values and beliefs, emphasizing the collective mission and purpose, as well as considering the ethical implications of his / her decisions. idealized influence (attributed): it refers to whether or not the leader is seen as charismatic, powerful and confident and if the followers would like to be associated with him / her. it is the attribution followers give to their leaders. inspirational motivation: den hartog et al. (1997) defined inspiration as the capacity of a leader to act as a model for subordinates. inspirational motivation refers to the ways leaders take to inspire the followers to achieve both personal and organizational goals. the leader may do that by looking at the future optimistically and enthusiastically by providing a realizable and acceptable vision the effect of transformational leadership behavior on organizational culture: an application in pharmaceutical industry 67 with clear communication and by presenting followers ways to reach them. in return, leaders create meaning, challenge and motivation in their followers’ work (avolio and bass, 2004). intellectual stimulation: dionne et al. (2004) suggested that this component refers to promoting intelligence, rationality and careful problem solving in followers, challenging followers to think creatively and to find solutions to difficult problems. den hartog et al. (1997) claimed that intellectual stimulation encourages followers to question their own values, assumptions and beliefs and even those of their leaders. inquisitive followers will not be subject to public criticisms because of their mistakes. the leader welcomes the new ideas and solutions by the followers. she / he stimulates followers to think about new ways for old problems. in this way, followers will be able to see and solve the unforeseen problems by the leader (avolio and bass, 2004). individualized consideration: this dimension refers to treating followers as individuals and not just members of a group (dionne et al., 2004). leader will satisfy the follower by advising, supporting and paying attention to their individual needs and motivate them to develop themselves. the goal of the leader here is not only about recognizing and satisfying the needs of the followers, but also to mentor and coach them to reach their full potential. to reach this goal leaders also make sure that they redefine the organizational climate to a supportive one that promotes new learning opportunities for followers. 2.2. organizational culture culture, the character of organization, is one of the major issues in organization theory and in academic research, as well as in management practices. in spite of the fact that this concept is relatively a new one in organizational theory, various studies have been performed in this field. studies of organizational culture share a common goal that is to uncover and interpret aspects of organizational life so that one can better understand the perceptions, beliefs, and actions of organizational members (martin et al, 1997). organizational culture provides its members an understanding to work through the basic problems of survival in and adaptation to the external environment as well as to develop and maintain internal processes (martin, 2002). schein (1999) stated that organizational culture is the property of a group and it is a powerful, latent, and often unconscious set of forces that determine both our individual and collective behavior, ways of perceiving, thought patterns, and values. sathe (1983) suggested that culture plays a subtle, but pervasive role in organizational life and with a better understanding of organizational culture, organizational leaders can effectively operate within it, deviate from it and when necessary change it. as a supportive idea, cameron and quinn (1999) indicated that most organizational scholars and observers now recognize that organizational culture has a powerful effect on the performance and long-term effectiveness of organizations. spender (1983) stated that organizational culture is a belief system shared by an organization’s members. being one of the pioneer authors in this concept ouchi (1981) dealt with symbolic aspects of the concept and defined the term a set of symbols, ceremonies and myths that communicate the underlying values and beliefs of that organization to its employees. the contemporary definition of organizational culture includes what is valued, the dominant leadership style, the language and symbols, the procedures and routines, and the definitions of success that characterizes an organization. organizational culture represents the values, underlying assumptions, expectations, collective memories and definitions present in an organization (cameron and quinn, 1999). the definition of van fleet (1991) by taking together the three common threads that run through these various definitions allowed us to create a definition which most authors would probably agree. that is “organizational culture is the set of values, often taken for granted that helps people in an organization understand which actions are considered acceptable and which are considered unacceptable”. components of organizational culture pettigrew (1979) explained the elements of culture as symbols, rituals, language, beliefs and myths. trice and beyer (1993) divided the elements of culture into two categories. first category is the values and norms. second category is the process of transformation of those values and norms to the members of organization. others extended these classifications as stories, heroes, ceremonies etc. among them the model of schein (1985) is the most systematic approach to explain elements of culture. according to him, culture exists on three levels. assumptions deal with the fundamental aspects of culture and represents what members believe international review of management and marketing, vol. 1, no.4, 2011, pp.65-73 68 to be reality and thereby influence what they perceive and how they thing and feel (hatch, 1997). shein (1985) defined seven factors which should be resolved by every culture so that the basic assumptions of that culture can be defined. those are relationship to environment, nature of reality and truth, nature of human, nature of human activity, nature of human relationship, nature of time and homogeneity vs. diversity. values are the standards, goals and social principles of organization. they represent what is important for the organization. they are connected to moral and ethical codes (swales, 1995). they define the basic consideration of members such as freedom, democracy, tradition, wealth, or loyalty (hatch, 1997). values may be located at the surface level in above symbolic approach. beliefs which are difficult to distinguished from values may be classified in this category. hatch (1997) contributed shein’s “value concept” by adding “norms” which are closely related to values, in this category. norms in general are the unwritten rules which establish the type of behavior primarily organization and other individuals may expect from the member of organization. hatch (1997) argued that values define what is valued. on the other hand, norms draw the boundaries what is considered to be normal or abnormal. artifacts, the tangible elements of culture, are the evidence of what is culture’s core. they represent the visible, tangible and audible part of culture with stories, myths, logos, ceremonies, jargons etc. artifacts are classified as physical manifestation, behavioral manifestation and verbal manifestation given in table 1. table 1. the classification of artifacts general category specific examples art / design / logo buildings / décor dress / appearance material objects physical manifestation physical layout ceremonies / rituals communication patterns traditions / customs behavioral manifestation rewards / punishments anecdotes / jokes jargon / names / nicknames explanations stories / myths / history heroes / villains verbal manifestation metaphors source: hatch, 1997, pp. 216 2.3. the effect of transformational leadership behavior on organizational culture the role of leadership in creating culture is almost an indisputable reality in organizational theory. one of the most prominent author that suggested this reality is schein (1985) who stated that organizations do not form accidentally, instead they are goal oriented and created because one or more individuals perceive that a coordinated and concerned action of a number of people can accomplish. schein (1985) stated that the process of culture formation is a process of creating a small group. despite small differences, every organization involves four steps: 1. a single person (founder) has an idea for a new enterprise. 2. the founder brings in one or more other people and creates a core group that shares a common goal and vision with the founder. 3. the founding group begins to act in concert to create an organization by raising funds, the effect of transformational leadership behavior on organizational culture: an application in pharmaceutical industry 69 obtaining patents, incorporating, locating work space and so on. 4 . others are brought into the organization and a common history begins to be built. if the gr ou p remains fairly stable and has significant shared learning experiences, it will gradually develop assumptions about itself, its environment and how to do things to survive and grow (schein, 1985). transformational leaders have a high role on creating the organizational culture. the values, that transformational leader adopted, can also be adopted easily by the employees. it is important to have a good skilled transformational leader because he / she is taken as a model by the employees in the organization. if the leader has personality and behavioral disorder, the organizational culture can be effected by this disorder problems. this irregular atmosphere at the organization damages the employees working atmosphere and reaching the common goals become difficult. transformational leaders are the ones who can create the culture of the organization, help employees to involve in the culture and make it his / her own and try to make organizational culture stable in the organization by his / her good communication skills and leadership ability. 3. methodology 3.1. sample the sample of this study is conducted from a pharmaceutical company in istanbul which is in private sector. the sample consists of 96 individuals from different departments of the organization. 3.2. hypotheses h1: there is a positive and significant correlation between transformational leadership and long / short term orientation. h2: there is a positive and significant correlation between transformational leadership and masculinity / feminity. h3: there is a positive and significant correlation between transformational leadership and power distance. h 4 : there is a positive and significant correlation between transformational leadership and individualism / collectivism. h5: there is a positive and significant correlation between transformational leadership and uncertainity avoidance. 3.3. measures the questionnaire consisted of 3 independent sections including measurement scales is designed to assess the constructs of this study and demographic information. demographic variables: in the first section of the questionnaire there are demographic vaiables such as gender, age, position at job, educational background and tenure in the organization to gain general information about the respondents. measurement of transformational leadership: multifactor leadership questionnaire (mlq) which is designed by avolio and bass (2004) is used. there are four subscales which are charisma, being the source of inspiration, being intellectual and individual support. all of these subscales are measured by 5 items from “strongly disagree” to “strongly agree”. measurement of organizational culture: thirty-item scale is used. there are five subscales which are long / short term orientation, masculinity / feminity, adaptation, being the member of organization and certainity. all of these subscales are measured by 5 items from “strongly disagree” to “strongly agree”. 3.4. research findings for analyzing data, the statistical package program spss 15.0 is used. according to the descriptive statistics, the sample consists of 37 women (38%) and 59 men (62%). 49% (47 participants) of the sample is between the ages of 20-30, 34% (33 participants) of the sample is between the ages of 31-40 and 17% (16 participants) of the sample is between the ages of 41-50 and higher than 50. 54% (52 participants) are white-coller employee, 46% (44 participants) are blue-collar employee. 4 participants (4%) are primary school graduates, 40 participants (42%) are high school graduates, 33 participants (38%) are university graduates, 15 participants (16%) have a master’s degree. 30 participants (31%) have a tenure in the organization between 0-5 years, 50 participants (52%) have a tenure in the organization between 6-10 years, 16 participants (17%) have a tenure in the organization more than 11 years. international review of management and marketing, vol. 1, no.4, 2011, pp.65-73 70 3.5. reliability analysis to ensure the items’ internal consistency, reliability analysis is conducted for transformational leadership and organizational culture. cronbach alpha scores are ranged between 0.893 and 0.975. the means, standart deviations and reliability coefficients for each variable are given in table 2. table 2. means, standart deviations and reliability coefficients of transformational leadership and organizational culture scale mean std. dev. cronbach α transformational leadership (overall) 3.7421 1.1845 0.8963 charisma 3.6791 1.0974 0.8521 being the source of inspiration 4.0973 1.0168 0.8873 being intellectual 3.5690 1.1683 0.8632 individual support 3.3782 1.1739 0.8792 organizational culture (overall) 2.5247 1.5789 0.9750 long / short term orientation 3.1983 0.9832 0.8943 masculinity / feminity 2.9673 1.1298 0.9453 power distance 3.2891 1.3425 0.8932 individualism / collectivism 2.7830 1.0354 0.9532 uncertainity avoidance 3.8020 1.0127 0.8992 in addition, factor analysis using principal components solution with varimax rotation is performed to find the structures for transformational leadership and organizational culture measures. the results of factor analysis are examined, but not given here. 3.6. correlation analysis in order to investigate the hypotheses of the study, correlation analysis is performed and the results are given in table 3, 4, 5, 6 and 7. table 3. correlation analysis between transformational leadership and long / short term orientation long / short term orientation correlation coefficient 0.591** sig. (2-tailed) 0.000 transformational leadership n 96 ** correlation is significant at the 0.01 level (2-tailed). correlation analysis has been performed to test h1 to identify the correlation between transformational leadership and long / short term orientation. according to table 3, correlation test results show that there is a positive and significant correlation between transformational leadership and long / short term orientation. table 4. correlation analysis between transformational leadership and masculinity / feminity masculinity / feminity correlation coefficient 0.548** sig. (2-tailed) 0.000 transformational leadership n 96 ** correlation is significant at the 0.01 level (2-tailed). the effect of transformational leadership behavior on organizational culture: an application in pharmaceutical industry 71 correlation analysis has been performed to test h2 to identify the correlation between transformational leadership and masculinity / feminity. according to table 4, correlation test results show that there is a positive and significant correlation between transformational leadership and masculinity / feminity. table 5. correlation analysis between transformational leadership and power distance power distance correlation coefficient 0.462** sig. (2-tailed) 0.000 transformational leadership n 96 ** correlation is significant at the 0.01 level (2-tailed). correlation analysis has been performed to test h3 to identify the correlation between transformational leadership and power distance. according to table 5, correlation test results show that there is a positive and significant correlation between transformational leadership and power distance. table 6. correlation analysis between transformational leadership and individualism / collectivism individualism / collectivism correlation coefficient 0.478** sig. (2-tailed) 0.000 transformational leadership n 96 ** correlation is significant at the 0.01 level (2-tailed). correlation analysis has been performed to test h4 to identify the correlation between transformational leadership and individualism / collectivism. according to table 6, correlation test results show that there is a positive and significant correlation between transformational leadership and individualism / collectivism. table 7. correlation analysis between transformational leadership and uncertainity avoidance uncertainity avoidance correlation coefficient 0.397** sig. (2-tailed) 0.000 transformational leadership n 96 ** correlation is significant at the 0.01 level (2-tailed). correlation analysis has been performed to test h5 to identify the correlation between transformational leadership and uncertainity avoidance. according to table 7, correlation test results show that there is a positive and significant correlation between transformational leadership and uncertainity avoidance. 4. conclusion organizational researchers have increasingly emphasized the roles of the transformational leaders on organizational culture. the studies also provide evidence that these concepts have significantly constructive influence for achieving a work climate which has positive effect on increasing employee performance and the supportive relations among them. a plenty of studies have been conducted in various organizational settings. some of the empirical results generally support the relations in the same way, but some of them are conflicted. there is not a collective understanding international review of management and marketing, vol. 1, no.4, 2011, pp.65-73 72 about the associations of these concepts in the literature. the results of the analyses reported in this study indicate significant findings which will give information about how these concepts are interacting in turkish organizations and these findings will also provide a significant addition to the literature. to sum up, one of the most important factors to make a difference under the working conditions of the business environment in 2000’s is a committed, productive, highly motivated and innovative human resource. with increase of technological advances and changes, there is need for organizations to address employee satisfaction, organizational commitment, work itself and organizaional culture. the success, survival and competing power of organizations depend on the commitment of their members, supporting their individual developments, ensure their participations, creating an organizational culture and make it stable for a period that all of the members in the organization share the common values and norms and these can be achieved with a leader who has good communication skills, high charisma. also, it is important to have a leader who is the source of inspiration and intellectual. 5. limitations and recommendations one of the limitations of this study is the sample size. the sample of the study consists of only one firm from production sector in pharmaceutical industry. the research could be carried out in different production and service provider sectors. the second limitation of this study is the time. if this study could be performed in wider time period the results would be different because of the changes in business environment. this study aims to define the effect of transformational leadership behavior on organizatonal culture. further work should contain a more diverse sample from different sectors, maybe from different regions to observe the effect of cultural dimesions on the variables that are searched. also, this study investigates transformational leadership. transactional or authentic leadership can be analyzed in further studies. references antonakis, j., avolio, b. j. and sivasubramaniam, n. (2003), context and leadership: an examination of the nine-factor full-range leadership theory using the multifactor leadership questionnaire, the leadership quarterly, 14, 261-295. avolio, b. j. and bass, b. m. (2004), multifactor leadership questionnaire, manual and sampler set, third edition, mind garden, inc. bass, b. m. (1990), from transactional to transformational leadership: learning to share the vision, organizational dynamics, 18, 19-31. bennis, w. (1959), leadership theory and administrative behavior: the problem of authority, administrative science quarterly, 4, 259-301. bowers, d. g. and seashore, s. e. (1966), predicting organizational effectiveness with a four-factor theory of leadership, administrative science quarterly, 11, 238-263. cameron, k. s. and quinn, r. e. (1999), diagnosing and changing organizational culture: based on the competing values framework, new york: addison-wesley. conger, j. a. and kanungo, r. n. (1987), toward a behavioral theory of charismatic leadership in organizational settings, academy of management review, 12, 637-647. den hartog, d. n., van muijen, j. j. and koopman, p. l. (1997), journal of occupational psychology, 70, 19-34. dion, l. (1968), the concept of political leadership: an analysis, canadian journal of political science, 1, 2-17. dionne, s. d., yammarino, f. j., atwater, l. e. and spangler, w. d. (2004), transformational leadership and team performance, journal of organizational change management, 17, 177-193. egri, c. p. and herman, s. (2000), leadership in the north american environment sector: values, leadership styles and context of environmental leaders and their organizations, the academy of management journal, 43, 571-604. hatch, m. j. 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(1979), on studying organizational culture, administrative science quarterly, 24, 570-581. sathe, v. (1983), implications of corporate culture: a manager’s guide to action, organizational dynamics, 12, 5-23. schein, e. h. (1985), organizational culture and leadership: a dynamic view, san francisco: jossey-bass. schein, e. h. (1999), the corporate culture survival guide, san francisco: jossey-bass. spender, j. c. (1983), myths, recipes and knowledge-bases in organizational analysis, unpublished manuscript, graduate school of management, university of california. swales, c. (1995), organization structures and processes, oxford, blackwell publishers ltd. tannenbaum, r. and massarick, f. (1957), organizational leadership and participative management, management science. trice, h. m. and beyer, j. m. (1993), the cultures of work organizations, prentice hall. van fleet, d. d. (1991), behavior in organizations, boston, houghton mifflin company. yukl, g. (1999), an evaluation of conceptual weaknesses in transformational and charismatic leadership theories, leadership quarterly, 10, 285-305. . international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2017, 7(1), 423-427. international review of management and marketing | vol 7 • issue 1 • 2017 423 developing international migrant labors pattern: the case of tourism and hospitality industry nurhazani mohd shariff1*, azlan zainol abidin2 1school of tourism, hospitality and environmental management, uum colgis, universiti utara malaysia, kedah, malaysia, 2school of languages, civilization and philosophy, uum cas, universiti utara malaysia, kedah, malaysia. *email: hazani@uum.edu.my abstract the needs of international migrant labors to fill in the shortages of labor in various sectors have created several advantages. further, the employment of international migrant labors in tourism and hospitality industry presents a series of opportunities alongside challenges for stakeholders such as migrants, employers and host communities. the international migrant labors can assist in making market entry mode and marketing strategies selection decisions. a study was conducted to develop international migrant labors pattern in the case of tourism and hospitality industry in langkawi, malaysia. the pattern of international migrant labors is presented through their various socio-demographic profiles. it is noted in the pattern that majority of the international migrant labors is male within the range of 31-50 years old and only few of them are still single. in fact, most of them are from thailand. the pattern shows similar results for the female international migrant labors. the pattern also highlights that the international migrant labors for both male and female graduated from university, however, only few of the females possessed the degree certificate. interestingly both male and female international migrant labors can communicate good english. this pattern would assist the tourism and hospitality industry to plan a strategic recruitment process concerning the international migrant labors. by taking into account their socio-demographic profiles would contribute to the segmentation of the international migrant labors for future recruitment. keywords: international migrant labors, pattern, employment, tourism and hospitality industry jel classifications: f22, j21, z31 1. introduction the tourism and hospitality industry is considered unpopular as an employment choice due to its low status and large surplus of unskilled labor market (saunders, 1981). even though the estimates of the number of jobs in tourism and hospitality continue to grow, there is also a concern that the industry will experience a labor shortage in the near future (cthrc, 2003). in fact, the industry largely has an image of providing low skilled and low paying jobs, and attributes that are not likely to motivate mobility into the industry (krakover, 2000; hjalager and anderson, 2001). hence, the tourism and hospitality industry is expected to have a difficult time attracting and keeping labor. however, in malaysia, the arrivals of international migrant labors significantly help meet the shortage of labor of the various economic sectors of the country. according to the economic report 2010/2011, from the total of 1.8 million international migrant labors in malaysia, majority was from indonesia (50.9%), followed by bangladesh (17%), nepal (9.7%), myanmar (7.8%), india (6.3%) and vietnam (4.2%). today, there is an estimated 6.7 million international labors who are working in various sectors in malaysia with 2.1 million legal and 4.6 million unauthorized workers. as reported in the labour force survey report malaysia (2014), there are 2.135 million registered international labors in malaysia with almost 800,000 legal international labors working in unskilled sectors ranging from cleaners, helpers, laborers, service workers and garbage collectors. since the number of international migrant labors have been tremendously increased, it is important for the tourism and hospitality industry to develop a pattern on their socio-demographic profiles. this would eventually assist the workforce department particularly in designing and preparing new policy for the work act 1955 and the immigration act 1959. therefore, a study was undertaken in langkawi, malaysia to develop a pattern of the international migrant labors working shariff and abidin: developing international migrant labors pattern: the case of tourism and hospitality industry international review of management and marketing | vol 7 • issue 1 • 2017424 in the tourism and hospitality industry by investigating their socio-demographic profiles. 2. literature review 2.1. the needs for migrant labors according to the oecd report (oecd, 2009), since the mid1970s, the migration across national borders has been a rising trend for the oecd countries and the number has been speeding up tremendously in the mid-2000s. the number of unemployment for oecd countries increased reaching up to 7.3% in february 2009 and up from 5.6% a year earlier. the conditions of economic downturn significantly affected the labor market of migrant labors. furthermore, countries such as the united states and japan experienced a decreased of total employment between 2007 and 2008 where else countries such as spain reached a rate of unemployment of 15.5%, turkey with 10.2%, and ireland with 10%. additionally, there is clear evidence of less temporary labor migration in europe which is dwarfed by the decline in freemovement migration, which accounted for as much as half of all migration in recent years. the report significantly reported that the number of new applicants to the uk’s worker registration scheme fell 24% in 2008 and 32% in 2009. a for ireland, the comparable declines were 42% in 2008 and 60% in 2009. switzerland where else norway stated both saw 30% declines. many studies have stressed on the needs of migrant labors to fill in the shortages of labor in various sectors. in fact, the idea of migrant labors had created several advantages for the selected sectors for instance, the immigrant employees can assist in making market entry mode, marketing strategies selection decisions and in tackling business environmental barriers between the immigrants’ country of origin and country of residency (chung, 2002, 2004; chung and enderwick, 2001). the study by chung (2002) on firms’ in china, taiwan and hong kong confirmed the impact of immigrant employee effects on the selection of marketing strategy. the findings suggested that firms with an immigrant employee effect tend to adapt their products and price strategies more than those which do not have such an advantage. additionally, studies also indicated that immigrant employees can help firms shorten their learning process about a foreign host market. the study significantly confirmed that firms with low international business experience can still operate successfully in host markets by relying on the experience and networking of their immigrant employees in these markets. meanwhile, another study on new zealand firms operating in taiwan found that the immigrant effect had a significant influence on the choice of market entry mode (chung and enderwick, 2001). this study suggested that firms which were controlled or established by immigrants from the host market were more likely to choose a foreign direct investment mode. 2.2. migration in the tourism and hospitality industry in the perspective of employment in this world, ajis et al., (2014) highlight that the countries in asia can be considered as the major providers of foreign immigrants. migration of labors to the tourism destination is common to both developed and developing countries, although developed countries of tourist destinations may be in a stronger position to absorb new migrants due to their more diversified and stable economic base. according to mohamed et al., (2012), the numbers of international labours are increased from year to year whereby assisting companies to save costs by employed labors in lower scale salary. additionally, a study by bachtiar et al., (2015) suggest that the contribution of professional international labours to outputs’ growth is relatively small compared to middle and heavy industries that intensively utilize physical capital even though the demand for it is still beneficial. according to walsh (1991) in the uk, the employment of parttime, temporary and casual laborrs was central to productivity and not peripheral as had previously been suggested in previous literature. one of the complexities of tourism employment is that establishments that may have a mainstay of domestic and international tourists will also be used by locals, especially during the off season (lee-ross and pryce, 2010). although many studies suggest positive outcomes from employing foreign workers, some negative consequences for the industry have also been identified. choi et al., (2000) and william and hall (2000) argued that this ongoing relationship between migration, migrant labor and tourism employment continues partly because a mobile international workforce offers a solution to labor shortages where the local workforce is not willing to engage in low pay, low status and seasonal employment. in fact, the presence in large numbers of migrant labors in such hospitality organizations is of consequence for tourism academics as it carries implications for both destination image and the tourist experience of the destination. tourism can also bring about migration within the labor force, through the creation of employment opportunities. thus, the major motivation for this type of tourism-induced migration is economic, “even where social objectives are also significant” (connell, 1987. p. 108). even when migrants are from a similar social and cultural background as the local population, other negative impacts may still result. for example, migration to tourism areas fosters urbanization with its large potential for adverse effects such as congestion, inflated land prices, modified social organizations and changes in cultural values (cleverdon, 1979; cukier-snow and wall, 1993). in addition, migrants will often work for lower wages than the local unemployed population, especially if these migrants originate from rural areas (lever, 1987). further supporting this claim, monk and alexander (1986) found that migrants to margarita island, venezuela, were the main beneficiaries of tourism-generated employment, since many of the newly-created jobs were either inaccessible to the poorer segments of the local population or unattractive to the better off segments. however, in another study, migrants are found to become a source of community tension, particularly if they are perceived to be a burden on community resources, to represent competition for jobs or if they do not integrate into the host society and thus seem to challenge social norms (rogers et al., 2009). some researchers have found that migration is common in tourism employment, especially where the seasonality of the tourist traffic is significant (monk and alexander 1986; lever, 1987). circular migrants can serve a seasonal industry without loading the community with a heavy social service burden. at the same time, shariff and abidin: developing international migrant labors pattern: the case of tourism and hospitality industry international review of management and marketing | vol 7 • issue 1 • 2017 425 immigration for tourism has caused a demand for employment (merrill, 1982). harrison (1992) supported the view with an example from kenya, where despite the high numbers of new jobs created by tourism, regional unemployment remained high because of the large numbers of migrants who sought work within the tourism sector. another question regarding migration which should be addressed is whether migrants compete for tourism jobs with the local labor force or whether they fill a niche left open for social, cultural, economic or political reasons. many migrants were found to share a number of characteristics: they tended to be young, predominantly male (although migration of women has increased as their educational opportunities have expanded), had more than primary level education, and came from a wide socioeconomic strata. 3. research methodology 400 international migrant labors who are legally working in the tourism and hospitality industry in langkawi were selected as sample of the study. this is based on 291,997.44 international migrant labors working in the service sector in malaysia (department of statistics, 2012). questionnaire survey was used as primary data collection of the study. only 4 and 5 star hotels, fast food service restaurants and international cuisine restaurants in pantai cenang area, langkawi were considered as unit of analysis. pantai cenang was selected as it consists of most tourism and hospitality sectors of the island and additionally, it also represents major tourism spots and activities in langkawi. the questionnaires were distributed to the international migrant labors through the human resource managers or related officers at the sectors. within 2 weeks, the researcher approached the human resource managers or related officers to gain the completed questionnaires. the questionnaire consisted of respondent’s socio-demographic profiles such as gender, age, marital status, educational level, qualification, proficiency in english and country of origin. the study used the statistical program for social science with descriptive and inferential analysis to identify patterns and general trends in the dataset of this study. 4. results and discussion a total of 258 useable questionnaires out of 400 were obtained, representing 64.5% response rate. the socio-demographic pattern of international migrant labors in the tourism and hospitality industry is presented as below. 4.1. gender and age pattern the percentage of the results indicated that 70.5% respondents are male and the remaining 29.5% is female. as for the age distribution, the percentage showed that 2.7% is <18 years old, 69.4% is between 18 and 30 years old, 27.1% is between 31 and 50 years old and the remaining 0.8% is >50 years old. figure 1 depicts the pattern of international migrant labors according to their gender and age distribution. even though most of the international migrant labors are male, the pattern shows that none of them is under the category of >50 years old. in fact, majority of the female international migrant labors are >50 years old. the highest percentage of male international migrant labors is between the ages of 31 and 50 years old. similarly, this is also accountable for the female international migrant labors. 4.2. gender and marital status pattern additionally, the questionnaire also asked the respondents their marital status and the results highlighted that most respondents are single (51.9%). meanwhile 40.3% is married, 4.3% is divorced and another 3.5% is provided as other category. figure 2 presents the pattern of international migrant labors according to their gender and marital status. it can be seen that most of the male international migrant labors are under the category of other status. most of them are also divorced and only few are married and still single. the similar results are also can be seen for the female international migrant labors. 4.3. gender and educational level pattern the respondents were also asked to indicate their educational level and the results of the survey emphasized that majority are educated from secondary school (41.4%), followed by high school (38.4%), college (13.6%) and university (7.0%). figure 3 presents the pattern of international migrant labors according to their gender and education level. the patterns show that both male and female highlight similar pattern for their educational level background. figure 1: international migrant labors gender and age pattern figure 2: international migrant labors gender and marital status pattern shariff and abidin: developing international migrant labors pattern: the case of tourism and hospitality industry international review of management and marketing | vol 7 • issue 1 • 2017426 even though only a small portion of the overall international migrant labors graduated from university, most of the male and female international migrant labors graduated from university. in contrast, few of them were secondary school leavers. 4.4. gender and qualification pattern additionally, the results noted that majority of the respondents have possessed a certificate (50.8%). in fact, most of them have also possessed diploma/higher diploma (43.0%) and followed by undergraduate degree (5.0%) and postgraduate degree (1.2%). figure 4 depicts the pattern of international migrant labors according to their gender and qualification. majority of the male international migrant labors possessed a postgraduate degree which eventually is in line with their educational level. only few of them possessed a certificate. however, none of the female international migrant labors possessed a postgraduate degree as they stated in their educational level. most of them only possessed undergraduate degree. 4.5. gender and proficiency in english pattern the results of the study eventually highlighted that majority of the international migrant labors also stated that they can speak good english (36.0%) and very good english (22.5%). the remaining stated as can speak little english (24.4%) and very little english (17.1%). the pattern of international migrant labors according to their gender and proficiency in english is depicted in figure 5. both male and female can speak good english which reflected their educational level and qualification. 4.6. gender and country of origin pattern the respondents were further asked to state their country of origin. the results of the survey indicated the highest percentage is from indonesia (21.3%). the findings then revealed that 17.8% respondents is from india, followed by 15.9% respondents from bangladesh, 12.4% from philippines, 8.5% from thailand, 2.7% from pakistan and 0.4% from vietnam. however, the results also indicated that 20.9% respondents are from other countries such as nepal, united kingdom and few are from maldives. even though the highest percentage is from indonesia, based on the their gender as depicted in figure 6, most of the male international migrant labors are from thailand and same goes to the female. majority of the female international migrant labors are also from vietnam whilst the male are from under the category of other countries not stated in the questionnaire. 5. conclusion the pattern of international migrant labors in the tourism and hospitality industry specifically in langkawi, malaysia provides significant impacts to the recruitment of employment. sectors in tourism and hospitality industry need to plan strategic approach to balance the arrival of international migrant labors since majority of them are currently from thailand. the sectors should also recruit figure 3: international migrant labors gender and educational level pattern figure 4: international migrant labors gender and qualification pattern figure 5: international migrant labors gender and proficiency in english pattern figure 6: international migrant labors gender and country of origin pattern shariff and abidin: developing international migrant labors pattern: the case of tourism and hospitality industry international review of management and marketing | vol 7 • issue 1 • 2017 427 international migrant labors from other countries by taking into account their skills level such as from phillipines and burma. additionally, having male international migrant labors with university degree probably would assist the sectors to have more professional international migrant labors who will be dealing with the customers. more, the sectors should also plan to recruit female international migrant labors who are below the age of 50 so they can work hard towards achieving the highest level of productivity. age factor is considered vital element in the recruitment process particularly when it involved recruiting international migrant labors since the sectors probably need to apply for the life and medical insurance for them. having this pattern eventually provides the industry with data and valid information which can be used to plan strategic recruitment process. it would also assist the industry to overcome the issue of labor shortages within the industry and more, can be used to segmentize the arrivals of international migrant labors accordingly to their country of origin. 6. acknowledgments the authors would like to acknowledge universiti utara malaysia and also the ministry of higher education malaysia for sponsoring the study under the fundamental research grant scheme (frgs) s/o code 13029. references ajis, m.n., keling, m.f., othman, z., shuib, m.s. 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(2004), the malaysian economy in 2004. available from: http://www.bnm.gov.my. international review of management and marketing vol. 1, no. 3, 2011, pp.54-64 issn: 2146-4405 www.econjournals.com the relationship between mobbing and organizational commitment in workplace murad yüksel department of business administration, balikesir university, balikesir, turkey. email: gulmurcin@yahoo.com bedriye tunçsi̇per department of economics administration, balikesir university, balikesir, turkey. email: tbedriye@balikesir.edu.tr abstract: the concept which is called mobbing in work place means that a person is the subject of consistent negative behaviors of one or numerous individuals in a certain period of time. when the related literature is analyzed, it is observed that there is a limited number of studies focusing on the mobbing and organizational commitment. in these regards, the primary aim of this study is to test if there is a relation between mobbing in working place and organizational commitment of employees. keywords: mobbing, organizational commitment, intend to leave. jel classifications: m12 1. introduction studies on social relations in work environment have extended as far as the howthorne resarch of elton mayo (agervold, 2007:161). the concept of mobbing has increasingly drawn attention of studies on personal relations in work place in the last 10-15 years (leymann, 1996:165; zapf and einarsen, 2001:369; agervold, 2007:161; girardi et al.. 2007:172; nolfe et al.. 2007:67). in these studies, while the subject of mobbing conceptually has been investigated by leymann (1996) and zapf and earnisen (2001), resch and schubinski (1996) has studied on the concept of prevention of mobbing in work environment. mikkelsen and einarsen (2001), has explored to spread of the subject of mobbing between danish employees, and then by comparing outcomes with other countries, has measured the relationship of mobbing with psychological and psychosomatic stress symptoms. hoel et al., (2001), has worked on the concept of mobbing in england, and has also measured the effects of mobbing to organization by the answers of 5288 employees among 70 organizations. between previous and present mobbing victims, the psychological relation of mobbing has been explored by using mmpi-2. furthermore, agervold (2007) has investigated the definition and boundaries of mobbing on 3024 public sector employees. it appears that, studies on presence, definition, severity and measurement of mobbing in work place has been performed extensively in europe and australia (hoel et al., 2001:443; liefooghe and davey, 2001:375). in turkey, the concept of mobbing has been studied by many researchers. while kırel (2007) has conceptually researched what could be preventive measures aimed to succeed to prevent or to manage mobbing, what may affect performance negatively and what may also decrease the * principally, it should be focus on the expression of “mobbing”. according to zapt and eainarsen (2001), the expression of “mobbing at work” is a term used in german spoken and scandinavia countries. this term is called “bullying at work” in english spoken countries. leyman (1996) has not used terms of “bully” especially in english. according to leyman, “bullying” refers physical attack and principally it is observed between children and young communication. mobbing is generally appeared in adults and this situation is related with behaviors. in the literature, several other terms have also been used to used instead of “mobbing” such as “scapegoating“, “psychological terror”, “workplace trauma”, “ work harassment”, “emotional abuse” (nolfe et al., 2008:68), “bullying”, “abusive behavior” and “workplace terror “ (aydın and özkul, 2007:170). in this study, “mobbing” term has been used. the relationship between mobbing and organizational commitment in workplace 55 organizational and professional commitment. cemaloğlu and ertürk (2007) have investigated mobbing, which elementary school teachers and managers have been exposed to, relevant to gender. in addition, while aydın and özkul (2007) have explored the scope of mobbing and its size in the hotel administration, yıldırım and yıldırım (2007) have investigated the emotional, social and psychological influences of mobbing on nurses working in healthcare sector and methods of individualistic avoidance methods from the mobbing. likewise, aksu and balcı (2009) have researched on exposing the level of mobbing and the perceptions of coping with mobbing of elementary school teachers. an empirical research has been explored in order to determine the relationship between the mobbing and organizational climate by yılmaz et al. (2008). öztürk et al., (2008) have researched to develop a mobbing scale for academic nurses and to determine the size of mobbing at nursing collages by using the mobbing experiences of academic nurses. while demirel (2009) has investigated to determine whether the mobbing behaviors of employees in different public institutions differ from each other according to the institutions, kılıç (2009) has researched the mobbing in learning organizations. tengilimoğlu and mansur (2009) have researched whether there is a relationship between the mobbing and organizational commitment however, any significant relations could not be find out between both of them in their studies. but demirgil (2008) has found a significant relationship between the mobbing and organizational commitment. according to these two studies, the main aim of our study is to investigate the relationship between the mobbing and organizational commitment in different organizations in turkey. 2. the definition and historical development of the mobbing 2.1. definition of mobbing according to leymann, the mobbing in the work place is unethical and unkind communication way. this communication way is generally applied to one person by one or several persons in a systematical and direct way. the mobbing behaviors, to which a person is exposed, cause to stay in helpless and undefended position. those unkind behaviors which are taking a long time and repeated frequently are concluded with psychological, psychosomatic and social misery. in other words, according to leymann (1996:168), the scientific definition of the mobbing is a social interaction which includes bringing the person into the helpless position with potentially high risk of impulsion according to zapf and einarsen, the phenomenon called as mobbing in work life, refers to negative actions are being exposed to a person by one or several others in work place in a certain time interval and having difficulties defending him or herself against these actions because of different reasons (zapf and einarsen, 2001:369). when we investigate descriptions, the mobbing as conceptual refers aggressor and unfriendly actions to apply directly and systematically one or several persons and as a consequence, people are aggrieved (mikkelsen and einarsen, 2001:394; leymann, 1996:168; zapf and einarsen, 2001:369, hubert and veldhoven, 2001:416). the mobbing which is defined as serious problems (salin, 2001:426), are different from conflicts where are encountered in work place. there must be power instability to be exposed to the mobbing and behaviors must systematically go on in a certain time. besides, person who is exposed to the mobbing does not able to defend her/himself (aydın and özkul, 2007:171). in other words, as a consequence of power instability between parties or because of the mobbing, victim begins to be incapable to get over from the mobbing (mikkelsen and einarsen, 2001:394). to mention about the mobbing, there must be a rumor, innuendo, intimidation, humiliation (girardi et al., 2007:172), discrediting and isolation which creates all sorts of infelicity behaviors. (matthiesen and einarsen, 2001:468). whereas in many countries, the mobbing is defined for every negative behaviors directed against particular target, researchers advocates different criteria to speak about mobbing. leyman suggests that mobbing duration must continue through 6 months and occur at least once a week. (leymann, 1996:168). zapf and eirnarsen (2001), other researchers suggest that if the duration of the mobbing is less than 6 months and it occurs less than once a week, it is sufficient to be exposed to the mobbing. however, there is a consensus that mobbing should be directed against a special target, that there is a more than single action and that the target is or ends up in an inferior position from which it is difficult to defend him or herself (zapf and einarsen, 2001:370). international review of management and marketing, vol. 1, no. 3, 2011, pp.54-64 56 5 2.2. historical development of mobbing the mobbing was defined for the first time as a behavior of animal groups by the ethnologist, konrad lorenz (1991). lorenz called the threat of a larger animal to a group of smaller animals as the mobbing. later, a swedish physician heinemann who was investigating the relations of children between their class hours, has used this terminology, “the mobbing”, to define the very destructive behavior of small groups of children directed against a single child (leymann, 1996:168; aydın and özkul, 2007:171). the publication of brodsky in 1976 referred to “the harassed worker” was about the mobbing at work place. the typical cases regarding the mobbing were studied for the first time in that book. however, brodsky presented cases as workplace accidents, psychological stress and exhaustion caused by long work hours instead of analyzing them directly. this book has focused on inconvenient conditions of employees, nowadays investigated by stress research (leymann, 1996:167). as a result of the concept of mobbing, or bullying, has introduced to the scandinavian and german communities since the mids-1980s by leymann, a great number of studies have been undertaken in order to more precisely define the concept and nature of workplace bullying to describe the prevalence and forms of bullying and to identify personality traits and organizational factors associated with bullying (salin, 2001:426; hoel et al., 2001:443; zapf and einarsen. 2001:369). in 1996, eight articles by researchers from six countries have been published together in the special edition of “european journal of work and organizational psychology” magazine. these papers were presented at the seventh european congress on work and organizational psychology in györ (hungary). afterwards, a series of symposia on mobbing in workplace have followed that in verona in 1997, in helsinki in 1999, and in prague in 2001. all these symposia have a major force on studies regarding the subject of mobbing in order to become a widespread phenomenon in europe (zapf and einarsen, 2001:370-1). according to studies, “mobbing” has become a widespread phenomenon in many countries. in fact, %3-4 of the working population of scandinavia has been affected from mobbing. in addition, finnish and british studies have pointed out higher prevalence rates, approximately 10% (salin, 2001:426). 2.3. effects of mobbing on individual, organizational and the society the mobbing may be directly verbal or physical attacks to the victim, but it also may be subtle actions such as excluding or isolating the victim from his/her work group. according to organizational measures, acts of mobbing such as taking away responsibilities or devaluating one’s work and efforts, social isolation and exclusion, and exposure to the teasing, insulting remarks, and ridicule are the most common behaviors (zapf and einarsen, 2001:370). when the effects of mobbing to the organization are being investigated, it is seen that the mobbing causes higher absenteeism, higher intent to leave the organization, higher turnover, and earlier retirements (salin, 2001:426, leymann, 1996:174). additionally, it is determined the mobbing has negative effects on performance of employees (kırel, 2007) and organizational commitment (demirgil, 2008:74). in the studies, it is seen that the mobbing has negative influences on psychological and physical health of the victim, and also efficiency of other employees (mikkelsen & einarsen, 2001:394). in fact, the rises in negligence, staff turnover, and cases of sick leave have related to mobbing in the workplace (mikkelsen & einarsen, 2001; 394). furthermore, it causes several troubles in both job satisfaction and health of victim (salin, 2001:426). the unfriendly behaviors in work place have not been completely negative structure when they have started to become apparent. they were formed by quite normal interactive behaviors. however, if they keep go on frequently and for a long time, their concept and meaning has changed. so, the mobbing has to be set apart from conflicts in the organization. according to leymann, these all negative behaviors should be investigated in five categories depending on the effects they have on the victim (leymann, 1996:170). 1. effects on the victims’ possibilities to communicate adequately (no occasion to communicate by the management; verbal attack regarding work tasks; verbal threats; verbal activities to reject victim etc.). 2. effects on the victims’ possibilities to maintain social contacts (colleagues do not talk to victim or forbidden to contact with them by isolating victim). the relationship between mobbing and organizational commitment in workplace 57 3. effects on the victims’ possibilities to maintain their personal reputation (gossiping about victim; others ridicule victim; making fun of victim’s inadequacy). 4. effects on the victims’ occupational situation (do not give any works to victim or given unnecessary tasks). 5. effects on victims’ physical health (given very dangerous work tasks to victim, victim is threatened or attacked physically, etc.). studies connected to the mobbing point out that many victims of mobbing suffer from several psychological stresses such as anxiety, depression, irritability and self-hate. the majority of victims of mobbing exhibit various psychosomatic symptoms. in addition, the mobbing on victims has also negative effects on other employees in the work environment. in this way, the mobbing is a significant factor of psychological stress (mikkelsen and einarsen, 2001:394). 3. organizational commitment in the organizational psychology discussion, the concept of organizational commitment is being an expanding interest since 1960s (wasti, 2005:291, becker, 1960:32, gul, 2002:32). in studies on organizational commitment, it is determined that organizational commitment correlates with job satisfaction (witt & wilson, 1989:268, chen, 2006:274), organizational adaptability and turnover (angle & perry, 1981:3), job scope and challenge, role clarity and freedom from conflicts, organizational dependability or concern for the workers, participation in decision making (meyer & allen, 1988:196), absenteeism (cohen, 1991:253), and efficiency of the organization in general (meyer and herscovitch, 2001:299). although the increase of attention given to the organizational commitment, there is still plenty of collisions about what commitment is, where it is directed, how it develops, and how it affects behavior. in addition, the commitment takes various forms including commitment to organizations, unions, occupations and professions, team and leaders, goals and personal careers (meyer and herscovitch, 2001:300). according to oliver (1990; 19), research on organizational commitment has produced various viewpoints to the concept and also overmuch definitions of the phenomenon. although organizational commitment has been conceptualized in various ways, in the literature of organizational commitment, it is described as an “affected attachment” characterized by a sharing of values, to be desirous to keep membership, a willingness to exert effort on behalf of the organization (meyer and allen, 1988:196). the variety of definitions on organizational commitment causes confusion in categorized of the concept (gul, 2002:38). for instance, buchanan (1974:533) has used three measures, “identification”, “involvement” and “loyalty”, in order to measure the commitment. organizational commitment has been investigated under two subscales, “value commitment” and “commitment to stay in the organization” by angle and perry (1981, 1); three subscales, “justification”, “identification” and “internalization” by o’reilly and chatman (seymen, 2008), and three subscales “moral commitment”, “calculative commitment” and “alienative commitment” (penley and gould, 1988:46-47). a three-component model involving “affective”, continuance” and “normative” approaches has been developed in order to conceptualization of organizational commitment has been developed to define organizational commitment as a psychological case that binding the person to the organization by allen and meyer (1990; 3-4). furthermore, this model developed by meyer and allen has been commonly used in other studies in last 20 years (dawley et al., 2005:512, tengilimoğlu, mansur, 2009:72). according to meyer and allen, “affective commitment” is concerned with employees’ attachment to, identification with and involvement in, the organization (meyer et al., 1998; 32, seymen, 2008). according to authors, affective commitment to the organization could be characterized by a sharing the values, a desire to maintain membership and working without any expectations for the benefit of the organization (meyer and allen, 1988:196). in consequence of the affective commitment, employees want to maintain their memberships in the organization (dawley et al., 2005:513). “continuance commitment” is interested employees to be aware of the high costs of leaving by employees (meyer and herscovitch, 2001:304, meyer et al., 1998:32). in other words, it is to keep working because of the financial damage by demitting (seymen, 2008). international review of management and marketing, vol. 1, no. 3, 2011, pp.54-64 58 5 once and for all, “normative commitment” is the feeling of obligation to work and loyalty to the organization (dawley et al., 2005; 513). this feeling of obligation can be thought as the result of familial or cultural pressures (dawley et al., 2005:513, seymen, 2008). the employees, having high degree of normative commitment, feel that they ought to continue their jobs in the organization (dawley et al., 2005:513). in this study, the organizational commitment model of allen and mayer, as stated above, is used to specify the commitment dimensions, because this model is the most comprehensive model including other alternative models. 4. the relationship of mobbing and organizational commitment as mentioned before, the mobbing causes higher absenteeism, higher intent to leave the organization, higher turnover, and earlier retirements (salin, 2001; 426, leymann, 1996; 174). in present organizations by the increases of economical slumps and changes in working conditions, to increase commitment feelings of employees has become more important. in this regard, mobbing in work place has been estimated having a close relationship with organizational commitment. although a (r=-.22) meaningful, negative and weak relationship has been determined between mobbing and organizational commitment in the study of demirgil (2008), any significant relations cannot be found between both of two in the study of tengilimoğlu and mansur (2009). by considering these two studies, out first hypothesis in this research is going to be tested like that; h1; there is a negative relationship between mobbing in work place and organizational commitment. in studies on organizational commitment, employees, having high degree of affective commitment, make involvement in goals and values of the organization (meyer et al., 1998; 33). thus, it affects the turnover positively (seymen, 2008). the acts of mobbing, the verbal or physical attacks to the victim, additionally subtle actions such as excluding or isolating the victim from his/her work group, causes higher absenteeism without any excuses, and also higher intent to quit from the organization. hence, our second and third hypotheses are; h2; there is a negative relationship between mobbing in work place and affective commitment. h3; there is a positive relationship between mobbing in work place and intention to quit. according to the studies, employees, higher degree of continuance commitment, maintain to stay in the organization because of the costs of leaving from the organization. in other words, employees have been obligated to stay in the organization (seymen, 2008). especially the unemployment ratio in turkey has been considered; individuals keep staying in the organization, and also consume more efforts in order to stay in the organization, even the level of mobbing increases. so, individuals endure to acts of mobbing due to obligation and spend efforts in order not to lose their jobs. in consequence of our fourth hypothesis is; h4; there is a meaningful relationship between the level of mobbing and continuance commitment. in other words, even the level of mobbing applied to employees increases; their continuance commitment to the organization does not decrease. the employees, higher level of normative commitment, keep working because of their loyalty (dawley et al., 2005; 513) and feeling of obligation (meyer and allen, 1990; 4) to the organization. so, they perceive to keep working in the organization as thinking it is an obligation, and keep also staying in the organization thinking doing the right. the mobbing in work place influences the feelings of employees negatively. therefore, our last hypothesis is; h5; the normative commitment decreases by the increase of mobbing in work place. in other words, by the increase of mobbing applied to employees, normative commitment of employees decreases. 5. method of the research 5.1. the sample the private hospitals in downtown of balıkesir are formed the sample of our research based on survey work. when the occupation of hospitals in turkey is considered, employees in the hospitals have quite intense communication with their executives and colleagues, and also the patients. therefore, the private hospitals have been used for the research in order to measure the mobbing more precise. the managements of four hospitals in balikesir downtown have been informed about questionnaire and have been asked for permission in order to exercise the research. while three of the the relationship between mobbing and organizational commitment in workplace 59 hospitals have confirmed the confirmed, the last one has rejected the survey application. the total employee number of these hospitals is 457. 200 of questionnaires have been delivered to random employees from these three hospitals and necessary explanations have been declared to the participants. after three days, the questionnaires have been collected. 135 of the questionnaires delivered to the participants have been taken back as filled up with the %67.5 return rates. 120 questionnaires are useable in order to analyze the developed hypothesizes. 5.2. the measures the questionnaire consists there sections. the survey includes demographic specialties of employees in the first section; points to measure the level of mobbing to which employees are exposed in the second section, and questions to determine their organizational commitment in the third section. all of the variables used in the second and third section of the questionnaire have been measured by the measures prepared according to the five likert type between 1= never and 5= always. the mobbing; the measure including 26 questions, developed by leymann (1993) and interpreted by demirgil (2008), has been used in order to measure the level of the mobbing to which employees are exposed. organizational commitment; in last 20 years, the model arranged by allen and meyer, has been using extensively in the studies on organizational commitment (dawley et al., 2005). in this respect, four-dimensional organizational commitment measure, developed by allen and meyer and interpreted by demirgil (2008), has been used in this questionnaire. the questionnaire has been tested on 28 employees work in service industry, in order to identify the eristic or abstruse expressions. the reliability of the questionnaire has been determined by the cronbach alpha reliability coefficient, and it has been taken .96 for the mobbing and 0.82 for the organizational commitment. 5.3 analysis method the data gathered by the questionnaire has been analyzed by the statistical data analysis package programme named as spss 15.0. the data regarding the demographic characteristics of the applicants have been evaluated by using frequency and percent values. the correlation analysis has been applied to relations between variables; besides, the categorical regression analysis has been performed to determine whether the mobbing has a control over the organizational commitment. 6. outcomes and comments 6.1. factor analysis the mobbing; the measure including 26 questions, developed by heinz leymann (1993) and interpreted by demirgil (2008), has been used in order to measure the level of the mobbing to which employees are exposed. the coefficient of cronbach alpha regarding the measure is 0.96. the factor analysis has not been performed to measure. it is analyzed by one dimensional via the study of demirgil (2008). organizational commitment; the kmo value regarding the measure of organizational commitment has been found as 0.717. the barlett test has been resulted meaningful (x2= 515.493). according to both of tests’ results, to apply the factor analysis concerning the measure of organizational commitment has been decided to be suitable. four dimensions which values are greater than one have been determined by factor analysis. the five dimensions have explained 0.6179 of total variances. the states have formed the factor 1, 2, 3 and 4 represent “affected commitment”, “normative commitment”, “continuance commitment” and “aim to give up the job” respectively. the coefficient of cronbach alpha is 0.82. the based values are proper for the reliability of the measure. 6.2. outcomes related with demographic characteristics of the participants as seen in table 1, %75.8 of the sample is female and %24.2 of the sample is male. %38.3 of the participants is between 21-25 years old and education level of %43.3 is high school. %49.2 of the participants has been working between 1-5 years in their present organizations. the martial status of employees is %51.7 married and %48.3 single. the ratio of participants, working as temporary and permanent is %85.8 and %14.2 respectively. international review of management and marketing, vol. 1, no. 3, 2011, pp.54-64 60 6 table 1. demographic variables of applicants demographic variables f % female 91 75,8 gender male 29 24,2 married 62 51,7 martial status single 58 48,3 20 and under 13 10,8 21-25 years 46 38,3 26-30 years 20 16,7 31-40 years 26 21,7 age 41 and over 15 12,5 elementary 7 5,8 high school 52 43,3 vocational high school 44 36,7 undergraduate degree 14 11,7 education master degree / doctorate 3 2,5 less than a year 39 32,5 1-5 years 59 49,2 6-10 years 10 8,3 tenure of office 11 years and over 12 10 permanent 17 14,2 staff status temporary 103 85,8 6.3. outcomes related with relationship between the mobbing and organizational commitment by examining the total points of the mobbing, it is determined that 5 (%0.04) of the 120 participants have been exposed to high level mobbing, 20 (%17) participants have been exposed to mid-level mobbing and 95 participants have not been exposed to any mobbing. the mean and standard deviation values of variables and the correlation results of variables have been shown in table 2. there is a capability of being understood that a meaningful and positive relation between the points of the mobbing with continuance commitment, intent to leave the organization and organizational commitment; however, a meaningful and negative relation between the mobbing and affective commitment. nevertheless, any meaningful relation cannot be found between psychological violence and normative commitment according to results of the analysis. table 2. the relationship between the total points of the mobbing with affective commitment, normative commitment, continuance commitment, intention to leave the organization and organizational commitment ave. ss 1 2 3 4 5 1 the mobbing 1,98 ,78 2 organizational commitment 3,00 ,44 ,220(*) 3 affective commitment 3,37 ,65 ,-359(**) ,-0,21 4 normative commitment 2,83 ,94 ,015 ,555(**) ,057 5 continuance commitment 3,01 ,96 ,273(**) ,793(**) ,-206(*) ,287(**) 6 intention to leave the organization 2,78 ,82 ,360(**) ,708(**) ,-545(**) ,142 ,491(**) *p<0.05, ** p< 0.01 the relationship between mobbing and organizational commitment in workplace 61 6.4. the categorical regression analysis after the relation of variables has been determined by correlation analysis, the categorical regression analysis has been performed in order to test hypothesizes. table 3. the categorical regression analysis to determine the effects of the mobbing on organizational commitment r2 f β p organizational commitment ,10 4,388 ,319 .006 as shown in table 3, there is a significant relationship between the mobbing and organizational commitment. being positive of the beta value, points out that there is no negative relation between them. in this instance, hypothesis 1 (there is a negative relationship between mobbing in work place and organizational commitment) has been rejected. table 4. the categorical regression analysis to determine the effects of the mobbing on affective commitment r2 f β p affective commitment ,198 7,903 -,444 .000 a meaningful relation between the mobbing and affective commitment has been detected as seen in table 4. being negative of beta value expresses the negative relation among them. in other words, the mobbing influences the affective commitment by a ratio of %19.8. in fact, hypothesis 2 (there is a negative relationship between mobbing in work place and affective commitment) has been accepted. therefore, with the increase of the mobbing level applied to employees, there is going to be decreases in affective commitment to their organizations. this result supports the outcomes of demirgil (2008) and tengimoğlu and mansur (2009). table 5. the categorical regression analysis to determine the effects of the mobbing on intention to leave the organization r2 f β p intention to leave the organization ,157 4,250 ,396 .001 as seen in table 5, the mobbing has been effective on intention to leave the organization with a ratio of %15.7. the beta value is positive; thereby, it shows the relation is not negative. hence, there is going to be intentions to leave the organization with the increase of the mobbing. by virtue of results, hypothesis 3 (there is a positive relationship between the mobbing in work place and intention to quit) has been accepted. this result parallels to the study of demirgil (2008). table 6. the categorical regression analysis to determine the effects of the mobbing on continuance commitment r2 f β p continuance commitment ,136 3,585 ,369 .005 the table 6 exhibits that the mobbing has been %13.6 effective on the continuance commitment. being positive of beta value expresses there is not any negative relation among them. moreover, if the mobbing applied to employees increases, their continuance commitment to the organization is not going to decrease. hence, hypothesis 4 (there is a meaningful relationship international review of management and marketing, vol. 1, no. 3, 2011, pp.54-64 62 6 between the level of mobbing and continuance commitment) has been accepted. this result also supports the outcomes of demirgil (2008). table 7. the categorical regression analysis to determine the effects of the mobbing on normative commitment r2 f β p normative commitment ,033 1,979 ,182 .141 as you see in the table 7, there is no meaningful relation between the mobbing and normative commitment. hereby, hypothesis 5 (the normative commitment decreases by the increase of mobbing in work place) has not been accepted. in addition, this result confirms outcomes of demirgil (2008) and tengimoğlu and mansur (2009). 7. results and discussion the mobbing is being defined internationally as a growing serious problem in work place (salin 2001:426), influences the physical and mental health, efficiency (mikkelsen and einarsen, 2001:394), performance, work satisfaction (salin 2001:426), and organizational satisfaction (demirgil 2008:74) of employees as competitive advantage sources negatively. in this study, it is determined that 5 (%0.04) of the 120 participants have been exposed to high level mobbing, 20 (%17) participants have been exposed to mid-level mobbing and 95 participants have not been exposed to any mobbing by examining the total points of the mobbing. in other words, it is understood that %21 of the participants have been exposed to the mobbing in work environment. when the literature about the concept has been investigated, the research has shown that the mobbing is a widespread phenomenon in many countries. especially, %3-4 of the population of employees in scandinavia has been subject of the mobbing. in fact, in finland and england, the mobbing ratio increases more than %10 (salin, 2001:426). the remarkable results have been observed in this research. principally, the ratio of employees to which exposed to the mobbing, has been recognized to reach quite high level (%21). in the literature, it is specified as the mobbing has a negative effect on organizational commitment; however, the relationship between the mobbing and organizational commitment has been determined as positively. in addition, the effect of the high level of continuance commitment of employees has been considered in connection with these results. a negative and meaningful relation between the mobbing and affective commitment has been identified in our study. this outcome supports the outcomes of demirgil (2008) and tengilimoğlu and mansur (2009). the average of affective commitment of the participants in this research is 3.37. this ratio reports the affective commitments to the organizations of the employees are in high level. by examining analysis, a negative and meaningful relation between affective commitment and intention to leave the organization, has been arisen. in other words, the increase of affective commitment of employees is going to be cause the decrease in intention to quit and continuance commitment. a positive and meaningful relation has been determined between the mobbing in work place and tendency to leave the organization. this outcome is a sustaining result to the literature. even employees intend to leave the organization; they cannot put this idea into practice because of the economical conditions of turkey. in other words, employees have a high level of continuance commitment in this time period which has a growing unemployment ratio, especially affected by the 2008 economical crisis (the average of continuance commitment in this study has been determined as 3.01). thus, even the level of mobbing applied to employees increases; employees are going to show more commitment to their organizations because of being vacated. in addition, this subject also has been supported by our research. in this research, any relation between the mobbing and normative commitment, cannot be found. this outcome supports the research of demirgil (2008). the biggest issue in this project is to determine that whether the employees are exposed to the mobbing. the employees have been hesitating to share the mobbing behaviors to which they are exposed and also, they live with the fear of losing their job. even performing the research by the relationship between mobbing and organizational commitment in workplace 63 protecting the privacy of participants, employees could fill the survey with unlike answers. otherwise, the results cannot be generalized because the research has been performed only in private hospitals in balikesir. in generally, the persons always expose to the mobbing, are thought only the executives. in the following studies, it can be investigated that whether subordinates expose to the mobbing to their executives. furthermore, to be chosen of the sample in different managements’ areas is going to be more suitable in order to investigate the concept. references agervold, m., (2007), bullying at work: a discussion of definitions and prevalence, based on an empirical study, scandinavian journal of psychology, 48, 161–172. aksu, a. & balcı, y., (2009) i̇lköğretim okullarında psikolojik yıldırma ve psikolojik yıldırmayla baş etme, e-journal of new world sciences academy, 4(4), 1367-1380, allen n.j. & meyer j.p., (1990), the measurement and antecedents of affective, continuance and normative commitment to the organization, journal of occupational psychology, 60, 1-18. angle, h. l. & perry, j. l.,(1981), an emprical assesment of organizational commitment and organizational effectiveness, administrative science quarterly, 26, 1-14. aydın ş. & ozkul e., (2007), i̇ş yerinde yaşanan psikolojik şiddetin yapısı ve boyutları: 4-5 yıldızlı otel i̇şletmeleri örneği, anadolu üniversitesi sosyal bilimler dergisi, 7 (2) 169-186. becker h. s. 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(2001), bullying in the workplace: recent trends in research and practice an introduction, european journal of work and organizational psychology, 10(4), 369-373. . international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2020, 10(3), 1-6. international review of management and marketing | vol 10 • issue 3 • 2020 1 post tax reform and corporate effective tax rate: evidence from tunisia kamel naoui1, abdelkader kasraoui2* 1university of manouba, higher school of business, 2010, la manouba, tunisia, 2phd student, university of manouba, higher school of business, 2010, la manouba, tunisia. *email: kasraouiabdelkader@gmail.com received: 12 january 2020 accepted: 25 march 2020 doi: https://doi.org/10.32479/irmm.9414 abstract this study examines the impact of the tax reform on corporate effective tax rate (etr) and firm-specifics in tunisia for the post tax reform period (after the fiscal year 2014). the corporate effective tax rate is a component by major firm-specific characteristics, especially firm size, capital structure (leverage), inventory intensity, capital intensity. the etr provides information about the tax burdens and can be used as a political instrument to boost the economic reliance. the post tax reform period reflects the impact of lower corporate tax rate on the firm characteristics. the sample consists of 112 firm-year observations from 16 listed companies in tunis stock exchange (known bourse de tunisbvmt) covering 7 years from 2010 to 2016. our result indicates that the tax reform had a significant impact only on the inventory variable but no significant results on the others firm characteristics for the post-tax reform period. these findings urge the tunisian’s tax authority to reformulate the corporate tax system. keywords: tax reform, corporate effective tax rate, tunisia jel classifications: g30, g32, m4 1. introduction the researchers are recognizing that the tunisian corporate tax system is a major barrier to economic growth by the tax burden on companies (alm, 2015). according to alm (2015), the object of the corporate tax reform should be to create a system that has an efficient and competitive tax rate. two times reductions of the corporate tax rate by 10 percentage points between 2007 and 2014. the corporate tax rate reduction was carried out by two categories (from 30% to 25% for the companies listed before 2014, from 25% to 20% for the new listings companies), the increasing of the minimum tax (mt)1 from 0.1% to 0.2% of the total gross turnover and 0.1% of the turnover from exports. 1 a corporation has to pay a minimum tax liability referred to in paragraph ii of article 44 of the code of the income tax and of the corporation tax. for example to make a comparison with other countries like south africa, carreras et al. (2017) observe an average etr of 5.3% for the manufacturing sector, 4.8% for the trade sector and 4.9% for the construction sector from the year 2010 to 2013. the tunisian’s tax reform, related to the finance law for the year 2014, is an occasion to test the efficiency of the tax policy on the corporate economy and finance, by the assessing of corporate etr on the firm characteristics. the aim this study in this area is that corporate tax reform is infrequent in tunisia but the studies of impacts on determinants’ etr after the reform are limited. it’s an opportunity to examine how tunisian’s companies respond to a tax reform. in many cases we are as much interested in how specific-firm characteristics respond to the tax reform, i.e., a specific-firm characteristics multiplied by tax reform. to make generalizable statements, it is preferable to model with random effects model. this journal is licensed under a creative commons attribution 4.0 international license naoui and kasraoui: post tax reform and corporate effective tax rate: evidence from tunisia international review of management and marketing | vol 10 • issue 3 • 20202 2. literature review and hypothesis development in this section, we examine the relevant literature on the effect of the tax reform on the specific-firm characteristics such as financing, investment operations and capital structure via the corporate effective tax rate. 2.1. corporate effective tax rate many papers provide a theoretical and empirical framework about the impact of the corporate effective tax rate on the firm decisions (for example financing, investment, capital structure…). to measure the corporate etr many studies used a quotient produced by the division of the company’s tax liability and the accounting income, gupta and newberry (1997), plesko (2003) and richardson et al. (2012). further, gupta and newberry (1997) analyzed that tax expenses varying across firms is an indicator to suggest that the tax system is inequitable, a justification for tax reform. the etr used by shevlin and porter (1992) to identify the level of neutrality of the tax system and to identify the feed-back of firms with higher and lower tax expenses. indeed, alm (2015) claims that “…relative to international competitors, tunisia has a high marginal effective tax rate for businesses.” 2.2. tax reform for swenson (1994) and desai and dharmapala (2005) the aim of the corporate tax reform is to reduce the cost of doing business and increasing the firm’s value. according to duanjie and jack (2011), tax reforms would help to create economic growth and ultimately more corporate income. in the same context, alm (2015) concludes that the tunisian corporate tax system requires a tax reform by reducing the statutory tax rates. 2.3. etr, tax reform and firm size the existence of empirical studies unable to conclude the relationship sign between the etr and the firm size but the other studies prove a positive variability (zimmerman, 1983). for siegfried (1972) states that under the political power theory, firms with large size have a low etr because they have more resources than the smaller firms to influence the political process, for example the investment on long term assets generate more depreciations and decrease the income tax. another direction of political theory states that giant firms have lower etr because they have an arsenal of resources available for the managers to manage the political environment and organize their activities to achieve an optimal tax position (richardson and lanis, 2007). for the reason of missing corporate tax data on the tunisian context, the current study uses a micro backward-looking approach to examine the variability of corporate etr based on the financial statements. in other words, the numerator is the tax expense, a proxy for income tax charge paid or payable by the company and the denominator is pre-tax income, a proxy for company’s accounting income. the measure of etr captures the average rate of tax per unit money of accounting income. under the political cost theory, the large companies are targeted by governments in order to make the most of the tax revenue, that is the case in tunisia (20% contribute more than 80% of the country’s tax revenue). as the tax burden is a tool of political costs, this theory claims shows that firm size is positively associated with the etr (watts and zimmerman, 1986). historically, (zimmerman, 1983) finds a positive relationship between etr and firm size. on the other hand porcano (1986) observes a negative relation between the dependant and the independent variables (size, etr). so too, gupta and newberry (1997) claim significant negative effect between the size of the company and the effective tax rate. moreover, tran (1998) observes a negative association between etr and firm size. in another study the causes of this negative association due to that larger firms benefit more from tax-planning (tax management) than smaller firms. richardson et al. (2012) conclude that large companies are likely to be aggressive for tax purposes which leads to a lower effective tax rate. we expect a negative versus a positive association between etr and firm size for the two periods of the study. h1: etr is negatively associated with firm size at the pre-period tax reform h2: etr is positively associated with firm size at the post-period tax reform 2.4. etr impact on financial and investment functions the first corporate function is the financing decisions with a direct impact on etr because the capital structure between debt and equity financing generates its tax cost (gupta and newberry, 1997). consider, for example, the situation in which the choice between the sources or the techniques of financing the assets of the firm gives two situations: the interests of the debt are deductible on the other hand the dividends do not have any more (richardson et al., 2012). research by gupta and newberry (1997) finds a negative association between etr and leverage. naoui and kasraoui: post tax reform and corporate effective tax rate: evidence from tunisia international review of management and marketing | vol 10 • issue 3 • 2020 3 firms’ investment decisions might also impact on etr. for example, the effect of investments on the etr lies in the depreciation charge for legally deductible assets. another effect of investment is the inventory intensity who is a substitute for capital intensity, with the inventory intensive, firms should have higher etr (zimmerman, 1983). gupta and newberry (1997) provide that firms with a value of fixed assets have lower etr due to tax deductions, while firms with a greater inventory intensity ratio have higher etr. finally, r&d expenses have a direct impact on etr, as soon as the amounts are disbursed by the firm. presented as a deductible expense from the tax income, r&d has a negative sign with etr (gupta and newberry, 1997). the hypotheses to be detected are as follows: h3: etr is negatively associated with firm leverage. h4: etr is negatively associated with firm capital ratio. h5: etr is positively associated with firm inventory ratio. h6: etr is negatively associated with firm r&d ratio. 2.5. etr, tax reform and corporate functions to investigate whether the tax reform had an effect on etr, and if it impacted on the associations between etr and variables reflecting the outcomes of firms’ financing and investment decisions, richardson and lanis (2007) estimate this impact on the australian corporate tax system. for the financing mechanism firms rely more heavily on debt in the structure of their capital, this is expected to increase etr after the tax reform, as the reduction in the corporate tax rate decreases the tax savings on interest. for investment, where firms are capital-intensive, this is also expected to increase etr after the tax reform, due to the removal of accelerated depreciation and a reduction in the corporate tax rate. finally, the tax reform proposed no change in tax policy for the r&d tax concession, so the tax reform have an impact on the association between etr and r&d expenditure (richardson and lanis, 2007). following from the above discussion, we hypothesize that: h7: etr is negatively associated with the tax reform. h8: the association between etr and firm leverage is positively impacted upon by the tax reform. h9: the association between etr and firm capital intensity is positively impacted upon by the tax reform. h10: the association between etr and firm inventory intensity is negatively impacted upon by the tax reform. h11: the association between etr and firm r&d expenditure is not impacted upon by the tax reform. 3. method 3.1. sample and data using the panel data on 16 publicly-listed companies in tunisian stock exchange of securities over the 7 years period 20102016 (112 firm years), after elimination the following categories of companies: a. banks, insurance and leasing companies. b. firms realized negative accounting income (richardson and lanis, 2007). c. firms that have tax losses carryover2 because their etr tend towards a negative direction. d. firms with etr higher than one causes an econometric problem (gupta and newberry, 1997. p6). e. firms with missing data. the data for this study were collected through the financial statements available on the tunis stock exchange of securities (known bourse de tunisbvmt) web site3. 3.2. dependent variable the dependent variable is represented by etr. in conventional research, etr is measured on the basis of the financial data shown in the financial statements of the companies. etr is the quotient of two headings of the income statement as tax due divided by accounting result before taxes. however, the choice of the numerator and the denominator opens a scientific debate on the components of each heading (plesko, 2003). for example, the use of the cumulative taxes or only the corporate tax is used since any increase in a monetary unit of taxation may affect the tax burden of this economic entity. at the level of the second part, the question to ask is what type of income or result we can admit? the choice is between three propositions: the accounting income before taxes, the taxable income and the operational cash flow. the taxable result should not be used with a presence of tax deductions that have an impact on etr. we select the numerator (income tax due) after tax deductions and the denominator (accounting income) are before tax deductions (gupta and newberry, 1997). we use accounting income (accounting result) as the income measure in the denominator. 3.3. independent variables the independent variables represent the different characteristics of tunisian firms, namely: size: natural logarithm of total assets (accounting value); indlt: capital structure, this variable represents the financing operation, is measured by the non-current liabilities divided by total assets (accounting values). invest: capital intensity ratio, this variable measured by noncurrent assets divided by total assets. invent: inventory intensity, the value of inventory divided by total assets. for the independent 2 losses carried forward for five years. however, deferred amortization carried forward for an unlimited period (paragraphs iv of article 48 of the code of the income tax and of the corporation tax). 3 www.bvmt.com.tn naoui and kasraoui: post tax reform and corporate effective tax rate: evidence from tunisia international review of management and marketing | vol 10 • issue 3 • 20204 variable r&d represents the spending charges divided by net sales (richardson and lanis, 2007). 3.4. control variables firms’ operations could also impact on etr. wilkie (1988) finds that etr is a function of the ratio of tax deductions to accounting income, where tax deductions (e.g. amortizations) are items that cause accounting income to differ from taxable income. to the extent that tax deductions are not proportionately related to accounting income, etr can change simply due to changes in accounting income. hence, we use return on assets (roa) to control for changes in firms’ operating results. gupta and newberry, 1997) find that roa is measured as pre-tax income divided by total assets. we expect roa to have a positive sign because an increase in return on assets leads to an increase in etr. the company’s activity sector is a firm-specific factor that influences the etr. the industry sector (insec) is measured with dummy variable. the dummy equals 1 if the company’ sector is “industries” and 0 otherwise to control for the impact of the activity on etr. 3.5. tax reform variable to test the tax reform’s impact on etr, a period dummy variable (taxreform) is included in our study (coded 1 for the posttax-reform period, 0 otherwise), along with interaction terms comprising the taxreform dummy variable multiplied by each of the firm-specific variables and control variables. the taxreform coefficient provides a test of the mean shift in etr after tax reform. the interaction term coefficients permit testing for slope shifts in each of the firm-specific and control variables after tax reform and therefore determine whether these associations changed after the tax reform (richardson and lanis, 2007). however, the firm-specific and control variable coefficients provide evidence on their associations with etr for the period before and post tax reform (richardson and lanis, 2007). 3.6. regression model our empirical analysis involves estimating the following regression model is based on the method developed by swamy and arora (1972). having random effects means having a group– (or time–, or both) specific component in the error term. etr size invest invent indlt rd it it it it it it � � � � � � � � � � � � � � 0 1 2 3 4 5 66 7 8 9 1 roa insec taxreform taxreform �*�size it it it it it � � � � � � � � � 00 11 12 taxreform *�invest taxreform �*invent taxr it it it it� � � � � � eeform *indlt taxreform *rd taxreform *roa � it it it it it it� �� �13 14 �� �� �15taxreform �*insecit it it the independent variables: size (size), balance-sheet characteristics assets versus capital (invest, invent and rd), capital structure (indlt), firm operations activity (roa), the company’s activity sector (insec), the tax reform (taxreform) and interaction terms (taxreform * size, taxreform * invest, taxreform *invent, taxreform * indlt, taxreform *rd, taxreform *roa and taxreform *insec). 4. results 4.1. descriptive results to make a comparison with other studies for the tunisian context menchaoui et al. (2017) find that an average etr of 18.03% and a median etr of 17.56% for the period 2007-2011 for the tunisian corporate groups. the dependent variable, etr has a mean of 17.26% and a median of 19.16% different from the statutory company tax rates (25% or 20%) due to the existence of the accounting-tax divergence in the tunisian context (table 1). for the independent variables, size has a mean of 7.883 and a median of 7.888, about the size we conclude that all of the companies of our sample have a similar size with a restraint market, invest has a mean of 0.598 and a median of 0.583, invent has a mean of 27.7% of assets and the cumulate of the mean of the two variables is 87.5%, so we can conclude that the total assets in our sample composed by net property, plant, equipment and inventory presented by 87.57% of companies’ assets. indlt has a mean of 0.070 and a median 0.033. rd has a mean of 7%, especially for the companies of technology and pharmaceutical industry having the higher percentage and a median of 0.010, and roa has a mean of 0.090 (9%) and a median of 0.063 (6.3%). 4.2. measurement model our estimation about the impact of the tax reform on the firmspecifics is presented in table 2. the model is significant with a level of α=10% due to a large number of independent variables. the results show that the tunisian company’s has a specific reaction for the size variable and for the value of inventory in the post-tax reform period with a significant coefficient positive and negative signs. the positive sign of the reaction between the company size and the tax reform can be explained by the impact of reducing corporate tax rate on large companies. these findings converge with our hypothesis (h1 and h2). the coefficient on the inventory is negative and significant, we confirm the hypothesis h10, suggesting that the inventory value increases after the tax rate reducing. table 1: descriptive statistics etr size invest invent indlt rd roa mean 0.1726 7.883 0.5984 0.277 0.070 0.017 0.090 median 0.1916 7.888 0.5831 0.235 0.033 0.010 0.063 s.d. 0.332 0.045 0.021 0.065 0.045 0.008 0.046 naoui and kasraoui: post tax reform and corporate effective tax rate: evidence from tunisia international review of management and marketing | vol 10 • issue 3 • 2020 5 4.3. testing panel data we run the hausman test to select between fixed or random effects where the null hypothesis is that the best model is “random effects” versus the alternative hypothesis is “the fixed effects”, the p = 0.401, we adopt the null hypothesis with a presence of random effects. we use the breusch-godfrey test (breusch, 1978; breusch and pagan, 1980) for detecting a serial correlation in panel models. the null hypothesis is that there is no serial correlation of any order up to the p = 0.894. we can conclude that no serial correlation in our model, so the term error’s observations are uncorrelated with each other (wooldridge, 2010). a second test, is to detect the cross-sectional dependence in panels, if individuals respond to common shocks, (pesaran, 2004; 2015), the p = 0.892, we conclude that no cross-sectional dependence for the tunisian’s listing companies the model is specified correctly resulting pure disturbance, idiosyncratic and uncorrelation across companies. a third test to detect the heteroscedasticty is the breush-pagan test. the test is also no significant, the p = 0.217, the model is homoscedastic and the variance of estimated residuals is fixed. 5. discussion the study provides an empirical evidence to evaluate the association between the tax reform and the corporate effective tax rate in tunisia. we have to focus on the impact of the tax reform on etr, and its impact on the impact between etr and variables reflecting the financing and investment functions by reducing of the corporate tax rate and increasing minimum tax on the income. for the two periods – pre-tax reform and post tax reformwe find a significant effect between the etr and the three independent variables such as the size, rd and the insec, but no significant effect on firms characteristics in the post-tax reform for the fiscal year 2014 except the inventory variable invent with a negative significant coefficient. to relate our results to the empirical taxation literature, the etr is an indicator of tax planning dyreng et al. (2008), we find that the association between etr and firm-specific variables changes in the two periods. for alm (2015) using the “allocative effects” term to find that taxes affect the ability to create resources. indeed, this inefficiency results a weak employment of resources in the tunisian context. 6. conclusion the tunisian companies competition was distorted due to a high etr comparison to other countries4, they are less competitive especially after taxes. for example the dependant variable rd has a significant link to the etr only in the pre-tax reform. another factor can explain the inefficiency of the tax reform is the increasing of the inflation rate on the post tax reform period 2014-2016 rouissi and frioui (2014)5 at this approach boadway et al. (1984) find that inflation reduced the effective tax rate on net property, plant and equipment but raise the tax of inventories. an additional factor proves this negative impact on firmscharacteristics is the tunisian tax system is ad hoc (alm, 2015) due to the excess of taxation in tunisia. for alm (2015) suggests reducing the statutory rate by reforming the tax system. 4 (alm, 2015): level of taxes: when the level of taxation (including social security contributions) in tunisia (as a percent of gdp in 2010) is compared to a subset of relevant middle east and north africa (mena) countries (e.g., algeria, bahrain, djibouti, egypt, iran, iraq, jordan, kuwait, lebanon, libya, malta, morocco, oman, qatar, saudi arabia, syria, united arab emirates, west bank and gaza, yemen), taxes relative to gdp are generally higher for tunisia than for the median of other mena countries. 5 (rouissi & frioui, 2014) increase of the inflation: the inflation rate, which continues to climb, reaching to end of april 2012 to 5.7% with a peak of 8.2%. table 2: random –effects model results of interaction between tax reform, etr and firms-characteristics for the period 2010-2016 (n=112) variable predicted sign estimate std. error t-value pr(>|t|) (intercept) 1.805 0.716 2.518 0.013* size − −0.209 0.089 −2.331 0.021* invest − 0.039 0.088 0.451 0.652 invent + 0.132 0.203 0.650 0.516 indlt −0.408 0.482 −0.846 0.399 rd − −6.276 2.136 −2.937 0.004** roa + −0.420 0.663 −0.633 0.527 insec ? 0.006 0.002 2.761 0.006** taxreform − −0.451 1.513 0.297 0.766 taxreformsize + 0.022 0.026 0.857 0.006** taxreforminvest + −0.086 0.136 −0.635 0.526 taxreforminvent − −0.656 0.390 −1.683 0.095 taxreformindlt + 0.168 0.713 0.236 0.813 taxreformrd + 0.638 2.694 0.236 0.813 taxreformroa − 0.142 0.778 0.182 0.855 taxreforminec ? 0.000 0.003 0.156 0.875 ‘***’, ‘**’, ‘*’ statistical significance at levels of 0%, 1%, 5% and 10%, respectively naoui and kasraoui: post tax reform and corporate effective tax rate: evidence from tunisia international review of management and marketing | vol 10 • issue 3 • 20206 the third reason to explain the null impact of the tax reform for the fiscal year 2014 and after is the increasing of the mta from 0.1% to 0.2% of the total gross turnover and 0.1% of the turnover from exports. 6.1. limitation the limitations of this study to more explain the impact of the tax reform on the firm’s characteristics. first, we have to use the ratio of the income tax expenses to the operating cash flow to appear the firms’ added value. second, plesko (2003) argues that the use of financial statements for the etr measure has shortcomings and limitations and should be interpreted with a precautionary measure. we couldn’t include unlisted firms to our sample because of data unavailability (accounting and tax data). indeed, the etr model may be incomplete many firms have negative accounting income and tax losses carry forward are excluded from the sample despite they pay income tax (zimmerman, 1983; richardson and lanis, 2007) with mta equals to 0.2% of the gross sales and revenues plus the authority tax about up to 0.2% for the same taxable base, the registration taxes on the corporate assets, the payroll taxes and others contributions imposed on tunisian’s firms for example the total rate for the social security contributions paid by the employer is 16.57% of the gross salaries. third, we6 eliminated the sum of the reinvested earnings, the deduction capped at 50 % of net tax income subject to corporate tax6. finally, a tunisian company subject to withholding tax on corporate tax, the rate is 1.5% on the gross revenue receipts. 6 investment incentives code. duanjie, c., jack, m. 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[last accessed on 2018 jan 04]. microsoft word 2 ok india 2 50-177-1-sm.doc international review of management and marketing vol. 1, no. 4, 2011, pp.74-85 issn: 2146-4405 www.econjournals.com investigating the moderating role of corporate image in the relationship between perceived justice and recovery satisfaction: evidence from indian aviation industry vikas gautam icfai university, dehradun. india. email: vgautam78@gmail.com abstarct: i n t h e c o nt ex t o f p r es e n t r es ea r c h, a u t h or a t t e mp t s t o b r i d g e t h e ga p s i n t h e l it er a t u r e b y i n v es t i ga t i n g p er c e i v e d ju s t i c e d i me n s i o ns a n d t o e x a mi n e w h et h e r b r a nd i ma g e p la ys mo d er a t i n g r o l e i n t h e r e la t i o ns h ip s b et w e e n p er c e i v e d ju s t ic e a n d r e c o v er y s a t is f a c t i o n. t h e s t u d y is b a s e d o n p r i ma r y da t a , c ol l e c t e d f r o m t h e a ir c u s t o me r s i n d e v e l o p i n g c ou nt r y, i n d ia . t he f ir s t mo d e l o f t h e h i er a r c h i c a l r e gr es s i o n a na l ys es i n d i c a t e d t ha t a ll t hr e e ju s t ic e di m e n s i o ns of d is t r ib u t i v e ju s t ic e, p r oc e d u r a l ju s t ic e, a n d i nt er a c t i o na l ju s t i c e a r e p os it i v e l y r e la t e d t o r ec o v e r y s a t is f a c t i o n, a n d t h e e f f e c t of dis t r i b u t i v e ju s t ic e o n r ec o v er y s a t is f a c t i o n wa s s t r o n g e r t ha n i nt er a c t i o na l ju s t ic e, a n d s u b s e qu e n t l y, e f f e c t of i nt er a c t i o na l ju s t ic e o n r e c o v er y s a t is f a c t i o n wa s s t r o n g e r t ha n p r oc e d u r a l j u s t i c e. t h e r es u lt s a ls o c o nf ir me d t ha t a ll t hr e e i nt er a c t i o n t er ms w er e s i g n if i c a nt , w h ic h s h o ws t ha t c or p or a t e i ma g e p la ys a mo d er a t i n g r o l e b et w e e n p er c e i v e d ju s t ic e d i me n s i o ns a n d r ec o v e r y s a t is f a c t i o n. keywords: c or p or a t e i ma g e ; d is t r ib u t i v e ju s t ic e ; p r oc e d u r a l ju s t ic e ; i nt er a c t i o na l ju s t ic e ; i n d ia n a via t i o n i n d u s t r y. jel classifications: c10, l93, m31 1. introduction i n t h e s er v ic e e n v ir o n me n t , it is a l mo s t i m p os s ib l e t o p r o v i d e ha s s l e f r e e s er v ic e r o u n d t h e c l oc k du e t o u n i qu e na t u r e of s er v i c es . i t ha r d l y ma t t er s h o w e x c e p t i o na l t h e s er v i c e a n or ga n iz a t i o n d e l i v er s , e v er y or ga n iz a t i o n s t i l l o f t e n ma k e s mi s t a k e s i n me et i n g t h e e x p e c t a t i o n s o f mor e d e ma n d i n g c u s t o m er s , w h o ha v e a p r op e n s it y t o b e mor e d e ma n d i n g a n d l es s l o ya l t ha n e v e r b e f or e. i t is i mp os s ib l e t o e ns u r e hu n dr e d p er c e nt er r or f r e e s er vi c e s t o c u s t o me r s du e t o u n i qu e na t u r e o f s er v ic e s ( b it n er , 1 9 9 3 ) . d e l r i o l a nz a et a l. ( 2 0 0 9 ) a r gu e t ha t e v e n t h e mo s t c u s t o me r or i e nt e d or ga n iz a t i o n w it h t h e s t r o n g es t qu a l it y p r o gr a m is u n l i k e l y t o b e a b l e t o e l i mi n a t e a l l s er v i c e f a i lu r es . s er v i c e f a i lu r e c a u s es c u s t o me r d is s a t is f a c t i o n wit h t h e s er v i c e p r o v i d er , a n d du e t o t ha t c u s t o me r s ma y ex it s i l e nt l y, s p r ea d a n e ga t i v e w or d of mo u t h, r a is e t h e ir c o mp la i nt s t o t h e op er a t or , or c o nt i n u e w it h t h e s a me s er v ic e p r o v i d er r e g a r dl es s of t h e ir d is s a t is f a c t i o n ( k i m e t a l. , 2 0 0 9 ) . s er v ic e r e c o v er y r e f er s t o t h e a c t i o ns t a k e n b y a c o mp a n y i n r ej o i n d e r t o a s er v ic e f a i lu r e ( s e e f i gu r e 1 ) . f a i lu r es o c c u r b ec a u s e of va r i ou s r ea s o ns l i k e : t h e s er v ic e ma y b e u na va i la b l e w h e n p r o mis e d ; i t ma y b e d e l i v er e d b e h i n d s c h e d u l e or t o o l e i s u r e l y; t h e ou t c o m e ma y b e er r o n e o u s or i na d e qu a t e l y ex e c u t e d a n d e mp l o y e e s ma y b e d is c ou r t e ou s . a l l t h is t yp e of f a i lu r es b r i n gs a b ou t n e ga t i v e f e e l i n gs a n d r es p o ns es f r o m c u s t o me r s . i f n ot r es o l v e d, t h e n t h e s e s er v ic e f a i lu r e s ma y r es u lt i n c u s t o me r s l ea v i n g, t e l l i n g ot h er c u s t o me r s a b ou t t h e ir n e ga t i v e e x p er i e n c e s a n d e v e n c ha l l e n g i n g t h e c o mp a n y t hr ou g h c u s t o me r ’ s r i g ht s or l e ga l wa ys . investigating the moderating role of corporate image in the relationship between perceived justice and recovery satisfaction: evidence from indian aviation industry 75 f ig ur e 1 . r e c o v e r y p a r ado x o n p a s t r es ea r c h ha s r e v ea l e d t ha t , r es o l v i n g c u s t o me r p r ob l e m e f f e c t i v e l y a n d e f f i c i e nt l y ha s a s t u r dy i mp a c t of c u s t o m er ’ s s a t is f a c t i o n, l o ya lt y a n d b ot t o m l i n e p er f or ma n c e. t h er e f or e, c u s t o me r s w h o ex p er i e n c e s er v i c e f a i lu r es , b u t e v e nt u a l l y s a t is f i e d b a s e d o n s er v i c e r ec o v er y e f f or t s b y t h e or ga n i z a t i o n, w i l l b e mor e l o ya l t ha n t h os e w h os e is s u e s a r e n ot r es o l v e d i n t h e du e c ou r s e o f t i me . t h e c u s t o me r s w h o c o mp la i n a n d ha v e t h e ir p r ob l e ms r es o l v e d s w i f t l y, a r e mu c h mor e li k e l y t o p a t r ona g e t h e s a me s er v ic e p r o v i d er a ga i n t ha n t h o s e w h o s e c o mp la i nt s a r e n o t r es o l v e d i n t i me . t h e c u s t o me r s , w h o n e v e r c o mp la i n a r e l es s l i k e l y t o r ep a t r o na g e. s mit h a n d b olt o n ( 2 0 0 2 ) a d dr es s e d s er v ic e r e c o v er y a s a mo m e n t of t r u t h f or t h e c o mp a n y, w h ic h is d e c is i v e f or gr a t if y i n g it s c u s t o mer s a s w e l l a s c or r ob or a t i n g it s a s s oc ia t i o ns w it h t h e m. g r o nr o os , ( 1 9 8 8 ) d e f i n e d s er v ic e r ec o v er y a s t h e a c t i o n s a n or ga n iz a t i o n t a k e s i n or d er t o r es p o n d t o a s er v i c e f a i lu r e. s p a r ks a n d m c c o l lk e n n e d y ( 2 0 0 1 ) d e f i n e d s er v i c e r e c o v er y s t r a t e g i e s a s t h e s t r a t e g i e s p r a c t ic e d b y a n or ga n i z a t i o n a n d it s e mp l o y e e s t o c o m e b a c k t h e c u s t o me r t o a s t a t e of s a t is f a c t i o n . t h e f i na l g oa l of s er v ic e r e c o v er y is t o a p p ea s e d is s a t is f i e d c u s t o m er s a l l t h e wa y t hr o u g h a p p os it e a c t i o ns i n or d er t o l es s e n p ot e nt ia l ha r m t o c u s t o m er r e la t i o ns h i p s c a u s e d b y f a i lu r e of s er vi c es ( h a a n d j a n g, 2 0 0 9 ) . s p a r ks a nd m c c o ll k e n n e d y ( 2 0 0 1 ) a r gu e t ha t r es ea r c h er s a c r os s t h e w or l d ha v e u t i l iz e d ju s t i c e t h e or y a s t h e ma i n f r a me w or k f or i n v e s t i ga t i n g s er v i c e r ec o v e r y p r oc e d u r es i n or d er t o c o mp r e h e n d e f f e c t i v e s er v i c e r ec o v er y mo r e v it a l l y. a c c or d i n g t o ju s t ic e t h e or y, p er c e i v e d j u s t ic e is a mu lt i d i me n s i o na l c o nc e p t c o mp r is i n g t hr e e d i me n s i o ns na me l y : d is t r ib u t i v e, p r oc e d u r a l, a n d i nt er a c t i o na l ju s t ic e. r e ga r d l e s s o f t h e r ec e n t a d va n c es w i t h r e f er e n c e t o t h e e f f e c t s of p er c e i v e d ju s t ic e o n p os t r ec o v er y s a t is f a c t i o n, t h er e is s t i l l n e e d t o f i n d ou t h o w r ec o v er y e f f or t s ma d e b y s er v i c e p r o v i d er a f f e c t c o ns e q u e nt c u s t o me r s ’ r e c o v er y s a t is f a c t i o n. d e l r i o l a nz a et a l. , ( 2 0 0 9 ) s u g g e s t e d t h a t t h er e is a r ic h i nt er e s t i n e x p l or i n g t h e r e la t i v e i mp or t a nc e of t h e d i me n s i o ns o f p er c e i v e d ju s t ic e o n r ec o v e r y s a t is f a c t i o n b e c a u s e t h e s e d i me n s i o ns d o n ot e x p la i n r ec o v er y s a t is f a c t i o n i n e q u a l r e la t i v e i mp or t a nt ma n n e r . i n t h e f i n d i n gs of t h e s t u d y, a u t h or s s t r es s e d t ha t t h er e is u r g e nt n e e d t o a na l y z e t h e d i me n s i o n s o f p er c e i v e d ju s t ic e s ep a r a t e l y r a t her t ha n a g gr e ga t e f or m. l a t er , s t u d y r e c o m me n d e d c o ns i d er i n g r o l e o f mo d e r a t i n g f a c t or s i n t h e r e la t i o ns h ip s b et w e e n p er c e i v e d ju s t ic e a n d r e c o v er y s a t is f a c t i o n. a mo n g t h e s e va r ia b l e s , t h e y r e c o mm e n d e d s t u d y i n g c u s t o me r s ’ i ma g e a b ou t t h e c o mp a n y’ s b r a n d, a n d g l ob a l s a t is f a c t i o n w it h t h e c o mp a n y a n d t h e ir a t t r ib u t i o ns of t h e c a u s es o f t h e p r o b l e m. o n t h e ot h er ha n d, r e ga r d l es s o f t h e international review of management and marketing, vol. 1, no.4, 2011, pp.74-85 76 i mp or t a nc e of b r a n d i ma g e , l it t l e e f f or t ha s b e e n ma d e t o ex a mi n e t h e r o l e o f b r a n d i ma g e i n r e la t i o n t o p er c e i v e d j u s t i c e r e ga r d i n g s er v ic e r ec o v er y e f f or t s a n d r ec o v e r y s a t is f a c t i o n. m or e o v er , c h e b a t a n d s lu s a r c z y k ( 2 0 0 5 ) ex a mi n e t ha t t h e e x p li c it e f f e c t s o f t h e t hr e e ju s t ic e d i me n s i o n s o n c u s t o mer l o y a lt y a r e qu it e d i v er s e f or m ea c h ot h er . bu t lit er a t u r e ha s n ot b e e n f ou n d r e la t e d t o e f f e c t o f p er c e i v e d ju s t i c e d i me n s i o n s o n s a t is f a c t i o n w it h s er v i c e r ec o v er y. m a x h a m a n d n et e m e y e r ( 2 0 0 2 ) i n v e s t i ga t e d t h e e f f e c t s o f p er c e i v e d ju s t i c e o n s a t is f a c t i o n w it h s er v ic e r ec o v er y, b u t t h e y d i d n ot i n v es t i ga t e t h e r e la t i v e e f f e c t s of t h e p er c e i v e d ju s t ic e d i me n s i o ns . ba s e d o n t h e a b o v e b a c k gr ou n d , c u r r e nt s t u d y a t t e mp t s t o b r i d g e t h e ga p s i n t h e l it er a t u r e b y i n v es t i ga t i n g p er c e i v e d ju s t i c e d i me n s i o ns a n d t o e x a mi n e w h et h e r b r a nd i ma g e p la ys mo d er a t i n g r o l e i n t h e r e la t i o ns h ip s b et w e e n p er c e i v e d ju s t ic e a n d r e c o v er y s a t is f a c t i o n. 2 . l i t e r a t u r e r e v i e w a n d h y po t h e s e s d e v e l o pm e n t s er v ic e p r o v i d er s a n d c u s t o m er s c a n n ot a v o i d t h e i n c i d e n t s t ha t t a k e p la c e du r i n g e x c ha n g e p r o c es s e s . c o ns e qu e n t l y, t h e y a nt i c ip a t e f la x e n b e ha v i ou r f r o m ea c h ot h er a n d t h e y d o t h e ir a p p r a is a l b a s e d o n p er c e i v e d ju s t ic e. j u s t ic e t h e or y b y a da m ( 1 9 6 3 ) s t a t es t ha t i n e v e r y e x c ha n g e t ha t t a k es p la c e, p e o p l e e va lu a t e t h e i np u t s a ga i ns t t h e ou t c o me s a n d c o mp a r e t h e m w i t h t h os e o f ot h er s i n p a r a ll e l s it u a t i o ns . i n t h e i nc i d e n t t ha t t h er e is a n e q u i l ib r iu m b e t w e e n t h e m, t h e ex c ha n g e is c o ns i d er e d a s ‘ f a ir ’ , b u t i f t h e ou t c o me s d o n ot m e e t w it h t h e p er s o n ’ s e x p e c t a t i o ns , t h e n t h is r es u lt s i n d is c r i mi na t i o n. p a s t lit er a t u r e r e la t e d t o s er v i c e f a i lu r e a n d r ec o v er y ha s p r es e n t e d s u b s t a nt ia l e v i d e n c e of t h e a p p r o p r ia t e n es s o f t h e c o n c e p t of ju s t i c e a s a s ou r c e f or u n d er s t a n d i n g t h e p r o c es s of s er v i c e r e c o v er y a n d it s ou t c o me s ( s mit h et a l. 1 9 9 9 ; t a x , br o w n, a n d c ha n dr a s h e ka r a n, 1 9 9 8 ; b l o d g et t et a l. , 1 9 9 7 ; g o d w i n a n d r os s , 1 9 9 2 ) . d is t r ib u t i v e ju s t i c e : d e l r i o l a n z a ( 2 0 0 9 ) d e f i n e d d is t r i b u t i v e ju s t ic e a s t h e a s s ig n m e n t of t a n g ib l e r es o u r c es b y t h e c o mp a n y t o r es o l v e a n d r e c o mp e n s e f or a s er v ic e f a i lu r e. a c c or d i n g t o w a ls t er et a l. ( 1 9 7 3 ) , w h e n a n i n d i v i du a l p er c e i v e s t ha t b e n e f it s ha v e n ot b e e n a l l o c a t e d e q u it a b l y; h e/ s h e e x p er i e n c es d is t r es s , w h ic h i n t u r n mot i va t es h i m/ h er t o r ef u r b is h t h e d is t r ib u t i v e ju s t ic e. va r i o u s a u t h or s a c r os s t h e w or l d l i k e : g o d w i n a n d r os s , ( 1 9 9 2 ) ; h of f ma n et a l. , ( 1 9 9 5 ) ; s mit h e t a l. ( 1 9 9 9 ) p r o v i d e d e v i d e n c e b a s e d o n t h e ir e mp ir ic a l s t u d i es t ha t p er c e i v e d f a ir n e s s o f t a n g ib l e ou t c o me s ha v e a p o s it i v e e f f e c t o n r e c o v er y e va lu a t i o n . p r e v i ou s l it er a t u r e i n s er v i c e r ec o v er y ha s me a s u r e d dis t r ib u t i v e ju s t i c e w it h t h e h e l p o f f i v e va r ia b l es , na me l y : ju s t i c e , f a ir n es s , n e e d, va lu e, a n d r e wa r d ’ o f ou t c o me s ( c h eb a t a n d s lu s a r c z y k, 2 0 0 5 ; w ir t z a n d m a t t i la , 2 0 0 4 ; s mit h et a l. , 1 9 9 9 ) . p r oc e du r a l j u s t i c e : d e l r i o l a n z a , ( 2 0 0 9 ) d e f i n e d p r o c e du r a l ju s t ic e a s t h e t e c h n i qu e s t h e c o mp a n y u s e s t o d ea l w it h t h e p r ob l e ms a r is i n g du r i n g s er v ic e d e l i v er y i n t er ms o f a c c es s ib i l it y, t i mi n g/ s p e e d , p r oc e s s c o nt r o l, d e la y a n d f l e x ib i l it y t o a da p t t o t h e c o ns u m er s ’ r e c o v er y n e e d s . m or e o v er , a c c or d i n g t o d a v i d o w ( 2 0 0 3 ) p r o c e du r a l ju s t ic e i n c lu d e s p o l ic i e s , p r oc e d u r es , a n d t o o ls t ha t f ir ms u s e t o s u p p or t c o mmu n i c a t i o n w it h c u s t o me r s a n d s p e c if i c a l l y, t h e t i me t a k e n t o p r oc e s s c o mp la i nt s a n d t o a r r iv e a t a d e c is i o n . m a t t i la ( 2 0 0 1 ) i n t h e c o nt e x t o f s er v ic e r ec o v er y d e f i n e d p r oc e d u r a l ju s t i c e a s t he c u s t o mer ’ s p er c ep t i o n f or t h e s e v er a l s t a g e s of p r oc e d u r es a n d p r o c es s e s n e e d e d t o r ec o v er t h e f a i l e d s er v ic e . p a s t lit er a t u r e s u p p or t e d s ix s u b d i me n s i o ns f or p r oc e d u r a l j u s t i c e l i k e ; f l e x i b i l it y , a c c es s ib i l it y, p r oc e s s c o nt r o l, d e c is i o n c o nt r o l, r es p o ns e s p e e d , a n d a c c e p t a n c e o f r es p o ns ib i l it y ( d e l r i ol a nz a , 2 0 0 9 ; t a x, br o w n, a n d c ha n dr a s h e ka r a n , 1 9 9 8 ; b l o d g et t et a l. , 1 9 9 7 ; t hib a u t a n d w a l k er , 1 9 7 5 ) . i nt er a c t i o na l j u s t ic e : s p a r ks a n d m c c o l lk e n n e d y ( 2 0 0 1 ) d e f i n e d i nt er a c t i o na l j u s t i c e i n t h e c o nt e x t o f s er v i c e r e c o v er y t ha t t h e e va lu a t i o n of t h e d e gr e e t o w h ic h t h e c u s t o me r s ha v e e x p er i e n c e d ju s t ic e i n hu ma n i nt er a c t i o ns f r o m investigating the moderating role of corporate image in the relationship between perceived justice and recovery satisfaction: evidence from indian aviation industry 77 t h e e mp l o y e e s o f s er v ic e or ga n iz a t i o n du r i n g t h e s er v ic e r ec o v er y p r o c es s . f i n d i n g s f r o m t h e p a s t l it er a t u r e s u g g e s t e d s ix s u b d i me n s i o ns f or i nt er a c t i o na l ju s t i c e na me l y ; c o u r t es y, h o n e s t y, of f er i n g ex p la na t i o ns , e mp a t h y, e n d ea v ou r , a n d o f f er i n g a p o l o g i es ( d e l r i ol a n z a , 2 0 0 9 ; m c c ol l k e n n e d y a n d s p a r ks , 2 0 0 3 ; c le m me r , 1 9 8 8 ; t a x et a l. , 1 9 9 8 ) . g e n e r a l l y, i nt er a c t i o na l ju s t ic e f o c u s es o n i nt er p er s o na l i nt er a c t i o ns d u r i n g s er v ic e d e l i v e r y p r oc e s s . c or p or a t e i ma g e : c or p or a t e i ma g e ma y b e d e f i n e d a s p er c e p t i o n o f a n or ga n i z a t i o n h e l d i n c o n s u mer me mor y a n d w or ks a s a f ilt er w h i c h i n f lu e n c es t h e p er c ep t i o n of t h e op er a t i o n o f t h e c o mp a n y ( g r o nr o os , 1 9 9 8 ; k e l l er , 1 9 9 3 ) . d ob n i a n d z i n k ha n ( 1 9 9 0 ) d e f i n e d c or p or a t e i ma g e a s t he r ep r es e n t a t i o n of a b r a nd i n t h e c o ns u mer ’ s mi n d t ha t is l i n k e d t o a n of f er i n g. k e l l e r , ( 1 9 9 3 ) a r g u e d t ha t c or p or a t e i ma g e c a n b e s e e n a s a s et of p er c e p t i o ns a b ou t a b r a n d t h e c o ns u m er f or ms a s r ef l e c t e d b y b r a n d a s s o c ia t i o ns . ac c or d i n g t o n g yu n a n d l e la n c ( 2 0 0 1 ) c or p or a t e i ma g e is r e la t e d t o t h e d if f er e nt p h ys i c a l a n d b e ha v i ou r a l a t t r ib u t es of t h e c o mp a n y , l i k e; b u s i n e s s na me , a r c h it e c t u r e, va r i et y o f g o o ds or s er v ic e s , t r a dit i o n, i d e o l o g y , a n d t o t h e f e e l i n g o f qu a l it y c o m mu n i c a t e d b y ea c h p er s o n i nt er a c t i n g w i t h t h e c l i e n t s o f t h e c o mp a n y. t h e c or p or a t e b r a nd is i nt a n g i b l e i n na t u r e a n d i n va lu a b l e f or t h e or ga n iz a t i o n. r ob er t a n d d o w l i n g ( 2 0 0 2 ) a r gu e d t ha t t h e c or p or a t e b r a n d i s a va lu a b l e i nt a n g ib l e a s s et , t ha t is ha r d t o i mp er s o na t e, a n d w h i c h ma y h e l p c or p or a t i o n i n a c h i e v i n g s u s t a i n e d s u p er i o r f i na n c ia l p er f or ma n c e. g o o d b r a n d i ma g e n ot o n l y i n d i c a t es t ha t t h e b r a n d ha s a p os it i v e i ma g e b u t a ls o ex h ib it s a h i g h er l e v e l of b r a n d i ma g e s t r e n gt h i n c o m p a r is o n t o ot h er b r a n ds ( k i m a n d k i m, 2 0 0 5 ) . p er c e i v e d ju s t i c e a n d r ec o v er y s a t is f a c t i o n : t h e ma i n p u r p os e of s er v i c e r ec o v e r y ef f or t s is t o b u d g e a c u s t o me r f r o m a s ta t e o f d is s a t is f a c t i o n t o a s t a t e o f s a t is f a c t i o n ( z e mk e , 1 9 9 3 ) . w ir t z a n d m a t t ila ( 2 0 0 4 ) s p e c if y t ha t r ec o v er y ou t c o me s , p r oc e d u r es , a n d i nt er a c t i o n a l t r ea t me nt ha v e a c o mb i n e d e f f e c t o n p os t r ec o v e r y s a t is f a c t i o n. s a t is f a c t i o n a n d f u t u r e l o ya lt y of c u s t o mer s a r e d e p e n d e n t o n t h e ir f e e l i n g s o n w h e t h er t h e y ha v e b e e n t r ea t e d f a ir l y or n ot . i n g e n e r a l, c u s t o mer s e x p e c t a s er v i c e r e c o v er y t o b e f a ir i n o r d er t o r e c o v er t h e ir s a t is f a c t i o n a n d l o ya lt y. n u m er ou s a u t h or s ha v e f ou n d t ha t a ll t hr e e f or ms of ju s t ic e i nc lu d i n g d is t r ib u t i v e ju s t i c e, p r o c e d u r a l ju s t i c e, i nt er a c t i o na l ju s t i c e ha v e a p os it i v e e f f e c t o n o v er a l l s er v i c e r e c o v er y s a t is f a c t i o n ( k i m e t a l, 2 0 0 9 ; d os s a nt os a n d f er na n d e s , 2 0 0 8 ; k a r a n d e et a l. , 2 0 0 7 ; k a r a t ep e, 2 0 0 6 ; k a u a n d l o h, 2 0 0 6 ; p a t t er s o n et a l. , 2 0 0 6 ; o k et a l. , 2 0 0 5 ; s mit h , bo lt o n, a n d w a g n er , 1 9 9 9 ; t a x et a l. , 1 9 9 8 ; c l e m m er a n d s c h n e i d e r , 1 9 9 6 ; ) . t h e s e s t u d i es w er e c o n du c t e d i n d i f f er e n t s er v ic e i n du s t r i es l i k e ; h ot e l c u s t o m er s , mo b i l e p h o n e b u y er s , u n d er gr a du a t e s t u d e n t s , a ir l i n e p a s s e n g e r s . o n t h e b a s is of a b o v e b a c k gr ou n d, f o l l o w i n g h yp ot h e s e s a r e p r op os e d i n t h e c o nt ex t of p r es e nt s t u d y : h 1 . t h er e ex is t s a p os it i v e r e la t i o n s hi p b e t w e e n p er c e i v e d j u s t ic e a n d r e c o v er y s a t is f a c t i o n.  h 1 a . t h er e ex is t s a p os it i v e r e la t i o ns h ip b et w e e n d is t r ib u t i v e ju s t ic e a n d r ec o v e r y s a t is f a c t i o n.  h 1 b . t h er e ex is t s a p os it i v e r e la t i o ns h ip b et w e e n p r o c e du r a l ju s t ic e a n d r ec o v e r y s a t is f a c t i o n.  h 1 c . t h er e e x is t s a p os it i v e r e la t i o ns h ip b et w e e n i nt er a c t i o na l ju s t ic e a n d r ec o v e r y s a t is f a c t i o n. p er c e i v e d ju s t ic e, r ec o v e r y s a t is f a c t i o n a n d b r a n d i ma g e : p a s t l it er a t u r e h yp ot h e s iz e s t ha t c or p or a t e i ma g e i n f l u e n c e s c u s t o mer s ’ s a t is f a c t i o n ( a n dr ea s s e n a n d l i n d e s t a d, 1 9 9 8 ) . n g u y e n a n d l eb la n c ( 2 0 0 1 ) a r gu e d t ha t h i g h l e v e l o f c or p or a t e i ma g e is r e la t e d t o a b et t er p er c e p t i o n o f t h e qu a l it y, b u s i n e s s na me a n d i d e o l o g y o f a n or ga n iz a t i o n. g o o d b r a n d i ma g e n ot o n l y i n d ic a t es t ha t t h e b r a n d ha s a p os it i v e i ma g e b u t a ls o s h o ws a h i g h er l e v e l of b r a n d i ma g e s t r e n gt h t ha n ot h e r b r a nds k i m a n d k i m, ( 2 0 0 5 ) . t hu s , a go o d c or p or a t e i ma g e is v it a l f or c o mp a ni e s . international review of management and marketing, vol. 1, no.4, 2011, pp.74-85 78 c o ns u me r s w h o b u i l d u p a p os it i v e me n t a l i ma g e of a b r a n d w i l l ha v e a p r op e ns it y t o wa r ds h i g h c u s t o mer s a t is f a c t i o n t hr ou g h a ha l o e f f e c t w h er e a l l t h i n gs l i n k e d w it h t h e b r a n d a r e s i mi la r l y va l e n c e d ( l a i et a l. , 2 0 0 9 ) . t h e r ea c t i o n of t h es e t yp e o f s it u a t i o ns a s s u r e c o ns u me r s t ha t e v e n i f s er v ic e f a i lu r es oc c u r qu it e of t e n, w h e n c u s t o mer s ha v e a p os it i v e me n t a l i ma g e o f a b r a nd, t h e y w i l l t h i n k t ha t t h e c o mp a n y w i l l b e n e f it t h e m i n f u t u r e c ou r s e o f t i me . h e n c e, t h e e f f e c t of p er c e i v e d ju s t ic e du e t o r e c o v er y e f f or t s ma d e b y c or p or a t e, w h o g ot p os it i v e me n t a l i ma g e , mi g h t ha v e a s t r o n g er i mp a c t o n t h e r ec o v er y s a t is f a c t i o n of c u s t o me r s . i n t h e p a s t l it er a t u r e r e la t e d t o t h e p r es e nt s t u d y, a u t h or d i d n ot f i n d e n o u g h p r e v i ou s s t u d i e s , w h o ha v e ex a mi n e d t h e mo d er a t i n g r o l e of c or p or a t e i ma g e i n r e la t i o n t o p er c e i v e d ju s t ic e i n s er v ic e r e c o v er y. t h er ef or e, c u r r e nt r es ea r c h p r op os e s t h e f o l l o w i n g h yp ot h e s es : h 2 : t h e e f f e c t o f p er c e i v e d ju s t ic e o n r e c o v er y s a t is f a c t i o n is h i g h er g i v e n c u s t o mer s ha v e a p os it i v e i ma g e o f t h e c or p o r a t io n.  h 2 a : t h e e f f e c t of d is t r ib u t i v e j u s t i c e o n r ec o v er y s a t is f a c t i o n is h i g h er g i v e n c u s t o mer s ha v e a p os it i v e i ma g e o f t h e c or p o r a t io n.  h 2 b : t h e e f f e c t of p r o c e d u r a l ju s t ic e o n r ec o v er y s a t is f a c t i o n is h i g h er g i v e n c u s t o mer s ha v e a p os it i v e i ma g e o f t h e c or p o r a t io n.  h 2 c : t h e e f f e c t o f i nt er a c t i o na l ju s t ic e o n r ec o v e r y s a t is f a c t i o n is h i g h e r g i v e n c u s t o me r s ha v e a p os it i v e i ma g e of t h e c or p or a t i o n.  3 . c o n c e pt u a l fr a m e w o r k o f t h e s t u d y t h e c o n c e p t u a l f r a me w o r k of t h is s t u d y wa s h yp ot h e s iz e d a c c or d i n g t o t h e ob j e c t i v es of t h e s t u d y a n d t h e l it er a t u r e c o n s u lt e d f or t h e p r es e nt s t u d y ( s e e f i gu r e 2 ) . f ig ur e 2 . fr a me w o r k o f s t udy d is t r ib u t i v e , p r o c e du r a l a n d i nt er a c t i o na l ju s t ic e s w i l l a f f e c t r e c o v er y s a t is f a c t i o n ( h 1 a , h 1 b , h 1 c ) . m or e o v e r , c o r p or a t e i ma g e p la ys mo d e r a t i n g r o l e b et w e e n t h e r e la t i o ns h ip b et w e e n d i s t r ib u t i v e , p r oc e d u r a l, a n d i nt er a c t i o na l ju s t ic e s a n d r e c o v er y s a t is f a c t i o n ( h 2 a , h 2 b , h 2 c ) . distributive justice recovery satisfaction procedural justice interactional justice corporate image investigating the moderating role of corporate image in the relationship between perceived justice and recovery satisfaction: evidence from indian aviation industry 79 4 . r e s e a r c h m e t ho d o l o g y 4 . 1 . m e as ur e me nt s c a l e s m u lt ip l e it e m s c a l e s w er e u s e d t o me a s u r e ea c h c o ns t r u c t i n t h is s t u d y. m os t l y va l i da t e d mea s u r i n g s c a l e s w er e u s e d w it h s l i g ht mo d i f i c a t i o n s t o me e t t h e ob j e c t i v es o f t h e s t u d y. a l l t h e s c a l e s u n d e r s t u dy w er e mea s u r e d o n s e v e n p o i n t l i k er t ’ s s c a l e r a n g i n g f r o m ‘ s t r o n g l y d is a gr e e ” ( 1 ) t o “ s t r o n g l y a gr e e ” ( 7 ) . w h er ea s i n t h e c a s e of c or p or a t e i ma g e, t hr e e it e m s w er e o n s e v e n p o i nt s c a l e of “ v er y l o w ” a n d “ v er y h i g h” a n d t h e 4 t h it e m w it h “ m u c h w or s e” a n d “ m u c h b et t er ” . t o me e t t h e o b j e c t i v e s of t h e s t u d y, d is t r ib u t i v e ju s t ic e wa s mea s u r e d b y a f ou r it e m s c a l e a d op t e d f r o m b l o d g et t et a l. , ( 1 9 9 7 ) a n d s m i t h et a l. , ( 1 9 9 9 ) . t h e p r o c e du r a l ju s t ic e wa s mea s u r e d b y a f ou r it e m s c a l e a da p t e d f r o m bl o d g e t t et a l. ( 1 9 9 7 ) a n d k a r a t ep e ( 2 0 0 6 ) . t o mea s u r e t h e i nt er a c t i o na l ju s t i c e c o ns t r u c t , w e u s e d a f i v e it e m s c a l e a da p t e d f r o m k a r a t ep e ( 2 0 0 6 ) , s mit h e t a l. , ( 1 9 9 9 ) , a n d t a x et a l. ( 1 9 9 8 ) . t h e r ec o v e r y s a t is f a c t i o n s c a l e wa s mea s u r e d b y a f ou r it e m s c a l e a da p t e d f r o m m a x ha m a n d n e t e me y er ( 2 0 0 2 ) . t h e f ou r it e m s c a l e f or c or p or a t e i ma g e wa s a da p t e d f r o m z e it ha ml ( 1 9 8 8 ) , a n d s e l n es ( 1 9 9 3 ) . 4 . 2 . d at a c o l le c t io n p r i ma r y da t a w er e c o l l e c t e d f r o m p e o p l e w h o t r a v e l b y a ir l i n es op er a t i n g i n i n dia n a v ia t i o n i n du s t r y. t h e r es p o n d e n t s w er e a p p r oa c h e d b y t h e r es ea r c h er a t a ir p or t s a t t h e t i m e, w h e n t h e y w er e wa it i n g t o b oa r d p la n e. t h e p r o c e du r e o f a p p r oa c h i n g a ir c u s t o mer s a t t ha t t i me w a s h e lp f u l w it h o u t ha v i n g t o ob t a i n c u s t o mer r ec or ds i n a d va nc e b y r e qu es t i n g d e p a r t me nt of i n d ia n a via t i o n. a s c r e e n i n g qu e s t i o n wa s a s k e d t o c h e c k i f r es p o n d e n t s e n c ou nt er e d a n y s er vi c e f a i lu r e w it h a ir l i n e o p er a t or s du r i n g t h e p a s t s ix mo n t hs . t h e s t r u c t u r e d qu e s t i o n na ir e wa s a d mi n i s t er e d a mo n g t a r g et p o p u la t i o n b y r es ea r c h er h i ms e l f . s i nc e, t h e qu e s t i o n na ir e wa s a da p t e d f or m p a s t s t u di es , s o it wa s i mp er a t i v e t o t es t it f or s u it a b i l it y t o i n d ia n c o nt ex t a n d s er v ic e i n d u s t r y. a p i l ot s t u d y wa s c o n du c t e d t o a s c er t a i n t h e s u it a b i l it y of t h e c o ns t r u c t s ( n= 5 2 ) i n i n d ia n a v ia t i o n i n du s t r y s et t i n g. r e lia b i l it y c h e c k ha s b e e n p er f or me d t o k n o w t h e s u it a b i l it y o f t h e c o ns t r u c t f or t h is i n du s t r y a n d c o nt ex t . a f t er a s c er t a i n i n g t h e s u it a b il it y of t h e s t u d y c o n s t r u c t s , t h e qu e s t i o n na ir e wa s a d mi n is t er e d t o t h e c u s t o me r ’ s s a mp l e s i z e o f 2 1 7 r es p o n d e n t s . s i nc e p i l ot s t u d y r es u lt s w er e i n t h e f a v o u r o f t h e c o n s t r u c t s , t h os e r es p o n s es w er e a ls o i nc lu d e d i n t h e s a mp l e. o u t o f t h e 2 1 7 c ol l e c t e d , 1 9 qu e s t i o n na ir es w e r e e it h er i n c o mp l et e or t h e a ns w er s w er e f ou n d t o b e u nr e l ia b l e , l ea v i n g a r e ma i n i n g 1 9 8 qu es t i o n na ir es t ha t w er e r et a i n e d f or f u r t h er da t a a na l ys is . 4 . 3 . d e mo g r a p hi c p r o f i l e t h e s t r u c t u r e d qu e s t i o n na ir e u s e d i n t h e s t u d y i nc lu d e d a s e c t i o n o n c u s t o mer ’ s p r of i l e, a s va r i ou s d e mo gr a p h ic a n d ot h er f a c t or s w er e l i k e l y t o i nf lu e n c e t h e c u s t o m er s er v ic e s o f f er e d b y t h e c o mp a n y. i n f or ma t i o n o n d e mo gr a p h ic a n d s o c i o e c o n o mi c f ea t u r es m a y a ls o b e h e l p f u l t o p r o v i d e s er v i c e s e f f e c t i v e l y. a d e mo gr a p h ic p r o f i l e of t h e r es p o n d e n t s c o ns is t e d o f a g e, g e n d er , ma r it a l s t a t u s , e du c a t i o na l q u a l if i c a t i o ns , e mp l o y me n t s t a t u s , a n d mo n t h l y i n c o me . a mo n g t h e r es p o n d e n t s 6 1 . 4 p er c e n t w er e of t h e a g e gr ou p 2 8 t o 4 0 y ea r s , a nd 2 3 p er c e nt o f 2 7 y ea r s a n d b e l o w a g e gr o u p . a g o o d mi x o f ma l e a n d f e ma l e r es p o n d e n t s wa s f ou n d i n t h e da t a c o l l e c t e d c o mp r is i n g ma l es w it h 5 2 . 3 p er c e n t a n d f e ma l e s w it h 4 7 . 7 p er c e n t . t h e ma j or it y o f t h e r es p o n d e n t s w er e ma r r i e d ( 6 2 . 5 p er c e nt ) , a s p er c e nt a g e of u n ma r r i e d wa s 3 7 . 5 p er c e n t . t h er e w er e mo r e p os t gr a du a t e r es p o n d e n t s ( 5 9 . 6 p er c e nt ) t ha n gr a du a t e a n d ot h er s . m or e o v e r t h e o c c u p a t i o na l va r ia b l e s s h o w e d t ha t t h e r es p o n d e n t s ha d ma j or p or t i o n o f p r of e s s i o na ls ( 7 2 . 4 p er c e n t ) , w h er e a s t h e p er c e nt a g e of s e l f e mp l o y me nt , ot h er s w er e 1 9 . 5 p er c e nt , 5 . 7 p er c e nt r es p e c t i v e l y. i n t h e s u r v e y it wa s a ls o f ou n d t ha t t h e r es p o n d e n t s c a me f r o m d if f er e nt i n c o me b a c k g r ou n ds ; a ma j or p a r t of t h e m ( 6 4 . 7 p er c e nt ) ea r n e d mor e t ha n r s . 4 0 , 0 0 0 p er mo nt h b u t l e s s t ha n r s . 4 0 , 0 0 0 w er e o n l y 3 5 . 3 p er c e nt . international review of management and marketing, vol. 1, no.4, 2011, pp.74-85 80 5 . d a t a a n a l y s i s a n d fi n d i n g s t h e s p s s s of t wa r e p a c ka g e 1 7 . 0 v er s i o n w a s u s e d f or a na l y z i n g t h e da t a c ol l e c t e d f or t h is s t u d y. t h e m ic r os of t – e x c e l s of t wa r e p a c ka g e wa s a ls o u s e d t o ma k e s o m e b a s i c c o mp u t a t i o ns l i k e c a lc u l a t io n of t h e a v er a g e va lu es , s t a n da r d d e v ia t i o n et c . 5 . 1 . r e l i ab i l it y t e s t t o t es t t h e r e l ia b i lit y of t h e s et o f it e ms f or mi n g t h e s c a l e a mea s u r e o f c o ns t r u c t r e l ia b i l it y ( c r o n b a c h’ s a lp ha ) wa s c o mp u t e d. c r o nb a c h ’ s a lp ha is u s e f u l i n m ea s u r i n g h o w w e l l a s e t of va r ia b l e s or it e ms me a s u r e a s i n g l e, o n e d i me n s i o na l la t e nt c o ns t r u c t . t h e a l p ha va l u es o f 0 . 7 0 or gr ea t er r ep r es e n t s a t is f a c t or y r e l ia b i l it y of t h e it e ms mea s u r in g t h e c o ns t r u c t ( d i me n s i o n ) a n d r e l ia b i l it y l e s s t ha n 0 . 6 0 is c o n s i d e r e d p o or ( s e ka r a n, 2 0 0 3 ) . i n t h e c u r r e nt s t u d y , c r onb a c h ’ s a lp ha va lu e f or a l l c o ns t r u c t s r a n g e s f r o m 0 . 7 5 2 t o 0 . 9 0 3 ( s e e t a b l e 1 ) , w h i c h e ns u r es t ha t c o ns t r u c t s u s e d f or t h e s t u d y a r e qu it e r e l ia b l e. t ab l e 1 . r e l i a b i l it y a na l y s is r e s ul t s n a me o f c o ns t r uc t n o . o f it e ms c r o nb a c h’ s a lp ha v a l ue n o . o f r e s po nd e nt s c or p or a t e i ma g e 4 0 . 7 8 6 1 9 8 r e c o v er y s a t is f a c t i o n 4 0 . 7 5 2 1 9 8 d is t r ib u t i v e j u s t i c e 3 0 . 9 0 3 1 9 8 p r oc e du r a l j u s t ic e 3 0 . 8 1 2 1 9 8 i nt er a c t i o na l j u s t i c e 5 0 . 7 9 6 1 9 8 5.2. exploratory factor analysis e x p l or a t or y f a c t or a na l ys is wa s p er f or me d i n t h e s t u d y t o c h e c k w h e t h e r t h e da t a c o l l e c t e d a r e c o ns is t e nt w it h t h e p r es c r ib e d s t r u c t u r e. t h e r es u lt s f o r e x p l or a t or y f a c t or a na l ys is w it h k m o ( 0 . 8 8 3 ) , ba r t l et t ’ s t es t o f s p h er ic it y ( c h i s qu a r e 1 6 7 3 . 3 1 4 , s i g n if i c a n c e 0 . 0 0 0 ) p r o v e s t ha t e x p l or a t or y f a c t or a na l ys is d o n e w it h t h e e l e v e n s t u d y va r ia b l e s is e f f e c t i v e. t hr e e f a c t or s w er e e x t r a c t e d u s i n g t h e met h o d s o f p r i n c ip a l c o mp o n e n t a na l ys is . t h e t hr e e f a c t or s ex t r a c t e d f r o m t h e s t u d y va r ia b l e s e x p la i n 7 7 . 7 4 % o f t h e va r ia n c e. p r i n c i p a l c o mp o n e nt a na l ys is u s i n g va r i ma x r ot a t i o n w i t h k a is er n or ma l iz a t i o n wa s e mp l o y e d t o f i n d t h e d i me n s i o na l it y o f t h e da t a s et c o l l e c t e d . t h e l oa d i n gs o f t h e d i me n s i o n s i d e n t i f i e d i n f a c t or a na l ys is w er e s t a b l e. e a c h o f t h e va r ia b l e l oa d e d h i g h o n a s i n g l e f a c t or . t h e s e l e c t e d f a c t or s w er e b a s e d o n e i g e n va lu e s e qu a l t o or gr ea t er t ha n 1 . 0 0 . c u t o f f p o i nt wa s 0 . 4 0 i n c a s e o f c u r r e n t s t u d y. f a c t or l oa d i n gs ma t r ix is s h o w n i n t a b l e 2 . 5.3. multiple regression analysis h i er a r c h ic a l r e gr es s i o n a na l ys e s w er e c o n du c t e d o n t h e p r i ma r y da t a c ol l e c t e d t o t es t t h e s t u d y h yp ot h es e s . m or e o v er , s a me t yp e of r e gr es s i o n a t t e mp t e d t o i n v es t i ga t e t h e r e la t i o ns h ip b et w e e n p er c e i v e d ju s t ic e d i me n s i o ns a n d r ec o v er y s a t is f a c t i o n a n d t h e mo d e r a t i n g r ol e of c or p o r a t e i ma g e i n t h e r e la t i o ns h ip b et w e e n p er c e i v e d ju s t ic e a n d r ec o v er y s a t is f a c t i o n. t h e f ir s t mo d e l of t h e h i er a r c h i c a l r e gr es s i o n a na l ys es i n d ic a t e d t ha t a l l t hr e e ju s t i c e d i m e n s i o ns of d is t r ib u t i v e ju s t ic e, p r oc e d u r a l ju s t ic e, a n d i nt er a c t i o na l ju s t ic e a r e p os it i v e l y r ela t e d t o r e c o v er y s a t is f a c t i o n ( s e e t h e t a b l e 3 ) . t hi s p os it i v e r e la t i o ns h ip of p er c e i v e d ju s t i c e d i me n s i o ns w it h r ec o v er y s a t is f a c t i o n s u p p or t s h yp ot h e s e s h 1 a , h 1 b , a n d h 1 c . t h is mo d e l s u p p or t s t h e f a c t t ha t t h e e f f e c t o f d is t r ib u t i v e ju s t ic e o n r ec o v er y s a t is f a c t i o n wa s s t r o n g e r t ha n i nt er a c t i o na l ju s t ic e, a n d s u b s e qu e n t l y, e f f e c t o f i nt er a c t i o na l ju s t i c e o n r e c o v er y s a t is f a c t i o n wa s s t r o n g er t ha n p r o c e du r a l ju s t ic e. investigating the moderating role of corporate image in the relationship between perceived justice and recovery satisfaction: evidence from indian aviation industry 81 t ab l e 2 . f a c t o r l o a d i ng s m a t r i x f a c t o r l o a d i ng s v a r i ab l e 1 2 3 i nt er a c t i o na l j u s t i c e1 0 . 4 8 3 . 8 9 2 i nt er a c t i o na l j u s t i c e2 . 9 2 6 0 . 4 5 1 i nt er a c t i o na l j u s t i c e3 0 . 5 1 3 . 8 0 8 0 . 4 9 1 i nt er a c t i o na l j u s t i c e4 0 . 4 4 1 . 6 5 6 i nt er a c t i o na l j u s t i c e5 0 . 4 1 1 . 5 8 5 p r oc e du r a l j u s t ic e 1 0 . 5 1 1 . 7 7 0 p r oc e du r a l j u s t ic e 2 0 . 4 2 1 . 6 1 1 p r oc e du r a l j u s t ic e 3 0 . 4 3 3 . 8 2 3 d is t r ib u t i v e j u s t i c e 1 . 8 1 3 0 . 5 4 2 d is t r ib u t i v e j u s t i c e 2 . 8 8 3 0 . 5 5 1 d is t r ib u t i v e j u s t i c e 3 . 7 1 6 0 . 4 7 2 t ab l e 3 . multiple regression results change statistics model variable beta value (stnd.) r r square adjusted r square f value r square change f change p r oc e d u r a l j u s t i c e 0 . 3 1 7 d i s t r i bu t i ve j u s t i c e 0 . 4 8 3 1 i n t er a c t i on a l j u s t i c e 0 . 3 9 3 0 . 8 5 1 0 . 7 2 5 0 . 7 0 8 6 3 . 6 3 7 0.725 6 3 . 6 3 7 t h e s ec o n d mo d e l o f t h e a na l ys is i n v e s t i ga t e d t h e d ir e c t ef f e c t o f c or p or a t e i ma g e o n r e c o v er y s a t is f a c t i o n. r es u lt s o f t h e s t u d y p r o v i d e d e v i d e n c e s o f d ir ec t p os it i v e i mp a c t o f c or p or a t e i ma g e o n r ec o v e r y s a t is f a c t i o n ( s e e t h e t a b l e 4 b e l o w ) . t ab l e 4 . multiple regression results change statistics model variable beta value (stnd.) r r square adjusted r square f value r square change f change p r oc e d u r a l j u s t i c e 0 . 2 1 3 d i s t r i bu t i ve j u s t i c e 0 . 2 5 3 i n t er a c t i on a l j u s t i c e 0 . 2 6 4 2 c or p or a t e i m a g e 0 . 5 2 1 0 . 8 8 5 0 . 7 8 3 0 . 7 7 1 3 2 . 2 0 6 .0798 3 2 . 2 0 6 international review of management and marketing, vol. 1, no.4, 2011, pp.74-85 82 5 . 4 . m o de r a t io n a na l y s is t hir d mo d e l of t h e s t u d y r e v ea l e d t h e mo d er a t i n g e f f e c t a n d i nt er a c t i o n t er ms b et w e e n p er c e i v e d ju s t ic e d i me n s i o ns a n d c or p or a t e i ma g e ( s e e t h e t a b l e 5 ) . a l l t h e t hr e e s t a t e d h yp ot h es e s h 2 a , h 2 b , a n d h 3 c w er e s u p p or t e d. i t m ea ns t ha t i n a ll t h e t hr e e d i me n s i o ns , i nt er a c t i o n t er ms w er e s i g n i f i c a nt , w h i c h s h o ws t ha t c or p or a t e i ma g e p la ys a mo d er a t i n g r o l e b et w e e n p er c e i v e d ju s t ic e d i me n s i o ns a n d r ec o v e r y s a t is f a c t i o n, n ot r e j e c t i n g a n y h yp o t h es e s . t ab l e 5 . m o de r at io n a na l y s is r e s ul t s change statistics model moderating variable beta value (stnd.) r r square adjusted r square f value r square change f change c or p or a t e i m a g e x p r oc e d u r a l j u s t i c e 0 . 2 0 7 c or p or a t e i m a g e x d i s t r i bu t i ve j u s t i c e 0 . 7 1 2 3 c or p or a t e i m a g e x i n t er a c t i on a l j u s t i c e 0 . 4 0 4 0 . 9 2 6 0 . 8 5 8 0 . 8 4 2 9 . 8 9 7 0.073 9 . 8 9 7 6 . d i s c u s s i o n t h e r es u lt s of t h e s t u d y r e v ea l e d t ha t a ll t h e t hr e e d i me n s i o ns of p er c e i v e d ju s t ic e na me l y; d is t r ib u t i v e ju s t i c e, p r o c e du r a l ju s t ic e , a n d i nt er a c t i o na l j u s t i c e a r e p os it i v e l y r e la t e d t o r ec o v e r y s a t is f a c t i o n. t h e s t u d y mo d e l s u p p or t s t h e f a c t t ha t t h e e f f e c t o f d is t r ib u t i v e ju s t i c e o n r ec o v er y s a t is f a c t i o n wa s s t r o n g e r t ha n i nt er a c t i o na l ju s t i c e. t h is f i n d i n g o f t h e s t u d y is c o n s is t e nt w it h t h e p a s t s t u d i e s c o n du c t e d b y m a x ha m a n d n e t e m e y e r , ( 2 0 0 2 ) , a n d s mit h, b o lt o n, a n d w a g n er , ( 1 9 9 9 ) . f u r t h er it wa s f ou n d t ha t t h e ef f e c t of i nt er a c t i o na l ju s t i c e o n r ec o v er y s a t is f a c t i o n is s t r o n g er t ha n p r oc e d u r a l ju s t ic e . t h e i mp a c t of d is t r ib u t i v e ju s t ic e o n r ec o v er y s a t is f a c t i o n a p p ea r s t o b e s t r o n g er t ha n t ha t of i nt er a c t i o na l ju s t ic e , w h i c h is c o ns is t e n t w it h t h e p r e v i ou s f i n d i n gs o f s mit h, b o lt o n, a n d w a g n er , ( 1 9 9 9 ) a n d m a x ha m a n d n et e m e y e r ( 2 0 0 2 ) . t he mo me n t ou s r o l e of d is t r ib u t i v e ju s t ic e i n i n f lu e n c i n g c u s t o me r s a t is f a c t i o n w ou l d b e s u p p or t e d b y f a ir dis t r ib u t i v e t r ea t me n t i n t er ms o f d is c ou nt s , r ef u n d s et c . t ha t a r e i mp or t a nt i n r et u r n i n g b a c k s a t is f a c t i o n f r o m i n d ia n a ir c u s t o m er s . t hu s , ma na g e me nt o f i n d ia n a v ia t i o n i n du s t r y s h ou l d ex e c u t e a n e f f e c t i v e wa y of d is t r ib u t i v e ju s t i c e. m or e o v er , i n d ia n a via t i o n ma na g e me n t s h ou l d a ls o i mp l e me nt a n e f f e c t i v e wa y of i nt er a c t i o na l ju s t ic e s u c h a s a p p ea r i n g c ou r t e ou s a n d r es p e c t f u l, of f er i n g a p ol o g i e s , a n d s h o w i n g e mp a t h y a n d a t t e nt i v e n e s s , s i n c e i nt er a c t i o n ju s t ic e wa s f ou n d a n i mp or t a nt p r e d ic t or of r ec o v er y s a t is f a c t i o n i n t h e s t u d y. i nt er a c t i o n t er ms of a l l t h e t hr e e d i me n s i o n s of t h e p er c e i v e d ju s t ic e w er e f ou n d s i g n if i c a nt , w h i c h s u p p or t s t h e f a c t t h a t c or p or a t e i ma g e p la ys a mo d er a t i n g r ol e i n t h e r e la t i o ns h ip a mo n g a l l t h e t hr e e d i me n s i o ns o f p er c e i v e d ju s t ic e . t h is r es u lt s u p p or t s t h e p l ea t ha t c or p or a t e i ma g e w i l l a f f e c t t h e e f f e c t s of p r oc e d u r a l ju s t ic e o n r e c o v er y s a t is f a c t i o n. 6 . 1 . m a nag e r i a l i mp l i c a t io ns fo t he s t udy p r es e nt s t u d y p r op os e s f o l l o w i n g k e y i mp l ic a t i o n s f or i n d ia n a v ia t i o n ma na g e m e n t b a s e d o n t h e f i n d i n g s :  t h e a v ia t i o n ma na g e me nt s h o u l d f o c u s o n t r a in i n g e mp l o y e e s t o ma k e t h e m u n d er s t a n d a b ou t t h e a s p e c t s o f p er c e i v e d ju s t i c e, t h e f a ir d is t r ib u t i v e t r ea t me n t , i nt er p er s o na l c o m mu n i c a t i o n is i m p or t a nt t o t h e c u s t o me r s .  i n or d er t o i n c r ea s e d is t r i b u t i v e ju s t i c e w h ic h ha d a s t r o n g e r r e la t i o ns h i p w it h r ec o v er y s a t is f a c t i o n; ma na g e me n t of i n dia n a v ia t i o n s h o u l d d e v e l o p s p ec if i c mo n e t a r y c o mp e n s a t i o n gu i d e l i n e s w h i l e t r a i n i n g b ot h f u l l t i m e a n d p a r t t i me e mp l o y e e s t o qu i c k l y a n d p r op er l y r ea c t t o va r i ou s s er v ic e f a i lu r e investigating the moderating role of corporate image in the relationship between perceived justice and recovery satisfaction: evidence from indian aviation industry 83 s it u a t i o ns . m or e o v er , t h e y n e e d t o t r a i n f r o nt d e s k s t a f f t o of f er p r op e r a r r a ys of c o mp e ns a t i o n s w it h s i mi la r va lu e s a nd l e t t h e ir c u s t o mer s s e l e c t t h e b e s t c o mp e ns a t i o n.  r e ga r d i n g, d is t r i b u t i v e t r ea t me n t t r a i n i n g, t h e y s h ou l d a ls o e mp l o y a t r a in i n g p r o gr a m, w h i c h s p e c i f i c a l l y i l lu s t r a t es t h e r ea c t i o ns i mp r o v i n g t h e i nt er a c t i o na l ju s t i c e p r a c t ic e t hr ou g h t ea c h i n g h o w t o p r op er l y t r ea t a n gr y a n d f r u s t r a t e d c u s t o mer s , w it h t h e h e lp of e mp a t h y a n d a p o l o g y. 6 . 2 . l i mit a t io ns a nd f ut ur e r e s e a r c h l i k e a l l ot h er s t u d i es , t h is r es ea r c h a ls o s u f f er s f r o m va r i ou s l i mi t a t i o ns , t ha t c u r b t h e g e n er a l i z a t i o n of t h e f i n d i n gs a n d p r o v i d e s a v e n u es t o t h e r es ea r c h er s f or f u t u r e r es ea r c h. s i nc e t h e p r es e n t s t u d y o n l y f o c u s e d o n o n e s er v ic e i n du s t r y ( i n d ia n a ir l i n e i n d u s t r y ) a n d i n a s p e c i f ic d e v e l o p i n g na t i o n, t h e r es u lt s c a n n o t b e g e n e r a l iz e d t o ot h er s er v i c e s e c t or s a n d d i f f er e nt g e o gr a p h i c a l l oc a t i o ns . h e n c e , f u t u r e r es ea r c h c a n r ep l ic a t e t h is s t u d y i n ot h er s er v ic e s e c t or s a n d di f f er e n t c ou nt r i es t o va l i da t e t h e r es u lt s o f t h is s t u d y. m or e o v er , f u t u r e r es ea r c h ma y a ls o s ea r c h f e w ot h er mo d er a t i n g va r ia b l e s i n t h e r e la t i o n s h ip b et w e e n p er c e i v e d ju s t ic e w it h s er v ic e r e c o v er y a n d r ec o v er y s a t is f a c t i o n. 7 . c o n c l u s i o n s e a r li er r es ea r c h i n t h e a r ea of s er v ic e r e c o v e r y ha s h e l p e d t h e r es ea r c h er s t o u n d er s t a n d t h e i mp or t a nt r o l e o f p er c e i v e d ju s t ic e o n r ec o v er y s a t is f a c t i o n. t h ou g h, t h e c u r r e nt r es ea r c h f u r t h er mo r e i n v e s t i ga t e d t h e r o l e o f c or p or a t e i ma g e i n s er vi c e r ec o v e r y s it u a t i o ns . c u r r e nt s t u d y a t t e mp t s t o b r i d g e t h e ga p s i n t h e lit er a t u r e b y i n v e s t i ga t i n g p er c e i v e d ju s t i c e d i me n s i o ns a n d t o ex a mi n e w h et h er b r a n d i ma g e p la ys mo d e r a t i n g r o l e i n t h e r e la t i o ns h ip s b et w e e n p er c e i v e d ju s t ic e a n d r e c o v er y s a t is f a c t i o n. t h e f ir s t mo d e l of t h e h i er a r c h i c a l r e gr es s i o n a na l ys es i n d ic a t e d t ha t a l l t hr e e ju s t i c e d i m e n s i o ns of d is t r ib u t i v e ju s t ic e, p r oc e d u r a l ju s t ic e, a n d i nt er a c t i o na l ju s t ic e a r e p os it i v e l y r e la t e d t o r e c o v er y s a t i s f a c t i o n, a n d t h e e f f e c t of d is t r ib u t i v e ju s t ic e o n r ec o v er y s a t is f a c t i o n wa s s t r o n g er t ha n i nt er a c t i o na l ju s t ic e, a n d s u b s e qu e nt l y, ef f e c t o f i nt er a c t i o na l ju s t ic e o n r e c o v er y s a t is f a c t i o n wa s s t r on g e r t ha n p r o c e d u r a l j u s t i c e. t h e r es u lt s a ls o c o n f ir me d t ha t a l l t hr e e i nt er a c t i o n t er ms w er e s i g n if i c a nt , w h i c h s h o ws t ha t c or p o r a t e i ma g e p la ys a mo d e r a t i n g r o l e b et w e e n p er c e i v e d ju s t i c e d i me n s i o n s a n d r e c o v er y s a t is f a c t i o n. r e fe r e n c e s a da ms , j . s . ( 1 9 6 3 ) . t o wa r d a n u n d er s t a n d i n g o f i n e q u it y. j ou r na l o f ab n or ma l a n d s oc ia l p s yc h o l o g y, 6 7 , 4 2 2 3 6 . a n dr ea s s e n, t . w . , l in d e s t a d, b. ( 1 9 9 8 ) . c u s t o me r l o ya lt y a n d c o m p l e x s er v ic e s : t h e i mp a c t o f c or p or a t e i ma g e o n qu a l it y, c u s t o me r s a t is f a c t i o n a n d l o ya lt y f or c u s t o me r s w it h va r y i n g d e gr e e s of s er v ic e ex p er t is e. i nt er na t i o na l j ou r na l of s er v i c e i n d u s t r y m a na g e m e n t , 9 ( 1 ) , 7 – 2 3 . b it n er , m . j . ( 1 9 9 3 ) . m a na gi n g t h e e v i d e n c e o f s er v ic e. i n s c h e u i n g, e . e . , c hr is t op h er , w . f . ( e ds ) , t h e s er v i c e q u a l it y h a n d b o o k, a mer i c a n m a na g e m e n t as s oc ia t i o n ( am ac o m ) , n e w y or k, n y, 3 5 8 7 0 . b l o d g et t , j . g . , h il l, d . j . , t a x, s. s . ( 1 9 9 7 ) . t h e ef f e c t s o f d is t r ib u t i v e, p r oc e d u r a l, a n d i nt er a c t i o na l ju s t ic e o n p os t c o mp la i nt b e ha v i ou r . j ou r na l of r et a i l i n g, 7 3 ( 2 ) , 1 8 5 2 1 0 . c h eb a t , j . c . , s lu s a r c z y k, w . ( 2 0 0 5 ) . h o w e m ot i o ns me d ia t e t h e e f f e c t s of p er c e i v e d ju s t ic e o n l o ya lt y i n s er v i c e r e c o v er y s it u a t i o ns : a n e mp ir ic a l s t u d y. j ou r na l o f bu s i n es s r es ea r c h, 5 8 ( 5 ) , 6 6 4 6 7 3 . c l e m me r , e . c . , s c hn e i d e r , b. ( 1 9 9 6 ) . f a ir s e r vi c e. i n t . a. s wa r t z , d . e . b o w e n, & s . w . br o w n ( e ds . ) , a d va nc e s i n s er v i c es ma r k et i n g a n d ma na g e me nt ( p p . 1 0 9 – 1 2 6 ) . g r e e n w i c h, c t : j ai p r es s . international review of management and marketing, vol. 1, no.4, 2011, pp.74-85 84 c l e m me r , e . c . ( 1 9 8 8 ) . t h e r o l e o f f a ir n es s i n c u s t o mer s a t is f a c t i o n w it h s er v i c es . d o c t or a l d is s er t a t i o n, p s yc h o l o g y d e p a r t me nt , u n i v e r s it y of m a r y la n d, c o l l e g e p a r k, m d . d a na h er , p . j . , m a t t s s on, j . ( 1 9 9 4 ) . c u s t o me r s a t is f a c t i o n du r i n g t h e s er v ic e d e l i v er y p r oc e s s . e u r op ea n j ou r na l of m a r k e t i n g, 2 8 , 5 1 6 . d a v i d o w, m . ( 2 0 0 3 ) . o r ga n iz a t i o na l r es p o n s e s t o c u s t o m er c o mp la i nt s : w ha t w or ks a n d w ha t d o es n ’ t ? j ou r na l of s er v i c e r es ea r c h, 5 ( 3 ) , 2 2 5 5 0 . d e l r i o l a nz a , a. b. , va z qu e z c a s i e l l e s , r . , d ia z m a r t in a. m . ( 2 0 0 9 ) . s a t is f a c t i o n w it h s er v i c e r e c o v er y : p er c e i v e d ju s t i c e a n d e mo t i o na l r es p o ns e s . j ou r na l o f bu s i n es s r es ea r c h, 6 2 ( 8 ) , 7 7 5 7 8 1 . d ob n i, d . , z i n k ha n, g . m . ( 1 9 9 0 ) . i n s ea r c h o f b r a nd i ma g e : a f ou n da t i o n a na l ys is , g o l db er g, m e , g or n, g , p o l la y, r w . a d va n c es f or c o ns u me r r es ea r c h, 1 7 , 1 1 0 – 1 1 8 . d os s a nt os , c . p . , f er na n d e s , d . v. h . ( 2 0 0 8 ) . a nt e c e d e n t s a n d c o ns e qu e n c e s o f c o ns u me r t r u s t in t h e c o nt e x t o f s er v ic e r e c o v er y. br a z il ia n a d mi n i s t r a t i v e r e v i e w, 5 ( 3 ) , 2 2 5 2 4 4 . g o o d w i n, c . r os s , i . ( 1 9 9 2 ) . c o ns u mer r es p o ns e s t o s er vi c e f a i lu r es : i n f lu e n c e o f p r oc e d u r a l a n d i nt er a c t i o na l f a ir n e s s p er c e p t i o n s . j ou r na l o f bu s i n es s r es ea r c h, 2 5 , 1 4 9 6 3 . g r o nr o os , c . ( 1 9 8 8 ) . s er v ic e q u a l it y : t h e s ix c r it er ia of g o o d p er c e i v e d s er v ic e q u a l it y. r e v i e w o f bu s i n e s s [ s t j o h n ’ s u n i v er s it y] , 9 ( 3 ) , 1 0 1 3 . h a , j . , ja ng, s . ( 2 0 0 9 ) . p er c e i v e d ju s t ic e i n s er v ic e r ec o v er y a n d b e ha v i ou r a l i nt e nt i o ns : t h e r ol e of r e la t i o ns h ip qu a l it y. i nt er na t i o na l j ou r na l o f h os p it a l it y m a na g e me n t , 2 8 , 3 1 9 – 3 2 7 . h o f f ma n, k . d . , k e l l e y, s . w . , r ot a s k y, h . m . ( 1 9 9 5 ) . t r a c k i n g s er v i c e f a i lu r es a n d e mp l o y e e r e c o v er y ef f or t s . j ou r na l o f s er v ic e s m a r k et i n g, 9 ( 2 ) , 4 9 6 1 . k a r a nd e, k . , m a g n i n i, v. p . , t a m, l . ( 2 0 0 7 ) . r ec o v er y v o ic e a n d s a t is f a c t i o n a f t e r s er v ic e f a i lu r e : a n ex p er i m e n t a l i n v e s t i ga t i o n o f me d i a t i n g a n d mo d e r a t i n g f a c t or s . j ou r na l of s er vi c e r es ea r c h, 1 0 ( 2 ) , 1 8 7 – 2 0 3 . k a r a t ep e, o . m . ( 2 0 0 6 ) . c u s t o mer c o mp la i n t s a nd or ga n iz a t i o na l r es p o ns e s : t h e e f f e c t s of c o mp la i nt s ’ p er c e p t i o n s o f ju s t ic e o n s a t is f a c t i o n a n d l o ya lt y. i nt er na t i o na l j ou r na l of h os p it a l it y m a na g e m e nt , 2 5 ( 1 ) , 6 9 – 9 0 . k a u , a. k . , l o h, e . w . y. ( 2 0 0 6 ) . t h e e f f e c t s of s er v ic e r e c o v er y o n c o ns u me r s a t is f a c t i o n : a c o mp a r is o n b e t w e e n c o mp l a ina nt s a n d n o n c o mp la i na nt s . j ou r na l of s er v i c es m a r k et i n g, 2 0 ( 2 ) , 1 0 1 1 1 . k e l l er , k . l . ( 1 9 9 3 ) . c on c ep t u a l iz i n g, mea s u r in g, a n d ma na g i n g c u s t o m er b a s e d b r a nd e qu it y. j ou r na l of m a r k et i n g, 5 7 ( 1 ) , 1 – 2 2 . k i m, h . b. , k i m, w . g . ( 2 0 0 5 ) . t h e r e la t i o n s h ip b et w e e n b r a n d e q u it y a n d f ir ms ’ p er f or ma n c e i n lu x u r y h ot e l s a n d c ha i n r es t a u r a nt s . t ou r is m m a na g e me n t , 2 6 , 5 4 9 5 6 0 . k i m, t . , k i m, w . g . , k i m, h . b. ( 2 0 0 9 ) . t h e e f f e c t s o f p er c e i v e d ju s t ic e o n r e c o v er y s a t is f a c t i o n, t r u s t , wor d of mo u t h, a n d r e v i s it i nt e n t i o n i n u p s c a l e h ot e l s . t ou r is m m a na g e m e n t , 3 0 , 5 1 – 6 2 . l a i, f . , g r if f i n b. m . , ba b i n, b. j . ( 2 0 0 9 ) . h o w qu a l it y, va lu e, i ma g e, a n d s a t is f a c t i o n c r ea t e l o ya lt y a t a c h i n e s e t e l e c o m. j ou r na l o f bu s i n es s r es ea r c h, 6 2 , 9 8 0 – 9 8 6 . m a t t ila , a. ( 2 0 0 1 ) . t h e e f f e c t i v e n e s s of s er v ic e r ec o v e r y i n a mu lt i i n d u s t r y s et t i n g. j ou r na l of s er v ic e s m a r k et i n g, 1 5 ( 7 ) , 5 8 3 9 6 . m a x ha m, j . i i i , n et e m e y e r , r . ( 2 0 0 2 ) . a l o n g it u d i na l s t u d y of c o mp la i n i n g c u s t o mer s ’ e va lu a t i o n s of mu lt ip l e s er v ic e f a i lu r es a n d r e c o v er y e f f or t s . j ou r na l of m a r k et i n g, 6 6 ( 4 ) , 5 7 7 1 . m c c o l lk e n n e d y , j . r . , a nd s p a r ks , b. a. ( 2 0 0 3 ) . ap p l ic a t i o n of f a ir n e s s t h e or y t o s er v ic e f a i lu r es a n d s er vi c e r e c o v er y. j ou r n a l of s er v ic e r es ea r c h, 5 , 2 5 1 6 7 . investigating the moderating role of corporate image in the relationship between perceived justice and recovery satisfaction: evidence from indian aviation industry 85 m c c o l l ou g h, m . a. ( 2 0 0 0 ) . t h e e f f e c t o f p er c e i v e d ju s t i c e a n d a t t r ib u t i o n r e ga r d i n g s er v ic e f a i lu r e a n d r ec o v er y o n p o s t r ec o v er y c u s t o me r s a t is f a c t i o n a n d s er v ic e qu a l it y a t t r ib u t es . j ou r na l o f h os p it a l it y & t ou r is m r es ea r c h, 2 4 ( 4 ) , 4 2 3 4 4 7 . n gu y e n , n . , g a s t o n l e b la n c , g . ( 2 0 0 1 ) . c o r p or a t e i ma g e a n d c or p or a t e r ep u t a t i o n i n c u s t o me r s ' r et e n t i o n d e c is i o ns i n s er v i c es . j ou r na l o f r et a i l i n g a n d c o ns u me r s er v ic e s , 8 , 2 2 7 2 3 6 . o k, c . , ba c k, k . , s ha n k l i n, c . w . ( 2 0 0 5 ) . m o d e l i n g r o l es o f s er vi c e r e c o v er y s t r a t eg y : a r e la t i o ns h ip f o c u s e d vi e w . j ou r n a l of h os p it a l it y a n d t ou r is m r es ea r c h, 2 9 ( 4 ) , 4 8 4 – 5 0 7 . p a t t er s o n, p . g . , c o w l e y, e . , p r a s o n gs u ka r n , k . ( 2 0 0 6 ) . s er v i c e f a i lu r e r ec o v er y : t h e mo d e r a t i n g i mp a c t of i n d i v i d u a ll e v e l c u lt u r a l va l u e or i e nt a t i o n o n p er c ep t i o ns of ju s t ic e. i nt er na t i o na l j ou r n a l o f r es ea r c h i n m a r k et i n g , 2 3 ( 3 ) , 2 6 3 – 2 7 7 . r ob er t s , p . w . , d o w l i n g, g . r . ( 2 0 0 2 ) . c or p o r a t e r ep u t a t i o n a n d s u s t a i n e d s u p er i or f i na nc ia l p er f or ma nc e. s t r a t e g ic m a na g e m e n t j ou r na l, 2 3 , 1 0 7 7 9 3 . s e ka r a n, u. ( 2 0 0 3 ) . r e s ea r c h me t h o d s f or b u s i n es s : a s ki l l b u i l d i n g a p p r oa c h. j o h n w i l e y a n d s o n s , i n c . s e l n e s , f . ( 1 9 9 3 ) . a n ex a mi na t i o n of t h e e f f ec t of p r o du c t p er f or ma n c e o n b r a n d r ep u t a t i o n, s a t is f a c t i o n a n d l o ya lt y. e u r op ea n j o u r na l of m a r k et i n g, 2 7 ( 9 ) , 1 9 – 3 5 . s mit h, a. , b o lt o n, r . ( 1 9 9 8 ) . a n e x p er i me n t a l i n v e s t i ga t i o n o f c u s t o mer r ea c t i o n s t o s er v ic e f a il u r e a n d r ec o v e r y e n c ou nt er s : p a r a d ox or p er i l. j o u r na l o f s er v ic e s r es ea r c h, 1 ( 1 ) , 6 5 8 1 . s mit h, a. k . , b o lt o n, r . n . , w a gn er , j . ( 1 9 9 9 ) . a m o d e l o f c u s t o me r s a t is f a c t i o n w it h s er v ic e e n c o u nt er s i n v o l v i n g f a i lu r e a n d r e c o v er y. j ou r na l o f m a r ket i n g r es ea r c h, 3 6 ( 3 ) , 3 5 6 – 3 7 3 . s p a r ks , b. n . , m c c ol lk e n n e d y, j . r . ( 2 0 0 1 ) . j u s t ic e s t r a t e g y op t i o ns f or i n c r ea s e d c u s t o mer s a t is f a c t i o n i n a s er v i c es r e c o v er y s e t t i n g. j ou r na l o f bu s i n e s s r es ea r c h, 5 4 , 2 0 9 2 1 8 . t a x, s . s . , br ow n, s . w . , c ha n dr a s h e ka r a n, m . ( 1 9 9 8 ) . c u s t o m er e va lu a t i o n o f s er v ic e c o mp la i nt e x p er i e n c es : i mp l i c a t i o n s f or r e la t i o n s h ip ma r k e t i n g . j ou r na l of m a r k et i n g, 6 2 , 6 0 7 6 . t hib a u t , j . , l . w a lk er . ( 1 9 7 5 ) . p r oc e du r a l j u s t i c e : a p s yc h o l o g i c a l a na l ys is , h i l ls da l e , n j : e r l b a u m. w a ls t er , e . , b er s c h e i d, e . , w a ls t er , w . ( 1 9 7 3 ) . n e w d ir ec t i o ns i n e q u it y r e s ea r c h. j ou r na l of p er s o na l it y a n d s o c ia l p s yc h o l o g y , 2 5 ( 2 ) , 1 5 1 7 6 . w ir t z , j . , m a t t ila , a. s . ( 2 0 0 4 ) . c o ns u me r r es p o ns e s t o c o mp e n s a t i o n s p e e d o f r ec o v e r y a n d a p o l o g y a f t er a s er v ic e f a i lu r e. i nt er na t i o na l j ou r na l o f s er v ic e i n du s t r y m a na g e m e n t , 1 5 ( 2 ) , 1 5 0 1 6 6 . z e it ha ml v. a. ( 1 9 9 8 ) . c o n s u mer p er c e p t i o ns o f p r i c e, qu a l it y, a n d va lu e : a mea ns e n d mo d e l a n d s y nt h es is of e v i d e n c e . j ou r na l of m a r k et i n g, 5 2 ( 3 ) , 2 – 2 2 . z e mk e , r . ( 1 9 9 3 ) . t h e a r t of s er v i c e r e c o v er y : f ix i n g b r o k e n c u s t o mer s a n d k e e p i n g t h e m o n y ou r s i d e. a me r ic a n m a na g e me n t as s o c ia t i o n, n e w y or k, 4 6 3 – 4 7 6 . . international review of management and marketing | vol 6 • special issue (s6) • 2016112 international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2016, 6(s6) 112-115. special issue on "management of systems of socio-economic and legal relations in modern conditions of development of education and society” services and their role in the national economy: notions transformation alexander p. latkin1*, larisa krochmal2, juliya kovshun3 1vladivostok state university of economics and service, vladivostok, russia, 2far eastern state agrarian university, blagoveshchensk, russia, 3far eastern state agrarian university, blagoveshchensk, russia. *email: krokhmal_la@mail.ru abstract services are involved in consumer, intermediary and public markets and contain processes of varying complexity, including state transformation of physical objects, people or codified data. so there is quite a wide range of studies that have expressed doubts about the accuracy of the properties traditionally attributed to the service. an open dialogue between members of the scientific community, as well as the dialogue of researchers with entrepreneurs becomes the basis for the development of a new paradigm of service. according to the opinion of many authors the service cannot be regarded as a general category, it is time to consider its characteristics which are justified by the practice and differ from the purely theoretical ideas. at the heart of these changes there is an impact of innovations on services development, which forces companies to change the organizational rules, regulations and interaction process within the company and to move to a new “lifestyle,” focusing on consumer preferences. keywords: service, innovation, consumer preferences, companies, development jel classifications: a10, m10, d11 1. introduction tertiarisation as a consequence of national economies development is characterized by the displacement of the primary and secondary sectors and increasing importance of services in the production of the world’s gross product. scientists have already joined in the discussion of the problems of information business and the formation of a quaternary sector of the economy, however, the discussion about the definition of “service” is not complete. for over 200 years the center of scientific discussion has been contradistinction of product and services, which originated in 1776 due to the famous work “the wealth of nations” by adam smith. in modern economic literature you can find three main approaches to the definition of “service:” sectoral, contrastive and synthetic. however, detailed analysis of the methods shows that, ultimately, the method of this problem research, which was formed more than 200 years ago, remains the same: the researchers, participating in scientific discussions, always correlate service and product. most researchers emphasize that the service is different from the product due to the fact that it is not tangible; it is time-consuming and is consumed at the time of production (karaomerlioglu and carlsson, 1999). the traditional list of service and product distinctive properties includes four specific characteristics: intangibility, heterogeneity, inseparability, and perishability (kotler, 2003). however, in practice, the services do not necessarily have these characteristics. in particular, some services are not consumed at the time of production: for example, computer programming, and life insurance. there are services that are available after the sale of a product, such as repair services. however, the majority of researchers agree that services are intangible. services include a wide range of activities: knowledge-intensive, relatively low-tech and low-skilled. services are involved in latkin, et al.: services and their role in the national economy: notions transformation international review of management and marketing | vol 6 • special issue (s6) • 2016 113 consumer, intermediary and public markets and contain processes of varying complexity, including state transformation of physical objects, people or codified data (miles, 1996). so there is quite a wide range of researchers who has expressed doubts about the accuracy of the properties traditionally attributed to the service (kotlyarov, 2012). manual on statistics of international trade in services 2010 (united nations publication, 2012) simultaneously offers two definitions of services. the first definition describes the service as a heterogeneous range of intangible products and activities that are difficult to simple definition and explains that it is often difficult to separate services from products with which they may be related to some extent (united nations, 2009). in the second case, with reference to the system of national accounts 2008, services are defined as a result of production activity that changes the state of the units consuming services, or facilitates the exchange of products or financial assets. the definition also clarifies that trade in services cannot be performed separately from their production, and by the end of their production, they should already be provided to consumers (united nations, 2009). according to the general agreement on trade in services the second definition includes any service in any sector except services supplied in the exercise of governmental authority. service supplied in the exercise of governmental authority is any service which is supplied on a noncommercial basis, without competition with one or more service providers. thus, the discussion over definitions of services remains open, and the existence of different interpretations of services in the documents regulating the international activity, becomes the basis for a review of existing approaches used in this discussion. with the development of this sector and increase of research volume, the boundaries of this category become even more uncertain and the question concerning the definitions of the term “service” is retained. the main question for the researchers is the question of how to describe a service in the context of changes that are taking place in this area in practice. in 2004 renowned experts in marketing services c. lovelock and e. gummesson published their work “whither services marketing? in search of a new paradigm and fresh perspectives” (lovelock and gamesson, 2004). the authors proposed to open a new dialogue, able to change existing stereotypes and look at the service from a completely different point of view. publication is inherently revolutionary, but the main thing is that, having proposed the revision of the existing paradigm, it has opened prospects for researchers. the authors did not provide ready-made solutions, but offered new directions of scientific debate to the scientific community: the rejection of products and services separation; abandonment of service as a single category; search for new characteristic of service that distinguishes it from the product. 2. main part an open dialogue of scientific community members, as well as the dialogue of researchers with entrepreneurs engaged in this area, becomes the basis for the development of a new paradigm of service. according to these authors the service cannot be regarded as a general category, it is time to consider its characteristics which are justified by the practice but differ from the purely theoretical ideas. our view is based on research of changes in the behavior of producers and consumers taking place in the global economy, as well as the nature of the goods and services market. on that basis, it seems justified to formulate the following theoretical and methodological provisions of the transformation of traditional service understanding. as penrose argues (1959), “no goods can be made without a combination of different services, supplied by company engaged in the production” (penrose, 1959). a service is the result of any economic activity of both specialized service and manufacturing companies, which supply consumer with goods used to create services in the form of income, profit or image. all companies, seeking to occupy better position in the market of goods and services, have to constantly accompany their sales with package of services. in the process of forming such packages, the company is guided by the market and customer preferences and constantly improves the package containing a service. improving this package, companies are using innovative approaches: in fact, they improve that part of the package, which includes service. service companies trading only in services are also involved in this process and also forced to sell not the service, but a package consisting of different types of services in order to occupy better position in the market. thus, we should speak not only of the product-service package, but also of service-service package. in this paper we consider product-service package. in economic literature, such a package is called a hybrid product. the process of services provision can be seen as a process of “co-production,” in which both a producer and a consumer are using their resources to get the benefit. with this approach, any economic activity can be represented as the exchange of services. the impact of innovations on the development of services is forcing companies to change the organizational rules and regulations, as well as processes of interactions within the company and to move to a new “lifestyle,” focusing on consumer preferences (barcet, 2010). innovative processes are specifically planned by companies when they are purposefully engaged in teaching personnel to deal with new technology, but they can also occur spontaneously under the influence of customer requirements. thus, there is an interactive learning process initiated by any of the interested parties (gallouj and savona, 2009). innovative services are more often used by manufacturing companies who are looking to differentiate with the help of new services and complex stratification of productservice package (chae, 2012). hertog (hertog et al., 2010) believes that the success of the service innovation is achieved by those companies (including industrial enterprises that acquire more and more services), in which one can find the action of at least one of the following factors, providing the ability to differentiate: • monitoring of consumer preferences and analysis of technological capacity for their implementation; latkin, et al.: services and their role in the national economy: notions transformation international review of management and marketing | vol 6 • special issue (s6) • 2016114 • formation of the concept of consumer preferences meeting; joining and separation of services components; • co-production and coordination; flexible production scale providing; training and adaptation. therefore, strategies of companies have been diversified in recent years (brax, 2005), generating knowledge, and adapting to the needs of customers and markets (figure 1). new strategies of companies are caused by the transformation of relations in the industrial sector, as a result of the innovation processes in the economy, as well as the changing preferences of consumers. services sector has received an additional impetus for the development not only due to the coordination of services in the manufacturing sector, but also due to the formation of new connections between consumers and producers. according to practitioners, hybrid products become the basis of competitive advantage and increase the company’s gain because services profitability is higher than products profitability: services on the average may reach 25% of profitability, whereas products – only 5%. so, creating a hybrid pair, you can earn the bulk of the profit on the service. the company takes over a growing number of services ensuring success in the market at all stages of the product creation, including the stage of making a decision on production. the product enters the market as a package consisting of the goods and a variety of services at different stages of its production. the changed conditions have formed four kinds of bonds between the product and services (figure 2), and the manufacture of goods can be presented in the form of product-services packaging; a. bonds formation begins long before the organization of commodity production, when the company decides whether to produce it. at this stage, the company investigates the market, studies consumer preferences with respect to a particular product and makes decisions on sales promotion, price policy, organization and management of product movement to the user, and after-sales service. b. the manufacturing process is accompanied by increased product-services integration when some specific service components are added and this has a noticeable effect on the characteristics of the product itself. these service components the following types of additional services: engineering, design and software. however, this list can be greatly extended, depending on the findings made at the stage of decisionmaking on the product manufacturing. c. the process of product-services packaging is usually carried out at places of sale and is accompanied by a whole range of services associated with its selling. for example, at the points source: the report of the high level group on manufacturing. march 2008 (entemp seo strategies, 2008) figure 1: new strategies of manufacturing companies source: compiled by the author based on selling solutions: emerging patterns of product-service linkage in the australian economy (2002) figure 2: four types of bonds between the product and services latkin, et al.: services and their role in the national economy: notions transformation international review of management and marketing | vol 6 • special issue (s6) • 2016 115 of sale the consumer gets financial services, providing a buyer with credit resources, as well as delivery services, technical assistance on complex technical goods connecting, etc. adding a number of services to the product allows the company to benefit, which is manifested in the ability to differentiate its offer, depending on the wishes of the consumer. in some cases, this policy provides additional sources of revenue. d. at the last stage there is already a clear dominance of the services over the product because additional services act as a guarantor of successful functioning of the purchased product, supporting it with additional range of work and services. in today’s world, companies are facing unprecedented pressure from the market. only those organizations that conduct business in the most efficient way and achieve lower operational costs while maintaining high quality of products and services manage to survive and be a success under these conditions. business-process is the hallmark of outsourcing in comparison with a variety of other forms of service provision and customer care. outsourcing is based on the transfer of the functions related to maintenance of company activity to the third-party company on the basis of the contract. this third-party company is experienced in areas which are vital to the customer but are not the subject of customer’s professional activity. experts in this area argue that in order to ensure successful functioning of the company it is necessary to decide which functions should be better transferred to other companies. with the advent of hybrid products, companies are forced to make the right choice: some service functions should be transferred, and some, on the contrary, should be added to the range of services delivered by the company. thus, there is a need to structure activities within the company to form at least two packages of works and services. the first package should contain a set of works and services, which increases the company’s specialization in the market, and the second provides normal functioning of the company itself and creates comfortable environment for employees and business units. in fact, there is a classification of services, which reflects the company’s attitude to strategic behavior on the market to increase its competitiveness. however, economic content of the reason which underlies this classification becomes unclear. it is also not clear whether the company can outsource some other services which it provided earlier, ensuring its competitiveness. there may be a single answer – yes, it can. at a later date the company can be interested in outsourcing of services, which had previously provided its competitive advantage due to their exclusive nature. thus, the company will produce “new” services on its own as long as the market size is too small to support the emergence of specialized suppliers. with the expansion of the market, these functions can be transferred to specialized companies. this will occur when the production of “new” services will be cost-effective for independent specialized companies. this further confirms that the division of labor increases the productivity of companies in the market. 3. conclusion it results in opportunity to talk about the ability of the service to become an independent direction of service sector as a result of progressive interaction of services and products. the service, which has appeared in an integrated product-service package for the first time, then develops and acquires high-quality characteristics that can respond to changing consumer preferences within this package. later it separates from the product and is able to act independently on the market as a business unit. thus, the service support of the products not only results in hybrid products, but also is the basis for the development of new service companies. this is a good explanation of “explosive” nature of the increase in the number of service companies in the world. references barcet, a. (2010), innovation in services: a new paradigm and innovation model. cheltenham: edward elgar. p49-67. brax, s. (2005), a manufacturer becoming service provider challenges and a paradox. manufacturing service quality, 15(2), 142-156. chae, b. (2012), a framework for new solution development: an adaptive search perspective. service industries journal, 32(1), 127-149. entemp seo strategies. (2008), entemp seo and life improvement best seo and life enhancing information. dublin: entemp. p106. gallouj, f., savona, m. (2009), innovation in services: a review of the debate and a research agenda. journal of evolutionary economics, 19(2), 149-172. hertog, p., van der aa, w., de jong, m. (2010), capabilities for managing service innovation: towards a conceptual framework. journal of service management, 21(4), 490-514. karaomerlioglu, d., carlsson, b. (1999), manufacturing in decline? a matter of definition. economy, innovation, new technology, 8, 175-196. kotler, p. (2003), marketing management. 11th ed. upper saddke river, nj: prentice hall. kotlyarov, i. (2012), the essence of the service as an economic good. herald of omsk university. economy series, 3, 79-86. lovelock, c., gamesson, e. (2004), whither services marketing? in search of a new paradigm and fresh perspectives. journal of service research, 7(1), 20-41. miles, i. (1996), innovation in services. manchester, england: manchester statistical society. penrose, e. (1959), the theory of the growth of the firm. 3rd ed. oxford: oxford university press. united nations. (2009), annual report 2009. new york: united nations. p722 united nations publication. (2012), annual report 2012. new york: united nations publication. p195. . international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2016, 6(4), 1055-1065. international review of management and marketing | vol 6 • issue 4 • 2016 1055 strategic issues in information systems planning from the ghanaian perspective ebenezer ankrah* department of information studies, university of ghana, legon, ghana. *email: eankrah@ug.edu.gh abstract the banking sector has seen considerable transformation in the 1980s starting from the united states, then europe and now the global village. this study adopted the survey methodology. the purpose of this study was to determine the key variables in information system (is) planning of six banks in the greater accra region of ghana. the main objective of the study is to explore the success predictors of strategic is planning (sisp) and to investigate the staff participation in is strategy (iss) formulation. the cases investigated were three local banks and three foreign banks. the six banks used were named bank a, bank b, bank c, bank d, bank e and bank f for the sake of anonymity. with adherence to a survey research methodology, this study used the questionnaire instrument. the total number of questionnaire returned was 248 out of 410, presenting a response rate of 60.5%. the findings revealed that, the local banks concentrate on management team and information technology department for the formulation of iss. the story is different for that of the foreign banks. for the foreign banks they solely depend on technology group for the formulation of iss. from the findings, the local banks indicted that, the most important sisp success factors are resources, is alignment to the business strategy and staff training and staff involvement. whilst the foreign banks also indicated that, the most important sisp success factors are resources, organizational and technological changes and top management involvement. keywords: information systems planning, information systems strategy, ghana jel classification: m1 1. introduction information and communication technology (ict) has changed the approaches to conducting business transactions and meeting the growing demands of customers for most organizations. the promise of information system (is) in the banking sector has been seen in terms of its potential to increase customer base, reduce transaction costs, improve the quality and timeliness of response, enhance opportunities for advertising and branding, facilitate self-service and service customization, and improve customer communication and relationship (garau, 2002). the banking sector has seen considerable transformation in the 1980s starting from the united states, then europe and now the global village. the main forces behind this significant transformation in the banking industry are deregulation and innovation in information technology (it). these forces have brought about increased competition, not only among banks, but also in other financial and non-financial industries. over the years, it has contributed to the blurring differences in retail, corporate and investment banking all over the world as universal banking seems to be the most favored and preferred form of banking to specialized banking. harold and jeff (1995) contend that financial service providers should modify their traditional operating practices to remain viable in the 1990s and the decades that follow. they claim that the most significant shortcoming in the banking industry today is a wide spread of failure on the part of senior management in banks to grasp the importance of technology and incorporate it into their strategic plans accordingly. woherem (2000) claimed that only banks that overhaul the whole of their payment and delivery systems and apply ict to their operations are likely to survive and prosper in the new millennium. he advices banks to re-examine their service delivery systems in order to properly position themselves within the framework of the dictates of the dynamism of ict. the banking industry in ghana has witnessed tremendous changes linked with the developments in ict over the years. the quest for survival, global relevance, maintenance of existing market share and sustainable development ankrah: strategic issues in information systems planning from the ghnanaian perspective international review of management and marketing | vol 6 • issue 4 • 20161056 has made exploitation of the many advantages of ict through the use of automated devices imperative in the industry. the term strategic is (sis) has for many become synonymous with “the strategic use of it”. but unlike the short cycles of summer files or the similarly brief lives of buzzwords buried soon after birth, the sis concept now enters its second decade firmly entrenched world-wide. yet the meaning and reference of this idea remains a bit elusive. current approaches to designing a sis aim to obtain top management awareness, and to identify and implement applications that may generate competitive advantage. the systematic approaches are based on two main ingredients: a set of guidelines indicating how it can support the business viz. the competition and a planning and implementation strategy. the guidelines refer to specific models of competition, while planning and implementation methodologies are grounded on the understanding of how an effective business strategy should be formulated and carried out (wiseman, 1988). as the pace of competition is intensifying, the use of siss as competitive weapons is increasing day by day. today, business operations and iss are so tightly integrated with each other that it would almost be impossible to improve business processes unless corresponding is support the change. to support any change in the organization, information should be properly planned, developed, implemented and maintained in any organization. the designing of is is an important phase because, if is are not properly designed it may lead to organization’s failure. the decreasing cost of the technology and the power of imitation may quickly curtail any competitive advantage acquired through a sis. on the other hand, the iron law of market competition prescribes that those who do not imitate superior solutions are driven out of business. this means that any successful sis becomes a competitive necessity for every player in the industry. tapping standard models of strategy analysis and data sources for industry analysis will lead to similar systems and enhance, rather than decrease imitation. how then should “true” sis be developed? it is not surprising, by the way, that business organizations should ask themselves: • is sis offering true competitive advantage, or do they just represent a competitive necessity? • how can one implement systems that cannot be easily copied, thus generating returns over a reasonable period of time? iss strategy (iss) is concerned mainly with aligning is development with business needs and with trying to gain a strategic advantage through the proper using of it in the firm. it is a planning process for the development of systems towards some future vision of the role of iss in the organization. iss defines the organization’s demand for is/it – the requirements or “demand” for information and systems to support the overall business strategy. it brings together the business aims of the organization, a clear understanding of the information needed to support those aims, and the implementation of computer systems to provide that information. iss is firmly grounded in the business, taking into consideration both the competitive impact and alignment requirements of is/it. basically, is strategy defines and prioritizes the investments required to achieve the “ideal” application portfolio, the nature of the benefits expected and the changes required to deliver those benefits, within the constraints of resources and systems interdependencies (ward and peppard, 2002). 2. literature review 2.1. the strategic planning process in today’s highly competitive business environment, budgetoriented planning or forecast-based planning methods are insufficient for a large corporation to survive and prosper. the firm must engage in strategic planning that clearly defines objectives and assesses both the internal and external situation to formulate strategy, implement the strategy, evaluate the progress, and make adjustments as necessary to stay on track. a simplified view of the strategic planning process is shown in figure 1. 2.2. mission and objectives the mission statement describes the company’s business vision, including the unchanging values and purpose of the firm and forward-looking visionary goals that guide the pursuit of future opportunities. guided by the business vision, the firm’s leaders can define measurable financial and strategic objectives. financial objectives involve measures such as sales targets and earnings growth. strategic objectives are related to the firm’s business position, and may include measures such as market share and reputation. 2.3. environmental scanning the environmental scan includes the following components: • internal analysis of the firm • analysis of the firm’s industry (task environment) • external macro environment (political, economic sociocultural, technological analysis). the internal analysis can identify the firm’s strengths and weaknesses and the external analysis reveals opportunities and threats. a profile of the strengths, weaknesses, opportunities, figure 1: the strategic planning process source: simplified strategic planning ankrah: strategic issues in information systems planning from the ghnanaian perspective international review of management and marketing | vol 6 • issue 4 • 2016 1057 and threats is generated by means of a strengths, weaknesses opportunities, threat analysis. an industry analysis can be performed using a framework developed by michael porter known as porter’s five forces. this framework evaluates entry barriers, suppliers, customers, substitute products, and industry rivalry. environmental analysis (scanning or appraisal) is very important to modern organization. it is used by corporate planners to monitor the economic factors, competition, government legislation, suppliers, technology and market setting to determine the opportunities for and threats to the enterprise. organizations scan the environment in order to understand external forces of change so that they may develop effective responses which secure or improve their position in the future. the importance of environmental analysis lies in its usefulness for evaluating the present strategy, setting strategic objectives, and formulating future strategies. the banking industry is a very strategic catalyst for the overall economic growth in any country. in nigeria, the industry is generally regarded as an engine room for economic growth and development because of the crucial role it plays in linking all segments of the economy in the main stream (ugboaja, 2002). the fortunes of business enterprise are known to have been determined by changes in the social, economic, political, technological, business and industrial conditions. it is therefore pertinent that a thorough and careful analysis be carried out on these factors. the general problem of environmental scanning faced in the industry however, could anchor on total ignorance of environmental characteristics which affect them or inadequacy of information for management to plan, implement and control certain events within and outside the organization’s environment. a number of studies have been conducted on the subject of environmental scanning and corporate performance. miller (1994) carried out analysis on 81 detailed case studies of successful and failing businesses. the study found that environmental scanning was by far the most important factor in separating the successful companies from the unsuccessful, that this, it accounted for more than half of the observed variance. environment creates both problems and opportunities for organization. organization depends on the environment for scarce and valued resources, and organization must cope with unstable and unpredictable external and internal events. the environment itself perhaps, more than any other factor, affected organizational structure, internal processes and managerial decision making. from an information processing perspective, the environment is important because it creates uncertainty for managers. environmental uncertainty increases information processing within organization because managers must identify opportunities, detect threats, interpret problem areas and implement strategic or structural adaptation. before an organization can begin strategy formulation it must scan its environmental for strengths and weaknesses. strategic managers view environmental scanning as a prerequisite for formulating effective business strategies (beal, 2000). environmental scanning includes both looking at information (viewing) and looking for information (benczur, 2005). strategic managers are challenged to anticipate changes in the environment and be flexible enough to adjust strategies to creatively seek out new opportunities. the process of environmental scanning creates the opportunity to weave together the past, present, and future change (mason, 2001). a corporation uses this tool to avoid strategic surprise and to ensure its long-term health. it is against this background that, researchers believe that there is a positive relationship between environmental scanning and corporate performance. wheelen and hunger (2006), defined environmental scanning as the evaluation, monitoring, and dissemination of information from the external and internal environments to key people within the corporation. the term environmental analysis refers to the process of picking up signals from the larger environment, analyzing their significance for the organization and tracking the most relevant of these signals. environmental analysis also referred to an organized activity of the group responsible for strategy, which improves a firm’s competitiveness by gathering, processing and internally diffusing information, in order to rule the environment. choo (2001) defines environment scanning as the acquisition and use of information about events, trends, and relationships in an organization’s external environment, the knowledge which would assist management in planning the organization’s future course of action. every business organization operates in an environment that transcends its official boundaries. organization’s environment can be defined as all the forces and conditions within and outside the organization that affect the organization in its day-to-day activities. meanwhile the environment of business is a highly dynamic, complex, and competitive one. the forces a business is to contend with are varied as they are continually changing. thus managers must take into account the influence of the environmental forces that can affect the performance of their organizations. they must have sufficient knowledge to be able to identify, evaluate and cope with environmental forces that may affect the operations of their organizations. a thorough understanding and analysis of the business environment by managers will enable the business to cope with the changing forces within the environment. to adequately understand organizational environments, one must borrow some concepts from system theory. one of the basic assumptions of system theory is that organizations are neither self sufficient nor self contained. rather, they exchange resources with and are depended upon the external environment, which is defined as all elements outside an organization that are relevant to the physical operations (some of these element connect the organization to the physical world) (stoner et al., 2004). organizations take “input,” that is raw materials, money, labor and energy from the external environment, transform them into products and/or services and then send them back as ‘output’ to the external environment. the external environment has both direct-action and indirection-action elements, also called shareholder including shareholders union, suppliers and many others who directly influence an organization. indirect action elements; such as the technology, economy, and politics of a society, affects the climate in which an organization operates and have the potential to become direct element. 2.4. strategy formulation given the information from the environmental scan, the firm should match its strengths to the opportunities that it has identified, while addressing its weaknesses and external threats. to attain superior profitability, the firm seeks to develop a competitive ankrah: strategic issues in information systems planning from the ghnanaian perspective international review of management and marketing | vol 6 • issue 4 • 20161058 advantage over its rivals. a competitive advantage can be based on cost or differentiation. michael porter identified three industryindependent generic strategies from which the firm can choose, namely: cost leadership, differentiation and focus strategies. 2.5. strategy implementation the selected strategy is implemented by means of programs, budgets, and procedures. implementation involves organization of the firm’s resources and motivation of the staff to achieve objectives. the way in which the strategy is implemented can have a significant impact on whether it will be successful or not. in a large company, those who implement the strategy are likely to be different people from those who formulated it. for this reason, care must be taken to communicate the strategy and the reasoning behind it. otherwise, the implementation might not succeed if the strategy is misunderstood or if lower-level managers resist its implementation because they do not understand why the particular strategy was selected. 2.6. evaluation and control the implementation of the strategy must be monitored and adjustments made as needed. evaluation and control consist of the following steps: 1. define parameters to be measured 2. define target values for those parameters 3. perform measurements 4. compare measured results to the pre-defined standard 5. make necessary changes. 2.7. iss the literature on iss is extensive, much of it anecdotal in character, or exhorting managers or chief executives to make more use of it. the function of an iss itself is best described by wilson (1999) who states that: “an iss brings together the business aims of the company, an understanding of the information needed to support those aims, and the implementation of computer systems to provide that information. it is a plan for the development of systems towards some future vision of the role of iss in the organization.” an iss is something which is essentially a planning process in the minds of the decision makers, users and developers of the systems. it is supported with written reports and plans, but they are of secondary importance. the iss is concerned mainly with aligning is development with business needs and with trying to gain a strategic advantage through the proper using of it in the firm. it is a planning process for the development of systems towards some future vision of the role of iss in the organization. iss defines the organization’s demand for is/it – the requirements or “demand” for information and systems to support the overall business strategy. it brings together the business aims of the organization, a clear understanding of the information needed to support those aims, and the implementation of computer systems to provide that information. iss is firmly grounded in the business, taking into consideration both the competitive impact and alignment requirements of is/it. basically, iss defines and prioritizes the investments required to achieve the “ideal” application portfolio, the nature of the benefits expected and the changes required to deliver those benefits, within the constraints of resources and systems interdependencies (ward and peppard, 2002). iss is of central importance to is practice and research. chen et al. (2010) in their extensive review of the literature suggest that the concept of iss is a term that is used readily. however, it is also a term that is not fully understood. in their study, they follow a perspective paradigm based on the strategic management literature to define iss as an organizational perspective on the investment in, deployment, use, and management of is. through a systematic literature search, they identified the following three conceptions of iss employed implicitly in 48 articles published in leading is journals that focus on the construct of iss: 1. iss as the use of is to support business strategy; 2. iss as the master plan of the is function; and 3. iss as the shared view of the is role within the organization. they find that the third conception best fits the iss. as such, they consequently propose to operationalize iss as the degree to which the organization has a shared perspective to seek innovation through is. specifically, they proposed iss typology and suggest that an organization’s iss falls into one of the two defined categories (i.e., is innovator or is conservative) or is simply undefined. they also developed measures for this new typology. they argue that the proposed instrument, which was cross validated across both chief information officers and senior business executives, has the potential to serve as a diagnostic tool through which the organization can directly assess its iss. they contend that their reconceptualization and operationalization of iss provides theoretical and practical implications that advance the current level of understanding of iss from extant studies within three predominant literature streams: strategic is planning (sisp), is/business strategic alignment, and competitive use of is. salmela and spil (2002) indicate that early attempts to formulate iss concentrated on the analytical task of deriving iss from business plans. the limitations of the static plans that often resulted from these formal studies were, however, soon discovered. the critics suggested informal and incremental planning to ensure flexibility, creativity and strategic thinking to comprise emergent strategies as well as planned strategies. in previous is planning research, there appears to be a contradiction between the published planning methods and the generally held views about effective implementation of is planning process. the explicit methods described in is literature predominantly assume a comprehensive is planning process. despite the fact that many researchers consider incremental approaches to be more effective, methods that can be used to facilitate incremental is planning are few, not detailed enough and not comprehensive. the four cycle’s method introduced attempts to combine the strengths of both the comprehensive and incremental planning to be able to recognize emerging trends and to make an e-business strategy. the method provides a basic schedule for organizing planning activities. is planning is seen as a continuous process that is periodically adjusted to the expectations of the participating managers. practicing managers can use the method to facilitate implementation of an incremental and continuous is planning process. ankrah: strategic issues in information systems planning from the ghnanaian perspective international review of management and marketing | vol 6 • issue 4 • 2016 1059 2.8. sisp success predictors there is an overwhelming consensus in the literature that no other process predicts the sisp success as well as top management commitment and active participation (ang and teo, 2001; bechor et al., 2010). top management plays a key role at enabling good communication and cooperation between different departments and different stakeholders which have specific information needs and opinions about it issues. other important areas of top management involvement are: the promotion of the commitment to change, the control of the sisp implementation and the initiation of regular updates of the sisp plan. strategic business planning represents the most sophisticated and complete process of strategic thinking that provides the enterprise with the capability of continuous control and analysis of the long term alignment between all relevant environmental and enterprise characteristics (ruohonen, 1996). this process is composed of four phases (hunger and wheelen, 1998): environment scanning, strategy formulation, strategy implementation and strategy evaluation and control. top management sophistication measured as the quality of top management knowledge and know-how through all four phases of the strategic business planning process was proven to have an important positive effect on the efficiency and spread of it use in the enterprises (gupta and collins, 1997). until the 1990s, most authors considered the role of it limited to the operational level of planning (garg et al., 2002) and did not consider it as a technology that could create important competitive strategic advantages (griffiths et al., 1990). however, in the last 20 years, such views significantly changed. today, it is considered one of the key general purpose technologies (bresnahan, 2001) that can deliver strategic advantages through all the four phases of strategic planning (garg et al., 2002) and radically change the process of the creation of goods in the enterprises (hitt and snir, 1999). thus, it has become essential that the top managers themselves become power users of it since without the first-hand knowledge and personal experience, top managers can hardly be able to successfully manage sisp and capture the potential of it. the need to align the business strategy and the it strategy has long been advocated as necessary for an enterprise to gain sustainable competitive advantages by both researchers and practitioners (chan and sabherwal, 2001; garg et al., 2002). for this reason, copying the is from competitors does not create large benefits unless the enterprises have very similar business strategies (chan and sabherwal, 2001). the need to align it with business needs is thus a recognized sisp objective (earl, 1993) present in several sisp success models (grover and segars, 1998). enterprises have limited resources to invest in it. consequently, evaluating and prioritizing it projects become important in order to ensure efficient and effective allocation of the available resources. for this reason, a priority system positively influences the success of the is/it strategy implementation (hartono et al., 2003) and is thus recognized as an important activity that influences sisp success (ang and teo, 2001; bechor et al., 2010). such a system should not be a reflection of the power of any stakeholder group, but rather reflect the importance of an it project for the achievement of a business strategy. good personal and professional competences of project team members lead to successful management of it and result in projects that are, with high probability, completed on time and on budget. the ability to obtain sufficiently competent project leaders and team members from the ranks of the middle management was thus soon recognized as a critical sisp success factor (nelson and somers, 2001). in sisp, competence includes more than just familiarity with the technical aspects of systems development. business process identification, knowledge about business processes, as well as interpersonal skills are even more important since they facilitate greater integration between the business planning and the sisp process (ang et al., 1997). there is a wide spread consensus in the literature that enterprises can only gain the majority of benefits from it investments if they complement such investments with changes in business strategy, structure, processes and culture (oecd, 2004). the successful design and implementation of the organizational changes required for a productive use of it is, however, one of the hardest sisp success predictors to manage successfully because it is accompanied by significant risks, increased complexity and large costs (appleton, 1997). thus, it is not surprising that the underestimation of the magnitude and number of difficulties an enterprise encounters while managing this sisp success predictor is the most common reason that the deployment of it ends unsuccessfully (nelson and somers, 2001). several authors include the design and implementation of technical changes in the overall success predictor of change management (kuang et al., 2001; nelson and somers, 2001). however, establishing is goals, planning software functionality, choosing appropriate applications and managing the conversion from the old to the new is require specific know-how which differs from the knowhow needed to manage organizational change. since monitoring these two “change” success predictors separately enables a clearer attribution of task responsibility to individual internal stakeholders (it management vs. top management). the importance of user satisfaction and acceptance of the new is as a predictor of a successful sisp implementation is well documented (bechor et al., 2010). when an enterprise involves key users in the sisp process, they get a broader understanding of the significance of the sisp process for the enterprise as a whole and better comprehend the necessity to change their tasks (bingi et al., 1999) which lowers their overall resistance to change. user involvement in sisp thus positively impacts the flexibility of the is, which in today’s uncertain environment is often an important benefit (palanisamy, 2005). end user training is necessary when enterprises implement sisp because it provides the necessary knowledge to end users for efficient execution of their tasks within the newly deployed is. the goal of the training should be to enable the users to perform new tasks, do existing tasks faster and increase their quality of work. good user training also significantly reduces the resistance to change from the end users (mahrer, 1999). gottschalk (1999) also found out that if enterprises pay attention to user training during the planning stages of sisp, user training becomes a good predictor of the success of sisp implementation. 2.9. early banking operations in ghana the banking industry in ghana has undergone far reaching changes from colonial times through independence to the present. banks ankrah: strategic issues in information systems planning from the ghnanaian perspective international review of management and marketing | vol 6 • issue 4 • 20161060 are financial institutions that provide a range of services to their customers: savings, money transmission and credit services, safe custody and portfolio management functions, and in the process making profits. before the 1950s, the number of bank accounts in ghana was very few and what mattered most was the personal contact between the bank manager and his customers. there was hardly any urgent demand for information because of the low volumes of transactions. this made it possible to satisfy customers with manually kept records. thus the majority of banking services were performed using manual operations and personal contact with customers without much information transfer and handling of customer data. as commercial activities increased and people developed more banking awareness, the volume of work grew and so did the demands on the bankers’ services from the customers. the manual system could no longer cope with the demands from customers. neither did it meet managements’ need for timely and accurate information to cater for the dynamic business environment (andoh, 1998). for instance, within the banks, a lot of mundane and boring jobs like interest rate calculation and long tedious additions were still being done manually by staff. in the early 1950s, however, electro-mechanical machines were introduced into the banking industry in ghana. this enabled customers to have their bank statements on time and within the banks, tedious jobs like interest rate calculation were taken over by machines, making their jobs more enjoyable and boosting staff morale. prior to technological development, banks used the manual system for their operations and customers had to travel to banking halls where they have opened their account to transact business with that particular bank. 2.10. ghanaian banks the banking sector is comprised largely of commercial banks, savings and loans associations as well as rural and community banks. the central bank often called bank of ghana (bog) exercises oversight responsibility over all the financial institutions in the country. in an effort to ensure systematic development of the banking system, the central bank has the responsibility of ensuring that banking is responsive to the needs of the ghanaian public. the banking system is by far the largest component of the financial system. the banking sector has undergone several structural changes following the implementation of a series of reforms in the sector. the bog pursues a liberal policy with regard to entry into the banking system. rose (1999) defines banks as “those financial institutions that offer the widest range of financial services, especially credit, savings and payment services and performs the widest range of financial functions of any business economy.” over the years the banking industry has experienced several losses. banks that had been performing well suddenly announced large losses due to credit exposure that turned sour, interest rate position taken, or derivatives exposures that may or may not have been assumed to hedge balance sheet risk. in response to this, banks have almost universally embarked upon an upgrading of their risk management and control systems (santomero and mello, 1996). the ghanaian economy has experienced high influx rate of foreign banks in recent times. banking operations are characterized with complexity and competition. to remain competitive, there is the need for a scientific approach in operations. one such an approach is iss. ghana has 27 universal banks, 135 rural banks and 49 non-bank financial institutions, including leasing firms, mortgage providers, finance houses, and savings and loan institutions and that is without counting the thousands of “susu” collectors, who serve as informal, small-scale depository institution for market traders and shopkeepers. of the 27 universal banks, 10 are locally owned while the remaining are backed by international owners; a mixture of european, american and african banking groups (the report, ghana, 2014). many business managers operate in an information fog bank, never really having the right information at the right time to make an informed decision. instead, managers rely on forecast, best guesses, and luck. the result is over or underproduction of products and services, misallocation of resources, and poor response time. the purpose of this study was to determine the key variables in is planning of six banks in the greater accra region of ghana. the main objective of the study is to explore the success predictors of sisp and to investigate the staff participation in iss formulation. the benefits of iss to banks discovered by the study would be beneficial to the banking industry. scholars interested in the development and implementation of iss would also benefit from this research work. iss professionals would as well benefit from this research since it has revealed many issues about iss planning. policy makers would not be left out of the benefit from this research work. 3. methodology this study adopted the survey methodology. the method allows the results of the study to be generalized from the sample perspective, to the entire population. thus the results obtain also give high level of reliability. taking into account the purpose of the study and the research objectives, this study is comfortably placed within a scientific epistemology of logical positivism because it allows is researchers to answer research questions about the interaction of humans and computers and it also emphasis on quantitative data. the cases investigated were three local banks and three foreign banks. the six banks used were named bank a, bank b, bank c, bank d, bank e and bank f for the sake of anonymity. the populations for the study were the strategic and the operational staff. all the strategic staff and the operational staff were considered at their head offices in greater accra region. with adherence to a survey research methodology, this study used the questionnaire instrument. out of the 62 copies of questionnaire for the strategic staff, 32 (51.6%) copies of questionnaire were completed and returned. similarly, for the operational staff, 348 copies of questionnaire were administered, and 216 (62.1%) copies were completed and returned. the total number of questionnaire returned was 248 out of 410, presenting a response rate of 60.5%. the sampling technique for the operational staff was simple random sampling. random sampling includes choosing operational staff from a population through unpredictable means. but because the population is relatively small, the researcher decided to use all the strategic staff instead of a sample. the statistical package for social sciences (spss) was used to analyze the data. a simple frequency, percentages and chi-square ankrah: strategic issues in information systems planning from the ghnanaian perspective international review of management and marketing | vol 6 • issue 4 • 2016 1061 test of independence to ascertain the significance of the relationship between variables were used to present the results of the study. ethics were observed accordingly in conducting this research. introductory letters were sent to all the banks for permission to use them in the study. in the data collection process, informed consent of the respondents was sought and respondents were guaranteed anonymity and confidentiality by the researcher. all citations were duly acknowledged and all participants treated respectfully. 4. discussions on major findings this section covers the discussion of major findings in relation to both the research objectives and existing knowledge. the discussion segment provides the researcher the opportunity to highlight the reflections, differences, similarities, and extends current knowledge of the area in which the study has been carried out. it is also a chance to demonstrate exactly what the researcher knows about the topic by interpreting the findings and outlining what they mean. a discussion section of a research should demonstrate the original thinking. the research must underpin what is already known about the area. in addition, where something new has been discovered it is important to outline what is new and compare it to what is already known. it is necessary to consider how one’s results would extend the knowledge about the field. 4.1. human resource requirement in many organizations, is and human resources management (hrm) have become full strategic partners at the governance level. the strategic potential of hrm is well recognized as effective hrm practices support business goals and objectives (noe et al., 2010; wofford, 2002). human resource is the set of individuals who make up the workforce of an organization, business sector or an economy. in any is environment, people play a very pivotal role. in order to formulate and implement the iss, the human resource must be taken into consideration. if the right people are not used, it may affect the formulation as well as the implementation of the iss. for this reason, the strategic staff respondents were asked to indicate the level of quality of their human resource to achieve their goals in the next 5 years. the analysis of the responses by banks is presented in table 1. all the respondents from the foreign banks (bank d, bank e, and bank f) indicated high human resource quality. four respondents from each of banks b and c indicated that the bank has high human resource quality. one (20.0%) respondent from bank c indicated that the banks have low human resource quality whilst 2 (33.3%) of the respondents from bank b also indicated that the human resource quality is moderate. the quality of staff can affect the formulation and implementation of iss. low quality staff can affect the iss negatively whilst high quality staff can affect the iss positively. some of the banks also poach experienced staff from other banks. 4.2. financial resource requirement strategic art is the skillful balancing of ends (objectives), ways (courses of action), and means (resources) (chen et al., 2010). the financial resources are the means by which the bank can acquire the technology. the financial strength determines whether the bank is in the position to acquire the technology or not. to find out whether the bank is in position to acquire new technology, the strategic staff respondents were asked to indicate the financial position of the bank. the responses are presented in table 2 and analyzed on bank bases. five out of the six banks have high financial position. bank d, bank e, and bank f which constitute the foreign banks all have high financial positions. two of the local banks (bank a and bank b) also recorded high financial position. bank c is the only local bank that did not record hundred percent high financial position. for this bank, some of the respondents stated moderate whilst the remaining 3 (60.0%) also indicated high financial position. 4.3. is infrastructure infrastructure is basic physical and organizational structures needed for the operation of an enterprise or the services and facilities necessary for an economy to function (sullivan and sheffrin, 2003). it can be generally defined as the set of interconnected structural elements that provide framework supporting an entire structure of development. the is infrastructure is very important when it comes to implementation. for this reason, the operational staff respondents were asked to indicate the level of is infrastructure in the bank. table 3 presents the responses from the operational staff. is infrastructure has been identified in recent years in some businesses as having a critical impact on the firm’s ability to use it competitively. although a flexible infrastructure is considered highly valuable under certain circumstances, it is difficult to plan and to measure because there is no common, operational definition (duncan, 1995). relatively few of the operational staff 3 (1.4%) described the level of is infrastructure as low. most of the operational staff 197 (91.2%) indicated that, the level of is infrastructure is high. this opinion is also shared by most of the strategic staff 31 (96.9%). it could be inferred from the table 3 that, most of the banks have a high is infrastructure to implement their iss. the foreign banks have a very high it infrastructure to implement the iss whilst the local banks do not have that high infrastructure for the iss implementation. it is worth noting that table 1: responses on quality of human resource quality by banks n=32 frequency (%) bank a bank b bank c bank d bank e bank f low 1 (20.0) moderate 2 (33.3) high 6 (100.0) 4 (66.7) 4 (80.0) 5 (100.0) 5 (100.0) 5 (100.0) total 6 (100.0) 6 (100.0) 5 (100.0) 5 (100.0) 5 (100.0) 5 (100.0) source: field data, 2016 ankrah: strategic issues in information systems planning from the ghnanaian perspective international review of management and marketing | vol 6 • issue 4 • 20161062 some of the respondents from bank c indicated that the bank is infrastructure is low. only the local banks indicated that the banks have moderate is infrastructure. the level of is infrastructure also affects the success of is implementation. 4.4. improved technology technology is the making, modification, usage, and knowledge of tools, machines, techniques, crafts, systems, methods of organization, in order to solve a problem, improve a preexisting solution to a problem, achieve a goal or perform a specific function (www.ehow.com). it has become a necessary component in any organization with increasing strategic significance. all the banks use technology one way or the other. therefore, new technology could be bought to replace obsolete technology or the existing technology could be upgraded. there are different types of technology used in the banking sector to achieve their goals. to find out how the respondents expect to achieve the goals of the bank in the next 5 years, the strategic staff respondents were asked to indicate the type of technology that the bank would need. from the responses, all the respondents from the foreign banks indicated that, the technology needed by the bank to achieve its goals in the next 5 years are improved network infrastructure, more servers and work stations. the respondents from the local banks (bank a, bank b, and bank c) also indicated that the banks need improved banking software and it outsourcing (to outsource some of the banking operations). it could be inferred that, the technology needed by the foreign banks is completely different from that of the local banks to achieve their respective goals. 4.5. willingness of staff to use new technology new technology is invading our lives at an ever-increasing rate. while many people find new technology exciting and can’t wait to get involved in it, some people may feel intimidated by it, or feel that it only complicates their lives and puts more stress on them. some staff find it difficult to change from a manual system to a computerized system. changes are difficult to make, therefore it was important to find out whether the staff, both strategic and operational are willing to use a new technology. analyzing the responses from the operational staff, 10 (4.6%) out of 216 respondents stated that, they are not willing to use a new technology since they are already used to the existing technology. 20 (9.3%) respondents also indicated that they are indifferent using a new technology, and 186 (86.1%) respondents affirmed their willingness to use a new technology. for the strategic staff, the responses were not different, 2 (6.3%) out of 32 respondents were indifferent. this suggests that, even at the strategic level not all staff are willing to use new technology whilst 30 (93.8%) respondents affirmed their willingness of using a new technology. karimi et al. (1996) found out that the degree of it integration within firms is a primary determinant of firms’ willingness to use it as part of their strategic response to globalization. change is difficult but it is also inevitable. to find out the relationship between work experience and the willingness to use a new technology, a cross tabulation of the two variables was constructed. even though cross tabulation could be done for the responses of both strategic and operational staff, the researcher chose to present that of the operational staff (table 4) for lack of space. as the number of years increase, the willingness to use new technology also increases. of the 15 operational staff with <1 year work experience, majority (10) of the respondents indicated their unwillingness to use a new technology. since the software (spss) has the capability of testing for the relationship between the two variables, this was requested for. the statistics at the bottom of table 4 indicate that, there exists a relationship between work experience and willingness to use a new technology. as can be seen from the correlation coefficient (0.569), this relationship is positive and quite strong. from the statistics at the bottom of table 4 for the foreign banks (nf = 102, chi-square = 73.578, df = 4, p = 0.000, and cor = 0.710), there exists a relationship between work experience and willingness to use a new technology. as can be seen from the correlation coefficient, this relationship is positive and quite strong. for the local banks (nl = 114, chi-square = 9.194, df = 4, p = 0.056, and cor = 0.245) there also exists a relationship between work experience and willingness to use a new technology but this relationship is not strong. comparing these two statistics, it could be suggested that the foreign banks staff are more willing to use new technology that the local banks staff. table 2: responses on the strategic staff on financial position by banks n=32 frequency (%) bank a bank b bank c bank d bank e bank f moderate 2 (40.0) high 6 (100.0) 6 (100.0) 3 (60.0) 5 (100.0) 5 (100.0) 5 (100.0) total 6 (100.0) 6 (100.0) 5 (100.0) 5 (100.0) 5 (100.0) 5 (100.0) source: field data, 2016 table 3: levels of is infrastructure by banks no=216 frequency (%) bank a bank b bank c bank d bank e bank f low 3 (8.8) moderate 5 (11.6) 5 (13.5) 6 (17.7) high 38 (88.4) 32 (86.5) 25 (73.5) 30 (100.0) 37 (100.0) 35 (100.0) total 43 (100.0) 37 (100.0) 34 (100.0) 30 (100.0) 37 (100.0) 35 (100.0) source: field data, 2016. is: information system ankrah: strategic issues in information systems planning from the ghnanaian perspective international review of management and marketing | vol 6 • issue 4 • 2016 1063 4.6. staff participation in the iss formulation the formulation and implementation of iss are very important phases in any iss cycle. the people involved are equally important as the process. basic strategic planning is comprised of several components that build upon the previous piece of the plan, and operates much like a flow chart. however, prior to embarking on this process, it is important to consider the players involved. the caliber of people involved can have a great impact on the formulation of the iss. for this reason, the strategic staff respondents were asked to identify the staff participation in iss formulation. the strategic staff responses are presented in table 5. from the table 5, there are three participants in iss formulation. the local banks concentrate on management team and it department for the formulation of iss. the story is different for that of the foreign banks. for the foreign banks they solely depend on technology group for the formulation of iss. the technology group is a group within each of the foreign banks that has the responsibility of formulating iss for the respective banks. it is also important to note that, outsourcing and all staff are not considered in the formulation process. wilson (1999) also states that, 6.4% of the respondents claim that iss is a function of individual department, which is at odds with the organization-wide focus. top management is responsible for the development and implementation of iss since iss can have a significant strategic impact on an organization’s performance (clemons and mcfarlan, 1986). top management also needs to take responsibility for fostering iss with the potential to provide this impact. there are many approaches to establishing iss planning teams. broadly, there are three main approaches: the use of planning specialists, general is staff or coalition teams (grover and segars, 1998). 4.7. sisp success predictors strategy formulation involves designing and developing the company’s strategies. determining company’s strengths aids in the formulation of strategies. strategy formulation is generally broken down into three organizational levels: operational, competitive, and corporate. the worryingly low implementation success rates lead to the realization that sisp is a significantly more complex process that has to address not only the relevant technological issues but also organizational, behavioral and managerial aspects. a successfully implemented sisp process does not end with the implementation of a technologically superior is, but also encompasses appropriate organizational changes, business process reengineering and organizational learning for a more productive use of it. it is especially important that the capabilities of the sisp process constantly improve to reflect changing technology and business related developments. for this reason, the operational staff respondents were asked to identify the important sisp success predictors. the responses are analyzed and presented in table 6. table 4: responses on work experience by willingness of staff to use new technology n=216 willingness of staff to use new technology total not willing somehow willing most willing working experience <1 year count 10 5 0 15 expected count 0.7 1.4 12.9 15.0 1-5 years count 0 15 65 80 expected count 3.7 7.4 68.9 80.0 6-10 years count 0 0 100 100 expected count 4.6 9.3 86.1 100.0 11-15 years count 0 0 16 16 expected count 0.7 1.5 13.8 16.0 16-20 years count 0 0 5 5 expected count 0.2 0.5 4.3 5.0 total count 10 20 186 216 expected count 10.0 20.0 186.0 216.0 no=216 chi-square=178.222 df=8 p=0.000 cor=0.569 nf=102 chi-square=73.578 df=4 p=0.000 cor=0.710 nl=114 chi-square=9.194 df=4 p=0.056 cor=0.245 source: field data, 2016 table 5: staff participation in the iss formulation ns=32 frequency (%) bank a bank b bank c bank d bank e bank f management team 4 (66.7) 4 (66.7) 3 (60.0) it department 2 (33.3) 2 (33.3) 2 (40.0) technical group 5 (100.0) 5 (100.0) 5 (100.0) total 6 (100.0) 6 (100.0) 5 (100.0) 5 (100.0) 5 (100.0) 5 (100.0) source: field data, 2016. iss: information system strategy ankrah: strategic issues in information systems planning from the ghnanaian perspective international review of management and marketing | vol 6 • issue 4 • 20161064 different banks perceived sisp success predictors differently. this is also seen in the origin of the banks. for the local banks, the most important sisp success preditors are resources, is alignment to the business strategy and staff training and staff involvement. the foreign banks also indicated that, the most important sisp success predictors are resources, organizational and technological changes and top management involvement. it could be inferred from the table 6 that, according to the respondents, the most important sisp success predictors are resources, organizational and technological changes, is alignment to the business strategy, top management involvement, and staff training and staff involvement. it is worth noting that none of the banks considered control and evaluation as an important factor. all the banks, both local and foreign, recognize the importance of resources to the success of sisp, since majority of the respondents indicated that. in response to the same question, the strategic staff also responded in a similar manner. grover and segars (1998) researched into sisp success and concluded that, sisp requires significant outlays of increasingly scarce human and financial resources. 5. conclusion as the field of strategy management has expanded, strategy researchers and practitioners have shown increasing interest in the role of it in strategy formulation and implementation, and in its impacts on financial performance. technology has brought about a complete paradigm shift in the functioning of banks and delivery of banking services. banks must consider the “mechanistic” perspective on strategy formulation from the business strategy literature into current sis frameworks. according to such a perspective, management should in a first phase engage in a purely cognitive formulation process: through the appraisal of the environment, its threats and opportunities, and the strengths and weaknesses of the organization, key success factors and distinctive competencies are identified and translated into a range of competitive strategy alternatives. once the optimal strategy has been selected, agreed upon and laid out in sufficient detail, the next phase of implementation follows. the perspective is based on a set of premises or assumptions, to be found in most sis models, such as the critical success factors, the value chain, the strategic thrusts, and the sustainability analysis. specifically, the approach can be characterized as being conscious and analytic, top-down and controloriented, simple and structured, and separating action and structure. the findings revealed that for the local banks, the most important sisp success factors are staff training and staff involvement, resources, and is alignment to the business strategy. for the foreign banks, the most important sisp success factors are top management involvement, resources, and organizational and technological changes. there is the need to develop all the resources 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(2000), information technology in the nigeria banking industry. ibadan: spectrum. . international review of management and marketing | vol 6 • special issue (s4) • 2016 155 international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2016, 6(s4) 155-160. special issue for “asia international conference (aic 2015), 5-6 december 2015, universiti teknologi malaysia, kuala lumpur, malaysia” effect of protean career attitudes on organizational commitment of employees with moderating role of organizational career management muhammad latif khan1*, rohani salleh2, mohamad abdullah bin hemdi3 1department of management and humanities, university technology petronas, perak, malaysia, 2department of management and humanities, university technology petronas, perak, malaysia, 3faculty of hotel & tourism, uitm shah alam malaysia, selangor, malaysia. *email: latifmarwat@hotmail.com abstract the purpose of this study is to develop a conceptual framework for theoretical background explaining about the expected relationship between protean career attitudes and organizational commitment with moderating role of organizational career management (ocm) within today’s unstable and uncertain career scenario. career literature shows that individuals having a protean career attitudes are less committed to their organizations however any practical researches on this relationship are not sufficient and need further empirical investigation. review literature summarize the organizational commitment and it possible relationship with protean career attitudes with moderating role of ocm. this is followed by conceptual framework and propositions. further it is suggested that individuals with protean career attitudes do not results in less organizational commitment until organization does not ignore them for ocm. upcoming future research must examine practically the correlation between protean career attitudes and organizational commitment of employees with moderating role of ocm. hr practitioners, managers, and organizations should develop the protean career attitudes in order to utilize their valuable skills and abilities. it is also suggested that organization can enhance the organizational commitment of employees when they perceive sufficient career development opportunities. this paper contributes to the career literature by theoretically identifying the relationship between protean career and organizational commitment with moderating impact of ocm. in future this study will empirically investigate the correlation between protean career attitudes and organizational commitment with moderating role of organizational commitment of hotels managers in malaysia. keywords: protean career attitudes, organizational commitment, organizational career management jel classification: l2 1. introduction the varying nature of career and people behavior requires a healthier mutual understanding between employees and employers (weng and mcelroy, 2012; weng et al., 2010). pressures of globalization, technological advances, and the communication revolution have changed job design, which have meant key adjustments for many employees (burke and ng, 2006). along with these essential employment market changes in the late 20th and early 21st century, and coping with them, have also changed the workplace attitudes of many employees. as a result employees try to find more empowerment of their own career growth (direnzo and greenhaus, 2011), and rather than by their employing organization and get benefits and satisfaction set by themselves (weng and mcelroy, 2012; weng et al., 2010). organizations have started downsizing and diverted to leaner and flatter organizational structure in response to globalization, competitiveness around the word and economic recession worldwide (sullivan, 1999). career researcher suggested that protean career attitude is the suitable coping trait to the current uncertain career scenario (gubler et al., 2014; hall and mirvis, 1996). while the concept of protean career has gained substantial recognition and attracted significant research attention (baruch et al., 2015; lee et al., 2014), empirical investigations regarding this career orientation are still in the early stages. in this context, it identifies that traditional career khan, et al.: effect of protean career attitudes on organizational commitment of employees with moderating role of organizational career management international review of management and marketing | vol 6 • special issue (s4) • 2016156 model losing it worth and consequently replaced by protean career, which can realize the changing scenario in batter way (arthur and rousseau, 1996; baruch, 1999; bridges, 1995). the two aspects of protean career attitudes (self-directed, value driven) suggest that individual becomes the owner of their own career instead of organizational career (arthur and rousseau, 1996). researchers have discussed that fluctuations in economy have changed the nature of psychological contracts (rousseau and wade-benzoni, 1995) and ultimate employees have lost their organizational commitment (cappelli, 1999), organizational commitment of employees require further re-examination (baruch, 1998; hervas-oliver et al., 2013). i believe that organizational career management (ocm) programs will enhance the organizational commitment of protean career attitudes (eisenberger et al., 2002). we consider that organizations offer career development opportunities for protean career (self-directed and value driven attitudes) can retain the organizational commitment of employee s (briscoe and finkelstein, 2009). a noteworthy gap in the literature also exists about the relationship between protean career attitudes and organizational commitment. protean career attitudes have been less investigated from organizational outcomes like organizational commitment and mostly analyzed from individual perspectives such as career success and employability (mcardle et al., 2007). the purpose of this is article to identify the relationship between organizational commitment and protean career attitudes, because people with protean attitudes are proactive and thought to be less committed to their organization (arthur and rousseau, 1996; greenhall, 1982; hall, 1976; hall, 2002; zaleska and de menezes, 2007). it is still incoachesive that protean career attitudes are the real predicators of organizational commitment or not and need for empirical investigation (zaleska and de menezes, 2007). to understand it better that how protean career attitudes affect the organizational commitment; we will first review these theoretical constructs. 2. literature review 2.1. protean career attitudes the term protean derived from the latin word proteus that refers to great individual ability to adjust the shape of something in dealing with uncertainty (briscoe and hall, 2006). protean career attitudes possess two essential features: being self-directed and being values-driven. self-direction here refers to the degree to which an individual takes control of his/her own career strategically (briscoe and hall, 2006; mirvis and hall, 1994). a values-driven approach, on the other hand, refers to the high consciousness of individual towards his or her own personal priorities and is used as the standards in making and assessing decisions (hall and mirvis, 1996). the individuals with this proactive traits are aware of their own career achievement as well as highly concerns with organization priorities (grant and ashford, 2008). as shown in reviewed literature, the protean career models refers to an indication of declining tendency in an organizational commitment but any practical research on this subject so far is found highly insufficient (sullivan et al., 1998; zaleska and de menezes, 2007). several career related outcomes has been found by former researcher on protean career attitudes. in contrast, far too little attention has been paid to examines theoretically based variables in predicting the correlation of protean career and organizational commitment of employees (gubler et al., 2014; rowe, 2013). according to various career researcher like arthur and colleague have contended that due to globalization and technological developments, career are increasingly turn into boundryless and individuals develops protean career attitudes in order to cope with uncertain situation of employment (arthur and rousseau, 1996; hall, 2002; sullivan, 1999; sullivan and arthur, 2006). to explore the relationship between protean career attitudes and organizational commitment is the focus of this study. this relationship would enable us to identify the expected behavioral consequences of different career attitudes, as commitment is one of most important determinant of performance, loyalty, and turnover (mathieu and zajac, 1990; meyer et al., 1989; 2002; mowday et al., 1982; shore and wayne, 1993). furthermore, it is very essential for organization to retain competent pool of candidates with long-term affective commitment in order to sustain their competitiveness around the world. 2.2. organizational commitment considering its correlation to turnover intension and real turnover (briscoe and finkelstein, 2009; sullivan, 1999), organizational commitment becomes one of the most vital concepts in the field of human resource management (hrm), organizational behavior, and management (cohen, 2007). it refers to an emotional bond or attachment between the employees and their organization (mahanta, 2012). in fact, these commitment modules are commonly perceived affective, normative and continuous as three different concepts (meyer et al., 2012). amongst all these components, organizational affective commitment has been preferred to be the emphasis of this study. to survive, organizations need to gain the commitment of their members. here, organizational commitment has some critical implications for both individual and organizational outcomes and it is a central issue for an organizations (ito and brotheridge, 2005; kavi, 2013). past studies found that organizational commitment is negatively related to employees intention to leave (lee et al., 2012; peachey et al., 2014). employees with higher levels of organizational commitment tend to work towards the benefit of the organization (meyer et al., 2004), which in turn, generates positive outcomes at both individual and organizational levels such as employee loyalty and job satisfaction. empirical research reveals some consequences of organizational commitment essential to highlight including intentions to leave the organization, absenteeism, and low level of job performance (becker et al., 1996; gellatly et al., 2006; luchak and gellatly, 2007; mowday et al., 1982). having studied the literature, it has been found that, as implied in the protean career models, there is a declining tendency in organizational commitment (zaleska and de menezes, 2007). the ones having protean career attitudes might have a lack of commitment to their organizations (sullivan, 1999). apart from khan, et al.: effect of protean career attitudes on organizational commitment of employees with moderating role of organizational career management international review of management and marketing | vol 6 • special issue (s4) • 2016 157 how well-known the protean career models in correlation with decline of organizational commitment; there, however, has been little discussion in an empirical research about this issue, so far (briscoe and finkelstein, 2009; sullivan et al., 1998). empirical research carried out by briscoe and finkelstein (2009) to explore the relationship between protean career attitude and organizational commitment but did not find empirical support. these career researcher therefore suggested to use the other variables that may affect the relationship between protean career and organizational commitment (briscoe and finkelstein, 2009). ocm which is also called organizational support/supervisor support may the predicator of organizational commitment (verbruggen et al., 2007), because ocm has been found the strong predicator of organizational commitment (ko et al., 1997). therefore motivation of skill full employees with affective commitment is a challenging issue for organizations and employees. ocm can be the factor to retain the talent with different proactive behavior (ito and brotheridge, 2005; kavi, 2013). for this, it can be summarized that in the perspective of protean attitudes, workers will show an affecting obligation provided that they practice identity and worth fit with the current organization and this as a result realizes to stay with the same organization in consideration to the opportunities for endless learning and career growth as provided by organization (agarwala, 2003; meyer et al., 2004; sturges et al., 2001). as it is discussed that people with protean career attitudes continually looking for career development opportunities, this reasonable organizational support seems rational. thus, the present study attempts to investigate theoretically whether the relationship between the protean career attitudes and organizational commitment is moderated by the ocm. 2.3. moderating effect of ocm ocm refers to the programs or activities initiated by organizations in supporting their employees’ career success (kong et al., 2010). the issues of ocm have been largely studied by researcher (birasnav and rangnekar, 2012; budhwar and baruch, 2003). perceived ocm was proposed to be an organizational influencing factor. ocm, which is also known as “organizational support for career development” or “organizational sponsorship,” refers to different activities, programs and support provided by organizations to care and develop employees’ career success (ng et al., 2005; orpen, 1994). ocm programs also called organizational career development (verbruggen et al., 2007). the new age organization perform noteworthy new part in the career development by providing more support to human assets (baruch, 2006). although responsibility for career management has been transferred to individuals from organizations yet organizational support for career management should not be neglected. thus organizations can enhance their competitiveness’ around the world by providing more career success to their employees (baruch, 2006). as described by career authors, employees career management imitated by organization build the development of employees citizenship behavior (kong et al., 2011). when ocm practices meet employees expectations (kong et al., 2011), this will enhance commitment and other positive outcomes. career management help can be seen as one form of perceived organizational support. perceived organizational support has been positively related to job performance and negatively linked to withdrawal behaviors such as absenteeism and turnover (rhoades and eisenberger, 2002). i believe that ocm programs will enhance the organizational commitment of protean career attitudes (eisenberger et al., 2002). it is very important to identify that individuals feel proud when they perceive the organizational support in achieving their goals (cummings, 2008; lent and brown, 2006). 2.4. problem statement tourism industry is one of the national key economic areas, significantly contributing to the malaysian economy. the industry is seventh largest contributor to national income with gross national income (gni) total of rm37.4 billion in 2011. the industry has been and will continue to be a key economic sector in malaysia and can be evident by the increasing amount of arrivals and receipts of tourists to malaysia. its receipts of 1 billion per week from tourists, ranks malaysia 13th globally with regard to tourist’s receipts and shows a constant growth (etp, 2011). most importantly, with regard to vision 2020, it is expected that the industry will provide an incremental contribution of rm103.6 billion to the malaysia’s gni. hotel sector is one of the major components in the country tourism industry that make up substantial proportion of the industry receipts and therefore it needs to be managed effectively. as the hotel industry is a human based industry, depends mainly on humans as an essential part of the product, because of their direct interaction with the customers. although committed workforce is very important for the success and sustainable growth of the industry, unfortunately, labor turnover crises have been emerging globally in the face of many businesses, including hotel industry (al battat et al., 2013). a high voluntary turnover in the hotel industry has been reported in recent studies and reports (hemdi and rahim, 2011). for example, in a nationwide survey of 143 companies across various sectors, conducted by malaysian employers federation, hotel industry was reported among top three industries, facing employee retention issues; accounted an average 32.4% annual turnover rate (nasyira, et al., 2014). this statistic pointed out that the average rate of voluntary turnover in hospitality industry is almost double than overall industry turnover rate which is 15.2% (goh, 2012). past studies found that organizational commitment is negatively related to employees intention to leave (lee et al., 2012; peachey et al., 2014). employees with higher levels of organizational commitment tend to work towards the benefit of the organization (meyer et al., 2004), which in turn, generates positive outcomes at both individual and organizational levels such as employee loyalty and job satisfaction. employees’ organizational commitment is thus one of the key challenges affecting malaysian hotel industry. hence, it is imperative to know the factors that influence employee’s level of commitment. hospitality industry report more khan, et al.: effect of protean career attitudes on organizational commitment of employees with moderating role of organizational career management international review of management and marketing | vol 6 • special issue (s4) • 2016158 problem to retain in experienced competent pool of managers (wang and tsai, 2012; watson, 2008). the proposed conceptual framework is presented in figure 1. 2.5. significance of the study the present study makes several theoretical and practical contributions, as discussed below. 1. theoretical contribution: although career success construct has been extensively studied in the academic literature, its mediating role between protean career attitudes and organizational commitment has been less discussed; particularly, in terms of subjective and objective career success. the present study fills the research gap by examining career success as a potential mediator between protean career attitude and organizational commitment. 2. past research studied ocm as an antecedent, and most often discussed in academic context such as schools, universities, less investigated in business organizations, especially in service industry. hence, the inclusion of ocm as a potential moderator, and its discussion in service industry is a considerable theoretical contribution of the present study. 3. majority of the studies on protean career have been conducted in western world, especially in developed countries. however, studies on protean career attitude in developing countries such as malaysia are rather limited. the present study enriches the literature on protean career in a new context. 4. overall, the finding of this study will make a significant contribution on the empirical side of the literature on organizational commitment, career success, career attitude and career ocm. 5. practical contribution: the findings of this study will help relevant authorities in hotel industry, hr practitioners, managers to better strategize future policies in order to increase employees’ organizational commitment. 3. discussion this conceptual article intended to enhance a theoretical background explaining about the expecting variables of protean career in its correlation to employees’ organizational commitment. the research article determines that job-related, organizational and individual factors have some prophetic effects on employee’s proactive protean career. the field of protean career and its relationship to organizational commitment correspond to the central pillar of hrm, playing an essential role for the advance employees’ abilities and understanding along their career track (ito and brotheridge, 2005; swanson and holton, 2001). the main ideology of all these aspects is linked to protean career in individual career development. framework offers specific individual, organizational and job-related variables probably leading to protean career and employees’ organizational commitment. hrm experts therefore should concern with the manifestation of protean career as new career developments between skilled employees (eisenberger et al., 2002). they should identify its distinctive traits of internal value driven and self-directedness aspects of new career attitudes. hrm specialists here must assist and backing employees to assume their own obligation in career management (kidd and smewing, 2001). hrm practitioners principally need to concern with the outcomes of the effect of individual-related factors on protean career (tseng and mclean, 2008). afterwards, there will be more self-confidence among employees to believe that there is a high determination of aptitudes and understanding towards the self-managed career rather than external powers such as good fortune, luck or probabilities. expectedly, having taken a vigorous notice and deliver assistance in their employees’ career growth, an organization would have more benefits in view of the organization ability to generate the commitment of the employees and minimize the intention of the employee for turnover (briscoe and finkelstein, 2009). in addition to this, it is important for the managers to have awareness for the possibility in correlation of job characteristics and protean career attitude. 4. conclusion in addition, this theoretical concept helps hr practitioners, managers, and organizations to understand the individuals having distinct protean career attitudes in order to utilize their skills and abilities. this review also provides a direction about the effect of ocm which can enhance the organizational commitment of protean career individuals. further it is concluded that organization should realize the career success opportunities of employees in order to retain the protean career for long-term. therefore organization should asses’ different type of ocm programs. this study helps hr practitioners to understand how employees view career development from the perspective of protean career. therefore, management should assess various types of job design and organizational support programs and examine how these development opportunities affect employees’ career scenarios. the conclusion of this study also point out that all those who have a protean career attitudes do not results in less organizational commitment automatically. such declining intentions are related to organizational rigid policies. in this regard organizations need to re-examine policy of “throwing the baby with bath water.” figure 1: proposed conceptual framework self-directed career attitude value driven career attitude organizational career management organizational commitment khan, et al.: effect of protean career attitudes on organizational commitment of employees with moderating role of organizational career management international review of management and marketing | vol 6 • special issue (s4) • 2016 159 consequently the loyalty, caring and commitment of employees cannot be dismissed on protean career attitudes until organizations do not ignore them. we suggest the focus be less on how not to lose them and more on how to leverage their unique perspectives and offerings. references agarwala, t. 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(2007), human resources development practices and their association with employee attitudes: between traditional and new careers. human relations, 60(7), 987-1018. . international review of management and marketing | vol 6 • special issue (s4) • 2016 125 international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2016, 6(s4) 125-131. special issue for “asia international conference (aic 2015), 5-6 december 2015, universiti teknologi malaysia, kuala lumpur, malaysia” factors affecting adoption of mobile services kamaal allil1*, mohammed naved khan2 1department of management and marketing, college of commerce and business administration, dhofar university, salalah, sultanate of oman, 2department of business administration, faculty of management studies and research, aligarh muslim university, aligarh, uttar pradesh, india. *email: kallil@du.edu.om abstract the extent of adoption of mobile services in india has not progressed as expected. in this backdrop, the present research investigated factors affecting intention to adopt (ia) mobile services. using researcher controlled sampling, data was generated from students enrolled in business schools. two sets of statistical techniques were employed. the first set was used to refine and test the validity and reliability of the research instrument by using cronbach alpha, inter-item and item-total correlation, and principal component analysis. the second set was used to estimate interrelated dependence relationships by using structural equation modelling. mobile service adoption model was proposed. results suggest that attitude, compatibility, subjective norm, perceived usefulness, and personal innovativeness are significant determinants of ia mobile services. the findings can be of vital importance to practitioners when developing new services and strategizing marketing campaigns. the study also opens up several avenues for additional research in the domain of adoption of mobile services. keywords: mobile services adoption, india, intention to adopt jel classifications: m300, m310 1. introduction increasingly, mobile services are becoming more important for companies and consumers due to the possibility of uniqueness and personalized interchange of information (watson et al., 2002). the core focus of mobile services rests on the notion of reaching out to customers regardless of their location and delivering the right information to the right consumer at the right time (barnes, 2002). however, the adoption pace of mobile services has not progressed as expected (carlsson et al., 2006). thus, understanding factors that affect the adoption of mobile services is of decisive importance. 2. theoretical framework and hypotheses from the perspective of technology acceptance theories and models, many researchers have approached and investigated the adoption of mobile banking (brown et al., 2003; luarn and lin, 2005); mobile multimedia services (pagani, 2004); mobile devices/services (carlsson et al., 2006); mobile advertising (he and lu, 2007); mobile banking services (hosseini et al., 2015); multimedia message service (hsu et al., 2007); mobile internet usage (lee et al., 2002); mobile technologies (park et al., 2007); wireless short messaging services (turel et al., 2007); and mobile services adoption (wang and li, 2012); mobile government (liu et al., 2014); mobile entertainment services (kondo and ishida, 2014); and mobile coupon service adoption (ha and im, 2014). thus, in the present study, factors pertaining to adoption have been identified from technology acceptance/adoption theories/ models (ajzen, 1991; davis, 1989; venkatesh et al., 2003) as well as from previous research. these factors include attitude towards mobile services (ajzen, 1991; taylor and todd, 1995); subjective norm (sn) (ajzen, 1991; ajzen and fishbein, 1980); perceived usefulness (pu) (davis, 1989; rogers, 1995); compatibility (rogers, 1995); personal innovativeness (pi) (rogers, 1995). in addition, adoption intention was considered as main dependent variable to predict the future usage behaviour (ajzen, 1991; ajzen and fishbein, 1980; davis et al., 1989). allil and khan: factors affecting adoption of mobile services international review of management and marketing | vol 6 • special issue (s4) • 2016126 attitude (a): in consumer behaviour, attitudes refer to overall evaluations that indicate people’s favourability towards action (hoyer and macinnis, 2004). it was found that adoption decisions of people are highly affected by their attitudes (erumban and de jong, 2006) and differences in attitudes of individuals affect the use and interaction with their environment (hofstede, 2001). in the theories of technology adoption, attitude has been considered to be very important and proposed as a main construct in the technology acceptance model (tam) proposed by davis et al. (1989), theory of planned behaviour (tpb) by ajzen (1991), and theory of reasoned action (tra) suggested by ajzen and fishbein (1980). in these three models, attitude was considered as a direct factor of adoption intention (ajzen, 1991; ajzen and fishbein, 1980; davis et al., 1989). in the literature of mobile services, attitude has been found to be a determinant of intention to adopt (ia) mobile entertainment services (kondo and ishida, 2014), mobile coupon service adoption (ha and im, 2014), mobile social network games (park et al., 2014), mobile map services (park and ohm, 2014), mobile devices/services (carlsson et al., 2006), and mobile services (bauer et al., 2005). thus, attitude is theorized in this study to be a direct factor and expected to influence the adoption intention. in the light of the above, the following hypothesis was framed: h1: attitude towards mobile services (a) has direct and significant influence on ia mobile services. 2.1. sn it is the person’s perceived pressure from other people who are important to him to perform/adopt or not to adopt the innovation (ajzen, 1991; venkatesh et al., 2003). however, sn has been represented as social influence in unified-theory-of-acceptanceand-use-of-technology proposed by venkatesh et al. (2003). taylor and todd (1995) also considered social influence analogous with sn and defined it as peer influences, superior influences, and other people’s opinions. thus, the social context may influence an individual’s perception that certain important referents think that the individual should or should not perform a particular behaviour as well as the individual motivation to act in accordance with the group (ajzen and fishbein, 1980). therefore, the significant others have a key and important influence on adoption intention because individuals adapt their behaviours to their social context. many theories of technology adoption such as innovation diffusion theory (idt) (rogers, 1995), tpb (ajzen, 1991), and tra (fishbein and ajzen, 1980) have theorized sns as a direct determinant of adoption intention. however, tam suggested by davis (1989) has excluded sn as a determinant of usage intention. in innovation diffusion literature social influence has been considered as a key dependent variable especially in early phases of adoption where the individual has little information or no experience about the innovation (cooper and zmud, 1990; hartwick and barki, 1994; liu et al., 2014). in the perspective of the present study, the term sn was used to refer to the social influence and the perceived social value of mobile services that may affect individual’s ia mobile services. that is, it refers to consumer perceptions concerning the adoption of mobile services by taking into account the views of the referent group such as friends or pears. thus, sn is theorized to be a direct factor in this study and it is expected to influence the ia. h2: sn has direct and significant influence on ia mobile services. 2.2. pu in the literature, pu, relative advantage and perceived utility has been used interchangeably. it is the extent to which an individual thinks that using an innovation would improve his or her performance (davis, 1989). moore and benbasat (1991) defined relative advantage as the extent to which a system is observed as being superior to the previous. in the theories of technology acceptance, pu was considered important and theorized as a main construct (direct factor) of adoption intention such as tam (davis, 1989, davis et al., 1989) and idt (rogers, 1995). as suggested by venkatesh et al. (2003), the pu of tam is equivalent to the perceived relative advantage of rogers’ idt. a thorough review of literature shows that pu has a significant and positive effect on the ia innovation (agarwal and prasad, 1999; hsu et al., 2007; hu et al., 1999; luarn and lin, 2005; park, et al., 2014; pura, 2005; venkatesh, 1999; venkatesh and morris, 2000). it is predictable that pu will influence significantly adoption intention of mobile services. thus, there exists sound rationale for theorizing pu as a direct factor of adoption intention in the present study. h3: pu of mobile services has direct and significant influence on ia mobile services. 2.3. compatibility (c) it is the extent to which an innovation is consistent with what people do (rogers, 1995). also, it is defined as the extent to which the system fits with the adopter’s past experiences, current needs, and existing values (moore and benbasat, 1991). in the theories of technology acceptance, compatibility was considered important and theorized as a main and direct construct of adoption intention including idt (rogers, 1995). several empirical studies have confirmed that the compatibility of an innovation has a positive effect on the adoption (cooper and zmud, 1990; hsu et al., 2007; kleijnen et al., 2004; tan and teo, 2000). in addition, previous findings from empirical studies have supported that compatibility was a direct factor influencing adoption (cooper and zmud, 1990; hsu et al., 2007; kleijnen et al., 2004; tan and teo, 2000). also, holak (1990) found that compatibility has a large and direct positive impact on purchase intentions and adoption of mobile internet (hsu, et. al., 2007). allil and khan: factors affecting adoption of mobile services international review of management and marketing | vol 6 • special issue (s4) • 2016 127 from the above discussion, it is amply clear that there exists sufficient ground to treat compatibility as direct factor influencing ia in the research model and thus the following hypothesis was considered: h4: compatibility (c) with mobile services has direct and significant influence on ia mobile services. 2.4. pi innovativeness is an individual’s propensity to be more receptive to new ideas (rogers, 1995). it refers to a general tendency to seek, collect, and distribute novelty early (im et al., 2003; leung and wei, 1998). pi varies and it has been found to have a significant influence on ia where adopter and non-adopters were distinguished significantly by pi (busselle et al., 1999). previous researches have also revealed that pi increases the level of adoption of mobile services (hung et al., 2003), internet shopping (li, 2004), and internet in a university (busselle et al., 1999). strong evidence from research on innovation diffusion supports the view that highly innovative individuals have more positive intentions to adoption (rogers, 1995). thus, several authors argue that innovativeness is an individual trait that leads people to adopt new things (manning et al., 1995) and that it is permissible to think of a trait that we can term consumer innovativeness. although, innovativeness is not listed as core construct in the theories/models considered in the present study, it would be worth investigating whether this construct influences ia mobile services. thus, pi was theorised as a direct factor: h5: pi has direct and significant influence on ia mobile services (ia). therefore, the proposed research model for adoption of mobile serviecs (figure 1) consists of five core constructs namely attitude towards mobile services (a), sn, pu of mobile services, compatibility with mobile services (c), and pi. the dependent variable considered was ia mobile services. 3. research methodology the researcher controlled sample comprised students from both public and private institutions offering business management courses and located in and near to the capital city of india, new delhi. five institutions were covered namely aligarh muslim university, jamia hamdard university (jh), asia pacific institute of management, all india management association and jamia millia islamia. although such samples are not strictly representative, they are less likely to create any systematic bias (craig and douglas, 2005). final sample comprised 399 indian respondents. it is to be noted that according to wimmer and dominick (2000), for multivariate studies, a sample size of 300 is considered to be good. measurement items used in this research have been adapted from adoption theories and related research including that of agarwal and prasad (1998), bauer et al. (2005), carlsson et al. (2006), hsu et al. (2007), merisavo et al. (2007), moore and benbasat (1991), okazaki (2007), sweeney and soutar (2001), sheehan and hoy (1999, 2000), davis (1989), taylor and todd (1995), and venkatesh et al. (2003). keeping in mind the objectives of the study, some additional items were developed and included in the research instrument. structured closed-ended questionnaire designed specifically for the study was personally administered by the researcher on the student respondents. pre-testing of the instrument was done to assess the items used in the survey (hair et al., 2010) and to establish the scale’s content validity (hair et al., 2006). pilot survey was then used to test question wording and other aspects of the survey (ticehurst and veal, 2000). 4. analysis 4.1. scale refinement each multi-item scale was factor-analyzed to evaluate dimensionality, and reliability analysis was performed to determine if each item contributed to scale reliability. besides, correlational analysis was applied to confirm the validity of the construct (table 1). we omitted items if they did not load satisfactorily with the majority of the other scale items or if they failed to improve internal consistency. mentzer et al., (1999) suggested that a final scale may contain lesser, even one-fourth or one-fifth of the original items. during scale refinement five items were dropped (i.e. a3, a5, pu1, pu4 and pi3). 4.2. fit estimates in structural equation modeling, the fit indices establish whether, overall, the model is acceptable. if the model is acceptable, researchers then establish whether specific paths are significant. table 2 lists the fit indices and demonstrates that the results are within the acceptable thresholds. 4.3. path analysis the structural model was estimated by lisrel 8.50. a standardized path estimate was used with maximum likelihood. the path coefficients are used to assess the magnitude and direction of relationships and were thus used to test the various research hypotheses (figure 2). 5. findings from table 3, it is clear that all the considered hypotheses (i.e., h1, h2, h3, h4, and h5) were supported. figure 1: proposed mobile services adoption model attitude (a) subjective norm (sn) perceived usefulness (pu) compatibility (c) personal innovativeness (pi) intention to adopt (ia) allil and khan: factors affecting adoption of mobile services international review of management and marketing | vol 6 • special issue (s4) • 2016128 msam posits all factors proposed in the conceptual model (figure 3). these factors are: (1) attitude towards mobile services (a), (2) sn, (3) pu of mobile services (pu), (4) compatibility with mobile services (c) and (5) pi. 6. summary and discussion 6.1. attitude towards mobile services (a) it was found to be the most important motivating factor influencing ia mobile services. these results are consistent with the findings of several previous researchers (bauer et al., 2005; carlsson, et al., 2006; daim et al., 2012; erumban and de jong, 2006; park and ohm, 2014). furthermore, the results are also consistent with many theories of technology acceptance namely tra (ajzen and fishbein, 1980), tam (davis et al., 1989) and tpb (ajzen, 1991). 6.2. sn it was found to be a determining factor of ia mobile services. these findings are also consistent with various technology adoption models such as tra (fishbein and ajzen, 1980) and tpb (ajzen, 1991). these findings are also in line with findings of previous researchers (hartwick and barki, 1994; kazi and mannan, 2013; liu et al., 2014; lu et al., 2012; lucas and spitler, 1999; roger, 1995; venkatesh and morris, 2000). however, these findings are inconsistent with the study of kondo and ishida (2014) where they found that sn had non-significant effects in ia. 6.3. pu of mobile services in the proposed model it was found to be the second most important determining factor of ia mobile services in the proposed model. these results are consistent with findings of earlier studies in the context of information systems where pu has significant effect on ia (agarwal and prasad, 1999; hu et al., 1999; jackson, chow and leitch, 1997; kazi and mannan, 2013; park, et al., 2014; venkatesh, 1999; venkatesh and davis, 2000; yang et al., 2012). 6.4. compatibility with mobile services (c) compatibility was found to be a determinant of ia mobile. strong evidence from many related empirical studies also supports these results. in previous research, compatibility was found to be a direct factor influencing adoption (cooper and zmud, 1990; hsu et al., 2007; kleijnen et al., 2004; tan and teo, 2000). 6.5. pi it was considered as a determinant of ia mobile services. these results are consistent with those of previous studies (ha and im, 2014; li, 2004; rogers, 1995; yang et al., 2012). 7. managerial implications the findings of the study provide valuable insights not only to academic researchers but also to marketing practitioners and telecommunication companies. the hypothesized model provides deeper understanding of the relationships between key factors and adoption intentions and can be of immense help in promoting adoption of mobile services in india. the study identifies five factors that can play a significant role in adoption of mobile services in india. in a decreasing order of importance, they are attitude towards mobile services, sn, pu of mobile services, compatibility with mobile services and pi. mobile telecommunication companies attempting to motivate consumers to adopt mobile services need to utilise this information effectively while formulating marketing strategies and policies. the marketing practitioners should (1) be conscious of consumers’ attitude toward mobile services (2) not lose sight of social table 1: summary of reliability and validity analysis and factor loadings for retained items of mobile services scale measurement items abbreviation items inter-item correlation item-total correlation cronbach’s alpha factor loadings intention to adopt ia 3 0.408−0.418−0.526 0.473−0.547−0.552 0.700 0.561−0.667−0.675 attitude a 3 0.272−0.287−0.544 0.316−0.481−0.521 0.617 0.379−0.680−0.692 subjective norm sn 3 0.373−0.386−0.480 0.441−0.505−0.518 0.672 0.541−0.638−0.649 perceived usefulness pu 3 0.306−0.328−0.610 0.354−0.582−0.592 0.686 0.404−0.714−0.730 compatibility c 3 0.499−0.533−0.646 0.568−0.648−0.678 0.788 0.631−0.732−0.758 personal innovativeness pi 3 0.364−0.393−0.424 0.449−0.470−0.493 0.657 0.565−0.597−0.626 table 2: results of sem fit indices for msam fit index msam acceptable threshold levels sources χ2 (df) 200 (120) lower χ2 relative to df hooper et al., 2008 normed χ2 1.67 2:1 tabachnick and fidell, 2007 rmsea 0.041 <0.07 steiger, 2007 srmr 0.044 <0.08 hu and bentler, 1999 gfi 0.947 ≥0.9 hooper et al., 2008 agfi 0.925 >0.9 bentler and bonett, 1980 cfi 0.981 >0.9 bentler and bonett, 1980 nnfi 0.975 ≥0.95 hu and bentler, 1999 pnfi 0.748 no threshold levels hooper et al., 2008 rmsea: root mean square error of approximation, srmr: standardized root mean square residual, gfi: goodness of fit index, agfi: adjusted goodness-of-fit index, cfi: comparative fit index, nnfi: non-normed fit index, pnfi: parsimony normed fit index, msam: mobile services adoption model, sem: standard error of mean table 3: results of sem for msam hypotheses paths parameter estimate (β) results h1 a→ia 0.47 supported h2 sn→ia 0.21 supported h3 pu→ia 0.20 supported h4 c→ia 0.08 supported h5 pi→ia 0.07 supported msam: mobile service adoption model, ia: intention to adopt, a: attitude, sn: subjective norm, pu: perceived usefulness, c: compatibility, pi: personal innovativeness, sem: standard error of mean allil and khan: factors affecting adoption of mobile services international review of management and marketing | vol 6 • special issue (s4) • 2016 129 perspective in which the mobile services can be beneficial for the target audience (3) pay greater attention on highlighting utilitarian aspects/usefulness of mobile services, (4) explain how mobile services can be compatible with different consumer lifestyles, and (5) try to identity innovators, as they can play the role of early adopters of these services. based on the above, it can be safely surmised that key findings emerging from the suggested models considered can be of invaluable help to marketing practitioners and mobile companies alike in formulating appropriate marketing strategies that can help not only attract new customers but also retain existing ones. 8. limitations of the study this study suffers from certain limitations which are discussed below. first, researcher controlled sample may limit the generalizability of the findings. secondly, the student respondents are more acquainted with information technology than the general consumer population, and thus might consider mobile services as being more acceptable than other samples. thirdly, this study did not include socio-demographic variables (e.g. income profile, age, rural-urban, etc.) in analysis. fourthly, this study did not examine the causality and interrelationship between the factors influencing the ia. lastly, it did not consider the effect of 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(2012), mobile payment services adoption across time: an empirical study of the effects of behavioral beliefs, social influences, and personal traits. computers in human behavior, 28(1), 129-142. 63_irmm 3527 haryanto okey.indd international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2017, 7(1), 484-491. international review of management and marketing | vol 7 • issue 1 • 2017484 market orientation, learning orientation and small medium enterprises performance:the mediating role of innovation aris tri haryanto1*, tulus haryono2, hunik sri runing sawitri3 1department of management, sekolah tinggi ilmu ekonomi aub surakarta, indonesia, 2faculty of economics and business, universitas sebelas maret surakarta, indonesia, 3faculty of economics and business, universitas sebelas maret surakarta, indonesia. *email: arisharyanto26@yahoo.co.id abstract this study aims to empirically demonstrate the relationship of market orientation, learning orientation on innovation and business performance within the scope of the small and medium enterprises (smes). besides, this research also explaines the importance of company’s innovation as a mediating relation to improve business performance. the samples of this study were 155 managers or owners of meubeller smes in the region of karisidenan surakarta. the sampling technique used in this research was purposive sampling. the basic consideration of this research was the experience of the smes meubeller (either the manager or owner) in managing their businesses. the hypothesis testing results showed that market orientation gave positive effect on business performance and innovation of the company. orientation learning gave positive effect on business performance and innovation of the company. company’s innovation infl uenced business performance. keywords: market orientation, learning orientation, performance, innovation jel classifi cations: l1, m31 1. introduction the meubeller industry in indonesia in recent years experiences a decline in competitiveness. it is seen from: a decrease in production volumes, the contribution in gross domestic product, as well as in foreign exchange earnings, and also a decrease in trade specialization index (isp). this condition is caused by several problems that hinder the industry to develop, among the problems are: limited supplies of wood raw materials or rattan which price is relatively expensive, low human resource capabilities compared to competitor countries, especially in the fi eld of design and engineering production, the higher number of imported meubeller overfl ows the domestic market as the effect of free market, and also the stringent demands on environmental issues in the countries of export destination. one important strategy for improving the performance of the company is innovation (abou-moghli et al., 2012; hoonsopon and ruenrom, 2009; hsu, 2012; najib and kiminami, 2011; salavou and avlonitis, 2008). innovation is an essential component of the competitiveness of companies in improving performance and is a part of growth strategies to enter new markets and increase existing market share (kumar, 2012). companies which are motivated to improve competitiveness in global market also begin to implement a strategy based on innovation in anticipating the rapid technological change and tighter global competition through collaboration and value creation (co-creation) with customers (laforet, 2009; meroño-cerdán et al., 2008; ngugi et al., bournemouth university, 2010). besides innovation, market orientation is also an important factor in improving business performance (aljanabi and noor, 2015; baker and sinkula, 1999; carbonell and escudero, 2009; kara et al. 2005). slater and narver (1994) revealed that classifi cation of market orientation is divided into two types of market orientation; responsive and proactive. further mentioned that further researches are still required to study the market orientation which is divided into the one with responsive characteristics and the one with proactive. the results of the study stated that market orientation had positive effect on company performance. haryanto, et al.: market orientation, learning orientation and smes performance: the mediating role of innovation international review of management and marketing | vol 7 • issue 1 • 2017 485 keskin (2006) in his study said that in addition to market orientation, organizational learning also affects the performance. a study conducted by michna (2009) provided evidence of the relationship between organizational learning and performance of the organization. the dimension of organizational learning has a correlation to the performance of the organization. while eris and ozmen (2012) in their research showed that organizational learning has a correlation to the performance of the organization. a research by eris and ozmen (2012) provided evidence of the role of market orientation, organizational learning, and innovation on company’s performance. while kropp et al., (2006a) said that there is a relationship between entrepreneurial orientation, marketing activities, and organizational learning on entrepreneurial performance in the international business companies. this study aims to contribute thoughts on the role of market orientation and organizational learning on innovation and business performance improvement. various previous studies have provided evidences of positive relationship of market orientation and organizational learning on innovation and performance. based on the descriptions, it is important for small and medium enterprises (smes) with market-orientation and the need of organizational learning in improvng business performance. this study also comes from the phenomenon of export meubeller sales trend in indonesia that is showing a decline. on the other hand, the market potential served by smes meubeller in surakarta is increasing. seeing the potential of the meubeller smes market, then the smes meubeller actors should be able to improve their ability in creating innovative business. 2. theoretical framework and hypothesis development 2.1. market orientation, innovation, and business performance market-oriented organizations need to develop a better understanding on the strengths and weaknesses of competitors, to use that knowledge to develop and implement strategies in order to create better customer value and customer satisfaction. narver and slater (1990) stated that the primary dimension of market orientation is customer orientation and competitor orientation and in order to be able to apply both orientations better, it needs to be combined with the third orientation that is coordination among functions within the company that will increase the durability of the company against competitors while increasing satisfaction of customers. meanwhile kohli and jaworski (1990) explained models of antecedents and consequences of market orientation. the research results showed that the policy role of senior manager, the dynamics in the cooperation across departments within the company, as well as the organizations system as antecedents of market orientation followed by the role of the response of employees, customer responsiveness, and performance of the company as the consequences of market orientation. further explained that successful market orientation, according to kohli and jaworski (1990), have three main requirements: (1) focus on customers, (2) coordinated marketing, (3) coordination across departments within the company. smirnova et al., (2011) tested the effect of market orientation with the dimension of customer orientation gives positive effect on relational capabilities and insignifi cant on business performance. market orientation with the dimension of crossfunctional orientation gives insignifi cant effect on relational capabilities and signifi cant one on business performance. market orientation with the dimension of cross-functional coordination does not significantly affect on relational capabilities and business performance. relational capabilities give effect on business performance. a study supported the above research was also conducted by wang and feng (2012) which showed that customer orientation gives positive effect on the capabilities of customer relationship management (crm), customer centric organizational systems positively affect on the capabilities of crm, crm technology has positive effect on crm capabilities, crm capabilities give positive effect on company performance. a research by eris and ozmen (2012) provided clear evidence of a positive relationship of market orientation, organizational learning, and innovation on company performance. however, studies that examined the relationship between organizational learning organizational performance using indicators of corporate performance such as market growth, profi t growth, customer satisfaction and fi nancial statements gave contradictory results. based on literature review and previous study, we propose: h1: market orientation gives positive effect on business performance. the study developed by kohli and jaworski (1990)) and also slater and narver (1994) found that quick and accurate responses to customer needs become important factors when the company is dealing with the aggressive competitors that are ready to break through the market. meanwhile, carbonell and escudero (2009) suggested that leaving a strong infl uence on the organization’s ability to reach speeds of their innovation, so as to improve performance in new product launches. bodlaj (2003) stated that the market orientations (both proactive and responsive) played an important role in the innovative performance marked by the success of sales of new products that add value for customers and improve the performance of the company. market orientation itself according to jensen and harmsen (2001) is seen as an important factor of innovation performance of companies that is characterized by the level of success of new product development. meanwhile, slater and narver (1994) in their study found a positive relationship between the orientation of the market and the consequences of innovation, which the innovative performance of new products. based on literature review and previous study, we propose: h2: market orientation gives positive effect on innovation. haryanto, et al.: market orientation, learning orientation and smes performance: the mediating role of innovation international review of management and marketing | vol 7 • issue 1 • 2017486 2.2. learning orientation, innovation and business performance learning orientation is an important factor in achieving organizational innovation and superior company performance, as in some researchers including (baker and sinkula, 1999; eris and ozmen, 2012; eshlaghy and maatofi , 2011; kropp et al., 2006b; mavondo et al., 2005). learning orientation is the development of new knowledge or insight that has the potential behavior to develop innovation within the company and even able to learn from each personnel of the company is a sustainable advantage for the company (baker and sinkula, 2009). there are three indicators of learning orientation in this study, namely: commitment to learn, shared vision, and a variety of views, the success of the company. a reasearch by eris and ozmen (2012) provided clear evidence on the role of market orientation, organizational learning and innovation on company’s performance. however, the studies that examined the relationship between organizational learning and organizational performance using indicators of corporate performance such as market growth, profi t growth, customer satisfaction, and the fi nancial statements give contradictory results. while mavondo et al. (2005) in their research found that lerning orientation, customer orientation and the role of human resources gave positive effect on company performance. other studies that examined the causal relationship between organizational learning and corporate performance concluded that the learning process in the organization has an infl uence on the performance of the organization (eris and ozmen, 2012; lin and kuo, 2007). kropp et al. (2006a) examined the relationship between entrepreneurial orientation, marketing activities and organizational learning on entrepreneurial performance in the international business companies and the results showed positive relationship between innovation, market orientation and organizational learning with international business performance. while michna (2009) in his research found the relationship between the three variables consisting of cross-cultural management in the enterprise, organizational learning and organizational performance correlated to organizational learning. the dimensions of an organizational learning had a correlation to the performance of the organization. based on literature review and previous study, we propose: h3: orientation learning gives positive effect on business performance. the results of the study examined the relationship of organizational learning to innovation giving different results, but experts and practitioners continue to believe that organizational learning gives effect on the company’s innovation (lin and peng, 2008). furthermore, lin and peng (2008) in their study concluded that learning orientation affects innovation, and innovation infl uenced the performance of a business. researchers such as sony and naik (2011) also concluded that the dimensions of the six sigma contributed to the commitment to learn and organizational learning contributes positively to innovation performance. lin and peng (2008) in their study found that the orientation of the market undertaken by the company provided a real contribution to the learning orientation of the company. furthermore, this study also showed that the entrepreneurial orientation variable affects innovation, learning orientation affects the innovation, so that the innovation also provides a dominant infl uence on business performance. based on literature review and previous study, we propose: h4: orientation learning gives positive effect on innovation. 2.3. innovation and business performance innovation is widely seen as an important component of competitiveness that is embedded in the organizational structure, the production process, launched products, as well as marketing strategy within a company (alpkan et al., 2010). further explained, the basic guideline to determine the activity of innovation at a company level is divided into four different types of innovation, namely: product innovation, process innovation, marketing innovation, and organizational innovation. type of innovation as a whole has a positive impact on company’s performance. a research conducted by eshlaghy and maatofi (2011) showed the important role of innovation that could make a positive contribution to the performance of the company. the company’s role in responding to the bumpy environment requires innovation, which automatically has a central role in reaching comparative excellence and highest performance. although many researchers in the past have investigated the infl uence of innovation on organization performance, it seems the role of innovation needs to support the company’s performance. meanwhile the result of another researcher discovered that it was important for companies to be critical for innovations since they are important parts of the company and the opportunities for the company’s success in the future (holtzman, 2008). another fi nding also found that many companies were doing innovation, both in the form of technological innovation and also marketing (lin and chen, 2007; meroño-cerdán et al., 2008). a study of olson et al., (2005) described the company’s performance with regard to how the company’s business strategy is implemented effectively and effi ciently. the process of the implementation of business strategy is related to how marketing activities completed. the result of the performance is less precise when only seen from one dimension, so that the measurement of marketing performance is not enough to use a single size. a study of eshlaghy and maatofi (2011) summed up the importance of innovation that could make a positive contribution to the performance of the company. the company’s role in responding to the bumpy environment requires innovation which automatically has a central role in reaching comparative excellence and highest performance. although many researchers in the past have investigated the infl uence of innovation on performance organization, it seems the role of innovation is needed to support the company’s performance. haryanto, et al.: market orientation, learning orientation and smes performance: the mediating role of innovation international review of management and marketing | vol 7 • issue 1 • 2017 487 based on literature review and previous study, we propose: h5: innovation gives positive effect on business performance. based on the above results, an empirical research model can be developed as follows. 3. research methods 3.1. sampling respondents of this study came from the smes of meubeller industries in surakarta area. while the unit of this study was the managers or owners of smes meubeller in surakarta, sukoharjo, sragen where they fi lled out a questionnaire and had an interview. number of questionnaires collected in the region was 32 respondents from surakarta, 63 respondents from klaten, and 60 respondents from sragen. so, the total sampling was 155 respondents. the sampling technique used in this research was purposive sampling. the basic consideration applied was the experience of the smes meubeller (either the manager or owner) in managing their businesses. the other consideration referred to the defi nition of smes according to act no. 20/2008 on the criteria of smes, including: having wealth net of more than rp. 50 million and rp. 500 million, excluding land and buildings, and having an annual sales turnover of more than 2.5 billion rupiahs to 50 billion rupiahs. 3.2. measurement market orientation is an organizational culture that is highly effective and effi cient to produce culture needed in order to create superior value for buyers (kohli and jaworski, 1990). the question items used to measure market orientation employ three sub-factors: competitor orientation, customer orientation and inter-functional coordination. the instrument in this study was measured by using likert scale with range of score from 1 to 5. score 1 represents the least agree answer and score 5 values the highest agreement. learning orientation is the development of new knowledge or insight that has the potential behavior to develop the innovation process within the company and even able to learn from each personnel of the company is a sustainable advantage for the company (baker and sinkula, 2009). there are three indicators of learning orientation in this research: commitment to learn, shared content, and a variety of different views, success of the company. the instrument in this study was measured by using likert scale with range of score from 1 to 5. score 1 represents the least agree answer and score 5 values the highest agreement. innovation is a way to continuously build and develop organization that can be achieved through the introduction of new technologies, new applications in new forms of organization (low et al., 2007). the instrument used to measure innovation in this research implemented three indicators, namely: product innovation, process innovation, and marketing innovation. the instrument in this study was measured by using likert scale with range of score from 1 to 5. score 1 represents the least agree answer and score 5 values the highest agreement. business performance is an output that has been achieved through the company’s operational activities, including the achievement of corporate goals through both internal and external achievements (lin and peng, 2008). the business performance in this study employed indicators of increased sales volumes, improved earnings, asset enhancement, and increased number of customers. the instrument in this study was measured by using likert scale with range of score from 1 to 5. score 1 represents the least agree answer and score 5 values the highest agreement. 3.3. measure validity and reliability after collecting the data, the next step was testing the validity and reliability of the instrument used to fi nd out its validity and reliability. the hypothesis testing in this study used structural equation modeling (sem) program with the same step; to test the parameters resulted from goodness of fi t and directly test the hypothesis of research on the causal relationship developed in the model. maximum likelihood estimation (mle) technique was used in this study. the samples used in this study have met the criteria of recommended number of sample adequacy for the technical mle and the criteria of average error variance of indicator (average variance extracted) with a minimum sample size of up to 150 with the provision of standardized loading estimated is <0.7 and communality value equals to 0.5. the instrument testing (questionnaire items) of this study applied confi rmatory factor analysis in examining the relationship of constructs and the indicators (validity of the questionnaires). the reliability test was conducted by using cronbach alpha (cronbach’s α). here are the results of confi rmatory factor analysis test and cronbach’s α. 4. analysis and results the results of the statistical test using sem on full model can be observed in figure 1. while in table 1, it describes the result of the assumption test on sem development. the test scores have indicates the fulfi llment of goodness of fi t criteria as shown by chi-square at 76.353, probability value at 0.006, tli at 0.952, goodness of fi t index (gfi) at 0.931, adjusted gfi at 0.887, and 0.062 of rmsea which indicate that those scores have met the determined cut-off. it suggests that this research model is accepted and meets the determined criteria (standards). meanwhile, the calculations for mean, standard deviation, and matrix correlation among construct of market orientation, learning orientation, innovation, and performance can be illustrated in table 2. the score of correlation between market orientation and business performance indicates an insignificant correlation (0.360). the relation between the construct of market orientation with innovation shows a less strong correlation (0.447*). the association between the construct of learning orientation and business performance indicates a strong correlation (0.571**). the construct relation between market orientation with innovation shows a strong correlation (0.586**). similarly, the relation of construct between innovation and business performance also indicates a strong correlation (0.617**). haryanto, et al.: market orientation, learning orientation and smes performance: the mediating role of innovation international review of management and marketing | vol 7 • issue 1 • 2017488 market orientation and innovation as indicated with the score of (t = 2.297>1.96) with signifi cance value (0.022<0.05). therefore, the hypothesis which states that market orientation positively affects innovation is confi rmed. so, hypothesis 2 is accepted. learning orientation signifi cantly affects business performance. table 2 indicates the result of structural model of association between learning orientation and business performance as shown with (t = 2.670>1.96) score with signifi cance value (0.008<0.05). hence, the hypothesis which describes an existence of positive effect of learning orientation with business performance is proven. thus, hypothesis 3 is accepted. learning orientation signifi cantly affects innovation. table 2 shows the structural result of relationship between learning orientation and innovation as indicated with (t = 4.152>1.96) score with signifi cance value (0.000<0.05). hence, the hypothesis figure 1: the full model of association among market orientation, learning orientation on innovation and business performance table 1: scale items for measures refl ective scale names and items (measured on 1-5 point likert scale indicating the extent to the which the respondent agrees with following statements) standardized factor loading market orientation (cronbach’s α = 0.814) competitor orientation customer orientation inter-functional coordination learning orientation (cronbach’s α = 0. 775) commitment to learning a shared vision various views, the success of the company innovation (cronbach’s α = 0. 778) innovation in the creation of a new product innovation in the production process innovation in product marketing activities business performance (cronbach’s α = 0.8 88) the sales growth increased profi ts asset growth 0.784 0.800 0.730 0.743 0.741 0.709 0.749 0.741 0.713 0.860 0.848 0.847 figure 2 indicates standardized path coeffi cients of relationship among market orientation, learning orientation, innovation, and business performance. in addition, the result of this study is also shown in table 1 which formulates 5 hypotheses. the discussion on the relationship of each variable can be explained as follows. market orientation affects insignifi cantly on business performance. table 2 shows the result of structural model of relationship between market orientation and business performance as indicated with (t = 0.448<1.96) score with signifi cance value (0.654>0.05). hence, the hypothesis which declares the positive infl uence of market orientation on business performance is not confi rmed. thus, hypothesis 1 is rejected. market orientation has a signifi cant effect on innovation. table 2 illustrates the result of structural model of relationship between haryanto, et al.: market orientation, learning orientation and smes performance: the mediating role of innovation international review of management and marketing | vol 7 • issue 1 • 2017 489 figure 2: conceptual model of market orientation, learning orientation, on innovation and business performance which states that there is a positive effect of learning orientation on innovation is confi rmed. thus, hypothesis 4 is accepted. innovation has a signifi cant effect on business performance. table 2 illustrates the result of structural model of association between innovation with business performance as indicated by the score (t = 3.484>1.96) with signifi cance value (0.000<0.05). so, the hypothesis which claims a positive effect of innovation on business performance is confi rmed. thus, hypothesis 5 is accepted. 5. discussion this study is designed to give empirican evidences on: • the relationship of market orientation and business performance • the relationship of market orientation and innovation • the relationship of learning orientation and business performance • the relationship of learning orientation and business performance • the relationship of innovation and business performance the result of this study has proven that market orientation insignifi cantly affects business performance. this fi nding is totally different to a research done by smirnova dkk. 2011 which describes that market orientation with the dimension of orientation on competitors gives effect on business performance. another different result is also found by wang dan feng 2012 which claimes that customer orientation positively affects company’s performance. market orientation gives signifi cant effect on innovation. this fi nding is in line with bodlaj (2003) which fi nds a signifi cant relationship of market orientation (proactive or responsive) on innovation as marked by the success of new product sales. similarly, jensen and harmsen (2001) also fi nd the same result that discovers a crucial factor of company’s innovation performance as marked by the level of new product development success. learning orientation affects business performance. this result is supported by the previous study conducted by eris and ozmen (2012) on the role organization learning and innovation toward company’s performance. mavondo et al. (2005) also support the result of this study, they fi nd that learning orientation, customer orientation, and human resources positively affect company’s performance. learning orientation affects innovation. this fi nding is in line with lin and peng (2008) who conclude that learning orientation affects innovation that eventually innovation affects business performance. another fi nding as from sony and naik (2011) has also confi rmed this study which concludes that the dimension of six sigma contributes to the commitment to learn and the organization learning gives positive contribution on innovation performance. innovation gives signifi cant effect on business performance. this result supports the previous fi nding from eshlaghy and maatofi (2011) which reveals the important role of innovation that will table 2: the test result of path coeffi cient of relationship among market orientation, learning orientation on innovation and business performance hypothesis standardized path coeffi cients t value probability result h1 market orientation→business performance 0.058 0.448 0.654 not signifi cant h2 learning orientation→business performance 0.409 2.670 0.008 signifi cant h3 market orientation→innovation 0.233 2.297 0.002 signifi cant h4 learning orientation→innovation 0.448 4.152 0.000 signifi cant h5 innovation→business performance 0.598 3.484 0.000 signifi cant note: *signifi cant at p≤0.05; if (t) ≥1.96 table 2: descriptive statistics and correlations construct mean±standard deviation 1 2 3 4 market orientation 3.541±0.681 1.000 learning orientation 3.647±0.773 0.428** 1.000 innovation 3.310±0.674 0.447** 0.586** 1.000 business performance 3.212±0.873 0.360 0.571** 0.617** 1.000 *correlation is signifi cant at the p<0.1 level (two-tailed). **correlation is signifi cant at the p<0.05 level (two-tailed). ***correlation is signifi cant at the p<0.01 level (two-tailed) haryanto, et al.: market orientation, learning orientation and smes performance: the mediating role of innovation international review of management and marketing | vol 7 • issue 1 • 2017490 provide positive contribution on company’s performance. a study by eshlaghy and maatofi (2011) has also confi rmed this research fi nding, they underline the important role of innovation that can contribute positively of company’s performance. 6. conclusions this study offers empirical evidence on the relationship of market orientation and business performance which in the previous researches have been proven empirically. this study also provides theoretical contribution on the previous clarification study conducted by narver and slater (1990) on the primary dimensions of market orientation are customer orientation and competitor orientation which are able to boost company’s performance. kohli and jaworski (1990) have also explained the roles of market orientation, dynamic within companies cross department coorperation, and also organization system as an antecedent of market orientation that is then followed by the role of customer response which affects the company’s performance. an important fi nding of this study indicates an insignifi cant result of relationship between market orientations with business performance. it means, an intense effort needs to be carried out by the actors of meubeller smes to respond the customers, to respond the movement of competitors, and also to conduct intensifi ed cross functions coordination. one of the efforts that need to be done by the actors is to actively respond on what is demanded by the customers. referenc es abou-moghli, a.a., abdallah, g.m.a., muala, a.a. 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/untaggedcmykhandling /leaveuntagged /untaggedrgbhandling /leaveuntagged /usedocumentbleed false >> ] >> setdistillerparams << /hwresolution [2400 2400] /pagesize [612.000 792.000] >> setpagedevice . international review of management and marketing | vol 6 • special issue (s6) • 2016116 international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2016, 6(s6) 116-120. special issue on "management of systems of socio-economic and legal relations in modern conditions of development of education and society” socio-economic and public-power aspects of the state and society relations in modernizing russia valentin y. lyubashits1, alexey y. mamychev2, maria v. vronskaya3, alla a. timofeeva4* 1south federal university, rostov-on-don, russia, 2vladivostok state university of economy and service, vladivostok, russia, 3vladivostok state university of economy and service, vladivostok, russia, 4vladivostok state university of economy and service, vladivostok, russia. *email: niko.m_2002@mail.ru abstract the paper discusses the socio-economic and publicly-power aspects of the state and society relations in the modernized russia traced the process of formation and development of corporate democracy. as a key problem is pointed out that russia is predisposed to the state, paternalistic oriented model of economic democracy, including its corporate component. it is argued that the creation and enforcement of effective legislation, “filtering” narrow group interests of any type requires a regulatory system of the state. such activities of the russian state could lead to the realization of the absolute principle of “inviolability” of the property that adequate non-interference of the state in the current framework of democratic institutions. separately, in the work it provides a comparative analysis of the formation of corporate democracy in eastern europe and russia. it is argued that the “corporate” structure, as part of a functional representation of the system are an intermediate form and they can be turned in both directions – and a “democracy of proprietors” and administrative “managed democracy.” keywords: power, government, civil society, institution of property, corporate democracy, political system, economic processes jel classifications: d72, k40, m14, g30 1. introduction one of the important aspects of the relations between state and society, which reveals the nature and dynamics of specific relations, is the institutional aspect. institutional infrastructure includes a diverse range of operating forces, which each in their own way represent themselves. some political scientists distinguish, on the one hand, the organization of political representation – state bodies, political parties, etc., and on the other, the various interest groups included in the functional representation system. the most important structural element of the functional representation of the corporation acts. the subject of this article is especially democratic processes in the corporate structures of modern russia in a comparative retrospective. 2. literature review before identify special characteristics of corporate democracy in russia, as a system of functional representation, it is necessary at least in general terms, to consider the basic concept of democracy and identify conceptual belonging to them (concepts) of the corporate form of democracy (agamirov et al., 2015). we will come to the conclusion that “corporate” structure, as part of a functional representation of the system are an intermediate form and they can be turned in both directions – and a “democracy of proprietors” and administrative “managed democracy” (lyubashits et al., 2015). for one of the well-known interpretations of the specifics of democratic regimes include the work of s.n. eisenstadt “paradox of democratic regimes: fragility and variability” (eisenstadt, 2002), in which democratic regimes are viewed as a natural political institutionalization of modernity with its increased demand in the variability and adaptability (ovchinnikov et al., 2015). eisenstadt analyzes constitutional and participatory concept of democracy. both of these concepts are rooted in the historical and ideological and institutional base of the cultural and political program of modernity. lyubashits, et al.: socio-economic and public-power aspects of the state and society relations in modernizing russia international review of management and marketing | vol 6 • special issue (s6) • 2016 117 constitutional interpretation and the concept of democracy were formulated by j. schumpeter in his work “capitalism, socialism and democracy” in contrast to the “classical doctrine” of democracy, which was based on the idea of “common good” and the political system for its implementation, the schumpeter defines democracy and its method of how such institutional arrangements for political decisions in which individuals acquire the power to decide by means of a competitive struggle for votes (schumpeter, 1995). in politics, as in economics, the laws of competition act, that is, people who claim to be the leaders and wishing to obtain political power, will come together to compete for votes (baranov et al., 2015). the element of competition is the essence of democracy and theory of competitive leadership, according to schumpeter, it gives a satisfactory explanation of the facts of the democratic process. the classical theory of democracy (more democratic method) in the heyday of capitalist society predominated in the process of political and institutional changes. democracy was a practical tool for the reconstruction of forms of social and political structures that preceded the rule of the bourgeoisie. moreover, the ideology of democracy based on the rationalist interpretation of human actions and values. schumpeter defined as follows classical doctrine of democracy, “there is a democratic method of a set of institutional means of political decision making, with the help of which the common good by providing opportunities to the people to solve problems through the election of individuals who are going to carry out his will” (schumpeter, 1995). we will not dwell on the criticism of this model by schumpeter democracy, we note that he has devoted a section identifying the causes of the survival of the classical doctrine. his reasoning on this subject continue to remain relevant in today’s russia, embarked on the path of modernization. here is an example four positions. • first, the doctrine of collective action. for many of those who stayed with their religious (socialist) beliefs, the classical doctrine became their political complement. the author specifically drew their attention to the analogy of the socialist religious beliefs; • second, forms and phrases of classical democracy for many nations (russia is not an exception) are associated with the events of their history, who enthusiastically accepts the vast majority of the population; • third, there are social structures in which the classical theory of democracy is largely continues to fit the facts. this primarily refers to undeveloped industrial societies; • fourth, politicians use such phraseology that flatters the masses and makes it possible not only to avoid responsibility, but on behalf of the people to deal with their opponents. schumpeter also finds an explanation openly egalitarian nature of the classical theory of democracy. we note one important point in the reasoning of the scientist, it is important for our further analysis of the different forms of democracy and the choice of the russian democratic transformation (lyubashits et al., 2015). schumpeter emphasizes, “it is impossible to expect the effective functioning of democracy as long as the vast majority of people in all classes will not agree to abide by the rules of the democratic game, which in turn means that they basically agree with the fundamental principles of institutional structures” (schumpeter, 1995). failure to comply with the latest conditions and forced the scientist to propose and justify a different theory of democracy. thus the theory of competitive leadership suggests that competition depends on strict adherence to constitutional precepts and rules. another interpretation of eisenstadt as a participatory democracy represents (eisenstadt, 2002). this is a form of democracy in which the rule is carried out not oligarchic groups, and the “weight” that includes all citizens. the researcher in this interpretation focuses on two main types: “republican” and “communitarian.” the first focuses on the importance of responsible participation of citizens in the political process, no matter what restrictions are not met in this way. the second part is considered as a public good, which can manifest itself not only in the national political arena, but also in the equally important areas of life: at the local level, workplace and others. eisenstadt identifies institutional and ideological consequences inherent in this or that interpretation of democracy. “most importantly, he notes – constitutional and participatory democracy interpretation differed in terms of which of the two fundamental values that accompany the formation of democracy – freedom and equality – they placed the cornerstone” (eisenstadt, 2002). if the constitutional interpretation of democracy with all its modifications has been associated primarily with the heritage of representative institutions and practices, the participatory version guided by the importance of the participation at every level of public life, including intermediary institutions or associations (mordovcev et al., 2015). 3. main part we are mostly interested in the position of community version of participatory democracy, as they meet the objective of the study of the corporate form of democracy. representative authorities considered communitarians as important guides and tools to overcome the deep inequalities that prevent the successful functioning of democracy. suffice cautious perception of representative institutions is due to the fear that they are not always conducive to the full participation of citizens in political life and can preserve the inequitable distribution of wealth and power at every level of public life: at the level of the social community as a whole, the local community or the workforce. on the basis of its commitment to the fundamental values of private property and free of contractual relations, in the face of corporate monopolization undermines the viability of the capitalist system. distribution conflicts infinitely torn apart the social and political fabric of society, make it a highly unstable and disordered. in this case, in achieving a favorable distribution of the state structure, following the internal logic, should resort to price controls and income tax incentives to establish and fund social assistance lyubashits, et al.: socio-economic and public-power aspects of the state and society relations in modernizing russia international review of management and marketing | vol 6 • special issue (s6) • 2016118 programs to maintain or improve the welfare of certain groups. immediately on the state begin to pressure other groups wishing to obtain similar benefits. corporate society in which the main role is played by the economy of organized groups, advocates the closest analogue of today’s bureaucratic, “bureaucratic” economy. there is some reason to use methodological approaches eminent economists and sociologists schumpeter and hayek’s analysis of democracy no problems in the transition from capitalism to socialism, but on the contrary, the transition from socialism to capitalism. we can watch the match point (point of no return?) of the two opposite tendencies of character. one leading to the “future” socialist – western democracy, as it was seen in the 40 years of the last century, and the other – in the “past” the capitalist as it is presented today, at the turn of two epochs. then we can offer the thesis that the “corporate” structure is an intermediate form and they can be turned in both directions – and to the market, and the administrative state. such a system – a kind of criterion of reversibility/irreversibility of social transformation. it is possible that a corporate base that is an intermediate step that society, breaking with totalitarianism, is forced to take place in reverse order. democratization or diffusion of property that occurred in the developed countries in the second half of the twentieth century, shows the main vector of development of economic democracy in russia, especially in the corporate sector. as an important tool to overcome the deep inequalities in society is the implementation of private property rights. let us bear in mind that there have been some advances in the understanding of “private property” in modern political economy. recall the idea of schumpeter’s “diluting the idea of ownership” in the corporation (instead of the walls and the foundation – a pack of papers). in theoretical models describing the operation of the property, the starting point of the analysis is most often served as the ownership of the factors of production, especially in the physical and financial assets, as well as human capital. it is assumed that the results of all ownership transactions in the market are fixed contracts system. of fundamental importance today appears the following circumstance: no concluded contract cannot be considered “complete.” when it comes to contracts for the hiring of labor or rent any property, (production equipment) cannot cover all situations that may arise, and to determine in advance the rights and obligations of the parties in each of these cases. in these cases, the right of ownership is found primarily due to incomplete contracts. therefore, defined in institutional economics as residual property rights – in relation to the requirements of the contract – order and control rights. citing this definition, neo-institutionalists emphasize that this approach assumes an economy in which there are not only wellhoned structure agreements, drawing up the results of market transactions, but also brought up many decades “culture of the contract.” the definition of property rights through the residual implies that the participants in the economic process confident in the reliability of any contractual obligation. formal, but not the actual registration of private property in the ussr was the spring of 1991. prior to that, four years conducted cosmetic reforms such as economic independence of state-owned enterprises, private ownership was invented like “the right of full economic management,” permits cooperative and rental companies. at the turn of 1990-1991. it affirms the position of the inevitability of privatization in the ussr and russia, without which – in the presence of a dominant public sector – to talk about the right of private ownership of the shares and securities markets or other attributes of a market economy is not necessary. ussr law “on property in the ussr” dated march 6, 1990 and the amendments to the constitution of the ussr, dated 14 march 1990 (st.10-13) tolerance of the property of citizens and non-state legal persons of means of production, securities and other material and intangible objects and rights income. of course, the principle of full recognition and protection of all forms of ownership is closely linked to political pluralism and democratic values. the principle of absolute protection of property rights, a recognized priority of the state determines the stability of the political system and enhances public confidence in its institutions. on the contrary, real democratic institutions and decision-making procedures allow the fullest and with minimal costs to the community to realize the balance of interests of different ownership entities. adherence to these principles is the recognition and international standards developed by the international community in the second half of the xx century. in the context of globalization of the world economy the effective protection of property rights at the national level is the establishment of favorable conditions for the integration of the russian economy into the international economic space. the country’s history are the following main stages of redistribution of property: • spontaneous privatization process (1987-1991); • mass privatization (1992-1994); • post-privatization redistribution of property (the concentration of sputtered shares of privatized enterprises since 1993 as the most common process; • loans auction 1995; • war “oligarchs,” 1997; • transition from legal to criminal procedural technologies of corporate control and redistribution of the share capital in 1996-2004). spontaneous privatization process (1987-1991) was associated with the emergence of rental and cooperative legislation, the right of full economic management on state-owned enterprises, the lack of unified legal and privatization procedures. its forms were lyubashits, et al.: socio-economic and public-power aspects of the state and society relations in modernizing russia international review of management and marketing | vol 6 • special issue (s6) • 2016 119 nomenclature-bureaucratic, nomenclature-territorial “collective,” “the managerial” and others (radygin, 1992). mass privatization (1992-1994) characterized by an intense build-up of a “critical mass” corporatization, privatization vouchers distributed among the citizens of russia. the most important result of the mass privatization – from the perspective of the development of a new system of property rights – was the creation of new institutions: the corporate sector (more than 30 000), corporate securities market, the system of institutional investors, about 40 million formal shareholders on the results of mass privatization. according to the estimates of the rf ministry of state property and the ministry of economy of the russian federation, the share of gdp in the public sector in 1994 was 38%, in 1996 – 23%. the share of privatized enterprises (including corporations with the state share), respectively, 37% and 39%, the share of private enterprises initially – respectively 25 and 38%. post-privatization redistribution of ownership took place against the background of the overall control of the consolidation process in the russian corporations. the basic conflict of all these years, there was a conflict between the old managers, fiercely defending their position, and potential “invaders” control. transformation of corporate institutional characteristics includes two sub-steps. firstly, phase years 1995-1997. associated with the completion of the redistribution of property in a number of key companies in russia. as a result, the transmission group of the most influential banks in a number of lucrative export-oriented enterprises of the oil and steel industries in the country was created a few really large controlled banks to corporate structures. they were called fpg (financial-industrial groups) and conglomerates (according to estimates by the federal securities commission – federal securities commission, in 1996, the struggle for control was completed in 25% of russian companies at the beginning of 1998 – 50%.) vo secondly, due to the emergence of legal constraints associated with the entry into force of the law “on joint stock companies” and other legal documents in the second half of the 90’s – early 2000s. in the struggle for control are increasingly used procedural techniques, including in violation of corporate law. at the federal level, reanimated the idea of ownership of labor collectives and large state-owned holding companies as the main structural unit of the russian economy. in 1998, the federal law № 115-fz of july 19, 1998 “on peculiarities of the legal status of joint-stock companies of workers (people’s enterprises).” the structure of the russian union of people’s enterprises (cfstr is a nonprofit organization that brings together businesses of different legal organizational forms with the number of employees from 50 to 5,000 people) consists of about 50 companies from 26 regions of russia (konovalov, 1995). experience the redistribution of property in russia in the 90s. it indicates that the “people’s enterprises” are a form of maintaining or strengthening the position of small business directors or managers as a way to protect corporations from hostile takeovers. during the transition of the russian society and its economy in the area of property rights has expanded the zone of uncertainty, as the state property protection system is blurred, and the new clear system of private property rights is still lacking. blur property rights not only leads to paralysis of the investment activity of corporations, but also the difficulties of the process of institutionalization of corporate (economic) democracy. it is clear that historically (traditionally) down the distribution of property structure of the corporation determines the specific national model of corporate governance and the appropriate democratic mechanisms (williamson, 1985). supporters of the neo-institutional approach to the economy unlike schumpeter, treat the corporation as “the network of contracts” (alchian and demsetz, 1975). in russian conditions, the lack of a developed system of long-term culture and a clear standard contract enforcement mechanism, as the ownership of transmission channels, causes massive violations of the rights of shareholders, unit enforcement of (enforcement of the system of enforcement of contracts and property rights) for political purposes, the development of non-market relations economic agents, growth in rent-oriented activities, corruption. it should be noted that a number of fundamental for the development of a national model of corporate governance issues investigated in 1998-2005 (radygin et al., 2003). the national studies indicate that the legal environment and structure of the russian economy is so specific that it makes sense to try to build a special – “russian” – a model of corporate governance. its special features are: firstly, lack of transparency of the ownership structure, due, in particular, the illegitimate nature of privatization and subsequent redistribution of property; secondly, the imperfection of russian legal institutions is changing our understanding of the relationship between corporate governance and ownership structure. in western studies of ownership structure is endogenous with respect to the legislative level of investor protection. in an economy with developed financial markets and the protection of property rights and contract enforcement capital structure and, in particular, the ownership structure of endogenous and determined by the business structure, income distribution, the size of the enterprise, the nature of uncertainty, etc. at the same time, the presence in russia of high transaction costs in the capital market leads to the fact that the ownership structure is changing relatively slowly. we cannot say that the ownership structure is exogenous, because enough time has passed after the privatization in order to there was a significant redistribution of property. however, the ownership structure is changing more slowly than the level of corporate governance, so it is treated as an exogenous variable. low level of law enforcement makes corporate governance from the formal to the informal institution. in developed countries, the level of protection of investors’ rights is determined by law and therefore considered to be a predetermined value. the russian corporate law is not fulfilled, so to protect the rights of foreign investors is not required, but voluntary, the company chooses its level of performance. 4. conclusions russia is much more predisposed to the state, paternalistic oriented model of economic democracy, including its corporate component. lyubashits, et al.: socio-economic and public-power aspects of the state and society relations in modernizing russia international review of management and marketing | vol 6 • special issue (s6) • 2016120 the russian government will take and actually assumes more of what meted universal economic theory. effective active than any other civilized country. formation of democratic institutions in transition is manifested in the special role of the state as a “creative destroyer;” it requires a longer period of time for this process, comparable to all the transition. creation and execution of effective legislation, “filtering” narrow group interests of any kind (political, populist, criminal, etc.) needs daily regulatory activities of the state. such activities of the russian state could lead to the realization of the absolute principle of “inviolability” of the property that adequate non-interference of the state in the current framework of democratic institutions. modernizing russia’s economy, despite the really significant changes that have taken place in the property relations, continues to remain a serious gap between nominal and real property rights, and in some cases real control rights are preserved in the hands of the old/new political and economic nomenclature. thus, the emerging private property in many cases continues to keep “nonmarket,” undemocratic, and the redistribution of this property controlled by political and other motives, which are often poorly linked to a concern for the effective use of the acquired property. economic democracy in many respects continues to be nominal. moreover, the process is carried out a merger of banking and industrial capital and the state in its specific “transitional” form. this raises not only the positive effects but also provokes struggle narrow group (private and/or public) interest, and, therefore, leads to all sorts of preferences under the law, “the special relationship” individual economic actors with the state, corruption, criminals, etc. thereby amplifies “procedural uncertainty,” characteristic of the transition from the “ordered” centralized management relations to political democracy and economic freedoms to the statement. there remains the possibility of appeal or in the direction of the practice of “managed democracy” or “democracy of owners.” another feature of the corporate practice of democracy is the absence, in practice as well as in the social historical memory of the russian population information about the pre-socialist market institutions, in contrast to a number of countries in central and eastern europe. thus, experts in the field of financial markets in russia give comparative data on investment funds in russia and some countries of eastern europe: in absolute terms, the total net assets of investment funds in poland, hungary and the czech republic in 5-7 times higher than in russia, based per capita gap noted up to 80-fold. formation of the ownership society – an indispensable foundation of a free democratic society. the establishment of real property rights would create a full-fledged civil society, independent of the state. this privatization is an absolute imperative for the exit from the socialist feudalism. the general positive result of the complex and contradictory process of formation of the ownership structure in russia was primarily gradual stabilization (ordering structure) of property rights from the amorphous and dispersed structure to the emergence of explicit (formal, based on the right of ownership) or hidden (informal, based on the actual power corporation) corporate control poles. this process was closely associated with positive changes in corporate law norms, legislation in general, fixing the system of functional representation. “corporate” structure, as part of a functional representation of the system are an intermediate form and they can be turned in both directions – and a “democracy of proprietors” and administrative “managed democracy.” 5. acknowledgment the research is done with funding from granting by the president of russian federation as part of research project “archetypal (socio-cultural) bases of russian governmental organization and its evolution in xxi century” № md-6669.2016.6. references agamirov, a., mordovtsev, a., mamychev, a., sarychev, i. 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(2015), state and algorithms of globalization. mediterranean journal of social sciences, 6(3s6), 277-282. available from: http://www.dx.doi. org/10.5901/mjss.2015.v6n3s6p277. mordovcev, a., mordovceva, t., mamychev, a. (2015), the convergence of law: the diversity of discourses. mediterranean journal of social sciences, 6(3), 262-267. ovchinnikov, a., mamychev, a., mamycheva, d. (2015), sociocultural bases of state legal development coding. mediterranean journal of social sciences, 6(3s4), 67-74. radygin, a. (1992), spontaneous privatization: motivations, forms and stages. studies on soviet economic development, 3(5), 341-347. radygin, a., entov, r., mezheraups, i. (2003), features of formation of national corporate governance models. moscow: iet. schumpeter, j. (1995), capitalism, socialism and democracy. moscow: eksmo. p864. williamson, o. (1985), the economic institutions of capitalism: firms, markets, relational contracting. new york: free press. . international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2016, 6(3), 551-558. international review of management and marketing | vol 6 • issue 3 • 2016 551 brand building for competitive advantage in the ghanaian jewelry industry felicia naatu* department of procurement and marketing, school of business and law, university for development studies, wa campus, ghana. *email: fenaat@yahoo.com abstract branding is a crucial component in marketing that determines the success of an organisation. however, developing a successful brand to gain competitive advantage is essentially a marketing problem in the ghanaian jewelry industry. globalization and competition especially from asia and other developed parts of the world results in market share decline, firms’ failure and job losses in the ghanaian jewelry industry. the objective of this paper was to study the branding strategies of precious minerals marketing corporation (pmmc) and ernie’s classic jewelry and how that influences their competitive advantage. primary data were obtained from management and customers of these two companies through interviews and questionnaires. descriptive statistics were used in the analysis of the survey data. the results indicate that research and development, internal branding, brand positioning/promotion and customer orientation are the critical branding factors for competitive advantage adopted by the firms. however, pmmc was found to be more competitive compared to ernie’s classic jewelry through brand building. the results have several implications and recommendations for firms’ development through branding. keywords: branding, competitive advantage, descriptive statistics jel classification: m3 1. introduction branding is a crucial component in marketing that determines the success of an organisation. it is everything that an organisation does to create in the minds of customers and prospects the perception that there is no product or service on the market that is quite like the firm’s (moore et al. 2009). the purpose of this is not only to win customers but to retain them. developing a successful brand to gain competitive advantage is essentially a marketing problem in the jewelry industry that requires a marketing thought and marketing approach. it enables a focus on how best a product or company can develop an edge and become superior to their competitors. and this porter (2008) argument can be achieved by creating one or more value creating activities in a way that creates more overall value than competitors do. a brand is a name, term, logo, sign, symbol, design, or a combination of these; created to identify the goods or services of one seller or group of sellers and differentiate them from those of competitors (kotler and pfoersch, 2006). however, the current brand conceptualization is far more complex. most academics agree that it now entails more than a logo or an advertising theme. for example, yap (2006) consented that a brand is not just a product, logo or trademark, nor is it only about advertisement or tagline. these are only the means to an end, the end being the establishment of a competitive brand. brands identify the enterprise or company and the source of all its goods and services. the brand stands for something specific: it is the corporate personnel that conveys value, creates trust, and delivers assurances of a consistent quality and service leading to repeat purchase and loyalty from customers, users, and the world at large. brands are assets constitutive of intellectual capital value, significant drivers and creators of market capitalization, reputation and public integrity (bradford, 2009). moore et al (2009) suggested that brand otherwise represents many more intangible aspects of a product or service; it embodies the collection of feelings and perceptions about quality, image, lifestyle and status. the power of a brand lies in its ability to command a good reputation, goodwill and the naatu: brand building for competitive advantage in the ghanaian jewelry industry international review of management and marketing | vol 6 • issue 3 • 2016552 best memorable position in the mind of the proposed consumer (khan, 2005). standing out amidst a massive chorus of competitors is a challenge for any company in today’s business climate. kotler and pfoersch (2006) elaborated that brands facilitate the identification of products, services and businesses as well as differentiate them from the competition. they further contended that they are effective means to communicate the value and benefits a product can provide. a brand which is widely known in the market place acquires recognition and effect confidence in customer relationship. the importance of branding cannot be overemphasized with the constant technological discoveries. branding has become the language for almost every savvy marketer, marketing gurus and researchers. it has even permeated the walls of nonprofit organisations as they seek to optimize their goal. it is therefore, of no wonder that there have been many researches done on it leading to the discovery of its role and importance in the business world today (shiffman and kanuk, 2009). however, the case of jewelry firms in ghana has been given little attention. corporate branding is established when the organisation brands the company’s name and subsequently brand all the company’s product under the umbrella of the organisation. corporate branding helps to convey the vision, mission, values and intention of the organisation. it leads to cost effectiveness as it uplifts the entire brand of brands of the company (charkraborty, 2010). corporate branding builds on the tradition of product branding, seeking to create differentiation and preference. however, corporate branding is conducted at the level of the firm instead of the product or service, and furthermore extends its reach beyond customers to stakeholders such as employees, customers, investors, suppliers, partners, regulators and local communities (hatch and schultz, 2001). a corporate brand is not necessarily limited to a single corporation. it can also apply to a variety of corporate entities, such as corporations, their subsidiaries, and groups of companies (balmer and gray, 2003). balmer and gray (2003) again assert that corporate identity, as an important corporate asset, represents the firm’s ethics, goals and values, to differentiate the firm from its competitors. with the exception of some few firms, the jewelry industry in ghana can be said to be ineffective in corporate branding and hence lacked competitive advantage in relation to foreign products. industries in ghana, especially the jewelry sector have been affected by economic, political, social, cultural and legal pressures of the country. in recent years also, protectionism has given way to globalization, and with that change, ghanaian jewelers have to compete with imports and traders/jewelers from other countries specialized in jewelry that are more endowed with capital. unfettered by protectionism, retailers have seized on the opportunity, often choosing to go directly to offshore manufacturers. as retailers become larger and more globally connected, they continue to build global brands marketed around the world leaving out the majority of the ghanaian jewelry firms which face many challenges. such challenges include the rise of low-cost goods from asia, difficulty in accessing capital, lack of innovation from entrepreneurs, relatively high prices of products due to high unit cost, poor distribution channels and inability to promote local brands. the result has been market share declines, firms’ failure and job losses in the industry (thompson, 2007). the fact that companies such as precious minerals marketing corporation (pmmc), pearl jewelry, emefa jewelry and a few others have strong brands and are not only surviving but are competing strongly in the market. this indicates that, while faced with the aforementioned factors, most of the less competitive jewelry enterprises are lazed in some strategies and practices key to building strong brands, hence the probable reason for the failure of most jewelry enterprises in the country. kotler and armstrong (2008) emphasized that carefully developed and managed brands are powerful assets that equip the company with power and value in the marketplace. while agreeing with this proposition, research has not been conducted in the area so that less competitive jewelry firms can learn competitive strategies such as branding. a study on the branding strategy of well established companies can provide lessons for the smaller jewelry firms to gradually gain competitive advantage. 2. literature review a brand is not just a memorable name but a set of differentiating promises that link a product or a service to its customers. it knows itself and communicates consistency, whether through advertising and packaging or pricing and customer-service policies. a successful brand differentiates a brand from competitive products, sets it apart from a competition and generates consumer loyalty and long-term financial return (yap, 2006). white (2010) contended that branding is the process of determining your competitive advantages, building an institutional culture and business strategy around those advantages, and then communicating that brand effectively and consistently. this implies that being able to identify ones strengths which could constitute a competitive advantage of a company is imperative for the achievement of a successful brand. according to gossen and grisham (2010), a company needs to analyze the competition, identify its strengths, validate advantages, know its customers and their values, create brand compatibility, align value proposition and business processes in order to achieve competitive advantage. the relatively limited studies in the jewelry industry in ghana further limits analysts the ease of assessing these variables for competitive advantage. the use of branding to achieve competitive advantage requires to a larger extent a brand strategy. brand strategy is the what, where, when, how and whom you plan on communicating and delivering your brand messages. it is the plans for the systematic development of brand to enable it meet its agreed objectives (egan, 2007). the strategy should be rooted in the brand’s and the company’s vision and driven by the values as well as principles of differentiation to sustain customers appeal (kotler and armstrong, 2008). a strong brand strategy would increase the awareness of a company and its offerings in a way that establishes strong feelings, reactions and a favourable view towards the company as a whole. this sort of brand awareness can only be achieved through skillful brand strategy (yap, 2006). this strategy can aid in creating the naatu: brand building for competitive advantage in the ghanaian jewelry industry international review of management and marketing | vol 6 • issue 3 • 2016 553 impression that a brand associated with a product or service has certain qualities or characteristics that makes the brand special and unique. successfully out-branding your competitors is a continuous battle for the hearts and minds of your customers (kotler and armstrong, 2008). kotler and armstrong explained that the enterprise must first have knowledge (through research) about its environment to develop a brand with the values of the organisation that would be strong enough to gain a competitive edge. the proposition of the brand makes must be very compelling, attractive and unique among competitive offerings. the capacity of local jewelry firms in ghana to conduct market research on their brand can be a challenge resulting from absence of the required human or financial resources. winning brand strategies starts with top-notch research. with values set, a brand proposition is ready to be established. at a minimum, both must be done to establish clarity on the brand’s strengths and weaknesses, the target audience and the competition. if possible, branding research should also be done on the brand’s industry, its history, the status of the market and possibilities for future expansion (moore et al. 2009). other research that a firm might want to do is find out what its competitors’ offerings are like. how does the organisation offering stack up? what can a customer get from the firms product that they can’t get from anyone else? one needs to find out these things, and have the seeds for a winning branding strategy in order to gain a competitive advantage (yakimova, 2005). competitive advantage is the tool that enables a company to take a bigger market share and generate more sales. it is a key determinant of superior performance that ensures survival and prominent placing in the market (knox, 2004; porter, 2008). since superior performance is the ultimate goal of every firm, competitive advantage is the foundation highlighting the significant importance to develop same. competitive advantage occurs when an organisation acquires or develops an attribute or combination of attributes that allows it to outperform its competitors (porter, 2008). these attributes can include access to natural resources, or access to highly trained and skilled personnel. competitive advantage requires delivering more value and satisfaction to target consumers than competitors do. by competitors analysis, which entails the process of identifying key competitors, assessing their objectiveness, strategies, strengths and weaknesses, the company may be able to develop competing marketing strategies unique and quiet differentiated that would strongly position the organisation against competitors and give it the greatest possible competitive advantage (kotler and armstrong, 2008). as advantage comes from the differential in any firm attributes, be it ownership, access, or knowledge based, that allows one firm to better provide customer value than others can, any factor that contributes to the existence and/or enlargement of such a differential could serve as a source of firm advantage (ren et al., 2010). since the overall objective of firms is to provide value for customers and the organisation itself, marketers must ensure a continuous provision of greater value in terms of the competition that builds the brand value, and which makes it in the best interest of customers to stay with the company rather than switch to other firms (shiffman and kanuk, 2009). the foregoing discussion implies that every firm will want to have a competitive advantage in the product or services its delivers to the market. however, a choice of poor brand strategy may defy such objectives of comparative advantage among young firms. empirical studies have identified the determinants of competitive advantage. thompson et al. (2010) argued that, individual resources alone may not yield sustainable competitive advantage. amit and shoemaker (1993) cited by mathur et al. (2007) confirmed this by saying, only a subset of a company’s resources classified as strategic assets contributes to its competitive advantage. this is what moore et al. (2009) identified as the intangible assets of the organisation. they explained that it is through the strategic combination and integration of the set of available resources that yield sustainable competitive advantage. the set of activities and processes through which a company deploys its resources effectively in a way that others cannot imitate is known as the core competences of the organisation. they include: superior system for delivering customer order accurately and swiftly, better after sale service capability, more skilled in achieving low operating costs, unique formula for selecting good retail location among others. it is usually the stock of these variables that determine a firm’s advantage in any moment: what positions you have, what resources you possess, and how much goodwill you have deposited in customers and suppliers, i.e. the strength of your name, and your reputation. researchers have established that to build a competitive brand one invariably builds a competitive advantage. the marketing concept which is now the modern business orientation has been largely embraced by most marketers. this concept evolved through several alternative approaches such as the product concept, production concept and the selling concept to marketing concept and more recently the societal concept, where the organisation goes beyond the focus on consumer and other stakeholders to include environmental concerns (shiffman and kanuk, 2009). with these concerns coupled with the need for profit making and survival in today’s challenging market place, savvy marketers recognize the need to engage in the production of goods and services that consumers would find friendly and worth buying. in order to be able to produce goods that customers would find worth purchasing marketing research becomes handy. through research (i.e., internal and external audit) marketers get to interact with the surrounding factors of the organisation which leads to the discovery of factors. from figure 1, these factors include threats, strengths, weaknesses and opportunities, and the discovery of their valuable assets that must be effectively deployed to achieve successful brands. research also leads to the discovery of informed knowledge about target audience. equipped with enough and relevant information about customers, their needs and wants, marketers can then tactically develop strategic brands (products/services) by differentiating their products from competing brands. through a strategically developed brand the firm can position itself well in its target customers’ mind. branding becomes effective when through effective positioning a firm develops a unique selling propositiona distinct benefit or point of difference for the product or service through marketing activities such as advertisement and personal selling. when the company is able to communicate the true value of the brand to naatu: brand building for competitive advantage in the ghanaian jewelry industry international review of management and marketing | vol 6 • issue 3 • 2016554 customers, consumers form positive image about the brand and perceive it as such. through that the company can finally attain competitive advantage. consequently when the company is consistently able to create value, invariably it leads to powerful brand equity which then yields the attraction and retention of valuable customers. figure 1 is a figurative demonstration of the model. the discussion on the conceptual framework implies that brand remains an integral element necessary for the attainment of competitive advantage. besides, a series of interrelated process is also be required to achieve competitive advantage through branding as depicted in figure 1. how firms in the jewelry industry in ghana achieve competitive advantage through effective branding is not discussed by empirical studies. 3. methodology 3.1. study area the study was conducted on pmmc and ernie’s classic jewelry. these companies were established by nationals and engage in the production and sale of precious minerals including jewelry. pmcc limited is a limited liability company operating under the companies’ code, with the government of ghana as the sole shareholder. it is a company that has seen many changes in its brand name since its establishment in 1963. the company was established in 1963 as “ghana diamond marketing board” charged with the responsibility for the purchase and marketing of the country’s diamonds but has undergone various reforms over the years. finally in year 2000, it was converted by act 461 (statutory corporation’s conversion to companies act) to a limited liability company to operate under the ghana companies code (act 179 of 1963) as pmmc limited. the company’s head office is located in accra (ghana) but operates in most of the small-scale gold and diamond areas in the country namely: accra, kumasi, tarkwa, akwatia, and takoradi with offices and local agencies. for its jewelry operations the company operates its own shops in accra and kumasi. the kumasi branch where the study was conducted has an estimated customer base of 500. in addition to buying and selling, however, the pmmc performs a number of other tasks including the promotion and development of precious minerals and jewelry industry in ghana. ernie’s classic jewelry, mostly referred to as “ernie’s” is a jewelry enterprise solely owned by ernestina bosompem, the current manageress of the business. ernie’s was established in 2004 but actually registered in the year 2006. the firm is located in kumasi (ghana) and has its activities covering the production, sales, importation and retailing, repairs and polishing of gold and silver jewelry. its vision is to become the leading firm in the jewelry industry in kumasi. 3.2. study design the design of the study is explanatory. explanatory study establishes causal relationship between variables. hence it gives the avenue for studying whether or not there is indeed a relationship between branding and the attainment of competitive advantage. and if so how positive the relationship is and how it can be explored to a company’s advantage. saunders et al. (2007) elaborated that in choosing a research strategy what is most important is not the label that is attached to a particular strategy, but whether the strategy chosen will help answer the research questions to address the research objectives. accordingly, the research strategy adopted (case study) for this study was chosen based on the research objectives and questions, the extent of existing knowledge, the amount of time and other resources available for the study. a case study was chosen because it has considerable ability to generate answers to questions such as “why? “what?” and “how?” which enables a rich understanding of the context of the research and the processes enacted (morris and wood, 1991 cited by saunders et al. 2007). 3.3. data and sampling primary data were obtained from staff and customers of pmmc and ernie’s jewelry through interviews schedules and questionnaire administration. pmmc kumasi branch consists of 7 staff; a manager, an accountant, 4 salespeople, and 1 production personnel. its customers were estimated to be about 500. ernie’s classic jewelry consists of 5 staff; a manager, a sales representative and 3 production staff. its customers were estimated to be about 280. thus the total population of the study was 792. all the 7 staff of pmmc and 5 staff of ernie’s were interviewed. however, customers of the two firms were sampled through a statistical procedure recommended by israel’s (2009). according to him, the desire sample size is estimated using a formula specified as: n n n = +1 2( )α where n = sample size, n = total population, and α2 = error margin. the desired confidence level for the study was 95%, with a 5% error of tolerance. the sample size for pmmc’s customers was calculated as follows; n = 500, α2 = 5/100. figure 1: brand building for competitive advantage source: author’s construct naatu: brand building for competitive advantage in the ghanaian jewelry industry international review of management and marketing | vol 6 • issue 3 • 2016 555 thus, n = + 500 1 500 5 100 2 ( / ) n = 222.2 the sample size for pmmc’s customers was therefore = 222. in the case of ernie’s; n = 280 and α2 = 5/100. thus, n = + 280 1 280 5 100 2 ( / ) n = 164.7 hence the sample size for ernie’s jewelry customers was =165. non-probability sampling technique was used in selecting customers of the study firms. the lack of a comprehensive sampling frame for the target respondents precludes the use of probability sampling procedures. the study therefore, employed a convenience/haphazard sampling technique. this method involves selecting haphazardly those cases that are easiest to obtain for the sample, such as the person interviewed at random in a shopping center (robson, 2002). the sampling selection process is continued until the required sample size has been obtained. data was coded and entered into the statistical package for social scientist software for further analysis. descriptive statistics including frequency tables, charts, and graphs were used to show some of the results from the field work. 4. results and discussion out of ernie’s staff response of 5, 2 were junior staff constituting about 40.0% with the remaining 60.0% constituting senior staff members. besides, pmmc on the other hand had 5 out of 7 of its management respondents being junior staff and the remaining 2 constituting the senior staff. the senior staff therefore, constituted about 28.6% of the total staff whereas those of the junior staff constituted a majority of 71.4%. in terms of the experience of the staff of pmmc, 23.6% have <3 years’ experience with the firm and in branding, 57.1% have had between 3 and 6 years’ experience, and finally 14.3% had more than 6 years’ experience with the firm and branding. ernie’s have about 60% of its staff with experience below 3 years, and 40% between 3 and 6 years (table 1). the distribution of staff experience clearly indicates relatively much experienced staff of pmmc as compared to ernie’s carrying out branding. therefore pmmc’s current market share of about 65% as against that of ernie’s 5% which was discovered through interview could be attributed to this relatively higher experience of its staff. 4.1. branding by pmmc and ernie’s it was discovered from the study that both pmmc and ernie’s use branding as a marketing strategy. both junior and senior staff of the two companies interviewed indicated that they use branding as their main strategy of gaining competitive advantage. the use, according them is attributed to the significant importance attached to branding by the management. besides, apart from furnishing customers with the awareness of the company and/or it products, branding also leads to increased sales and differentiation of a company and its offerings. the staff of pmmc mentioned that a strong brand culture could give a firm the opportunity of developing products that commensurate with image that the firm seeks to portray to its audience. it could also lead to increased customer base. they also mentioned that brand equity leads to reduction of its employee turnover and customer retention. the staff of ernie’s like pmmc responded positively to the question of the use of branding. they indicated a strong appreciation by the firm for branding. their appreciation for branding was however attributed to the desire to enjoy the benefits as mentioned by pmmc (differentiation of firm, provision of customers with brand knowledge, attracting customers, increasing sales, building customer trust and making customers loyal). the results imply that the two jewelry companies recognized the importance of branding and its influence on competitive advantage. 4.2. types of branding adopted by pmmc and ernie’s there are three main types of branding that are currently viewed as critical by savvy marketers of today. these are; corporate branding, product branding and internal branding (kotler and armstrong, 2008). pmmc and ernie’s equally confirmed kotler and armstrong’s view as they assented to the use of these types of branding. however, pmmc is more avid to the pursuance of corporate branding than ernies. this fact can be attributed to the economic disposition of the firms. that is pmmc being a state owned firm with more funds at its disposal than ernies which is privately owned by an individual. management of the firms also agreed that the types of branding adopted are very important and have each contributed to the attainment of their current market shares of about 5% for ernie’s and about 65% for pmmc in the jewelry industry. they further added that branding has aided in increasing customer awareness and retention, and hence led to increased sales and profitability. an enquiry on management perception of the role of branding revealed 100% of pmmc staff and 80% of ernie’s vouched that branding is very important. this suggests that the two companies hold branding in high esteem. table 1: experience of staff pmmc ernie’s years frequency (%) years frequency (%) below 3 2 (28.6) below 3 3 (60.0) 3-6 4 (57.1) 3-6 2 (40.0) above 9 1 (14.3) above 9 total 7 (100.0) total 100 (100.0) pmmc: precious minerals marketing corporation naatu: brand building for competitive advantage in the ghanaian jewelry industry international review of management and marketing | vol 6 • issue 3 • 2016556 4.3. critical brand building factors for competitive advantage the results of the study provide that both firms believe that the aspects of branding that should be considered key for achieving competitive advantage include the following: 4.3.1. research and development research equips a firm with knowledge about competition, threats and opportunities as well as assists the firm to recognize its weaknesses and strengths. research supplies the firm with information about the needs of customers which consequently aids management to incorporate the needs into the company’s products and marketing activities. it was discovered that pmmc has the required resources to actively engage in research than ernie’s; and that has given the former a relatively more competitive power than the later. 4.3.2. internal branding internal branding ensures that internal customers first accept the company’s strategies, products and value which invariably impacts on external branding. meaning that with internal branding employees are given the opportunity to understand, accept, and add value to the brand(s). this influences greatly their ability to deliver the brand intent at their maximum best. both firms adopt and this kind of branding as main strategies. 4.3.3. brand positioning/promotion it typically involves marketing communication activities such as adverts, packaging, taglines, sales promotion, public relations and others. gathered from the interviews, some of the mistakes that some firms often make are to convey mismatching information about true brand value to target customers. this usually doesn’t augur well for such firms as customers are bound to find out about the value in their encounters with the brand. analysis of the value of the brand points out various dimensions; consisting of quality, aesthetic appeal, convenient use of products and accessibility, or affordability. each customer has his values, preferences and motivations. this requires organisations to be truthful in their communication activities to appeal to the particular type of target with corresponding needs. 4.3.4. customer orientation according to the staffs they have realized that focusing mainly on product development or selling their products to the exclusion of their customers’ views and preferences surely do not pay well. hence the “marketing concept” is adopted to ensure that customers get value for their money in terms of quality, price, and convenience in getting access to products and good customer service. customer orientation strategy increase customer awareness, attraction, satisfaction and retention. this invariably gives the firm a competitive advantage. 4.4. critical factors of brand building for competitive advantage the analysis of the responses of customers confirmed what the staff disclosed to be of essence in brand building. that is research and development, internal branding, brand positioning and customer orientation were found to be indispensible in developing competitive brands to gain competitive advantage. the results also provide that some key aspects of branding that were found to be of great value to customers in the jewelry industry are; quality, aesthetic appeal, convenient access to and use of products and good customer service. it was also found that the female gender plays a major role in giving a jewelry firm competitive advantage. in that, they are the majority of customers that patronize jewelry. the dominant age range constituting the majority who patronize jewels was found to be employed adults above 25 years. all these nitty-gritty issues would be hard to determine without research and development. if a firm is not customer oriented it may not even be pushed to undertake the invaluable research. and if internal branding is not taking seriously, the firm would hardly offer a good product or service. employees may not even be motivated to deliver to their maximum best to talk of good customer service. the last of all is brand positioning which is more effective when firm ensures consistency in value creation and communication. this ensures customers trust and loyalty in the brand. 4.5. comparative analysis of staff and customers response on brand building for competitive advantage 4.5.1. process of branding according to the staff of pmmc and ernie’s in branding research and development is very important as it leads to the discovery of things about customers that were previously unknown. the staff implied that such things as the dominant gender, age and employment status of customers which are important in choosing a target market can be obtained through research. through research also a firm can determine what customers considers valuable. that is in terms of quality, aesthetic appeal, innovation and good customer service. research, apart from unearthing customers’ values to firms, also equips firms with valuable information concerning the industry. with the proliferation of rivalry firms it is imperative that a firm be abreast with issues concerning it and its industry at all times in order to defend its position. this fact was however confirmed by what the customers also disclosed that their purchase decisions are influenced by quality, aesthetic appeal, convenient access to products, and affordability of products. these customers however were not exhibiting the same preferences meaning that in order for the firms to reach out to all of their target customers they must categorize them into segments and this demands research. 4.5.2. firms performance in competition it was disclosed by the staffs of pmmc and ernie’s that research and development and internal branding are very necessary in branding. they mentioned that it entails the involvement of employees in brand development right from the onset to finish. according to the firms internal branding equips internal customers with the ability to better serve customers according to the brands intent and better customer service. this fact was however confirmed by the responses of customers that customers are motivated to remain loyal to a firm by the satisfaction they derive from consuming a firm’s product and the firm’s customer service. this confirmation is well represented by the statistics that 77.5% naatu: brand building for competitive advantage in the ghanaian jewelry industry international review of management and marketing | vol 6 • issue 3 • 2016 557 of customers of pmmc and 76.4% of ernie’s customers regard customer service as an important factor in their purchase decision. this connection between internal branding and employees’ better performance and service delivery explains that internal branding and research are very important in determining a firm’s better performance in the jewelry sector. 4.5.3. effect of branding on customers’ purchase decisions for the staff of pmmc and ernie’s, effective true brand communication is important in positioning a brand. that is a firm’s ability to be consistent in value creation and communication about brand is important as it affects customers trust and their decision to remain with a firm. the customers confirmed this by saying that a firm portraying false image has the potential to dent profitable relationships that could have been developed with profitable customers, given that they are bound to find out through the patronage of the firms products and services. research has also proved that customers’ word of mouth is a powerful tool that can either benefit or destroy an organization (egan, 2007). this confirms that customers’ dissatisfied with a firm and its products and services apart from discontinuing their dealings with the firm would also spread the ripples of their negative experience denting the image and reputation of the firm. however firms that have the ability to match the true brand value in their promotion of the brand have the advantage of gaining “free” promotion of their brand through customers’ word of mouth. 4.5.4. critical brand building factors necessary to gain competitive advantage it was however deduced from the staff and customers of pmmc and ernie’s that the factors of branding necessary to gain competitive advantage are research, the integration of customers’ needs in products and marketing activities, true brand value promotion, and above all being customer oriented and innovative. 4.5.5. firms’ performance in the face of competition in the jewelry industry there is no business entity in the world that has no few to several challenges or obstacles serving as hindrances on its progress. firms in the jewel industry in ghana like ernie’s and pmmc are no exception. amidst many challenges jewelers of today are challenged with greater responsibility to win and attract customers because of intense rivalry caused by the proliferation of firms in the industry now. ernie’s for instance as revealed through interview is confronted with several problems like inadequate funds, managerial bankruptcy (finance and marketing), inadequate technical know-how and many others hence seem to be very weakly rooted in the face of competition. nevertheless, pmmc is relatively better in the face of challenges in the industry clearly indicated by its market share of about 65 percent as against the estimated 5% of ernie’s. the firms’ market shares are estimations made by their various managers confirmed by the junior staff and customers. from the staffs responses it was found that pmmc is far more competitive than ernie’s. for instance pmmc undertakes marketing research which is very essential for every business to be competitive. pmmc apart from undertaking market research employs several media activities to brand the company and its products whereas ernie’s does not. 5. conclusions and recommendations the researcher’s study of the ghanaian jewelry industry using pmmc and ernie’s as case study brought to light several findings which are typically consistent with existing literature and theory for peculiar reasons. there is more to branding than merely promoting it. consumers have the opportunity now to choose from varieties of products irrespective of where they were made. the ghanaian jewelry industry, which faces greater challenges presented by globalization and international trade hence must device means beyond merely promoting their brand name and engaging in selling rather than marketing. meaning jewelers in order to develop successful brands must align the needs and wants of customers with end products in a way that would give much pleasure and satisfaction to the customers at their convenience. deducing from the study to achieve this, research and development, internal branding, customer orientation, customer service and true brand communication becomes indispensable. a combination of these elements will offer the firms an advantage in competition. it is therefore, recommended that management of jewelry firms conduct market research to identify the needs and preferences of their target customers to gain competitive advantage. management should build and manage their brands with long term perspective. besides, jewelry firms are advised to make sure that they are consistent in brand value creation and information dissemination to ensure customers trust and reliability in brand. thus firms should be innovative, produce quality goods and fabricate aesthetically beautiful jewelry to satisfy and excite customers. by this firms would not lie about the benefits of the brand and what they say would be consistent with what they offer. references amit, r., schoemaker, p.j.h. 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(2005), the brand-supportive firm: an exploration of organisational drivers of brand updating. journal of brand management, 12(6), 445-460. . international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2018, 8(4), 65-70. international review of management and marketing | vol 8 • issue 4 • 2018 65 the role of work motivation as effect intervening variable of intrinsic reward, supervision of work and satisfaction of compensation on employee performance (a sudy at cooperatives in the city of pekalongan) singgih setiawan1, sulistiyani sutarlan2*, nurchayati sumarno3 1department of magister management, faculty of economics and business, university of 17 agustus 1945 semarang, indonesia, 2department of magister management, faculty of economics and business, university of 17 agustus 1945 semarang, indonesia, 3department of magister management, faculty of economics and business, university of 17 agustus 1945 semarang, indonesia. *email: tiyani.sulis24@yahoo.com abstract this study aims to examine the effect of intrinsic reward (ir), supervision of work (sw) and satisfaction of compensation (sc) on employee performance (ep). in addition, this study also aims to examine the effect of work motivation (wm) as an intervening variable. to test the variable, the researcher chose cooperatives in the city of pekalongan as research object. the research was conducted by distributing questionnaires to 120 employees at fifteen cooperatives in the city of pekalongan. sampling research using probability sampling with simple random sampling technique. the result of this research shows that ir, sw and sc have significantly positive effect on ep at cooperatives in the city of pekalongan. but wm as intervening variable weakens the effect of reward instrinsik, sw and sc on ep at cooperatives in the city of pekalongan. keywords: intrinsic reward, supervision of work, satisfaction of compensation, work motivation, employee performance jel classifications: j3, m1 1. introduction the development of human resources in an organization must be seriously taken care of. the good management of human resources will give effect on the stability of organization as well as an effort to reach the purpose and organization’s objectives. human resources is one of the important factors in an organization, because it conducts company’s activities and develops the company. therefore, human resource factor must be able to be well managed in order to provide optimal result for the company. good employee performance (ep) is also expected by all organization or company. the more employee has high perfomance, the more increased the overall productivity so that organization or company can survive global competition. ep can be distinguished or measured based on technical ability in working so that the particular employee will gain experience and training before conducting works (rivai, 2009). one of the human resource development aspects which is very important to notice is intrinsic reward (ir), which will effect on the enhancement of ep. employee’s contribution for organization is very dominant, because employees are work producer for the organization. every work in an organization is always done by its employees. whether the organization is successful or not is based on the human factor who do the works, thus rewards to employees are needed in accordance with their performance and work performance. ir can also motivate employees to get the reward, thus it will motivate them to work better, in order to create employee work motivation (wm) which will effect on company ep. employee is one of the most important elements is a company, so employee’s supervision of work (sw) and satisfaction of work setiawan, et al.: the role of work motivation as effect intervening variable of intrinsic reward, supervision of work and satisfaction of compensation on employee performance (a sudy at cooperatives in the city of pekalongan) international review of management and marketing | vol 8 • issue 4 • 201866 are important matters in an effort to enhance ep. company does a lot of ways to stimulate employee wm, i.e., by giving material or immaterial incentive and compensation in the form of a reward, e.g., ordering or charter, which includes doing such program as supervision of ep in daily work routines. compensation is important for employees as individuals, because the amount of compensation reflects the measurement of their performance value among the employees, their families, and society. compensation is also important for the company because it reflects organization effort to keep human resources or in other words, in order that the employees have good spirit and work ability towards the company. the compensation reward for employees is employee’s right as well as company’s responsibility (handoko, 2003). there are some studies which research those variables, such as syahril (2016), winangsih (2017) and riyadi (2016) who found that all rewards give positive and significant effect on ep, including ir which gives positive and significant effect on wm as well as ep. nursanti (2014) found that sw has significantly positive effect on ep. pratama (2015), winangsih (2017), fitra (2014), and kiswuryanto (2014) stated that satisfaction of work has significantly positive effect on ep, but satisfaction of work has significantly negative effect on employee satisfaction it is through the mediation of wm, and wm has negative effect on ep. cooperative is one of the company growth enhancers which is based on society economy. cooperative is business institution owned and operated by individuals for the necessaries of its members. cooperative has very important role for all ranks in the society in conducting financial transaction. the current development of cooperative is supported by the development of minor and macro business (ukm) in the vast developing city of pekalongan. along with the society economic growth in pekalongan, cooperative is expected to become an institution for fund provider to finance and develop businesses, either in farming, trading, industry, or other non financial factors. in order to manage cooperative, only with big fund is not enough, it must also be supported by intensive, planned, and measured coaching pattern for all cooperative employees. it is caused by challenges because there are many problems that must be encountered, such as cooperative principle which has been able to be fully done up to the moment, especially in an effort to make its members prosperous; the quality of human resources that must be developed in order to get healthy, strong, advanced, qualified, and independence cooperative as well as possess competitiveness to be able to compete in the global era. in order to answer problems of cooperative human resources mostly experienced by cooperatives in indonesia, we must pay attention to aspects of the efforts to increase ep of the cooperative. management is fully related to human resources, because a cooperative organization will not run well if it does not have intelligent employee with good performance. this thesis study is based on the phenomenon in the field, to create healthy and advanced cooperative, it needs main factors, work force employee are the most important things, because employees are the users and the motors as well as the determinant of all activities in the organization. whereas phenomenon in the cooperative of the city of pekalongan is that the lack of the awareness of attendance and the service level that is not maximum yet, which directly affect the quality of performance of the cooperative of the city of pekalongan. in order to increase ep, there are some factors that must be paid attention to, among others are ir, sw, and satisfaction of employee compensation. the purposes of this research are: 1. to recognize the effect of ir on wm at cooperative in the city of pekalongan. 2. to recognize the effect of sw on wm at cooperative in the city of pekalongan. 3. to recognize the effect of satisfaction of compensation (sc) on wm at cooperative in the city of pekalongan. 4. to recognize the effect of wm on ep at cooperative in the city of pekalongan. 5. to recognize the effect of ir on ep at cooperative in the city of pekalongan. 6. to recognize the effect of sw on ep through wm at cooperative in the city of pekalongan. 7. to recognize the effect of sc on ep through wm at cooperative in the city of pekalongan. 2. literature review 2.1. the effect of ir on wm it is very clear that reward has a very strong relationship with wm of the employees, because in reward, there is an indicator which can automatically develop employee’s motivation; by reward, employees can become encouraged in doing their works, so that they become better, and in the end, they can gain reward from the company. ir can be determined by our own personalities, our own behaviors, and our own work spirit. this explanation is supported by the research of syahril (2016) and winangsih (2017) which stated that ir has significantly positive effect on wm. h1: ir has positive effect on wm. 2.2. the effect of sw on wok motivation by the sw, an employee will instinctively do his work as best as he can, and employee wm will occur because of that. supervision is a necessary thing and it is important for the employees in the company organization in order that the work of the employees can be controlled and in line with the job desk of their work, and it can be completed on time. this explanation is supported by the research of nursanti (2014) which stated that sw has significantly positive effect on wm. h2: sw has positive effect on wm. 2.3. the effect of sc on work compensation although compensation is not the only factor that affects performance, it is admitted that compensation is one of the setiawan, et al.: the role of work motivation as effect intervening variable of intrinsic reward, supervision of work and satisfaction of compensation on employee performance (a sudy at cooperatives in the city of pekalongan) international review of management and marketing | vol 8 • issue 4 • 2018 67 determinant factors which can enhance ep. if employees feel that their works are appreciated and organization uses good compensation system, generally, employees will be motivated to increase their performance. therefore employee wm which will make employees work for as best and as maximal as possible will occur in order to gain the intended compensation. this explanation is supported by the research of pratama (2015) and fitra (2014) which stated that sc has significantly positive effect on wm. h3: sc has positive effect on wm. 2.4. the effect of wm on ep motivation is as a process of generating, directing, and keeping or maintaining human behavior to be focus on the purpose, in order to increase performance and more positive attitude. thus, by wm embedded in individuals unconsciously, it will also affect ep which in the future, it will make it into a better company. this explanation is supported by the research of nursanti (2014) which stated that wm has significantly positive effect on ep. h4: wm has positive effect on ep. 2.5. the effect of ir on ep through wm reward is an incentive which relates fees for increasing productivity of the employees in order to reach competitive excellence. reward can also mean retribution, prize, award, or honorarium in order that one works harder on improving or increasing the achieved performance. thus, reward which also means retribution or honorarium is a stimulation to be able to gain motivation for a good and excellent ep. reward makes employees encouraged and enthusiastic in achieving the reward. this explanation is supported by the research of winangsih (2017) which stated that ir has significantly positive effect on ep through wm. h5: ir has positive effect on ep through wm. 2.6. the effect of sw on ep through wm because of sw, an employee will instinctively do his job as best as he can, and employee wm will occur. supervision is a crucial thing and it is important for employees in an organization/company in order that their work can be controlled and it’s according to their job desk, as well as can be done on time. therefore, sw has great influence on ep and also can increase employee wm. this explanation is supported by the research of nursanti (2014) which stated that sw has significantly positive effect on ep through wm. h6: sw has positive effect on ep through wm. 2.7. the effect of sc on ep through wm compensation is something accepted by the employees as a substitution of their service contribution for the company. the rewarding of compensation is one of the function implementation of human resource management related to all kinds of individual rewards as an exchange of doing organizational tasks. a good compensation system is a system which can guarantee satisfaction of organization members. one of the manager ways to increase productivity of work, satisfaction of work, and motivation of work is through compensation. if compensation system is well designed, it will give positive effect on individual, team, an organizational performance. although compensation is not the only factor which will affect work, it will still be admitted that compensation is one of determinant factors that can enhance ep. if employees feel that their work is well-appreciated, and organization implement good compensation system, generally, employees will be motivated to improve their performance. thus employee wm when employees do as best and as maximal as they can to get their desired compensation will occur. this explanation is supported by the research of pratama (2015) and kiswuryanto (2014) which stated that sc has significantly positive effect on ep through wm. h7: sc has positive effect on ep through wm. 3. type of research and data source the type of this research is quantitative, which provides findings achieved by using statistical procedures. the type of data used in this research is primary and secondary data. primary data is data gained from respondents through questionnaires, while secondary data is data gained from notes, books, company statements, and government statements. 3.1. definiton of variable operational 3.1.1. ir (x1) ir such as awards, findings of new challenges, positive and caring attitude of the superiors, and work rotation (aktar, 2012) using indicators, as: recognition, careed advancement, responsibility and learning opportunity. 3.1.2. sw (x2) supervision is examination standard organisation to review actual work achievement compared to the predifined standards, and hold necessary corrective action (dessler, 2004, using indicators as: determining measurement of work standard, work assessment, work comparison, and work improvement. 3.1.3. sc (x3) compensation is what the employees receive as a reward of the work given (davis and newstrom, 1989) using indicators as: salary, incentive, bonus, training, and a leave. 3.1.4. wm (y1) wm is motives encouraging employees to do works according to main job and position function which is valued and measured basen on motivator and factor dimension (teck and wahed, 2011) using indicators as: driving force, will, willingness, and responsibility. 3.1.5. ep (y2) ep is one’s ability to do something to achieve his goal determined by predifined measurement not only phisically but also including work ability, discipline, responsibility, loyalty, honesty, and team work which are done in a certain period according to each authority and responsibility in order to achieve the purpose of organization (robbins, 2006) using indicators as: human performance, ability, initiative, and independence. setiawan, et al.: the role of work motivation as effect intervening variable of intrinsic reward, supervision of work and satisfaction of compensation on employee performance (a sudy at cooperatives in the city of pekalongan) international review of management and marketing | vol 8 • issue 4 • 201868 3.1.6. population and sample the type of population in this research is infinite population where the members or the population elements are all cooperatives in the city of pekalongan which numbers are 150 cooperatives with 1430 employees. this research uses purposive sampling method, a technique to determine research sample using some certain considerations. samples which become respondents in this research is fitted into 120 people or around 10% of the total cooperative employees of the city of pekalongan. this is done to make it easier for data processing and to have a better testing. samples taken are based on probability sampling, simple random sampling technique, where researcher gives the same probability for all members of population (employees) to be chosen as samples which are done randomly without paying attention to levels in the population. data collection mehod used in this researvh is giving questionnaires to the respondents. questionnaire is data collection techniques done by rating the questnions or written satements to the respondents to be answered. measurement scale used in this resarch uses likert scale consisting of five stages: a. value of 1 is given for the answer of strongly disagree (sts) b. value of 2 is given for the answer of disagree (ts) c. value of 3 is given for the answer of neutral (n) d. value of 4 is given for the answer of agree (s) e. value of 5 is given for the answer of strongly agree (sts). 4. data analysis this research uses multivariate technique of structural equation modeling (sem). the choice of this sem analysis technique is based on a consideration that sem has an ability to combine measurement model and structural model simutaneously and efficiently is compared to other multivariate techniques. measurement model is used to examine another dimension of a construct which is latent variable. structural equation shows causality relation among other constructs in the model. software used to process data is amos spss. according to the results in table 1, the equation can be made as follows: wm=0.383ri+0.578sw+0.247sc. ep=0.375ri+0.282sw+0.253sc+0.242wm. from the equation, it is recognized that coefficient of ir, sw, and sc has positive value or increases wm. sem analysis is used to know structural relationship among variables where its conformity is tested by goodness of fit index. the result of sem analysis in this research can be seen in the following image. from the figure 1, value of goodness of fit sem can be seen on the table 2. according to the table 2, chi-square value is acquired at 260.812 with probability of 0.109 > 0.05, value of rmsea at 0.026 < 0.08, value of tli at 0.986 > 0.90, value of gfi at 0.904 > 0.90, value of agfi at 0.964 > 0.90, value of cfi at 0.982 > 0.90 and value of cmin/df at 1.472 show that this model conformity test results a good reception. therefore, it can be concluded that modeling analysis structure in this research can be conducted. table 1: regression weights table (group number of 1 default model) regression weights estimate se cr p ir→wm 0.383 0.162 2.358 0.018 sw→wm 0.578 0.127 4.563 *** sc→wm 0.247 0.122 2.028 0.043 wm→ep 0.242 0.121 2.002 0.045 ir→ep 0.375 0.169 2.216 0.027 sw→ep 0.282 0.140 2.013 0.044 sc→ep 0.253 0.126 2.010 0.044 source: processed primary data (2018). ir: intrinsic reward, sw: supervision of work, sc: satisfaction of compensation, ep: employee performance table 2: table of goodness of fit sem model test goodnes of index cut-off value result of model remark chi-square kecil 260.812 good probability >0.05 0.109 good rmsea <0.08 0.026 good tli >0.90 0.986 good gfi >0.90 0.904 good agfi >0.90 0.964 good cfi >0.90 0.982 good cmin/df <2 1.472 good source: processed primary data (2018) figure 1: structural equation model setiawan, et al.: the role of work motivation as effect intervening variable of intrinsic reward, supervision of work and satisfaction of compensation on employee performance (a sudy at cooperatives in the city of pekalongan) international review of management and marketing | vol 8 • issue 4 • 2018 69 the effect of ir, sw, and sc on wm and ep, as well as the effect of wm on ep. 5. conclusion according to the result of analysis and discussion on the previous chapter, it can be concluded as follows: ir has significant effect on wm which is shown with the effect of ir to wm which value is acquired at 0.383 and value of p-value (significant) at 0.018 smaller than 0.05 so ir has significantly positive effect on wm at cooperative in the city of pekalongan. sw has significant effect on wm which is shown with the effect of sw to wm which value is acquired at 0.578 and value of p-value (significant) at 0.000 smaller than 0.05 so sw has significantly positive effect on wm at cooperative in the city of pekalongan. sc has significant effect on wm which is shown with the effect of sc to wm which value is acquired at 0.247 and value of p-value (significant) at 0.043 smaller than 0.05 so sc has significantly positive effect on wm at cooperative in the city of pekalongan. wm has significant effect on ep which is shown with the effect of wm to ep which value is acquired at 0.242 and value of p-value (significant) at 0.045 smaller than 0.05 so wm has significantly positive effect on ep at cooperative in the city of pekalongan. wm is an intervening variable which weakens the effect of ir to ep which is shown by the result of intervening test at 0.093 which value is smaller than the direct effect of ir to ep at 0.476, thus wm is an intervening variable which weakens the effect of ir on ep at cooperative in the city of pekalongan. wm is an intervening variable which weakens the effect of sw to ep which is shown by the result of intervening test at 0.139 which value is smaller than the direct effect of sw to ep at 0.421, thus wm is an intervening variable which weakens the effect of sw on ep at cooperative in the city of pekalongan. wm is an intervening variable which weakens the effect of sc to ep which is shown by the result of intervening test at 0.060 which value is smaller than the direct effect of sc to ep at 0.319, thus wm is an intervening variable which weakens the effect of sc on ep at cooperative in the city of pekalongan. 6. suggestion researcher can give suggestions as follows: the management should give opportunity of career advancement for employees who can complete tasks given and be responsible for all works that given to them; the management should conduct assessment on each employee’s performance as well as work evaluation and comparisan each year of each employee’s performance. salary received by the employees should be in accordance with the standard of incentive and bonus given by the company, it must be in accordance with the overtime work, and cooperative must do trainings for the employees, employees should have the sense of responsibility on their position as well as be responsible on a task and their own work and employees should be able to complete their own task and should have high enthusiasm in doing their job. 7. managerial implications managerial implications in this research are: 1. ir affects on wm and ep. ir can be successful in enhancing wm and ep, if the organization: a. give reward when a work has been completed successfully. b. give an opportunity for career advancement and acquire higher position. 2. sw affects on wm and ep. sw can be successful in enhancing wm and ep if the manager: a. set work standard according to the rules. b. reprimand employees who have low work standard (declining standard). c. assess and evaluate ep. d. conduct supervision to fix employee work which is not in accordance with the work standard. 3. sc affects wm and ep. sc can be successful in enhancing wm and ep if the management: a. give salary in line with employee’s expectation. b. give incentive. c. give bonus. d. give work trainings. e. give a leave. 4. wm affects on ep. wm can be successful in enhancing ep if: a. the management give encouragement and spirit to work better. b. employees work by their own will to gain experience and knowledge. c. employees work willingly and be responsible on their position and task given. 5. ep can be acquired if: a. employees have knowledge and master their work. b. employees are able to complete their work with high accuracy on time. c. employees are also able to find new discovery in completing their work and problems. 8. limitations of this study they are: 1. this study is only inputting variables of ir, sw, and sc which affect wm and ep, thus there are still many other factors which must be paid attention to, which make it possible to have effect on wm and ep. 2. variable of wm is intervening variable. in this study, wm setiawan, et al.: the role of work motivation as effect intervening variable of intrinsic reward, supervision of work and satisfaction of compensation on employee performance (a sudy at cooperatives in the city of pekalongan) international review of management and marketing | vol 8 • issue 4 • 201870 weakens the effect of ir, sw, and sc on ep. thus re-test needs to be conducted by replacing objects or research variable. 9. future research agenda in the future research, it is suggested to research other variables which affect ep, such as leadership, employee trust on the management or education, also on different objects which has possibilities to have effect on ep. references aktar, s.s. (2012), the impact of reward on employee performance in commercial banks of bangladesh: an emprical study. iosr journal of business and management (iosr-jbm), 6(2), 9-15. davis, k., newstrom, j.w. (1989), human behavior at work: organizational behavior. new york: mcgraw-hill. dessler, g. (2004), manajemen sumber daya manusia. 9th ed. jakarta: pt. indeks kelompok gramedia. fitra, h. (2014), analisis pengaruh kompensasi terhadap kinerja karyawan dengan kepuasan kerja sebagai variabel intervening (studi pada karyawan cv. f1 advertising jember). jurnal ekonomi dan bisnis vol. 8 no.2. jember, indonesia: universitas muhamadiyah jember. handoko, t.h. (2003), manajemen cetakan kedelapan belas. yogyakarta: bpfe yogyakarta. kiswuryanto, a. (2014). analisis pengaruh kompensasi dan lingkungan kerja terhadap kinerja karyawan dengan kepuasan kerja sebagai variabel intervening (studi pada karyawan bagian hrd di pt. indocement tunggal prakarsa tbk.bogor). jurnal ekonomi dan bisnis, 7(23), 14-26. nursanti, e. (2014), pengaruh rotasi kerja, pengawasan kerja dan kompensasi terhadap kinerja karyawan melalui motivasi sebagai variabel intervening pada perusahaan manfaat group kabupaten semarang. diponegoro journal of social and political, 1, 1-10. pratama, d. (2015), pengaruh kompensasi dan motivasi pada kinerja karyawan dengan kepuasan kerja sebagai variabel intervening. jurnal ekonomi dan bisnis, 4(7), 1-16. rivai, v. (2009), manajemen sumber daya manusia untuk perusahaan. bandung: pt. remaja rosda karya. riyadi, s. (2016), peran komitmen organisasi sebagai mediasi hubungan kepemimpinan transformasional dan sistem reward terhadap kinerja karyawan. media ekonomi dan manajemen, 31(2), 144-159. robbins, s.p. (2006), perilaku organisasi. kelompok gramedia, jakarta: pt indeks. syahril, r.r. (2016), pengaruh reward ekstrinsik dan instrinsik terhadap kinerja dengan kepuasan kerja sebagai variabel intervening. jurnal riset manajemen, 3(1), 23-37. teck, h., wahed, a. (2011), herzberg’s motivation-hygiene theory and job satisfaction in the malaysian retail sector: the mediating effect of love money. malaysia asian academy of management journal, 16(1), 73-94. winangsih, a. (2017), analisis pengaruh penghargaan instrinsik dan kompensasi terhadap kinerja melalui motivasi kerja sebagai variabel intervening (studi pada dosen feb ums). jurnal ekonomi dan bisnis, 9(5), 6-17. . international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2017, 7(5), 140-152. international review of management and marketing | vol 7 • issue 5 • 2017140 identifying factors to measure managerial and leadership competence of business school educated managers ahmed shaikh1#, christo a. bisschoff2*, christoff j. botha3 1regent business school, durban, south africa, 2nwu school of business and governance, north-west university, potchefstroom, south africa, 3nwu school of business and governance, north-west university, potchefstroom, south africa. *email: christo. bisschoff@nwu.ac.za abstract the article explores a model to measure managerial and leadership competence of business school educated managers by seeking to identify the latent variables in the model. here the research uses exploratory factor analysis (efa) to identify latent variables. the article also renders a verdict on the validity of the model as a higher objective of model development. in total 385 questionnaires using a five-point likert scale were independently administered to business school educated managers; 94% responded. efa identified five factors explaining a cumulative variance of 56.5%. these are leadership skills, managerial challenges, emotional intelligence, personal value system, and cultural sensitivity. measuring criteria with low factor loadings or those with high dual-loadings were eliminated in the purification of the measuring criteria. the data have a high reliability coefficient of 0.947 while the constructs also adhered to the validity requirements. the research is of value to managers who aim to improve their managerial and leadership skills after studying advanced management programmes at business schools, employees of such educated managers and also to academia aiming to explore this avenue of managerial and leadership skills development further. keywords: management, leadership, competencies, validity, measurement, model, factors jel classifications: a23, i23, m19 # this article stems from the doctoral research by ahmed shaikh (student number: 27032388) at the nwu school of business and governance, north-west university, potchefstroom, south africa. 1. introduction the fourth industrial revolution poses a great challenge to managers and leaders to be competent and effective in this new economy where the fast-changing business environment is dominated by major volatility and disruptions (schwab, 2016). consequently, organisations have to be highly adaptive to remain competitive. smit et al. (2016) capture it succinctly when they state that these disruptions bring with it not only huge benefits but also the complexities of managing organisations that have to deal with diversity and constant change. this transformation is affected by both external and internal factors which relate to management and leadership (chirimbu, 2011). constant strategic refocusing and planning require a successful change in the organisation and requires the active participation of competent managers or leaders (anderson, 2017). within this context, the questions of competent management or leadership are now, more than ever, important areas of focus for the survival and growth of any organisation. managers are also expected to lead using global and even virtual teams in the workplace (maitland and anderson-terry, 2017), and have to adapt to cross-cultural differences and attempt to cope with important differences in interpersonal communication styles, preferred approaches to organizational control and authority relations, and work-related knowledge and problem-solving approaches (cramton and hinds, 2014; fong et al., 2016, cornellissen, 2017). in the midst of these complex dynamics, vexing management and leadership questions remain, for example, what are the implications of these technological changes for managers or leaders of companies? what are the characteristics of the manager who has to navigate the organisation through the era of mass disruptions? is the current managerial or leadership shaikh, et al.: identifying factors to measure managerial and leadership competence of business school educated managers international review of management and marketing | vol 7 • issue 5 • 2017 141 style still appropriate if organisations are changing relentlessly and also profoundly? here eulitz (2016) provides candid advice by pointing out that, primarily, a change of thinking is required. traditional thinking such as the linear organisation structure and current leadership styles are adapted to address new challenges and could even become obsolete. this poses more challenges to managers and leaders, and it is clear that special attention needs to be given to the skills and competencies of managers and leaders to equip them to embrace the disruptive changes of the fourth industrial revolution. this will enable them also to lead, manage and encourage their employees to do the same (staffen and schoenwald, 2016). 2. problem statement reflecting the changes in the current global business environment, new skills and competencies are needed by the future manager or leader. here petrie (2014) notes that while the nature of the challenges that managers or leaders face is rapidly changing, the methods that are being used to develop the challenges, however, provides stability because they remain the same. modern thinking methodology is required to face these challenges (eulitz, 2016), and new thinking paradigms are eminent to successfully negotiate the challenges posed by the new economy. here, smith (2014) reports that the majority of top managers he surveyed, indicated that their organisations are not equipped to cope with this complexity. as a result, organisations are forced to construct changes to survive in the fast-changing global economy with management and leadership that are not equipped to be the change agents. they require more (and new) managerial and leadership competencies to successfully guide the organisation successfully in the disruptive and changing business environment. also, although these managers and leaders do possess skills and competencies, the application thereof in the new global economy changes. a typical example here is that although a manager might have excellent team-working skills, he or she is now forced to manage such a team as a culturally diverse and virtual team; this requires new team management competencies. however, the problem facing managers, leaders and organisations pertains to what skills and competencies are required to negotiate the new global economy best, and if identified, can these skills be measured among the managers and leaders? this question underpins the primary problem addressed in this article. 3. research objectives the primary objective of this article is to develop a model to measure the managerial competence of business school educated managers. the primary objective is achieved by the following secondary objectives: • identify the important measuring criteria postulated in the theoretical model; • identify the latent variables to measure competence; • ensure reliability of the latent variables identified; • empirically validate the model to measure management and leadership competencies; and to • present an empirical model to measure management and leadership competencies. 4. literature review the literature review consists of three key elements. firstly, the use of alumni or university students as the target population for a meaningful research endeavour. secondly, the appropriate statistics employed to simplify and validate the model, and then thirdly, to confirm the relevance of the latent variables from the literature. 4.1. measuring managerial and leadership skills among alumni or business school populations students or alumni of universities have long been a favourite target population for researchers. there are many reasons for that, but primarily these respondents are selected because they (fullerton and bisschoff, 2013): • have specific knowledge of an institution; hence are able to provide accurate feedback on the topic that the institution would like feedback on; • easy to target and collect information from; • provides a homogenous group which suits the study design well. the literature shows that various studies dating back to 1985 support the use of student and/or alumni populations. in summary, the more relevant studies are: • exploring differences between business and non-business students on 30 ethical issues; business students showed more concern on three of the five statistically significant differences (mcnichols and zimmerer, 1985). • a similar analysis in 1993 among the same student groups using 19 ethical scenarios found only two significant differences; business students were more accepting than the non-business students, of marketing and anti-union activities (fullerton, 1993). • in the business ethics studies, rapule (2009) compared 2009 final year executive master of business administration (mba) students to their 2007 alumni counterparts, and craven (2010) compared the executive mba students to local and international managers at an international agricultural company. • brand loyalty and the management thereof successfully used an array of final year business school educated managers to determine brand loyalty in fast-moving consumer goods in 2010 (bisschoff and moolla, 2014). • naidoo (2011) also used the business school student population successfully in her study to measure employee stress amongst managers. • in research by imandin (2015) the study compiled an employee engagement model based on the data collected from the executive mba students; and • in a more recent study in south africa, business school executive mba students were compared longitudinally by bisschoff (2017) who documented the acceptability of managerial ethical scenarios. shaikh, et al.: identifying factors to measure managerial and leadership competence of business school educated managers international review of management and marketing | vol 7 • issue 5 • 2017142 although these, and a myriad of other studies, proved that valuable, reliable and valid data could be collected from student populations, the question remains as to why specifically executive mba students are such a popular choice in empirical research. here moolla (2010) offers a plausible explanation by stating that: • the students are in full-time employment and study part-time. this posed a rationale that, as employed consumers, they would have had high exposure to a wide range of brands that suited his brand loyalty study. • additionally, their strong educational background and higher income make them better-informed consumers. • most executive mba students consist mainly of middle and top managers with a minimum of 3 years’ work experience. • this managerial exposure of executive mba students represents a community that is more likely to analyse their own management and leadership behaviour; this a rich source of business education experience to tap into. • this target population sets a minimum educational level for entry into the research which is positively connected to understanding research and content validity. • this means that they can understand the terminology and nomenclature specified in the questionnaire. • the population represents a segment that is more informed about contemporary business and management practices. in summary, although the basis of comparison between the studies differs, these studies have all shown that student, alumni and student-alumni combination populations can be successfully employed and targeted. this is even more so in the case with part-time students such as executive mba students. based on his research, peterson (2001) argues that student groups and even students versus non-students’ groups can be compared for research purposes. mcnichols and zimmerer (1985), rapule (2009), craven (2010), moolla (2010), naidoo (2011), imandin (2015), bisschoff (2017) all indicated that business-orientated studies are possible and that these studies yield good results. perhaps the work by thekiso (2011) and shaikh (2013) on measuring skills and competencies in management and leadership provides the best proof of the successful use of executive (or part-time) mba students as valuable sources of information for research purposes. based on the above discussion, it is evident that the use of student or alumni samples is appropriate under certain circumstances. this then means that the executive mba populations are justified as target populations for this study. 4.2. statistics employed this study employs three sets of statistical techniques. • firstly, the data is scrutinised to ensure that it can be used for further analyses. this is done by determining if the data collected by the sample is adequate to do so (thus enough data points have been collected); if the data is reliable and if the data symmetry compound is suitable. here the kaiser-meyerolkin (kmo), cronbach’s alpha coefficient and bartlett’s sphericity test statistics are used, respectively. • secondly, the data is subjected to exploratory factor analysis (efa) to weed out non-contributory measuring criteria. that is criteria that dual-loads onto more than one factor or criteria have loadings below the cut-off factor loading set in this study; that is 0.40. • then the identifying and labelling of the latent variables of measuring managerial and leadership competence. • finally, to validate the results using some validity measures. these techniques and their decision criteria are discussed next. 4.3. kmo measure of sample adequacy the kmo measures if the sample is adequate; this means that there has been sufficient data points used to provide an adequate sample. according to mediaspace (2007) (in imandin et al., 2016), “the results displayed are an index to compare the magnitudes of the observed correlation coefficients to the magnitudes of the partial correlation coefficients.” here naidoo (2011, p. 19) indicates that the kmo measure of sampling adequacy is interpreted according to its returned value between 0 and 1. preferably the kmo value should be bigger or equal to 0.7 to be satisfactory, although kmo values between 0.60 and 0.70 are deemed acceptable for further analysis. a kmo value below 0.50 is not an acceptable value. in this study where exploratory factors analysis is pursued, various researchers warned that it would be inappropriate to continue should the kmo be <0.50 (imandin et al., 2016; du plessis, 2009, p. 26; du plessis, 2010 and field (2009, p. 645). it is, therefore, important in this study to exercise care and consider the kmo before continuing towards factor analysis. 4.4. bartlett’s test of sphericity sphericity is a general condition of compound symmetry. however, more understandably, the term sphericity is seminally explained by the example that the sphericity of “the distribution of balls inside a ball bearing determines the quality of the bearing, such as the load it can bear or the speed at which it can turn without failing” (wadell and hakon, 1935). likewise, the sphericity of the data determines how well the data can provide the answers the researcher needs. in multivariate statistical analysis, like efa, bartlett’s test of sphericity is used as an indicator of the suitability of the data to continue towards this type of analysis (ucla, 2017a). bartlett’s tests should return a p-value of 0.05 or less to allow the researcher to proceed towards a factor analysis. bartlett’s test is, like the kmo, a test statistic used as a gatekeeper for further analysis. 4.5. reliability the most popular reliability statistic used is cronbach’s coefficient alpha (fink, 1995). published by the mathematician cronbach in 1951, the coefficient determines the internal consistency (or mean correlation of items in the questionnaire) which renders a verdict on the reliability (wuensch, 2009, p. 9). however, an alpha coefficient is an important indicator that deals with “consistency” or “repeatability” of analysis (ucla, 2017b). here field (2009, p. 677-681) states that when a questionnaire produces similar scores every time it is used under the same conditions, it shows the ability to collect data with a high reliability coefficient. reliability coefficients are regarded to be satisfactory if they are equal or higher than 0.70 (field, 2009, p. 666), although cortina (1993, p. 102) has proved in his research that coefficients of 0.57 and higher are shaikh, et al.: identifying factors to measure managerial and leadership competence of business school educated managers international review of management and marketing | vol 7 • issue 5 • 2017 143 also acceptable. based on the successful application of cortina’s research by naidoo (2011), muthambara (2013), bisschoff et al. (2017) and others, the lower limit for a reliability coefficient is thus set at 0.57 while the desired reliability coefficients are 0.70 and above. 4.6. efa costello and osborne (2005, p. 5) state that factor analysis is used for the identification of groups and to cluster variables. these groups are factors (or latent variables) embedded in the data (ucla, 2017a). here imandin et al. (2016) point out that efa is used mainly for: • understanding the structure of a set of variables • to identify an underlying or latent variable group; and to • reduce a dataset to a more manageable size while retaining as much of the original meaning thereof as possible. factor analysis also allows for specialised application settings. one such important setting is the selection of the method of rotation. in desired repeatable studies, the rotational principle leans towards an orthogonal rotation where the angle between the axes is kept constant. if there is no desire to compare the results in the future to similar studies, an oblique rotation may be used as it could explain a higher variance if the angle between the axes is not fixed. this could yield a better variance explained (bisschoff, 2017). however, field (2009, p. 796) suggests that in exploratory research settings (such as this study) a varimax rotation may be more desirable as it tends to maximise the dispersion of factor loadings within the factors and also the variance explained by the data (field, 2009, p. 796). this study, therefore, used an orthogonal varimax rotation. additionally, the analysis also employed, as suggested by costello and osborne (2005, p. 3), the maximum likelihood factor extraction method was used because the data was normally distributed. this supports the explanation of a high cumulative variance. in setting the cut-off factor loadings, the objective of developing a model weighed heavily; here, based on the success of similar research, only criteria with factor loadings of 0.40 and higher were retained (bisschoff and moolla, 2014; fields and bisschoff, 2013a). regarding the cumulative variance explained, this study aims for 60% to indicate a good fit to the data (schunn and wallach, 2012; field, 2009, p. 672) although 50% is also deemed satisfactory in an exploratory research setting (costello and osborne, 2005, p. 7). the number of factors to extract was based on the eigenvalues to be equal or higher than one. 4.7. validity imandin et al. (2016) define validity as “the degree to which a study accurately reflects or assesses the specific concept that the researcher is attempting to measure”. in agreement, researchers at the california state university (los angeles) states that “while reliability is concerned with the accuracy of the actual measuring instrument or procedure, validity is concerned with the study’s success at measuring what the researchers set out to measure” (csu, 2014). in practice, this means that the “degree of validity” determines how truly the study measures what it intended to measure, and thus reports on the truthfulness of the research results (golafshani, 2003, p. 601). table 1 shows the types of validity applicable to this study and provides the requirements to achieve each one. table 1 was adopted and then adapted from a similar study by imandin et al. (2016). 5. research methodology 5.1. design and questionnaire structure a literature study identified the 11 management and leadership competencies while in-depth theoretical research guided the way towards formulating the 42 specific measuring criteria that were included in the questionnaire. the skills, item code, criteria and origins on which the questionnaire was based, appear in table 2. the self-generated criteria that appear in the table are based on either multiple authors’ (sometimes vague) views on a specific concept or have been formulated based on a similar (but not directly attributable) line of thought some author(s) had. the questionnaire contained two sections: section a: demographics and section b: measuring criteria. section a consists of eight questions to compile the demographic profile of the respondents. section b consists of the 11 management and leadership skills, each with its measuring criteria, in statement format to which the respondents had to indicate their level of agreement or disagreement on a five-point likert scale. in total, section b consisted of 42 measuring criteria (table 2). 5.2. data collection the population was all executive mba students at two private business schools. these schools have a wide geographic service area which covers the whole of south africa. annually these students attend study schools in the major centres, durban and johannesburg. during such a study school in june 2017, the data was collected. the attendees were requested to complete the questionnaires in a classroom context. it was clearly indicated that participation is voluntary and also anonymous. trained research assistants, of which most were lecturers well acquainted with academic research, distributed, assisted and collected the questionnaires. a total of 385 questionnaires were distributed and 362 completed, and usable questionnaires were collected. some 21 were incomplete and could not be used while two questionnaires were not returned. this resulted in an effective 94.0% response rate. the data was captured by the statistical consultation services of the north-west university and analysed with the ibm social package for social sciences version 24 (spss, 2017). 5.3. ethical clearance the study was classified as an ethically low-risk category study and ethically cleared by the ethics committee of the faculty of economic and management sciences at the north-west university. the low-risk category requires only approval, and no formal ethics number was issued. 6. results 6.1. reduction of the measuring criteria studies by fields and bisschoff (2013a; 2013b) and bisschoff and moolla (2014) successfully simplified and purified their measuring shaikh, et al.: identifying factors to measure managerial and leadership competence of business school educated managers international review of management and marketing | vol 7 • issue 5 • 2017144 instruments using efa. the efa employed a varimax rotation because of its ability to maximise variance explained (field, 2007, p. 642). as indicated the following statistical decision criteria, as applied by bisschoff and moolla (2014, p. 1116), were implemented: • factor loadings of 0.40 and higher (fields and bisschoff, 2014, p. 48-49); • a cumulative variance that exceeds 50% (schunn and wallach, 2012; costello and osborne, 2005, p. 7); preferably 60% (field, 2009, p. 662); • a kmo measure of sampling adequacy higher than 0.70 (field, 2007, p. 660); • bartlett’s test of sphericity needs to be lower than 0.05 (field, 2009, p. 660 and 648); and • reliability, as measured by cronbach’s alpha, to exceed 0.70 (ideally) (field, 2009, p. 675); also sets a secondary lower limit of 0.57 (cortina, 1993, p. 102). the data required four rounds to purify to eliminate all non-loading criteria (<0.40) and dual-loading criteria (criteria that load high on more than one factor). this purification helps to improve the validity of the analysis (gaskin, 2014) and to simplify the results into an operational model that can be used to measure managerial and leadership competencies in practice. the results of the four successive rounds of the efa appear in table 3. the table shows which criteria were eliminated after each round of analysis and also how that elimination affected the statistical indicators (see the criteria in appendix a as per item codes). table 3 shows that the cumulative variance explained decreased from 62.3% to 56.5% as the 42 criteria decreased to 25 when the low-loading and dual-loading criteria were omitted. additionally, the number of factors also reduced to five clear factors. this significantly simplified the model by eliminating 17 noncontributory criteria and five factors which explained low variance for the loss of only 5.8% of the total variance. the other statistical measures remained excellent with marginal differences in the sample adequacy (kmo), sphericity (bartlett tests) and reliability (alpha coefficients) that all remained very favourable with both the alpha coefficient and the kmo exceeding 0.90 in all four cases, while bartlett’s test of sphericity also remained below the required 0.05 level. the real value of purification, however, resides with the reduction of the number of factors (from ten to five) and thereby creating a much more measurable and manageable model of leadership and managerial competence. the loss of 5.8% of the total variance explained is but a small price to pay for the additional validity gained by the reduction in the number of factors and measuring criteria (hill and hughes, 2007, p. 8). 6.2. factor analysis the results of the final round (and simplified factor model) are shown in table 4 where the sample adequacy by kmo and sphericity of bartlett’s test are shown, respectively. table 5 shows the five factors that were extracted after the varimax rotation. these factors explain a cumulative variance of 56.5%. the rotated factor loadings are shown in table 5. in table 5 the factor loadings of the criteria and the variance explained by the factors appear. the variance explained shows that factor 1 is the most important factor explaining 18.2% of the variance, followed by factor 2 which explains 11.4%, down to the least important factor 5 which explains 7.5% thereof. cumulatively the factors explain 56.5% which is higher than the initially required 50%, but slightly lower than the desired good fit at 60% of the variance explained. regarding the reliability of the factors, all of them except factor 4 have excellent reliability coefficients more than the required 0.70. inexplicably, factor 4 has a cronbach alpha coefficient table 1: measures to validate a factor model validity measure evidence required for validity claims external validity population validity 1.kmo measure of sampling adequacy exceeds 0.70 (shadish et al., 2002; field, 2009, p. 658) 2.significant factor loadings realised (>0.40) (farrel, 2007, p. 4) ecological validity 1.expert opinion and consultation on methods and appropriateness (shuttleworth, 2013) 2.pre-testing of questionnaire (csu, 2014; gaskin, 2014, p. 3) internal validity 1.rigour of study: supervised and stepwise checked by experts 2.alternative explanations assessed via consultation with topic specialists and focus group discussion with selected researchers criterion validity content validity testing against benchmark tests performed only in literature sources (csu, 2014; college board, 2012) predictive validity content validity alignment of criteria to subject area achieved by in-depth theoretical study on previous measurement models in a similar field (huitt, 1998; shuttleworth, 2013) construct validity convergent validity 1.high factor loadings (>0.40) per factor (gaskin, 2014, p. 5; farrell and rudd, 2009, p. 4) 2.satisfactory variance explained (>50%); desired (>60%) (costello and osborne, 2005, p. 7; field, 2009, p. 637) 3.high average reliability (α=0.7) (gaskin, 2014, p. 7; knowledgebase, 2014) discriminant validity 1elimination all dual-loading criteria (farrell and rudd, 2009, p. 5; gaskin, 2014, p. 4) 2.inter-correlations of factors below 0.70 (mathbits, 2014; knowledgebase, 2014) face value validity the factors identified by the analysis make good sense and are partially confirmatory of the theory. no unexpected factors surfaced. the results make good sense (gaskin, 2014, p. 4) *the sources in the table as used by imandin et al. (2016) have been retained. source: imandin et al. (2016). kmo: kaiser-meyer-olkin shaikh, et al.: identifying factors to measure managerial and leadership competence of business school educated managers international review of management and marketing | vol 7 • issue 5 • 2017 145 table 2: additional constructs supported by the literature global leadership competence measuring criteria origin leading change 1.as a leader, i need to be prepared to help my organisation to keep pace with change 2.i believe that there is a relatively high level of failure in strategic change efforts in organisation 3.as a leader, i need to drive the topic of change, be a change agent myself and promote diversity 4.mba programmes must include a course on managing strategic change in the core curriculum 5.i believe that most managers do not embrace the reality of regular change in their organisations hoffman (2016); truxillo et al. (2016); eulitz (2016); sinh (2016); anderson (2017) cultural intelligence 6.i believe that cultural intelligence is a critical success factor of the leadership process and organisational transformation 7.leaders with cultural understanding and sensitivity are better placed to leverage culture and use it to help accomplish organisational goals 8.increased advances in ict, the degree of cultural diversity is bound to increase pressure on organisational leaders sulaiman and mohezar (2006); walker et al. (2003); hitt et al. (2005); hitt et al. (2012); fong et al. (2016); alon et al. (2016) team building 9.team performance is a major determinant of the overall organisational performance 10.business leaders of the 21st century is going to spend a greater portion of their time working in teams 11.i believe that leaders who are collaborative are most successful in their leadership efforts 12.collaborative leaders generate goodwill in the team, which in turn enhances team performance macmillan (2001); campbell (2006); hatting (2016); reese (2016); maitland and anderson-terry (2017) strategic leadership 13.strategic leadership focuses less on day-to-day events and more on underlying trends and patterns 14.strategic leadership has the potential to create a competitive advantage for an organisation which is hard for competitors to imitate 15.strategic leaders envision the future and inspire others to work towards creating a viable future for the organisation 16.strategic leadership is directly connected to organisational renewal and strategic innovation day (2000); oritz (2004); hitt et al. (2012); anderson (2017); hatting (2016) conflict management 17.i must manage the gaps and tensions that emerge due to the diversity of my team members 18.a leader’s conflict management ability is key to the current business environment of diversity, complexity and continuous change 19.if i manage conflict poorly, business performance will suffer campbell (2006); kamal (2015); reese (2016); anonymous (2017) communication skills 20.a leader’s performance is closely tied to his/her communication competence 21.mba degrees and business education programmes must include communication skills to improve graduates’ impact in the workplace 22.leaders spend a substantial part of their time communicating with their constituents. 23.influencing others is central to leadership, and this is achieved through effective communication 24.communication will increasingly become networked and matrix-based across multidisciplinary teams wiemann (1997); lanier et al. (1997); tanyel et al. (1999); frederickson (2006); du-babcock (2006); simpson (2006); conrad and newbury (2011); giles (2016); reese (2016); anonymous (2017), cornellissen (2017) global leadership mindset 25.i understand the global mindset is the ability to see beyond national culture, organisational boundaries, and local business opportunities 26.the global leadership mindset is essential for success in the 21st century because it enables leaders to embrace paradox and complexity rogers and blonski (2010); cohen (2010); igi global (2017) (contd...) shaikh, et al.: identifying factors to measure managerial and leadership competence of business school educated managers international review of management and marketing | vol 7 • issue 5 • 2017146 of 0.556. this is marginally below cortina’s 0.57 margin and indicates that the factor cannot be deemed reliable. however, a low reliability coefficient does not mean that a factor is of lower importance for the current study, it merely renders a verdict on the likelihood that this factor will present itself in a repetitive study of similar nature. although this factor shows a lower likelihood to do so, morgan (2017) warns that care should be taken in the absolute interpretation of coefficient alpha. coefficients of 0.50 and higher are also deemed usable when researchers operationalise their research (morgan, 2017). the table also shows the measuring criteria about each factor. after consideration of the criteria within the factors, the five factors were labelled and explained. 6.2.1. factor 1: leadership skills factor 1 is the most important factor, explaining 18.2% of the variance, and deals with a range of issues that broadly relate to leadership skills. more specifically, factor 1 consists of leadership skills such as conflict management, soft managerial skills, career planning, change management and communication. table 3: purification of the measuring criteria round var. expl. (%) kmo bart-lett number of factors alpha criteria eliminated* 1 62.3 0.937 0.000 10 0.947 cos5, eei3, eei4, glm1, pvs3, pvs4, teb1 2 58.1 0.935 0.000 7 0.938 caw1, com1, emi1, glm2, stl3 3 57.2 0.933 0.000 7 0.935 lec3, stl2, teb4 4 56.5 0.920 0.000 5 0.933 *** *appendix a for criteria codes. kmo: kaiser-meyer-olkin table 4: kmo and bartlett’s tests measure of sampling adequacy 0.920 bartlett’s test of spherecity approx. chi-square 2997.081 df 276 significant 0.000 kmo: kaiser-meyer-olkin table 2: (continued) global leadership competence measuring criteria origin emotional intelligence 27.i understand self-awareness to be a key part of emotional intelligence 28.emotional intelligence can result in an outstanding performance at work. an emotionally intelligent leader is aware of relationship management as well as task orientation 29.an emotionally intelligent leader is aware of relationship management as well as task orientation 30.if i am emotionally intelligent, i understand the impact that my emotions and behaviour would have on others around me cherniss et al. (1998); ovans (2015); boyatzis et al. (2000); abbatiello et al. (2017); stein (2017) ethical and external influences 31.the public has higher expectations these days for the ethical behaviour of companies 32.mba graduates are required to reflect greater ethical awareness – especially since the 2008 crisis 33.leaders in business are regularly faced with ethical issues such as bribery, corruption, kickbacks for contracts among others 34.leaders must have a basic knowledge of ethical language and behaviours in their daily interactions sulaiman and mohezar (2006; 2009); whetten and cameron (2015, p. 37); bisschoff (2017) career awareness 35.i am aware that employees are required to have technical skills in the digital economy 36.lifelong learning is an essential feature of career development in the knowledge economy 37.career planning is part of my self-development – rather than my employer’s responsibility 38.i am aware that even technical jobs require soft skills such as creativity, collaboration and business savvy carr (2008); hogan and hogan (2001); nanterme (2016); accenture (2016) personal value system 39.i apply my own beliefs, values, ethics, knowledge and skills in my leadership style 40.leadership behaviours are to be built on character as a foundation 41.ethical lapses in business are partly a result of character flaws of leaders 42.the demonstration of solid character is going to be an indispensable quality of 21st century leaders hernez-broome and hughes (2004); tubbs and schulz (2006); satija (2009); berger et al. (2012); katulwa (2015); katulwa (2016); dillon and bourke (2016) mba: master of business administration shaikh, et al.: identifying factors to measure managerial and leadership competence of business school educated managers international review of management and marketing | vol 7 • issue 5 • 2017 147 6.2.2. factor 2: managerial challenges factor 2 deals with issues about managerial challenges and also diversity management issues. hence, initially, the line of thought was to label it as such. however, closer scrutiny revealed that diversity management issues actually do pose specific challenges to management. factor 2 is regarded as a realistic subset of managerial challenges faced by south african managers and explains 11.4% of the variance. 6.2.3. factor 3: emotional intelligence factor 3 is related to emotional intelligence. in the context of the modern digital economy, abbatiello et al. (2017) argue that emotional transformation is regarded as critical in the transformation of both the leadership process and the organisation. this means that leaders need to react differently to management and leadership in an organisation. the factor explains 10.8% of the variance. 6.2.4. factor 4: personal value system factor 4 deals with personal value systems of a leader and explains 8.6% of the variance. interestingly, this factor has been found in a number of studies seeking to determine managerial and leadership competencies (tubbs and schulz, 2006; kanter, 2010; katulwa, 2015; 2016; barrett values system, 2017). these studies note that, in the context of volatility and uncertainty, leaders can remain effective in their roles “by applying their leadership attributes such as beliefs, values, ethics, character, knowledge and skills”. the results of these studies confirm that managers and leaders will need to continue to depend on their portfolio of personal experiences and value systems. here, berger et al. (2012) confirm that a personal value system is a skill required by managers and leaders to create and facilitate career-defining experiences. 6.2.5. factor 5: cultural sensitivity factor 5 is the least important factor and explains 7.5% of the variance. this factor deals with the competence of cultural intelligence; a widely recognised critical factor for leadership success and organizational transformation (maznevski et al., 2013). increased globalization has amplified cultural diversity in the workplace and made the ability to lead across cultures a critical managerial competence for effective managers (stevens et al., 2014). 6.3. factor correlations and multiple regression analysis pearson correlation coefficients were calculated to determine the relationships between the factors. all the factors showed high inter-factor correlations (p≤0.05). these high correlations require a more in-depth analysis into how these factors influence one another, for example, to use a regression function (galkins and andrews, 2014). factor 1: leadership skills are the most important factor because it explains the highest variance. consequently, multiple regression was used to determine how factors 2, 3, 4 and 5 (as independent variables) contribute towards factor 1 as the dependent variable). the results appear in table 6. the table shows that all four independent variables (factors 1–4) are significant (p ≤ 0.05) contributors to factor 1, with factor 2 contributing the most (0.336) down to factor 5 (0.119) which contributes the least. in practice, this means that leadership skills (factor 1) can be improved by managerial skills (factor 2) with a regression weight of 0.336, and also by emotional intelligence (factor 3) with a regression weight of 0.288, by personal value system (factor 4) with a regression weight of 0.197 and by cultural sensitivity (factor 5) with a regression weight of 0.119. this then means that to improve leadership skills, it is worth the while to develop managerial skills first as this will yield the highest positive return on the leadership skills. this is also true in their declining order of importance for the other factors. the calculated r2 = 0.533 (adjusted r2 = 0.528) for the function means that the variance declared is 53.3%. this is satisfactory. the regression function then constitutes: y=1.146+0.336x1+0.288x2+0.197x3+0.119x4 substitution with the factor labels, the function reads: leadership skills (y)=1.146+(0.336 × managerial skills)+(0.288 × emotional intelligence)+(0.197 × personal value system)+(0.119 × cultural sensitivity) interpretation of the regression function means that managerial skills are the biggest predictor of leadership skills, followed by emotional intelligence. cultural sensitivity has the lowest predictable influence on leadership skills. in practice, this means that an improvement in managerial skills will benefit and improve leadership skills more than the other factors and should be attended to first. leadership development programmes should then firstly include teaching managerial skills, secondly attempt to improve table 5: rotated factor analysis criteria f1 f2 f3 f4 f5 com3 0.715 lec1 0.705 lec2a 0.659 cos1 0.627 caw3 0.623 caw4 0.620 cos2 0.619 com2 0.549 caw2 0.549 ee11 0.623 cos3 0.620 teb2 0.619 stl1 0.579 cus3 0.541 ee12 0.491 emi3 0.805 emi4 0.721 emi2 0.715 lec2 0.501 pvs1 0.710 pvs2 0.700 lec4 0.469 cus2 0.837 cus1 0.798 variance (%) 18.2 11.4 10.8 8.6 7.5 cum. variance (%) 18.2 29.6 40.4 49.0 56.5 cronbach alpha 0.886 0.715 0.780 0.556 0.783 shaikh, et al.: identifying factors to measure managerial and leadership competence of business school educated managers international review of management and marketing | vol 7 • issue 5 • 2017148 emotional intelligence, then aim to instill a personal value system, and finally, try to increase cultural awareness. 6.4. validity measures finally, the simplified model requires judgement on the relevant validity measures required (refer back to table 1). the validity measures applied to the model that measures management and leadership competencies were adopted from imandin et al. (2016) who sucessfully applied it in their research. these measures are the external validity (using both population and ecological validity), internal validity, criterion validity (using both concurrent and predictive validity), content validity, construct validity, and criterionrelated validity (using both construct and discriminant validity). after comparing the results of the analyses to the perspective validity measures in table 1, it was concluded that the simplified model achieved validity of all the requirements except for one validity category, namely criterion validity. criterion validity consists of both content and predictive validity. these two sub-requirements and the reasons for failure to meet them are explained below: • content validity is where the results of the model are required to be tested against benchmark tests performed only in literature sources (college board, 2012; csu, 2014, both as cited by imandin et al., 2016). this study is an exploratory study. this means that at present there are no directly comparable benchmarks to test the model against. hence the model could not be tested, and validity cannot be determined. once such benchmarks become available, research can confirm or determine if the model achieved validity or failed to do so. • predictive validity requires that the model is operationalised and that these predictions than be scrutinised to ascertain that they are correct, thus validating the operational side of the model (shuttleworth, 2013). surely, this is a very important step in the final validity of the model, but at present, this is future music. the exploratory model did not yet predict outcomes and as such also here the verdict is out on this validity category until such predictions could be made and then evaluated for accuracy. in conclusion, the model passed all but one futuristic validity measure. the model is thus deemed to be valid until future research either confirms or deny its content and predictive validity. 7. a model to measure managerial and leadership competencies the analyses enabled the development of a model to measure management and leadership competencies. in total 17 criteria were omitted from the theoretical model. the model has five factors that explain a cumulative variance of 56.5%. four factors have excellent reliability while the fifth factor shows moderate reliability. the model is shown in figure 1. figure 1 shows that the five factors identified do not consist of sub-factors or further underlying variables. this is important because it indicates that the factors identified are pure and do represent the management and leadership competencies as they were labelled. factor 1: leadership skills, is the most important factor in the model explaining 18.2% variance, followed by factor 2: managerial challenges at 11.4% variance. likewise, factor 5: cultural sensitivity is then the least important factors with an explained variance of 7.5%. 8. conclusions from the analysis, the following conclusions can be drawn. 8.1. conclusions 1 and 2 this article identified management and leadership competencies and its respective measuring criteria. strongly literature orientated, the study identified eleven management and leadership competencies, measured in total by 42 criteria. the study scientifically reduced the eleven competencies to a more manageable five factors, measured by 25 criteria (thereby reducing the measuring criteria by 17). • it is concluded that the study succeeded to significantly simplifying the model to measure management and leadership competencies. • based on the conclusion above, it is also concluded that the simplification of the model now enables an easier operalisation of the model in the industry, thus putting academic research to use in practice. 8.2. conclusion 3 and 4 the success of simplifying the model and achieving satisfactory reliability and validity can be attributed to a high sample adequacy as measured by kmo. (this study had a kmo value of 0.933.). additionally, sphericity (as measured by bartlett) measures if the data is suitable for factor analysis. here the chi-square for this study was 2997.081, the degree of freedom was 276, and the significance was below 0.05. the cumulative variance, as explained by the five factors, is also satisfactory at 56.5%. it is thus concluded that to develop or simplify a model successfully: • an adequate sample is required; and • sphericity is tested to ensure the data’s suitability to be subjected to further analysis. without these gatekeeper statistics, the attempts to develop a model are risky. table 6: multiple regression on factors model unstandardised coefficients standardised coefficients t significant b standard error beta 1 (constant) 1.149 0.170 6.776 0.000 factor 5 0.083 0.030 0.119 2.797 0.005 factor 4 0.157 0.033 0.197 4.784 0.000 factor 3 0.235 0.037 0.288 6.425 0.000 factor 2 0.320 0.045 0.336 7.150 0.000 adependent variable: factor 1 shaikh, et al.: identifying factors to measure managerial and leadership competence of business school educated managers international review of management and marketing | vol 7 • issue 5 • 2017 149 8.3. conclusion 5 • the validity measures showed good content, internal and external and discriminant validity (in support of other validity criteria). resultantly, it is concluded that the model to measure management and leadership competencies is a valid model to do so. 8.4. conclusion 6 • leadership skills and managerial challenges are the most important factors in the model showing that modern leaders should hone their leadership skills in the fast-changing business environment of the fourth industrial revolution, while managers are required to apply their skills to conquer the challenges the business environment throws at them to maintain competitiveness and efficiency. 8.5. conclusion 7 • also, leaders and managers should also apply their competence in the areas of cultural sensitivity, emotional intelligence and develop a personal value system to successfully negotiate the 21st century challenges to manage their diverse cultural workforce wisely, leading by example based on high personal values. 9. summary in this article, the latent variables or factors to measure management and leadership competencies have been identified and modelled. in addition to simplifying the original set of measuring criteria, the model was also subjected to reliability and validity confirmation. the model is reliable and returned satisfactory reliability coefficients. regarding the validity, the model proved to be valid in all except the future validity requirements. this cannot yet be determined, and future research should be employed to ensure the model can predict management and leadership competencies accurately. as a result, the article presents a usable validated model to measure management and leadership competencies of managers and leaders. the model is also a managerial tool for managers to employ if they want to measure the competencies their managerial or leadership staff have while it provides a solid theoretical basis for future academia in their managerial competency-related research projects. references abbatiello, a., knight, m., philpot, s., roy, i. 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[last accessed on 2017 jun 06]. appendix a: list of deleted criteria code criteria elimination round cos05 communication will increasingly become networked and matrix based across multidisciplinary teams 1 eei03 leaders in business are regularly faced with ethical issues such as bribery, corruption, kickbacks for contracts among others 1 eei04 leaders must have a basic knowledge of ethical language and behaviours in their daily interactions 1 glm01 i understand the global mindset is the ability to see beyond national culture, organizational boundaries, and local business opportunities 1 pvs03 ethical lapses in business are partly a result of character flaws of leaders 1 pvs04 the demonstration of solid character is going to be an indispensable quality of 21st century leaders 1 teb01 team performance is a major determinant of the overall organizational performance 1 caw01 i am aware that employees are required to have technical skills in the digital economy 2 com01 i must manage the gaps and tensions that emerge due to the diversity of my team members 2 emi01 i understand self-awareness to be a key part of emotional intelligence 2 glm02 the global leadership mindset is essential for success in the 21st century because it enables leaders to embrace paradox and complexity 2 stl03 strategic leaders envision the future and inspire others to work towards creating a viable future for the organization 2 teb04 collaborative leaders generate goodwill in the team, which in turn enhances team performance 3 stl01 strategic leadership focuses less on day-to-day events and more on underlying trends and patterns 3 stl02 strategic leadership has the potential to create a competitive advantage for an organization which is hard for competitors to imitate 3 appendix . international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2018, 8(4), 36-44. international review of management and marketing | vol 8 • issue 4 • 201836 the influence of leadership and external environment on performance through learning organization, and the influence towards competitiveness through performance of institute of economic science in java budiyono1*, budiyanto2, suwitho3 1college of economics indonesia surabaya, indonesia, 2college of economics indonesia surabaya, indonesia, 3college of economics indonesia surabaya, indonesia. *email: budiyono_bk@yahoo.co.id abstract this study aims to provide information on how to improve the performance and competitiveness of stie in indonesia. the variables in this study consisted of two exogenous variables, namely leadership and the external environment. three endogenous variables, i.e., organizational learning, performance and competitive. the method in this study uses structural equation model (sem) and the data processed by using amos during the research period of five months, from may 2017 to october 2017. the population in this study are institute of economic science in java, amounting to 142 are institute of economic science in coordination of private universities (kopertis) region iii to region vii by reason of the island of java is a barometer of higher education in indonesia. the research result shows that the leadership has significant effect on the competitiveness of institute of economic science, the external environment has a significant effect on the competitiveness of institute of economic science, leadership has a significant effect on performance through organizational learning, the external environment has a significant effect on performance through organizational learning, leadership has a significant effect on competitiveness through performance, and the external environment has a significant effect on competitiveness through performance. keywords: leadership, external environment, organizational learning, performance and competitiveness jel classifications: d83, l2 1. introduction performance and competitiveness of the institute of economic science in indonesia is still relatively low, there are many institute of economic science in indonesia sanctioned form of guidance, should not accept new students, freezing permits, even getting sanction of revocation of a license and was forced to shut down (forlap.dikti.go.id). the low performance can be seen from the ranking results universities in indonesia, the results issued by the higher education rankings 2017 there is only one college of economics in indonesia that fall within the top 100 best colleges higher education version as follows in table 1. when viewed from the accreditation of higher education institutions (aipt) at the institute of economic science in indonesia are carried out by accreditation of higher education (ban-pt) in 2017 showed that the performance of the institute of economic science in indonesia is still low (table 2). in terms of the competitiveness of the institute of economic science in indonesia is still low when compared with universities and institutes. the indicator can be seen on the graduates toget the first job of more than 3 months, while a graduate of the university and the institute of the majority get the job less than three months. based on the decision the minister of higher education no. 429a/m/ kp/viii/2015 on classification and ratings universities in indonesia preparing four measurements of the performance of universities in implementing the three roles of the university (tri dharma) is the quality and quantity of lecturers, quality budiyono, et al.: the influence of leadership and external environment on performance through learning organization, and the influence towards competitiveness through performance of institute of economic science in java international review of management and marketing | vol 8 • issue 4 • 2018 37 of management, quality of student activities and the quality of research activities and social community service. the increased performance of the organization also requires a leadership. according to nurwanti (2013) stated that the role of the leader is a variable that gives the greatest influence on performance. as well as siagian (1999. p. 47) stated that leadership as an activity to influence the behavior of people to work together toward a specific goal they want together. according to roscahyo (2013), states that there is an influence of leadership style which consists of autocratic, democratic and free rein together on employee performance. timothy et al., (2011) stated that the research results showed that transactional leadership style has positive and significant impact on performance. organizational performance is also affected by organizational learning in the management of the college of economics in indonesia purposed to enhance the skills and knowledge to improve the competence resources. organizational learning carried out continuously to adapt to the external environment of institute of economic science in indonesia which always changing in order to achieve optimal performance. nurwanti research (2013) shows that there is influence of leadership roles, organizational learning and organizational competencies towards performance. absah (2007) stated that learning organizations has significant influence. while by heizer and render (kuncoro, 2006) stated the external environment is an environment that is outside the organization which need to be analyzed to determine the opportunities and threats that will be faced by an organization, the external enviroment measured in five indicators, namely: government regulation, the market situation, science and technology, environment and social culture industry. the results about a leadership influence on competitiveness by catalina (2009); kuncoro (2006); gakure et al. (2014) stated that the leadership effect on competitiveness. this is in line with the results of the al-zoubi (2012); khan and anjum (2013) which stated that the leadership effect on competitive advantage. however, it is different from the research results of ling and jaw (2011) which stated that the leadership does not have influence to competitiveness. the results of research on the influence of the external environment on competitiveness by kraja and osmani (2013) stated that the external environment has a positive influence on competative advantage. however, these studies do not concur with ingga’s research (2009), that there is no significant influence of the external environment on competitive advantage. the research result about leadership effects on performance by hurduzeu (2015); nurwanti (2013); hilmi (2013); cahyono (2012); trang (2013); inaray et al. (2016) stated that there is a leadership influence on performance. in contrast to the results of research yuliana (2010); brahmasari and suprayetno (2008); timothy et al. (2011); tongo-tongo (2014) stated that the leadership does not have a substantial and direct effect on performance. the research results on the influence of the external environment on performance. according to wulandari (2009), the external and internal environment affect on performance, but it is not in line with the koech and namusonge research (2012), which stated that there is no significant influence of the external environment on organizational performance. the results of the research on the influence of leadership on performance by babatunde (2015); hilmi (2013); cahyono (2012); trang (2013); inaray et al. (2011), leadership take effect and influence on the performance, but not in line with the results of yuliana’s research (2010); brahmasari and suprayetno (2008); timothy et al. (2011) stated that the leadership has no significant effect on performance. the results of research on the influence of the external environment on competitiveness by kraja and osmani (2013) showed that the external and internal environment has an influence on competitiveness. in contrast to the results of research ingga (2009), which showed that there is significant influence between the external environment and competitiveness. 2. literature review 2.1. leadership leadership is a person’s ability to influence a group in canoes to reach the goal. the shape of the impact that can be done formally as a managerial level in a particular organization. because management positions consisting of levels which usually describes the authority, an individual could assume a leadership role as a result of the position held in the organization (robbins and coulter, 2012). according to robbins and coulter (2012) stated there are three styles of leadership; autocratic leadership style, laissez-faire leadership style (full free), and democratic leadership style. table 1: rangking top 100 universities indonesia name pt rank universitas gajah mada 1 institut tehnologi bandung 2 institut pertanian bogor 3 universitas indonesia 4 institut tehnologi surabaya 5 stie malangkucecwara 58 source: the minister of higher education (kemenristek), 2017 table 2: accreditation of higher education institutions (aipt) college of economics in indonesia higher education accreditation aipt a accreditation aipt b accreditation aipt c no accredited aipt amount the college of economics (stie) 1 10 68 265 344 source: data processed higher education accreditation (ban-pt) 2017 budiyono, et al.: the influence of leadership and external environment on performance through learning organization, and the influence towards competitiveness through performance of institute of economic science in java international review of management and marketing | vol 8 • issue 4 • 201838 leadership in this study is a democratic leadership style, democratic leadership style is oriented to humans, and provide efficient guidance to his followers. there is coordination of the work of his staff, with an emphasis on internal responsibility and the good responsibility (kartono, 2013. p. 86). this leadership strength lies in its unity which is the strength in running the organization. democratic leadership highly appreciated the potential of every individual involved may want to listen to the advice and suggestions to subordinates, who are willing to admit recognize the special expertise with the field in each of these aspects is able to provide the capacity of each member of a very effective way possible at the moment and the right conditions. in other words, according (kartono, 2013. p. 86) stated that the democratic leadership is a leadership group of developers that can be said to be effective with the following indications: 1. delegation of authority. 2. awareness and responsibility for the duties and obligations of each. 3. giving priority to the welfare and smoothness of all aspects of the organization. 4. teamwork. 2.2. external environment an organization is always influenced by the environment around him. the changes to the organization should have to analyze the factors that influence the occurrence of a change. changes in the organization can be influenced from external and internal factors. as a discourse and disclosed by drucker (1993), the presence of a source of organizational change is able to come out of the condition and situation of the external and internal that are not expected to be able to anticipate, innovation based on the needs of the process, the emergence or the emergence of irregularities, changes in market structure or the structure of the industry, demographics, changes in perception, atmosphere and meaning and also new knowledge. all of them lead to the existence of a demand or request to an organization that is always trying to hold development in various ways for the betterment of the organization. external factors are the business environment surrounding the operating company of her emerging opportunities and threats business. the size of these opportunities depends on the competitive advantages possessed by an industry. if the competitiveness compete owned a industry stronger than the competitors which means that the opportunity to seize the opportunities will be greater. however, if the competitive advantage held low, of the opportunity to seize the opportunities will be smaller, will face even greater threats (ingga, 2009). the internal environment consists of a structure, culture, resources (wheelen and hunger, 2002. p. 9). the internal environment consists of a structure, culture, and resources. internal environment should be analyzed to determine the strength and weaknesses in the company. the structure is the way of organizations to manage the organizational resources with regard to communication, authority, and work flows. while heizer and render in kuncoro (2006) states the factors that influence the external environment, namely: 1. government regulations 2. the market situation. 3. science and technology. 4. industrial environments. 5. social-cultural. 2.3. performance the performance is a reflection that appears on the achievement of the company’s success that can be used as the achievements of the various activities or activities undertaken (venkatraman and ramanujam, 1986). then the performance according to waterhaouse and svendsen (1998) is defined as an actions or activities that can be measured. then the performance is a reflection of the achievements of the both the quantity and quality of the work produced by individuals, groups and organizations and can be measured. the same opinion was also expressed by wells and spinks (1996) stated that the performance shows the results of behavior that’s valuable to the criteria or quality standards. with reference to the opinion of rue and byard (1997) and anthony and govindarajan (2001), in this study the performance is defined as the end result or achievements of the college of economics for a specific period. based on the decision the minister of higher education no. 429a/m/ kp/viii/2015 on classification and ratings universities in indonesia in 2015 and the circular letter coordinator kopertis vi no. 429/k6/kl/2015 prepare four measurements of the performance of universities in implementing tri darma namely the quality and quantity of lecturers, quality of management, quality of student activities and the quality of research activities and community service. as for each of the following indicators: 1. the quality and quantity of lecturers. 2. quality management. 3. the quality of student activities. 4. total achievements (gold, silver, bronze) achievements in national and international competitions. 5. the quality of research activities and social community service. 2.4. organizational learning argyris (1976) stated that organizational learning is a process to detect and fix errors that exist. learning organization based think taylor is the opportunity given to the employee or employees so that the organization becomes more efficient (luthans, 1998). organizational learning means the process of improvement actions through knowledge and a better understanding (fiol and lyles, 1985), next, garvin (2002) provided an understanding of organizational learning as an organizational skill or expertise to create, acquire, interpret, transferring, and sharing knowledge, which is aimed at modifying its behavior to describe the knowledge and new insights. organizational learning is a membership organization to create, acquire, interpret. transfer and sharing of knowledge. aims to modify his behavior in order to illustrate the barudan insight knowledge (garvin, 2002). the views expressed by taylor organizational learning is every opportunity given to an employee or employees so that the organization becomes more efficient (luthans, 1998). budiyono, et al.: the influence of leadership and external environment on performance through learning organization, and the influence towards competitiveness through performance of institute of economic science in java international review of management and marketing | vol 8 • issue 4 • 2018 39 marquardt (2002. p. 30) the dimensions of organizational learning is measured by using 6 indications are: systems thinking, mentality, professional skills, teamwork, expertise sharing vision, and dialogue. 2.5. competitiveness porter (1995. p. 5) says: “competition is at the core of the success or failure of firms.” that competition is the core of the success or failure of the company. there are two sides posed by competition namely the success to encourage companies to be more dynamic and compete in providing products and provide the best service for the market, so the competition is considered as an opportunity to motivate. on the other hand the failure would weaken the companies whihc is static, fear of competition and are not able to produce products that have a good quality, so the competition is a threat for his company. according muhardi (2007. p. 39) competitiveness of the operation is the function-oriented operation not only into the internal,but also out (external) that respond to their business market proactively. higher education accreditation (ban pt) measures indication in the accreditation field assessment study programs based description of learning achievement of graduates indonesia national qualification framework (kkni) which refers to permenristek higher education no. 44 of 2015 articles 5 and 6 as follows: attitudes, knowledge, skills (specific skills and general skills)and work experience. 3. conceptual framework conceptual framework is intended to provide guidance deductive reasoning, this process starts from the problem identification research of empirical research shows the gap between research that is inconsistent about the results of the research, giving rise to a gap of research or contradictory results (figure 1). in addition, pay attention to the phenomena associated with the low performance of institute of economic science in indonesia and the low competitiveness of the institute of economic science in indonesia. studies on low performance and competitiveness of the institute of economic science in indonesia has not been done by previous researchers that focus specifically on the variables that can improve the performance and competitiveness of institute of economic science in indonesia. from the findings of a phenomenon in low performance and competitiveness of the the institute of economic science, the researchers tried to follow up with the research associated with variables that can improve performance and competitiveness. then compiled theoretical overview related to the variables that can improve performance and competitiveness. from empirical and theoretical studies reviewed by the researchers, the concept of this study consisted of 5 variables: 2 exogenous = external environmental leadership and 3 an endogenous variable that organizational learning, performance and competitiveness. 4. research methods the method in this study using sem and the data processed using amos, during the research period of 5 months, the month of may 2017 to october 2017. the population in this study is the institute of economic science in java, amounting to 142 stie. 5. results and discussion 5.1. sem analysis results 5.1.1. confirmatory factor analysis of leadership (x1) based on a table 3 can be explained that the leadership construct can be considered valid based on the loading factor that has been qualified with is p < 0.05 and critical ratio (cr) above 2.58. the data in the table 3 indicate that there are four indicators of leadership declared valid and capable of forming a leadership construct because it has met the cr value and its probability. 5.1.2. confirmatory factor analysis external environment (x2) based on table 4, it can be explained that the construct of external environment can be declared invalid based on the loading factor that has been qualified with is p < 0.05 and cr above 2.58. the data in table 4 indicates that there are four indicators of external environment which are declared to be valid and capable of forming an external environment because it has met the cr value and probability. 5.1.3. confirmatory factor analysis organizational learning (y1) based on the table 5, it can be explained that the organizational learning construct can be declared invalid based on the loading factor that has been qualified with is p < 0.05 and cr above 2.58. the data in table 5 indicate that there are four indicators of the organizational learning which declared to be valid able to form organizational learning construct because it has met the cr value and its probability. 5.1.4. confirmatory factor analysis performance (y2) based on the table 6, it can be explained that the construct of organizational learning can be declared valid based on the loading factor that has been qualified with the p < 0.05 and cr above 2.58. the data in the table 6 indicates that there are four indicators of organizational learning whcih are declared valid and capable of forming a construct of performance because it has met the cr value and its probability. 5.1.5. confirmatory factor analysis competitiveness (y3) based on the table 7, it can be explained that the competitiveness construct can be declared valid based on loading factor value that has been qualified with the p < 0.05 and cr above 2.58. figure 1: conceptual framework budiyono, et al.: the influence of leadership and external environment on performance through learning organization, and the influence towards competitiveness through performance of institute of economic science in java international review of management and marketing | vol 8 • issue 4 • 201840 the data in table 7 indicates that there are four indicators of competitiveness which are declared valid and capable of forming a competitiveness construct because it has met the cr value and its probability. 5.2. sem assumptions test results 5.2.1. outlier test detection of multivariate outlier performed by mahalanobis distance at the level of p < 5%. the results of this study on the level of p1 for observation number 12 is obtained value of 0.023 which is smaller than the tolerance value of 0.05 it can be said that it does not happen outlier. 5.2.2. normality test the results showed that the value of c.r.multivariate in the table of −0.520 is between −2.58 and 2.58, it means that the normality assumption has been met, and the research data used to estimate the model worthy of study. 5.2.3. multicolinerity test and singularity the rresult of the condition number = 44.275, this value is more than zero so that it can be concluded that there is no multicollinearity problems and singularity on the analyzed data, means that the data in this study can be used in subsequent estimates. 5.3. conformance test results model the result of goodness of fit indices test on the model of structural equation shows that the data is fit because it has not met the required criteria. chi square test results of 239,956 < χ2(5%;213) = 248,048 means the aggregate model is acceptable. demon also with rmsea of 0.035 < 0.08, gfi value of 0.921 > 0.90, agfi value of 0.917 > 0.90 so that in general the results can be accepted table 3: the value of loading factor coefficient for leadership constructs variables indicator loading factor se cr p information leadership (x1) x1_1 0.361 0.063 5.780 *** valid x1_2 0.330 0.065 5.043 *** valid x1_3 0.437 0.066 6.657 *** valid x1_4 0.424 0.07 6.016 *** valid description ***p<1%. cr: critical ratio table 4: the value of loading coefficient factor for external environment constructs variables indicator loading factor se cr p information external environment (x2) x2_1 0.482 0.054 8.886 *** valid x2_2 0.548 0.066 8.370 *** valid x2_3 0.477 0.066 7.276 *** valid x2_4 0.447 0.065 6.871 *** valid x2_5 0.483 0.058 8.301 *** valid description ***p<1%. cr: critical ratio table 5: the value of loading factor coefficient for organizational learning construct variables indicator loading factor se cr p information learning organizations (y1) y1_1 0.68 0.08 8.51 *** valid y1_2 0.572 0.077 7.422 *** valid y1_3 0.525 0.074 7,11 *** valid y1_4 0.555 0.073 7.579 *** valid y1_5 0.633 0.072 8.85 *** valid y1_6 0.573 0.061 9.406 *** valid description ***p<1%. cr: critical ratio table 6: the value of loading factor coefficient for performance construct variables indicator loading factor se cr p information performance (y2) y2_1 0.345 0.082 4.224 *** valid y2_2 0.510 0.080 6.346 *** valid y2_3 0.646 0.090 7.147 *** valid y2_4 0.451 0.066 6.837 *** valid description ***p<1%. cr: critical ratio table 7: the value of loading factor coefficient for competitiveness construct variables indicator loading factor se cr p information competitiveness (y3) y3_1 0.435 0.066 6.554 *** valid y3_2 0.736 0.107 6.878 *** valid y3_3 0.605 0.103 5.877 *** valid y3_4 0.429 0.060 7.180 *** valid description ***p<0.01 (1%). cr: critical ratio budiyono, et al.: the influence of leadership and external environment on performance through learning organization, and the influence towards competitiveness through performance of institute of economic science in java international review of management and marketing | vol 8 • issue 4 • 2018 41 with the marginal/good so it remains eligible. this means that the data in accordance with the model. 6. discussion 6.1. leadership (x1) the average value of the leadership variable 4.47 which indicates a very high score. thus it can be interpreted that the average of the leadership on the entire java higher education of economics college (stie) have high category. the other interpretations indicate that the leadership is going well. from the leadership variable (x1) it get the value of the highest order to the lowest value of the order value as follows, namely, the highest score by an average of 4:52 i.e., indicator welfare prioritize and smoothness whole aspect within such organizations (x1.3), second namely indicators of the delegation of authority (x1.1) with a value of 4.50, the third is the indicator of teamwork (x1.4) with a value of 4.48, and the lowest value in the awareness indicator and responsibility for the duties and obligations of each (x1.2) with a value of 4.37. 6.2. external environment (x2) respondents have a tendency to answer the questionnaire in category score of 4–5. on the external environment variables obtained an average of 4.37 which are in very high category. the average value per indicators have varying values, namely x2.1 has an average value of 4.42 which is on the very high category. x2.2 indicator has an average value of 4.35 which is on the very high category. x2.3 indicator has an average value of 4.30 which is on the very high category. x2.4 indicator has an average value of 4.30 which is on the very high category and indicator x2.5 has an average value of 4.45 which is on the very high category. from the external environment variables (x2) on to the value of the highest order to the lowest value of the order value as follows, namely, the highest score by an average of 4.45 which is on socio-cultural indicators (x2.5); the second is an indicator of government regulation (x2.1) with a value of 4.42; the third is on the market situation indicator (x2.2) with a value of 4.35; and the lowest value contained in the two indicators of science and technology (x2.3) and environmental indicators industrial (x2.4) with a value of 4.30. 6.3. learning organizations (y1) from the organizational learning variable (y1) at can value from the highest to lowest score with a sequence of values as follows, namely, the highest score by an average of 4.29 is the indicator dialogue (y1.6); the second is an indicator of thinking systems (y1.1) with a value of 4.27, the third is on the shared vision indicator (y1.5) with a value of 4.17; namely the fourth profession expertise indicator (y1.3) with a value of 4.15; the fifth is the mentality indicator (y1.2) with a value of 4.14 and the lowest value in the indicator teamwork (y1.4) with a value of 4.09. 6.4. organizational performance (y2) from the organizational performance variable (y2) it can the value of the order from highest to lowest score with a sequence of values as follows, namely, the highest score by an average of 3.16 which is the indicator of management quality (y2.2); the second are indicators of quality and quantity lecturer (y2.1) with a value of 3.05; the third is the student activities quality indicators (y1.3) with a value of 2.30; and the lowest rate at which activity quality indicators research and community service (y2.4) with a value of 2.18. 6.5. competitiveness (y3) from the higher education competitiveness variable (y3) it can value which ordered from the highest to lowest score with a sequence of values as follows, namely, the highest score by an average of 4.41 that is the attitude indicator is correct and civilized behavior (moral and ethical high) (y3.1); the second is an indicator of practical experience working student (y3.4) with a value of 3.25; the third is the indicator of knowledge is mastery of concepts, theories, methods, and/or philosophy of different disciplines (average gpa) (y3.2) with a value of 3.18; and the lowest score on that indicator general skills and specific skills (graduates have a companion certificate diploma) (y3.3) with a value of 3.16. 6.6. the result of the hypothesis 1. leadership effect on competitiveness leadership significant positive effect on the competitiveness accepted, means that there are positive significant between the leadership on competitiveness. the influence of the leadership on the competitiveness of the direct coefficient of 0.361 with cr 2.537 (table 5:16). the result of analysis p = 0.011 < 0.05, hence expressed significant positive effect. this means that leadership improvement (x1) significantly affects the improvement of competitiveness (y3), thus the better the leadership, the better the competitiveness. 6.7. the result of the research hypothesis 2. the external environment shows significant positive effect on competitiveness influence the external environment affects the competitiveness with direct coefficient of 0.339 with a cr of 2.943 > 1.96 with p = 0.003 < 0.05. these results provide information that the influence of external environmental variables on competitiveness accepted, means the better external environment the better the competitiveness. 6.8. the result of the hypothesis 3. leadership influence performance through organizational learning the results of the analysis of leadership on organizational learning in table 5:16 is equal to 0.051 and value of cr of 3.400 > 1.96 with a p = 0.029 < 0.05, organizational learning on performance with the coefficient value of 0.188 with the cr of 2.162 > 1.96 with a p = 0.031 < 0.05, and the leadership of the performance with a coefficient of 0.051 with a cr of 3.400–0.029 p < 0.05), x1 against significant y1, y1–y2 significant. when viewed against the direct influence x1 towards y2 = coefficient value 0.636 and cr value 3.439 > 1.96 (0.05 significance), and x1 towards y1 through y2 equal (x1 -> y1) * (y1– y2) = 0.1191. the research proves that the indirect effect is greater budiyono, et al.: the influence of leadership and external environment on performance through learning organization, and the influence towards competitiveness through performance of institute of economic science in java international review of management and marketing | vol 8 • issue 4 • 201842 when compared to the direct effects of organizational learning and could mediate the effect of leadership on the performance, the better the leader improves the organizational learning then it can improve the performance. 6.9. result of hypothesis 4. the external environment shows significant positive effect on organizational performance through learning based on the data processing is known that the coefficient on the external environment to the organizational learning in table 5:16 was 0.005 and the cr of 3.333 > 1.96, p = 0.026 < 0.05, the coefficient of organizational learning on performance of 0.188 and cr of 2.162 > 1.96, p = 0.031 <0.05, the coefficient of the external environment on the performance of the 0.005 and the cr sebesaar 3.333 <1.96–p = 0.026. if compared between the direct influence of x2–y2 = coefficient value 0.005 and cr 3.333 > 1.96 with a p = 0.026 < 0.05, while the external environment on performance through organizational learning is equal to (x2–y1) (y1–y2) = 0.108 means that the indirect effect is greater than the direct effect. and organizational learning may mediate the effect of the external environment on the performance, the better the external environment improves organizational learning, it can improve the performance. the results are consistent with the munizu’s research (2010), which states that external factors have significant and positive impact on the performance as well as research conducted by invalid (2007) where the results showed that organizational learning has a significant effect on performance. 6.10. result of hypothesis 5. leadership has a positive effect on competitiveness through performance based on the data processing is known that the coefficient of influence between the leadership of 0.361 with the cr of 2.537> 1.96 with a p = 0.011 < 0.05; the influence coefficient value between performance on the competitiveness of 0.538 with a cr of 2.045 > 1.96 with a p = 0.041 < 0.05; the coefficient of influence of leadership on the competitiveness of 0.361 with a cr of 2.537 > 1.96 with a p = 0.011 < 0.05. if it is compared between the direct influence of leadership on the competitiveness of the value of the coefficient 0.361 and cr value 2.537 > 1.96 with p = 0.011 < 0.05, while the x1–y2 through y3 through equal to (x1–y2) * (y2–y3) = 0.027 means that the indirect effect is smaller than the direct effect. performance may mediate the effect of leadership on competitiveness, but a direct influence on the competitiveness of leadership is greater than through performance. 6.11. the external environment has a positive effect on competitiveness through performance based on the data processing is well known that the external environment on the performance coefficient of 0.005 with a cr of 3.333 > 1.96 with a p = 0.026 < 0.05; the coeficient value of the performance towards the competitiveness of 0.538 with a cr of 2.045 > 1.96 with p = 0.041 < 0.05; the coefficient of the external environment on the competitiveness is 0.339 by the cr of 2.943 > 1.96 with a p = 0.03 < 0.05. if it compared between the direct influence of x2–y3 = coefficient value and the value of the cr 0.339 2.943> 1.96 (0.05 significance), while x2–y2 through y3 equal to (x2–y2) * (y2y3) = 0.0269 means that the indirect effect is smaller than the direct effect. performance may mediate the effect of the external environment on the competitiveness, but the direct influence of the external environment on the competitiveness is greater than through performance. 7. research findings empirically, this research could prove that the influence of leadership on organizational performance through learning has a significant effect on the institute of economic science in java. the mediation test results of the direct influence of leadership on performance with significant results and indirect influence of leadership on performance through organizational learning is also significant then organizational learning acts as a partial mediation variable (solimun, 2017. p. 90, 91). empirically, this research could prove that the influence of the external environment on the performance through organizational learning have a significant effect on the institute of economic science in java. the test results mediating direct influence on the performance of the external environment with significant results and the indirect influence of the external environment on performance through organizational learning learning organization is also significant that acts as a partial mediating variables (solimun, 2011. p. 90, 91). empirically, this study produced findings that performance mediates the influence of the leadership on competitiveness. the mediation test results show the direct influence of the leadership on competitiveness with the significant results and the indirect effect of leadership on competitiveness through performance is also significant so that the performance variable serves as a partial mediating variables (solimun, 2011. p. 90, 91). empirically, this study produced findings that the performance mediate the influenceof the external environmental on competitiveness through performance. the mediation test results show the direct influence of the external environment on the competitiveness with significant results and the indirect influence of the external environment on the competitiveness through performance is also significant, then the variable performance serves as a partial mediating variables (solimun, 2011. p. 90, 91). 8. novelty of the research the analysis results of sem showed that the leadership has a positive significant effect on performance through organizational learning is a novelty because it has not been reviewed by previous researchers with the object of the research. the analysis results of the sem) showed that the external environment has a positive significant effect on performance through organizational learning is a novelty because it has not budiyono, et al.: the influence of leadership and external environment on performance through learning organization, and the influence towards competitiveness through performance of institute of economic science in java international review of management and marketing | vol 8 • issue 4 • 2018 43 been reviewed by previous researchers with institute of economic science as the research object. the analysis results of the sem showed that the leadership has a positive significant effect on the competitiveness through performance is a novelty because it has not been studied by previous researchers. the analysis results of the sem showed that the external environment has a positive significant effect on competitiveness through performance is a novelty because it has not been studied by previous researchers with the institute of economic science as the research object. 9. conclusion leadership has an effect on the competitiveness of the economics college (stie) in java means the better leadership in institute of economic science the level of competitiveness in institute of economic science will be higher. the external environment has an effect on the competitiveness of economics college (stie) in java is accepted means the better attention to the external environment then the higher the competitiveness in the institute of economic science. leadership influences the performance of the institute of economic science through organizational learning. this means that the better leadership, the better of the organizational learning and the better organizational learning, means the better performance of the institute of economic science. the external environment affects the performance of the stie through organizational learning. it means the better the external environment, the better learning and the better organizational learning will have an effect on the improvement of performance in institute of economic science. leadership affects competitiveness through institute of economic science performance. this means that the better leadership will be able to improve performance, as well as performance improvement will improve competitiveness in the institute of economic 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(2010), peran kepemimpinan dalam pencapaian kinerja organisasi melalui budaya, strategi, dan sistem akuntansi manajemen organisasi. simposium nasional akuntansi, university of jenderal soedirman purwokerto, 1-27. . international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2018, 8(5), 24-29. international review of management and marketing | vol 8 • issue 5 • 201824 the role of leadership style on turnover intention ayman mahmoud maaitah* department of public administration, faculty of business administration, mutah university, jordan. *email: maaitah@mutah.edu.jo abstract this research aims at exploring the effect of transformational leadership and transactional leadership on the turnover intention for directors of the greater amman municipality directorates; an analytical, descriptive method has been applied and utilised. research population was chosen from directors of the greater amman municipality departments and heads of sections, where the number of the population was 602, and a simple random sample was chosen, which equal to 274 responds, the researcher relied on questionnaires as the primary tool to collect data, 190 surveys were received back and 18 questionnaire were canceled because of the lack of their suitability for statistical analysis, this results in 172 valid questionnaires which represent 62.7% as a response rate for this study, the results find out also that there is a statistically significant impact for the transformational leadership and transactional leadership on substantial level to affect turnover intention from directors of greater amman municipality department’s point of view. the study concludes some points, most of them are: more research and field studies must be undertaken to identify the importance of transformational and transactional leadership in achieving greater amman municipality’s resent and future objectives, more attention must be paid for those directors in greater amman municipality who seem to have the attributes and characteristics of transformation leadership, and also those who have the ability and required skill to develop human resources in greater amman municipality, giving more trainings and special workshops to build leaders and train them on modern administrative methods in order to improve their abilities, performance and encourage them to provide the best they have. keywords: transformational leadership, transactional leadership, turnover intention jel classifications: g1, g12 1. introduction employees are the most valuable assets in the organization (gul et al., 2012). many successful organizations have strategies to look after their employees, such as good pay, attractive work environment, and profit sharing systems. they motivate employees for high productivity and retention with the organization. normally, employees will remain in the organization if they have a feeling of commitment to the organization. employee turnover is a critical and a serious challenge faced by organizations (ahmad 2010), which will affect both direct and indirect costs of an organization (steers et al., 2012). in addition, voon et al. (2011) estimates that hiring and training a replacement for a lost employee costs approximately 50% of the worker’s annual salary. lost revenues occur because new employees are not as productive as established employees. leadership is an influence process between leaders and followers. the leader intends to influence the followers’ behaviour to reach the organizational goals (limsila and ogunlana, 2008). furthermore, for an organization to succeed in its goals achievement and objectives the burden is on the leaders in the organization and their leadership behaviour (voon et al., 2011). in other words, the leadership must introduce activities to stimulate employees, and establish the roles for an individual or group towards goal achievement (awan and mahmood, 2010) and style is the behaviour pattern that characterizes a leader to tackle organizational issues. numerous different styles are identifiable in various leaders. every style possesses its own set of good and bad personalities (awan and mahmood, 2010) and (randeree and chaudhry, 2012). the differences in the work setting lead to the manager using different leadership style (jogulu, 2010) and (mujtaba et al., 2011). and (mat, 2008) suggests that the definitions of leadership are still evolving and scholars are always seeking to simplify these definitions to make it more comprehensible and practical during the daily business usage. for many years, the concern of many scholars was revolving around the characteristics of the active leader and maaitah: the role of leadership style on turnover intention international review of management and marketing | vol 8 • issue 5 • 2018 25 identifying who he is. however, it is tough to provide one standard definition of leadership. thus, people are still exploring leadership and its related matters. 1.1. research questions based on the problems discussed above, the central issue for this study would be what factors are considered critical in influencing individual’s turnover intention. specifically, 1. does transformational leadership affect turnover intention? 2. does transactional leadership affect turnover intention?. 1.3. research objectives generally, this study aims to examine what influence turnover intention, therefore, to answer the research questions posted above, the following research objectives were formulated: 1. to explore the relationship between transformational leadership and turnover intention. 2. to examine the relationship between transactional leadership and turnover intention. 2. theoretical framework and previous studies 2.1. leadership style leadership is considered very significant in any organisation because it is the leaders’ behaviours that are considered responsible for ruining or improving the organisation. the organisation’s orientations rely on the style adopted by its leaders. since leadership helps in planning the organisation’s orientations about the future, its leaders’ behaviours and practices are the things that drive their followers to achieve the goals. thus, followers usually follow their leaders’ behaviours when performing their duties (heravi et al., 2010). huang et al. (2010) identify two significant leadership styles. in the first style, the employee’s job level affects participative leadership behaviour perceptions and the second style the participative leadership influences performance which shall help practitioners in designing an adequate number of training and development programs to enhance the participative management. also, (limsila and ogunlana, 2008) and (heravi et al., 2010) found that the leadership behaviours are considered as an essential factor that influences organisational commitment and has a direct or indirect impact on turnover intention. hamstra et al. (2011) concluded that the leadership style is considered crucial in supporting work values to reduce employees’ turnover intention. the functions performed by managers can promote loyalty and friendly relations among employees. working with friends is considered as a crucial factor for employees to maximise their productivity and efficiency and thus, that shall significantly reduce the turnover rates (erkutlu, 2008). practical leadership skills and styles can improve job satisfaction and promote employees’ retention in organisations (kleinman, 2013). thus, employees’ retention and performance in organisations can be improved by adopting the appropriate leadership and managerial styles which are consistent with the business strategies to improve the employees’ motivation and morale. transformational leadership transformational leaders offer a purpose that goes is long-term and focuses on higher order intrinsic needs of their followers. these leaders are described as those who use motivation to guide their subordinates to perform to the best of their ability and to raise their levels of confidence through constant support (engelen et al., 2015). transactional leaders offer something employees want in exchange what the leaders want. in other words, transactional leaders exchange resources with their employees or a leader’s behaviour that provides rewards and punishments in return for the subordinate’s effort and transactional performance leadership involves motivating and directing followers primarily through attracted to their self-interest (deichmann and stam, 2015). according to gilbert et al. (2016) transformational leadership is determined by five factors. the first is represented in the idealised impact or attributed charisma which refers to the way in which the followers perceive their leader, and that shall affect the way they perceive the leader’s confidence, power, and transcendent ideals. as for the second factor, it is represented in the idealised impact or behaviour charisma (i.e., the specific leader’s behaviours reflecting his values, beliefs, sense of mission and purpose, and ethical and moral orientation). the third factor is represented in the inspirational motivation which refers to the leader’s capability to motivate and inspire his/her followers to pursue the achievement of the ambitious goals, raise followers’ expectations, promote their confidence, and create a self-fulfilling prophecy. the fourth factor is represented in the intellectual stimulation which refers to the way the leaders question the status quo and appeal to their followers’ intellect. it also refers to the method of innovating and solving problems creatively. the fifth factor is represented in the individualised consideration which is concerned with the leaders who provide their followers with customised socio-emotional support and empower and develop their followers simultaneously. on the other hand, bass (1999) believes that transformational leadership has shown an exchanged relationship between leaders and their followers. such leadership makes use of contingent rewards through which leaders clarify the expectations of the job to their follower. in addition, transformational leadership style refers to the elevating followers by their leaders beyond immediate self-interest. that can be done through idealised influence, individualised consideration, inspiration, and intellectual stimulation. such leadership shall boost follower’s maturity and ideals. it is concerned with the organisation and leaders’ selfactualisation, achievement, and well-being. as for the followers who work under the authority of a transformational leader or within a transformational team, they shall take care of each other, stimulate and inspire one another intellectually, and identify with the team goal. such followers tend to be highly productive. in recent studies (tafvelin, 2013) investigates factors influenced by transformational leadership. by analysing responses from questionnaires and interviews retrieved from social service employees, the findings showed that transformational leadership has a positive relationship with organisational outcomes which include well-being, commitment, and role clarity. similarly (tsai et al., 2015) examine the impact of transformational leadership maaitah: the role of leadership style on turnover intention international review of management and marketing | vol 8 • issue 5 • 201826 on job performance in taiwan smes with the mediating effect of organisational commitment and the moderating effect of employee competency. they find that transformational leadership influence job performance. in recent studies (brahim et al., 2015) examine the effect of transactional leadership on employee performance in banking institutions in algeria. by analysing a sample size of 132 employees from five banks with analysis of variance, the findings indicate that transactional leadership style has a substantial effect on employee performance. similarly, advani (2015) examines the impact of transformational and transactional leadership styles on employee performance in pakistan banking sector. by analysing responses through questionnaires from 172 employees, the findings indicate that both transactional and transformational leadership styles have an impact on employee performance. koesmono (2017) examines the impact of transactional leadership on employee turnover intention in indonesia. the data of 150 respondents were analysed with structural equation modelling program. the findings show that transactional leadership alongside job satisfaction and work motivation have an influence on turnover intention of employees at pt. sumber alfaria trijaya tbk. (minimarket alfamart) in east surabaya region of indonesia. in addition, saif (2017) examines the impact of transactional and transformational leadership on employee satisfaction in jordanian public hospitals. using a response rate of 86% from 800 questionnaires distributed among nine hospitals, the results of the analysis show that transactional and transformational leadership averagely influence employee satisfaction. 2.2. conceptualization of turnover intention many scholars have defined the concept of turnover in many ways. for example, price in 1977 describes turnover as the degree of movement across the membership division of an organisation. on the other hand, mobley in 1982 defines employee turnover as the discontinuance of membership in an organisation from an individual who received monetary compensation from the organisation. also, tracey in 1991 sees labour turnover as the changes in the composition of the workforce due to termination. a frequently used distinction of employee turnover from an organization is between voluntary and involuntary; voluntary employees-initiated decision is to leave the organization on their own; while instinctive organization-initiated choice is an employer’s decision to terminate the employee, plus death or mandatory retirement (dess and shaw, 2001), similarly (xiancheng, 2010) argues that voluntary turnover begins by employees wanting to leave for specific reasons, while involuntary turnover is an employee going the organization because the organization is downsizing or cost saving, or due to employee’s poor performance. transformational leaders have the high order needs of employees, while transactional leaders emphasise exchanging rewards for accomplishment. both transformational leadership behaviour and transactional leadership behaviour provide an efficient clarification of the employee turnover in the organisation (long and thean, 2012) and (hamstra et al., 2011). but (wells and peachey, 2011) investigated the relationship between leadership behaviour and turnover intention from national collegiate athletic association division i softball and volleyball assistant coaches in the usa. the results showed that transformational leadership has a direct effect on, and a negative relationship with turnover intention. however, transactional leadership also has a negative correlation with turnover intention. heravi et al. (2010) investigated the relationship between leadership behaviour and personnel turnover intention in it companies in iran. the results showed that transformational leadership had a negative correlation with turnover intention. while transactional leadership was not related to turnover intention. gul et al. (2012) examined the relationship between transformational and transactional leadership and turnover intention. the insurance sector of pakistan comprised the participants in this study. one hundred and twenty-one questionnaires were used. the results showed that the relationship between transformational and transactional leadership and turnover intention is negative. furthermore, the results showed that the samples are more related to transformational leadership than transactional leadership. long et al. (2012) found the relationship between leadership style and employees’ turnover intention of academic staff in malaysia. they argue that both types of leadership behaviour (transformational and transactional leadership) have a negative relationship with turnover intention, but the correlation is not significant. ali et al. (2014) examined leadership style by using transformational and transactional leadership behaviour. the study collected data from private section schools in pakistan. three hundred and fiftysix questionnaires were used. the study found that transformational and transactional leadership behaviours are negatively associated with turnover intention. tse et al. (2013) explored the relationship between transformational leadership and turnover intention, and the mediation role of affective commitment. the study used 490 employees in a large call centre of a telecommunication company in northern china. this study found that transformational leadership has a negative relationship with turnover intention and that affective commitment mediates it. ekong et al. (2013) investigated the relationship between leadership style and employee turnover. they conducted a survey in nigerian banks from which 500 questionnaires were collected. the study found that leadership style has a relationship to employee turnover intention. 3. methodology the section describes the research framework, research hypothesis, unit of analysis, data collection procedure and data analysis technique. 3.1 research framework this research framework was developed from past theoretical reviews that examined the relationship between all the variables maaitah: the role of leadership style on turnover intention international review of management and marketing | vol 8 • issue 5 • 2018 27 mentioned in the literature reviewed section (figure 1). the research framework was based on the academic gaps found in the theory and practices. precisely, this study intends to examine the relationship between leadership style, and turnover intention, the primary constructs include turnover intention as a dependent variable and leadership style. 3.2. research hypothesis h1: transformational leadership style is negatively related to turnover intention. h2: transactional leadership style is negatively related to turnover intention. 3.3. sample size the target population are involved in this study were directors and heads of department from different departments who are working in greater amman municipality. based on the total population in this study which is 602, the recommended sample size table by sekaran and bougie (2010) appropriate for the current research is 274. this means 274 doctors will be included as a representative sample for the whole study population. 3.3. unit of analysis this study is an attempt to explain the relationship between leadership style, and turnover intention among directors of the greater amman municipality departments and heads of sections. therefore, the unit of analysis is individually based; this implies that data was collected from directors and leaders of divisions who are currently working in greater amman municipality. 3.4. data collection procedure the primary target of this research is to test the stability of the constructs as proposed in the research hypothesis, based on the conceptual framework of the study. this study is quantitative in nature and data was collected through questionnaire. the questionnaire was based on scales adapted from previous studies. on a scale 1 (strongly disagree) to 5 (strongly agree). 3.5. data analysis technique data collected through the survey were analysed using spss (version 22) program for windows. before primary analyses, the data were examined for data entry accuracy, outliers, and distributional properties. 4. result and discussions a total of 274 respondents from directors of the greater amman municipality departments and heads of sections filled and returned the survey instruments administered to them, giving a response rate of (69.3%). a total of 18 questionnaires were discarded from analysis on two principal grounds. firstly, 13 surveys were excluded from analysis because they were incomplete as several missing data per case has been observed. secondly, five multivariate outliers were detected and excluded from further analysis as well. removing these numbers of questionnaires from the report is imperative as they do not represent the sample (hersey et al., 2010). eventually, the sample for this study was made up of a total number of 172 effective responses used for further analysis. table 1 shows the response rate obtained from the survey. the response rate of (62.7%) per cent achieved in this study is therefore considered excellent in view of sekaran and bougi (2010) suggestion that not <30% response rate is acceptable in survey research. the profiles of respondents are as follows: 57.1% of employee’s participants were male, and 42.9% were female (78% married and the rest stated as non-married). however, only 3.6% was noted that their age is more than 55 years old. the amount of salary they annually received was asked according to 6 different categories, the amounts of <400jd, to >1400jd. regarding the educational levels, 21.6% respondents held of a diploma certificate, 48.7% had bachelor’s degree. however, 29.7% were the holder of a postgraduate certificate (phd and master’s degrees). according to the data, response has 1 to 25-years experience working in greater amman municipality. the result indicated that the data set did not violate the normality assumption, indicating that all variables were approximately normally distributed (tables 2 and 3). as can be seen from table 4, the mean and the standard deviation of transformational leadership is 3.270 and 0.923 respectively, table 1: response rate item frequency (%) number questionnaires distributed 274 (100) number of questionnaires returned 190 (69.3) number of questionnaires rejected 18 (6.5) number of questionnaires retained 172 (62.7) number of questionnaires not return 84 (30.6) table 2: results of skewness and kurtosis for normality test variables skewness kurtosis statistic std. error statistic std. error turnover intention −0.933 0.139 0. 483 0.276 transformational leadership −0.533 0.139 −0.453 0.276 transactional leadership −0.345 0.139 −0.187 0.276 organizational climate −0.714 0.139 −0.161 0.276 valid n (listwise) 172 172 172 172 figure 1: research framework maaitah: the role of leadership style on turnover intention international review of management and marketing | vol 8 • issue 5 • 201828 which implies that the respondents are close to agreeing with the questions or statements of this construct. likewise, the mean, as well as the standard deviation for the other independent variables, are 3.292 and 0.831 for transactional leadership, therefore, in nearly all the independent latent constructs, respondents have lean towards moderately agreed. for the dependent variable (turnover intention), it shows mean of 4.324 and standard deviation of 1.120, indicating that respondents lean towards reasonably accepted. as shown in table 5, 54% (r2 = 0.54, f = 122.71, p < 0.01) of the variance in turnover intention was significantly explained by transformational leadership, transactional leadership, in the model, transformational leadership (β = −0.265, p < 0.01) and transactional leadership (β = −0.264, p < 0.01) were found negatively related to turnover intention, therefore, hypotheses 1and 2 were supported. the results suggest that response with leadership style tend to have lower turnover intention. 5. conclusion consistent with the second research question, the secondary objectives of the study were to investigate the relationship between leadership styles and turnover intention. towards this direction, two hypotheses were developed to test the connections for transformational and transactional leadership styles. the first leg of this research question hypothesised that transformational leadership has a negative and significant relationship with employee retention. the result also shows negative direction and considerable t-value. thus, transformational leadership is negatively and significantly correlated with turnover intention. this finding is consistent with the findings of (gul et al., 2012; long, et al., 2012; ali et al., 2014; tse et al., 2013; long and thean, 2012; wells and peachey, 2011). they all found a negative relationship between transformational leadership and turnover intention. therefore, employees are more likely to remain with an organisation if they believe that their managers show interest and concern for them. if they know what is expected of them, if they are given a role that fits their capabilities and if they receive regular positive feedback and recognition. mohammad et al. (2009) argued that transformational leaders able to provide a higher level of commitment, satisfaction and performance to the employees. the second leg of rq2 posed that transactional leadership style is negatively and significantly related to turnover intention. however, the empirical result does not support this proposition because the beta value is positive and the t-value was not significant. the findings revealed that transactional leadership doesn’t have any meaningful relationship with turnover intention, which leads to the decision that hypothesis h2, is not accepted. though not significant in findings, the link is positive in line with previous research findings (ekong et al., 2013; mohammad et al., 2009; hamstra et al., 2011). interestingly, other researchers also find a negative but significant relationship between transactional leadership style and turnover intention (ali et al., 2014). further , gwavuya (2011) affirm that incompetent leadership will lead to reduced employee performance, high stress, low job commitment, low job satisfaction and turnover intention. riaz and haider (2010) argued that transactional leadership style provides high comfort and organisational identification as compared to transformational leadership style. as a conclusion, once the transactional leader motivated the employee, such employee will stay with the organisation. table 3: multicollinearity test model collinearity statistics tolerance vif transformational leadership 0.681 1.469 transactional leadership 0.540 1.852 dependent variable turnover intention table 4: descriptive statistics of the constructs (n=172) construct minimum maximum mean±standard deviation turnover intention 1.00 5.00 4.324±1.120 transformational leadership 1.00 5.00 3.270±0.923 transactional leadership 1.00 5.00 3.292±0.831 table 5: regression results of transformational leadership, transactional leadership on turnover intention independent variables dependent variable t sig. tolerance vif work engagement (std beta) transformational leadership −0.265** −8.50 0.000 0.901 1.11 transactional leadership −0.264** −8.11 0.000 0.826 1.21 f value 122.71 r² 0.54 adj.r² 0.534 durbin-watson 1.757 *p<0.05, **p<0.01 maaitah: the role of leadership style on turnover intention international review of management and marketing | vol 8 • issue 5 • 2018 29 references advani, a. 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(2010), an analysis of the cause of employee turnover intention in hotels. ieee journal,  3(3), 5326-5329. . international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2017, 7(1), 354-362. international review of management and marketing | vol 7 • issue 1 • 2017354 e-lifestyle, customer satisfaction and loyalty among mobile subscribers in thailand siti hasnah hassan1*, t. ramayah thurasamy2, wai yee loi3 1school of management, universiti sains malaysia, malaysia, 2school of management, universiti sains malaysia, malaysia, 3school of management, universiti sains malaysia, malaysia. *email: siti.hassan@usm.my abstract this paper aims at assessing the relationship between e-lifestyle, customer satisfaction (cs), and loyalty among mobile service subscribers in thailand. the results reveal that e-lifestyle has a substantial effect on cs. subsequently, cs affects strongly on consumer loyalty towards telecommunication service providers. moreover, cs mediates the relationship between e-lifestyle and consumer loyalty. the study concludes that e-lifestyle has to be integrated into marketing strategies and customer relationship management in order to sustain consumer loyalty. from a practical point of view, the findings of this study could be used to inform businesses, particularly those in the telecommunication services industry in developing countries on the ways of enhancing cs and loyalty. keywords: customer satisfaction, e-lifestyle, loyalty jel classifications: m30, m31, m37 1. introduction mobile communication services are getting more pervasive in our daily life and the advanced technological expansion has brought numerous innovations that have facilitated our daily life and communication. the convergence of the telecommunication services eases the processes of various tasks in a uniform way, for example, mobile banking, mobile shopping, and mobile social media sites. this phenomenon has opened up great opportunities to telecommunication services industry, especially the mobile service providers. hence, it is of utmost importance for mobile service providers to understand the effective strategies which could be employed in attracting new customers, retaining and satisfying the existing customers, and increasing the customer loyalty to the company. the present study attempts to establish an in-depth understanding of the factors that could influence customer satisfaction (cs) and loyalty from the lens of customers’ e-lifestyle, while empirically develops a conceptual model that studies the foundation and formation of cs and loyalty in the mobile services market. creating the linkages among customers’ e-lifestyle, satisfaction, and loyalty are imperative in the context of mobile telecommunication due to the global explosion of usage of handheld electronic communication devices. due to the massive demand of mobile services, it has the potential to change the paradigm of how the market interacts with the customers. however, the occasions or opportunities for virtual-based telecommunication services to meet and greet their customers, especially in person are scarce. thus, it presents a real challenge for mobile service providers to interact and create attachments with their customers. these are the reasons why customers’ e-lifestyle is essential in understanding cs and loyalty. moreover, researchers and firms have become highly interested in finding out the sources and consequences of cs and loyalty. therefore, the research could provide meaningful insight for telecommunication firms to engage and strategize their interactive marketing (aksoy et al., 2013). furthermore, there is a need to examine the relationship between consumers’ e-lifestyle, satisfaction, and loyalty towards mobile service providers in order for these companies to keep moving in the same trajectory and speed of perpetual advancement of mobile technology in the global environment (hassan et al., 2015). the motivation for the present study is that the telecommunication hassan, et al.: e-lifestyle, customer satisfaction and loyalty among mobile subscribers in thailand international review of management and marketing | vol 7 • issue 1 • 2017 355 market in thailand has not achieved its peak. there are still rooms for improvement for the telecommunication services in thailand which have to be looked into in order to fulfil the users’ needs and subsequently, to survive in the fierce telecommunication industry. 2. literature review 2.1. loyalty customer loyalty has been discussed rather extensively in the context of product marketing and the new perspective of loyalty has been found to be significantly correlated with lifestyle and selfidentity (oliver, 2014). a conceptual model developed by oliver et al. (1997) explained the full spectrum of loyalty grounded by a hierarchy of effects model which included cognitive, affective, conative, and action (repurchase behaviour) dimensions. as the latest and advanced technology emerges, a new terminology, “e-loyalty” is coined which, in general, extends the concept of traditional brand loyalty into online consumer behaviour and lifestyle (gommans et al., 2001). therefore, this research considers the factors of e-lifestyle which might significantly influence cs and loyalty. in the lens of social sciences, behavioural elements of customer loyalty are highly interrelated to the action of repeated purchase in a specific period of time, and repurchase action are significantly due to cs. when a customer is satisfied with a product or service, there is high probability that the satisfied customer will make a repurchase, thereby establishing loyalty to the company or brand. hence, improving cs level is the key to effectively increase customer loyalty. firms are encouraged to create a strong bond between the customer and the product/company and satisfy their needs because by doing so, the customer loyalty will be increased. this study conceptualizes customer loyalty as customers’ repurchase intention from the same company and cs as an antecedent of customer loyalty. according to bayraktar et al. (2012), loyalty can be examined through the consumers’ intention to repurchase, toleration with the price, and their willingness to recommend a company’s products or services to others. in fact, customer loyalty acts as a root for a company to gain its competitive advantages among the competitors. hence, customer retention is considered as a fundamental act for mobile service providers (deng et al., 2010). 2.2. e-lifestyle consumers’ lifestyle denotes to consumer’s attitude, thinking, and sense towards their product purchasing and consumption behaviour (ahmad et al., 2010). in this 21st century, massive usages of internet and mobile devices have significantly transformed people daily lifestyle (yu, 2011). due to this phenomenon, the idea of e-lifestyle has been introduced to strengthen and improve marketing strategies on market segmentation and product/service delivery. most consumers consider their mobile phones as not only a tool for communication, but also a tool functioning as a multipurpose, technologically advanced device (castaldi et al., 2011). hence, the present study conceptualizes e-lifestyle as a set of individual behaviour that reflects psychological concerns and sociological consequences towards internet and electronic devices. previous literature was more inclined to examine the linkages between cs and loyalty. however, insufficient attention has been given to the influence social identification antecedents may have on cs and loyalty, for example, customer’s lifestyle. the increasing importance of consumer’s lifestyle and value in assuming cs and loyalty signifies the needs to investigate individual preferences in order to understand the consumer’s lifestyle and behaviour as a user of a communication means. in addition, the understanding of consumers’ e-lifestyle is important as it opens up a global marketplace for businesses which are traditionally restricted by geographical areas (ahmad et al., 2010). therefore, the present study adapts the e-lifestyle construct by yu (2011) which is established based on four interrelated components; e-activities, e-opinions, e-interests, and e-values; as dimensions to examine individuals’ psychological concerns and sociological consequences of e-lifestyle as a whole. the four elements in e-lifestyle construct were originally established by wells and tigert (1971), who first introduced three dimensions of activities, interests, and opinions (aio) as e-lifestyle and secondly, mitchell (1983) who grouped value, attitude, and lifestyle (vals) into e-lifestyle construct. wells and tigert (1971) described activities as real, visible behaviour, interests as consistent attention to specific objects, and opinions as responses to occasions. a study on e-lifestyle by ahmad et al., (2010) described that lifestyle should be measured by looking at consumers’ patterns of behaviour which are reflected by the consumers’ aios. on the other hand, mitchell’s vals rating scale aims at accessing the associations between the individual values, beliefs, and actions. the use of this rating scale would help to clarify that perceived value directly affects a person’s behaviour, where a perceived value is a combination of constructs of a person’s beliefs, attitudes, demands, and hopes. in this study, e-activities are classified as consumers’ online activities in terms of entertainment, transaction, and social networking. meanwhile, e-interest includes the consumers’ attentiveness about internet, latest technology, and trends. moreover, e-opinions represent the consumers’ view about the continued development of internet services in the perspectives of society, economy, culture, education system, and life well-being. last but not least, e-values symbolize the consumers’ beliefs on how internet could benefit them in terms of job efficiency, networking, knowledge, and convenience in life. based on the literature review, the hypothesis is developed as below: h1: e-lifestyle has a positive effect on cs. 2.3. cs cs is defined as customer’s experience-based assessment of how far their expectations are fulfilled by the overall functionality of products/services provided by the service provider. it is associated with an individual pursuit or goal that is to be attained from the product/service consumption and it also reinforces desirable endstate of consumption (oliver, 2014). there are a lot of studies that focus on the relationship between satisfaction and loyalty, but only a few studies look into the context of mobile telecommunication (aksoy et al., 2013). a few studies on mobile service industry suggested that cs could positively hassan, et al.: e-lifestyle, customer satisfaction and loyalty among mobile subscribers in thailand international review of management and marketing | vol 7 • issue 1 • 2017356 influence customer loyalty (calvo-porral and lévy-mangin, 2015; hassan et al., 2015). cs is important for a firm because it could potentially enhance the firm’s competitive advantages in terms of financial stability, customer retention, word of mouth, and re-purchase intention. specifically, it is evidenced that the strength of customer relationship is an important indicator of the performance of a firm, and eventually increases the firm’s revenue and corporate reputation. in addition, previous literature also shows that higher cs could establish higher switching barriers (e.g., organizational credibility and relational values) and later, enhance customer loyalty (rani and kannan, 2015). in other words, switching barriers would reinforce customer loyalty to a firm with which they feel satisfied and fulfilled. a satisfied customer would tend to recommend the firm to others and would not easily switch to other substitute firms. based on the literature review, the hypotheses are developed as below: h2: cs has a positive effect on loyalty. h3: cs mediates the relationship between e-lifestyle and loyalty. figure 1 depicts the research framework of this study which encompasses the four formative-reflective dimensions of e-lifestyle (e-activities, e-interest, e-opinions, and e-values) classified as a second-order construct, cs, and loyalty. 3. materials and methods a total 1500 self-administrated questionnaires were distributed to subscribers of major mobile service providers in thailand (i.e., ais, dtac, true move, and tot) within some areas in this country. these are the areas that have become the sub-region of continuous development, progress, wealth, peace, and quality of life according to the 5-year imt-gt roadmap (adb, 2008). the covered areas in thailand included states of surat thani, phuket, and hatyai. since we were not able to obtain the list of total population in the suggested areas, a non-probability purposive sampling approach was employed whereby only mobile subscribers of the four particular mobile providers in thailand were chosen, while the rest were excluded from the data set. smartpls 2.0 software (ringle et al., 2005) was utilized to evaluate the relationships between the constructs of the research model by conducting partial least squares (plss) analysis. 3.1. measurement scales development this survey included four sub-constructs (i.e., e-activities, e-interests, e-opinions, and e-values) underlying consumers’ e-lifestyle as the second-order construct. the e-lifestyle instrument adapted in this study was originally developed by wells and tigert (1971) and mitchell (1983) and adapted by yu (2011) in his seminal work. the items of e-lifestyle’s were measured using a five-point likert scale ranging from 1 (strongly disagree) to 5 (strongly agree). the instrument was, hence, adapted based on the malaysian-response context. next, the items of cs were measured using a seven-point likert scale ranging from 1 (not at all satisfied) to 7 (very satisfied), whereas the items of loyalty were measured using a seven-point likert scale, ranging from 1 (strongly disagree) to 7 (strongly agree). the measurement items of cs and loyalty were selfdeveloped and some of the items were adapted from balmer et al. (2001) and du et al. (2007). table 1 indicates the items’ descriptions adapted from the previous literatures. 4. results 4.1. demographic profiles of respondents a total of 420 valid questionnaires were received by the end of data collection period (28% response rate). table 2 illustrates the demographic profile of 420 respondents in thailand. the demographic profile includes the gender, age, race, highest education level, monthly salary, monthly mobile subscription, and most recent subscription of the respondents. the respondents who are female were more than double than that of the number of male respondents with the rate of 68.3% females versus 31.7% males. the age of the respondents in this study varied. about 63% of the respondents are between 17 and 21 years old. meanwhile, about 23% of the respondents are between 22 and 26 years old and only about 10% of the respondents are >26 years old. this particular demographic information shows that the majority of the respondents in this study could be classified as generation y (i.e. birth years between 1980s and 2000s). majority of the respondents were undergraduates with bachelor degree (74.8%), while only a few respondents with ph.d. degree (1.4%). approximately 75% of the respondents were with monthly salary of <thb10,000 and this shows that many of them are students at the university level, whereas the rest of the respondents were with salary above that amount. 24% of the respondents who are mobile subscribers spent <thb250 monthly on mobile subscription. majority of the respondents (approximately 38%) spent between thb2510 and thb500 on subscription monthly, while only 5.7% spent over thb1000 on mobile subscription. in general, it could be deduced that mobile users in thailand mostly use aia/ais (3g) and dtac. it shows that there is an observable competition in telecommunication sector between these two mobile operators. aia/ais (3g) was number one in terms of subscription among the respondents (43.1%) and dtac came in second with 34%, while tot3g had lesser popularity among the respondents as compared to these two mobile operators in thailand. 4.2. normality and common method bias hair et al. (2014) guidelines of pls structural equation modelling (sem) reporting approach was followed in this paper. pls-sem figure 1: research framework hassan, et al.: e-lifestyle, customer satisfaction and loyalty among mobile subscribers in thailand international review of management and marketing | vol 7 • issue 1 • 2017 357 is a non-parametric approach in which the data do not need to be normally distributed. however, skewness and kurtosis have to be examined prior to data analysis in order to evaluate whether or not variable distribution is symmetrical (hair et al., 2014) and ensure that the data are not far from normal distribution. the skewness and kurtosis values of most items studied ranged between −1 and +1, which are below the levels suggested for transformation of variables (ghisseli et al., 1981). therefore, the non-normality of data is not an issue for the research. furthermore, common method bias was assessed by conducting harman’s single factor (podsakoff et al., 2003). accordingly, single factor accounted for the majority of variance explained (11.26%). this suggests that common method bias is not a major issue in this study. 4.3. measurement model measurement model results comprised two sections; formative and reflective assessments. there were four formative constructs (e-activities, e-interests, e-opinions, and e-values) in the research. nevertheless, cs and loyalty were considered as reflective constructs. figure 2 depicts the measurement model of the study using the pls analysis. in order to assess the validity for formative constructs, several steps need to be done sequentially. first, scholars need to assess multicollinearity issue for the formative indicators (peng and lai, 2012). high correlation between two formative indicators can have an effect on the results because it boosts the standard error and reduces the ability to demonstrate that the estimated weight is different from zero (hair et al., 2014). variance inflation factor (vif) is a means used to assess the multicollinearity issue (petter et al., 2007). in the context of pls-sem, a vif value of 5 and higher indicates a potential collinearity problem (hair et al., 2011). second, scholars should assess each formative indicator’s contribution to the formative construct score which is created by aggregating the formative indicators of a construct using the item weight (götz et al., 2010). item weight should be significant, the sign of item weight should be consistent with the underlying theory, and the magnitude of the item weight should also be >0.10 (andreev et al., 2009). table 1: items’ descriptions for constructs constructs items descriptions e-activities i frequently use internet to.... ea1 play games or listen to online music ea2 shop for products/services ea3 do my banking transactions or finances ea4 share my opinions within network communities (e.g., facebook, twitter, etc.) ea5 chat with my friends or colleagues/classmates ea6 arrange trips by booking flight/bus tickets, accommodation and etc. ea7 participate in social events ea8 read news or get data ea9 download or watch movie online e-interests i use internet because.... ei1 i am very interested in discovering new things online ei2 i would like to stay updated with the latest electronic development ei3 i feel happy to use the newest technology ei4 i like gaining knowledge through online ei5 i like to participate in the network of social communities ei6 i like browsing and searching on the web ei7 i enjoy online shopping e-opinions continued development of internet services is.... eo1 positive for our society eo2 positive to have better understanding about our culture eo3 positive for our education system eo4 positive for our economy eo5 bringing more happiness to our daily life eo6 very important to know the condition of vulnerable societies e-values i believe that using internet.... ev1 enhances the convenience in my life ev2 improves my job efficiency ev3 expands my circle of friend ev4 enhances interaction among people ev5 decreases face-to-face emotional interaction among people ev6 provides the learning environment that i have benefited from the impact ev7 provides more new knowledge cs cs1 i am satisfied with this operator cs2 i am satisfied with the quality of services loyalty l1 i am loyal to this mobile network operator l2 i am willing to continue my subscription with this mobile network operator l3 i highly recommend this mobile network operator to my friends l4 i won’t switch to the other mobile network operators l5 i intend to extend the subscription with this mobile network operator during the next three months cs: customer satisfaction hassan, et al.: e-lifestyle, customer satisfaction and loyalty among mobile subscribers in thailand international review of management and marketing | vol 7 • issue 1 • 2017358 the validity of the four formative constructs (e-activities, e-interests, e-opinions, and e-values) in the research was assessed using vif and outer weighting significance results. table 3 shows that the vif values of all the four constructs of e-lifestyle were lesser than 5, thus implying that the collinearity issues are not at a critical level for e-lifestyle’s second-order construct. the first step for the assessment of the formative constructs was met and the second step to assess formative measurement was to analyse the item weight in formative measurement models for their significance and relevance (hair et al., 2014). bootstrapping procedure generating 500 subsamples was implemented to examine whether the outer weight in formative measurement models was significantly different from zero. table 4 illustrates the assessment of the formative constructs using the significance values of the item weight. the e-activities had a total of nine formative items. the weight for three items was not significant (i.e. ea7, ei2, and ei6). however, the outer loadings for ei2 and ei6 were more than 0.50. therefore, they needed to be remained in the data sample set. for the constructs of e-opinions and e-values, all the formative indicators had the item weight value >0.10, hence significant. ea7 was removed from the model because it was neither significant nor had the item loading >0.50. the next section presents the results for validity and reliability of the reflective measurement models for the first-order constructs. 4.3.1. reflective measurement results the assessment of the reflective measurement models in the pls analysis included composite reliability (cr) and cronbach’s alpha to evaluate internal consistency among items for each construct, item loading, and average extracted variance (ave). it was basically conducted in order to assess convergent validity. it also involved cross loading and fornell-larcker criterion to evaluate discriminant validity among the constructs of the research model of study (chin, 1998; hair et al., 2014; henseler et al., 2009). item loading and reliability were examined in order to evaluate the properties of the reflective measurement models. item loading should be 0.708 or higher that a latent variable can explain a substantial part of each indicator’s variance (fornell and larcker, 1981; hair et al., 2014). table 5 depicts the item loading for all the reflective measurement items which were almost >0.708. it was confirmed that the cr and cronbach’s alpha for constructs were satisfactory with values >0.70 (refer table 5) (fornell and larcker, 1981). hence, the internal consistency among the items for each construct was confirmed. table 5 illustrates the ave values for each construct of the study model. ave is defined as a mean value of the squared item loading associated with the construct and an ave value of 0.50 or higher is adequate for each construct to explain more than half of its correspondent items (hair et al., 2014). as illustrated in table 5, ave values for all constructs were >0.50, thus it is satisfactory. table 3: collinearity statistics e-activities e-interests e-opinions e-values indicator vif indicator vif indicator vif indicator vif ea1 1.439 ei1 1.709 eo1 1.818 ev1 1.545 ea2 1.835 ei2 1.937 eo2 2.126 ev2 1.697 ea3 1.903 ei3 1.882 eo3 1.776 ev3 1.859 ea4 1.345 ei4 1.844 eo4 1.503 ev4 1.845 ea5 1.307 ei5 1.767 eo5 1.533 ev5 1.538 ea6 1.838 ei6 1.504 eo6 1.454 ev6 1.569 ea7 1.960 ei7 1.176 ev7 1.485 ea8 1.413 ea9 1.584 vif: variance inflation factor table 2: demographic profile of respondents (n=420) variable category frequency (%) gender male 133 (31.7) female 287 (68.3) age 17-21 261 (62.1) 22-26 97 (23.1) 27-31 20 (4.7) 32-36 17 (4.1) 37-41 10 (2.3) >41 5 (1) highest educational level high school 50 (11.9) diploma 26 (6.2) degree 314 (74.8) master 24 (5.7) phd 6 (1.4) monthly salary <thb10,000 313 (74.5) thb10,000-20,000 80 (19) thb20,001-30,000 4 (1) thb30,001-40,000 6 (1.4) thb40,001-50,000 5 (1.2) >thb50,000 6 (1.4) monthly subscription <thb250 100 (23.8) thb251-500 159 (37.9) thb501-750 75 (17.9) thb751-1000 62 (14.8) >thb1000 24 (5.7) current subscription to mobile operator aia/ais (3g) 181 (43.1) dtac/dtac trinet 143 (34.0) true move/true move-h 63 (15.0) tot3g 14 (3.3) others 3 (0.7) age: 9 missing; salary: 6 missing values; subscribers: 16 missing values hassan, et al.: e-lifestyle, customer satisfaction and loyalty among mobile subscribers in thailand international review of management and marketing | vol 7 • issue 1 • 2017 359 in the pls analysis, two criteria were used to evaluate the discriminant validity (i.e. cross loading and correlation) for the reflective measurement models. first, items should load more strongly on their correspondent constructs than on other constructs. second, the square root of each construct’s ave should be higher than the level of correlations involving the construct (chin, 1998). table 6 illustrates the cross loading for the constructs. the fornell-larcker criterion needs to be evaluated to confirm the discriminant validity of the reflective constructs of the second-order models. hence, inter-construct correlation statistics were inspected to assess the measurement model. as shown in table 7, all the constructs shared more variance with their items (ave) than with the other constructs. in addition, all the correlations were below the cut-off value of 0.80 (hair et al., 2010). in conclusion, the discriminant validity among the constructs of the study is confirmed where both the cross loading and fornell-larcker criterion are met. in overall, several statistical approaches were conducted to assess the internal reliability, convergent validity, and discriminant validity of the measurement model. therefore, it is concluded that the model in the present study has satisfactory validity and reliability criteria in order to proceed with the structural model analysis. 4.4. structural model results collinearity issues between the constructs need to be inspected prior to the structural model assessment. the assessment of vif was conducted to detect multicollinearity. according to the pls’s rule of thumb, a vif value of five and above shows a potential problem of collinearity (hair et al., 2011). in this study, the vif values for all the constructs were less than five and this reveals that there is no collinearity issue. figure 3 illustrates the structural model. 4.4.1. direct effects testing the results of the structural model estimate are illustrated in table 8. the structural model was run using the bootstrap procedure which generated 500 resamples following the recommendation by hair et al. (2014). as the t-statistics and standard error indicate (refer to table 8), all path coefficients were significant. thus, all hypotheses were supported at 99% confidence level. 4.4.2. mediating effect testing to test the mediation effect, the procedure of “bootstrapping the indirect effect” by preacher and hayes was used (preacher and hayes, 2004, 2008). first, the indirect effect of the mediating path figure 2: measurement model table 4: validity results for formative first‑order constructs formative construct formative indicator item weight (item loading) t value e-activities ea1 0.174 (0.547) 2.466*** ea2 0.194 (0.566) 2.197** ea3 0.127 (0.410) 1.549* ea4 0.253 (0.508) 4.091*** ea5 0.207 (0.526) 2.927*** ea6 0.202 (0.485) 2.400*** ea7 −0.074 (0.463) 0.865ns ea8 0.368 (0.719) 5.514*** ea9 0.257 (0.691) 3.378*** e-interests ei1 0.358 (0.755) 4.068*** ei2 0.032 (0.681) 0.468ns ei3 0.314 (0.790) 4.156*** ei4 0.233 (0.765) 3.373*** ei5 0.213 (0.739) 2.881*** ei6 0.024 (0.556) 0.375ns ei7 0.218 (0.514) 2.640*** e-opinions eo1 0.343 (0.810) 5.168*** eo2 0.136 (0.680) 1.776** eo3 0.169 (0.735) 2.263** eo4 0.160 (0.635) 2.291*** eo5 0.273 (0.744) 4.167*** eo6 0.279 (0.720) 4.342*** e-values ev1 0.212 (0.710) 3.050*** ev2 0.285 (0.781) 3.809*** ev3 0.160 (0.671) 2.479*** ev4 0.105 (0.649) 1.766** ev5 0.107 (0.605) 1.480* ev6 0.258 (0.702) 3.548*** ev7 0.278 (0.741) 3.637*** ns: not significant. *p<0.10, **p<0.05,***p<0.01 hassan, et al.: e-lifestyle, customer satisfaction and loyalty among mobile subscribers in thailand international review of management and marketing | vol 7 • issue 1 • 2017360 (e-lifestyle > cs > loyalty) was calculated, and the indirect effect was 0.329 (0.411*0.8). next, the 95% bootstrapped confidence interval was calculated, and the indirect effect of 0.329, 95% boot ci: (ll = 0.238, ul = 0.420) did not straddle a 0 in between. this indicates that there is a mediation effect for the path e-lifestyle > cs > loyalty, and it can be concluded that the mediation effect is statistically significant. table 9 shows the bootstrapping analysis which indicates that the indirect effect of β = 0.411 is significant at 0.01 level with a t-value of 7.875. in addition to path coefficient results, the complementary evaluation tools for structural model results and the r2 values of endogenous constructs are illustrated in table 10. based on the results, it can be deduced that 17% of the variations in cs can be explained by the constructs of e-lifestyle, while 64% of variations in loyalty can be explained by the construct of cs. likewise, the changes in the r2 value that occur when a particular exogenous construct is omitted from the model can be employed to assess whether the omitted construct has a substantive impact on the endogenous constructs (hair et al., 2013). accordingly, this measure is conceived as the effect size (f2) and it can be calculated as: f r included r excluded r included 2 = − − 2 2 21 where r2 included is the r2 value when a selected exogenous latent variable is included and r2 excluded is the r2 value when a selected exogenous latent variable is excluded from the model. the guidelines for assessing f2 are the values of 0.02, 0.15, and 0.35 which represent small, medium, and large effects respectively (cohen, 1988). according to table 10, the value for the effect size with regard to the impact of e-lifestyle ion cs was 0.204 which was considered as a medium effect. meanwhile, the effect size of cs on loyalty was large. the stone-geisser ’s q2 for endogenous constructs were 0.154 and 0.521 for cs and loyalty respectively, signifying acceptable predictive relevance because their values were above zero. regarding the goodness of fit, this approach has been challenged recently because it does not represent a good-of-fit criterion in pls-sem due to its inability to make a distinction between a valid model from an invalid model (henseler et al., 2012). therefore, it is not advisable for researchers to apply this approach when assessing the overall quality of a model. 5. discussion and conclusion the use of online services available on mobile phones has pervaded every facet of people’s lives nowadays, thereby boosting telecommunication services industry. the key success factors in these mobile online businesses are to obtain a better understanding about human patterns and strategize accordingly. in this study, the e-lifestyle instrument was validated and assessed. the findings of this study could provide beneficial information for marketers to table 5: convergent validity and reliability results for constructs construct item loading cr cronbach’s alpha ave cs cs1 0.961 0.962 0.920 0.926 cs2 0.964 loyalty l1 0.915 0.957 0.944 0.817 l2 0.930 l3 0.916 l4 0.878 l5 0.881 e-lifestyle ea 0.801 0.900 0.853 0.693 ei 0.822 eo 0.853 ev 0.851 cr: composite reliability, ave: average extracted variance, cs: customer satisfaction table 6: cross loading results item cs e-lifestyle loyalty cs1 0.961 0.384 0.758 cs2 0.964 0.408 0.781 ea 0.752 0.801 0.258 ei 0.750 0.822 0.291 eo 0.752 0.853 0.365 ev 0.660 0.851 0.270 l1 0.696 0.356 0.915 l2 0.322 0.333 0.930 l3 0.313 0.295 0.916 l4 0.400 0.301 0.878 l5 0.323 0.343 0.881 cs: customer satisfaction table 7: inter-construct correlations variable 1 2 3 cs 0.962 e-lifestyle 0.412 0.832 loyalty 0.800 0.360 0.904 n=420. diagonals (in bold) represent the square root of the average variance extracted and off-diagonals represent the correlation. cs: customer satisfaction table 9: mediating effects hypothesis testing hypothesis relationship standard beta standard error t-value decision h3 e-lifestyle>cs>loyalty 0.411 0.047 7.875*** supported ***p<0.001. cs: customer satisfaction table 8: direct effects hypothesis testing hypothesis path path coefficient (beta) standard error confidence interval t-value decision h1 e-lifestyle → cs 0.412 0.046 0.336-0.489 8.921*** supported h2 cs → loyalty 0.800 0.019 0.763-0.827 41.514*** supported ***p<0.001, one-tailed. cs: customer satisfaction hassan, et al.: e-lifestyle, customer satisfaction and loyalty among mobile subscribers in thailand international review of management and marketing | vol 7 • issue 1 • 2017 361 enhance their companies’ marketing strategies and also be used as a foundation to execute a more effective marketing research related to consumer behaviour (yu, 2011). the empirical results show that the four sub-constructs of e-lifestyle were weighted differently under the shed of consumer e-lifestyle. the four constructs significantly influenced cs and shaped individual e-lifestyle. generally, the two hypotheses established in the present study were both supported by the results obtained from the pls analysis. specifically, the measurement model results indicate that the firstorder constructs of e-lifestyle carry different weight in terms of their influence on cs and loyalty where the e-activities have the lowest item weight, while the e-values have the highest weight. these results demonstrate the significant focus consumers give on values and beliefs when they subscribe to a particular mobile service provider. more specifically, thai mobile subscribers use internet on their mobile phones mainly to chat with their friends, arrange trips, or download movies. this reflects thai consumer behaviour towards e-activities that they do in a regular basis. additionally, thai consumers are more interested to discover new things, gain knowledge, and participate in social networks through online. remarkably, they perceive that internet services available on mobile phones are useful and essential for the development of their society, culture, and education system. finally, thai consumers believe that using internet on mobile phones has a high impact on improved job efficiency, expansion of circle of friends, and provision of learning environment. based on the four first-order constructs of consumers’ e-lifestyle, the thai consumers were satisfied with the brand and quality of services provided by the four major mobile firms which were ais, dtac, true move, and tot. consistent with the previous literature, the present study reveals that satisfaction has the strongest relationship with loyalty. from the marketing perspectives, the weight and significance of e-activities, with respect to using internet on mobile phones to do normal activities, were more than that of the other constructs (e-interests, e-opinions, and e-values). the results of this study suggest that the more service providers fulfil their consumers’ daily needs, the higher the opportunity is for them to establish cs. this relies on how well online services designed for mobile phones can largely influence the need of consumers’ daily life and work. in addition, this research contributes to the body of knowledge through the examination of various influential factors of cs and loyalty in mobile telecommunication services industry, which is now becoming an increasingly important topic of discussion and research. as the study reveals the significance of consumers’ e-lifestyle in influencing their satisfaction and loyalty, it is suggested that mobile service providers should continue improving personalized services to their customers, enhancing key functionalities of services, and developing service innovations. this is because the core factor which influences cs and loyalty is the ability of a firm to fulfil their customers’ needs and wants (al-debei and al-lozi, 2014). future research could also include cultural factors into the framework because cultural diversity is also an important aspect in determining cs and loyalty via different consumers’ lifestyles (kassim and asiah abdullah, 2010). references adb. 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(2011), construction and validation of an e-lifestyle instrument. internet research, 21(3), 214-235. . international review of management and marketing | vol 6 • special issue (s4) • 2016196 international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2016, 6(s4) 196-199. special issue for “asia international conference (aic 2015), 5-6 december 2015, universiti teknologi malaysia, kuala lumpur, malaysia” technical competency for diploma in mechatronic engineering at polytechnics malaysia azman hasan1, sharifah nurulhuda tuan mohd yasin2*, mohd fauzi mohd yunus3 1faculty of technical and vocational education (ftve), universiti tun hussein onn malaysia. batu pahat johor malaysia, 2faculty of technical and vocational education (ftve), universiti tun hussein onn malaysia, batu pahat johor malaysia, 3department of mechanical engineering politeknik ibrahim sultan, pasir gudang johor malaysia. *email: shnurulhuda@gmail.com abstract mechatronics is the combination of mechanical engineering, electronic engineering, computer engineering, software engineering, control engineering, and systems design engineering in order to design, and manufacture useful products. mechatronics is a multidisciplinary field of engineering. the paper discusses about the technical competency for diploma in mechatronic engineering at the polytechnic graduates. this competency is reference accreditation board for engineering and technology, american society of mechanical engineers and japan accreditation board for engineering education. competency standards are statements of attainment in specific abilities in the workplace that graduates have to accomplish upon completing their studies in their respective programmes in polytechnics. competency standards for the program, highlight the standards or statements of attainment to measure accomplishments in the programme of diploma in mechatronic engineering at the polytechnics. curriculum development process started by getting feedback from the industry, information from government documents relating and interpreting the results of a needs analysis. in addition, this process also involves designing and providing a program structure, courses and syllabi for courses of study according to the criteria. statement of the competency standards serve as a guide in preparing the course syllabus for the dem. accordingly, the standard of competence is a summary of learning outcomes as described by course learning outcomes in curriculum documents. keywords: technical competency, mechatronic engineering, polytechnics jel classifications: j10, m10 1. introduction the shift toward globalization and a knowledge-based economy as well as rapid changes in the labor market now mean that hard work can no longer guarantee employment for young people (shyr, 2012). industry has identified a need for engineers with knowledge of this integration (allen, 2006). in the world of globalization, employability skills are one of the most important skills required. employability skills necessary for each individual will be able to effectively and efficiently. employers will typically outline several criteria for staff, such as communication skills, technology skills, problem solving skills, confidence and responsibility skills. however, today’s graduates lack the skills required by employers. this causes employers to be less interested in hiring them. the mismatch between the skills required by employers and the skills possessed by the graduates is one of the causes of unemployment (husain et al., 2013) (shutt et al., 2010). a skill gap report in 2005 found that nearly half of the employers surveyed expressed that existing employees lacked work ethics and selfmanagement skills, such as attendance and punctuality. in addition, 46% of employers reported that their employees lacked problem solving skills (elsen et al., 2005). graduates that dominate technical skills are not the main driver of the unemployment problem. employers evaluate prospective employees, hasan, et al.: technical competency for diploma in mechatronic engineering at polytechnics malaysia international review of management and marketing | vol 6 • special issue (s4) • 2016 197 not only on technical skills, but also on their non-technical skills (maniam and liong, 2007). graduates are not exposed to the concept of good theory at school or tertiary institutions. as a result, graduates lack the skill to think, analyze, communicate in different languages, and to interact with society. raybould and sheedy (2005) state that an employer generally requires employees who are able to work under pressure, have the ability to make decisions, communicate, teamwork, are self-confident, and have self-management and learning skills. under the impact of globalization and the knowledge-based economy, as well as the influence of rapid change in the labour market, working hard is no longer a guarantee as a way for a youth to gain initial employment. the threshold required to be continually employed for a youth has increased annually and, starting from the 1990s, developed countries in europe and america have considered the enhancement of the competencies of young people as an important policy in promoting their core skills so that they can adapt to a varied and flexible career development modes (yeh et al., 2010). 2. related work the term “mechatronics” was first introduced in japan in 1969 to describe the integration of mechanics and electronics accreditation board for engineering and technology and american society of mechanical engineers (abet and asme). the term is widely used in europe and is generally understood by engineers in the u.s., but is less recognized by the general public. as of 2006, the abet recognizes 42 undergraduate mechatronics engineering programs around the world. however, there is only one undergraduate mechatronics engineering degree program in the u.s. that is accredited by abet. abet has recognized the emerging importance of mechatronics engineering and has recently proposed specific evaluation criteria for “mechatronics engineering and similarly named programs” that are in the review process (auyang, 2004). mechatronics integrate the fundamental elements of mechanical, electrical, engineering, and information systems, to form a powerful, adaptable, interdisciplinary approach to solving practical problems (shyr, 2012). other that, mechatronics is explained as an integrated multidisciplinary approach to product design and therefore differs fundamentally from classical single-discipline engineering programs (acar, 1995) (allen, 2006). mechatronics is poised to become the key enabling technology for enhancing competitiveness in the modern era, making it indispensable to the continued competitiveness of national economies (shyr, 2012). the component of mechatronic based on ieee/asme in (allen, 2006) involve of: • the synergistic integration of mechanical engineering with electronics. • intelligent computer control in the design and manufacture of products and processes. • the blending of mechanical, electronic, software, and control theory engineering topics into a unified framework that enhances the design process. the multiple disciplines involved with mechatronics as shown in figure 1. the concept of competence is the key to vocational and education training (vet) (mansfield, 1989). definition of competent refers to products or educational training and experience, rather than a natural feature such as intelligence (gipps and stobart, 2003). competency in vet refers to individuals who are able to consistently implement the knowledge and skills based on the required performance standards at work (ncver, 2012) and have the ability to meet the performance standards in the workplace (fletcher, 1994). competence at work refers to (i) the performance of technical skills that can be accepted (ii) organizational tasks (iii) provide appropriate feedback and reaction when there is a problem or mistake (iv) fulfil a role in all of the work (v) the transfer of knowledge and skills to new situations (gillis and bateman, 1999). thus the concept of competence is emphasized by several authors is the ability to perform tasks in the workplace (rahman et al., 2014). the function of universities in providing curriculum and components of educational field are not in line with the required workplace skills. this leads to the difficulties among the graduates to obtain jobs, which match their skills and qualifications. this also leads to a problem, in which graduates are not able to implement what they have learned at the educational institutions in their working field (hanapi and nordin, 2014). 3. materials and methods the aim of this study is to determine the technical competency for diploma in mechatronic engineering at the polytechnic graduates. in order to achieve this aim, the study was conducted qualitatively in the form of a document review. several previous study reports, conference proceedings, and journals have been referred to as a literature review, and analysed with the data collected using a matrix table (strauss and corbin, 1990). based on sallabas (2013) and best and kahn (1998), the document review method is the most appropriate tool to collect information in a qualitative study. moreover, onwuegbuzie et al., (2012) believe that the variables relevant to the topic can be identified by conducting a quality figure 1: disciplines of mechatronics (allen, 2006) hasan, et al.: technical competency for diploma in mechatronic engineering at polytechnics malaysia international review of management and marketing | vol 6 • special issue (s4) • 2016198 review of the literature. this technique was used, because it is an organized method of reviewing and evaluating paper documents and electronic resources. literature studies from journals, reports, and working papers were used as materials and resources for our document analysis. 4. results and discussions based on previous research that has been discussed before, researcher concludes that student must be competent if knowledge, skill and attitude will be perform and expert while working in the industry. some past research shows that efficiency is considered external behaviours, consists of knowledge, skills, and attitudes (shyr, 2012). there are some research and surveys in the world that present competency from various perspectives such as in taiwan, asia dan japan. the studies had been done from different view and different characteristics. for example, study on competency for knowledge in term of sensors, electrical machinery control, programmable logic control, pneumatic control, mechatronics, graphical monitoring and control, computer control, remote monitoring and control, and system integration (shyr, 2012). additionally, there was a study to explore the competency for mechatronic user in japan accepted by acar (1995) in tan et al., (1998) assessing about mechanical, microprocessor hardware and software, electronics, actuators and control. m o r e o v e r, m o s t m e c h a t r o n i c s e d u c a t i o n a n d r e s e a r c h activities in asia are related to process oriented cad:cam, intelligent mechatronics and intelligent controls (tan et al., 1998). on the other hand, it is shown that there are different aspects, sight and factors related to competency in knowledge are reported in previous study. in literature, it is not patent which of these factors are significant in knowledge for views industry oriented competency for mechatronic technology in malaysia. thus, to keep abreast with rapid technological advancements and evolving requirements in industries today, department of polytechnic education (dpe) constantly collaborates with major industry players in the country in developing the respective curriculum. one of the most important factors driving the growth of productivity is by having a qualified and talented manpower in order for the industry to develop and remain competitive in the world market. this is equally true in industries where there is a rapidly growing demand for highly competent and technically savvy workforce. the activities of many industries require increasingly competent technician in engineering field, particularly in mechanical engineering (dpe, 2010). in response to these issues, curriculum development and evaluation division of the dpe has developed and introduced diploma in mechatronic engineering for polytechnics. this programme aims to prepare students with knowledge, skills and abilities necessary in the mechatronic engineering industries. to meet the needs of the industry, which revised the curriculum content of several key players from the industry, which were involved in the process of curriculum development (dpe, 2010). diploma in mechatronic engineering for polytechnic is developed to give balanced emphasis on theoretical and practical aspects. six semesters required to complete, in which five academic semesters at the polytechnics each and one semester of industrial training in the relevant industries in the fourth quarter. the technical components of the body of knowledge for diploma in mechatronic engineering at the polytechnics comprise eleven knowledge areas namely, electronic system, mechanical system, computers and control systems. these knowledge areas are further divided into their respective sub-areas as shown in table 1. diploma in mechatronic engineering program comprises 4 areas of study and in which each area is sub divided into different sub areas. the four areas comprise mechanical systems, electronic systems, computer systems and control systems. each area of study is further subdivided into several knowledge sub-areas. mechatronic engineering area of study comprises 16, dynamic of mechanical system fundamental of mechanics, mechanical drawing and cad, power electronics, industrial electronic, energy conversion (motors and actuators), interfacing, computer programming, real time computer systems, software engineering, computer systems, interfacing, system modelling and simulation, control systems, digital control systems, robotic and automation. 5. conclusions and suggestions the results from this study are able to serve as a guide for researchers to identify the technical competency for diploma in mechatronic engineering at the polytechnic graduates. competence is important in the working world, because workers cannot be considered complete or competent; if they only have good technical ability, without knowledge of employability skills. competence (or competency), which is the ability of an individual to do a job properly, is a set of defined behaviors that provide a structured guide to enable the identification, evaluation, and development in individual employees. development of standards of competence and implementation of integrated curriculum standards in polytechnic education system has improved market access, increasing the individual earnings and enhance mobility within the polytechnic graduates (mohamood and shariff, 2010). this study aims review about curriculum development process starts with getting feedbacks from industries, information from the relevant table 1: body of knowledge knowledge area knowledge sub area technical mechanical systems dynamic of mechanical system fundamental of mechanics mechanical drawing and cad electronic systems power electronics industrial electronic energy conversion interfacing computer systems computer programming real time computer system software engineering computer systems interfacing control systems system modelling and simulation control systems digital control systems robotic and automation source: department of polytechnic education (dpe, 2010), competency standards for polytechnic graduates: diploma in mechatronic engineering hasan, et al.: technical competency for diploma in mechatronic engineering at polytechnics malaysia international review of management and marketing | vol 6 • special issue (s4) • 2016 199 government documents and interpreting needs analysis results. apart from that, the process also involves designing and preparing the programme structure, courses and syllabus for a programme of study according to specified criteria. statement of competency standards serves as a guide in the preparation of the course syllabi for diploma in mechatronic program. thus, the statement of competency standards is the summary of curriculum learning outcome statements as described by the course learning outcome in the curriculum document. therefore, this study will be made to develop framework enhance student competency in mechatronic for industrial and dpe to explore their competency to improve knowledge, as this is important for the success of human capital. references (dpe). (2010), competency standards for polytechnic graduates: diploma in mectronics engineering. putrajaya: dpe. acar, m. (1995), mechatronics engineering education and training. in: international conference on recent advances in mechatronics. p238-239. allen, r.g. (2006), mechatronics engineering: a critical need for this interdisciplinary approach to engineering education. ijme intertech conference, session en. auyang, s.y. (2004), engineering – an endless frontier. cambridge, ma.: harvard university press. best, j.w., kahn, j.v. (1998), research in education. 8th ed. needham heights: allyn and bacon. p4-30. elsen, p., jaginowski, j., kleinert, r.a. (2005), 2005 skill gap report. available from: http://www.doleta.gov/wired/files/us_mfg_talent_ management.pdf. fletcher, s. (1994), nvqs standard and competence. 2nd ed. london: kogan page. gillis, s., bateman, a. (1999), assessing in vet: issues of reliability and validity. australia: ncver. gipps, c., stobart, g. 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(2005), are graduates equipped with the right skills in the employability stakes?. industrial and commercial training. available from: http://www.emeraldinsight.com. sallabas, m.e. (2013), analysis of narrative texts in secondary school textbooks in terms of values education. educational research and reviews, 8(8), 361-366. shutt, j., iles, p., zhu, x. (2010), employability, skill and talent management in zhejiang province. journal of chinese entrepreneurship, 3(1), 24-35. available from: http://www.emeraldinsight.com. shyr, w. (2012), industry-oriented competency requirement for mechatronics technology in taiwan. tojet: the turkish online journal of educational technology, 11(4), 195-203. strauss, a., corbin, j. (1990), basics of qualitative research: grounded theory procedures and techniques. newburry park: ca: sage. tan, k.k., lee, t.h., dou, h.f., lim, s.y. (1998), various developments in mechatronics in asia. pergamon, 8, 666-680. yeh, r.c., chen, y., kuo, s. (2010), industry-oriented competency requirements of business administration-majored technological university students in taiwan. world transactions on engineering and technology education, 8(4), 431-435. . international review of management and marketing | vol 6 • special issue (s6) • 2016 121 international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2016, 6(s6) 121-125. special issue on "management of systems of socio-economic and legal relations in modern conditions of development of education and society” geo-economic factors of an intensification development of laos in association of southeast asian nation conditions lyudmila v. shkvarya1*, andrey v. strygin2, vasilij i. rusakovich3 1russian university of peoples’ friendship, moscow, russia, 2moscow automobile and road construction state technical university, moscow, russia, 3plekhanov russian university of economics, moscow, russia. *email: dastard@rambler.ru abstract in association of southeast asian nation (asean) since 2015 came into force the creation of the project “asean economic community.” in this regard, it is important to examine the consequences of this process, particularly with regard to individual countries, in particular – the least developed, which include laos. laos is a member of asean, is also directly involved in the process of formal and actual regional economic integration and the formation of the asean economic community. in the xxi century the world economy undergoes a significant transformation, increased global instability. among them – the deepening of regional economic integration processes in different regions of the world – in western european union north american free trade agreement, asean. the asean countries occupy a strategic location on the route from the indian ocean to the pacific, being at the crossroads connecting the pacific basin to the middle east, africa and europe. keywords: association of southeast asian nation, laos, regional economic integration, association of southeast asian nation economic community jel classifications: o53, o50, f02 1. introduction sustainable economic union countries speaker attracts attention of researchers, including – in the conditions of the global financial crisis of 2008-2009, and in the subsequent period (prakash and ikumo, 2012). the researchers said: “in the aftermath of the asian financial crisis, association of southeast asian nation (asean) countries had two important aspects of economic growth. the first is the proliferation of bilateral and multilateral free trade agreements (fta) and the second is the presence of a unique and complex production network, including both large firms and small and medium-sized businesses. as a result of the global financial crisis there was a need to further strengthen the interdependence in the region and the asean countries have begun to conclude agreements on the fta first with neighboring countries – china and korea and then to japan, india, australia and new zealand.” it is of interest the growing role of asean in world trade: asean retained not only high rates of economic growth, but also to foreign trade, as the intra-regional and extra-regional, including – with the russian federation, the mutual trade cooperation between russia and asean actively growing. bilateral trade grew by 13%, from $19.9 billion in 2013 to $22.5 in 2014 (reshetnikova, 2012). it is interesting to analyze the fact that asean countries are increasing their presence in the global investment processes, so that the subject of several studies. interest in fdi in asean is largely predetermined by the protection of intellectual property in these countries, which is important in terms of transfer of high technologies. and finally, a great interest is the growth of regional economic integration in asean, its existence “can be considered as one of the most successful examples of creating a regional integration grouping in the eastern world” (shkvarya et al., 2014). however, some authors consider it is trade in services as an engine of integration into asean and its liberalization are also on the agenda in the asean (panfilov and strygin, 2011). shkvarya, et al.: geo-economic factors of an intensification development of laos in asean conditions international review of management and marketing | vol 6 • special issue (s6) • 2016122 however, trade liberalization as k. itakura studies suggest mixed effects on the integrating countries. in some cases, such as the author’s calculations show, even the negative impact of liberalization is possible some countries, such as laos and the philippines (itakura, 2014). the same applies to production integration in asean. although asean as in any other developing region of the world, actively carried out industrial cooperation, which supports a number of studies (kimura and ayako, 2011), the effects of this cooperation are also different for individual countries. the aim of this study is based on analysis of the current state of socio-economic and external trade provisions of the asean, to identify the role of laos in asean and to establish the possible directions of its participation in asean, in particular, run under the asean economic community in 2015, as well as the possible consequences this initiative for laos. 2. research methods for the purposes of analysis and critical scientific discussion, we turned to modern research and reports of international organizations (world trade organization [wto], international monetary fund, etc.), the asean official sources and articles in academic economic journals. the theoretical aspect of this study is to identify the current trends in the socio-economic dynamics and the role of the asean integration process. the practical component of this research include the development of policy recommendations for the government of laos. total asean area is 4.487 million km2, the total population of over 622 million people. (2014) and is growing rapidly, presenting a capacious (and growing) market, and a combined gross domestic product (gdp) of asean countries exceeded $2.4 trillion at high and sustained its dynamics (table 1 and figure 1). all this enables the participating countries to have access to this vast market combined. this is especially important for laos – a small country with no access to the sea. as can be seen from the analysis of the data presented, the asean economies were quite resistant to the global crisis, and now asean is the 7th largest economy in the world, which is ahead of brazil and russia (yoo, 2016). the methodology validation is based on the research of stavropol region. the combined gdp of grouping in 2015 exceeded $ 2.5 trillion, and by 2020 it is projected to reach 4 trillion cumulative growth rate of asean’s gdp is quite high: it amounted to 4.9% compared to the world average of 3.5% in 2015, until 2020 the rate of growth is projected at 5.6%. this will enable asean to become by 2050 the 4th economy in the world. at the same time the analysis of the data presented, that asean remains high differentiation of the levels of economic development of the member countries of the association. laos, myanmar, vietnam, cambodia, among the least developed asean countries. it is interesting to note that during the monitoring period, the total gdp of asean has increased by 4 times, while the gdp of laos – 7, and the economy of laos has been the most rapidly and steadily growing in the unit in 2011-2014, i.e., grew more rapidly than the asean average. in 2014, according to unctad, the gdp growth rate was 7.3% in laos, which is a very strong indicator amid global instability (rylov et al., 2016), reaching a level of $12.3 billion, according to unctad. this is a historic maximum of laos. table 1: dynamics of gdp of asean countries in 2000-2015, mln. usd country 2000 2001 2002 2003 2004 2005 2006 2007 brunei darussalam 6001.281 5601.02 5843.367 6557.404 7872.191 9531.437 11470.49 12247.35 cambodia 3666.638 3991.795 4289.402 4664.899 5337.89 6293.048 7274.502 8639.241 indonesia 165,473.8 160,921 196,146.3 234,772.4 256,836.9 285,868.6 364,570.5 432,216.7 lao people’s democratic republic 1665.31 1684.979 1758.293 2014.09 2376.062 2716.784 3541.451 4213.934 malaysia 97,583.55 96,537.08 104,924.7 114,660.1 129,795.6 143,534.4 162,692.3 193,549.5 myanmar 7275.326 7633.918 10,369.13 9924.908 10,253.85 11,930.83 13,851.58 18,232.53 philippines 81,044.63 76,279.65 81,376.61 83,927.58 91,392.48 103,095.5 122,239.2 149,394.5 singapore 94,308.33 87,701.14 90,640.32 95,956.61 112,697.3 125,429 146,014.2 178,259.1 thailand 126,147.9 120,051.9 134,300.9 152,280.7 172,895.6 188,847.3 221,035.9 262,081.2 vietnam 31,172.63 32,685.2 35,064.11 39,552.5 45,427.85 52,917.29 60,913.45 71,015.59 gdp asean 614,339.4 593,087.6 664,713.2 744,311.2 834,885.7 930,164.2 1,113,603 125,8834 country 2008 2009 2010 2011 2012 2013 2014 2015* brunei darussalam 14,393.51 10,732.66 12,370.5 16,691.38 16,953.95 16,111.11 14,971.38 15,467.00 cambodia 10,351.92 10,401.84 11,242.28 12,829.54 14,054.44 15,249.68 16,435.48 17,000 indonesia 510,228.6 539,580.1 709,190.8 845,931.6 876,719.3 868,345.6 848,025.3 881,831 lao people’s democratic reppublic 5285.17 5585.017 6743.619 8060.6 9397.286 10,759.61 11,666.98 12,303.0 malaysia 230,811.6 202,257.5 247,533.5 289,037.6 304,725.7 312,433.7 326,113.3 338,272 myanmar 25,864.44 32,934.81 41,517.78 57,933.92 61,571.04 63,030.97 67,627.82 68,728 philippines 174,235.5 168,373.6 199,637.2 224,147.2 250,240.1 272,066.7 285,098 297,036 singapore 190,318 190,164.4 233,292.3 272,316.1 284,298.6 295,744 301,193.1 304,968 thailand 290,174.3 279,982 338,778.3 366,946.4 393,185.4 420,167.4 405,533 409,799 vietnam 91,094.05 97,180.25 115,931.8 135,539.5 155,820 171,222 186,598.6 194,096 gdp asean 1,542,757 1,537,192 1,916,238 2,229,434 2,366,966 2,445,131 2,463,263 2,539,500 gdp: gross domestic product, asean: association of southeast asian nation shkvarya, et al.: geo-economic factors of an intensification development of laos in asean conditions international review of management and marketing | vol 6 • special issue (s6) • 2016 123 finally, the stable growth of per capita income in the unit, as seen from figure 2. gdp per capita average of the asean in 2014 amounted to 3.9 thousand dollars (in the world – $10.7 thousand). the highest rates in singapore and brunei – $54.6 and $35.4 thousand, respectively, in 2014. in 2014, laos has reached a historic high for the value of turnover – both exports and imports for the study period (table 2). statistics show that the role of laos in the foreign trade of asean (as well as in the regional gdp) is minimal, although it has steadily increased. thus, in 2000 the turnover of laos in asean’s total trade turnover amounted to 0.07%, and 0.2% in 2014 (table 3 and figure 3). favorable foreign policy and the accession to the wto in february 2013 allowed laos more actively integrate into the regional and international economy and diversify its geographic markets. the traditional – and largest – trade partners are laos, thailand, vietnam and china, and thailand account for up to 2/3 of the foreign trade turnover of laos. at the same time, laos is exporting its products to the markets of over 40 countries, including the us, japan and australia, the uk, france, germany and other european union countries, as well as in russia. as can be seen from the analysis of the presented data (table 4), for the typical laotian trade deficit (as a whole, and in the regional trade). in 2014, it amounted to $40.6 billion, i.e. 10% of the foreign trade balance of the country. and although its volume was reduced in comparison with the 2011-2013, the trade deficit recorded in the country for long periods due to inadequate infrastructure and non-diversified export base. these same problems as the research shows, are stored in foreign trade and laos, and the asean countries (table 4). in general, as research shows, intra-regional trade in laos is on the rise in terms of value (table 4). as our research shows, the volume of trade with laos, the asean countries increased during the study period (wisnu, 2013), more than 5 times, including export – by 6.2 times, imports – by 3.4 times, indicating that faster growth of exports to laos asean countries in the xxi century. an example of the intensified development of laos after the country’s entry into asean confirms the inevitability of cumulative, not only the effect of socio-economic development, but also can serve as a model for the construction of regional geo-economic models (panfilov and strygin, 2011) economic integration of other regions of the planet. 3. discussion transformation of asean economic community in 2015 is the subject of comprehensive research. many authors, based on the whole a positive experience of asean’s development, it is believed that this is the direction of asean activities will be successful in the long-term (pismennaya et al., 2015; prakash and ikumo, 2012). however, we close the view that the success of this project cannot be expected to automatically, and it assumes a solid job in each country “in dealing with internal reforms, gaps in infrastructure, lack of adequate human resources and institutions. in addition, this company, whose decisions and actions will contribute to the effective integration” (bas das, 2012). in addition, the negative effects of regional economic integration remain, in particular, the erosion of mfn (shkvarya et al., 2014) that can uniquely affect the national interests of laos and its economy. it is saved and amplified the need for laos to conduct serious work “in dealing with internal reforms, gaps in infrastructure, the continued lack of adequate human resources and institutions. in addition, it is necessary the development of private companies, whose decisions and actions will contribute to the effective integration” (shkvarya et al., 2014). figure 1: dynamics of gross domestic product in association of southeast asian nation countries in 2000-201, mln. usd figure 2: dynamics of per capita gross domestic product in the association of southeast asian nation countries in 2000-2014 figure 3: intra-regional trade in association of southeast asian nation countries in 2000-2014, bln. usd shkvarya, et al.: geo-economic factors of an intensification development of laos in asean conditions international review of management and marketing | vol 6 • special issue (s6) • 2016124 consequently, the government of the country need to carry out further reform of the national economy – how to strengthen it, and to improve its participation in asean, in particular, to strengthen the process of regional economic integration. these efforts – internal and external – will enable the country to diversify the national economy, to reform and strengthen the private sector, to promote the development of export potential, as well as the transport component 4. conclusion conducted a retrospective analysis of the socio-economic development of laos, taking into account the specifics of its geostrategy in particular south-east asia, the geopolitical development of the region in terms of the integration of convergence asean countries showed the real value of cumulative, a factor for intensification of the economic growth of both the lao and the wider possibilities of using its geostrategic resources in the whole region. at the same time, the results of the analysis in regional and international economic relations make it possible to talk about the creation of a more attractive investment climate for the further intensification of socio-economic development of laos, geostrategic resources that are of interest not only in the asian sub-region, but also become the subject of the asia-pacific region generally. references bas das, s. (2012), achieving the asean economic community 2015: challenges for member countries and businesses. singapore: iseas. itakura, k. (2014), impact of liberalization and improved connectivity table 2: foreign trade of asean countries in 2000-2014, bnl. usd country 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 export brunei 3.9 3.6 3.7 4.4 5.1 6.2 7.6 7.7 10.3 7.2 8.9 12.5 13.0 11.4 10.5 cambodia 1.4 1.5 1.9 2.1 2.8 3.1 3.7 4.1 4.7 4.2 5.1 6.7 7.8 9.3 10.8 indonesia 65.4 57.4 59.2 64.1 70.8 87.0 103.5 118.0 139.6 119.6 158.1 200.8 188.5 183.3 176.3 laos 0.3 0.3 0.3 0.3 0.4 0.6 0.9 0.9 1.1 1.1 1.7 2.2 2.3 2.3 2.7 malaysia 98.2 88.0 94.1 104.7 126.6 141.6 160.7 176.0 199.4 157.2 198.6 228.1 227.5 228.3 234.1 myanmar 1.6 2.4 3.0 2.5 2.4 3.8 4.6 6.3 7.0 6.7 8.7 9.2 8.9 11.2 11.0 philippines 38.1 32.1 35.2 36.2 39.7 41.3 47.4 50.5 49.1 38.4 51.5 48.3 52.1 56.7 62.1 singapore 137.8 121.8 125.2 159.9 198.6 229.6 271.8 299.3 338.2 269.8 351.9 409.5 408.4 410.3 409.8 thailand 68.963 65.0 68.108 80.324 96.248 110.936 129.722 153.9 177. 8 152.4 193.3 222.6 229.2 228.5 227.6 vietnam 144.5 150.3 167.1 201.5 264.9 324.4 398.3 485.6 626.9 571.0 72.2 96.9 114.5 132.0 150.5 total of export 560.163 522.4 557.808 656.024 804.748 945.436 1128.222 1302.3 1376.3 1327.6 1050 1224.3 1252.2 1273.3 1295.4 import brunei 1.1 1.2 1. 6 1.3 1.4 1.5 1.7 2.1 2.6 2.4 2.5 3.6 3.6 3.6 3.6 cambodia 1.9 2.1 2.4 2.6 3.2 3.9 4.8 5.4 6.5 5.8 6.8 9.3 11.0 13.0 13.5 indonesia 43.6 37.5 38.3 42.2 54.9 75.7 80.7 93.1 127.5 93.8 135.3 176.2 190.4 187.3 178.2 laos 0.5 0.5 0.4 0.5 0.7 0.1 1.1 1.1 1.4 1.5 2.1 2.4 3.1 3.0 3.3 malaysia 82.0 73.7 79.8 83.3 105.2 114.3 130.4 146.2 156.3 123.8 164.6 187.5 196.4 206.0 208.9 myanmar 2.4 2.9 2.3 2.1 2.2 1.9 2.6 3.3 4.3 4.3 4.8 9.0 9.2 12.0 16.2 philippines 37.0 34.9 41.1 42. 6 46.1 49.5 54.1 58.0 60.4 45.9 58.5 63.7 65.4 65.1 67.5 singapore 134.5 116.0 116.4 136.2 173.6 200.0 238.7 263.2 319.8 245.8 310.8 365.8 379.7 373.0 366.2 thailand 61.9 62.0 64.6 75.8 94.4 118.2 128.8 140.0 179.2 133.7 182.9 228.8 250.0 250.7 228.0 vietnam 156.4 162.2 197.5 252.6 319.7 367.6 450.2 626.8 807.1 699.5 848.4 106.8 113.8 132.0 149.3 total of import 521.3 493 542.8 596.6 801.4 932.7 1093.1 1339.2 1665.1 1356.5 1716.7 1153.1 1222.6 1232.7 1234.7 turnover 1081.46 1015.4 1100.6 1252.6 1606.1 1878.1 2221.3 2641.5 3041.4 2684.1 2766.7 2377.4 2474.8 2506.0 2530.0 change (%) −6.1 8.4 13.8 28.2 16.9 18.3 18.9 15.1 −11.7 3.1 −14.1 4.1 1.3 1.0 asean: association of southeast asian nation table 3: intra-asean trade in 2000-2014, bln. usd index 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 export 98.2 86.3 91.9 116.6 141.8 165.4 191.0 217.2 250.6 198.9 263.0 310.4 325.1 330.2 327. 1 import 84.3 75.6 81.6 10. 4 128.8 154.3 178.4 200.8 233.7 181.7 236.3 275.1 286.5 286.7 287.6 turnover 182.5 161.9 173.5 127.0 270.6 309.7 369.4 418.0 484.3 380.6 499.3 585.5 611.6 616.9 614.7 change (%) −11.3 7.16 −26.8 113.1 14.4 19.3 13.2 15.9 −21.4 31.2 17.3 4.5 0.9 −0.4 asean: association of southeast asian nation table 4: trade with asean in laos in 2000-2014, mln. usd index 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 export 165.8 151.5 139.1 153.0 156.2 307.2 583.0 572.1 693.7 526.5 884.7 1150.6 1202.1 1204.8 1020.8 import 429.3 396.9 344.2 340.9 506.2 689.4 837.8 835.1 1083.0 1043.3 1502.7 1775.8 2162.9 1923.9 2031.3 turnover 595.1 548.4 483.3 493.9 662.4 996.6 1420.8 1407.2 1776.7 1569.8 2387.4 2926.4 3365 3128.7 3052.1 change (%) −7.8 −11.87 2.2 34.1 50.45 42.56 −0.96 26.3 −11.6 52.1 22.6 15 −0.7 −2.4 asean: association of southeast asian nation shkvarya, et al.: geo-economic factors of an intensification development of laos in asean conditions international review of management and marketing | vol 6 • special issue (s6) • 2016 125 and facilitation in asean. journal of asian economics, 35, 2-11. yoo, j.g. (2016), an economic effect analysis of asean fta on fdi flows into the asean countries. journal of distribution science, 14(1), 39-49. kimura, f., ayako, o. (2011), production networks in east asia: what we know so far. asian development bank institute, (adbi). working paper series. number 320. tokyo: adbi. panfilov, i., strygin, a. (2011), the world economy and international economic relations. moscow: inlight. pismennaya, e., karabulatova, i., ryazantsev, s., luk’yanets, a., manshin, r. (2015), impact of climate change on migration from vietnam to russia as a factor of transformation of geopolitical relations. mediterranean journal of social science, 6(3s2), 202-215. prakash, a., ikumo, i. (2012), asean in the global economy an enhanced economic and political role. senayan: eria policy brief. reshetnikova, m. (2012), interdependence of national economies as the main factor of global economy uncertainty acceleration. in: research, theory and practice: materials of the international research and practice conference. wroclaw: wroclaw university. p38-42. rylov, d., shkurkin, d., borisova, a. (2016), estimation of the probability of default of corporate borrowers. international journal of economics and financial issues, 6(1s), 63-67. shkvarya, l., rusakovich, v., lebedeva, d. (2014), key areas of trade, economic and financial cooperation of the russian federation with the asean countries. management of economic systems, 12(72), 84. wisnu, d. (2013), why asean could stay strong? journal of asean studies, 1(1), 15-21. . international review of management and marketing | vol 6 • special issue (s4) • 2016168 international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2016, 6(s4) 168-175. special issue for “asia international conference (aic 2015), 5-6 december 2015, universiti teknologi malaysia, kuala lumpur, malaysia” cognitive, affective and conative loyalty in higher education marketing: proposed model for emerging destinations ndanusa mohammed manzuma-ndaaba1*, yoshifumi harada2, abd rahim romle3, abdul shukor shamsudin4 1school of business innovation and technoprenuership, university malaysia perlis, perlis, malaysia, 2school of business innovation and technoprenuership, university malaysia perlis, perlis, malaysia, 3college of law, government and international studies, universiti utara malaysia, kedah, malaysia, 4school of business management, cob, universiti utara malaysia, kedah, malaysia. *email: mnzuma1@gmail.com abstract this study propose a synergy of behavioral relationships in line with researchers observation that application of marketing theories in education services needs more strategic exploration. the cognitive behavior which is rational, the affective behavior which is often irrational and the action behavior that increases business performances through enhanced profits and reductions in marketing communications cost is the perspective of this conceptual study. these linkages will not only increase the influx of international students to a study destination but will also raise switching barrier and make the preferred destination unique in a competitive international education environment. the proposal is to make emerging education destination countries to gain competitive advantages through identification and differentiation of unique services for continuous survival. the model is based on relationship marketing targeted at steady and long term contractual involvement build on satisfaction and commitment. keywords: cognitive, affective, conative, relationship marketing, emerging destinations jel classifications: m10, j10 1. introduction the increase in demand for educational services across international boundaries particularly higher education (he) opened investment windows for developing countries to diversify their revenue base through international education programs (altbach and knight, 2007). the programs include all the three waves proposed by mazzarol et al. (2003) such as the traditional wave called consumption abroad, transnational education (offshore services) and the open learning system (online mode). the focus of most destinations is on the first and second mode for obvious economic reasons. attracting students to a particular country comes with economy of scale aside the main objectives (mazzarol et al., 2003). this has multiplier effects on the other sectors of the country economy. thus, international education is being promoted as country’s economic policy rather than social service. the implication is that market orientations approaches will be pursue in order to earn return on education investments (thomas, 2011). however, the concept of consumerist in he should be in relationship marketing rather than transactional marketing (abdol latif and bahroom, 2014). though, students are liken to customers but the nature of education services particularly length of consumption suggest building a relationship instead of “buy and pay” approach (elliot, 2003; brookes, 2003). this concept of relationship marketing has significance for the he sector since a strong student-university relationship may reduce the likelihood of student dropping out and increase students’ commitment towards completion of their study (abdol latif and bahroom, 2014). in addition, these students who are highly committed to pursuing their program at a destination may ultimately become representatives and ambassadors of such country upon graduation and subsequent employment by way of speaking well and recommending the manzuma-ndaaba, et al.: cognitive, affective and conative loyalty in higher education marketing: proposed model for emerging destinations international review of management and marketing | vol 6 • special issue (s4) • 2016 169 destination to potential students (thomas, 2011). just like in all service industries, retention of students is cheaper than recruiting fresh students and retention have been proven to increase organization’s performance, growth and profitability in many folds (reichheld, 1996). hence, relationship marketing principles of customer loyalty can be applied as retention theory in international education destination market. the economic gain derived from international education is expanding the market as new destinations emerged (mazzarol and soutar, 2012). the traditional destinations like usa, uk, australia, canada, france and germany made huge economic and social fortunes from the market (arambewela and hall, 2009). this prompted the hitherto source countries to expand their education facilities, created enabling environment for private sector investment in education and amended necessary laws to allowed foreign establishment of he institutions in the country (baharun et al., 2011). the world major source countries for international education are in asia with china and india taking the lead (unesco, 2013). these source countries have since changed their pattern of consumption and movement by way of encouraging their citizens to study at home in local institutions or foreign campuses located in their country or exploring neighboring countries for their consumption abroad (hendarman, 2013). the effect of the new pattern is reduction on the market shares of established destinations and intensive competition among emerging destinations. to mitigate these challenges, emerging destination must understand the cognitive variables (service quality, value, price), the affective variables (satisfaction, trust, commitment) and the conative variables (loyalty, wom, complaint behaviors) of different cultures. this study explores students’ perceptions of the relationship that they enter into when they set foot in a destination and the effect that this has on the development of student loyalty to that country. against this background, the present study proposed three factors, namely: service quality, satisfaction and commitment and examines how they relate to international student’s loyalty. the focus of this study is on emerging destinations where competition is stiff thereby making it difficult to attain the destination’s set targets of international students’ recruitment. there appear to be paradigm shift from the emphasis on 7ps of marketing theory to relationship marketing across service industries (vargo and lusch, 2004). generally, relationships exist along two extremes: transactional which is viewed as one-time single shot and long-term business and social interactions (li and petrick, 2008). the former is usually used in products market while the latter is common in services market. the nature of education market that span over a period of time and high involvement decision making process support building a long time relationship that can guaranty continuous study, re-enrolment, recommendation and positive word of mouth (grönroos, 2000). the benefits of long term student-destination relationship cannot be over emphasized. these include protecting the customer base of the destination through identification and differentiation of services and creating barrier to switching while improving performances (reichheld and sasser, 1990). it also has potentials to reduce risk, increased recognition, and imparting prestige (richard and zhang, 2012). the unique benefits of relationship marketing in service industry including education services are: improved understanding of customer requirements, gaining the ability to customize and tailor solutions; reducing choice, thereby simplifying the buying task; reducing information processing; lowering risk; and maintaining psychological and cognitive comfort and consistency (richard and zhang, 2012). therefore, destinations that succeeded in building strong and positive relationship with their student stands to gain competitive advantage in form of continuing patronage of loyal students who display decreased price sensitivity over time with a concomitant decrease in marketing costs, reduced overall costs, and partnership actions on the part of those students to the benefits of the destination (reichheld, 1996). the primary objective of this study is to propose a relationship model for emerging destination countries participating in international education services. the aim is to establish a path model linking service quality, satisfaction and commitment to student loyalty. the conceptualization of the model in this study would also demonstrate how a relationship marketing approach can be successfully applied in the context of education destination branding. using this approach, destinations can come up with some appropriate interventions which will improve the management of student loyalty to the country so as to retain them until completion and to entice them back for a higher professional degree and spread positive words of mouth about the destination. 2. literature review the development of relationship quality-based student loyalty model was pioneer by henning-thurau (2001). in their research, they identify service quality in terms of teaching and other academic engagements, trust on the staffs (academic and nonacademic) saddled with responsibility of executing the services and students’ commitment to the institution. their study was based on empirical data from a survey of postgraduate students’ dropout from several german universities. their findings confirmed strong relationship between service quality in academics, emotional commitment by the student to pursue their program and their loyalty behavior. trust has no effect on the students’ loyalty (henning-thurau et al., 2001). dick and basu (1994) research on dimensions of loyalty suggest satisfaction as an antecedent to loyalty. fornell et al. (1996) american customer satisfaction index also established loyalty as consequence of satisfaction. therefore, student’s satisfaction is a precursor to student’s loyalty in international education destination market (fares et al., 2013). based on relationship marketing perspective, helgesen and nesset (2007) found reputation and image as a significant determinant of student loyalty to their study destination. image of a service provider played dual role in shaping student’s perception. it is a pre-consumption factor and a post-consumption factor in loyalty determinant. the authors also found service quality, sources of information and facilities provided to significantly influence student’s satisfaction. the focus of this study is on the link between manzuma-ndaaba, et al.: cognitive, affective and conative loyalty in higher education marketing: proposed model for emerging destinations international review of management and marketing | vol 6 • special issue (s4) • 2016170 service quality, satisfaction and loyalty in highly competitive market within emerging countries. in another study conducted on a sample of active students and dropouts in a distance learning institution, five major factors was found to have an impact on student loyalty (ng, 2010). the five factors were satisfaction, goal commitment, family support, study habits and number of semesters attended. the study was based on data from a distance learning center in an emerging education destination. to attain loyalty of students, both attitudinal and behavioral aspects must be triggered. oliver (1999) viewed loyalty as multidimensional, yet the frequently operationalized dimension in literatures is combination of both behavior and attitude otherwise called composite loyalty. similarly, abdo latif and bahroom (2014) investigated loyalty behavior of students at a private open distance learning in malaysia using relationship marketing approach. after analyzing 2300 students data from different study center of the open distance learning, the hierarchical regression show emotional commitment to be higher, followed by service quality and trust has minimal impact on loyalty. the study recommended a three-step loyalty implementation program approach: commitment programs, improved services and building trust between the students and university staffs (abdol latif and bahroom, 2014). 2.1. dimensions of student’s loyalty hemsley-brown and oplatka (2006) confirmed that researches on marketing education need more exploration. applying behavioral decision making model in international education marketing needs some strategic approach in view of the nature of education services. the peculiar being time spent in its consumption. the time lag gives room for systematic building of relationship and emotional attachments with the right skills and facilities in place (henning-thurau et al., 2001). oliver (1997; 1999) definition of customer loyalty is the most comprehensive used by marketing researchers to operationalize the construct. according to the famous researcher “customer loyalty is a deeply held commitment to rebuy or re-patronize a preferred product or service consistently in the future, despite situational influences and marketing efforts having the potential to cause switching behavior.” thus, loyalty includes readiness to act (repurchase) and resistance over existing alternatives (keni et al., 2013). an attempt to differentiate loyalty and retention throw up academic controversy in marketing parlance. johnson and gustafsson (2000) explained that loyalty is a customer’s intention or predisposition to buy, while retention is the behavior itself. however, oliver (1999) insisted that a truly loyal customer must be both attitudinal and behaviorally loyal. the dimensions of loyalty are grouped into traditional (behavioral, attitudinal and composite) and multi-dimensional (cognitive, affective and conative). 2.2. behavioral dimension most of the early marketing researchers emphasized behavioral loyalty which is expressed by the frequency of purchase, volume of purchase, repeat purchase and consistency (jacoby and chestnut, 1978). in international education market, this behavior will be represented by measuring the outcome characteristics of students such as number of enrolment, percentage share of completion/drop out, volume of re-enrolment, market share of the destination/institution compared to alternatives, and the probability of purchase (richard and zhang, 2012). this is quantifiable and verifiable unlike intention that is attitudinal which has to be measure through other means, however, the two goes together in relationship marketing. 2.3. attitudinal dimension day (1969) suggest that there is more to loyalty than just behavior, considering what went on in customer’s mind before making a decision which he referred to as attitude. this includes brand preference and disposition towards the brand from the psychological commitment resulting in lower sensitivity to price (chaudhuri and holbrook, 2001). what goes on in consumer’s mind determine the attitude and disposition towards the service such as beliefs, feelings and intentions. in relation to international education services, attitudinal loyalty will be expressed by positive words of mouth and recommending the country/institution to potential students (oliver, 1999). 2.4. composite dimension the mixture of both attributes of behavior and attitudes as expressed by consumer’s focused on brand preference (attitudes) and share of the market (behavior) is called composite loyalty. much of marketing researchers operationalized loyalty from this perception. dick and basu (1994) define composite loyalty to reflect (6) necessary and sufficient conditions as follows: the biased (non-random); behavioral response (purchase); express over time (frequency and consistency); by some decision making unit; with respect to other alternatives brand; and a function of psychological process. in the concept of international education, destination countries or institutions prefer composite loyalty. students will enroll and will recommend and speak well of the destination if all other conditions are met (chaudhuri and holbrook, 2001). 2.5. cognitive dimension cognitive loyalty is another aspect of loyalty identified in more recent years, which viewed loyalty as a higher level dimension and involves the consumer’s conscious decision making process in the evaluation of alternative brands before a purchase is made (caruana, 2002). oliver (1997) building on the work of gremler and brown (1996) emphasized the value (price, time, energy, gain, loss, benefits) aspect of purchase decision in form of cognitive. thus, customers are loyal to the extent of cognitive appraisal of their decision. students are conscious of their expenses and the value of their purchases. they will exhibit cognitive loyalty to a destination after critically examining all available alternatives and then make decision rationally. 2.6. affective dimension affective dimension is the emotional bonds which make customers behave irrationally. in this case, cost is not the main consideration but commitment and attachment to the brand supersede other considerations (oliver, 1999). this follow the two fold loyalty proposed (spurious and true) by bloemer and kasper (1995). manzuma-ndaaba, et al.: cognitive, affective and conative loyalty in higher education marketing: proposed model for emerging destinations international review of management and marketing | vol 6 • special issue (s4) • 2016 171 according to the researchers, spurious loyalty is due to inertial effect while true loyalty is the emotional commitment represented by repeat purchase irrespective of attractive offer from the rivals. international destinations hunt this level of loyalty because of its multiple advantages to the students and also the destination. before a student demonstrates this level of loyalty, issues of service quality, satisfaction and image perception will be at the peak (wei and wonglorsaichon, 2014). 2.7. conative dimension this is the last of series of loyalty dimension proposed by oliver (1999) in multi-dimension and modern loyalty model. oliver (1999) concluded that, to detect conative loyalty, researchers need to assess consumer beliefs, feelings, and intention within the traditional consumer attitude structure. the behavioral intention used to measure behavior in the theory of planned behavior is effective at this level of loyalty dimension. intention lead to behavior if accurately measured (ajzen and fishbein, 1980). however, researchers have argued against situations where intentions never lead to behavior (oliver, 1999). in education market, students intention is difficult to measure due to unstable circumstances, however, intention to recommend, intention to reenroll, wom intention and intention to continue study has been investigated (jiewanto et al., 2012; wei and wonglorsaichon, 2014; manzuma-ndaaba et al., 2014). the findings of these researchers suggest strong and positive relationship between intention and actual behavior in international education market. 2.8. service quality service quality is the base line for all service industries, the survival of service providers depend on the perception of quality from the client (zeithaml et al., 1988). however, the judgment is not industry base but rather customer’s perception. if the service provider implement its service quality programs from the angle of the organization, there is likelihood of consumer’s different perception about it. therefore, service industries are encouraged to gauge customer’s perception of service quality issues concurrently with the implementation (zeithaml et al., 1996). educational services are regarded as pure service industries having satisfied the core phenomenon of intangibility, homogeneity, perishability and inseparability (zeithaml et al., 1988). in addition, researchers empirically established strong and positive link between service quality and customer loyalty across different service industries including he (boulding et al., 1993; sheu, 2011). there appeared to be a consensus among marketing researchers on the issue of service quality as multidimensional variable but hold divergent views on the actual numbers of dimensions (cronin and taylor, 1994). thus, qureshi et al. (2012) proposed that the number of dimensions of service quality is a function of the particular industry, service type and characteristics. this implies that different industries will have different dimensions or in some cases, same industries could have different dimensions depending on the type of investigation being conducted (kim and bang, 2015). the core service and periphery service approach used in service sectors like restaurants, hotels, and other quick services were applied to education (abdullah, 2006). three dimensions of core, auxiliary and affiliated services used in grocery stores, saloons, and similar service were experimented in education (firdaus, 2006). the servqual multi-dimensions proposed and empirically validated by parasuraman et al. (1985; 1988) have also being applied to educational services (hanaysha et al., 2011; biodun et al., 2012). specifically educational service quality dimension model was developed by some researchers (abdullah, 2006; firdaus, 2006), however, the aspect of educational services varies from country to country and the importance attached to each dimension also varies by culture (arambewela and hall, 2009). therefore, it is difficult to adopt universal dimensions for educational services across board. all these existing studies have presented a wide range of factors determining the quality of educational service. but there is lack of integration and classification systematically and in a concise way. this paper presents a conceptual framework for classifying various determinants into three hierarchical categories, and examines the categories’ influences on a student’s loyalty to purchase international education service. the proposed hierarchical dimensions are core services, augmented services and tangible services (kim and bang, 2015). the core services which form the innermost circle is the new knowledge gained, degree conferred, certificate earned and other academic related achievements. the second in the hierarchy is augmented services which covered how the core services are delivered. these include: courtesy of lecturers, responsiveness, reliability, sincerity, and brand awareness. the outermost services are the tangibles like structures and architectural designs in the school, library facilities, technology, learning facilities, laboratories, and other physical assets of the institution. the proposed three continuum level is to narrow down the dimensions in education services thereby limiting some overlapping in the servqual, hedperf, servperf dimensions. the aim is to integrate these dimensions viewed as cognitive with affective variables such as satisfaction and commitment and relate it with the conative dimension like favorable behavior or loyalty. the study does not represent a new paradigm shift in service quality dimensions studies because the three hierarchical service quality have been used in medical services by previous authors but was not integrated with other variables to determine loyalty (kim and bang, 2015). this study different in approach with the integrative proposal and contribute to knowledge in the area of education marketing strategy. 2.9. student’s satisfaction satisfaction is an affect issue where consumer expressed his/her feelings after consumption in relation to expected norm or standards. marketing researchers established confirmation/ disconfirmation based on consumer’s judgment of what is expected and what was actually served at the point of consumption (tse and wilton, 1988). since service is measured by perception, consumers developed a prior consumption expectation which form the basis for comparison after the service is consumed. this is the benchmark for students’ expectation before moving into host destination. on arrival and registered as student at a particular institution, students begin to compare both micro and macroeconomic indexes of the country to draw a discrepancies manzuma-ndaaba, et al.: cognitive, affective and conative loyalty in higher education marketing: proposed model for emerging destinations international review of management and marketing | vol 6 • special issue (s4) • 2016172 between what they met on ground and what they expect. if what they met supersede what they expect, students become delighted, if equal they are satisfied but if less, they complain and expressed dissatisfaction (kotler and keller, 2006). satisfaction is one of the frequently studied variables of consumer behavior. extant literatures have found satisfied customers to exhibit favorable behavior and by extension loyal to the product or service (caruana, 2002; chumpitaz and paparoidamis, 2004; smith and wright, 2004; zins, 2001). this implies that satisfaction is positively related to customer loyalty. schultz and bailey (2000) contend that customer satisfaction is a good way of developing and measuring customer loyalty because a satisfied customer tends to remain more loyal to the brand or the product than an unsatisfied customer; and in the short term, marketers can measure various forms of customer behavior, such as customer consistency (i.e. the number of times a customer buys in a certain time period) and longevity (i.e. the time period over which a customer buys the particular product or brand). the use of marketing theories in education opened up research windows in the areas of applicability of some marketing models in he services (hemsley-brown and oplatka, 2006). there are lots of studies in student’s satisfaction with the country (biodun et al., 2012), institution (hanaysha et al., 2011), course/program of study (jalali et al., 2011), lecturers (sheu, 2011), facilities (esmon and haron, 2013), accommodation/hostel facilities (sawyerr and yusof, 2013). all of these studies empirically validate positive relationship between satisfaction and loyalty. interestingly, most of the studies also analyzed relationship between cognitive variable like service quality and satisfaction. the results indicated linear relationship between service quality of education and noneducational services with student’s satisfaction (jalali et al., 2011; sawyerr and yusof, 2013; esmon and haron, 2013). therefore, this study conceptualized positive relationship between service quality, satisfaction and students’ loyalty. however, a number of authors argue that mere satisfaction is not enough to keep customers loyal (reichheld, 1996), other mechanisms also need to be considered (oliver, 1999). one such mechanism is commitment; the future of buyer-seller relationships depends on the commitment made by the partners to the relationship (morgan and hunt, 1994). 2.10. student’s commitment morgan and hunt (1994) argued that to sustain a relationship, issues of trust and commitment must be entrenched. if the parties are in doubt and less confident about the delivery of either partner, the relationship will not dwell. a comprehensive definition of commitment in a relationship was given by bowen and shoemaker (1998). according to the authors, commitment is “the belief that an ongoing relationship is so important that the partners are willing to work at maintaining the relationship and are willing to make short-term sacrifices to realize long-term benefits”. short-term sacrifices could be monetary or non-monetary, and the long-term benefits would be future business with customers and positive word of mouth by customers. this definition covered the requirement for a customer to be loyal to a provider and advanced loyalty driver beyond satisfaction. it follows that even if customer is satisfied, he/her needs high level of commitment to sustain the relationship and drive loyalty (mcalexander et al., 2003). in international education market, commitment is either way, the country/institution commitment to the goal of recruiting international students by providing unique services that will make the destination have competitive advantage over other competitors. however, students need to develop and pursue their commitment to the goal of the study. goal commitment in the part of the students triggers the desire to achieve and consistency in the program (thomas, 2011). to remain loyal to destination, students must exhibit some levels of commitment to the program, institution and the country. therefore, exploring affective variable particularly the various dimensions of commitment to determine the extent of influence on conative variable (loyalty) will open up research direction in theory and practice of international education marketing. interestingly, commitment is multi-dimensional existing in organization to influence loyalty in b2b or b2c service settings (fullerton, 2003; gounaris, 2005; tellefsena and thomas, 2005). but studies revealed the significant of two dimensions in service sectors (johnson et al., 2001). these are: affective commitment and calculative or continuance commitment. both types have been found to be relatively stable attitudes and beliefs about the relationship, but stem from different motivations. affective commitment on one hand is non-instrumental and is motivated by a generalized sense of positive regard for, and attachment to, the brand or supplier, and the desire to continue the relationship because he or she likes the brand or supplier and enjoys the relationship (richard and zhang, 2012). thus, affective commitment serves as a psychological or emotional barrier to switching which in turn keep customers loyal (johnson et al., 2001). in the other hand, calculative commitment is instrumental, based on more rational and economical aspects of the relationship (johnson et al., 2001). it results from a calculation of costs and benefits, which is detached from the context of the relationship itself (kotler and keller, 2006). calculative commitment stems from an anticipation of high termination or switching costs associated with leaving the relationship, forcing the customer to remain loyal due to economic considerations (gounaris, 2005; fullerton, 2003). both affective and calculative commitments have been found to mediate the effect of customer satisfaction on customer loyalty (johnson et al., 2001). the importance of calculative commitment is more felt in the b2b environment as a measure of churn within highly competitive services (gounaris, 2005). it is cognitive in nature since it involved cost-benefits analysis before making a decision. affective commitment in contrast is bonded by love and affection with little or no regard for cost or benefit. in this situation, students will be irrational when displaying affective commitment and rational when demonstrating calculative commitment (richard and zhang, 2012). this study adopts the affective commitment relationship to loyalty. the relationship between service quality, satisfaction, and commitment remains controversial in terms of the impact of service quality directly on customer loyalty versus the impact of service quality on customer loyalty through satisfaction. based on the literature reviewed and the objectives of this study, this manzuma-ndaaba, et al.: cognitive, affective and conative loyalty in higher education marketing: proposed model for emerging destinations international review of management and marketing | vol 6 • special issue (s4) • 2016 173 research focuses on clarifying the relationships between service quality (core, augmented and tangible services), students’ satisfaction, commitment (affective), and students’ loyalty within the international education market, and destination brands in particular. 3. conceptual model and hypotheses 3.1. hypotheses for the study the research model utilized in this study is illustrated in figure 1. service quality is expected to play an important role in both attracting and retaining international students to study destination (hanaysha et al., 2011; biodun et al., 2012). kim and bang (2015) argued further that all the three dimensions of service quality (core, augmented and tangible) should affect behavioral intentions such as loyalty. international students perceived service quality is observed to have a positive and direct effect on the student’s loyalty (richard and zhang, 2012). thus, the first hypothesis is: h1: service quality is directly and positively related to students’ loyalty to study destination. however, extent literature suggests that the effect of service quality on student’s loyalty is mediated by two affective variables of satisfaction and commitment (jalali et al., 2011; sawyerr and yusof, 2013; gounaris, 2005; fullerton, 2003). therefore, the second and third hypotheses are: h2: service quality will have an indirect effect on student’s loyalty through student’s satisfaction. h3: commitment mediate the relationship between service quality and student’s loyalty. customer’s satisfaction is desirable for all aspects of service encountered and lead to loyalty in service industries (zeithaml et al., 1996) however; the weight or magnitude of the influence is higher through commitment (morgan and hunt, 1994). therefore, the fourth hypothesis is: h4: satisfaction indirectly influence student’s loyalty through commitment. satisfaction of students is the singular target of education service providers because of its multiplier effects on the behavior of students. the researches on students’ satisfaction found direct relationship with loyalty (abdullah, 2006; firdaus, 2006; sheu, 2011; thomas, 2011). thus, the next hypothesis is: h5: student’s satisfaction has direct relationship with students’ loyalty. commitment is not a frequently studied variable in marketing, yet its influence on consumer behavior cannot be wish away easily with wave of hands. this is because it has the potential to strengthen a relationship and make it endure for the benefits of the parties involved (morgan and hunt, 1994). previous studies have established positive and direct relationship between commitment and loyalty in business to customer relations (gounaris, 2005; tellefsena and thomas, 2005). therefore, the last hypothesis is: h6: commitment is directly related to students’ loyalty. 4. conclusion the traditional and multi-dimension attributes of loyalty found in marketing theories can be applied to international education destination brand marketing having satisfied all the criteria for services as propounded by zeithaml et al. 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(2001), relative attitudes and commitment in customer loyalty models: some experiences in the commercial airline industry. international journal of service industry management, 12(3/4), 269-294. . international review of management and marketing | vol 6 • special issue (s4) • 2016 143 international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2016, 6(s4) 143-149. special issue for “asia international conference (aic 2015), 5-6 december 2015, universiti teknologi malaysia, kuala lumpur, malaysia” marketing for non-marketers: inclinations towards market orientation among public university librarians siti nisrin mohd anis1, noor hazarina hashim2*, amran md rasli3 1faculty of management, universiti teknologi malaysia, malaysia, 2faculty of management, universiti teknologi malaysia, malaysia, 3faculty of management, universiti teknologi malaysia, malaysia. *email: m-hazarina@utm.my abstract marketing and market orientation are well-known subjects within the field of librarianship. despite the nomological similarity between the terms, both are distinct in conceptualization. most librarians are actually referring to the total implementation of market orientation and cultural aspect of achieving patron’s value when addressing libraries’ marketing. in business studies, market orientation is a long established subject in itself. yet, it hasn’t been studied rigorously within the librarianship, though the librarians claim their understanding of the library’s market and marketing. nonetheless, the understanding about the difference is getting recognition among the librarians. most studies will employ on either narver and slater’s (1990) or kohli and jaworski’s (1990) dimensions. however, researchers have argued that to explain the phenomena fully, it will mostly benefit when the subject is investigated as an integrated concept. this article would like to discuss the usefulness of employing market orientation within the public sector such as public university libraries and how the librarians may benefit from it. this article proposes market orientation as an important factor within the libraries’ strategies, so that the librarians could perform better, remain competitive, continue to be relevant to their parents’ organizations as well as an effort towards survival of the professions’ itself. keywords: market orientation, public university librarians, strategic decision making, global changes jel classification: m31 1. marketing and the librarianship librarians pride themselves as an efficient information service provider. customarily, most librarians view marketing as a requisite to deliver satisfying service and delighting their customers. author like renborg (1997) in gupta (2008) claims that writings about marketing in the library context had first appeared in samuel swett green’s quoted speech at the ala conference in 1876. instead of 4p’s of marketing principle (product, price, place and promotion), the marketing strategies for the libraries consist of 7p’s which include participants, physical evidence and process (ewers, 2004; sharma and bhardwaj, 2009). table 1 depicts the 7p’s for the library marketing strategies. somehow, certain librarians have controversial attitudes about marketing because it is regarded as a managerial process links to profits inclination (aharony 2009; garoufallou et al., 2013b; shontz et al., 2004). for example, rossouw (2001) in garoufallou et al. (2013b) argued that marketing is costly and unfit for university libraries. nonetheless, in the marketing field, an influential paper by kotler and levy (1969) argued that marketing concept is applicable across all types of organizations. what’s more, spalding and wang (2006), garoufallou, et al. (2013b) and the association of research libraries augment that, the practice of marketing techniques not only directed to better funding effort, but it also improved the delivery of library services and collections which provide higher visibility for the libraries’ corporate image. upon realizing the tremendous changes in people’s preferences and organizational settings, librarians proactively position their service orientation to meet the need, wants and demands of their customers by adopting marketing strategies (garoufallou et al., 2013b). more librarians are currently viewing their users or patrons as “customers” (garoufallou et al., 2013b) and employs marketing to upgrade their library services (koontz et al., 2006b). likewise, it has been postulated that, the library marketing should include total anis, et al.: marketing for non-marketers: inclinations towards market orientation among public university librarians international review of management and marketing | vol 6 • special issue (s4) • 2016144 organizational effort, and proceed beyond the realm of marketing to best served their customers (shontz et al., 2004). the objective of this article is to position market orientation as a potential strategic opportunity to optimize customers’ expectation and retain competitiveness among public university libraries in malaysia. moreover, with the current academic transformation as well as scarcity of government sponsorship, it is a necessity to move beyond the customarily practice of library marketing. to position libraries usefulness, and gain recognition as one of the university’s strategic business units, the library workforce must be bold enough to employ new behavioral and cultural proclivities, such as becoming more market orientated. thus, the authors posit that being a market orientated may emphasize better funding effort, improved the efficiency and effectiveness of library services and collection and provide higher visibility for the library’s usefulness within the central organization (spalding and wang, 2006; garoufallou et al., 2013b). 2. associating market orientation with libraries for non-marketers such as librarians, the marketing orientation and market orientation terms often being used interchangeably (sen, 2010; shapiro, 1988). despite the nomological similarity between the terms, it is actually refers to different context about the market and marketing itself. one on hand, marketing is currently regarded as an “activity” instead of a “function.” this new term positions marketing as a broader activity in a company or organization, and no longer only a departmental responsibility. american marketing association board of directors (2007) regard the term as “the set of institutions activities and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.” this definition refines marketing as providing long term value benefactor than only as an exchange of money (short-term) for the benefit of the shareholder/organization. likewise, the institute of chartered marketing as cited by rowley (2003), defined marketing as “the management process, which identifies, anticipates and supplies customer requirements efficiently and profitably.” furthermore, marketing is eligibly a well-known concept within librarianship’s research (garoufallou et al., 2013a; garoufallou et al., 2013b; jose and bhat, 2007; koontz et al., 2006a; parker et al., 2007; robinson, 2012; rowley, 1997; shontz et al., 2004; spalding and wang, 2006). on the other hand, “market orientation” (or market-oriented behavior) is a well-known term employs by marketing practitioners as an indicator of the extent to which an organization implements the “marketing concept” (singh, 2005a; 2009b). it refers to “the activity and organizational culture that focuses on the performance and market activities” (hajipour et al., 2013) p. 94. both conceptualization from kohli and jaworski (1990) and narver and slater (1990) provide the overview of market orientation elements. therefore, according to shapiro (1988), the most distinct understanding between marketing and market orientation is market orientation projects the comprehensiveness of the whole marketing process, which include the market information and the cultural aspect to achieving customer’s value (hajipour et al., 2013). within the domain of business and marketing, market orientation is a long established subject in itself. yet, the concept hasn’t been studied rigorously within the librarianship, despite the claims that library’s core existence is solely to serve people’s information need. nonetheless, the understanding about the difference is getting recognition among the librarians. sen (2006; 2010) and singh (2005b; 2008; 2009a) are among the authors that promote the adaptation of the concept for the libraries. besides, empirical studies on market orientation are found mostly to be associated with public university libraries than other library types (public and special libraries) (garoufallou et al., 2013a). for example, study of market orientation and service performance in finnish public university libraries, yields a highly significant indicator of p = 0.0000 (singh, 2005b; 2009a). as most librarians misunderstood the actual meaning of marketing as they inferred marketing with advertising element, such as promotional activities, the librarians are actually referring to the efforts on emphasizing the customer’s satisfaction through actions and philosophical aspects of marketing (garoufallou et al., 2013a). generally, the existence of most organizations is to serve customers either for financial gain or organization’s competitiveness. in morris et al. (2007), non-profit organizations are serving multiple table 1: the 7p’s of the library marketing strategies (sharma and bhardwaj, 2009) the ps’ definition product products or services of the general reference and information service department. this is, of course, the information, reference, and ancillary services that add value price pricing of use of the library is usually that of the time and effort the user spends travelling to the library, as well as the time and effort spent place place of service, based upon knowledge of the market of a library, is essential in order to identify users and their discrete information needs and wants. to expand the service area, the library may have branches, bookmobiles, or electronic access, etc. promotion promotion includes utilizing persuasive information about general information, services, and communicating this information to target market segments that are potential users. five kinds of promotion include: publicity, public relations, personal representatives, advertising, and sales promotion participants all human actors who play a part in reference and information service delivery, namely the library’s personnel physical evidence the environment in which the reference and information services are delivered, that facilitates the performance and communication of the service process the procedures, mechanisms and flow of activities by which the reference and information services are acquired anis, et al.: marketing for non-marketers: inclinations towards market orientation among public university librarians international review of management and marketing | vol 6 • special issue (s4) • 2016 145 segments and groups, inclusive of the clients that receive the organization’s service and or the sponsors. while the former is the main reason of the organization’s existence, the latter enables its existence. the market orientation in non-profit contexts such as the public university libraries will be complicated than profit firms as each group have differing and potentially conflicting interests (morris et al., 2007). table 2 explicates summaries on market orientation within librarianship. table 2 indicates that the researchers recognize the key points of market orientation as a management style or attitude, customer-focused and long term competitiveness. most studies were conducted within the public universities than other library type. most measurement units are based on the organization except for aharony (2009) and harrison and shaw (2004) which is based on individual perceptions. empirical studies on individuals as the measurement unit are scarce within the market orientation literatures. what’s more, the study on library’s market orientation has yet been tested within the southeast asian region, specifically, malaysia. therefore, it will be an added contribution to investigate it from an individual measurement and in malaysian context. likewise, hadcroft and jarratt (2004) in sheppard (2011) augmented that, market orientation is a chronological succession of information based behaviors that consist behavioral norms for gathering, sharing and responding to market information. thus, the understanding on how employees define and conducting market-oriented behaviors are taken as a key to foster market orientation (felgueira and rodrigues, 2012; schlosser and mcnaughton, 2009; sheppard, 2011). what’s more, to further identify the usefulness of the concept, an empirical study on individual’s commitment and abilities to act more market orientated could be conducted. likewise, the concept is identical with library’s charter known as the five ranganathan’s law (1931). this law guides how library must operate according to their clients and stakeholders’ expectation. the five laws are explicated in table 3. the table 3 explicates the comprehensive commitment to attain customer’s benefits within the library’s philosophy. thus, the authors posit that, by employing the whole dimensions of being market orientated, the librarians could strongly support their organizations to create superior customer value, through the constitutional capabilities of its workforce, thus makes the firm more market-driven and sustain competitiveness (jaworski and kohli 1993; vorhies and harker, 2000). besides, earlier studies on market orientation augmented that, employees do play a significant part in the success of market orientated organizations (felgueira and rodrigues, 2012; schlosser and mcnaughton, 2009). 3. market orientation concept market orientation is broadly discussed from behavioral and cultural aspects (gray et al. 1998; kirca et al., 2005; kohli and table 2: summaries on market orientation within librarianship author (year) definition measurement unit country settings organizational setting ewers (2004) customer is the focal point of all organizational goals and integrates structure, management and operations secondary data queensland, australia public university ewers and austen (2004) is management style or attitude towards attaining customer’s value as customer is the focal point of all organizational goals and integrates structure, management and operations conceptual australia public universities harrison and shaw (2004) market orientation is considered to be an integral factor in the success of public libraries, and relates to gaining a sustainable competitive advantage by creating a consistently superior offering for consumers individual victoria, australia public libraries singh (2005a; 2008; 2009b; 2013) is about continuous and organization-wide gathering, disseminating and responding to market information to satisfy the target customers’ needs profitably thus leading to superior service performance of the organizations organization finland research libraries (public universities and special libraries) aharony (2009) customer is the focal point of organizational goals by understanding clients’ want and needs, the environment in which they operate, their resources and strengths, and the social factors which influence their clients individual israel public, academic and school librarians sen (2010) concerned with achieving value through a clear understanding of the customers, the organization and the wider business environment emcompassing corporate culture and engaging all departmental functions in customer-focused operations and strategy, p. 345 organization united kingdom public libraries klaib (2012) market orientation refers to the extent to which the organization is oriented towards the user and the recognition of the importance of the role of marketing in the delivery of marketing needs to all sections of the organization organization jordan private and public universities anis, et al.: marketing for non-marketers: inclinations towards market orientation among public university librarians international review of management and marketing | vol 6 • special issue (s4) • 2016146 jaworski, 1990; narver and slater, 1990; renko et al., 2009). kohli and jaworski (1990) with narver and slater (1990) provide the most established concept on market orientation. market orientation comprises of organizations values and beliefs about putting the customer foremost in business planning (renko et al., 2009). the behavioral perspective is represented by kohli and jaworski (1990) conceptualization, which concentrates on organizational activities that associated with the generation and dissemination of and respond to market intelligence (kirca et al., 2005). three elements represent kohli and jaworski’s (1990); intelligent generation, intelligent dissemination and responsiveness. intelligent generation or market intelligence consists of customers’ feedbacks as well as analysis of exogenous factors that may influence customers’ needs and preferences. next, the market intelligence which about the intelligent dissemination on how the information being shared, communicates, exploit, innovate or ‘purchase’ by other departments fulfill customers’ preferences. finally, responsiveness is the action conducted based on market intelligence by the act of distributing the collected information. from this perspective, it defines as “the organization wide generation of market intelligence pertaining to current and future needs of the customers, the dissemination of intelligence horizontally and vertically within the organization wide action and responding to it (jaworski and kohli, 1993). markor scale is developed in 1993 to measure firm’s performance (kohli et al., 1993). narver and slater (1990) propose the cultural perspective, which focused on organizational norms and values, and promote behaviors that are consistent with market orientation (deshpande et al., 1993; kirca et al., 2005; narver and slater, 1990). they referred market orientation as “the organization culture (i.e., culture and climate (in deshpande and webster, 1989) that most effectively and efficiently creates the necessary behaviors for the creation of superior value for buyers and thus, continuous superior performance for the business” (singh, 2005b), p. 61. the cultural perspective explicates from three behavioral components; customer orientation, competitor orientation and inter functional coordination. narver and slater (1990) describe that both customer and competitor orientations include activities of acquiring information about customers and challengers in the target market and disseminate the information across the organizations. inter functional coordination component is the efforts to coordinate and manipulate the collected information on customers and competitor by involving the cooperation between all departments to obtain a customer’s value (narver and slater, 1990). maktor scale is formulated to measure the constructs as proposed by narver and slater (1990). though both concepts are distinct, there are numbers of work that recommend the integration or collation of both concepts. author such as diamantopoulos and cadogan (1996) introduce an integrated model, which propose competitive orientation and customer orientation into three market orientation elements of intelligence generation, intelligence dissemination and responsiveness (hajipour et al., 2013). griffiths and grover (1998), gounaris and avlonitis (2001), matsuno et al. (2005) and carr and lopez (2007) in al-hakimi (2010) suggest that both concepts are complementary and supportive of each other. gray et al. (1998) validates that a combination of the existing market orientation scale proved to be more promising as managerial assessment and as parsimonious scales. table 3 portrays the supporting literatures for the authors’ aim to incorporate both cultural perspectives (narver and slater, 1990) and market intelligence (kohli and jaworski, 1990). the table 4 concludes that, due to the nomological similarities of both concepts, the combination or integration of both concepts may provide a comprehensive understanding about market orientation itself. however, certain authors such as cadogan and diamantopolous (1996), matsuno et al. (2005) are proposing an integration which involves the re-conceptualization of the concepts. for example, reconceptualised both market orientation into a single nomological network (al-hakimi 2010). whereas, matsuno et al. (2005), introduced that the cultural construct as an antecedents to the behavioral construct (al-hakimi, 2010). however, in order to understand the total market orientation proclivity among public university librarians, the authors are more interested in emphasizing the ‘collation’ effort by putting together both concepts to explain the market orientation construct instead of an integrated conceptualization. thus, the authors propose market orientation for public university librarians as an individual’s action in implementing of the whole marketing concept and organizational culture through competitors and customer orientation, interfunctional coordination and market intelligence by focusing on the customer’s expected to produce a long range organizational profit” (kohli and jaworski, 1990; narver and slater, 1990). 4. market orientation usefulness for the libraries library administrators indicate the value of market orientation as one of many strategic orientations to be adopted by the libraries (sen, 2010). nevertheless, the comprehensiveness of the whole aspects of market orientation is not being fully utilized. study by garoufallou et al. (2013b), found that most libraries in greece table 3: ranganathan’s the law of the library law no ranganathan’s law description 1 books are for use books in libraries are to be promoted and marketed to its users 2 every reader his (or her) book librarians remain neutral in serving various needs of its users by acquiring and serving varied collections for vast patrons’ information desire 3 every book its reader though a small number of readers will read a certain book, the book still has a place in the library 4 save the time of the reader patrons must be able to easily, quickly and efficiently locate the material desired 5 the library is a growing organism a library should be an up-to-date and dynamic changing institution; its outlook, books, methods, and its people anis, et al.: marketing for non-marketers: inclinations towards market orientation among public university librarians international review of management and marketing | vol 6 • special issue (s4) • 2016 147 had never performed a strengths, weaknesses, opportunities, and threats analysis or prepared a marketing plan, what’s more, employing a strategic evaluation of the whole concepts of market orientation. most libraries are also focusing on selected aspects of market orientation, for example, customer orientation. this is related to the former curriculum the librarians received during their academic years. in addition, global financial crisis also stunted marketing activities as the sponsorship from the government and university funding are getting less (garoufallou et al., 2013b). however, more experienced librarians are more likely to engage in market orientation efforts as they gained more understanding and additional training on the concepts. besides, more librarians are aware of the current challenge faced by libraries. thus, many librarians realize the potential of employing market orientation as a strategic option towards optimizing customer’s value despite the fund limitation. this effort is also a strategy to upgrade their reputation, and achieving the longer term in competitiveness (aharony, 2009). for public university libraries, organizational changes within the academic landscape influence how the libraries should position their marketing strategies. the transformation includes new accreditation strategies, global ranking competitiveness and challenge from private and virtual universities (anis et al., 2015; ujang, 2012). in the pursuit of competitiveness, fulfilling customers’ expectation is a priority for any service based organization. more librarians are willing to employ the term customers to address their clients. for public universities, customers are segmented as clients (students, academics, interdepartmental employees and related agencies) and stakeholders (sponsors or policy makers) (morris et al., 2007). to position the fit between organizational changes and clients into the new “business” framework, a collaborative efforts or “inter functional coordination” between university’s departments or within the department itself, is crucial. to attain the fruit, the librarians should move from an ad hoc approach, towards collecting information sharing, a formal information and knowledge management strategy with improved communications strategies (sen, 2010). despite the changes, academic librarians had taken less effort in improvising their current situation (sa’ari et al., 2012). a single report by allen (1998), unfortunately, indicates librarianto-be as less proactive, complacent, risk averse and bureaucrats (allen, 1998). however, the study could be contended as more librarians are open to change to survive the current circumstances. other than financial issues, librarians should also be alert of the current competing service provider. the existence of competitors isn’t direct or almost none within public sectors. however, for information provider agencies such as the libraries, competitor such as google, which has been claimed to surpass the librarian’s mediocre capability, should be accessed seriously (johnson and lilly, 2012). likewise, library science researchers postulate the current challenge with the trend of university students. the four challenges are called ‘the four horsemen of the library apocalypse’ that will determine the survival and sustainability of public universities librarian’s for the next 5 years (johnson and lilly, 2012). those issues include, (i) the unsustainable cost between procurement of capital funding compare to the library’s expenditures, (ii) google domination as the most powerful online information provider, (iii) declining patrons using the library’s materials and facilities and (iv) coping with the new type of patrons’ demand. as these are the ‘cutting-edge’ people with more complicated need, wants and demands, it is a necessity for the librarians to start revamping their current market orientation. 5. conclusion globalization affects the current condition of financial, economic and organizations. to survive the impact of globalization, every employee must readily embrace change. there are three categories of change; those who observe change, those who participate in change and the agent of change. to move forward and position the library’s relevancy, the public university libraries and librarians should take up the role as an agent of change. what’s more, to position the library’s usefulness and earned recognition as one of the university’s strategic business units, its workforce must be bold table 4: literatures regarding the collation of market orientation’s elements author setting the discussion gheysari (2014), kirca et al. (2005) profit sector both concepts of cultural perspective (narver and slater, 1990) and behavioral (kohli and jaworski, 1990) are inclined towards creating value for customers in exchange with long term profit gonzález-benito and gonzález-benito (2005) profit sector both approaches to market orientation are compatible and complementary because behavior is the basis for the formation of beliefs and values, and culture provides the rules of behavior (p. 798) jones and rowley (2009) profit sector incorporates the comprehensive overview of the implicit and explicit marketing behaviors (p. 8) al-hakimi (2010), cadogan and diamantopoulos (1995), carr and lopez (2007), farrell and oczkowski (1997), gauzente (1999; 2000), gounaris and avlonitis (2001), gray et al. (1998), griffiths and grover (1998), hajipour et al. (2013), harris and ogbonna (1999), homburg and pflesser (2000), hult et al. (2005), hurley and hult (1998), jaworski and kohli (1996), jones and rowley (2009), kohli et al. (1993), matsuno et al. (2005), sheppard (2011), slater and narver (1998) profit sector the nomological similarity of both dimensions convinced researchers the necessity of integrating/ collating both concepts to explain the phenomena fully anis, et al.: marketing for non-marketers: inclinations towards market orientation among public university librarians international review of management and marketing | vol 6 • special issue (s4) • 2016148 enough to employ new behavioral and cultural proclivities, such as becoming more market orientated. for the librarians provide satisfactory service to their customers, the library marketing should include a total organizational effort (shontz et al., 2004), which means proceeding beyond the realm of marketing. study by kohli and jawaroski’s (1990) indicate that, being market orientated is an equal responsible for every single employee than the single responsibility of the marketing department. this statement is in line with the intention of this article that posits the worthiness to investigate market orientation from an individual’s perception. moreover, the construction of a quality focused production orientation is supposed to be affected by an employee market-oriented behavior (schlosser and mcnaughton, 2009). organizations that are able to motivate its employees to act in the market-oriented ways, may eventually success in a market-oriented initiatives (schlosser and mcnaughton, 2009). felgueira and rodrigues (2012) also indicate that, when employees believe that they are making a good contribution towards their organization’s market orientation, they will form a strong commitment to the organization and more satisfied with what they do (esprit de corps). for public university librarians, the collected efforts will eventually profit customers, stakeholders and finally attaining organizational competitiveness in the longer term. references aharony, n. 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(2000), the capabilities and performance advantages of market-driven firms: an empirical investigation. australian journal of management, 25(2), 145-171. . international review of management and marketing | vol 6 • special issue (s6) • 2016 95 international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2016, 6(s6) 95-103. special issue on "management of systems of socio-economic and legal relations in modern conditions of development of education and society” the theory and practice of customer loyalty management and customer focus in the enterprise activity elena m. kiseleva1, marina l. nekrasova2, marina a. mayorova3*, marina n. rudenko4, vadim s. kankhva5 1moscow state university of mechanical engineering, moscow, russia, 2kuban state university, krasnodar, russia, 3yaroslavl state technical university, yaroslavl, russia, 4perm state national research university, perm, russia, 5moscow state university of civil engineering (national research university), moscow, russia. *email: marina8502@mail.ru abstract nowadays in companies paid much attention to client relationship management. in modern conditions there is an unclear distinction between the terms “customer loyalty” and “brand loyalty.” they were developed at different times and within different concepts: the term “brand loyalty” was coined in the early 20-ies in the united states and was developed in the framework of the branding concept, and the term “customer loyalty” began to develop actively in the 80 years. currently, brand loyalty – is one of the types of customer loyalty, developed mainly for consumer goods, so the methodology developed for this area, is of limited use and the concept, defining all the category of customer loyalty, should be regarded as “consumer loyalty.” consumer loyalty is divided into behavioral and perceived. monitoring behavioral loyalty is carried out by observing the actual behavior of the client and is the method of implementation of a retrospective transactional analysis of its consumer activity. emotional loyalty of customers is reflected in their level of awareness about the organization and about their needs they can satisfy, taking advantage of its products or services, as well as in the level of customer satisfaction with the company’s offerings, their quality and service provided by the organization. in addition, an important component of perceived customer loyalty is the emotional level of customer’s perception of the company. for the most complete and comprehensive assessment, it is the most appropriate to use an approach that involves monitoring of both behavioral and perceived of customer loyalty. keywords: loyalty management, marketing, customer jel classifications: l81, l84, m31 1. introduction loyalty – from the english word loyal (faithful, loyal) – is, above all, a positive attitude to the buyer of the company. loyalty – is a customer emotion that comes to you, in spite of the presence of other, more financially lucrative offers on the market. this is the main difference from the satisfaction – loyalty is not a rational evaluation, but the result of some, often unconsciously perceived, factors. moreover the view a loyal buyer “store like” is often a generalized nature. ask him “why?,” and the majority will not be able to give a plausible answer. 2. materials and methods the theoretical and methodological basis of the research was scientific works of fundamental and applied nature of domestic and foreign scientists in the field of marketing management, loyalty and customer management technologies. to achieve the objectives scientific methods of knowledge were applied: scientific methods (analysis, synthesis, dialectic, and systematic, integrated approach), economic and statistical methods (comparison, graphic). the information base for the research was: materials of the federal service of state statistics of rf, periodic economic publications; legislative and normative acts; information resources kiseleva, et al.: the theory and practice of customer loyalty management and customer focus in the enterprise activity international review of management and marketing | vol 6 • special issue (s6) • 201696 of the internet. the validity and reliability of the research results is provided by the study of domestic and foreign sources, the general economic and technical literature analytical materials of the subject area; the use of modern methods of research; confirming of the conclusions of the relevant calculations. 3. discussion in practice, under the loyalty often understand customer satisfaction, which is not quite true. as noted by s. sysoev and a. neumann, “satisfaction comes when the buyer happy and does not regret the money spent. but the client will not necessarily be loyal. loyal customer – is always a satisfied buyer, but the buyer is not satisfied with the always loyal (sysoev and neiman, 2004). although the customer satisfaction is the first step on the way to win his or her loyalty.” similar view is held by t.n. gerpott, who believes that “satisfaction with the service is not identical with customer loyalty (gerpott, 2001). by customer satisfaction should be understood a set of ordered assessments of individual service features (which may be positive or negative), and in these estimates are infused the individually perceived and expected quality characteristics. a positive assessment increases the power of intention to re-purchase, but does not define it completely, because it depends on the technical and functional and economic bindings of a customer to the company, the overall attractiveness of the competition service, the overall assessment of their own business.” there are several ways of classifying loyalty. for example, y.m. pustynnikova allocates material, including traditional and software, and intangible – procedural and personal loyalty factors. under the traditional loyalty of material factors the author understands the convenience provided to the consumer in terms of accessibility of the products and services offered by the company. software factors include the full range of options aimed at providing financial incentives to the buyer. procedural intangible factors relate to the convenience of interaction with the organization for a customer and personal – to the customer service level of the company. in terms of this classification the impact of factors should be allocated to a customer commitment. material factors provide the behavioral loyalty and intangible provide the perceived loyalty (pustynnikova, 2005). an alternative approach involves the provision of financial, functional and emotional factors, the totality of which provides customer loyalty (gorelik, 2003; sun and liu, 2009). this implies that to the financial factors being the tool of influence on the behavioral loyalty are related all the company’s efforts to provide material benefits to its customers. functional indicators of relevance in terms of behavioral and perceived loyalty, cover the aspects such as the regulation of the business processes of customer service and interaction with them, as well as the availability to consumers of information they need and ease of implementation of the transaction. emotional factors, in turn, provide only perceived customer loyalty by giving them a special status, providing personalized service and other benefits, bearing the non-financial nature. the purchasing loyalty value is not absolute but relative. after all, we have defined it in terms of emotional, rather than rational factors. loyalty should be considered with respect to the buyer’s perception of yesterday and today. if between these two perceptions are equal to or less than signs, we can safely say of the manifestation of greater loyalty with regard to the company in question by a customer. loyalty – is not a tactic but business strategy. the loyalty of customers, employees and partners are so interconnected that understanding and managing (dymshits, 2007), in one aspect, require understanding and management of the other two. loyalty philosophy is to create value, rather than making a profit. 4. the types and characteristics of consumers’ behavior the concept of client and his conduct – are the key concepts of modern marketing and business. this is a relatively new concept, because in the past the central concept was the buyer. consumers, customers can be divided into two groups: individual customers or individuals and corporate clients and legal entities (mann, 2004). consumer behavior is an activity aimed at obtaining, use, disposal of goods, as well as decision-making processes that precede these actions and follow them. the objective of studying consumers – understanding their needs and providing them with the most complete satisfaction. the main objectives of the study of consumers: • building structure needs of different categories of consumers; • study of consumer preferences; • requirements for the range and quality; • definition of satisfied and unsatisfied needs of the structure. the needs and motivations of consumer behavior (stone et al., 2005). the needs of potential clients are quite varied and complex and can be divided into the following 5 groups: 1. situational needs – are specific needs, which vary and are often formed as a result of a confluence of circumstances (the features of business environment, time and place). 2. functional requirements – in accordance to the purpose of specific goods and services. 3. social needs – the need in belonging and community with others. 4. psychological needs – they reflect the desire to gain confidence and reduce risk. they focus on emotions such as joy, excitement, success. 5. educational needs – the desire to self-development, to obtain information, to improve the understanding of what is happening and why. the requirements also can be divided into other groups: • satisfied and unsatisfied; • conscious and unconscious; • rational and emotional. kiseleva, et al.: the theory and practice of customer loyalty management and customer focus in the enterprise activity international review of management and marketing | vol 6 • special issue (s6) • 2016 97 requirements manifest themselves in the form of motifs that appear invisible, inner strength that encourages and stimulates buying behavior. motives can be subdivided into the following groups: • organic-basic (hunger, thirst, intimate attraction, maternal feelings, the sensation of pain); • emotional motives (fear and the desire for security, aggression, lust for power); • social motives (the desire for contact, thirst for activity); • motives of activity (need for experience, the need for physical activity, curiosity, inquisitiveness, creativity thirst). the types of consumer behavior: 1. the complex behavior, it occurs in cases where the consumer is deeply involved in the process of purchases – valuable and rare solutions (yeh, 2015). 2. habitual behavior – low involvement in the acquisition process. 3. behavior, focused on a wide range of goods, when involvement is low, but there are significant differences between the proposed goods brands. in the basis of these types of behavior are different types of solutions (table 1). models of consumer’s behavior: • economic; • sociological; • psychological. the economic model is based on the assumption that the buyer is rational and consistent in committing actions. the following conditions affect to his or her decision: the level of income, the price of goods, operating costs. the sociological model takes into account the following factors: the culture of the host country or region; peculiarities of social classes (kolody, 2004; kurbanov et al., 2016); belonging to the reference group; family circumstances; role positions and status. psychological model takes into account the following factors: type of person; self-esteem; feature of the perception of the external world; peculiarities of installations and beliefs. purchasing behavior of individual consumers. a distinctive feature of this group is their mass. they can be divided into the following groups in terms of motivation: • people who are motivated by basic needs and requirements; • people, moved from the outside (the middle class, tuned controversial and focused on prestige); • people, driven from the inside (high personal ambition, the desire for self-realization); • people who manage to reconcile the irreconcilable – the representatives of the special way of life. in relation to the market new products of individual buyers can be divided into the following subgroups: • pioneers innovators – inclined to take risks, to experiment with the excess of finance (the total mass of potential buyers, their share is 1-2%); • innovators – the early adopters (12%); • ordinary buyers – early majority (about 32%); • conservatives – late majority (about 32%), they are contradictory, do not approve of innovations, but willingly imitate ordinary customers; • retrogrades – ultra-conservatives (16%), they are opposed to any change, and very committed to the stereotypes and habits. the main stages of the process of purchasing behavior of individual buyer: 1. awareness of the needs in accordance with the individual motives. 2. search for possible ways to meet the needs (based on the experience and knowledge) (zakharov et al., 2016). 3. assessment of options on the basis of the information and the choice of the best option. 4. direct purchase, based on the system of values, preferences and habits. 5. assessment of the feasibility of further purchases on the basis of experience gained. particular attention should be paid to the analysis of individual buyer’s intentions: well-planned purchase, product and brand are selected in advance; partially planned purchase – there is an intention to buy the goods, but the choice of brand continues directly in the buying process; unplanned purchase, product and brand chosen on the spot. the study of consumer behavior allows: 1. of understanding, satisfaction of what needs the commodity provides. 2. to determine the need to improve of consumer properties. 3. allows identify the sources of information used by the buyer in their search. 4. allows to the buyer to make a decision based on the knowledge of its motives and incentives. 5. allows to refine an assessment of products offered. 6. allows to develop effective measures to maintain stable demand. table 1: types of solutions depending on a type of consumer behavior options of solutions straight purchase modified purchase new task the novelty of the problem or need low medium high informational needs and requirements minimum average maximum search the information minimal limited extensive consideration of new alternatives none limited extensive multiple factors influence the purchase very little moderate many financial risk low moderate high kiseleva, et al.: the theory and practice of customer loyalty management and customer focus in the enterprise activity international review of management and marketing | vol 6 • special issue (s6) • 201698 5. the methods of consumer loyalty management in the service sector the analysis of the development of relations between companies and their customers in russia led to the conclusion about the absence of a systematic approach to management and a lack of integrated techniques for improving customer loyalty, which in turn made possible the introduction of “program for improving customer loyalty,” which is understood as a specific sequence of actions and the system activities to increase the values of indicators of customer loyalty. analysis of the most well-known approaches of foreign authors to the use of customer loyalty in the formation of management solutions made it possible to identify principles of management by customer loyalty: a. differentiated offer – the main factor causing the loyalty is an offer of unique value to the consumer. to bring loyalty to the product (service), having no competitive differences, it is practically impossible; b. selection of consumers with a high level of internal loyalty – the socio-demographic characteristics such as gender, age, social status, income, etc. affect to the initial inclination of consumers to change provider. accordingly, the task of companies (firms) is to define for the industry customers capable to be the most loyal to the socio-demographic and psychographic characteristics; c. differentiation of working with clients – the most loyal and profitable customers deserve more privileges than the least loyal and least profitable; d. monitoring of indicators of the customers migration – the most painful blow to the company’s income is applied by customers who have changed the pattern of consumption – reduction and irregular visits (hwang et al., 2016). efforts to prevent even small reductions in consumer spending is at ten times more effective than measures, pursuing only one aim – to retain an existing customer; e. the motivation of all employees – an increase of loyalty among consumers is not possible by a single department of the organization, it should be one of the priorities at the management level, the whole company should be customeroriented; f. a switching barriers – along with an increase of customer satisfaction and quality of service, it is also necessary to create parallel high switching barriers, one of the species which are the loyalty programs. growing competition makes companies to use a variety of ways to attract and retain customers. the name itself – the promotion of the program – indicates that the basic motive of these programs is to provide customers the benefits. the best way to encourage any person: to give him any benefit – material, emotional, psychological. all known types of incentive programs are focused on any single benefit, others may also be present, but play a subordinate role. within the framework of the development of the financial benefits (silnov and tarakanov, 2015; kunelbayev et al., 2016; kunelbayev et al., 2016), it is necessary to take into account that the benefit received by the consumer should be long-term. providing customers with one-time discounts cannot be considered as a tool to ensure their loyalty, but in some cases can be used to encourage customers to be more active in using the company’s products and services. in that case, when it comes to achieving customer loyalty, they should receive the benefits and advantages throughout its cooperation with the organization. let us consider the most common tools of the influence on the behavioral loyalty as the basis of business management: 1. discount program. their essence is in providing customer benefits in the form of a refund of part of the paid value of the goods at the moment of purchase. there is a purely material benefit: a saved% of the value of goods and services. discounts offered on discount cards may be fixed or cumulative. in the case of a funded system discount amount depends on the customer’s previous spending – the more he spent for all time of using of the company’s services, the more substantial discount he will receive on all subsequent purchases. a significant advantage of the discount systems, particularly funded, is inherent in it the principle of providing benefits to the client on a regular basis, which also stimulates the buyer to use only a single, specific, company. however, this approach has a significant disadvantage. according to numerous studies, the minimum threshold sensitivity on discount cards at the level of 10%. 2. bonus programs – they are an alternative to discount, and imply the accumulation of specific points by customers, which in the future it can be exchanged for valuable gifts from a company’s catalog. such incentives usually turn out to be more economically expedient than providing cumulative discount, since the ratio of bonuses received by the consumer and the value of purchases made by them can be more profitable for the company. in addition, the bonus shares are more “emotional.” a client accepted an offer to take part in such a program to a greater extent will be interested in the accumulation of bonuses, and the importance of the factor of the cost of products offered for him will fall. the main problem in the development of bonus systems to encourage consumers is the difficulty of compiling a catalog of gifts for customers. at its formation it is important to find the right balance between consumer interests and the benefit. the consumer would be interested in participating in the program only if he will be able to exchange the accumulated points for something valuable for himself. 3. the draw of prizes among those who have made some purchases in a certain period of time is a kind of a manifestation of the bonus program, but at the same time, is an independent tool for influencing the behavioral loyalty. of course, here there is a material component of the benefits, too, but still the dominant is the emotional benefits: item (prize), obtained as a result as by “happy accident,” always emotionally colored. kiseleva, et al.: the theory and practice of customer loyalty management and customer focus in the enterprise activity international review of management and marketing | vol 6 • special issue (s6) • 2016 99 and even if a man does not need it – all the same the emotions that accompanied while getting a prize (and the memory of it) are usually positive. 4. cash-back program – a loyalty program that allows customers to return a certain percentage of each purchase. for example, buying a $ 100 product from a company, the customer can get back $ 1. all these methods of influence on the behavioral loyalty can be used both as a single loyalty program “for all,” as well as through targeted offers. a significant advantage of discount or bonus programs due to the personalization of their holders: use this tool enables an organization to monitor its customers’ buying activity and respond to the expectations of different groups of consumers. as demonstrated above, customer satisfaction is the basis for further construction of its loyalty (sergeevich and vladimirovich, 2015). therefore, in the course of consumption the products by clients offered by the company and services it is important to ensure the complete satisfaction of all their needs and requirements. for this it is important not only to provide customers with quality products at interesting financial conditions, but also to ensure the availability of convenient distribution channels, their presence in retail outlets (or the possibility to use the service in a place convenient for the consumer when it comes to the provision of services). all these factors are basic in creating complex loyalty, since only their presence will ensure the success of all initiatives in general. moreover, a significant imprint is imposed on the fact of the emergence of customer satisfaction from the cooperation with the organization, the convenience of this interaction for the client and the level of service that he receives in the company. it is important to realize that if the service procedure gives consumers the extra inconvenience and anxiety, then even suggestion of favorable financial conditions would not contribute to its retention in the active status. sooner or later the client in any case refuses to use the company’s services. thus, according to i. ivanyuk: “if customers do not receive the appropriate level of service, even for the sake of participation in the loyalty program, they are unlikely to be stable customers of this company” (kirillov et al., 2016). for the development of relations with customers on the way of a new client – a loyal customer need also to take into account a number of factors: 1. the physical characteristics of the service: the appearance of the office and a client lounge; effective presentation of the goods (merchandising); the appearance – the image of the staff; polite, helpful staff; respect for customers; manifestation of interest. 2. understanding the customer’s needs: attention to every client; special relationship with suppliers, vip-clients; provision of financial facilities; services for the delivery of goods; convenient goods return; car parking; convenient hours of operation, preferably without interruption; efficiency in solving problems with customers; 3. security: at the conclusion of transactions and negotiations; in the parking lot; 4. the company’s reputation: business staff capacity; confidence in the managers to work with clients; provision of guarantees; the accuracy in the calculation of the payment; observance of the terms of contracts; the possibility of return or rejection. 5. customer information: description of the goods or services, operational price list; notification of sales, promotions; fast response to customer appeal; information about the speed of service. the most important role in the management of the relation development plays a management client service: a. the study of customer’s expectations and perception of service: customer research – 1 time per year for comparison; assessment of customer satisfaction – immediately after the conclusion of the transaction; interviews with certain groups of customers; analysis of complaints and customer feedback. b. implementation of the studied expectations: implementation and upgrade service standards; new client technologies; giving greater powers to the best workers and providing links between departments; identification of trends in the qualitative improvement of customer service. c. information for customers: customers are informed on all the services provided and goods (price list, etc.); informing customers about planned sales; suggestion to clients that all their problems will be solved; fast response to customer appeal. the backbone of the concept of quality service for customers is their expectations. therefore, to ensure customer loyalty growth is necessary to understand what their wishes are, and what level of service they expect to receive in the company. since the development of specific rules and procedures imply the standardization, it is necessary throughout the work on the formalization of business processes to reach the largest possible number of client requests and satisfy as much as possible anticipation. this may require a study of customer preferences and develop unique services. moreover, as noted, for example, y.m. pustynnikova, it is also important to pay attention to identify shortcomings in the existing system of service and eliminate them (pustynnikova, 2005). at the same time, the author points out that even if the consumer is satisfied with all the traditional material factors, he may make repeat purchases and use the company’s services simply because he will not be satisfied with his alternative (sozinova et al., 2016). if the client has any other suggestions, he can switch to another provider of products and services. therefore loyalty complex should also include a number of significant, in terms of customers, emotional characteristics. emotional factors loyalty is difficult to formalize, as they are not based on getting by customers sensory-perceptible benefit from cooperation with a particular company, and operate the emotional motives of consumer behavior of a consumer. however, it is this property of intangible factors hides their main advantage for the company: if the complex loyalty organization contains a kiseleva, et al.: the theory and practice of customer loyalty management and customer focus in the enterprise activity international review of management and marketing | vol 6 • special issue (s6) • 2016100 sufficient amount of unique emotional characteristics, it practically guarantees its protection from competitors. as part of the work on the introduction of a complex loyalty, emotional component of the main task of the organization is seen the activity on formation of corporate culture of customer service. according to t.p. gerpotta, “customer focus means a principled position of the enterprise, which is reflected in the desire of all its departments and staff to quick and flexible to identify and satisfaction of needs and requirements of actual and potential customers” (rayheld, 2005). also, in terms of impact on the emotional customer loyalty, the important, role is played by measures aimed at providing customers with a variety of intangible benefits associated with the personalization of the service (including birthday cards and other holidays), the development of additional services that increase the ease of interaction with the organization, an invitation to join the exclusive club of privileged clients, etc. an important stage of building customer loyalty is to achieve a high level of satisfaction with products and services of the organization, as well as the level of service and quality of service provided by the company to its customers. moreover, during the formation of the complex loyalty it is important to provide the presence of a variety of measures aimed at ensuring the company’s clients both material and non-material preferences. so for all this it is important a skillful effective management of the organization. 6. the concept of “customer relationship management (crm) system” crm concept is a response to market demand to obtain the means to retain existing customers and attract new ones. crm-system – is an approach in business that puts the customer at the center of the enterprise activity. crm requires a company strategy, customerfocused, aimed at the efficiency of sales and service. crm definitions abound. a more appropriate to consider the concept of crm, in two contexts as a business strategy, and how automated customer relationship (crm-system) control system (bubentsova, 2006). two concepts – crm and crm-system, confusion between which often creates misunderstandings. crm – a concept, ideology, strategy, the core of which is the business customer focus. this model of mutual relations with clients, in which all the ways and means of communication with them – including the work of a sales manager, advertising, delivery, service, information technology, etc. – work so that not only meet customer needs, but also anticipate their expectations, needs and preferences. the main objective of this approach is increasing customer loyalty to the company and its products, which ultimately helps to keep old customers and attract new ones. now we turn to the concept of “crm-system.” this term denoted a perfect information system, the purpose of which – to automate business processes that ensure the interaction of all of its units to customers at a level determined by the crm – ideology. such a system, on the one hand, solves the tasks aimed at satisfying and retaining customers, on the other – provides optimization of the company by reducing the costs associated with search and information processing, data analysis, sales management, etc. ideal crm-system functionality includes a database of products, services and prices of the company, information about the state of the market and competitors (knowledge management); planning system (scheduling and resource reservation); contact management modules (contac management), operational manage interactions with customers (activity management), concluded transaction management (project management) and potential transactions (opportunity management); it contains tools for telemarketing, generating reporting (reporting); it provides automatic preparation of commercial offers, allows the analysis and segmentation of the target audience, create a list of potential customers and to distribute them among the sales representatives, to schedule marketing campaigns and research and analyze their results. thus, crm-system – is the ideal model, which includes a complete set of tools that can potentially be claimed by different organizations on the various stages of their development. in principle, this model can be implemented, but the system will be too expensive, and some of the functions (for each company is its own) would be unclaimed due to specifics of the business, industry, organizational structure, etc. however, a comprehensive overview of the crm-system model is necessary to estimate the specific solutions of crm class. on the assumption of this definition, we can say that crmsystems in their perfect embodiment do not exist. on the market there are products which can be compared with the global model and assess the degree of their compliance with it. in this regard, more accurately could talk about crm-solutions, which means a certain set of functional, created on the basis of a particular information system. crm – a business attraction strategy (choice) and customer management aimed at optimizing their value in the long term. crm assumes the presence in a company, philosophy and culture, customer-oriented, aimed at the efficiency of the marketing, sales and service. crm-applications enable effective crm, provided that the company has specific goals, strategy and culture (figure 1). the use of crm-systems is advantageous for each company, but the greatest benefit of crm-system companies bring the sector “business-to-business,” using the method of direct sales of goods and services to the final consumer. product or service here – is the goods, the benefits of which the consumer is not always immediately visible. or they (goods or services) are in a highly competitive market, providing customers with the variety of choice. examples of such companies are computer, advertising, consulting firms, banks, and others. direct sales imply a direct interaction between employees of the vendor with the customer. and the success of cooperation often depends on how well the manager prepared for a meeting with a client. that is, the quality of work with the client, provided full information about it, becomes kiseleva, et al.: the theory and practice of customer loyalty management and customer focus in the enterprise activity international review of management and marketing | vol 6 • special issue (s6) • 2016 101 an important competitive advantage. especially in cases, where the company’s business is built on long-term deals with the cycle of implementation. the ability to track the history of work with the client to predict his reaction to the taking action, all this sharply increases the company’s chances for successful completion of the transaction. ideologically the basis for the functioning of crm-system is a centralized database that serves the whole process of customer relationships at all its stages. because of this, the most common implementation, providing the most efficient organization is to implement with the use of the client-server principle of interaction (panova, 2005). the application is usually implemented in the form of a “thin” client, i.e. users get access to the information stored in a central database through a web browser. moreover, it can be both internal and external to the company’s users. the analytical part of crm-server functionality may include two components: a dbms for storing and processing the basic information and olap tools (english online analytical processing, analytical processing in the real-time) – the technology of information processing, including compiling and publication of dynamic reports and documents. it is used by analysts for fast processing of complex queries to the database and to analyze data in on-line mode. the most widely used olap is in products for business planning and data warehousing. to implement the functional logic on the server side they use server implementation of applications, such as asp (english active server pages – “active server pages”), jsp (english java server pages – server pages with the use of java). there are several infrastructure deployments of crm-systems. one of the forms of functioning of crm-systems is a form of lease with the provision of related services, such as data backup and maintenance of the “hot” recovery. in this case, all of the software required for crm, granted by a provider and stored on his server. it is accessed by the contracting authority on a rental basis. in addition to the software service the provider provides the hardware platform, network infrastructure and provides training for staff. most often it is expensive ready-made or finalizing system for a particular customer. another form of use is the deployment of the system with the use of the infrastructure of the organization. in this case, the service of information technology is to do not only maintaining of the operability and system stability, but also, as the rule its completion. basic tools that include control technology of relationships with customers: • the collection of all the accumulated customer’s information into a single customer base; • the collection of history of the relationships with customers, partners and suppliers; • the exchange of information between departments and employees without “information gaps;” • automation of work sequences (business processes) and their integration into the work environment; • obtaining of analytical reports; • sales forecasting; • planning and analysis of the effectiveness of marketing activities; • control of customer satisfaction, registration and analysis of complaints; • the accumulation of knowledge of the company and management. classification of crm-systems. most of the existing crmsystems were born from systems that have long automated certain principles of interaction with customers. many of the current crm-systems are the old sales force automation (sfa) systems (sfa – automation system works selling agents), sales and marketing system (sms) (sms – system information about the sales and marketing), customer support system (css) (css – system customer service) and similar ones, which have a few new fields and changed names and positioning. earlier crm-systems, as a rule, were “one-sided” (so-called “contact management,” or system support marketing activities, or a system to automate the service). however, almost all current crm-systems have to a greater or lesser extent, all the listed capabilities and the information processing levels (bhat and darzi, 2016). there are many classifications of crm-systems. one of the most common classifications is the division of modern crm-systems information processing by levels and tasks, which are solved by companies while using crm, on three key areas: 1. operational crm; 2. analytical crm; 3. collaborational crm. operational crm is a level of automation of operational procedures and implementing operational managers at various levels. they provide the registration and on-line access to basic information on events, companies, projects, contacts, documents, and so on. in russia, it is the information systems of this level, is often called crm-system. to this layer one can refer the frontoffice systems of marketing automation, sales and service; systems of integration of front-office and accounting subsystems; proper accounting systems, storing and processing financial information about customers. the consumers of automation results at this level figure 1: the focus of the company’s strategy with the concept of customer relationship management kiseleva, et al.: the theory and practice of customer loyalty management and customer focus in the enterprise activity international review of management and marketing | vol 6 • special issue (s6) • 2016102 are the direct executors, the staff of departments working with clients: marketing, sales managers, secretaries, heads of relevant line departments, the commercial directorate, and office of service support. it is important to note the fact that such systems provide reliable integration between the individual subsystems. analytical crm is a level of automation of administrative processes related to the in-depth analysis of data on the client base of the company. accordingly, information systems, included in this layer, are the systems of data warehousing, operational systems of the statistical analysis of the customer base. such systems provide reports on primary data, in-depth analysis of the information in the various sections (sales funnel, analysis of the results of marketing activities, analysis of the effectiveness of sales by product, customer segments, regions, etc.). the consumers of automation results at this level are often leaders involved in the strategic management of the company. among the problems to be solved with the help of analytical crm, are the synchronization of disparate data sets and statistical search of regularities in these data to develop the most effective marketing strategies, sales, customer service, etc. it requires good integration systems, a large amount of statistical data-established, high-quality analytical tools. analytical crm is less popular than operational. its foundations come into contact with the concepts data warehousing, data mining, so system suppliers in these areas actively promote and position their systems as an analytical crm system (e.g., sas). this class of systems is most applicable, electronic commerce. the data generated by such systems successfully used by marketing departments, as well as they can be provided to the client. it is possible a combination of operational and analytical systems. it is called crm for managing companies. they allow you to isolate the target groups, as well as to carry out two-way communication with customers by sending promotional messages and various information materials. to do this, different channels are used: traditional and e-mail, telephone, sms. systems perform the functions of storage and processing of the results of actions. with their help, statistical databases are created. collaborational crm (english collaboration – cooperation; collaborative, concerted action) is the level of automation of close interaction with customers through various channels of communication (telephone, personal contact, electronic channels). this layer of information systems may consist of a web portal (electronic channel – the internet), e-mail systems (also online), call-center (telephone channel), accounting and planning of contacts (personal contacts). such systems allow establishing a closer cooperation with the client, as a result he can have an impact on some of the processes in the company, for example, for the design, production, service improvements, and so on. to do this, it is necessary to create the conditions for unhindered access to the client’s internal processes. these conditions may be the organization of the interviews, to change the quality of products or order of service, the creation of web-pages to keep the track of order status by customers, the notification by sms on conducted transactions in the bank account, the ability for the client independently to complete and order online, for example, a car or computer units from the available options and others. the consumers of the result of automation of this level are the same employees that in a layer of operational crm. virtually there are no systems that support collaboration crm, on the market, including the fact that collaboration process in most cases is individual and should be automated by highly flexible crmsystem. in addition, this system should be based on the cheapest and open technologies of reducing the costs of an interface building between the organization and customers. there is also sales intelligence crm, which is developed on the basis of analytical crm systems. its advantages are the possibility of holding various sales options: crossing, complementing, substituting. besides, the system gives an idea of the characteristics of goods, customer trade turnover, the company’s profit with a particular client, the results of the comparison of clients, members of the target group. another classification of crm-systems is based on their core functionality: a. sales management (sfa). in close cooperation with each customer, the company can identify the most profitable transaction, thereby increasing profits. the effective cash flow management is impossible without the crm, since these systems allow to predict with accuracy the likelihood of transactions, as well as to increase it. the reduction of expenses is achieved by leaving routine manipulation, for which employees spend a lot of time. with regard to personnel staff turnover is reduced. each employee can compare the results of his activities with the work of the colleagues. this makes it possible to adopt the valuable experience of attracting customers; b. marketing management. due to the planning and analysis of the company it is possible to conduct targeted marketing. advertising campaigns are carried out taking into account the client sample; c. service management and call-centers (system for processing complaints from subscribers, fixing and further work with references of clients). routine operations are automated, thereby the process of control order’s transmission, reduces unplanned expenses. with the system we can improve the quality of service, and hence, increase customer loyalty. any customer, addressing once and obtaining excellent service, wants to return to continue the cooperation with the company. 7. conclusion aggravation of competition, an increase in communication expenses, the emergence of the effect of consumer shortages and the growth of their expectations cause the development of the concept of marketing of the relations between consumers, which replaces the classical marketing. a few years ago, marketing strategies have been focused on attracting new customers, but recently the focus shifted to the retention of existing, the formation of their loyalty and loyalty to the enterprise. the reason for these changes is the recognition that long-term relationships with clients are economically profitable; as they guarantee regular purchases, require lower marketing expenses per customer and due to the recommendations of loyal customers their numbers increase. kiseleva, et al.: the theory and practice of customer loyalty management and customer focus in the enterprise activity international review of management and marketing | vol 6 • special issue (s6) • 2016 103 however, the majority of russian companies have no experience of establishing partnerships with their customers. the main challenges for them are the lack of a systematic approach to the management of customer loyalty and the lack of scientific and methodological knowledge of the formation of enterprise management systems, aimed at retaining customers and increasing their loyalty. for example, the analysis of introduction relationship marketing at russian enterprises carried out by the specialists showed that a regular assessment of the level of customer satisfaction carried out only 26.2% of companies and 41.8% of the enterprises cannot assess the effectiveness of programs for retaining customers and increasing their loyalty. due to the lack of attention of companies to the satisfaction and loyalty of their consumers there arises their high outflow, thereby the sales are slowing down or even declining, the overheads are increased, profits are reduced. references bhat, s.a., darzi, m.a. 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(2016), cloud service for data analysis in medical information systems using artificial neural networks. international journal of applied engineering research, 11(4), 2917-2920. . international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2016, 6(4), 926-929. international review of management and marketing | vol 6 • issue 4 • 2016926 the adoption of internet banking: clients’ perspective in oman mansour naser alraja1*, badreldin f. salim2, mohammad ahmar uddin3, mohammed yousoof4 1department of management information systems, college of commerce and business administration, dhofar university, salalah state, sultanate of oman, 2department of accounting and finance, finance college of business studies, university of science and technology, khartoum, sudan, 3department of accounting and finance, college of commerce and business administration, dhofar university, salalah state, sultanate of oman, 4department of management information systems, college of commerce and business administration, dhofar university, salalah state, sultanate of oman. *email: malraja@du.edu.om abstract internet banking enables clients to manage their accounts or carrying out their work related to the bank via the internet, whether at home, office or from any place and at any time he/she desires to do. hence, the main objective of our paper is to identify the adoption level of internet banking among the clients of omani banks. therefore, the technology acceptance model (tam) is utilized to examine effect of perceived usefulness (pu), and perceived ease of use (peou) on clients’ intention to adopt internet banking in sultanate of oman. to accomplish this goal a manual questionnaire was administered to collect the requested data to test the clients’ intention to adopt internet banking. multiple regression test was used to analyze the collected data and test the hypotheses of the paper. the findings show that the tam model interpreted 56.3% of the variance in clients’ intention to adopt internet banking. both constructs’ (pu, and peou) have a significant influence on clients’ acceptance of internet banking. the results of the study are discussed. keywords: internet banking, technology acceptance model, perceived ease of use, perceived usefulness jel classification: g2 1. introduction the dependency on technology to find new markets or penetrate existed ones, is dramatically increased especially in developing countries (chipp et al., 2006). so they built unique ways to market products and services, by combining modern telecommunications with traditional physical facilities (parhalad, 2006). in this regard, cell phone is one of the important technologies used to expand the provision of financial services to the ‘unbanked’ population (leach et al., 2007). form customers perspective, the benefits include an increased speed in obtaining services, financial savings, increased perception of control, improved access to services; whereas from banks perspective, reducing the cost of labor and/or the ability to relocate employees to more efficient activities are the targeted benefits. despite these benefits, clients are becoming more discouraged in interacting with it-based products and services, and they are seeking a better balance between technologies and direct personal interact (parasuraman, 2000). regarding to (seitz and stickel, 1998) internet banking may enhance e-business. the term of internet or electronic banking refers to the dissemination of banking services over electronic networks directly to clients (singh and malhotra, 2004). the main goal of this study is to investigate the readiness of people to use the internet banking for gaining what they want from the banking transactions. we organized the remainder of this paper as follows: in section 2, we present the literature review. in section 3, we suggest our research model and hypotheses. in section 4, we present the research methodology and data gathering. in section 5, we analyze the data using multiple liner regression test, then we point out the research results. in section 6, we conclude the paper with discussion of the study results. 2. literature review information and communication technology had been studied from different perspectives such as information technology adoption, use, diffusion, maturity (gault and peterson, 2003; karahanna alraja, et al.: the adoption of internet banking: clients’ perspective in oman international review of management and marketing | vol 6 • issue 4 • 2016 927 et al., 1999; corrales and westhoff, 2006; alraja, 2015; eadie et al., 2012; hammami et al., 2015; husain and nazim, 2015). as well as in different fields like e-government, e-business, e-learning, e-commerce, and investment in information technology (alraja and malkawi, 2015; alraja and aref, 2015; alraja et al., 2015; uddin et al., 2016; alraja et al., 2016). however, the readiness to use technology indicates to “people’s tendency to adopt and utilize new technologies for reaching goals at work and/or in home life” (parasuraman, 2000). in this meaning, it refers to what extent clients are ready to use new technologies (caison et al., 2008). meuter et al. (2005) mentioned that the readiness for using new technology by clients is vital in this regards. parasuraman (2000) developed a model called the technology readiness index. this model contains four variables they are insecurity, discomfort, innovativeness, and optimism. many other studies focused on the psychological variables in studying technology readiness, and several information systems authors they focused attention on studying the acceptance of innovation used among other theories such as technology acceptance model, tra, tpb, and doi. some scholars lately started to emphasize the significance of compile other non-psychological variables such as the awareness (devlin and yeung, 2003), adopter’s experience (e.g. karjaluoto, 2002; tan and teo, 2000; brown et al., 2004; black et al., 2001), knowledge (e.g., fredriksson, 2003), exposure (e.g., chang, 2004; barbara, 2001). schaup et al., (2006) investigate the effect of quality information and quality system on satisfaction with the site, and the results showed that the information and system quality had a large and important role in the prediction of satisfaction with the website, and then in faith to use the site. al-qeisi, (2009) found that the excellent bank website design is one of the extremely significant factors affecting the use of the service and does not affect the decision on the type of adoption under the terms of the voluntary use and of advanced experience. albugami and bellaaj, (2014) concluded that the expected performance, web site design and security are the most important influencing factors to continue using of the service. gaitán, (2015) results showed that the most significant factors that influenced the continued use of the service was the custom, the expected performance, price value, expected effort, and the actual use directly affected intention and wired habit. a several of studies have shown that ease of use of new technology (technophobia) among clients have been faced with it-based services and products (meuter et al., 2003; edison and geissler, 2003). dispute zwass (1996), mentioned that e-business maybe began in the 1960s with the electronic data interchange. but melão (2008) argues that this operation started in the end of 1990s after the wide use of the internet with business, especially with financial institutions. internet banking offers a set of attractive facilities for remote access to accounts, including around the clock availability of transaction and inquiry services, global connectivity, access to historical and recent transaction data, and clients direct control of funds movement (eriksson and nilsson, 2007; furst et al., 2002). 3. hypotheses and research model depending on the above discussed literature the researchers proposed the following hypotheses: h1: high level of perceived usefulness (pu) has positive effect on clients intention to adopt internet banking. h2: high level of perceived ease of use (peou) has positive effect on clients intention to adopt internet banking. however, figure 1 represents the adopted variables in the research model. 4. methodology this study concerned with the readiness of banks’ clients in oman to adopt internet banking. the primary data collected using paper survey. the aim of this survey is to assess clients’ awareness about their readiness to benefit from the electronic services provided by banks. regression test was used to analyze the result. the total received and completed questionnaires were 273; only 267 of them were valid for analysis. 61.8% of the respondents were male, respondents ages ranged from 18 to 50. all respondents were have electronic payment card (mastercard, visa card, and etc.), all of participants used their own electronic card for pay at shops at least on time, but only 6.4% of participants were downloaded the application of their bank. the questions of our survey was prepared depending on validated instruments (alraja and aref, 2015; glover and benbasat, 2011; koufaris, 2002; pavlou et al., 2007). we did some modifications to fit the paper topic and omani environment. then the result items are randomly ordered for each construct. the 5-point likert-type is used on the survey instrument. all items were tested for reliability utilizing cronbach’s alpha (table 1). 5. data analyze and results in our paper we utilized multiple linear regression analysis to test the adopted model. tow independent variables (pu, peou) and one dependent variable (readiness to adopt internet banking). the research object is to set the extent to which participants are ready to adopt internet banking. based on above mentioned results in table 2, the adjusted r2 = 0.563 that mean the independent variables (pu and peou) interpreted 56.3% of the variance in participants intention to adopt internet banking. in spite of the entire model was significant (f = 172.671, p = 0.00), the study variables were individually tested for significance. depending on this test the two suggested hypotheses are accepted. table 3 shows the final results of hypotheses testing. 6. discussion both factors of the suggested model are significant: pu, and peou. that mean that majority of respondents think that internet banking services will help them to be in touch with their banks and do what they need remotely, so they will be more probable to use internet or electronic banking services, to do that they believe it should be easy to download the bank’s application and through that application they prefer to have an access with the bank to get support and help in case they couldn’t complete any process. however, because people are in the initial phase of adopting this technology, so they need to know more about the benefits of using this new technology and they support the idea that the ease of use internet banking will be more likely to affect their readiness to adopt internet banking. alraja, et al.: the adoption of internet banking: clients’ perspective in oman international review of management and marketing | vol 6 • issue 4 • 2016928 the following constructs (pu and peou) are used to examine clients’ perceptions about internet banking. the study has been shown that pu can be considered important factor on internet banking embracing. this variable has assist in clarifying the main factor which affecting the clients to adopt e-banking. we have to take in consider that the environment where the study implemented is a developing country with a small market for banks in the context of a population to use all electronic banking facilities, also questionnaire is used to collect the data, so there is probability of self-report bias. in the future researchers should try to validate the final achievements of this study by implementing its variables in other environments and moderate all the constructs by other variable like culture, gender, age or by adding new constructs like risks, and/or trust in internet banking, and they have to use different types of data collection. references albugami, m., bellaaj, m. 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(2003), measuring the diffusion of information and communication technology in society and its effects: canadian experience. international statistical review, 71(1), 49-57. table1: the result of cronbach’s alpha test variables no. items result pu 5 0.783 peou 5 0.705 readiness to adopt internet banking 4 0.766 peou: perceived ease of use, pu: perceived usefulness table2: results of regression analysis adjusted r2 f significant 0.563 172.671 0.000 predictors: (constant), pu, peou. dependent variable: readiness. peou: perceived ease of use, pu: perceived usefulness table 3: final results of hypotheses testing suggested-hypotheses β t significant accepted h1 (pu) 0.501 10.920 0.000 yes h2 (peou) 0.374 8.148 0.000 yes peou: perceived ease of use, pu: perceived usefulness figure 1: research model alraja, et al.: the adoption of internet banking: clients’ perspective in oman international review of management and marketing | vol 6 • issue 4 • 2016 929 glover, s., benbasat, i. 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(2000), factors influencing the adoption of internet banking. journal of the association for information systems, 1(5), 1-42. uddin, m.a., ahmar, f., alraja, m.n. (2016), e-examinations for management students in oman. international journal of applied business and economic research, 14(1), 87-95. zwass, v. (1996), electronic commerce: structures and issues. international journal of electronic commerce special section: diversity in electronic commerce research, 1(1), 3-23. irmm_027.indd international review of management and marketing | vol 6 • special issue (s6) • 2016 165 international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2016, 6(s6) 165-168. special issue on "management of systems of socio-economic and legal relations in modern conditions of development of education and society” the criminal law infl uence on the modern electronic and information society of the russian federation anton a. komarov1*, elena a. dorozhinskaya2, valeria i. krupnitskaya3, irina v. rozuman4 1siberian institute of management-branch of the russian presidential academy of national economy and public administration, novosibirsk, russia, 2siberian institute of management-branch of the russian presidential academy of national economy and public administration, novosibirsk, russia, 3siberian institute of management-branch of the russian presidential academy of national economy and public administration, novosibirsk, russia, 4siberian institute of management-branch of the russian presidential academy of national economy and public administration, novosibirsk, russia. *email: reise83@mail.ru abstract the present work is focused on the study of the prospects for further improvement of the territorial and extraterritorial principles of the criminal law in respect of the global information space. when carrying out in russian judicial and legal reform according to the constitution of the russian federation the problems concerning protection of the rights and personal freedoms, its interests by all law-enforcement system of the russian federation are priority. certainly, considering tendencies of the informatization development of the world public process, the documentalization of criminal procedure has to be carried out by means of electronic and information technologies. the main result of our study was made by building a set of recommendations of criminal law relating to the institution of the criminal law. however, it is obvious that the criminal law in time and space is made by a few different rights institutions. therefore, in the fi rst case we receive the formal answer to the question: what law is the subject to application; and in the second-on whom does its action extend. keywords: internet, information society, criminal law, jurisdiction, electronic society jel classifi cations: k14, k40, k49 1. introduction the theory of law gives the full answer on the actions of any legal act in general. however, with respect to the individual branches of law and the very specifi c rules, often there are numerous disputes. it is well known that in the process of the legal norms implementation there are the questions about the actions in time, the persons and territories. the fact that the action of the russian criminal law focused on the particular area, it is clear from the literal interpretation of the title of chapter 2 of the criminal code, “application of criminal law in time and space.” however, it is completely absent indication of the possibility of the criminal law on the public. this is stated in the title of specifi c articles 11, 12 of the criminal code, as the limits of the law against the perpetrators of the crime. only by analyzing the rules in the entirety, it becomes clear that all the ways of the law named in the theory of law, have been embodied in the sectoral legislation. the global computer network itself represents rather interesting social phenomenon. here it is diffi cult to approve the concrete way of action of the criminal law connected with the existence of the “virtual space,” or being limited exclusively to a group of people. not incidentally, scientists often speak about the modern society evolution, which is treated as the electronic and information society now (mkrtumova et al., 2016). even in conservative treatments of the operating criminal law, action to a group of persons is differentiated in relation to the concrete territory: outand of-the state borders. at the same time, the concrete territory is always connected with concept of the state jurisdiction, and in a case about the internet, it becomes diffi cult to establish such jurisdiction. if further to continue judgment about the government sovereignty, it is clear what exactly it supports a certain law and order in the territory under control. who and what sort of law and order supports in the internet space is not absolutely obviously. therefore, there is a question of applicability as national, so komarov, et al.: the criminal law infl uence on the modern electronic and information society of the russian federation international review of management and marketing | vol 6 • special issue (s6) • 2016166 the right in general in connection with the people’s behavior in the internet. undoubtedly, peculiar public relations arise there. nevertheless, whether can they be settled by the right in general? 2. materials and methods the criminal legislation of the russian federation establishes the four basic principles of the criminal law in space: territorial, personal, real and universal. as in most countries, the territorial principle is the fundamental, and the rest merely supplement its provisions. from our point of view, it is not entirely justifi ed, since in theory most of them have the possibility of direct action, without taking into account the basic principle, as implied by scientists, nominated by the respective concept (lyubashits et al., 2015). however, we see no need to question the doctrinal position regarding the limits of the action of the principles totality applied to traditional forms of crime. we consider it appropriate to analyze the capabilities of each of the principles in isolation on their adaptation to the provisions of crimes committed via the internet. to defi ne the initial, not limited by the fact of the territorial dominations principle, the rules content we propose to start to consider some theoretical position of each of them individually in relation to the “virtual space.” the federal law “about the electronic digital signature” dated january 10, 2002 no. 1-fl accelerated the transition of the information sphere of the criminal procedure to the computer basis, but the organizational and legal development of the modern information sphere of criminal trial is not fi nished yet. today questions of legal responsibility at commission of crimes in the computer information sphere of criminal procedure are not analyzed, classifi cation of these crimes is not carried out. however, the territorial principle badly works when it is about the exterritorial and not geographical objects, such as the global computer network internet. even the national “ru” segment of the internet is only in the material sense, a set of e-mail addresses associated with the russian federation. thus, the servers ranked as this segment are not obliged to be physically in the territory of russia. therefore, in strict sense the right of the russian federation is not quite applicable to the owners of such information resources (matulionyte, 2011). even worse is the case with the russian resources located in the domain name space of the fi rst level of other states or non-state commercial segments. as to aforesaid, the organizational structure research of the criminal procedure information sphere, the crimes analysis in it, the methodological drawing up the criminal proceedings uniform legal base at the crimes committed in the information sphere of the criminal trial, the defi nition of the computer form of the criminal trial information sphere place and role in uniform system of criminal legal proceedings of russia are essential and extremely actual both for science of criminal trial, and for lawenforcement practice. the crimes appearance in the electronic-computer structure of the criminal process and the electronic documents use require the introduction of new and changing old articles of the criminal procedure code of the russian federation, ensuring compliance with criminal procedure with the new conditions of its implementation. the main problem is the impossibility to defi ne accurately a place of crime the commission. recall that in the russian criminal and procedural legislation such concept is absent, but that cannot be said about the foreign (zyubanov, 2001). instead of attempts to interpret broadly a place of the crime commission in relation to the crimes made from the territory of other state, we could suggest to expand or narrow the concept of the territory on which jurisdiction of this or that state extends. the study objects are the procedural relations arising in the practice of the law enforcement offi cials in cases of crimes in the information sphere of the criminal procedure, the structure of the computer information environment of the criminal process. the research subject are the problems associated with the use of the criminal process electronic information technologies in various stages, from the legal assessment of the crimes committed in the computer information environment of the criminal process. the methodological basis of the study is the general scientifi c method of the dialectical cognition (kobersy et al., 2015). in addition, the analysis of the criminal process structures the logical method, the system-structural analysis is used. in the crimes’ classifi cation and comparing ways to use electronic document management in the variety of foreign systems of the criminal law, the method of comparative law is applied. when conducting sociological analysis, a range of methods is used: statistical, sociological, method of expert evaluations. using the legal modeling method, the authors formulated the specifi c proposals on the improvement of a number of norms of the existing criminal procedure code of the russian federation. the works of scientists-philosophers, historians, sociologists, jurists made the research theoretical basis. the study base was made by the works of theorists in the fi eld of the criminal procedural law: a.c. alexandrova, c.b. bazhanova, p.c. belkin, v.p. bozhyev, s.e. vitsin, m. a. krasnov, p. a. lupinskoy, v. f. popov, m.p. polyakov, n. s. polevy, c.b. polenina, m.s. strogovich, v. t. tomin, a.i. chuchayev, and the works of scientists-jurists in the fi eld of the computer crimes research: t.v. averyanova, b.c. komissarova, v. v. krylov, p. k. protasov, e.r. rossiyskoy. the important place in the work was featured for studying and use of the prominent domestic scientists’ works in the fi eld of the information: i.l. bachilo, i.m. gostev, v.a. kopylov is right (baranov et al., 2015). the research empirical base is obtained in the author study of the judicial practice review of the supreme court of the russian federation of the criminal cases (according to the official publications-bulletin of the supreme court of the russian federation), the judicial statistics offi cial review, materials and criminal cases, including the decisions taken by them in the komarov, et al.: the criminal law infl uence on the modern electronic and information society of the russian federation international review of management and marketing | vol 6 • special issue (s6) • 2016 167 regional provincial courts; the analysis of the russian legislation and universally recognized international legal acts regulating legal relations in the fi eld of computer-related crime and also during interviewing. hence one, but very signifi cant lack of the criminal law universal principle. today, the universal jurisdiction is exclusively contractual nature, i.e., in fact the obligation of a particular government to take all possible measures to punish the offender, when the opportunity arises. consequently, a number of crimes, this agreement cannot extend by virtue of optionality. for example, when in state the interests, the crime against another will be committed. 3. results and discussion to increase the criminal procedure effi ciency, the coordination and interaction of the regional divisions of the law enforcement agencies and related organizations, and close and operative communication with federal structures (zhalinsky, 2006) is important. the organization of the unifi ed federal information network of law enforcement agencies gives the chance to attract during criminal procedure to consultations of the most high-class lawyers, quickly to solve complex legal problems, considering the international and various national rules of law, the united front to fi ght against terrorism, to expand possibilities of the democratic principles realization of the citizens’ access to information of law enforcement agencies (matulionyte, 2011). legal modeling based on the information technologies (shulga, 2009), the use of legal computer programs for the crimes analysis and qualifi cation is very perspective during the criminal proceedings (falaleev, 2011). in connection with the need to use the electronic information technologies in criminal proceedings based on the analysis of theoretical sources, domestic and foreign experience and the results of concrete sociological research (frolova, 2013) developed proposals to improve the criminal procedure code, which, being embedded in the practice of criminal proceedings, allow to solve quickly and effi ciently complex task proceedings (komarov, 2013). the presence of the new computer fi eld of criminal process leads to the emergence of the new crimes types that require their detailed analysis (karabulatova et al., 2016). considering a large number of the offenses, which are available in the information environment of criminal process existing today, including plunder of criminal cases it is necessary to develop measures for the information computer protection of the criminal procedure. the fact that insuffi cient computer equipment of courts, low level of the information technologies uses in the criminal procedure do not lead to mass unauthorized accesses to the criminal trial information yet, should not constrain joint introduction of information technologies and measures of their protection in the criminal, and cost of the stolen information trained in modern technologies, can be a process. in this area it is expected the extremely highest and affect the interests and lives of many people. the information protection means of criminal proceeding trial must provide two directions: the citizens’ right to know about the state public life and the citizens’ right for the government bodies’ ignorance of their private life (agamirov et al., 2015). the revival of “the general right of the civilized world” idea, which quitted the stage owing to the development of national codifi cations in the fi rst quarter of the xix century, is urged to play a crucial role in legal regulation of the electronic and information technologies use and development in modern conditions (köstlin, 1845). the need for uniform rules and take into account the jurisprudence of each country determines in the legal regulation of the electronic information technology use and development, the priority confl ict rules and legal fi ctions. for russia, the international experience can be useful in terms of the analysis of its negative part. this will allow our country in dealing with existing and future problems not to make the mistakes made by the other countries, save resources and time. to build a legal framework in the fi eld of informatization it is necessary to understand that information is the intangible object, but can be contained in the material object, which may belong to another subject. information is different from the intellectual property and is divided into public, confi dential and closed. information security in the criminal process has two components: the protection of individual rights and freedoms and the security of person, corporation, society and the state leakage at leak or plunder of information from the information environment of the law enforcement agencies. the author’s sociological survey results confi rmed the relevance of the criminal process problems of the technology information environment, poor information environment of the criminal process and the legal basis of its use. moreover, it should be noted small amount of statistical deviation of the respondents’ opinions, which indicates the high reliability of the results: 83%-against 17% from the 150 respondents. many respondents are alarmed by the possibility of unauthorized entry into the information environment of the criminal process and with the help of it carrying out the commercial and political pr. therefore, the development of legislative measures to protect the information environment of criminal process is necessary, and it is not only about the information security, which is in law enforcement agencies but about the information, which is held by experts, interpreters and other specialists. 4. conclusion the language barrier is erased the internet thanks to the technology. the third circumstance is the computer information nature-its electronic character. in order that it took the form, digestible for the person, its transformation from the machine binary code to some visualized forms, unlike the same written messages of the xix century is necessary. we believe that the computer information, possessing similar properties, may not be required quasi-object within the territorial komarov, et al.: the criminal law infl uence on the modern electronic and information society of the russian federation international review of management and marketing | vol 6 • special issue (s6) • 2016168 principle of the criminal law in space. it is, of course, the subject of rights and being fi xed on the physical carrier-the material object. its distribution and use should be regulated by other legal methods different from the earlier known. you can draw an analogy between the cash to be transported and declared by citizens and plastic cards, the funds for which are not declared. however, those and other subjects represent material values. information is the integral component of the activity of society and each person separately; it turned into a condition of implementation by the person of all other vital rights and freedoms. there was a problem of information security as conditions of security of the personal society and state major interests, from external and internal threats in the sphere of the information turn. the information security problem is among the most important priorities of national security of russia that is fi xed in the concept of national security of the russian federation and the doctrine of information security. information processes cover all public spheres 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5.0 and later.) >> /namespace [ (adobe) (common) (1.0) ] /othernamespaces [ << /asreaderspreads false /cropimagestoframes true /errorcontrol /warnandcontinue /flattenerignorespreadoverrides false /includeguidesgrids false /includenonprinting false /includeslug false /namespace [ (adobe) (indesign) (4.0) ] /omitplacedbitmaps false /omitplacedeps false /omitplacedpdf false /simulateoverprint /legacy >> << /addbleedmarks false /addcolorbars false /addcropmarks false /addpageinfo false /addregmarks false /convertcolors /noconversion /destinationprofilename () /destinationprofileselector /na /downsample16bitimages true /flattenerpreset << /presetselector /mediumresolution >> /formelements false /generatestructure true /includebookmarks false /includehyperlinks false /includeinteractive false /includelayers false /includeprofiles true /multimediahandling /useobjectsettings /namespace [ (adobe) (creativesuite) (2.0) ] /pdfxoutputintentprofileselector /na /preserveediting true /untaggedcmykhandling /leaveuntagged /untaggedrgbhandling /leaveuntagged /usedocumentbleed false >> ] >> setdistillerparams << /hwresolution [2400 2400] /pagesize [612.000 792.000] >> setpagedevice . international review of management and marketing | vol 6 • special issue (s6) • 2016278 international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2016, 6(s6) 278-283. special issue on "management of systems of socio-economic and legal relations in modern conditions of development of education and society” services infrastructure forming in the process of transport logistics stock movement aleksei v. bogoviz1, yulia v. ragulina2, svetlana v. lobova3*, boris m. zhukov4, olga m. stepanova5 1all-russia research institute of agricultural economics, federal agency of scientific organizations, moscow, russia, 2federal research institute of system analysis of the accounts chamber of the russian federation, moscow, russia, 3altai state university, barnaul, russia, 4southern institute of management, krasnodar, russia, 5peoples friendship university of russia (rudn university), moscow, russia. *email: barnaulhome@mail.ru abstract logistics as a scientific and practical direction, covering a wide range of business activities, has gained a strong position in the world economic system. as a priority has proved the concept of integrated logistics, based on the consolidation of the participants of freight and goods movement system to ensure continuity and regularity of material products and associated information, service and financial flows in the intra, regional, inter-regional, sectoral and international levels. the experience of the developed capitalist countries shows that the use of logistics systems is to reduce transport costs by 7-20%. the costs of handling and storage of material resources and finished products are reduced by 15-30%; total logistics costs to 12-35%. accelerated turnover of material resources by 20-40%. reserves and resources of finished goods reduced by 50-100%. in short, the game is worth the candle. the formation of market relations in russia urgently requires the formation of transport and logistics infrastructure. its fundamental, system-elements should be hubs, main and local railways, container and working with products terminals, multimodal transport and logistics centers. in large network-wide units of federal and international level, such as moscow, leningrad (st. petersburg), krasnodar and others. target-consistent creation of a network of regional terminals and logistic centers, union-united in regional integrated transport and logistics system. keywords: mobile service system, transport logistics, transport hubs jel classifications: l14, l17, l23, m11 1. introduction to date, the problem of the rational organization of the service is one of the direction of the concept of the federal program “transport strategy of russia until 2030” the harmonization of the development of all spheres of transport in view of its integration into the global communications network. in this regard, urgent task of developing a service infrastructure in the form of transport logistics subsystem, corresponding to it in structure and complexity in order to ensure passengers and operational staff of financial, information and resource service on the whole route. 2. materials and methods the theoretical and methodological basis of the study served as a scientific work in the field of management, logistics, legislative and regulatory acts of the russian federation, the concept of logistics, techniques and methods of scientific knowledge (comparative and systematic analysis, sample surveys, synthesis). the issues of formation of service infrastructure in the process of movement of goods transport logistics involved authors: a.k. antoniuk, hadjinsky, göttingen (göttingen, 2000), golikov (golikov, 2004), holstein (holstein and yudin, 2013), dybskaya bogoviz, et al.: services infrastructure forming in the process of transport logistics stock movement international review of management and marketing | vol 6 • special issue (s6) • 2016 279 (2012), kurochkin (kurochkin, 2012), landsman (landsman, 2012), lukinskogo (lukinskogo, 2007), lutsk (landsman and lutsk, 2010), melnikov (melnikov et al., 2014), mirotin (mirotin and bokov, 2005), mirotin (mirotin et al., 2003), nikitin (nikitin et al., 2007), nikolaichuk (nikolaichuk, 2012), i.a. rachkovskaya, i.s. savchenko, a.g. shirladze, s.v. tashbaev, a.s. chubukov, d.b. yudin. 3. discussion currently, russian companies is acutely the question of optimization of activity, since modern conditions of economic development in russia are rooted principles of market economy, competition is growing. in this case it is necessary to pay special attention to the system, which makes it possible to improve the management of financial flows, which will lead to the optimization of the entire business. when a country enters a foreign capital that increases competition. in many areas of the reserves increase competitiveness in russia are almost exhausted. just search for new competitive solutions engaged in logistics. there is a need to devote more time to optimize economic activity, which is linked to the issues of creating effective operation of logistics systems. in principle, this problem can be described as the creation of competitive advantages by reducing logistics costs and improve service quality through the creation of integrated logistics systems. any successful company aims to enter the international market, especially in a globalized world economy, which is characterized by a single economic space of the pro-creation of a common market and monetary means of production and distribution. 4. globalization and logistics the globalization of logistics is an integral part of similar processes that occur in all areas of the world economy. this process did not leave without attention and russian companies, but to go on the international scene with outdated methods, concepts and methods of implementation of logistics operations, thus dooming themselves to failure. as a consequence, it is necessary to use modern technologies and innovations, resorted to by developed countries that are actively using the achievements of scientific and technological revolution, which is based on computer technology. the correct structure and the use of logistic systems, which is based on the introduction of international standards of operation of integrated logistics it is a success in the international markets and the integration of russia into the modern structure of the external economic relations. logistics plays an important role in economic activity in a market economy, as a factor in forming the core competencies. at the moment, the government of the russian federation pays special attention to the development of logistics infrastructure and its relationship with the international logistics environment, the expansion of domestic and foreign trade and the integration of our country into the global international market, namely, the question of russia’s accession to the wto. also on the agenda is the question of forming the government of a powerful macroeconomic demand for the development of international logistics infrastructure, as one of the main underlying factors affecting the dynamic and steady growth of the economy and strengthening its position in the international market. the use of logistics methods of planning, management, control and regulation of passenger traffic in space and time from its original source to the final consumer in its essence and purpose involves service support. this requirement is consistent with modern technology automation of financial and information services to passengers and people on the basis of the mobile terminal service system (cns), which includes a network of terminals, storage intelligence and software sap bi software. transport logistics is the most appropriate medium of interaction of transport processes and service. the starting point for the communication parameters and passenger service subsystem is the fact that all its input parameters are generated in each transport unit by separate routes, types of communications and correspondence (size, types and dynamics of admission requirements for services). accordingly, all the services you need to function in a mode of transport nodes, performing services according to international standards. the transport logistics methodology provides a service module, and its relationship with the rest of production and the transport module through a general criterion the amount and quality of passenger and freight traffic. the concept is based on a modular principle of formation of integrated transport and logistics systems involves interlinked development of each module, including the service. but any interaction subsystems, especially in transport, imposes wide increased demands on the reliability of joint functions. experience placing terminals with control via sap analytical repository of information in real time has shown that the lack of an integrated approach to their operation leads to a sudden failure, prolonged downtime, increase the number of emergency repairs. these factors negate any potential benefits of mobile service, reliability of information and financial services, the image of the terminal network owner and the profit in the service business. that is why the introduction of mobile service networks linked to the requirements of their sustainability (hadjinsky, 2013). spontaneously installed terminals do not provide coverage for high-quality and sustainable service the growing demand for variable services, especially in the new transport hubs. they cannot be reliably operate and constantly upgrade. experimental calculations and implementation of the methodology of formation and functioning of a network of terminals were performed in relation to the transport nodes located on the route moscow sergiev posad yaroslavl highway in jsc “platform” a leading developer of the investment project implementation of new service technologies on roads and in a number of sap-based regions bi. data analysis was developed regulations on economic performance (the average check, the revenue, cost, volume of transactions), and bogoviz, et al.: services infrastructure forming in the process of transport logistics stock movement international review of management and marketing | vol 6 • special issue (s6) • 2016280 technical readiness of control terminals park (availability factor, the reserve fund), which allowed to increase the sustainability of the service. and structurally terminal service network, as the integration of the work of the transport hubs, it becomes necessary transport logistics subsystem. service on international routes judged by the standards of the countries in the passage of these routes all over (in time and space). the passengers, operating personnel must be able to meet the needs of information and financial services for business and personal use on the whole route. otherwise, the transport unit does not meet international standards of quality, as a necessary condition of their continued existence. selection of the optimal structure of tlc, which includes terminal networks, service repair and maintenance, collection and software related to the complex problem of accommodation, which is considered in the class of mathematical programming problems (göttingen, 2000). development and maintenance of market change on transport, has led to a significant increase in the requirements for management information and financial technology. it is not enough to use the automated system only with developed accounting functions without consolidated analytic functions. new service technologies had become gradually became an effective means of making a profit. but for this purpose, it took their full integration in all areas of vehicle production in the form of terminal service system. it is this integration corresponds to the requirements of the world transport system, international transport corridors that are characterized by harmonization of all kinds of services to passengers, an integrated approach to linking all areas of the transport business, including the service subsystem. its function is to: • financial and resource service business and personal needs pass fats and operational staff participants of the transportation process; • information service participants of the transportation process to get needed information on individual needs. the structure of the service sector in the road and rail transport includes several levels – service networks, centers and individual companies providing a complex of services and payment for services, different nomenclature and functionality at all stages of the logistics. in this structure, a special place is occupied by the mobile service. in the domestic transport market it is not enough to pursue the best options “price-time.” expanding the scope and scale of services connected with the creation of adequate opportunities for customers of financial transactions throughout the entire journey, including the fees for the international management standards. expanding demand in the service sector and international interregional integrated transport and logistics centers (tlc). development of perspective volumes of transportation of passengers and goods especially in international traffic, and the need for compliance with international quality level of service impose strict requirements to improve the russian transport system (hadjinsky, 2005). integration service networks in tlc structure also creates potential for sap in terms of the creation of a data warehouse and business units intelligence (hadjinsky, 2013). optimal placement of the terminals on roads (highways) in the centers of towns and regions and to other potential services market objects associated with the problem of maintenance of the population and the organization of passenger traffic, manage “demand” and the service rates. terminals installed in areas of maximum population and movement of passengers (such as transport hubs, supermarkets, etc.). the potential for a permanent demand for services (kobersy et al., 2016; kobersy et al., 2014). advanced placement points can be determined by the results of the initial stage of the analysis of demand for services. however, the choice of the optimal placement of a multivariate economic objective, since they are fundamentally different at each node: the demand for services, competition, maintenance costs, sensitivity to changes in demand for payment (depending on the population). transport systems in different countries around the world are actively engaged in projects related to the mouth, posing the electronic self-service terminals to the same standard. implementation of these solutions should attract more passengers, as well as the flexibility to respond to changing needs in the area of service. however, it is noteworthy features: • first, the increased demands on the reliability of information and financial services, trouble-free operation of terminals in a high mobility of passengers; • secondly, the need for a systematic campaign to passenger service and operational staff in real in different nodes of the metropolis and on the way; • third, significant capital intensity of this investment project in sections starting investment of computer technology and software, not only in the terminal, but also in the operational infrastructure (technical operation of the service and collection). in this context, methodological support service infrastructure includes: • the economic justification of investment in the reliability of terminal networks, the corresponding covering demand for sustainable financial and information services to passengers and operating personnel; • monitoring organization (based on sap bi) and effectively adapt operational service composition and service modes, depending on changes in demand and, consequently, the structure of the terminal service system. it should be noted that the current direction of development of transport logistics is the development and efficient functioning of the service subsystem for the financial, resource and information service for passengers and operating personnel. the modernization bogoviz, et al.: services infrastructure forming in the process of transport logistics stock movement international review of management and marketing | vol 6 • special issue (s6) • 2016 281 of the transport infrastructure of megacities, equip highways, subways, railways, new technology services related to the transition trend towards cashless treatment. implementation of this direction is associated with the choice of the optimal structure of the service subsystem, providing reliable operation of terminals in the tlc. 5. features of development of logistic transport system of russia in recent years, we often hear and use the word logistics, but few completely understand the meaning of this term. logistics in modern society is the means to achieve the strategic objectives of enterprises by coordinating the flow of processes and crossfunctional integration (karpova, 2013; shkurkin et al., 2016). today made a mistake to assume that logistics is inseparably linked only to transport, but it is not so. so, allocate the purchase, production, sales, warehouse, logistics, inventory, logistics services, logistics, retail, etc. but it is necessary to give due, transport really is not the last place in the formation of logistics infrastructure, its activities are manifested in various spheres of logistics, on-since without transportation, a powerful logistics strategy cannot be realized in full. indeed, the value of freight currently cannot be overestimated. transportation of goods, as a service in demand, like a big business, and a private person. the difference is only in the scope and volume of the goods transported and the distance at which the goods are carried. on a geographical basis cargo can be divided into international and domestic. international transportation is carried out on the basis of international treaties and agreements concluded between the countries. transportation of goods in the country is carried out according to the rules of the state, which basically contain customary provisions of international agreements. by type of transport used in the transportation of cargo are four main types of wasps’ transportation: road, sea, rail and air. the use of different modes of transport has its own characteristics, advantages. therefore, depending on the objectives for the delivery of goods, the decision on the choice of transport and route. it should be noted that the international transport of a consignment, which often between states no land communication, the most commonly used vehicles of various kinds. transportation of shipments using a variety of vehicles called modal transportation. big business is actively using transportation services, as international arena and the domestic market. unlike businesses, individuals use freight solutions for local problems. typically, this apartment or holiday moving, delivery of building materials, household items, etc. transportation of private goods, for the most part, takes place over short distances within the boundaries of a city or region. for such shipments do not require heavy trucks, and transport companies are using low-tonnage vehicles. on long-distance routes are often used transport team when one vehicle carrying the goods of different senders. long-distance trucking teams often are made using the railway or heavy vehicles. transportation market is constantly evolving, it appears the new players and new technology. the process of transportation is improved through the introduction of new logistics technologies (sergeev, 2012). for almost any load there is a suitable mode of transport to deliver the goods at destination at the lowest cost in the shortest possible time. customer can only select the right shipping company that will perform the task professional cargo delivery. transport is an important element of the economy, whose main tasks are: • providing connections between regions of the country; • meeting the needs of the population in transportation; • raising the level of economic efficiency. these problems cannot be solved with one type of transport. therefore, in russia all modes of transport interact, complement each other, forming a transport system, which is represented in auto rail, water-in pipeline, sea, air and river transport. transport infrastructure a combination of all transport types, combined with each other points, in which there are several types of transport and goods carried exchanged between them. main functions of the transport system: • realization of the benefits of territorial and inter zonal division of labor; • transportation of results of economic activities and population; • ensure the functioning of inter branch complexes and relationships, both within and between regions and countries (dmitriev, 2012). the transport infrastructure of the russian federation is a set of vehicles to be included in the concept of infrastructure, operating in the country. transport network in russia one of the most extensive in the world, it includes: • railway traffic routes 87 thousand km; • roads with hard surface 984 thousand km; • overhead lines 600 thousand km; • river waterways 115 thousand km; • oil and gas pipelines 210 thousand. km. young russian logistics industry needs to develop technology compatibility times-personal methods of transport: sea, river, rail and road (chueva et al., 2016). and while transport car remains the main and most effective way to deliver weights domestically. bogoviz, et al.: services infrastructure forming in the process of transport logistics stock movement international review of management and marketing | vol 6 • special issue (s6) • 2016282 changes in the economic and political situation that took place in the russian federation for 2014, reflected on the state of the domestic market of transport and logistics services. according to rosstat, in the first 9 months of 2014 in comparison with the same period of 2013 cargo in road transport decreased by approximately 2.5% and on a railway by 1.2% (according to jsc “russian railways”). according to ministry of transport in the first half of 2014 compared to the same period in 2013 aviation cargo turnover decreased by about 6%, which is presumably due to the instability of exchange rates and the negative investment dynamics. there are several trends formed in 2014 in the russian transport logistics (karpova, 2014): 1. in connection with the change in the foreign policy situation and the desire to explore new business areas, according to ministry of transport trucking large and medium companies in 2014 declined in five of the eight federal districts and grew up in the central federal district (3.9% in 2013), siberian (+0.5%) and the far east (15%). also, if you compare with 2013 years in the study period, the volume of cargo shipment by “russian railways” network towards the ports of the far east, they increased by 12%. 2. another trend is to reduce the volume of imports of a number of food products from europe, which is largely associated with the sanctions against the russian federation. according to experts, the problems on the russian market of freight logistic services related not only to the political situation in the country and the crisis in the economy, which will definitely make the system deficiencies of the domestic transport logistics more visible and more exacerbate them. these problems are also associated with one of the highest levels of transport and logistics spending for subjects any economic activity, especially the production. according to various estimates, these costs reach 20% of gdp, which is about a quarter more than in china, and nearly three times more than in europe. according to the first two months of 2015 recorded a significant increase in turnover of russia’s southern ports. according to the association of sea commercial ports, the growth of turnover southern harbors has shown its greatest dynamics (22.1%), ahead of its main competitors in the baltic sea (8.1%). the share of the harbors of the azov-black sea are almost a third of total russian turnover. the transport system of russia as a whole and some of its key segments in need of investment and do not have the reserves’ long-term sustainability. “significant” “places” on the network of railways and roads are ways to sea ports, airports and border checkpoints (dmitriev, 2012). according to forecasts of ministry of transport of russia, by 2030 the share of turnover in the harbors of the azov-black sea basin, including the crimea, will be more than 400 million tons of cargo per year, which is twice the volume today. according to the forecast expert, the market structure of transport and logistics services in 2016 will appear as shown in the figure 1. as can be seen from the figure, the growth trend of storage services is maintained (in 2013, the storage services market shares of 3.2%). today it is the most promising segment of the market of transport and logistics services. but, at the same level of storage infrastructure remains quite low. so, of all warehouses volume in russia only 4% opportunity to provide high-speed execution of loading and unloading a truck. 6. program “development of russia’s transport system (2010-2020)” in accordance with the decree of the russian federation to the federal target program “development of russia’s transport system (2010-2020)” the government of the russian federation will be held following program: • development of modern and efficient transport infrastructure for the acceleration of movement of goods and lower transport costs in the economy; • increasing the availability of the transport complex of services for the population; • increase the competitiveness of russian transport system and transit realization in capacity of the country; • improve the safety and sustainability of the transport system; • improving the investment climate and development of market relations in transport. to a c h i e v e t h e s e g o a l s r e q u i r e s t h e f o l l o w i n g t a s k s (shcherbakov, 2013): • development of means of communication (public roads, railways, inland waterways); • the construction of high-speed roads and railway lines for the organization of high-speed passenger movement; • formation of a single road network year-round accessibility to the public; • the development of the airport network (airports-hubs, nodes and local domestic russian aero-ports); • increasing the capacity of russian ports, etc. transportation through the territory of russia is uneven due to the structure of the resettlement of the population of our country. main highways are located precisely in the european part of the country. figure 1: forecast of the russian market structure of transport and logistics services in 2016-2017 bogoviz, et al.: services infrastructure forming in the process of transport logistics stock movement international review of management and marketing | vol 6 • special issue (s6) • 2016 283 the transport sector, as well as all branches of our national economy, requires the mobilization of investments. the problem of formation and development of our country’s transportation does not give due importance to the government level: there is a large number of plans for reforming the logistic transport system of the state, but most of them have remained on paper, completely unfulfilled in life. 7. conclusion thus, based on this article, we can infer that the transport logistics market is faced with problems such as the poor infrastructure of the russian federation, a huge geographical extent of the country, lack of investment and growing demand for transport and logistics services. to address these problem requires deliberate state policy of development of logistics, which could make it one of the leading sectors in the domestic economy. to secure the implementation of service technology becomes important stage monitoring economic performance and condition of the terminal network factors: the volume of demand, the placement and loading of specific terminals, their status, uptime and operating costs and profit. stage monitoring should be performed based on sap bi software in real time to govern the operation of the terminal service system. the newest system property service networks, as opposed to locally installed thermo-channels, is the ability to customize and adapt to the expense of the general reserve fund services market changes, repair and maintenance services using analytical sap storage capacity. thus, developed and tested in practice, technical, methodological and pro-software enables the mobile terminal network as a service component-conductive transport and logistics system of domestic and international passenger and freight traffic on lines of communication. references chueva, t.i., niyazova, g.m., metsler, a.v., shkurkin, d.v., aznabaeva, g.h., kim, l.i. 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(2016), modernization of the sphere of tourist and hospitality industry of the south of russia as a growth factor of socio-economic stability of the region. international journal of economics and financial issues, 6(1s), 101-106. . international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2017, 7(1), 373-378. international review of management and marketing | vol 7 • issue 1 • 2017 373 ethical sensitivity of accounting students: evidence from malaysia suba ranjini nadaraja1, mazlina mustapha2* 1faculty of economics and management, universiti putra malaysia, 43400 upm, serdang, selangor, malaysia, 2faculty of economics and management, universiti putra malaysia, 43400 upm, serdang, selangor, malaysia. *email: mazlina05@gmail.com abstract the goals of ethics education include the fostering of awareness about ethical components in managerial decision making and assist the students to apply ethical analysis to daily business activities. it is claimed that the inclusion of ethics in accounting curriculum can give students guidance as to how to deal with the real business situations. this paper investigates the importance of ethical sensitivity of accounting students and how ethics education would affect them. specifically, it attempts to examine how attending ethic classes would affect their decision making. questionnaires were distributed to 114 final year accounting students at the beginning of the semester (pre) and at the end of the semester (post). interviews were also conducted to understand the issues of the study. paired sample t-tests were employed to analyze the data. the results appear to suggest that the final year accounting students understand the importance of ethics in general. the paired sample t-tests results show that after attending the ethic classes, their ethical sensitivity improved. however, when they were given some ethical situations to assess, the students indicated that they possessed moderate ethical sensitivity for both pre and post results. keywords: accounting students, ethics, ethics education, ethical sensitivity jel classifications: i290, i230, m490 1. introduction it is claimed that as the business environment becomes more complex, tomorrow’s business leaders need appropriate training to handle questionable ethical situations when they arise (richmond, 2001). ethical sensitivity towards ethical situation serves as a kind of triggering mechanism that starts the ethical decision making process (saat et al., 2010). williams and elson (2010) claim that students graduating with accounting degrees are not familiar with professional codes of ethics, and do not have the ability to detect nor address ethical accounting dilemmas. furthermore, in the complexity of today’s business environment, students still need additional guidance for making ethical decisions, which can help them to recognize the ethical dilemmas that are likely to arise while performing their jobs, as well as the rules, laws, and norms that apply in the business context. this is where ethics courses and practical training play a role in the universities. ethics courses would give the basic guidelines to the students about what right ethical practices comprise of and practical trainings provide exposure to accounting techniques and problems which are usually not encountered in the classroom (thompson, 2011). according to bampton and maclagan, (2005) ethical thinking is a generic competence, and ideally should be part of any curriculum. the view that ethics education, when properly incorporated into the curriculum, can make a difference in the attitudes and behavior of business students who are the future managers. such views received widespread attention and support after recent corporate scandals (luther and karri, 2005). however, there is also the consideration that, even if ethics education is effective in achieving such goals, this may only have a short-term impact (bampton and maclagan, 2005). accounting curricula must prepare students for their professional careers in accounting (williams and elson, 2010). jackling et al. (2007) support this view by noting that members of professional accounting bodies worldwide acknowledged that ethics should be part of the accounting curriculum just like any other accounting technical skill courses. previous studies claim that measuring students’ ethical sensitivity on whether they were given chances to make ethical decisions or encountered an ethical dilemma or ethical challenges is important to ensure that accounting students are properly developing adequate ethical reasoning skills within their undergraduate curriculum (chan nadaraja and mustapha: ethical sensitivity of accounting students: evidence from malaysia international review of management and marketing | vol 7 • issue 1 • 2017374 and leung, 2006). on the other hand, there are also people who doubt the necessity of ethics courses because they do not believe that ethics could be taught or learned in classrooms and suspect the ill timing of teaching ethics at postsecondary level and assert that ethics should be learned earlier. ethics courses have stimulated much discussion in society. there are conflicting views on whether ethics can be taught and conflicting expectations about how the teaching of ethics will lead to more ethical behavior (ho and lin, 2006). in addition, there are limited studies examining accounting students’ ethical sensitivity and how ethics courses and practical trainings help in exposing them compared to theoretical knowledge. thus, considering the important of this issue, this study aims to examine the ethics courses offered by malaysian public universities as part of accounting curriculum. specifically, this study would examine how ethics classes have assisted the students in their ethical decision making. in addition the students were also asked about the ethical situations/dilemmas that they faced during their practical training. it is claimed that based on the given exposure and experience, it is important to measure whether students are really prepared to face ethical challenges of the real world. although students benefit from the practical experience, some may be receiving negative signals from the training firm where the ethical climate is less than satisfactory (saat et al., 2010). this study is further supported by richmond (2001) who has argued that if socialization into the accounting profession actually begins during the collegiate years, it is important to the profession that undergraduate accounting students’ ethical reasoning skills are properly measured and understood. 2. related literature discussing about accounting profession, myyry (1993) reports that the professionals are relatively free to make their own decisions and often they have power over their clients. on the other hand, greater autonomy brings with it greater responsibility, thus professionals are more responsible for their professional behaviour than individuals working in occupations with a limited amount of autonomy (myyry, 1993). in line with that, recent developments in the profession (e.g., increased competition, broadened scope of services, frequent litigation) as well as rapidly occurring legal, political, social, and economic phenomena has intensified demands for an increased ethical awareness among accountants (ward et al., 1993) and future accountants. thus, ethics education is claimed to be important (higgs and kapelianis, 1999). business ethics as a subject has received a great deal of attention in recent years. the issues have ranged from what constitutes ethics to possible methods of altering ethical beliefs. perhaps the most widely examined topic in business ethics and ethical behavior in general, involves factors contributing to individual differences in ethical beliefs (peterson et al., 2001). taking a course in ethics appears to improve students’ ethical sensitivity and belief that ethical behavior is associated with successful business outcomes (weber and glyptis, 2000). gandz and hayes (1988) suggest that the goals of ethics education include the fostering of awareness of the ethical components of managerial decision making, the legitimization of ethical components as an integral part of managerial decision making, the provision of conceptual frameworks for analyzing the ethical components and to help individuals become confident in their usage, and the helping of students to apply ethical analysis to everyday business activities. the inclusion of ethics in accounting courses can give students guidance as to how to deal with these situations (bampton and maclagan, 2005). while many facets of one’s ethical personality are determined during adolescence, this ethical personality continues to change and develop well into adulthood; therefore, in order “to function ethically in professional situations (one) requires special education and preparation” in conjunction with one’s professional training (borkowski & ugras, 1992). however, sugahara, urasaki, minghai and boland (2010) argues that different cultures have different definitions of ethics in the context of accounting education because ethics education programs in each country reflect its national and cultural environment in addition to its’ education system. mcphail (2001) reports that the most important objective of ethics education is to disrupt students’ perceptions about their profession, themselves and the impact that their actions, as accountants, have on other individuals. in addition, hihebeital and jones (1992) noted that an assessment on the effectiveness of ethics instruction could be made regarding the students’ ability to identify alternative responses to a moral situation and the effects of various moral alternatives on various stakeholders. students also should be able to evaluate the ethical implications related to a particular accounting issue by referring to various ethical principles. reviews have revealed that ethical conduct and education are critical to modern society, the business world, and the accounting profession. when lapses in ethical behavior by accountants occur, the profession’s credibility is endangered (kerr and smith, 1995) levy and mitschow (2008) further revealed that while the absence of more broadly educated accountants has likely hurt the profession in a number of areas, they believe that inadequate ethics education is among the most critical failures. this is further supported by wood et al. (1988) which revealed that accounting students were more willing to engage in questionable activity (padding expense accounts, pressure from brokerage firms to recommend inferior investment products, price fixing within contract bids, inappropriate christmas gifts to purchasing agents, and illegal copying of computer software) than were their business counterparts. mcphail (2001) claimed that one of the initial challenges of accounting education is to develop a broader appreciation of accounting function as a context against which the moral aspects of this practice can be explored. however, as real ethical situations are often more ambiguous than those scenarios used in ethics education programs, and thus mere recognition may not be the important variable in terms of effectiveness of ethics education, individuals might look to others in their environment to guide their behavior (halbesleben, weeler & buckley, 2005). regardless at nadaraja and mustapha: ethical sensitivity of accounting students: evidence from malaysia international review of management and marketing | vol 7 • issue 1 • 2017 375 what stage ethics education takes place, the post-enron era has presented an opportunity for critical advances in ethics education and one in which professional accounting bodies ought to have a role (jackling et al., 2007). furthermore, the importance of the work environment on ethical behavior raises the issue of the role of professional accounting bodies in not only providing professional accreditation courses for university graduates, but also the provision of ongoing professional development activities in ethics education (jackling et al., 2007). thus, this study attempts to examine this issue. 3. research method data used in this study was collected using primary sources. questionnaires were distributed and interviews were conducted to better understanding the issue of the study. the questionnaire used in this research was adapted from min (2010), cagle and baucus (2006), jackling et al. (2007), saat et al. (2010) and richmond (2001). questionnaires were distributed to all 120 accounting students at a public university in malaysia. these respondents were final year students who had gone through their practical training. the same set of questionnaires was distributed to the same respondents in the first week of the semester and in the last week of the semester. paired sample t-tests were employed to analyze the data. about 114 questionnaires were returned and usable for the study. the questionnaire consisted of four sections. the first section attempted to solicit information about the importance of ethical values to the accounting students. the second section tried to obtain information about the perceptions of the students on ethical environment of the organizations or clients’ businesses that they encountered during their practical training. ethical scenarios were given in the third section of the questionnaire to measure the ethical sensitivity of accounting students. and the last section sought information about the respondents’ socio-demographic. the respondents were required to answer based on a five point likert scale (1strongly disagree to 5strongly agree). in addition, interviews were conducted to get further insight on their ethical sensitivity. twelve final year accounting students were chosen randomly for in-depth interviews. the interview took about 40 minutes each. 4. results and discussions 4.1. descriptive statistics all the respondents were final year accounting students in one public university in klang valley. the analysis of the profile indicates that more than majority (75%) of the respondents were female and 25% of the respondents were male. more than 38% of the respondents had cgpa between 3.51-4.00. another 44% of the respondents had cgpa between 3.01-3.50, and the balance (18%) had cgpa below 3.00. 4.2. paired samples t-test paired samples t-test was run to examine the effects of having ethics classes for the sample respondents. the same questionnaires were distributed to them at the beginning of the semester (before the class started – time 1) and at the end of the semester (time 2). 4.2.1. understanding and awareness table 1 summarizes the mean score of the respondents for time 1 and time 2. the items in this table are general in nature and try to solicit the respondents’ understanding and awareness about ethics. the results appear to indicate that all the mean score for time 2 is higher than time 1 and this indicates that students were more sensitive and aware about what was required from them (such as what was ethically right and what was ethically wrong) as citizens when they graduate and enter the job market. for example, the scores are significantly different between time 1 and time 2 for item “a person should make certain that their actions never intentionally harm another even to a small degree” and “being ethical and socially responsible is the most important thing a person can do”. table 1: understanding and awareness about ethical values item mean t sig (2tailed) pair 1 one should take action only when sure it is morally right time 1 3.75 -1.808 0.077* time 2 3.98 pair 2 accepting a customer with questionable credit, or a very short credit history is unethical time 1 3.16 -4.423 0.000*** time 2 3.76* pair 3 a company’s first priority should be employee morale time 1 3.31 -3.820 0.000*** time 2 3.88 pair 4 a person should make certain that their actions never intentionally harm another even to a small degree time 1 2.69 -7.574 0.000*** time 2 4.08 pair 5 being ethical and socially responsible is the most important thing a person can do time 1 2.88 -6.365 0.000*** time 2 4.08 * indicate significant at 10% level, *** indicate significant at 1% level nadaraja and mustapha: ethical sensitivity of accounting students: evidence from malaysia international review of management and marketing | vol 7 • issue 1 • 2017376 partly, these results were supported by the interview results. the interviewees were asked about their opinion on the ethic courses that they had attended during the semester. eight of the students claimed that classroom studies helped and guided them on what was ethical and what was not. among others they commented: “we must have the ethical values first, whether in class or training. we must have general idea on what it is all about." (mr d) “. my point is that, it is necessary to give a guideline, so that we know what is ethically right and what is ethically wrong.”(mr b) “……; now i think i know what is ethical and what is not.”(mr c) “i am more conscious now, as i know which one is right and wrong.”(mr d) “………not to say that i am more ethical, but now there is awareness”(miss j) this is consistent with earlier studies by gandz and hayes (1988) and bampton and maclagan (2005), which argue that ethics education may provide the guidelines for the students on what is ethically right and wrong. however, they also claimed that these classroom learning is not adequate to prepare them to face the working life. it provides the students with the understanding of ethical basic concepts but the real world is much more complicated. among others, the students state that: “...ethical training cannot adequately prepare students because sometimes in the real situation, what is right or wrong to do is not clearly taught in class. but when you go to real working world, things are more complicated, too much of problems and not easy to be identified.”(mr a) “...in the class, we are taught the right answers but in the real world it is different.”(miss g) “...of course it can’t prepare adequately but we must have the idea on ethics first.”(mr d) “……now i’m taking the ethics course, and what happen in the class is just discussions and mere talking.”(miss f) “in the real world, things are complicated, and not easy to solve” (mr c) however four other interviewees disagree, they stressed that it depended on how the classes were conducted. if the students were exposed to real world scenarios and related discussions, then it will be effective. “i think it depends on how the class is conducted. but sometimes, we do not know how we will react until we are tested.”(miss l) 4.2.2. ethical situation in real world – based on practical training experience in addition, the students were also asked about their own experience relating to ethical values and ethical environment at the internship organizations which they were attached to and the real working setting during their practical training. table 2 presents the results of the questionnaire for time 1 and time 2. the results in table 2 appear to show that the real situation out there is complicated. in pair 1 and pair 3, the mean score significantly decreased and different at 1% and 10% level of significant between time 1 and time 2. based on their practical training experience the level of agreement of the respondents appears to decrease in relation to “how business ethics are critical for the survival of a business enterprise”, “to remain competitive in a global environment, business company will have to maintain its ethical responsibility”. they also appeared to think that what was important for companies was the profits that they earned, and the efficiency, but not the ethical values (pair 2 and pair 4). table 2: respondents’ response based on their practical training experience item mean t sig (2tailed) pair 1 business ethics are critical to the survival of a business enterprise time 1 3.98 3.018 0.004*** time 2 3.47 pair 2 the most important concern for a company is making a profit, even if it means bending or breaking the rules time 1 2.37 -4.186 0.000*** time 2 3.25* pair 3 to remain competitive in a global environment, business company will have to maintain its ethical responsibility time 1 4.02 2.710 0.009** time 2 3.47 pair 4 efficiency is more important to a company than whether or not the company is seen as ethical or socially responsible time 1 2.73 -1.920 0.061* time 2 3.18 * indicate significant at 10% level, **indicate significant at 5% level, ***indicate significant at 1% level nadaraja and mustapha: ethical sensitivity of accounting students: evidence from malaysia international review of management and marketing | vol 7 • issue 1 • 2017 377 4.2.3. respondents’ response on the ethical situations section three of the questionnaire provided a few ethical situations for the respondents. they are supposed to state their level of agreement to the action taken by the doer in each of the situation. table 3 presents the results of their responses. table 3 presents the students’ responses to the scenarios to measure their ethical sensitivity. the detail results of the data indicate that (in each scenario) more than majority of the students strongly disagreed and disagreed with the unethical conducts in the scenarios. however, 17% 30% of the students chose to take the neutral position, and 6-20% of the respondents agreed with the unethical act, but none decided to strongly support the unethical acts. overall, the respondents appeared to understand the importance of ethics as shown in table 1. however, in table 3, the score of more than 2, but less than 3 (in both time 1 and time 2) in 5 point likert scale indicates that they are taking a moderate approach when assessing the given situations. this result is similar to the earlier findings of studies by mustapha and sing siaw (2012) and abu bakar, ismail and mamat (2010). they found that although the students would not prefer to indulge in unethical behaviour, but majority of them opted to be on the safe-side by neither acting unethically nor blowing the whistle. this is where the educators and faculties can play their roles in instilling the ethics values in the learning processes at the universities. this is especially important when the real environment in the job market is challenging as shown in the results in table 2. this environment may influence them if they are not properly guided. 5. conclusion this study explores the importance of ethical sensitivity among accounting students and how their ethic classes affect their ethical values. the study examines the pre and post effect of ethics education. the statistical results appear to suggest that the final year accounting students understand the importance of ethics in general. however, they indicated that they faced a real challenging environment during practical training where some of the organizations/clients’ organization seemed to put more priority to profit and efficiency rather than ethical values. this highlights the role of the educators, faculties and professional bodies to stress the importance of ethical values in business dealings so that this unhealthy environment will not influence them. when they were given some ethical situations to assess, the students indicated that they possessed moderate ethical sensitivity. there are some limitations in this study that may have implications in interpreting the results. the interviews were conducted with only 12 final year students. opinion and feedback from more interviewees may provide better findings. the perception of students and lecturers from both private and public universities may be obtained in future studies. references bakar, n.b.a., ismail, s., mamat, s. (2010), will graduating year accountancy students cheat in examination? international education studies, 3(3), 145-152. bampton, r., maclagan, p. (2005), why teach ethics to accounting students? a response to the skeptics. business ethics: a european review, 14(3), 290-300. borkowski, s.c., ugras, y.j. (1992), the ethical attitudes of students as a function of age, sex and experience. journal of business ethics, 11, 961-979. cagle, j.a.b., baucus, m.s. (2006), case studies of ethics scandals: effects on ethical perceptions of finance students. journal of business ethics, 64, 213-229. chan, s.y.s., leung, p. 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(2001), ethical reasoning, machiavellian behavior, and gender: the impact on accounting students’ ethical decision making. unpublished doctoral dissertation. blacksburg, va: virginia polytechnic institute and state university. sugahara, s., urasaki, n., minghai, w., boland, g. (2010), the effect of students’ ethics learning experiences to develop ethical reasoning abilities: a comparative study between japanese and chinese students. international journal of accounting, auditing and performance evaluation, 6(1), 54-79. thompson, j.h. (2011), a comparative empirical analysis of characteristics associated with accounting internships. international journal of business, humanities and technology, 1(1), 54-68. ward, s.p., ward, d.r., deck, a.b. (1993), certified public accountants: ethical perception skills and attitudes on ethics education. journal of business ethics, 12, 601-610. weber, j., glyptis, s. 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(1988), ethical attitudes of students and business professionals: a study of moral reasoning. journal of business ethics, 7, 249-257. irmm_029.indd international review of management and marketing | vol 6 • special issue (s6) • 2016174 international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2016, 6(s6) 174-179. special issue on "management of systems of socio-economic and legal relations in modern conditions of development of education and society” the republic of kazakhstan in the system of international regional integration associations dmitry v. shkurkin1*, sergey v. ryazantsev2, nikolay p. gusakov3, inna v. andronova4, viktoriya v. bolgova5 1eldirect llc, nevinnomyssk, russia, 2institute of socio-political research under the russian academy of sciences, moscow, russia, 3peoples friendship university (rudn university), moscow, russia, 4peoples friendship university (rudn university), moscow, russia, 5samara state university of economics, samara, russia. *email: shkurkin@eldirect.ru abstract nowadays the republic of kazakhstan is a member of many international and regional economic and political organizations such as the united nations, the world bank, the international monetary fund, the customs union, the eurasian economic community customs union, the organization for security and co-operation in europe, the shanghai cooperation organization, and so on. kazakhstan is a country ready to cooperate and participate in regional integration with neighboring states. kazakhstan in the region of central asia is an initiator and leader of all integration processes, is ready to a constructive dialogue with regional and international political and economic partners. experience of the development of integration processes in various countries with adequate answers to many important problems, the collective effectuation of sovereignty is the most optimal way of assurance of national interests and real independence in the modern interconnected world. participation of smaller, less developed and militarily powerful states in regional integration associations furnishes them a guarantee and real chance to counteract a policy of dictate, pressure and violence more effective. therefore, the prevention of threats to national security is the key priority in security in the region of central asia. keywords: integration processes, regional integration, economic cooperation, central asia jel classifi cations: f02, f15, o53, n85 1. introduction the subject is devoted to a place and role of kazakhstan in the world community, and also to interaction of the organization for security and co-operation in europe (osce) and kazakhstan both prior to and during taking chair in 2010. the relevance of this paper is in the need for accurate assessment of a place and role of kazakhstan in the world community and also its interactions with the organization for security and cooperation in europe. over 22 years of independence under the authority of the fi rst president, the leader of the nation n.a. nazarbaev kazakhstan has achieved impressive foreign policy progress in the world arena, become an authoritative responsible member of the world community. the principles of balanced multiple-vector foreign policy proclaimed by the president of the republic of kazakhstan at the rise of independence have confi rmed solvency and became an uncontested basis of interaction with the international community. today the republic successfully and fruitfully cooperates with the countries representing absolutely different regions of the world (tupchienko, 2013). diplomatic relations with 147 states of the world are established. practical value is defi ned by reliability of the outcomes of research that is confi rmed by a reference apparatus, its effi ciency of setting of a number of scientifi c problems. in general, the materials of the paper can be used in integrating researches on the history of domestic and foreign policy of kazakhstan and special courses for humanists. shkurkin, et al.: the republic of kazakhstan in the system of international regional integration associations international review of management and marketing | vol 6 • special issue (s6) • 2016 175 2. the republic of kazakhstanthe shanghai cooperation organization (sco) since fi rst days of its independence the republic of kazakhstan was actively integrated to the system of economic relations for the purposes of the steady progressive socio-economic development of the state. the modern period is characterized by increased international authority of kazakhstan, its increased regional and world importance, increased constructive role of kazakhstan and the president n.a. nazarbaev personally in initiation and materialization of much positive undertakings directed to the transformation of the multipolar world of competition and opposition to stability and growth. expressing an opinion concerning this matter, the president of kazakhstan has repeatedly emphasized that in the modern conditions the world cannot be unipolar and the concept of multi-polarity demand the revision and qualitatively new soundings (komissina and kurtov, 2005). the multiple-vector kazakhstan policy pursued by the president of kazakhstan is a policy directed to “the regime of trust and strategic dialogue.” qualitatively new sounding of the concept of multi-polarity is, fi rst of all, connected with the transition from the policy of force and confrontation to the policy of harmony and partnership. n.a. nazarbaev in his research works and speeches proclaims the policy of tolerance and international, interethnic, and interfaith harmony, expecting modern realities. today such a policy is quite urgent, and its implementation is very effective. the importance of kazakhstan integration into the world community and aiming of the republic at the preservation of stability all over the world and in the region in particular was repeatedly emphasized within strategic documents of kazakhstan. thus, in the strategy of kazakhstan to be a top 50 countries of the world “...” it is one of the key priorities, we consider our country as a responsible international member of the world community where kazakhstan fulfi lls geopolitical stability and safety functions (vesna et al., 2014). the further realization and of a balanced and responsible course considering the interests of kazakhstan and the dynamics of the regional and world development is one of the seven key priorities of the republic of kazakhstan. kazakhstan is located between two integration groups being already developed in west europe within the ec and only being formed in the asia-pacifi c region within the apec. therefore, in the development strategy of kazakhstan in the xxi century there is the need to use its unique geo-economic situation, rich intellectual and resource potential, possibilities of international integration to strengthening the positions of kazakhstan in the world as an intensively developing actively trading country. the key problem of eurasian economy of the republic of kazakhstan is an adaptation of the socio-economic strategy to parallel integration cooperation with the countries of the west and east. considering this matter and also national interests, the government of kazakhstan creates the optimal external strategy focused on balance of geopolitical interests of these parties in the region, the creation of favorable internal and external conditions to strengthen independence and exuberance of the country. an idea of eurasianism stimulates integration processes in the region, approach harmonization of sovereign states to economic partnership on the basis of cooperation, complementarity and peaceful development. today kazakhstan is an undisputed leader in integration processes not only within the commonwealth of independent states (cis) but also in the whole euroasian space. the role, image and infl uence of kazakhstan in central asia have grown over the last years. astana has proved that in certain critical situations (a change of power in kyrgyzstan) it can practically on equal terms to participate in the resolution of regional crises. the reasons for increasing international weight of the republic of kazakhstan were in obvious economic progress of the country by implemented reforms and elite consolidation, and, in general, the national rise of the society, an unfavorable internal political economic and international situation of regional neighbors. with the formation of the sco there was an attempt to create of the modern multilateral mechanism of regional security and economic cooperation made. since 1996 this structure played a quite signifi cant strengthening the measures of trust in central asia and prevented the expansion of confl icts. stupendous work carried out over the fi rst fi ve years has promoted the creation of the sco that is the international structure of a new type on 16 june 2001 at the meeting of the heads of six states such as kazakhstan, kyrgyzstan, tajikistan, uzbekistan, russia, and the people’s republic of china to be claimed. the countries of the sco possess a considerable part of the eurasian continent and a quarter of the world’s population. this is a macro-regional association within which a wide range of the issues concerning from security to the objectives of the economic development (movkebaeva, 2013). thus, analysis of the development of various cooperation directions of the countries which are members of the sco has showed the existence of considerable potential for the further growth and deeper interaction, possibilities only to integration expansion to all areas but its high-quality improvement, the transition to higher forms of integration construction. as to kazakhstan, it is a fair assumption to say that activity conducted by the sco the key tendencies of its development is directly in kazakhstan’s national interest. the further development of the sco and participation of kazakhstan in the organization promotes deeper regional cooperation for the purposes of control over stability in the region and seamless integration of kazakhstani economy to the regional and world economic systems. 3. the republic of kazakhstan and the association of southeast asian nations (asean) one of the key directions in foreign policy of kazakhstan is cooperation of kazakhstan with the region of southeast asia shkurkin, et al.: the republic of kazakhstan in the system of international regional integration associations international review of management and marketing | vol 6 • special issue (s6) • 2016176 where there is steady economic growth and serious demands for being a global player. in this direction the activation of cooperation of kazakhstan with the asean is not without interest. this integration association, formed in 1967 which purpose is regional cooperation in economic, cultural, social, technical and research spheres directed to strengthening peace and stability. the asean is on the lookout for the situation in the cis countries and, in particular, in central asia, and also objectively notes regional top position of kazakhstan showing the great results keeping economy, fi nancial and social and others spheres informed. therefore, among the countries of central asia as a possible strategic partner the asean considers, fi rst of all, kazakhstan (zainal-abidin, 2000). the association is ready to consider any offers of kazakhstan on cooperation establishment and does not exclude the entry of the republic to this international organization. kazakhstan, in its turn, also has often supported cooperation activation with the asean up to affi liation. for the purposes of strengthening integration processes kazakhstan is set to expand cooperation both with the countries which are the members of the asean and with the association in general that will promote the further economic growth of the republic. besides, being the members of the asean, kazakhstan is permitted to be an equal player on trade and economic space of southeast asia. an intention of kazakhstan to activate economic cooperation of the association of the states of southeast asia assumes inclusion of the republic of kazakhstan not so much to be the members of the asean as to institutions of the asean which conduct an international dialogue. that is why, at the meeting of the ambassador of the republic of kazakhstan mukhtar tleuberdi with the secretary-general of the asean ong keng yong in july 2005 in jakarta kazakhstan has expressed an intention to be engaged to work of the asean regional forum. ong keng yong has expressed his support and noted that the countries which are the members of the asean consider kazakhstan as a possible strategic partner in central asia. in the course of the talks the parties have agreed to make consolidated efforts on the development of interregional cooperation and establishment of a political dialogue between the asean and central asia. on the issues of the entry to the asean regional forum kazakhstan banks upon support of japan. in the course of briefi ng on the results of the talks with the secretary of state for foreign affairs of japan katsuya okada the secretary of state-minister for foreign affairs of the republic of kazakhstan kanat saudabaev has pointed out: “we are pleased for japanese support for our international initiatives and hope for their support in the entry of kazakhstan to corresponding structures of the asean” (chia and plummer, 2015). moreover, thailand, the socialist republic of vietnam, the philippines express their readiness to support kazakhstan to be a member of the asean. 4. kazakhstan as a participant of the conference on interaction and confidence-building in asia (cicma) making for the fi rst time a historical announcement for the fi rst time from a rostrum of the 47th session of the general assembly in 1992, the president of the rk n.a. nazarbaev has offered to create the cicma. in prospect the forum is had to be the effective multilateral on asian security. the head of kazakhstan has offered to start with easy and practical steps on a piecemeal basis. so there was a start to the process of the cicma. kazakhstani diplomats, taking part in the start of the conference, now note at that time few people believe in success of this foreign policy project. nevertheless, over the last nineteen years the forum was not only realized as the project, but was considered as the regional accredited structure on security with great participation of states, also as a tool of “preventive diplomacy” (bridges, 2014). the conference includes twenty three countries, seven states and three organizations such as the un, osce, and las have the status of an observer. since 1999 three were three successful summits and three meetings of secretaries of state for foreign affairs conducted. at the third summit of the cicma on 8 june 2010 in stamboul there were important decisions made. in particular, a composition of the forum has expanded; there was the fi rst in the history of the conference rotation of the position of the chairman. turkey has fi lled a position being one of the most active participants. there are regular the committee of senior offi cials meetings that promote effective solution of actual and urgent tasks. since 2007 the participating states began to conduct meeting of experts in the concrete directions for the development of working papers on implementation of confi dence-building measures. on a platform of the cicma the participating states not only carry out an intensive dialogue on the questions concerning security but also work over deeper practical interaction between the states of asia including economy. these efforts promote strengthening stability and revival of the peoples occupying the asian continent. in its activity the cicma, fi rst of all, considers peculiarities of the development of the countries of the region and asia in general. the conference considers peculiarities of this region by determination of the policy and acceptance of adequate acts. on space where europe is crossed with asia its inhabitants throughout three centuries of the expiring millennium were infl uenced by modernization regardless of its results. when energy and domestic resource like shagreen skin were depleted, there was so called period of the nation revival. however, the western model of adaptation to changing conditions was always an external irritant under which infl uence there were reforms conducted (kainazarov, 2014). these are boundary outlines of a cyclical nature of the history in the eurasian continent in the center of which there are now representatives of approved democracies of the world. shkurkin, et al.: the republic of kazakhstan in the system of international regional integration associations international review of management and marketing | vol 6 • special issue (s6) • 2016 177 5. the republic of kazakhstan and the osce the summit meeting of the osce in astana has become a historical reality of space between four oceans which geographical scale covers the distance from vancouver to vladivostok. the victory parade for 74 delegates in the person of the heads of states’ representatives within the hour by following the protocol by the president n. a. nazarbayev has proved that big matters become real. the head of state has expressed both personal respect to quests and delegates, great understanding, and high vision of values of the modern world. the understanding of problems of the broken world, active and empathic participation in the process of its unifi cation, the resolution of confl icts and an aspiration to fi ll life of the earth with the new content. these are the fi rst results of presidency of kazakhstan of the osce. each of these parameters demanded real actions, hard work which will be further done. the summit meeting in astana has proved the increasing role of the osce as an arbitrator not only in europe-wide but also in global affairs. if up to now the osce was considered as an effective and developed channel of interaction of the central asian region with europe, the process of presidency and the summit in astana have showed that kazakhstan became an idea provider and competent subject of the osce in prevention and dissolution of new calls for stability in the world. speech of the president of the russian federation d.a. medvedev has meant the need for activation the osce activity by strengthening of regional integration (mindlin et al. 2016), development of preventive measures for opposition to calls and the most important thing concerns potential revision. kazakhstan by its presidency in the osce has carried its weight to statement and strengthening of a role of an international organization not only europe-wide but also important for eurasia. the creation of the asian system of security (cicma) affords an opportunity for increasing coordination of two structures on security in the eurasian subcontinent in the future. as the secretary of state hilary clinton has noted that for the fi rst time the summit of the osce was conducted in the asian country. it is no coincidence that at the meeting with representatives of non-governmental organization before it there were the questions concerning women’s rights in the asian countries that is the perennial one for the east. not for nothing the osce is considered the largest regional organization among existing ones dealing with the issues on security and confl ict prevention. the countries of the eurasian continent, transcaucasia, central asia and north america refer to the region of the osce. the organization closely cooperates with its partners from the mediterranean and asian states. thus, the osce unites the euro-atlantic and euro-asian community on geographical space from vancouver to vladivostok. the key principle of the osce is a wide and comprehensive approach to security with ensuring close interrelation of the three primary activities of the osce of so called “baskets,” in particular, military-political, econology and humanitarian ones. the protection of fundamental rights and freedoms of man, partnership in the area of economy and environmental protection are considered as important components of peace and stability (zaviyalova et al., 2015). today the osce is the unique and only one europe-wide organization being the main tool of early warning and resolution of confl icts and also post-confl ict rehabilitation in eurasian space. with participation of the osce in kazakhstan the projects on improvement of the institutions of human rights commissioner, electoral legislation, judicial system reformation, countertraffi cking in persons, drug traffi cking, terrorism fi nancing and laundering of criminal income, increasing role of civil society in life of the country, mass media independence ensuring. the demand of kazakhstan for presidency in the osce is an expression of a consecutive course of the country on accelerated economic, social and political modernization, a responsible and balanced approach to ensuring of international and regional stability, security and development. the entry and further presidency of kazakhstan in the osce were caused by objective historical factors among which are the geographic situation, ethnosocial make-up of population, the level of development of national economy. that is why, the nation’s leadership leaders has made a decision that, fi rst of all, well-reasoned foreign policy, one main of the main directions of which also was the entry through the un, the osce and other international organizations to international relations and processes, introduction to achievements of the world civilization in political, economic, social, humanitarian, research, and educational areas, connection of the world community with problems of the transitional step of the kazakhstani society from administrative-planned to free market relations and provision of necessary assistance will be the key means of the achievement of kazakhstani strategic objectives. the entry of kazakhstan to the osce in january 1992 was supported by an aspiration to be an active member in europe-wide processes allowing to develop and apply the principles of the helsinki final act of 1975 and other documents of the osce. the main external fact was that, by recognition of the osce leadership, cooperation of the organization with the countries of central asia became one of the most promising channels of interaction between europe and the region. at that, within the organization there was increasing understanding of the matter that a wide range of problems (terrorism, extremism, drug traffi c, international crime, environmental matters) which central asia faces central can potentially destabilize the situation not only in this region but also in the whole region of the osce. at the stage of development of relationship with the conference on security and cooperation in europe the osce has laid shkurkin, et al.: the republic of kazakhstan in the system of international regional integration associations international review of management and marketing | vol 6 • special issue (s6) • 2016178 the groundwork for cooperation with the organization. in this with participation of the osce experts there were reviews of the economic situation in the central asian region under the conditions of the transition to the market system conducted, the recommendations to carrying out economic reforms, the issues concerning regional security, protection of rights and freedoms of man developed (vasilev et al. 2013; osadchy and akhmetshin, 2015). on december 1998 there were memorandums of mutual understanding between the government of the rk, the osce and the offi ce for democratic institutions and human rights signed and the osce center in almaty opened. in 2003 for the fi rst time kazakhstan proposed as a candidate for position of the chairman of the osce in 2009. up to now none of the countries of the ussr take chair not in this credible international organization and propose as a candidate for this position. in 2009 the madrid meeting of secretaries of state for foreign affairs of the osce participants has imposed to kazakhstan a great and responsible task on leadership in the osce in 2010. the consensus of 56 countries of the world was determined by the whole course of historical events over the last years. their trust and reasonable hopes, confl icts and contradictions, support and doubts took place. however, gave precedence to strong and balanced course of kazakhstan and the president n.a. nazarbaev for steady economic growth, increasing welfare of the people, systemic political reforms and the statement of the integrated model of kazakhstani democracy. now, an aspiration to the world standards of human dimensions, international and interethnic harmony, religious tolerance, respect for forefathers’ traditions (gurieva, 2015; barmuta et al., 2015), peaceful co-existence and growth of civil consciousness are its bright peculiarities. the state and society in kazakhstan interacts in equal dialogue and consensus. the strategy of activity of the osce in the sphere science and education should consider the main tendencies of a new millennium. the fi rst one consists in the matter that developed and separately developing countries consider capital investment to mentioned spheres, including mental capacity, as the key component of the strategy of economic development. science and education in kazakhstan are also focused on the priorities of industrial and innovative reform, socio-economic growth and progress. the other side of this problem is strengthened attention of the state, the ministry of education and science of the republic in particular, to the quality of talent scientifi c and technical density, an emphasis to its mobility and competitiveness. the world community is interested in kazakhstani vision of the osce prospects and kazakhstani contribution to its further activity. in light of modern international relations and globalization processes the world needs new political breath that, fi rst of all, will allow to encourage democratic processes (frolova et al. 2016; nikolaeva et al. 2015). secondly, the osce should be changed in its current image in the structural and substantial content. thirdly, the general process of improvement of the organizational legal and regulatory base of the osce must be followed by strengthening trust immunity. fourthly, there is the need to open the fl oodgates for revealing the full opportunities of the post-soviet content of the osce space. fifthly, kazakhstan as the osce chairman-in-offi ce must prove its authority and show its potential as a skilled player in the fi eld of the global and european policy. besides, kazakhstan will follow traditions of the osce on participation of kazakhstan to achievements of the world civilization in political, economic, social, humanitarian, research, and educational areas, connection of the world community with problems of the fi nal stage of the transitional period of the kazakhstani society from administrative-planned to free market relations and creation of the conditions for the entry into the world standards. 6. conclusion day by day increasing role and value of the country in global policy and economy are noticeable. kazakhstani diplomacy successfully realizes strategic foreign policy priorities pointed by the head of state. this paper pays much attention to multilateral diplomacy which importance in the conditions of globalization and cardinal fundamental changes in the modern international system of coordinates has greatly increased. within a few short years of independence, the role and responsibility of the republic of kazakhstan in international affairs has also greatly increased. kazakhstan has overcome a way from a young little-known state to authoritative regional superpower being an active participant in activity of the un and authoritative international organizations. the entry into the un on march 02, 1992 had a great political value for kazakhstan. the head of state has determined this momentous event by the following words: “kazakhstan became a full member of the un. the value of this fact is great: we have just not only proved following the principles of international law, but also stand under the peculiar protection this quite infl uential organization dealing with great work on security on the planet.” today, the multilateral foreign policy activity of kazakhstan is rich and multi-sided and covers all spheres of national interests the most urgent national problematics. responsible and proactive policy in the sphere of global security has made kazakhstan a leader of the movement for the nuclear-free world, demilitarization and non-proliferation of mass destruction weapon. 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5.0 and later.) >> /namespace [ (adobe) (common) (1.0) ] /othernamespaces [ << /asreaderspreads false /cropimagestoframes true /errorcontrol /warnandcontinue /flattenerignorespreadoverrides false /includeguidesgrids false /includenonprinting false /includeslug false /namespace [ (adobe) (indesign) (4.0) ] /omitplacedbitmaps false /omitplacedeps false /omitplacedpdf false /simulateoverprint /legacy >> << /addbleedmarks false /addcolorbars false /addcropmarks false /addpageinfo false /addregmarks false /convertcolors /noconversion /destinationprofilename () /destinationprofileselector /na /downsample16bitimages true /flattenerpreset << /presetselector /mediumresolution >> /formelements false /generatestructure true /includebookmarks false /includehyperlinks false /includeinteractive false /includelayers false /includeprofiles true /multimediahandling /useobjectsettings /namespace [ (adobe) (creativesuite) (2.0) ] /pdfxoutputintentprofileselector /na /preserveediting true /untaggedcmykhandling /leaveuntagged /untaggedrgbhandling /leaveuntagged /usedocumentbleed false >> ] >> setdistillerparams << /hwresolution [2400 2400] /pagesize [612.000 792.000] >> setpagedevice . international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2017, 7(1), 452-457. international review of management and marketing | vol 7 • issue 1 • 2017452 the link between information technology, activity-based costing implementation and organizational performance safaa ibrahim mahmood al-nuaimi1,2,3*, rapiah mohamed4, jamal mohammed esmail alekam5 1school of tunku puteri intan safinaz school of accountancy, college of business, universiti utara malaysia, 2rafidain bank – um al-rabi'ain, mosul, iraq, 3department of accounting, college of administration &economic, mosul university, mosul, iraq, 4tunku puteri intan safinaz school of accountancy, college of business, universiti utara malaysia, 5school of business management, college of business, universiti utara malaysia. *email: safaaibraheem99@yahoo.com abstract activity-based costing (abc) is as a strategic tool that ensures accurate product costs as compared to traditional costing system. the implementation of abc implementation offers useful information for performance measurement, cost control and strategic decision-making. meanwhile, certain factors such as information technology (it) determine the success of abc implementation and its impact on organizational performance. however, past studies in this realm have neither been so emphatic in explaining the role of it usage in implementing abc in organizations nor examined the perception of employees and organizations’ decision makers towards the adoption of abc. in addition, the government of iraq and the central bank of iraq has also issued strong recommendations to iraqi banks to consider initiating abc due to its influence of reduction cost. thus, this study is motivated to examine the direct and the indirect relationships between it, abc implementation and organizational performance of banks in iraq. this study surveyed 150 chief accountants of banks in the north region of iraq. the data collected was analyzed using spss version 21. the study revealed that there is a significant relationship between it, abc implementation and organizational performance. also, the findings of this study demonstrated that, abc implementation partially mediates the relationship between it, abc implementation and organization performance. future researchers are recommended to consider other contingency factors and examine their effect on abc implementation and organizational performance. keywords: organizational performance, information technology, activity-based costing implementation, contingency factors jel classifications: m41, m40, m150 1. introduction activity-based costing (abc) has been widely identified as a sophisticated cost management technique that is used to manage and reduce cost as well as improving organizational performance. abc is explained by a large number of authors (ahmed, 2012; kongchan, 2013) as a strategic tool that ensures accurate product costs as compared to traditional costing system. abc implementation also offers useful information for performance measurement, cost control and strategic decision-making. notably, the upsurge of researchers’ and practitioners’ attentions towards the implementation of abc in organizations was as a result of abc superiority over traditional costing methods and subsequently its significance in enhancing organizational performance (fei and isa, 2010; fatma and habib, 2014). as such, many organizations from different industries, including the banking industry have focused their attentions towards the implementation of abc due to the ability of abc to provide accurate costing information and enhance organizational performance. contingency theorist have argued excessively on the important nexus that exist between abc implementation and some contingency factors such as information technology (it) (baird et al., 2004). however, studies in this realm have neither been so emphatic in explaining the role of implementing abc in organizations nor determine the perception of employees and organizations’ decision makers towards the implementation of abc (kongchan, 2013). in addition, far little studies have examined how the implementation of abc impact on organizational performance. in this regard, a sizable number of contingency theorists have studied the impact of certain contingency factors on organizational performance and examined the effect of contingency factors on the process and success of abc implementation (anderson, 1995; askarany et al., 2007). al-nuaimi, et al.: the link between information technology, activity-based costing implementation and organizational performance international review of management and marketing | vol 7 • issue 1 • 2017 453 nonetheless, most of these previous studies focused on the manufacturing industry, little effort has been exerted on the financial or banking sector (hao, 2009). meanwhile, hussain and gunasekaran (2001) reviewed that abc is a costing system that is more pertinent to the service sector such as the banking industry. like some other developing countries, the implementation of abc for cost management in organizations is still evolving in iraq. although few study studies have reported that, abc is currently initiated across industries in iraq. other studies affirmed that, abc is used as a tool for planning, control and decision making in service management among organizations in iraq (ahmed, 2012). in addition, the government of iraq and the central bank of iraq has also issued strong recommendations to iraqi banks to consider initiating abc due to its influence of reduction cost. thus, this study is motivated to examine the direct and the indirect relationships between it, abc implementation and organizational performance of banks in iraq. 2. literature review 2.1. the relationship between it and abc implementation it is the digitalization or the automation of organizational operations. the application of it in operational process proffers the ability to disseminate timely and accurate information, resulting in improved managerial and employee decision-making process. in the banking sector, information technologies can be applied in both accounting-related and non-accounting processes. overall, the application of it plays a critical role in modern business, especially regarding the accounting function and management control. this is because, information technologies have radically transformed the nature of business and accounting practices (hunton, 2002). as indicated by sadagopan (2003), some of the most ordinary accounting processes which have been influenced by the application of it include: general ledger, accounts receivable, accounts payable, financial control, asset management, funds flow, cost centers, profit centers, profitability analysis, order and project accounting, product cost accounting, and performance analysis. invariably, the integration of it into the banking systems offers invaluable implications to the entire areas banking services and accounting systems (hunton, 2002). the rationale for deployment of it into the banking systems is chiefly enhance reductions in management routines and subsequently to transform from a transaction oriented institutions into an information analyst institutions (hunton, 2002). this transformation however, is consistent with the rationale behind the functionality of abc and hence, the reason why abc is being celebrated as a sophisticated cost management system. anderson (1995) asserted that, the accessibility of information technologies goes a long way in enhancing the success of abc implementation in an organization. the study conducted by askarany et al. (2007) revealed that, technological change in manufacturing practices were responsible for the failure of abc implementation by some australian plastics and chemical industries. this imply that, the application of it play an important role in enhancing performance and organizational operations. for instance, a company with a high level of it accessibility across different channels of operations would likely finds it easy to transmit, combine, and process external data from customers and other stakeholders. it may also be effortless for such company to share data among various internal units (e.g., forecasting, opening accounts, customer relationship management and accounting) and to retrieve information from various databases for decision support (e.g., cost information, reporting tools). furthermore, different units of organizations can work in unity (barua et al., 2004). in other words, the accessibility of it is an integration tool for organization which helps improve performance significantly. previous researchers have dwelled into examining the impact of it on organizational performance (melville et al., 2004). it was unanimously reported that, organizations gain immensely with the integration of it because extensive application of it have significant implications on operations of organizations and these implications are therefore central to improving organizational performance. in line with the above arguments, this study hypothesized that: h1: there is a positive relationship between it and abc implementation. 2.2. the relationship between it and organizational performance past studies have delve excessively on the relationships between the application of information technologies and organizational performance. there have been a level of consensus among past researchers with regards to the importance of investing heavily on the application of different information technologies at different levels organizational operations. past studies have observed that, there is a positive impact of technological investment on organizational performance (devaraj and kohli, 2003; james, 2013). for instance, devaraj and kohli (2000) found that, there is a positive effect of it capital and labor on organizational performance. consistently, the findings reported by shaukat and zafarullah (2009) demonstrated that, there is a positive relationship between technology and performance in the banking industry and manufacturing sectors. similarly, melville et al. (2004) found it to be a valuable factor in enhancing organizational performance. also the study conducted by ajibolade (2013) revealed that the more the complexity of technologies such as the higher level of mechanization and automation the more the significance of its impact on organizational performance. in the light of this, the study proposed the following hypothesis; h2: there is a positive relationship between it and organizational performance. 2.3. the relationship between abc implementation and organization performance a sizable number of researchers mostly, from the western countries have examined the effect of implementing abc on organizational performance. most of these past studies unanimously revealed that, the implementation of abc helps diminish the inaccuracy about the cost allotment and enhance organizational performance. shields (1995) revealed from an empirical investigation conducted al-nuaimi, et al.: the link between information technology, activity-based costing implementation and organizational performance international review of management and marketing | vol 7 • issue 1 • 2017454 in the u.s, demonstrated that, 75% of respondents said that the utilization of abc brought about enhancement in financial performance, and just 25% disagree to that. this outcome was affirmed later by mcgowan and klammer (1997). more recently, studies have demonstrated that the utilization of abc have significant importance on cost reduction and profitability analysis. zaman (2009) affirmed that the implementation of abc results in a better overall performance. similarly, elhamma and fei (2013) examined the relationship between the implementation of abc and the performance of morrocan firms. the study found that the management accounting system in light of abc strategy results in a superior performance for firms that have embraced it. furthermore, a positive relationship exists between applying the abc and the financial performance of companies (hardan and shatnawi, 2013). therefore, this study hypothesized that: h3: there is a positive relationship between abc implementation and organizational performance. 2.4. the mediating role of abc implementation on the relationship between it and organization performance implementation management accounting system such as abc has the potential to provide managers with accurate information for setting realistic performance target, performance evaluation standards and receive feedback from its activities (zaman, 2009; ittner et al. 2002), which will in turn result in improved organizational performance (zaman, 2009; rasid et al., 2011). previous researches have been conducted on the mediating role of management accounting system (mas) between organizational factors and performance. for example, rasid et al. (2011) investigated the mediating role of mas between competition intensity, innovativeness and technological advancement and organizational performance in malaysia and found that mas mediates the relationships. also, elhamma and fei (2013) who asserted that if the intensity of technological advancement is related to abc and organizational performance, then, the indirect effect of the implementation of abc on the relationship between it advancement and organizational performance could be proposed. thus, it is posited that: h4: abc implementation positively mediates the relationship between it and organizational performance. 2.5. conceptual framework in line with the literature review and hypotheses presented above, a conceptual framework is proposed and presented in figure 1. the conceptual framework shows the direct and the indirect relationship between it, abc implementation and organization performance. 3. methodology using a survey research design, a self-administered questionnaire was e-mailed to 200 chief accountants of banks in the north of iraq. the 162 questionnaires were returned which yielded 150 (75%) usable data. the unit of analysis in this study is organizational as the opinion of a chief accountant represent his/her bank. this study examined the function of it though the practices and functionalities of it in a conventional financial institution. five items were adapted from previous studies (zhu et al., 2004; barua et al., 2004; chapman and kihn, 2009) it is believed that the availability and the accessibility and the advancement of it enhance the implementation of sophisticated costing system such as abc and improve organizational performance. therefore, respondents in this study were required to indicate the extent to which they think their organization use information technologies. abc implementation is measured in this study with 12 items adapted from yi and ruhana (2010), yanren et al. (2008). in addition, the measurement of organizational performance were 8 items adapted from various sources such as; zaman (2009), ringim et al. (2012). respondents are requested to rate their agreement or disagreement with the provided statements in the questionnaire on a five point likert type scale from 1 = “strongly disagree” to 5 = “strongly agree.” even though the items adapted in this study have been used in previous studies for testing similar variables, exploratory factor analysis is conducted in this study. as such, the items were submitted to the principle component analysis and the varimax method was used for the rotation. as expected, three-factor solution were extracted. the factor loadings of the items are presented in table 1 together with the acceptable scores of cronbach’s alpha. 4. findings regression analysis in spss version 21 was used for testing the hypotheses proposed in this study. meanwhile, before conducting the regression analysis, the necessary statistical assumptions such as ensuring the data is normally distributed, elimination of outliers and examining the absence of multicollonearity were altogether met. following are the findings and discussions of the four hypotheses proposed in this study. h1: there is a positive relationship between it and abc implementation. in testing the above hypothesis, the direct relationship between it and abc implementation is examined. table 2 shows the result of the relationship. the result revealed that there is a significant relationship between it and abc implementation (b = 0.306, t = 3.910, p = 0.000). the interpretation of the findings implied that h1 is accepted. this findings imply that, the more the use of it among iraqi banks, the better abc can be implemented. h2: there is a positive relationship between it and organizational performance. according to the proposed hypothesis, the relationship between it and organizational performance was examined. the result of the fıgure 1: conceptual framework al-nuaimi, et al.: the link between information technology, activity-based costing implementation and organizational performance international review of management and marketing | vol 7 • issue 1 • 2017 455 testing is presented in table 2. the findings revealed that there is a significant relationship between it and organizational performance (b = 0.388, t = 5.115, p = 0.000). the findings implied that, the use of it have significant impact on organizational performance among iraqi banks. hence, an extensive application of it among iraqi banks will yield better improvements in their performances. h3: there is a positive relationship between abc implementation and organizational performance. this hypothesis is proposed to examine the relationship between abc implementation and organizational performance. the hypothesis is examined and the findings is presented in table 2. the result shows that, there is a significant relationship between abc implementation and organizational performance (b = 0.309, t = 3.946, p = 0.000). hence, the hypothesis is accepted. this implied that, the implementation of abc as a strategic management accounting system would help improve organizational performance in iraqi banks. h4: abc implementation positively mediates the relationship between it and organizational performance. in line with the objective of this hypothesis, which is to test the mediating role of abc implementation on the relationship between it and organizational performance, the study adopts the analytical procedure outlined by baron and kenny (1986) which include three discrete test namely; regressing the mediator on the independent variable, regressing the dependent variable on the independent variable and regressing the dependent variable on both the independent variable and mediator. according to baron and kenny (1986) the mediating role is established through these three test. hence the result of first revealed that there is a significant relationship between it and abc implementation (b = 0.306, t = 3.910, p = 0.000). also, the result of the second step shows that there is a significant relationship between abc implementation and organizational performance (b = 0.309, t = 3.946, p = 0.000). finally, the result of the last test is conducted by regressing both the predictor variable (it) and the mediator variable (abc implementation) on the dependent variable (organizational performance). the result of the simultaneous regression of it and abc implementation is presented in table 3. the result revealed that, abc implementation has a partial mediating role on the relationship between it and organizational performance. on this basis, h4 is accepted. the interpretation of this finding is that, abc implementation partially mediates the effect of it in improving organizational performance. 5. conclusions the findings of this present study revealed that, the use of it in iraqi bank is significantly related to organizational performance, table 2: the result of the relationship hypothesis coefficient t-value significant remark h1: it → abc implementation 0.306 3.910 0.000 supported h2: it → organizational performance 0.388 5.115 0.000 supported h3: abc implementation → organizational performance 0.309 3.946 0.000 supported it: information technology, abc: activity-based costing table 3: simultaneous regression of both it and abc on organizational performance hypothesis coefficient t-value significant it → organizational performance 0.323 4.149 0.000 abc implementation → organizational performance 0.210 2.687 0.008 it: information technology, abc: activity-based costing table 1: factor loadings of the research dimensions factors 1 2 3 organizational performance (cronbach’s alpha: 0.889) overall business performance 0.880 new service development 0.852 efficient customer relationship management 0.822 internal managerial efficiency 0.822 excellent financial performance 0.808 increase in yearly profit 0.606 increase in number of performing loans 0.567 branch income 0.545 abc implementation (cronbach’s alpha: 0.819) provides accurate information 0.916 enhance job effectiveness 0.885 positive impact on efficiency and waste reduction 0.860 positive impact on overall goal of the organization 0.852 positive impact on communication across sections of the organization 0.851 positive impact on innovations 0.844 positive impact on quality decision 0.815 provides accessible information 0.812 provides timeliness information 0.796 provides reliable information 0.788 makes cost management easier 0.720 provides positive impact on relationship across sections of the organization 0.696 it (cronbach’s alpha: 0.770) in our bank, we use institutional portal 0.822 in our bank, we use cost management systems 0.802 in our bank, we use customer relationship management systems 0.720 in our bank, we benefit from the functionalities of information technologies 0.594 in our bank, we use online workflow systems 0.590 al-nuaimi, et al.: the link between information technology, activity-based costing implementation and organizational performance international review of management and marketing | vol 7 • issue 1 • 2017456 in essence, the adoption of modern technologies such institutional websites, customer relationship management systems, online workflow systems and many other information technologies that are relevant in banks have significant implications in improving the performance of banks. the findings of this study in this regard is consistent with prior studies (such as; zhu et al., 2004; rasid et al., 2011). also, this findings of this study demonstrated that, the adoption of abc as a sophisticated cost management system has a significant impact on organizational performance. this findings is consistent with previous researchers in this realm (zaman, 2009; ittner et al., 2002). this imply that, the adoption of abc in organizations offers various advantages which include timeliness access to accurate costing information and in essence reduce costing. this study demonstrated that, the adoption of abc as cost management system has a direct influence on organizational performance in so many areas that is not limited to job effectiveness, efficiency and waste reduction, helping the organization to achieve their overall goal, improving communication across different department of the organization, hence making job easier for employees. in addition, the implementation of abc can help organization improve their performance through innovations is cost management, helping managers to make quality and productive decision and making customer relationship management effective. theoretically, the findings of this study, validates the theoretical perspectives of the contingency theory, by empirically revealing the implication of using digital and sophisticated information technologies in the organization which is expected to facilitate the successful adoption of abc. also, the study revealed that the implementation of abc implementation is a significant intervening variable that its successful implementation is capable of improving the performance of the organization (elhamma and fei, 2013). finally, the practical implication of this study is that, the paper provides an insight to the importance of using it among iraqi banks as one of the important conditions that mitigate the implementation of abc. also, the study provides an implication of the importance of abc as a strategic management tool in improving the current unimpressive performance of banks in iraq. references ahmed, n.r. (2012), implementing the system of costs based on activity in the banking sector an applied study: rashedbank, atteffhaa branch. al-anbar university journal of economic and administration sciences, 4(9), 326-344. ajibolade, s.o. (2013), management accounting systems design and company performance in nigerian manufacturing companies: a contingency theory perspective. british journal of arts and social sciences, 14(2), 228-244. anderson, s.w. (1995), a framework for assessing cost management system changes: the case of activity based costing implementation at general motors, 1986-1993. journal of management accounting research, 7, 1-51. askarany, d., smith, m., yazdifar, h. (2007), technological innovations, activity based costing and satisfaction. journal of accounting, business and management, 14, 53-63. baird, k.l., harrison, g.l., reeve, r.c. (2004), adoption of activity management practices: a note on the extent of adoption and the influence of organizational and cultural factors. management accounting research, 15(4), 383-399. baron, r.m., kenny, d.a. (1986), the moderator mediator variable distinction in social psychological research: conceptual strategy and statistical considerations. journal of personality and social psychology, 51, 1173-1182. barua, a., konana, p., whinston, a.b., yin, f. (2004), assessing internet enabled business value: an exploratory investigation. mis quarterly, 28(4), 585-620. chapman, c.s., kihn, l.a. (2009), information systems integration, enabling control and performance. accounting organizations and society, 34, 151-169. devaraj, s., kohli, r. (2000), information technology payoff in the health-care industry: a longitudinal study. journal of management information systems, 16(4), 41-67. devaraj, s., kohli, r. (2003), performance impacts of information technology: is actual usage the missing link? management science, 49(3), 273-289. elhamma, a., fei, y. (2013), the relationship between activity based costing, business strategy and performance in moroccan enterprises. accounting and management information system, 12(1), 22-38. fatma, a., habib, a. (2014), contextual factors impact on the use of new managemenet accounting practices: an empirical analysis in tunisian context. journal of research in international business and management, 4(3), 45-55. fei, z.y., isa, c.r. (2010), factors influencing activity-based costing success: a research framework. international journal of trade, economic and finance, 1(2), 144-150. hao, s. (2009), appraisal of the customer lifetime value of commercial banks based on unascertained measurement. international conference on information management, innovation management and industrial engineering. p399-402. hardan, s.a., shatnawi, t.m. 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(2013), factors influencing the implementation of activitybased costing in thai companies. doctoral dissertation, rmit university. mcgowan, a.s., klammer, t.p. (1997), satisfaction with activitybased cost management implementation. journal of management accounting research, 9, 217-237. melville, n., kraemer, k., gurbaxani, v. (2004), review: information technology and organizational performance: an integrative model of it business value. mis quarterly, 28(2), 283-322. rasid, s.z.a., rahman, a.r.a., ismail, w.k.w., osman, m.h.m., amin, m. 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(2009), impact of information technology on organizational performance: an analysis of quantitative performance indicators of pakistan’s banking and manufacturing companies. european journal of economics, finance and administrative sciences, 16, 36-49. shields, m.d. (1995), an empirical analysis of firms implementation experiences with activity based costing. journal of management and accounting research, 7(4), 148-166. yanren, x., wenbin, s., thomas, w.l. (2008), activity-based costing popularity in china. cost management, 22(3), 40-48. zaman, m. (2009), the impact of activity based costing on firm performance: the australian experience. international review of business research papers, 5(4), 200-208. zhu, k., kraemer, k.l., xu, s., dedrick, j. (2004), information technology payoff in e-business environments: an international perspective on value creation of e-19 business in the financial services industry. journal of management information systems, 21(1), 17-54. . international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2016, 6(4), 883-890. international review of management and marketing | vol 6 • issue 4 • 2016 883 consumers’ perceived interactivity and intention to use mobile banking in structural equation modeling darmesh krishanan1*, aye aye khin2, kevin low lock teng3, karuthan chinna4 1faculty of business management and professional studies, management and science university (msu), 40100 shah alam, selangor, malaysia, 2faculty of accountancy and management, universiti tunku abdul rahman (utar), 43000 kajang, selangor, malaysia, 3faculty of accountancy and management, universiti tunku abdul rahman (utar), 43000 kajang, selangor, malaysia, 4faculty of medicine, university of malaya, 50603 kuala lumpur, malaysia. *email: sriraghavendara@gmail.com abstract a fair amount studies has been carried out on mobile banking adoption but limited number of studies focused on perceived interactivity. in reality, literatures on the key motivations of the intention to use mobile banking are no common standard of measurement. therefore, there is a need to evaluate the factors influencing the malaysian consumers’ intention to use mobile banking services. this research fills the gap by integrating technology acceptance model with perceived risk, perceived cost and perceived interactivity aspects are incorporated. this study’s foremost ambition is to analyze empirically the malaysian consumers’ intention to use mobile banking services via structural equation modeling approach. the findings indicated usefulness, perceived cost, perceived interactivity, perceived risk, relative advantage and easefulness are significant determinants of consumers’ attitude towards using mobile banking which effects the consumers’ intention to use mobile banking. a critique of the destiny of mobile banking concludes this paper. keywords: consumers’ perceived interactivity, mobile banking usage, structural equation modeling approach jel classifications: g21, m31, o33 1. introduction mobile banking is an imminent technology that will illuminate the peoples’ lifestyle across the world. interestingly, mobile banking is defined in various approaches. however, these various definitions have a common rendition that mobile banking is a system that allows customers of a financial institution to conduct a number of financial transactions through a mobile device such as a mobile phone or tablet, as elucidated in wikipedia. in relation to that, drexelius and herzig (2001) instituted mobile banking as the ability to conduct bank transactions via a mobile device. basically, is about conducting financial transactions by the means of a mobile terminal. analogously, barnes and corbitt (2003), posits that mobile banking is a channel in which the customer interacts with a bank via mobile device such as a mobile phone or personal digital assistant. despite the fact of various researchers’ interpretation of mobile banking, in short, mobile banking is about doing monetary undertakings using a mobile phone or tablet. innovative mobile applications are developed in connection with the development of mobile banking. in malaysia, maybank was the first financial institution to introduce a free banking application, m2umap, on the iphone (maybank2u, 2009). homogeneously, cimb bank berhad infused cimb clicks which became the most popular and widely used banking app in malaysia. accordingly, almost all the banks in malaysia such as al rajhi banking and investment corporation (malaysia) berhad, ambank (m) berhad, bank islam malaysia berhad, bank simpanan nasional, cimb bank berhad, citibank berhad, hong leong bank berhad, malayan banking berhad, ocbc bank (malaysia) berhad, public bank berhad, rhb bank berhad, and standard chartered bank malaysia berhad offers mobile banking services (masrek et al., 2012). later in 2014, maybank launched maybank2u app which was a huge success with more than one million downloads. in 2015, maybank launched another app known as quick balance which accommodates customers who purely want to check balances (thestar.com.my, 2015). krishanan, et al.: consumers’ perceived interactivity and intention to use mobile banking in structural equation modeling international review of management and marketing | vol 6 • issue 4 • 2016884 numerous researchers have studied the technology adoption but not many studies are carried out on the consumers’ perceived interactivity and intention to use mobile banking within the malaysian perspective. mobile banking in malaysia is still in its infancy stages and unpopular to malaysians that leads to underutilization of this feature (amin et al., 2007). this is consistent with the findings of bank negara malaysia in 2015 that reported that there are 7,278.8 million subscribers of mobile banking services’ in malaysia while malaysian communications and multimedia commission reported that malaysia’s mobile phone penetration rate is as high as 143.8% in the q4 2015. comparing the mobile banking services’ subscribers to the mobile phone penetration rate, the former is relatively low. reciprocally, the transaction volume via mobile banking per capita is comparatively low with other payments methods (bank negara malaysia, 2016). the main objective of the study is to determine the factors that influence the consumers’ intention to use mobile banking services. additionally, the relationship between usefulness, easefulness, relative advantage, perceived interactivity, perceived cost and perceived risk with the attitude towards using mobile banking services elements are to be discovered. moreover, the relationships between attitude towards using mobile banking services and intention to use mobile banking are to be explored. 2. literature reviews 2.1. technology acceptance model (tam) tam was proposed by fred davis that champions that external stimulus comprises actual system’s features and capabilities govern the users’ motivation to use the system which predicts the usage of the system. he further inculcated that users’ motivation of actual usage were regulated by three factors that were perceived ease of use, perceived usefulness and attitude towards using a system which was mediated by users’ behavioral intention. perceived usefulness was the degree to which a person believed that using a particular system would enhance his or her job performance while perceived ease of use was explained as the degree to which a person believes that using a particular system would be free of effort (davis et al., 1989). in 2007, amin analyzed the mobile credit card usage intentions in sabah, malaysia which uncovered that perceived ease of use has a significant effect on the perceived usefulness of mobile credit card. on other hand, both these variables effects the customers’ usage intentions of mobile credit card. gu et al. (2009) investigated users’ behavioral intention to mobile banking in korea. the result shows that perceived usefulness and perceived ease-of-use influences behavioral intention in mobile banking significantly. selamat et al. (2009) examined the determinant factors and acceptance of information technology in the malaysian banking industry which found that that perceived usefulness and perceived ease of use influences bankers’ acceptance of new technology. riquelme and rios (2010) investigated the moderating effect of gender in the adoption of mobile banking in singapore and found that perceived ease of use and perceived usefulness has a significant influence on the intention to adopt mobile banking. consistently, yousafzai and yani-de-soriano (2012) found that intention to use internet banking significantly predicts its actual use. the results also revealed that perceived usefulness significantly influences the intention to use internet banking. besides that, moorthy et al. (2014) revealed that perceived use of use and perceived usefulness influences the academic’s e-filing adoption intention in their study of e-filing behaviour among academics in perak state in malaysia. in addition, perceived ease of use and perceived usefulness has great impact on users’ intention to adopt mobile self-service technologies (yang et al., 2014). furthermore, xiao et al. (2014) found that perceived ease of use and perceived usefulness influences attitude towards use while perceived ease of use effects significantly perceived usefulness in relation to continuing the reception of existing e-book reading in northern taiwan. moreover, özbek et al. (2015) found that both perceived ease of use and perceived usefulness displayed significant effect on behavioral intention to use online booking among russian tourists visiting antalya, turkey. jafari et al. (2016) examined the factors influencing the mobile advertising acceptance in mashhad, iran that revealed that perceived ease of use and perceived usefulness significantly impacts consumers’ attitude towards mobile advertising. simultaneously, intention to accept mobile advertising is significantly influenced by consumers’ attitude towards advertisement. 2.2. relative advantage of mobile banking püschel et al. (2010) investigated the adoption intention of mobile banking technology in brazil which revealed that relative advantage and compatibility are the most important factors that influence the consumer to adopt mobile banking. arvidsson (2014) found that relative advantage as a significant predictor of consumers’ attitudes to adopt the mobile payment services in sweden. furthermore, amaro and duarte (2015) examined the determinants of intentions to purchase travel online among internet users that revealed that relative advantage influences the attitudes towards online travel shopping significantly. 2.3. perceived risk of mobile banking li (2013) found that perceived risk affects attitude toward using the internet banking. hsieh (2015) examined the physicians’ acceptance of electronic medical records exchange system in taiwan that revealed that perceived risk is a significant predictor of physicians’ intention to use an electronic medical records exchange system. on the other hand, physicians’ attitudes toward using the system influence their intention to use it. furthermore, both perceived usefulness and perceived ease of use of the exchange system correlates significantly with the physicians’ attitude toward using it. 2.4. perceived cost of mobile banking cruz et al. (2010) found that perceived cost is a significant barrier on the brazilian’s adoption intention of mobile banking services. the behavioral intention to use the internet banking is effected by the perceived financial cost (tung et al., 2014). amberg et al. (2015) investigated the user acceptance for web based aptitude tests among university students in germany and found krishanan, et al.: consumers’ perceived interactivity and intention to use mobile banking in structural equation modeling international review of management and marketing | vol 6 • issue 4 • 2016 885 that perceived costs induces the users’ acceptance of web based aptitude tests. additionally, perceived usefulness and perceived ease of use influences users’ acceptance of web based aptitude tests too. 2.5. perceived interactivity of mobile banking wu (1999) examined the perceived interactivity and attitude toward web sites among university students which found a positive significant influence of perceived interactivity on the attitude toward web sites. teo et al. (2003) investigated the effects of interactivity level on web user’s attitude towards commercial web site among undergraduate students of national university of singapore which found interactivity on a web site exhibited positive effects on user’s attitude towards a web site. 3. research model development 3.1. model specification based on established relationship found by wu et al. (2015), arvidsson (2014), hsieh (2015), tung et al. (2014) and li et al. (2015), a conceptual framework is developed for these variables involved in this study which consists of usefulness, easefulness, relative advantage, perceived interactivity, perceived risk and perceived cost as the independent variables, attitude towards using mobile banking as the indirectly mediating effect and intention to use mobile banking as the dependent variable as shown in figure 1. simultaneously, seven hypotheses are devised as below: h1: there is a relationship between usefulness and attitude towards using mobile banking. h2: there is a relationship between easefulness and attitude towards using mobile banking. h3: there is a relationship between relative advantage and attitude towards using mobile banking. h4: there is a relationship between perceived risk and attitude towards using mobile banking. h5: there is a relationship between perceived cost and attitude towards using mobile banking. h6: there is a relationship between perceived interactivity and attitude towards using mobile banking. h7: there is a relationship between attitude towards using and intention to use mobile banking. in this research, stratified sampling method was adopted whereby malaysian age structure is used as the base to categorize the population is into different subgroups (sekaran and bougie, 2009). in this least biased probability sampling method, the findings are immensely generalizable. additionally, it saves time, money and energy resources given the limited budget available for this research. in this study, personally administered paper-based survey questionnaire is used as a data collection method to churn data from respondents which enables me to introduce my research topic as well as encouraging them to be candid in their responses due to the fact that it is less expensive and employs less time. the questionnaire is a combination of dichotomous scale, interval scale, category scale and likert scale questions. in addition, to that, respondents’ doubts are clarified on the spot (sekaran and bougie, 2009). items measuring the variables constructs is adapted from credible literatures and refashioned to be pertinent with this research. items constructs of usefulness and easefulness is adapted from luarn and lin (2005), venkatesh and morris (2000), ong and lai (2006) and lee (2009). measures of relative advantage is restyled from al-jabri and sohail (2012). moreover, items of perceived cost is redesigned from luarn and lin (2005), yu (2009) and alsheikh and bojei (2014). additionally, items of perceived risk is refined from lee (2009) and alsheikh and bojei (2014). besides that, items of perceived interactivity is assimilated from mcmillan and hwang (2002). moreover, items of attitude and intention to use is adapted from lee (2009), schierz et al. (2010), luarn and lin (2005), ong and lai (2006) and alsheikh and bojei (2014). data was collected within 7 weeks conducted during dec 2015-feb 2016 within klang valley. out of 1000 questionnaires distributed, 389 usable data was used for analysis. in this study, structural equation modeling (sem) approach is adopted. 3.2. model estimation 3.2.1. exploratory factor analysis a factor analysis was administered on the items comprising usefulness, easefulness, relative advantage, perceived interactivity, perceived risk, perceived cost, attitude towards using mobile banking and intention to use mobile banking. the factor analysis was conducted using principal components analysis. table 1 indicates the kaiser-meyer-olkin (kmo) and bartlett’s test values whereby the kmo value is 0.938 which is adjudged as superb (hutcheson and sofroniou, 1999). 3.2.2. reliability analysis reliability analysis is executed to test the internal consistency of the data set based on cronbach’s alpha value. the cronbach’s alpha figure 1: research framework of factor influencing the consumers’ perceived interactivity of mobile banking usage table 1: kmo and bartlett’s test kaiser-meyer-olkin measure of sampling adequacy 0.938 bartlett’s test of sphericity approximate chi-square 16516.738 df 741 significant 0.000 krishanan, et al.: consumers’ perceived interactivity and intention to use mobile banking in structural equation modeling international review of management and marketing | vol 6 • issue 4 • 2016886 of the constructs are above 0.7 which are within the acceptable magnitude. hence, reliability of the constructs is corroborated as provided in table 2 (nunnally and bernstein, 1994). 3.2.3. confirmatory factor analysis (cfa) 3.2.3.1. usefulness accordingly, cfa is conducted for the usefulness. upon inspection of the modification indices, it’s observed that the association of e1 and e5 is more than 15. hence, it is imperative to respecify the model correlating these residuals by designating a doubleheaded arrow. therefore, the modified measurement model is examined that revealed a more significant model fit indices as shown in figure 2. the modified measurement model for usefulness construct is acceptable (chi-square/df <5, cfi>0.9, rmsea<0.08). all the factor loadings are >0.7 and ave is 78%. 3.2.3.2. easefulness consistently, cfa is conducted for easefulness in figure 3. upon inspection of the modification indices, it’s observed that the association of e1 and e2 is more than 15. hence, it is essential to do the respecification of the model correlating these residuals by tagging a double-headed arrow. therefore, the modified measurement model is examined that revealed a significant absolute fit as shown in figure 4. the modified measurement model for easefulness construct is acceptable (chi-square/df <5, cfi>0.9, rmsea<0.08). all the factor loadings are >0.7 and ave is 75%. 3.2.3.3. relative advantage undeviatingly, cfa for relative advantage is conducted. upon inspection of the modification indices, it’s discerned that the association of e1 and e2 is more than 15. hence, it is essential to respecify the model correlating these residuals by stamping a double-headed arrow. therefore, the modified measurement model is examined that revealed a more significant absolute fit and parsimonious fit as shown in figure 4. the modified measurement model for relative advantage construct is acceptable (chi-square/ df <5, cfi>0.9, rmsea<0.08). all the factor loadings are >0.7 and ave is 80%. 3.2.3.4. perceived interactivity accordingly, cfa is conducted for perceived interactivity yielding a parsimonious fit normed chi-square, an incremental fit cfi and absolute fit of rmsea. basically, all the fit indices are within threshold values as shown in figure 5. the measurement model for perceived interactivity construct as shown in figure 5 is acceptable (chi-square/df <5, cfi>0.9, rmsea<0.08). all the factor loadings are >0.5 and ave is 65%. 3.2.3.5. perceived cost homogeneously, cfa is conducted for perceived cost. upon inspection of the modification indices, it’s discerned that the association of e1 and e2 as well as e4 and e5 is more than 15. hence, it is essential to respecify the model correlating these residuals by embossing a double-headed arrow. therefore, the modified measurement model is examined that revealed a more noteworthy absolute fit and parsimonious fit as shown in figure 6. the modified measurement model for perceived cost construct is acceptable (chi-square/df <5, cfi>0.9, rmsea<0.08). all the factor loadings are >0.7 and ave is 67%. table 2: reliability analysis variable cronbach’s alpha number of items usefulness 0.941 5 easefulness 0.939 5 relative advantage 0.953 5 perceived cost 0.919 5 perceived risk 0.947 5 perceived interactivity 0.757 4 attitude towards using mobile banking 0.948 5 intention to use mobile banking 0.962 5 figure 2: confirmatory factor analysis of usefulness figure 3: confirmatory factor analysis of easefulness figure 4: confirmatory factor analysis of relative advantage figure 5: confirmatory factor analysis of perceived interactivity krishanan, et al.: consumers’ perceived interactivity and intention to use mobile banking in structural equation modeling international review of management and marketing | vol 6 • issue 4 • 2016 887 3.2.3.6. perceived risk uniformly, cfa is conducted for perceived risk. upon inspection of the modification indices, it’s spotted that the association of e1 and e2 is more than 15. hence, it is paramount to respecify the model correlating these residuals by sculpting a double-headed arrow. therefore, the modified measurement model is examined that revealed a more noteworthy absolute fit and parsimonious fit as shown in figure 7. the modified measurement model for perceived risk construct is acceptable (chi-square/df <5, cfi>0.9, rmsea<0.08). all the factor loadings are >0.7 and ave is 78%. 3.2.3.7. attitude towards using mobile banking persistently, cfa is conducted for attitude towards using mobile banking. upon inspection of the modification indices, it’s spotted that the association of e4 and e5 is more than 15. hence, it is paramount to respecify the model correlating these residuals by sculpting a double-headed arrow. therefore, the modified measurement model is examined that revealed a more noteworthy absolute fit as shown in figure 8. the modified measurement model for attitude towards using mobile banking construct is acceptable (chi-square/df <5, cfi>0.9, rmsea<0.08). all the factor loadings are >0.7 and ave is 78%. 3.2.3.8. intention to use mobile banking proportionately, cfa is conducted for intention to use mobile banking. upon inspection of the modification indices, it’s spotted that the association of e1 and e2 together with e2 and e5 is more than 15. hence, it is paramount to respecify the model correlating these residuals by fashioning a double-headed arrow. therefore, the modified measurement model is examined that revealed a weightier absolute fit and parsimonious fit as shown in figure 9. the modified measurement model for intention to use mobile banking construct is acceptable (chi-square/df <5, cfi>0.9, rmsea<0.08). all the factor loadings are >0.7 and ave is 84%. 3.2.4. average variance extracted and composite reliability average variance extracted and composite reliability values of all the constructs are computed. bagozzi and yi (1988) endorses composite reliabilities of more than 0.60 is sufficient. accordingly, composite reliabilities of all the constructs are satisfactory. moreover, average variance extracted of more than 0.50 is essential. consequently, the average variances extracted of all the constructs are significant. table 3 shows an adequate convergent validity and discriminant validity for each construct in the model. 3.2.5. discriminant validity discriminant validity is prevailed when the variance shared between a construct with other construct in the model is greater than the variance within that construct itself (fornell et al., 1982). table 4 shows the correlation matrix for the constructs in which the diagonal elements have been replaced by the square roots of the average variance extracted. accordingly, discriminant validity is substantiated as the diagonal elements are greater than are all corresponding construct correlations. 3.2.6. hypotheses testing the sem was performed to test the relationship among constructs. the model fit indicators of the structural regression model is figure 7: confirmatory factor analysis of perceived risk figure 8: confirmatory factor analysis of attitude towards using mobile banking figure 9: confirmatory factor analysis of intention to use mobile banking figure 6: confirmatory factor analysis of perceived cost acceptable (chi-square/df <5, cfi>0.9, rmsea<0.08). the structural model is constructed as in figure 10. table 5 presents the statistics of structural regression model. hypotheses testing is examined using the critical ratio (cr) statistic whereby if cr>±1.96, the hypothesis is not rejected (byrne, 2013). there is a significant impact (β = 0.321, cr>±1.96, p < 0.05) of usefulness on attitude towards using mobile banking indicating usefulness is a significant predictor. besides that, there is a significant impact (β = 0.233, cr>±1.96, p < 0.05) of relative advantage on attitude towards using mobile krishanan, et al.: consumers’ perceived interactivity and intention to use mobile banking in structural equation modeling international review of management and marketing | vol 6 • issue 4 • 2016888 banking indicating relative advantage is a significant predictor. in addition, there is a significant impact (β = −0.288, cr>±1.96, p < 0.05) of perceived risk on attitude towards using mobile banking indicating perceived risk is a significant predictor. furthermore, there is a significant impact (β = −0.154, cr>±1.96, p < 0.05) of perceived cost on attitude towards using mobile banking indicating perceived cost is a significant predictor. moreover, there is a significant impact (β = 0.312, cr>±1.96, p < 0.05) of easefulness on attitude towards using mobile banking indicating easefulness is a significant predictor. homogeneously, there is a significant impact (β = 0.134, cr>±1.96, p < 0.05) of perceived interactivity on attitude towards using mobile banking indicating perceived interactivity is a significant predictor. intriguingly, there is a significant impact (β = 0.773, cr>±1.96, p < 0.05) of attitude towards using mobile banking on intention to use mobile banking indicating attitude towards using mobile banking is a significant predictor. on the whole, all the hypothesized paths in relation to table 3: average variance extracted and composite reliability construct average variance extracted composite reliability intention to use mobile banking 0.837 0.963 attitude towards using mobile banking 0.781 0.947 usefulness 0.776 0.945 easefulness 0.757 0.940 relative advantage 0.800 0.952 perceived cost 0.674 0.911 perceived risk 0.777 0.946 perceived interactivity 0.655 0.882 table 4: summary of inter-construct correlations itu atu usefulness easefulness ra pc pr pi itu 0.915 atu 0.828 0.884 usefulness 0.561 0.635 0.881 easefulness 0.575 0.644 0.754 0.870 ra 0.470 0.558 0.538 0.530 0.895 pc −0.365 −0.408 −0.261 −0.374 −0.260 0.821 pr −0.467 −0.422 −0.243 −0.210 −0.238 0.337 0.882 pi 0.346 0.368 0.284 0.319 0.355 −0.154 −0.178 0.810 itu: intention to use mobile banking, atu: attitude towards using mobile banking, ra: relative advantage, pc: perceived cost, pr: perceived risk, pi: perceived interactivity figure 10: structural model of the consumers' perceived interactivity of intention to use mobile banking krishanan, et al.: consumers’ perceived interactivity and intention to use mobile banking in structural equation modeling international review of management and marketing | vol 6 • issue 4 • 2016 889 direct relationships between the variables of the research model has p < 0.05, hence, the significance of the related hypotheses is corroborated (hair et al., 2006). 4. conclusion this study has revealed that higher the perceived usefulness and easefulness of mobile banking, consumers’ attitude towards using mobile banking becomes higher. the result is further justified with the study of (fu et al., 2012) which found that the perceived usefulness and perceived ease of use has significant effect on attitude. wu et al. (2015) consumers’ attitude is significantly affected by perceived usefulness and perceived ease. in this study, it is also proven that relative advantage is the vital factor that inspires more people to use mobile banking. accordingly, the result is justified with the study of (püschel et al., 2010) which found that relative advantage as a significant predictor of consumers’ adoption intention of mobile banking technology. moreover, in this study, it is established that consumers’ attitude towards using mobile banking is significantly affected by their perceived cost. moreover, (kuo and yen, 2009) found that perceived cost had a significantly negative effect on attitude. allegedly, in this study, perceived risk exhibited significant negative relationship with consumers’ attitude towards using mobile banking. moreover, the result is vindicated with the study of (lagzian and naderi, 2015) which found that perceived risk exhibited significant negative relationship on customers’ acceptance intention of e-invoice. in relation to perceived interactivity, consumers’ attitude towards using mobile banking is significantly influenced by perceived interactivity. this is warranted with the study of wu (1999) which found perceived interactivity has a significant influence on the attitude. hence, h1, h2, h3, h4, h5, h6 and h7 are supported by the data. this research meets the requirements of mobile banking backdrop. furthermore, it is an addition to the scanty number of literatures in the mobile banking subject. it also pervades the gaps of previous studies. from the findings of this far-reaching structural equation modelling approach, mobile banking service providers and mobile banking app developers will have to recognize the eminences of knowing and understanding consumer behaviour. in addition, both these mobile banking service providers and mobile banking app developers can utilize these findings of this research as a reference to improve their market share. this can be done by stages with the concept of personalisation of services to the consumers. apart from that, marketing strategies can be coined to suit to consumers’ attitude and behavioural intentions. therefore, the findings of this research could be used banks, mobile banking service providers and mobile banking app developers in their marketing game plan. fundamentally, it will be an instrumental to a country’s economic growth. references al-jabri, i.m., sohail, m.s. 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(2009), factors influencing the use of mobile banking: the case of sms-based mobile banking (doctoral dissertation, auckland university of technology). international review of management and marketing vol. 2, no. 1, 2012, pp.10-21 issn: 2146-4405 www.econjournals.com youth entrepreneurship as a way of boosting indian economic competitiveness: a study of orissa manjusmita dash department of business administration, utkal university, vani vihar, bhubaneswar-4, orissa, india. e mail: manjudash@ymail.com kulveen kaur department of commerce, utkal university, vani vihar, bhubaneswar-751004, orissa, india. email: kulveenkaur@gmail.com abstract: recently, interest in youth entrepreneurship has been fuelled due to high levels of unemployment amongst young people and as a way to foster employment opportunities or to address social exclusion. youth entrepreneurship has gained more importance in recent years in many countries, with increased interest in entrepreneurship as a way of boosting economic competitiveness and promoting regional development. based on survey and interview of the young entrepreneurs through a structured questionnaire in bhubaneswar and cuttack, the twin cities of orissa, the researchers have made an attempt to study the factors contributing to the promotion of young entrepreneurs to start up their own enterprise, to find out the constraints that impedes and prospects that motivates the young people in starting and running a business and to assess the performance of the young entrepreneurs in orissa. keywords: youth entrepreneurship; economic development; unemployment jel classifications: m10; m160 1. introduction the role that entrepreneurship plays in the socio-economic development of a country is well acknowledged. as a result, a large number of programmes to support entrepreneurship to fulfill its economic and societal roles designed by the governments and international organizations. however, due to the perception that the concepts of entrepreneurship and youth entrepreneurship are interchangeable, youth entrepreneurship remain somewhat unaddressed in many countries while considerable attention has been made upon entrepreneurship in general. the problems of entrepreneurship have been addressed in the same way for different groups within the population by the use of 'one size fits all' policies and programmes. recently, interest in youth entrepreneurship has been fuelled due to high levels of unemployment amongst young people and as a way to foster employment opportunities or to address social exclusion. furthermore, entrepreneurship is seen as a channel for the talents of many highly educated young people in areas such as information technology, biotechnology and other modern industries. youth entrepreneurship has gained more importance in recent years in many countries with increased interest in entrepreneurship as a way of boosting economic competitiveness and promoting regional development. while youth entrepreneurship is an under-explored field in academic and policy debates, two main factors account for its growing attention in developed countries. the first is the increased number of unemployed young people compared to the rest of the population; the second is the need for greater competitiveness, and the accompanying pressures for skills development and entrepreneurship as a way of addressing the pressures of globalization. in general terms youth unemployment is connected to: firstly, the difficult transition from school to work; secondly, the unwillingness of employers to employ inexperienced workers, and; thirdly, the frequent job changes by young people in an attempt to find a satisfactory job (united nations, 2003). although the literature on youth entrepreneurship is limited, there is evidence (greene, 2005) that young people think that working for themselves as a career option since it offers them an interesting job, freedom and autonomy which other working atmosphere might not provide. international review of management and marketing, vol. 2, no.1, 2012, pp.10-21 11 out of 15 major states of india, orissa is one of the states that have the advantage of rich mineral deposits and favourable natural resources like vast land with low population density, forests, water bodies and marine resources to accelerate the progress of economic growth through industrial development. particularly since 1980s, the state adopted a progressive industrial policy to encourage small scale industry (ssi) units and entrepreneurship among oriyans at the decentralized level. in spite of this, there has been little structural transformation of the state economy. more than 70 per cent of the state’s population still sticks to low yielding and rain-fed agriculture vulnerable to both droughts and floods. promotion of youth entrepreneurship in the state will not only quicken the pace of economic development but will allow the youth to utilize and make best use of their potentialities and will also solve the problem of spiraling unemployment. entrepreneur and entrepreneurship has been defined by various authors in various ways. peter drucker defines it as one who always searches for change, respond to it and exploit it as an opportunity. innovation is a specific tool of entrepreneur, the means by which they exploit change as an opportunity for a different business / service. according to schumpeter, an entrepreneur is a person who is willing and able to convert a new idea or invention into a successful innovation. entrepreneurship employs what schumpeter called "the gale of creative destruction" to replace in whole or in part inferior innovations across markets and industries, simultaneously creating new products including new business models. in general terms an entrepreneur is one who creates and establishes a new endeavor by analyzing prospect for profit/growth, as well as endows his/ her majority of the time and resources to make it his/her principal source of earning. for the purpose of this paper, ‘youth’ has been defined as a person between 18-35 years of age and a youth entrepreneur is defined as the entrepreneur with in the age group 18 – 35 years. 1.1. objectives and methodology i. to study the factors contributing to the promotion of young entrepreneurs to start up their own enterprise. ii. to analyze the constraints that impedes and prospects that motivates the young people from starting and running a business. iii. to assess the performance of the young entrepreneurs in orissa. the study is based on an exploratory research of 100 young entrepreneurs from the cities of bhubaneswar and cuttack. for undertaking the survey, a structured questionnaire was prepared which covered different issues relating to the social and economic background of entrepreneurs, motivating factors for entrepreneurship, problems faced by the entrepreneurs’ and the like. secondary data, i.e., through websites, books and journals were also referred for the preparation of the research article. the sample young entrepreneurs in these twin cities were drawn by using a multi stage cluster sampling method. due to shortage of time it was not possible to have an in-depth study of all the 100 sample entrepreneurs and we have studied two case studies which are given in annexure – iii and annexure – iv. 1.2. orissa – brief outline the state is also endowed with vast mineral deposits like coal, iron-ore, manganese-ore, bauxite, chromite, dolomite, nickel, precious and semi precious stones, etc. of the major rivers of the country, the mahanadi, which is a deltaic river, passes through the state with a large number of tributaries and distributaries. the state is divided into ten agro-climatic zones on the basis of soil, rainfall, climate and other relevant characteristics. orissa’s economy grew at 8.35% in 2009-10 and its growth rate is in line with national trends. in terms of real per capita income, the state has lagged behind the national average ever since independence. orissa per capita net state domestic product in 2008-09 was 71 paisa. orissa economy has been undergoing a structural change, with the sector becoming more and more pronounced. in 2008-09, the service sector accounted for 55% of the gross state domestic product followed by industry 25% and agriculture 20%. according to national family health survey-3 and 2001 census, orissa ranked 19th with 68.8% and 63.08% of literacy rate respectively. mounting unemployment, predominantly among educated unemployed, is one of the burning problems of the state. the agglomeration of unemployment has been estimated at 14.13 lakh person years in the state at the beginning of eleventh five year plan (2007-08) and it has been projected that about 10.53 lakh additional labour force are likely to join the labour market. youth entrepreneurship a necessity for economic competitiveness: a study on young entrepreneurs in orissa state of india 12 the incidence of poverty orissa among all indian states is high. orissa appears in the forefront of all states signifying all indices. almost 85% percent of people live in rural area of the state. around 42 % people in orissa and 47% people of rural orissa live below poverty. although it is the state of mineral resources and it spreads over 6000 sq km area. iron ore occupies 33% of india‘s reserve, bauxite is 50%, nickel is 95%, chromite is 98% and coal is 24 %, still it is difficult and stupendous task to do away with poverty in orissa. although the state has succeeded in removing poverty by 2.92 % between 1993-94 and 2004-05 but in absolute number the people below poverty has risen from 140.9 lakhs in 1993-94 to 151.75 lakhs in 2004-05 in orison against all india figure of decreased from 2440.31 to 2209.24 lakhs. this failure is achieved in time span of eleven years. so the annual average rate of reduction is only 0.265%. growth of micro, small and medium enterprises sector is being emphasized not only because of its potential for generation of employment opportunities but also for its contribution to the output of the state. during 2008-09, 4806 micro, small and medium enterprises went into production with total investment of rs.227.92 crore and 20,996 persons were provided employment opportunities. there has been a decline in the cottage industries in the state. during 2008-09, 9294 cottage industry units were functioning in the state with an investment of rs.34.83 crore and employment generation of 16,279 persons as compared to 2001-02 where 26,196 cottage industries were functioning with an investment of rs. 61.72 crore and employment generation of 36,937 persons during 2008-09, there were 25 public sector commercial banks with 1,658 branches, 11 private sector banks with 101 branches and 5 regional rural banks with 871 branches functioning in the state. in addition, 328 branches of orissa state cooperative banks and 5 branches of oscard banks were also functioning in the state, i.e. altogether 2,990 branches of different banks were functioning in the state. tourism sector is an important sector, which has the potential to stimulate growth and employment generation in the related fields like hotels, transports, shopping and catering. during 2008-09, tourists’ arrival in the state was about 64.02 lakh including 0.44 lakh tourists from foreign countries. inflow of funds to the state through tourist expenditure has increased from rs.2423.12 crore during 2005-06 to rs.3327.96 crore during 2008-09. the passion for going the entrepreneur way, outlining king-size ventures, intrinsic moves and the risk taking capacity to think out of the box is lacking in the state. the government and the people of orissa need to take the drive come together and work for a better orissa. they need to visualize bigger than petty issues like changing the name of “orissa” to “odisa”. “orissa has a long way to go – orissa shining”. 2. review of literature baker (2008) in the paper “fostering a global spirit of youth enterprise” outlines the present challenge of youth unemployment and investigates the role that youth enterprise can play in tackling this challenge, before examining the opportunities for public and private sector collaboration to achieve meaningful social and economic change. the paper draws on examples of existing collaborative youth enterprise initiatives suggesting how these may be replicable and scalable. the first report in ybi’s making entrepreneurship work series (2009) on “youth entrepreneurship recommendations for action” suggested that business, governments, and other sectors of society increasingly perceive that supporting young entrepreneurs can be a highly effective way to reduce youth unemployment and encourage growth in local communities. satapathy (2006) in his article “youth entrepreneurs in orissa, india” focuses on the schoolto-work evolution of youth in orissa, with the aim of identifying essential issues related to youth transition and nature of entrepreneurship existing in india. above all, it investigates the role and capacity of civil society organisations in sustaining and supplementing the government sponsored employment generation programme in india for capacitating a smooth youth transition into the world of work. nancy and thomas (2008) in their article “entrepreneurial orientation among the youth of india: the impact of culture, education and environment”, states that even though a combination of social configurations and cultural values within india that historically confined entrepreneurship, a number of efforts in recent years seem to have significantly recasted the national mindset regarding international review of management and marketing, vol. 2, no.1, 2012, pp.10-21 13 entrepreneurship, particularly among india’s youth who were found to exhibit a significantly higher level of interest in starting new ventures than their us counterparts. llisterri et al. (2006), “is youth entrepreneurship a necessity or an opportunity?” the authors examine the differences between youth who become entrepreneurs by necessity or by opportunity and also evaluate the range and quality of policies and programs that governments, development agencies and civil society are implementing to support the groups of young entrepreneurs. 3. data analysis characteristics of enterprise and entrepreneur the characteristics of the sample enterprises are given in annexure i and it was found that around 44% of the enterprises have 5 to 10 years of existence whereas 27% of the enterprises have 0-5 years of existence. the sample reveals that around 92% of the enterprises belonged to the category of small enterprises. 79% of the enterprises are selling consumer products, 15% industrial whereas only 6% are into intermediate selling. nearly 88% of the enterprise sold their products in the local market, 11% in other districts and 1% in villages. out of the total enterprise 87% are sole proprietors whereas 13% are into partnership form of business. 76% of the enterprise established their enterprise in market place whereas 16% and 8% established their enterprises at their home and industrial area respectively. the characteristics of the sample entrepreneurs, as given in annexure – ii, revealed that 57% of the respondents belonged to joint family whereas 43% belonged to nuclear family. around 73% of the respondents hailed from business origin and 27% from non business origin. out of the total respondents 97% are male entrepreneurs and only 3% are female entrepreneurs. 69% respondents are married whereas 31% are unmarried nearly 42% of the respondents are graduate, 29% under graduate, 18% matriculates and 11% post graduates. about 60% have average academic performance, 37% good and 3% poor academic performance. 84% belonged to middle class family, 14% upper class and 2% of the respondents are from lower class. a majority of respondents i.e., 75% are from business family, 24% service and 1% from agriculture family. 70% of the respondents have no prior working experience whereas 30% have few years of working experience. idea for establishing the enterprise table 1. sources of idea establishing the enterprise sl. no. sources of idea of establishing the enterprise success failure total (%) 1 friends and relatives 20 37 57 2 media coverage of business and business people 1 15 16 3 ideas received from training programme 2 3 5 4 career advisers 4 1 5 5 others 7 11 18 starting a new business means having a business idea translated into a concrete and structured business plan. future entrepreneurs will first of all need to evaluate the feasibility of the entrepreneurial idea through a careful analysis of the product and of its reference market. through the sample survey it was found that around 57% of the respondent got the idea of setting up the enterprise through their friends and relatives, 18% from other sources like market study, own idea, father and the like, followed by media i.e., 16%, training programmes and advisors 5% each. two case studies revealed that the entrepreneur that they got idea of establishing the enterprise from market survey and from relatives. reason for choosing entrepreneurship as a career many people opt for entrepreneurship as their career because of many reasons. some delve into the industry because they would want to run their own business, answering to no one and setting all the rules and protocols by themselves. others jump into entrepreneurship because they have seen that most successful people in the world own a successful business. there are also others that make entrepreneurship as a second career because their current jobs are not earning enough for them. from the sample research it was found that nearly half of the sample i.e., 50% of the respondents chose entrepreneurship as a career because they have the desire to be independent while 23% want to earn youth entrepreneurship a necessity for economic competitiveness: a study on young entrepreneurs in orissa state of india 14 more money, 14% of the respondents have to manage their family business. both the entrepreneurs in the case study said that they desired to be independent and wanted to earn more money. table 2. choosing entrepreneurship as a career sl. no. reasons of choosing entrepreneurship as a career success failure total 1 desire to be independent 16 34 50 2 to create jobs for others 2 5 7 3 inability to get desired jobs 3 2 5 4 dislike for the previous job / employer 2 3 5 5 to earn more money 9 14 23 6 to manage family business 4 10 14 reason for the choice of present location choosing the right location for a business is very vital to its success. the location will definitely affect the target consumers of the company. according to the sample analysis it was found that 44% of the respondents chose their present location of enterprise because of availability of market whereas 40% due to local area. around 9%, 6%, 3% and 1% chose because of easy availability of materials, infrastructure facilities, cheap labour and to avail government incentives. the entrepreneurs in the case study revealed the reasons behind the choice of present location were local market and availability of market. table 3. choice of present location sl. no. reasons of choosing present location of the unit success failure total 1 local area 10 30 40 2 to avail government incentives 1 0 1 3 easy availability of materials 4 5 9 4 cheap labour 2 1 3 5 availability of market 15 29 44 6 availability of infrastructure facilities 3 3 6 source of initial capital there are various sources of capital for a business to start up to stand viable and survive the global challenges, because enough money is required for business support, marketing, sales and distribution. nearly 51% of the respondents got their initial capital from family funds, 21% from their own funds followed by loan from others and loan from financial institutions i.e., 17% and 16% respectively. the two case studies revealed that family funds and loan from financial institutions were the major sources of initial capital. table 4. source of initial capital sl. no. source of initial capital success failure total 1 own fund 8 13 21 2 loan from others 8 9 17 3 family fund 11 40 51 4 loan from financial institutions 8 8 16 perception of society about young entrepreneurs good perception of society is needed to inspire youth that entrepreneurship is a strong opportunity for young people and they must be nurtured. the sample study reveals that around 51% of the respondents felt that their society perceives entrepreneurship as too risky occupation whereas 49% international review of management and marketing, vol. 2, no.1, 2012, pp.10-21 15 think that society perceives it as respectable career. from the sample case studies it was found that both of them felt that the society perceived entrepreneurship as a respectable career. table 5. perception of society about young entrepreneurs sl. no. perception of society about young entrepreneurs success failure total 1 too risky 14 37 51 2 respectable career 20 29 49 obstacle in getting assistance table 6. obstacle in getting assistance sl no. obstacle in getting assistance success failure total 1 undue delay 7 9 16 2 excess official formalities 13 23 36 3 rigid procedures 10 29 39 4 others 7 7 14 government plays a vital role in creating a conductive atmosphere for businesses to thrive and drive the country towards economic prosperity. government has taken many initiatives and has launched many programmes for the development of young entrepreneurs. young entrepreneurs are unable to receive the incentives and face difficulties in getting the assistance. it was found that 39% of the respondents felt that the procedure for getting assistance from the government was the major obstacle, 36% stated excessive official formalities were the major obstacle followed by undue delay and other i.e., 16% and 14% respectively. both the samples in the case studies agreed that excessive official formalities and rigid procedures were the hurdles in getting assistance from government. difficulty faced in obtaining finance table 7. difficulty faced in obtaining finance sl no. difficulty faced in obtaining finance success failure total 1 yes 18 39 57 2 no 16 27 43 the sample survey reveals that 57% of the respondents agreed that they faced difficulty in obtaining finance whereas 43% didn’t agree. they all felt that their businesses had great potential for growth and were all profitable businesses but lack of funds was setting them back and limiting their growth and sustainability. from the case studies it was found that they faced difficulties in obtaining finance. impediments in getting start up funding table 8. impediments in getting start up funding sl no. impediments in getting start up funding success failure total 1 no collateral 8 14 22 2 strict credit scoring 3 5 8 3 high interest rate 15 30 45 4 complex documentation procedures 5 12 17 5 others 3 5 8 youth entrepreneurship a necessity for economic competitiveness: a study on young entrepreneurs in orissa state of india 16 one of the severe problems faced by the young entrepreneurs is non availability of adequate finance to carry out their operations. banks also do not lend money without adequate collateral security or guarantees and margin money which many of them are not in a position to provide. it was found that around 45% of the respondents said that high interest rate were major impediment in getting start up funding while 22% felt that no collaterals were the major impediment, 17% said it was due to complex documentation procedure and 8% said it was due to strict credit scoring methodologies and other reasons. no collaterals and high interest rates were the major impediments in getting start up funds. barriers and obstacles in start up of business table 9. barriers and obstacles in start up of business variables success or failure rank 1 rank 2 rank 3 rank 4 rank 5 rank 6 total success 1 7 7 8 10 1 34 social / cultural attitude failure 5 18 14 11 9 9 66 success 14 5 4 6 5 0 34 access to finance failure 30 4 9 16 5 2 66 success 8 7 2 8 5 4 34 govt regulations failure 21 18 8 6 12 1 66 success 0 3 11 4 1 15 34 education, skill & training failure 3 4 7 7 14 31 66 success 8 5 6 5 3 7 34 business support failure 7 15 17 11 9 7 66 success 3 7 4 3 10 7 34 marketing of goods failure 0 7 11 15 17 16 66 the success or failure of an enterprise is often dependent on overcoming a series of potential barriers, e.g. securing sufficient financial backing, adequate and appropriate guidance and training etc. from the sample survey it was found that a majority of 44% respondents ranked access to finance as the important area where they faced obstacle to engage in business, whereas 29% ranked government regulation as the area of obstacle, 15% ranked business support as the major area of difficulty in startups. the two case studies revealed that lack of adequate access to finance and business support was the obstacles faced in start up of the enterprise. regulative barriers table 10. regulative barrier average score sl. no regulative barriers success failure over all f ratio probability 1 tax rates 2.47 1.95 2.13 4.673 .033 2 subsidy policy 3.56 2.68 2.98 7.664 .007 3 trade policy 3.53 2.61 2.92 9.458 .003 4 others 4.71 3.67 4.02 10.161 .002 as shown in the above table it was found from the sample survey that tax rates, subsidy policy, trade policy and few other taxation regulations are the regulative problems faced by the young entrepreneurs. tax rates were the major regulative barrier according to the sample case studies taken. international review of management and marketing, vol. 2, no.1, 2012, pp.10-21 17 important de-motivators (fears) to engage in business table 11. important de-motivators (fears) to engage in business average score sl. no. fears / de motivators success failure over all f ratio probability 1 financial risk 3.06 3.62 3.43 9.740 .002 2 access to finance 3.21 3.00 3.07 .754 .387 3 social risks 3.21 3.02 3.08 .969 .327 4 lack of skills 2.82 2.97 2.92 .303 .583 5 administrative hurdles 3.06 3.18 3.14 .278 .599 6 stigma associated with failing 3.65 3.18 3.34 2.188 .142 7 workload 2.85 2.91 2.89 .068 .795 8 corruption 3.12 2.86 2.95 1.049 .308 9 competition 3.35 3.55 3.48 .992 .322 10 market demand 3.50 3.92 3.78 3.438 .067 it was found that financial risk had a significant impact & is considered to be an important de motivating factor for young entrepreneurs in setting up an enterprise. emphasis laid upon by the family table 12. emphasis laid upon by the family average score sl. no. family environment success failure over all f ratio probability 1 education 2.82 2.26 2.45 3.796 0. 054 2 adventure 3.26 2.55 2.79 11.266 0.001 3 honesty 2.41 1.89 2.07 3.585 0. 061 4 religion 2.15 1.80 1.92 1.661 0.201 5 innovation 2.91 2.58 2.69 2.021 0.158 6 learning 2.59 2.05 2.23 6.538 0.012 7 independent 2.50 2.11 2.24 1.847 0.177 8 openness 2.88 2.59 2.69 1.379 0.243 9 doing business 2.32 2.18 2.23 0.308 0.580 10 hard work 2.21 1.71 1.88 3.549 0.063 from the sample it was found that education, adventure and learning are some factors / areas on which the families emphasized. the two case studies revealed that their family laid emphasis on honesty, religion, independent, doing business and hard work 4. conclusion the sample survey revealed that most of the young entrepreneurs even though had other occupational opportunities chose entrepreneurship as a career because they aspire to be independent and to earn more money. most of the young entrepreneurs in orissa suffer from the problem of deficiency of working capital, tax regulations and lack of adequate encouragement by the society. these have been the bane for poor performance in the state, contrary to the belief that orissa does not have indigenous, dynamic and committed entrepreneurs. today, youth is more daring and hardworking and career oriented, and can be easily transformed if proper training and knowledge in entrepreneurship can be provided. the cultivation of the new breed is in our hands and we have to stand-in their requirements with their skill and entrepreneurship orientation and perception enhancement for better orissa and india. entrepreneurship can be more acclaimed if we can capitulate the transformation process of the youth which had started in our nation and could live long and youth entrepreneurship a necessity for economic competitiveness: a study on young entrepreneurs in orissa state of india 18 continue if more doors can be opened in their favor because they are going to be entrepreneurial citizens of tomorrow. references agarwal, k.k .and upadhyay, r.k. 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(2007), “what makes a young entrepreneur?”, iza discussion paper no. 3139. chigunta f, wilson d. j.and schnurr j., (2005), “being ‘real’ about youth entrepreneurship in eastern and southern africa: implications for adults, institutions and sector structures” (series on youth and entrepreneurship), seed working papers. david w. t, (2008) "the entrepreneur in youth: an untapped resource for economic growth, social entrepreneurship, and education", international journal of entrepreneurial behaviour & research, 5, 367–369. economic survey of orissa, 2009-10. goel a, vohra n, zhang l and arora b (2007), “attitudes of the youth towards entrepreneurs and entrepreneurship: a cross-cultural comparison of india and china”, the indian institute of management, ahmedabad, w.p. no. 2007-01-06. greene, f.j. 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(2008) “entrepreneurial orientation among the youth of india: the impact of culture, education and environment”, journal of entrepreneurship, 1, 15-35. schoof u, (2006), “stimulating youth entrepreneurship: barriers and incentives to enterprise startups by young people” (series on youth and entrepreneurship), seed working papers. van stel, a., d. j. storey, and a. r. thurik (2007), “the effect of business regulations on nascent and young business entrepreneurship’’, small business economics, 28(2-3), 171-86. williams, d.r. (2004), “youth self employment: its nature and consequences”, small business economics, 23, 323-326. http://www.yesweb.org/publication.htm http://www.iadb.org/sds/mic www.youthbusiness.org/pdf/recommendationsforaction.pdf www.indianmba.com/faculty_column/fc431/fc431.html http://toostep.com/insight/youth-entrepreneurship-the-ultimate-key-to-self-reliance http://www.cacci.org.tw/journal/2009vol1/youth2009vol1.pdf international review of management and marketing, vol. 2, no.1, 2012, pp.10-21 19 annexure – i characteristics of enterprise factors dimensions frequency percentage 0-5 26 26 5-10 44 44 10-15 17 17 15-20 7 7 20-25 2 2 25-30 1 1 30-35 1 1 age of enterprise 35-40 1 1 small 92 92 size tiny 8 8 consumer 79 79 industrial 15 15 product category intermediate 6 6 local market 88 88 village 1 1 location of market for selling the products district 11 11 sole proprietor 87 87 ownership partnership 13 13 home 16 16 ind area 8 8 location of the enterprise market place 76 76 unsuccessful 66 66 success successful 34 34 annexure ii characteristics of entrepreneur factors dimension frequency percentage joint 57 57 type of family nuclear 43 43 business 73 73 origin non business 27 27 20-27 21 21 age 28-35 79 79 male 97 97 gender female 3 3 married 69 69 martial staus unmarried 31 31 matriculation 18 18 under graduate 29 29 graduate 42 42 education post graduate 11 11 good 37 37 average 60 60 academic performance poor 3 3 upper class 14 14 middle class 84 84 economic status lower class 2 2 agriculture 1 1 service 24 24 family occupation business 75 75 yes 30 30 prior working exp no 70 70 years of exp 0-5 14 14 5-10 15 15 youth entrepreneurship a necessity for economic competitiveness: a study on young entrepreneurs in orissa state of india 20 case studies – our entrepreneurial journey annexure iii  mr. gunjan joshi – wholesaler, distributor & stockist of medicines the life of an entrepreneur can be quite challenging & arduous — more so in the early part of the journey. in case of mr. gunjan joshi, life took a difficult turn years before he could even embark on his entrepreneurial journey. even before completing his graduation his mother passed away due to serious illness. due to continued health problems of his father, their business closed down in 1997.a few years later his father too passed away leaving his younger brother and younger sister behind. the pressure was compounded by the fact that he had to complete his studies and take the whole responsibility of the upbringing of his brother and sister. to add to the woes, he had to bear bitter experiences from his close relatives which left him shattered. nevertheless, mr. gunjan decided to take the challenges head on. after making market survey he toyed on various ideas and settled on starting wholesaling business in pharmacy. initially he use to travel to places within orissa selling samples, gaining knowledge about medicines and creating network with suppliers. then he established ‘nirmala enterprises’ in the year 2001. with no background in running a business, he faced multiple pressures and difficulties. for example, he faced difficulties in getting financial assistance from banks, no proper guidance was provided to him, penetrating into the market was difficult, creating customer base and collecting payments was strenuous. in the year 2006 he suffered from jaundice and was nearly on death bed. it was that juncture of his life where his business was stepping towards the sky of success. again in the year 2007 he met with a serious accident and injured his spinal cord. but it was his will power that made him survive and pull through. his journey is punctuated by highs and lows, coupled with a fair share of wins and losses, and backed by relentless effort, sacrifice & the unwavering support of his wife. with a burning passion of becoming a business tycoon and unflinching passion for success, today nirmala enterprises has 7 branches all over orissa with a turnover of more than rs. 70 lakhs approximately, which is nearly 12 times of his initial turnover. his products are sold in local market, villages and other districts of orissa. in a span of 9 years he has proved himself and built a level of trust in pharma world, in a skeptical market, and a business environment that was almost reluctant to new entrepreneurs. he has digged on his heels and worked away to prove himself. according to him, “earning money is easy but earning people is difficult”. over the years he has built good and strong relationships with people and has established his name in the market. he believes in providing best quality medicines and on time delivery supplies. he also supports various organizations by providing medicines at purchase prices and sometimes free of cost. he also provides medicines to the poor and needy people at lower rates. his hard work, self confidence, ability to get things done and strong determination are his key success mantras. he believes in the saying “if my mind can conceive it, and my heart can believe it, i know i can achieve it”. his advice to aspiring young entrepreneurs is give importance to time, think before you leap and be patient because “with time and patience a mulberry leaf turns into a silken gown”. his future plans are to enter into manufacturing of surgical equipments and he has already started taking initiatives. although he is facing problems in getting loan assistance and land allotment, still he is 101% confident of starting his new venture this year itself. he has already started stepping on the road towards success and has been trying to put in his best efforts in each try and as they say “u don't know how high you can fly. until you give a real good try. just do your best in each try. and force the sky to shift a little high.....” international review of management and marketing, vol. 2, no.1, 2012, pp.10-21 21 annexure iv  s. jasmander singh distributor of gna dura parts s. jasmander singh is one of the youngest distributors of gna dura part pvt. ltd., a pioneer concern in india having export in more than 52 countries. his enterprise is in top 10 list out of 50 – 60 distributors in india for last 5 years. his has won ‘best distributor’ award in the year 2000-01. s. jasmander singh was born in a middle class family. his father had a cloth business in patiala. he completed his 12th from patiala and then came to bhubaneswar to do civil engineering. but fate had something else in store for him. he took training and worked under the active supervision of his maternal uncle s. satpal singh, a leading businessman of the state. he wanted to establish himself and wanted to have an identity of his own. so, he started his own wholesale business of automobile spare parts “noble agencies” in the year 1996. he completed his graduation and simultaneously handled his business single handedly. in the year 1999 he called his parents from patiala and they settled here. he initially invested about rs.4 – rs.5 lakhs from his family funds and own income and today his annual turnover is more than rs. 2.5 crores. initially he faced the problem of getting financial assistance from banks as there was a lot of paper work to be done and security to be deposited. the distributors were reluctant to give him orders as he was new to this field and besides that he had only 2 staff members who assisted him. but his commitment and determination held him fast to his work. “dreams and dedication proved to be a powerful combination”. attractive opportunities, good facilities and market potential motivated him to go in for automobile & spare parts business. his perseverance, keenness & dedication carried him far on the path of success. he started his business in bhubaneswar initially and then went on expanding and slowly covered the whole of orissa. he is now the distributor of 5 branded companies in the major cities of orissa like cuttack, balasore, chandikhol, bhadrak etc to name a few in the list. in the year 2002 he met with a serious accident where his right hand got paralyzed. he had to go to delhi every 10 days for check up and daily had to go for physiotherapy. during that tough period of one year when there was a little ray of hope & few supporting and motivating people he did not lose his determination. with full vigour, energy, unrelenting efforts and positive attitude towards life, he took up the challenge and proved that this wasn’t a handicap to his path of success. with the full support of his family members and his relatives and faith in god he stood up and faced the challenge and proved that “where there is a will there is a way”. since then he never looked back. some of the major hurdles according to him in the path of success and growth are high taxation rates in orissa as compared to that of its neighbouring states. in orissa one has to pay vat at the rate of 12.5 % whereas in west bengal it is 4%, besides that there is entry tax of 1% also. there are administrative hurdles also. the reasons he gives for his success are god’s grace, faith in hard work, sincerity and self confidence. no doubt he faced stiff competition in his field of work but by providing quality products, better services and dealings & offering them at good prices has helped him to be in the top 10 distributors in india since last 5 years. he believes “if you keep your customers satisfied they will keep you in business”. his source of inspiration is god and his family. his family had supported and motivated him. his future plans are to take up distributorship of other spare part sales and expand his business into related field. his advice to the prospective entrepreneurs is that love for your work, devotion, sincerity, determination and honesty always pay. one should remember that “successful people don’t do different things but do things differently”. whatever one thinks, one should try to achieve it. we might be tempted to think that this success roadway could be sheer luck. but we must not forget that “luck is the dividend for sweat. the more you sweat the luckier you get”. . international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2017, 7(1), 230-237. international review of management and marketing | vol 7 • issue 1 • 2017230 the relationship organizational culture and organizational commitment on public service quality; perspective local government in bandung, indonesia dedi hadian* school of economic, pasundan, bandung, indonesia. *email: hdedihadian@gmail.com abstract literature studies prove the importance the role of organizational culture (oc) and organizational commitment that contribute to organizational performance, but it is a few links to the quality of public services. this study was conducted to contribute in cultural studies’ organizations and organizational commitment to public service. the research object of government organizations in the city of bandung, indonesia with a sample of 187 employees with proporsionate cluster random sampling technique. data were analyzed using structural equation modeling partial least squares. the results showed that oc and organizational commitment significantly influence the quality of public services. this suggests that policy makers in bandung local goverment, indonesia should be able to improve oc and organizational commitment to public service that is accepted by society can run optimally. keywords: organizational culture, organizational commitment, public service quality jel classifications: h83, m14, m38 1. introduction the paradigm of public service evolved from services that are centralized to provide more service-oriented focus on managing customer-driven government. for the realization of the implementation of public services is needed personnel qualified, have the ability to serve, to meet the needs, respond to public complaints satisfactorily, in accordance with their expectations through the wisdom, the legal instruments that serve as a reference in the control, regulation that the strength of social and community activities do not endanger state and nation. according to fernandez and rainey (2006) in order to deal with changes in public organizations are ensure the need, provide a plan, build internal support for change, overcome resistance, ensure top-management support and commitment, build external support, provide resources, institutionalize change, and pursue comprehensive change. public service synonymous with the representation of the existence of the government bureaucracy, because it deals directly with one of the functions of government is to provide services (john, 1995). therefore, a quality public service is a reflection of a quality of government bureaucracy, it is consistent with the results of research chuaire and scartascini (2014), which suggested that for strengthening public agencies. in the past, the paradigm of public service is to give a very big role to the government as the sole provider. in this regard, osborne and plastrik (1997) describes five myths about public sector reform, namely: (1) myth liberal, (2) myth conservative, (3) business myths, (4) myth workers, and (5) myth people. quality of service has become an important issue in the provision of public services in indonesia. the bad image of public service has always been inherent to the institution’s image service provider in indonesia. during this public service is always synonymous with inaction, injustice, and high cost. not to mention in terms of the service ethic in which the behavior of personnel service providers are not expressive and reflect the spirit of good service. therefore quality of service associated with the fulfillment of the expectations or needs of customers. hadian: the relationship organizational culture and organizational commitment on public service quality; perspective local government in bandung, indonesia international review of management and marketing | vol 7 • issue 1 • 2017 231 according to sanapiah (2008) public service is still have some character that causes people often allergy when dealing with the bureaucracy, namely: apathy, brush off, coldness, condescension, robotism, and role book. research by agus et al. (2007) showed that a strong correlation between service quality dimensions, service performance and customer satisfaction at the malaysian public service sector. furthermore, lipsky (2010) exposes the difficulty of implementing public policy and the disconnected between the legislature’s intended goals and eventual policy outcomes. recent study by alharbi et al. (2016) proved that organizational culture (oc) has significant effect on managerial effectiveness in saudi arabia. furthermore study by ramseook-munhurrun et al. (2010) showed that a significant effect of customer expectations to public service quality management in mauritian public service. another study by murray and howat (2002) who study the relationships among service quality, value, satisfaction, and future intentions of customers at an australian sports and leisure center indicated that value appears to play an important mediating role in satisfaction judgments of customers. according to perry and wise (1990) stated that public service motivation and identifies a typology of motives associated with public service that includes rational, normbased, and affective motives that describe the stimulated individual behavior implications of public service motivation. another study by warner and hefetz (2008) indicated that city managers have recognized the need to move beyond a simple dichotomy between market delivery and public planning to an approach that balances concerns with efficiency, market management and citizen satisfaction. perspective adopted by the bureaucracy as a service provider perspective is actually derived from the bureaucratic approach that tends to place itself as a regulator rather than as a public servant. performance of the bureaucracy at first much understood by the bureaucracy and the aspects of responsibility, namely the extent to which services diherikan compliance with formal rules are applied. the provision of services already pointing to the formal rules deemed to have met the good service and the service of officials deemed to have been consistent in applying the rules of public service. it is necessary to further explore the influence of oc and organizational commitment to provide good public services. 2. literatur review 2.1. oc according to schein (1990) oc as a patern of share basic assumptions that the group learned as it solved its problems of external adaptation and internal integration, which has worked well enough to be considered valid and, therefore, to be taught to new members as the correct way to perceive, think and feel in relation to these problems. meanwhile, according to moorhead and griffin (2013), oc is defined as: a set of acceptable values is always right, which helps a person in the organization to understand the actions that are unacceptable and which actions are unacceptable and values are communicated through stories and other symbolic ways. while hofstede et al. (1991) stated that culture is a mental program area that effect the way of thinking and behavior, collective mental program a group of people in a country referred by the national culture. sithi-amnuai (1996) limits the understanding of oc as a pattern of basic assumptions and beliefs held by members of an organization from the process of learning to the problems of external adaptation and internal integration problems. organizations have cultures through learning, inheritance, adaptation and verification of the value adopted or termed schein (1983) considered an invalid value is proven benefits. it also can be through a position of leadership as teaching by example or by sithi-amnuai (1996) as “through the leader him or herself,” namely the establishment of, and attitudes evident not just speech, charm or charisma. according to sithi-amnuai (1996) that being developed as they learn to cope with problems of external adaptation and internal integration. according to sathe (1983) by looking at the basic assumptions are applied in an organization that divides the “sharing assumption,” sharing means sharing the same values or the same values embraced by the organization as much as possible citizens. assumptions same values that apply are considered as factors that shape oc can be divided into: share thing, share saying share, share doing, and share feeling. while schein (1990) divides oc into several indicators among other things: (1) the qualitative aspects (basic), (2) quantitative aspects (shared) and aspects of the formation, (3) aspects of the component (assumption and beliefs), (4) the aspect of external adaptation (external adaptation), and (5) the aspect of internal integration (internal integration) as the process of unification of culture through assimilation of cultural organizations that enter and affect the character of the members. kluckholn and strodtbeck (1961) based on the results of research found that people differ in value orientation as follows: an evaluation of human nature; the relationship of man with his environment; the orientation of the activity; and the relationship between humans. furthermore, the cultural characteristics according to robbins and judge (2007) as follows: innovation and risk taking, attention to detail, outcome orientation, people orientation, team orientation, aggressiveness, and stability. furthermore hofstede et al. (1991) classifies oc into six dimensions as follows: processoriented versus resultoriented, employee oriented versus job oriented, parochial versus professional, open system versus closesystem, loose control versus tight control and normative versus pragmatic. meanwhile, luthans (2006) identified six important characteristics of the culture of theorganization, namely: observed behaviora lregularities, norms, dominant values, philosophy, rules and organizational climate. and according to makin and cooper (1999) suggests the dimensions of oc can be classified among others; orientation at organizational integration, orientation at performance, achievement orientation, employee orientation and theori orientation of the society. 2.2. organizational commitment commitment to each employee is very important because with a commitment to an employee can become a more responsible job than employees who are not committed. usually, employees who have a commitment, will work optimally so as to devote attention, thought, energy and time for the job, so what is already doing as expected by the company. understanding commitments hadian: the relationship organizational culture and organizational commitment on public service quality; perspective local government in bandung, indonesia international review of management and marketing | vol 7 • issue 1 • 2017232 under mowday et al. (1979; 2013) arguing that the commitment as a force identification of individuals who are in an organization. furthermore, curtis and wright (2001) explain that the concept can be broken down into three dimensions, namely: interest maintain membership in the organization, confidence and acceptance of the values and goals of the organization and willingness to work hard as part of the organization. for all of human resources within an organization has a strong commitment to the job, then all parties within the organization should always be motivated and to be able to motivate, it takes commitment from the top leadership of a secret societies. mathis and jackson (2001) stated that the commitment of the organization is the extent to which employees believe and accept organizational goals, as well as the desire to stay with or leave the company ultimately reflected in absenteeism and employee turnover. to achieve competitive advantage, organizations require various supporting factors. one of the supporters is the organization’s leadership in building the commitment of its employees. luthans (2006) defines organizational commitment in three terms, namely as (1) a power of attitude once the decision becomes part of the organization, (2) a desire or the will to realize high performance as the part that should be fostered in the organization, and as (3) a belief that is accepted as value/value once the goals to be achieved by the organization. meanwhile, robbins and judge (2007) looked at the organizational commitment is one of the working attitude. because it reflects the feelings of a person (like or dislike) to the organization where he works. robbins and judge (2007) defines it as an individual orientation to the organization that include loyalty, identification and engagement. thus, organizational commitment is an orientation active relationship between the individual and the organization. the orientation of these relationships result in individuals (employees) on their own will be willing to give something, and something given that illustrate support for the achievement of organizational goals. thus the organizational commitment refers to an attitude that should be owned by every employee to show loyalty to the organization in which they work. basically, organizational commitment is closely related to the psychological aspects in the acceptance and confidence in the values and goals of the organization is raised through a desire to maintain membership in the organization. to instill loyalty so highly committed employees, should enter the environment since the beginning of the new organization, employees are introduced to the vision, mission, goals, target values, and commitment to the organization. in essence, some definitions of organizational commitment of several experts in the above has almost the same emphasis on the individual processes (employees) in identifying himself with the values, rules, and organizational objectives. in addition, organizational commitment implies as something more than just a passive loyalty to the organization, in other words implies organizational commitment employee relationship with the company or organization actively. because employees who demonstrate a high commitment to have the desire to provide power and responsibility in contributing to the welfare and success of the organization where she worked. 2.3. public service quality with regard to the services in the public sector, one of the important principles that changed the paradigm of public service is the principle streering rather than rowing. with regard to this principle, the government is expected to act more as guides than just punting. scull functions can be performed more efficiently by other parties that a professional. this principle explains that the government can not continuously work alone, and must begin to change the paradigm of service for the purpose of the provision of services can be achieved better. there are still a lot of the principles introduced in this concept, but the bottom line is everything to change the perception of the workings of government. osborne and plastrik (1997) describes five important strategies to make it happen, namely: (1) core strategy: creating clarity of purpose, (2) strategy consequences: creating consequences for performance, (3) customer strategy: putting the customer in decisive positions, (4) the control strategy: moving the control from the top and center, (5) cultural strategy: create an entrepreneurial culture. according to makin and cooper (1999) explains that public participation especially in the decision making process is a mean to fulfill basic rights as citizens. ultimately the goal of public participation is to educate and empower citizens. meanwhile, according to marschall (2004), the purpose of public participation is basically to communicate and influence the decision-making process as well as assist in the implementation of the service. quality of service has become an important issue in the provision of public services in indonesia (juhana et al., 2015). the bad impression of public service has been inherent to the institution’s image service provider in indonesia. during this public service is always synonymous with inaction, injustice, and high cost. not to mention in terms of the service ethic in which the behavior of personnel service providers are not expressive and reflect the spirit of good service. quality of service is defined as a dynamic condition related to products, services, people, processes and environments that meet or exceed expectations. therefore quality of service associated with the fulfillment of the expectations or needs of customers. so that public services can be promoted leadership principles to guide decision making and increase of competitiveness (milakovich, 1995). an assessment of the quality of these services can be viewed from several different angles (evans and lindsay, 1999), for instance in terms of product based, where quality of service is defined as a specific function, with different measurement variables; user based, where quality of service is the degree of conformity with the services desired by the customer; and value based, related to the usefulness or satisfaction over priced. quality of service can be known when performed on several types of gaps associated with customer expectations, perceptions of management, and quality of service, provision of services, external communications, and that is perceived by customer. in the view of albrecht and zemke (1985; 2002) the quality of public services is the result of the interaction of various aspects such as service system, human resources service providers, and customer strategy. public service system that will produce good quality public services as well. a good system will provide standard hadian: the relationship organizational culture and organizational commitment on public service quality; perspective local government in bandung, indonesia international review of management and marketing | vol 7 • issue 1 • 2017 233 service procedures and provide built-in control mechanism so that any deviation that occurs will be easily identified. in addition, the service system must also be in accordance with customer needs. this means that the organizationshouldbe able to respond to the needs and desires of customers by providing service system and the right strategy. in connectionwithhumanresources, takes care workerswho are able to understand and operate a good service system. in addition, service personnel must alsobe able to understand the needs and desires of customers. the nature and type of customersvaried services requiredifferentstrategies and this should be known by service personnel. care workersneed to know the customerswellbeforeheprovides the service. while zeithaml et al. (1990) suggests 10-dimensions that must be considered in view of public service quality benchmarks, as follows; tangible, consisting of physical facilities, equipment, personnel and communications; realiable, consists of the ability of the service unit in creating a promised service properly; responsiveness, willingness to help consumers responsible for the quality of services provided; competence, its demands, knowledge and skills both by officials in providing services; courtesy, attitude or behavior hospitable, friendly, responsive to the desires of consumers and would make contact or personal relationships; credibility, fairness in every effort to attract public confidence; security, services provided should be free from various hazards and risks; access, there is the ease of establishing contact and approach; communication, a willingness to listen to the voice service provider, wishes or aspirations of customers, as well as a willingness to always convey new information to the public; understanding the customer, make every effort to understand the needs of customers. and parasuraman’s servqual model (parasuraman et al., 1988) studied the effect of consumers’ perception of quality of service (customer-perceived quality) in service industries and reduce the dimensions to reliability, tangibles, responsiveness, assurance and empathy. a quality service can also be done with the concept of “wholehearted service,” i.e., “service that comes from self that reflects the emotions, character, beliefs, values, viewpoints, and feelings.” therefore, service personnel are required to provide services to customers wholeheartedly. services such as this reflected the seriousness of the apparatus to serve. seriousness is intended, ministry officials making customer satisfaction its primary purpose. gibson et al. (2006) stated that the performance of public services consists of production is a measure that indicates the ability of an organization to produce the output required by the environment; quality is the organization’s ability to meet the expectations of customers and clients; efficiency is the best ratio between output and input; flexibility is a measure that indicates the organization’s responsiveness to the demands of internal and external changes. the flexibility associated with the organization’s ability to shift resources from one activity to another activity in order to generate new products and services are different in order to respond to customer requests; satisfaction refers to the feelings of employees towards work and their role in the organization; competition, describe the organization’s position in the competition with other similar organizations; development is a measure that reflects the ability and the responsibility of the organization to increase the capacity and potential for growth through resource investments, and survival is the ability of organizations to exist in the face of all the changes. 3. hypotheses hypothesis 1: high oc would lead to higher affective commitment. hypothesis 2: high oc would lead to higher normativecommitment. hypothesis 3: high oc would lead to higher countinuance commitment. hypothesis 4: high affective commitmentwould lead to higher public service quality. hypothesis 5: high normative commitmentwould lead to higher public service quality. hypothesis 6: high countinuance commitmentwould lead to higher public service quality. 4. research methods and data analysis this study aims to determine the influence of oc, organizational commitment toward public service quality. therefore, oc as independent variables with mediated by organizational commitment, and public service quality as the dependent variable. due to a large enough population and the limited available time and cost, then the sampling of the population studied. in addition the survey methods also do the assessment and comparison of the results that can be made conclusions. sampling technique using proporsionate cluster random sampling on employees in bandung local goverment, indonesia. distributing questionnaire had done dirly to 210 respondents but only 187 questionnaire were complete. respondents were asked to provide a response by choosing one of the choices. scoring on each item of the question to the problems in this study was done with a likert scale and with likert seven poin anchor ranging from very unimportant to very important. the oc, organizational commitment domains included in the survey were affective commitment (co1), normative commitment (co2), countinuance commitment (co3), and public service quality. the the instument of oc was adopted from a study by wallach (1983) and adopted by alharbi et al. (2016), with modification related to our study. the instrument of organizational commitment was adopted from meyer and allen (1997), allen and meyer (1993) and the instrument of public service quality was adopted from parasuraman et al. (1988). processing data using structural equation modelling, componentbased partial least squares (pls). measurement models pls based on measurement predictions have the nature of non-parametric through convergent validity, where the size of the reflective individual correlated with the value of loading >0.50 (chin, 1998) and the value disciriminant validity by comparing the value of the square root of average variance extracted (ave) of each construct with the correlation between the constructs in the model, if the value ave is greater than the value of the correlation between the hadian: the relationship organizational culture and organizational commitment on public service quality; perspective local government in bandung, indonesia international review of management and marketing | vol 7 • issue 1 • 2017234 constructs models disciriminant then said to have good validity (fornell and larcker, 1981) as well as the criteria cronbachs alpha >0.70. while the structural models were evaluated using coeffients path to construct first-order constructs, stone-geiser q-square test to test and t-test predictive relevance and significance of the parameters of structural lines. value of r2 used to test the effect of structural models with gof tenenhaus criteria (kock, 2012). testing of second order confirmatory factor analysis of second order factor or component known as hierarchical models (chin, 1998). 5. results and discussion 5.1. respondents characteristics most of the respondents are male (61%) and were 31-50 years old above (50%). in time of years in working, majority of respondents 1-10 years (57%) (table 1). data analysis by examining the results of convergent validity, disciriminant validity and cronbachs alpha. the results of calculation show seven indicators that have loading value <0.5 so that indicator dropped after it carried out the analysis again using indicators qualified testing model testing criteria pls. and calculating results cronbachs alpha and composite realibility and ave is as follows in table 2. the calculations in table 2 show that all have a value >0.7 for cronbachs alpha and ave have a value >0.5 and the results of composite reliability have value >0.7. while the results of the r2 and tenenhaus gof as shown in table 3. 5.2. results of hypothesis testing the results of hypothesis testing with the p value are obtained to see the effect of the independent variables partial to the dependent variables. meanwhile, the results of path coefficient and hypothesis testing are obtained to know the effect of the overall result of the study. the results of the research hypothesis testing are shown in tables 2 and 3. in table 4, it shows that the path coefficient of oc, organizational commitment and public service quality. from the calculation, it showed that only one of the results p-values that lower than significant level is affective commitment toward public service quality. from the calculation of regression analysis by using smartpls 3.0, it is obtained the results as shown in table 4 and figure 1 of p-values of structural model. the results showed that the organizational cultur significant effect on organizational commitment and contribute to the public service quality. the previous study support the results of this study presented as allen and meyer, 1990, agus et al. 2007, lipsky, 2010, alharbi et al. 2016, ramseook-munhurrun et al. 2010, murray and howat, 2002. study by faye and long (2014), which states the perception of the job for the public sector did not prove to significantly influence employee behavior on the job. these results are supported by research conducted by joo and park (2010) which states that organizational commitment can shape the attitudes of employees. another study by lau et al. (2002) which states that organizational commitment influence on employee attitudes and satisfaction of employees. similarly (diab, 2015) which states that organizational commitment is closely linked to the workers performance and job satisfaction in the ministry of health hospitals in amman. according to steers (1985), there are three causes of organizational commitment, namely: personal characteristics such as need for achievement, tenure or office, etc., job characteristics such as feedback, task identity, opportunities to interact, etc., and work experience. the commitment in an organization can be influenced by several factors. van dyne et al. (1994) mentions several factors that affect organizational commitment a person based on a multidimensional approach, namely: (1) personal factors, there are several personal factors that affect working class background, including age, table 1: respondents characteristics description category % gender male 61 female 39 age (years old) <30 24 31-50 50 >50 26 time of working (years) 1-10 57 11-20 32 >20 11 table 2: value of cronbachs alpha, average variance extracted an composite reliability variables cronbachs alpha ave composite reliability affective commitment 0.810 0.614 0.862 normative commitment 0.724 0.652 0.829 normative commitment 0.711 0.568 0.813 organizational culture 0.854 0.796 0.901 public service quality 0.923 0.558 0.933 ave: average variance extracted table 3: r2 and tenenhaus gof variables r2 t-statistics tenenhaus gof affective commitment 0.135 2.367 small normative commitment 0.191 2.760 small continuance commitment 0.430 5.982 large public service quality 0.662 11.744 large figure 1: result of structural model hadian: the relationship organizational culture and organizational commitment on public service quality; perspective local government in bandung, indonesia international review of management and marketing | vol 7 • issue 1 • 2017 235 working class background, attitudes and values as well as the intrinsic needs of workers. there are many studies that show that some types of workers have a higher commitment to the organization that hired him. based on these results, a more thorough worker, ekstrovet, and has a positive outlook on life (optimistic) tend to be more committed. in addition, workers who are oriented to the group, had a goal and showing concern for the group, is also the type of workers who are more tied to its membership. similarly, workers who are empathetic, willing to help others (altruistic) are also more likely to show behavior as a member of the group on his work. results of research al-tit and suifan (2015) also proved that there is a significant influence perception about the work of the employee’s behavior, which in turn increases employee satisfaction, (2) situational factors, distribution of values is an important component in any relationship or agreement. values are not too controversial (quality, innovation, cooperation, participation) will be more easily shared and will establish a closer relationship. if workers believe in the value of the product quality of the organization, they will be bound to the behaviors that play a role in improving the quality. if workers are confident in the value of participating organizations, they would be more likely to feel that their participation will make a difference. consequently, they will be more willing to find solutions and make suggestions to the success of an organization, (3) the supervisor’s behavior. the behavior of the supervisor is a fundamental in determining the level of interpersonal trust in the work unit. the behavior of supervisors who belong to it as sharing important information, making good effect, recognize and appreciate the good performance and do not injure others. an attempt to increase organizational commitment starting from the management, the process which to mobilize the commitment that starts at the highest levels of the organization with circles of executives. inconsistency and lack of confidence in the leaders will reduce the clarity of vision of an organization. leaders demonstrate a commitment to the values through their behavior send and through the way they reinforce the behavior of others so as to provide a public service quality. the leader of the organization is responsible for playing an important role in creating an atmosphere of work environment that encourages all personnel to high performance with high organizational commitment (luthans, 2006). moreover, sweeney and mcfarlin (2002) states that in order to increase organizational commitment can be done in a way; (1) trying to give credence to increase employee loyalty to the organization, (2) build the integration of vision and mission as well as the basis of values and attitudes objectives to be achieved by the organization, (3) using the pattern of teamwork to improve the normative commitments and (4) make countinious improvement in organizational commitment. in general, a paradigm shift is the shift frombureaucratic service thatis “served” to bureaucratic “serve.” service functionscarried and attached to the bureaucracy, not necessarily place the citizens as passive group. in this case the community participation in service must beimproved, because in line with the mission of empoweringratherthanserving. this empowermentwill lead to an increase in citizen participation in public service (chuaire and scartascini, 2014). public participation in the public service known as the concept of coproduction. basically the concept refers to the delivery of services coproduction well as an arrangement or process, in which the government and the community split conjoint responsibility in providing public services. so here no longer distinguishes between citizens as traditionalcustomerwith the government as a service provider. both parties mayact as part of service providers. thus the public service cann be understood as a concept and production customers in the public sector, namely consumer producer, regular producer and coproduction. 6. conclusion, recommendations and limitations the results showed that significantly influence the oc, organizational commitment and public service quality. however, if viewed more partial oc has a different effect on organizational commitment. while organizational commitment to public service quality have different influences where normative commitment and countinuance commitment significant influence but no significant effect on affective commitment. this indicates that the employee has a strong commitment to promote the organization, but they do not feel confident to remain a member of the organization. the results of this study showed that the higher the higher the oc, organizational commitment to advance the organization’s employees. on the other hand the higher organizational commitment also high public servicequality. pubic service quality overall influenced by oc and organizational commitment. organizational commitment partially influenced by oc. this means employees are more committed if the oc in the public service organization has a strong culture. furthermore, the results of this study contribute to the empirical gap that linked oc, organizational commitment toward pubic service quality, so as to contribute to the study of public service quality. for that need attention by the management of public service organizations to make improvements in building a strong oc that can foster organizational commitment to improve public service quality. this suggests that the need for the implementation of improvements in providing the oc so as to form the organizational table 4: result of path coefficient and hypothesis testing variables path coefficient p-values description h1: oc→affective commitment 0.163 0.083 reject h2: oc→normatif commitment 0.281 0.001 accept h3: oc→continuance commitment 0.480 0.000 accept h4: affective commitment→public service 0.368 0.000 accept h5: normatif commitment→public service 0.437 0.000 accept h6: continuance commitment→public service 0.656 0.000 accept hadian: the relationship organizational culture and organizational commitment on public service quality; 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(1990), delivering quality service: balancing customer perceptions and expectations. new york: free press. . international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2017, 7(1), 319-325. international review of management and marketing | vol 7 • issue 1 • 2017 319 factors influencing students of technology-based universities to become entrepreneurs azamudin badri-harun1*, kamarul ariffin mansor2, zullina hussain shaari3, md radzi zainol4, amzairi amar5 1department of management & humanities, universiti teknologi petronas, perak, malaysia, 2faculty of computer and mathematical science, universiti teknologi mara, kedah, malaysia, 3department of management & humanities, universiti teknologi petronas, perak, malaysia, 4department of management & humanities, universiti teknologi petronas, perak, malaysia, 5department of management & humanities, universiti teknologi petronas, perak, malaysia. *email: azamudin_harun@utp.edu.my abstract entrepreneurial activities, other than providing employment opportunity and help improved competitiveness, also becoming incubators of technological innovations. the investigation on factors influencing students of technology-based universities to become entrepreneurs is crucial as it enables the researcher to identify the contributing factors that might significantly influence these potential graduates to embark on entrepreneurial activities. in other words, the research could unravel the enabling factors of the undergraduate students to become entrepreneurs. the external elements being investigated were the role model and the role of the universities in promoting entrepreneurship. the study also focused on the internal elements which were views of achievement and views of personal control on the inclination to become entrepreneurs. the results of the analysis vary from one university to another. nevertheless, the investigation reveals that for full data set, role model, views on achievement, and views on personal control have a positive significant relationship with an inclination of students to become entrepreneurs. keywords: entrepreneurship, entrepreneurial mindset, entrepreneurship education jel classifications: j23, l26, i23 1. introduction every year universities in malaysia produce a substantial number of graduates in vast area of studies. the competitions in the job market among universities’ graduates have become so intense where jobs accessible are insufficient, which lead to the issue of employability among the graduates. in 2015, the largest percentage of unemployed people were youth in the age group of 20-24 years that contributed 42.1% (department of statistics, malaysia, 2016). the scenario reflected the difficulties of graduates who normally completed their studies between that particular range of age. in the current competitive job market, one must compete to secure a job as supply and opportunities of job are inadequate. consequently, many graduates failed to secure job upon graduation. on april 13, 2010, the ministry of higher education (mohe) introduced entrepreneurship development policy for institutions of higher education (iohe). the primary objective of the policy is to encourage human capital development in generating knowledgeable and innovative graduate entrepreneurs who are capable of facing the economic development challenges. the policy encompassed six strategic core, in which the establishment of entrepreneurship center in every iohe is one of them. the respective center functions as the planning, coordinating, monitoring and evaluating the entrepreneurship programs, and entrepreneurship education activities (mohe, 2010). in an entrepreneurship program (2012), instilling entrepreneurial culture among the students has been identified as the eminent platform in creating innovative human capital. hence, the entrepreneurship culture that is being developed in iohe through the corresponding policy is hoped to be able to enhance the awareness of the significance of entrepreneurship to the students. in supporting the initiative, the government of malaysia through several of its agencies, namely, small and medium enterprise badri-harun, et al.: factors influencing students of technology-based universities to become entrepreneurs international review of management and marketing | vol 7 • issue 1 • 2017320 corporation (smecorp), majlis amanah rakyat, sme bank (sme bank), institut keusahawanan nasional and others have developed numerous opportunities for all malaysians, including the graduates, to embark on entrepreneurial ventures at the sme level. one of the government strategies to overcome employability issues is to provide business opportunity to everyone and encourage them to become entrepreneurs. the extensive efforts of these government agencies are predominantly to inculcate the entrepreneurial spirit and development of entrepreneurship in the country. smecorp, for instance, is responsible ‘to empower the critical mass of smes with efficient processes, robust business models, access to financial resources, smart partnerships, market-entry strategies and sustainable growth solutions, through various platforms and programmes for sme development’ (smecorp, 2016). 2. entrepreneurship 2.1. the significance of entrepreneurship entrepreneurship has become so prevalent for the agenda of economic development of a country (christensen et al., 2002). even university students keep discussing on the importance of entrepreneurship in many aspects like career opportunities, economic development and so forth. solomon et al. (2005) indicated that over the last decade a significant attention in entrepreneurship studies has been amplified at the undergraduate and graduate level. matlay and westhead (2005) pinpointed that annual international conferences, workshops and summits are conducted that focused on the magnitude of entrepreneurship to the development of individual, society and country. at the moment, entrepreneurship is considered as critical strategies in developing economy of a country or nation. entrepreneurship is not only favorable but also critical for a resilient economy (henry et al., 2003; gorman et al., 1997). according to schaper and volery (2004), in facing the challenges of globalization, many countries have focused on entrepreneurship in enhancing their competitiveness and economic growth. the success of alibaba. com founded by jack ma has become one of the crucial means of economic growth in the people republic of china (prc). as an authentic entrepreneurial leader, jack has contributed enormously to the economic development of prc in recent years. as of may 2016, the company has recorded sales value of usd 14.96 billion and employs more than 36 thousand of employees (the forbes, 2016). entrepreneurship has positive impacts and become a catalyst of economic growth as it created job opportunities and generated income to the people of the country (gurol and atsan, 2006). scarborough and zimmerer (2003), in particular, described entrepreneurship as the driving factor for competitiveness, innovation and economic improvements of many nations. the fact that wages employment or secure employment is no longer a guarantee especially in the public sector for university graduates has become one of the prominent aspects explaining this unsurpassed occurrence (nafukho and muyia, 2010). in addition, the luxury thought of university graduates are the elite and intelligent group in the society, whom can easily acquire employment upon graduation has no longer reflected the realities of today’s employment world (seet and seet, 2006). henry (2003) reiterated that students are now acquiring knowledge and skills on business acumen that enable them to obtain relevant entrepreneurial knowledge and skills in opening up new business ventures. the importance and contributions of entrepreneurial endeavors have widely become critical research topic among the academia as well as the industrial practitioners (lee et al. 2005). 2.2. entrepreneurship research most research has identified that there is a positive correlation between economic progress and entrepreneurial activities notably, in terms of the transformation in technology, sustainability of the companies and generation of new job opportunities (karanassios et al., 2006). a work by o’shea et al. (2005) ascertained a significant relationship between entrepreneurial spinoffs and the support from the universities. collins et al. (2004) studied on the entrepreneurship aspiration of new students in three universities and found past factors influenced students’ experience which created various needs for them. nevertheless, certain internal and external elements of individuals might have some significant impacts on the potential endeavors as successful entrepreneurs. hence, the objective of this study is to investigate the influencing factors of the students at the technology-based universities in malaysia to embark on entrepreneurial ventures as their future career, taking into account the elements of role model and role of the universities (external), and views on personal control and achievement orientation (internal). 3. research framework and hypotheses 3.1. research framework the questionnaire was developed based on earlier studies by various scholars. the first constructs items on career planning and entrepreneurial inclination (cpei1-cpei5) were adapted from jumaat and jasmani (2012). there are five items in this section. the role model constructs consist of five items (rm1rm5) adapted from study previously carried out by ooi et al. (2011). the third construct under study is role of universities in promoting entrepreneurship that contains five items (rupe1rupe5) adapted from a study done by jumaat and jasmani (2012). the fourth construct views on personal control consist of nine items (vpc1-vpc9) were adapted from study by zullina et al. (2015). finally, the construct views on achievement were measured through eight items (va1-va8) adapted from study done by zullina et al. (2015). the respondents were required to respond to the statement for each of the construct based on a 5-point likert scale ranging from 1 = strongly disagree to 5 = strongly agree. 3.2. hypotheses h1: there is a significant positive relationship between role model and the inclination of students to become entrepreneurs. h2: there is a significant positive relationship between the roles of universities in promoting entrepreneurship on the inclination of students to become entrepreneurs. badri-harun, et al.: factors influencing students of technology-based universities to become entrepreneurs international review of management and marketing | vol 7 • issue 1 • 2017 321 h3: there is a significant positive relationship between views on achievement and the inclination of students to become entrepreneurs. h4: there is a significant positive relationship between views on achievement and the inclination of students to become entrepreneurs. 4. methodology 4.1. sample and data this study considers three technology-based universities in malaysia, namely universiti teknologi petronas (utp) seri iskandar, universiti malaysia pahang (ump) kuantan and universiti teknologi malaysia (utm) skudai. samples are taken from 3rd year undergraduate students who enrolled in engineering or technology based programs offered by the respective institutions. 152 students have responded to the survey such that 54 students are from utp, 39 from ump and the remaining 59 students were from utm. to perform the data analysis using the proposed model with four predictors, a minimum sample size of 39 were required. this is based on the estimation based on the gpower software that generates a power of 0.80 for a proposed model with large effect size (hair et al., 2013; faul et al., 2009). furthermore, since this study requires a comparison between institutions, a minimum sample of 30 is required for each group (sekaran and bougie, 2013). 4.2. data analysis this study employs partial least squares structural equation modeling (pls-sem) to examine both the measurement model and structural model for the proposed framework (figure 1). modern views on pls now see that pls is considered to be a full-fledge structural equation modeling (henseler et al., 2016), which act similar to regression analysis but outstand the traditional regression analysis such that it takes into account the measurement error in the analysis. with that in mind, the pls-sem is a two-stage process by first assess the measurement model for validity and reliability before continuing the hypothesis testing or path analysis through the structural model analysis stage. first, we performed harman’s single factor test in order to assess the issue of common method bias with the survey questionnaire. the test shows that a single factor accounted for only 24.015% of the variance extracted which is far below the cutoff value of 50% of the total variance explained (podsakoff et al., 2003). this result reveals that there is no common method bias in our survey questionnaire and we can proceed with the next analysis, which is the pls-sem. to perform the pls-sem analysis in this study, we make use the availability of smartpls version 2.0 m3 beta software (ringle and wende, 2005). in pls-sem, the path coefficients obtained from the structural model analysis are analogous to standardized beta in ordinary least squares obtained from regression analysis. to assess the significant path showing the relationship of one construct to another, we perform bootstrapping procedure with 5000 re-sample as compared to the minimum re-sample of 1000 suggested by chin (2010). the path is said to be significant if the t-statistic is more than 1.645 (one-tail) or more than 1.96 (two-tail). the path coefficient values obtained ranges from −1 to +1 such that values closer to +1 indicate strong positive linear relationship and values closer to −1 indicate strong negative linear relationship (hair et al., 2013). for this study, the analysis was repeated four times based on full sample and subgroup sample (full = 152, utp seri iskandar = 54, ump kuantan = 39, and utm skudai = 59). before estimating the structural model path, the measurement model criteria such as convergent validity and discriminant validity were examined and separately checked (hair et al., 2013). in this study, based on recommendation from hair et al. (2013), the convergent validity could be achieved through the examination of the items factor loading, average variance extracted (ave) and composite reliability (cr) of each latent construct. in accordance to hair et al. (2013), items with loadings <0.5 were removed from the analysis. in addition, items were also removed if the item cross-loading with other constructs were <0.2 (chin, 1998). on top of the examination on the item factor loadings and cross-loadings, convergent validity was also assessed through its ave and cr values. literature suggested that the minimum cutoff values for ave is 0.5 (henseler et al., 2009; hair et al., 2013) and the minimum cutoff value for cr is 0.7 (hair et al., 2011). thus, items were removed one by one for each latent construct until both the minimum threshold for ave and cr were achieved. to be consistent with our analysis, these criteria must assess throughout the full data set and all the three sub data sets based on institutions under study. table 1 provides the summary of this analysis. once the convergent validity was established, the next is to access the discriminant validity of the proposed model. this study employs the fornell–larcker criterion analysis to assess the discriminant validity for the full and split sample. to ensure the establishment of discriminant validity through this analysis, we compare the correlation of each construct with the square root of the ave of the respective construct (fornell and larcker, 1981). table 2 shows that the square root ave displayed in the diagonals are all greater than its correlation in the off-diagonal elements in its respective column and rows. this suggests that the discriminant validity was achieved for the full and split sample. thus, based on the result shown in tables 1 and 2, we can conclude that the measurement model has adequate and satisfactory convergent validity and discriminant validity. figure 1: research framework badri-harun, et al.: factors influencing students of technology-based universities to become entrepreneurs international review of management and marketing | vol 7 • issue 1 • 2017322 once the measurement model was established, we perform the structural model analysis to test the hypotheses developed earlier. the structural model path coefficients and the r2 were examined to determine how well the data supported the hypothesized model being proposed for the full and split sample (chin, 1998). according to chin (1998), he suggested that we used the bootstrapping method with a resampling of at least 1000 to test the significance of the path coefficients estimated from the structural model analysis. in this study, we performed 5000 resampling. the path significance was investigated using the calculated t-statistics obtain from the bootstrapping method. we employ a directional hypothesis test such that the path estimate is significant if the t-statistic values are well above the critical t = 1.645. the goodness of fit (gof) index measures the model fit by using the geometric mean of the average communality and the average r2 ( 2gof ave r= × ). the cutoff values for assessing gof analysis are gofsmall = 0.1, gofmedium = 0.25 and goflarge = 0.35 (hoffmann and birnbrich, 2012). table 3 and figure 2 provide the summary of the path coefficients results. h1: hypothesis related to role model and the inclination of students to become entrepreneurs. based on the result shown in table 3, we found that h1 was supported in the full data (β = 0.231, p < 0.05) and the utp seri iskandar data (β = 0.332, p < 0.01). however, h1 was not supported for the ump kuantan and utm skudai since the t-value was 1.547 and 1.500 respectively, which is lower than the critical t-statistics of 1.645. h2: hypothesis related to the role of universities in promoting entrepreneurship on the inclination of students to become entrepreneurs. the analysis indicates that h2 is supported in the utp seri iskandar data (β = 0.190, p < 0.05) and the utm skudai data (β = 0.187, p < 0.05). for both the full data and ump kuantan data, the hypothesis was not supported. table 1: factor loadings, ave and cr of full and subsamples latent construct item full sample (n=152) utp (n=54) ump kuantan (n=39) utm skudai (n=59) loading ave cr loading ave cr loading ave cr loading ave cr career planning and entrepreneurial inclination cpei1 0.887 0.771 0.870 0.925 0.822 0.902 0.912 0.831 0.908 0.869 0.665 0.798 cpei3 0.868 0.887 0.910 0.757 role model rm2 0.869 0.726 0.842 0.793 0.712 0.831 0.941 0.751 0.857 0.940 0.587 0.726 rm4 0.835 0.892 0.785 0.540 role of university rupe2 0.871 0.751 0.900 0.783 0.596 0.815 0.944 0.870 0.953 0.837 0.729 0.889 rupe3 0.888 0.849 0.903 0.893 rupe4 0.841 0.675 0.950 0.829 views on achievement va2 0.738 0.631 0.911 0.737 0.593 0.897 0.864 0.766 0.952 0.617 0.545 0.876 va4 0.831 0.825 0.931 0.721 va5 0.755 0.673 0.763 0.839 va6 0.768 0.726 0.873 0.622 va7 0.827 0.806 0.903 0.797 va8 0.842 0.841 0.909 0.802 views on personal control vpc6 0.776 0.654 0.850 0.824 0.670 0.858 0.547 0.650 0.842 0.826 0.586 0.809 vpc8 0.869 0.876 0.915 0.765 vpc9 0.777 0.751 0.901 0.700 ave: average variance extracted, cr: composite reliability, utp: universiti teknologi petronas, ump: universiti malaysia pahang, utm: universiti teknologi malaysia table 2: fornell–larcker criterion discriminant validity of data sets [1] [2] [3] [4] [5] full sample (n=152) [1] cpei 0.878 [2] rm 0.395 0.852 [3] rupe 0.291 0.147 0.867 [4] va 0.372 −0.010 0.368 0.794 [5] vpc 0.550 0.435 0.266 0.313 0.808 utp (n=54) [1] cpei 0.906 [2] rm 0.514 0.844 [3] rupe 0.481 0.175 0.772 [4] va 0.326 −0.007 0.562 0.770 [5] vpc 0.609 0.427 0.436 0.227 0.818 ump kuantan (n=39) [1] cpei 0.911 [2] rm 0.376 0.866 [3] rupe 0.278 0.501 0.933 [4] va 0.633 0.214 0.228 0.875 [5] vpc 0.546 0.509 0.418 0.694 0.806 utm skudai (n=59) [1] cpei 0.815 [2] rm 0.225 0.766 [3] rupe 0.237 −0.133 0.854 [4] va 0.325 0.021 0.484 0.738 [5] vpc 0.526 0.216 0.047 0.286 0.765 diagonal elements are the square roots of the ave while the off diagonals are the correlations between constructs. cpei: career planning and entrepreneurial inclination, rm: role model, rupe: role of universities in promoting entrepreneurship, va: views on achievement, vpc: views on personal control, ave: average variance extracted, utp: universiti teknologi petronas, ump: universiti malaysia pahang, utm: universiti teknologi malaysia badri-harun, et al.: factors influencing students of technology-based universities to become entrepreneurs international review of management and marketing | vol 7 • issue 1 • 2017 323 h3: hypothesis related to views on achievement and the inclination of students to become entrepreneurs. findings shown in table 3 revealed that h3 was supported for the full data (β = 0.235, p < 0.01) and for the ump kuantan data (β = 0.554, p < 0.01). on the other hand, h3 was not supported for the utp seri iskandar data and utm skudai data. h4: hypothesis related to views on personal control and the inclination of students to become entrepreneurs. the result found in table 3 indicate that h4 was supported for full data (β = 0.355, p < 0.01), utp seri iskandar data (β = 0.353, p < 0.01), and utm skudai data (β = 0.456, p < 0.01), but not for the ump kuantan data. 5. discussions and findings based on the results shown in figure 2 and table 3, it reveals that for full data set, role model, views on achievement, and views on personal control have a positive significant relationship with an inclination of students to become entrepreneurs. the model explained about 39.6% of the total variation (r2 = 0.393) and have a medium effect size according to cohen (1988). the gof index for the full data valued at 0.529, which indicate a good model fit. for the utp seri iskandar data set, role model, role of universities in promoting entrepreneurships, and views on achievement have a positive significant relationship with an inclination of students to become entrepreneurs and the model explained about 52.3% of the total variation (r2 = 0.523) with a large effect size based on cohen (1988). the gof = 0.596 for utp seri iskandar data indicate that the proposed model has a good model fit. for the ump kuantan data set, only views on personal control has a positive significant relationship with an inclination of students to become entrepreneurs that account for almost 46.2% total variance explained (r2 = 0.462) with large effect size according to cohen (1988). the gof = 0.598 for ump kuantan data indicate that a good model fit was established. finally, yet importantly, for the utm skudai data set, the role of universities in promoting entrepreneurships and views on personal control were positively significantly influence the inclination of students to become entrepreneurs. the gof = 0.467 indicate that the model fit well with the data and account for 35.1% of the total variance explained (r2 = 0.351). 6. conclusions and limitations the study was designed to investigate the factors influencing students of technology-based universities to become entrepreneurs. in summary, role model, role of universities in promoting entrepreneurships, and views on achievement had a positive significant relationship with an inclination of students to become entrepreneurs for utp seri iskandar students. for ump kuantan, only views on personal control had a positive significant relationship t ab le 3 : r es ul t f or d ir ec t p at h re la ti on sh ip fo r fu ll an d su bs am pl es h yp ot he se s p at h f ul l s am pl e (n =1 52 ) u t p (n =5 4) u m p k ua nt an (n =3 9) u t m s ku da i ( n= 59 ) st an da rd be ta se tva lu e r es ul t st an da rd be ta se tva lu e r es ul t st an da rd be ta se tva lu e r es ul t st an da rd be ta se tva lu e r es ul t h 1 r m → c pe i 0. 23 11 0. 09 91 2. 33 34 * s 0. 33 17 0. 10 08 3. 28 89 ** s 0. 22 74 0. 14 70 1. 54 66 n s 0. 14 90 0. 12 96 1. 15 00 n s h 2 r u pe → c pe i 0. 07 59 0. 05 46 1. 39 01 n s 0. 19 01 0. 10 54 1. 80 31 * s 0. 02 30 0. 10 35 0. 22 25 n s 0. 18 66 0. 10 24 1. 82 28 * s h 3 v a → c pe i 0. 23 54 0. 08 62 2. 73 21 ** s 0. 14 15 0. 10 83 1. 30 59 n s 0. 55 43 0. 18 83 2. 94 34 ** s 0. 10 15 0. 12 01 0. 84 52 n s h 4 v pc → c pe i 0. 35 54 0. 09 88 3. 59 83 ** s 0. 35 25 0. 12 03 2. 92 97 ** s 0. 03 53 0. 14 56 0. 24 28 n s 0. 45 62 0. 15 05 3. 03 16 ** s ** p< 0. 01 , * p< 0. 05 . c pe i: c ar ee r p la nn in g an d en tr ep re ne ur ia l i nc lin at io n, r m : r ol e m od el , r u pe : r ol e of u ni ve rs iti es in p ro m ot in g en tr ep re ne ur sh ip , v a : v ie w s on a ch ie ve m en t, v pc : v ie w s on p er so na l c on tr ol , u t p: u ni ve rs iti t ek no lo gi pe tr on as , u m p: u ni ve rs iti m al ay si a pa ha ng , u t m : u ni ve rs iti t ek no lo gi m al ay si a, s e : s ta nd ar d er ro r, s: s ig ni fic an ce , n s: n on -s ig ni fic an ce badri-harun, et al.: factors influencing students of technology-based universities to become entrepreneurs international review of management and marketing | vol 7 • issue 1 • 2017324 with an inclination of students to become entrepreneurs, whereas, utm skudai shared the role of universities in promoting entrepreneurships with utp seri iskandar and views on personal control with ump kuantan students to become entrepreneurs. based on the overall results, the likelihood of students to embark on entrepreneurial ventures after their graduation was quite diverse between these universities. nevertheless, two similar factors were found to be shared between at least two of the universities. the role of universities in promoting entrepreneurship were shared between utp seri iskandar and utm skudai, and the views on personal control were shared between ump kuantan and utm skudai. it offered the impression that utp seri iskandar and utm skudai had effectively inculcated the entrepreneurship culture to their students, which corresponded to the aspiration of mohe when they introduced the entrepreneurship development policy for iohe back in 2010 (mohe, 2010). it was also thought-provoking to comprehend the influence of the role of universities in promoting entrepreneurship over the view of personal control and vice versa since the relationship of both factors were not being analyzed, but were found had positive significant relationship with an inclination of students to become entrepreneurs for utm skudai. even so, as this study was restricted to only three technologybased universities in malaysia, the findings and conclusions might only be representing those institutions. other limitations were external factors like entrepreneurial curriculum education and entrepreneurial internship program, and internal factors like views on innovation and views on self-esteem, which might have effect on the research variables that were excluded in the study. more research on this particular area with a larger sample of respondents, more related variables and addition of few other technology-based universities might further validate the outcome of this research. 7. acknowledgments the authors would like to thank utp for facilitating the research process. references chin, w.w. 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(2015), technical and business undergraduates’ self-efficacy in entrepreneurship. journal of economics, business and management, 3(4), 417-420. international review of management and marketing vol. 2, no. 1, 2012, pp.43-51 issn: 2146-4405 www.econjournals.com internet marketing usage by small indian entrepreneurs: an exploratory study of punjab raj kumar gautam punjabi university regional center, mohali, punjab, india. email: raj5310@gmail.com abstract: information technology tools such as internet and web marketing plays a significant role in expansion of marketing operations. the paper aims at to examine the awareness level, advantages associated with internet marketing and internet marketing problems faced by the small entrepreneurs of punjab. a number of statements indicating the advantages and problems associated with internet marketing have been developed and the respondents were asked to express their level of agreement/disagreement with these statements on five-point likert scale. kruskal-wallis test has been applied to know the significant differences among the respondents relating to different industries, age and turnover groups with respect to these statements. the test has been applied at assumed p-value =0.05. the statements with less than 0.05 p-value are considered significant and those with p-value more than the assumed value are considered to be insignificant. the findings reveals that units relating to bicycle and bicycle parts and leather and leather products are not using internet for the purpose of marketing. it has also been found that majority of the units consider that internet marketing is advantageous to them. keywords: internet marketing; small entrepreneurs; information technology; viral marketing jel classifications: m; m30; m31; m39 1. introduction companies using modern marketing techniques such as internet marketing, viral marketing, search engine marketing and e-mail marketing will be more successful in meeting the competition. a web based marketing campaign allows the organizations to create a customer information system, which is linked to its customers profiles, thus, the ability to target potential sales, is a powerful tool, enabling the organization to give people what they want rather than applying a generalist advertising campaign that may not reach its target audience (nicolas, 2006). trim (2002) revealed that relationship marketing has evolved and is playing an integral part in the formation of partnership arrangement in an era characterized by network and technology utilization. harkar and akkeren (2002) viewed the benefits related to new technology, such as shortening the product life cycle and changing standards. joseph et al. (2001) viewed that the internet/ web marketing became dominating on the business landscape. companies began to transform domestic and global markets by shaping and reshaping relationships in the supply chain and by creating systemic change in the way consumers shop, organizations buy, prospects are reached, transactions are completed, customers are served and business is conducted. e-commerce is clearly riding a steep and heady growth curve. the world wide web ignores geographic and political boundaries and temporal restrictions. companies of all size and structures are discovering opportunities to save costs, especially for the processing and delivery of digital goods. even for many tangible goods, cost reductions are palpable as the new technology promise closer and faster connections with suppliers and customers. in the web world, consumers can search much more thoroughly and efficiently. website content ranking and grouping can allow straightforward access to website content, by making frequently required content the most accessible and by grouping related content for ease of identification. from a website marketing prospective the more accessible website content international review of management and marketing, vol. 2, no.1, 2012, pp.43-51 44 relating to product and services offered, the more likely that such product and services will be purchased by the consumers (taylor and england, 2006). the objectives of the study are:  to examine the awareness level and usage of information technology tools by the small manufacturers.  to study the perception of small entrepreneurs regarding advantages of using internet marketing.  to find out the internet marketing problems being faced by the ssis. 2. research methodology for the purpose of present study, selected ssi units manufacturing textiles, bicycle and bicycle parts, leather and leather products, and food products and beverages in the state of punjab have been considered. the planned sample of 200 units comprised 50 small-scale units each selected from manufacturing areas such as textiles, leather and leather products, bicycle and bicycle parts, and food products and beverages. however, as the data provided by the respondent entrepreneurs of 27 units was not complete, therefore, they were excluded from the final analysis. thus, the final sample comprised of 173 ssi units of punjab. the study is based on primary data. the primary data has been collected by a structured non-disguised and pre-tested questionnaire. the data has been analyzed on the basis of three variables, viz. industry, age of the units and turnover of the units. industry-wise analysis has been done on the basis of four industries, viz. textiles (tx), bicycle and bicycle parts (bbp), food products and beverages (fpb), and leather and leather products (llp), and food products and beverages (fpb). on the basis of age, units have been categorized into three age-groups, viz. a1 (up to 10 years), a2 (10 to 20 years), and a3 (above 20 years). turnover-wise units have been classified into three categories, that is t1 (up to rs. 2 crore), t2 (rs.2 to 4 crore) and t3 (above rs. 4 crore). 3. analysis and discussion the sample comprising 173 units includes 43 textiles units, 46 bicycle and bicycle parts units, 43 food products and beverages units, and 41 leather and leather products units. it has been observed that 82 units fall into age group a2, 54 units belong to a1 and 37 units relate to age group of a3. it has also been seen that 66 units relate to turnover-group t1 followed by group t3 (65) and t2 (42). kruskal-wallis test has been applied to know the significant differences among the respondents relating to different industries, age and turnover groups with respect to these statements. the test has been applied at assumed p-value =0.05. the statements with less than 0.05 p-value are considered significant and those with p-value more than the assumed value are considered to be insignificant. the data obtained from the respondents has been presented in tables 1, 2 and 3. information technology usage by small manufacturers (1) awareness about information technology tools the respondents of the surveyed units were asked to specify their awareness about various information technology tools available in the market. the responses of the respondents have been presented in the tables 1, 2 and 3. table 1. awareness about information technology (industry-wise mean score) tools tx bbp fpb llp total (a) internet marketing 40 (93.0) 43 (93.5) 41 (95.3) 40 (97.6) 164 (94.8) (b) viral marketing 4 (9.3) 0 (0) 2 (4.7) 0 (0) 6 (3.5) (c) search engine marketing 2 (4.7) 0 (0) 9 (20.9) 2 (4.9) 13 (7.5) (d) e-marketing 15 (34.9) 8 (17.4) 3 (7.0) 28 (68.3) 54 (31.2) (e) any other 1 (2.3) 1 (2.2) 1 (2.3) 1 (2.4) 4 (2.3) n = 43 46 43 41 173 internet marketing usage by small indian entrepreneurs: an exploratory study of punjab 45 it is clear from the above table that most of the respondents from all the units surveyed (94.8%) are aware of ‘internet marketing’. this is followed by ‘e-marketing’ (31.2%). industry-wise analysis indicates that relatively higher proportion of respondents (68.3%) belonging to leather and leather products industry are aware of ‘e-marketing’ in comparison to the respondents relating to textiles (34.9%), bicycle and bicycle parts (17.4%), and food products and beverages (7%). the table further shows that a large majority of the respondent units belonging to different industries are not aware of the concept of ‘viral marketing’ and ‘search engine marketing’. in brief findings reveal that large majority of the units are aware of the ‘internet marketing’. however, proportionately higher number of units belonging to leather and leather products is aware of ‘e-marketing’ as compared to other surveyed industries. table 2 shows the age-wise analysis of the respondents regarding the awareness about information technology tools. table 2. awareness about information technology tools (age-wise mean score) tools a1 a2 a3 total (a) internet marketing 51 (94.4) 78 (95.1) 35 (94.6) 164 (94.8) (b) viral marketing 1 (1.9) 4 (4.9) 1 (2.7) 6 (3.5) (c) search engine marketing 4 (7.4) 8 (9.8) 1 (2.7) 13 (7.5) (d) e-marketing 12 (22.2) 27 (32.9) 15 (40.5) 54 (31.2) (e) any other 3 (5.6) 0 (0) 1 (2.7) 4 (2.3) n = 54 82 37 173 the table reveals that more than 94 per cent units relating to all the three age groups are aware of the concept of ‘internet marketing’. however, a noticeable number of units belonging to different age groups are also aware of ‘e-marketing’, the percentages being 22.2 per cent for a1, 32.9 per cent for a2 and 40.5 per cent for a3. majority of the respondents from all age groups are not aware of the concept of ‘viral marketing’ and ‘search engine marketing’. in nutshell, age group-wise findings reveal that relatively higher number of units relating to age category a3 are aware of ‘e-marketing’ over units falling under other age groups. the responses of the respondents from different turnover groups are presented in table 3. table 3. awareness about information technology (turnover-wise mean score) tools t1 t2 t3 total (a) internet marketing 60 (90.9) 41 (97.6) 63 (96.9) 164 (94.8) (b) viral marketing 2 (3.0) 1 (2.4) 3 (4.6) 6 (3.5) (c) search engine marketing 4 (6.1) 5 (11.9) 4 (6.2) 13 (7.5) (d) e-marketing 17 (25.8) 9 (21.4) 28 (43.1) 54 (31.2) (e) any other 2 (3.0) 1 (2.4) 1 (1.5) 4 (2.3) n = 66 42 65 173 table 3 depicts that that over 90 per cent respondents from each of the categories t1, t2 and t3 are familiar with ‘internet marketing’. however, 43.1 per cent units relating to turnover group t3, followed by 25.8 per cent from t1 and 21.4 per cent from t2 are also aware of the ‘e-marketing’. international review of management and marketing, vol. 2, no.1, 2012, pp.43-51 46 further, most of the respondents relating to all turnover groups are not aware of the concept of ‘viral marketing’ and ‘search engine marketing’ as the respective percentages are very small. the foregoing analysis indicates that the units from turnover group t3 have more awareness about ‘e-marketing’ as compared to the units from other turnover groups. it has also been found that large majority of units relating all turnover groups are not aware of the ‘viral marketing’ and ‘search engine marketing’. (2) use of internet in marketing the entrepreneurs of the selected units were enquired about the usage of ‘internet’ for the purpose of marketing their products. the industry-wise, age-wise and turnover-wise responses of the respondents are presented in tables 4, 5 and 6 respectively. table 4. usage of internet in marketing (industry-wise analysis) internet in marketing tx bbp fpb llp total using 35 (81.4) 24 (52.2) 26 (60.5) 19 (46.3) 104 (60.1) not using 8 (18.6) 22 (47.8) 17 (39.5) 22 (53.7) 69 (39.9) n = 43 46 43 41 173 table 4 shows that 60.1 per cent of the total respondents use internet for the purpose of marketing their products. industry-wise analysis reveals that relatively higher number of respondents from textiles (81.4%), followed by food products and beverages (60.5%), bicycle and bicycle parts (52.2%) and leather and leather products (46.3%) have been using internet for marketing their products. relatively, higher proportion of units relating to leather and leather products (53.7%) are not using internet for the purpose of marketing. the foregoing analysis reveals that units belonging to textiles, and food products and beverages have been using internet for marketing purposes. table 5. usage of internet in marketing (age-wise analysis) internet in marketing a1 a2 a3 total using 29 (53.7) 50 (61.0) 25 (67.6) 104 (60.1) not using 25 (46.3) 32 (39.0) 12 (32.4) 69 (39.9) n = 54 82 37 173 age-wise analysis as given in the above table reveals that 67.6 per cent respondents belonging to age group a3, followed by a2 (61.0%) and a1 (53.7%) have been using internet marketing for selling their products. however, relatively higher number of units from age category a1 (46.3%) are not using internet for marketing purpose. the study reveals that relatively more units belonging to age group a3 have been using internet marketing as compared to units in age groups a1 and a2. table 6. usage of internet in marketing (turnover-wise analysis) internet in marketing t1 t2 t3 total using 34 (51.5) 23 (54.8) 47 (72.3) 104 (60.1) not using 32 (48.5) 19 (45.2) 18 (27.7) 69 (39.9) n = 66 42 65 173 internet marketing usage by small indian entrepreneurs: an exploratory study of punjab 47 table 6 reveals that majority of the respondents from the category t3 (72.3%), followed by categories t2 (54.8%) and t1 (51.5%) have been using internet for marketing their products. relatively, higher numbers of units (48.5%) from turnover group t1 are not using internet marketing as compared to units relating to other turnover groups. in brief the analysis reveals that more units in the turnover category t3 are marketing their products through internet. (3) advantages associated with internet marketing the entrepreneurs of the surveyed units were asked about the level of agreement towards the perceived advantages of internet marketing. kruskal-wallis test has been applied to know the significant difference among the respondents belonging to different industries, age and turnover groups. the industry-wise, age-wise and turnover-wise responses of the respondents are presented in tables 7, 8 and 9 respectively. table 7. advantages of using internet marketing (industry-wise mean scores) advantages total tx bbp fpb llp k.w.statistics p-value (a) paperless transactions 4.10 4.42 3.67 4.58 3.73 36.651 .000* (b) lower manpower cost 3.61 4.09 3.13 3.81 3.49 28.629 .000* (c) elimination of middlemen 3.60 4.00 3.22 3.98 3.39 23.259 .000* (d) quicker order execution 3.52 4.02 2.80 4.07 3.39 40.118 .000* (e) results in low price of product 3.43 4.02 2.87 3.42 3.34 37.465 .000* (f) large coverage of the market 3.81 4.30 3.24 4.35 3.44 42.933 .000* (g) any other 1.34 1.47 1.00 1.05 1.88 16.030 .001* note: * denotes significant results having p-value less than 0.05. table 7 shows that the respondents agree that internet marketing is a ‘paperless transactions’ (mean score 4.10). in addition to this, the respondents also agree that ‘large coverage of market’, ‘lower manpower cost’, ‘elimination of middlemen’, ‘quicker order execution’ and ‘results in low price of products’ (mean score being more than 3 in all) are important advantages of internet marketing. industry-wise analysis reveals that the respondents relating to textiles industry agree that usage of internet marketing has advantages such as ‘paperless transactions,’ large coverage of the market’, ‘lower manpower cost’, ‘quicker order execution’, and ‘results in low price of product’ (mean score being more than 4). however, the units belonging to bicycle and bicycle parts neither agree or disagree with the advantages of ‘quicker order execution’ and ‘results in low prices of product’ (mean score being nearly 3). similarly, the respondents relating to food products and beverages opined that internet marketing has advantages such as ‘paperless transactions’, ‘large coverage of market’ and ‘quicker order execution’ (mean score being more than 4 in all). further, the units belonging to leather and leather products also agree that use of internet marketing is advantageous for the units (mean score being more than 3 in all factors). it has been observed that relatively more units relating to textile industry feel that internet marketing has advantages like ‘paperless transactions,’ ‘large coverage of the market’, ‘lower manpower cost’, ‘quicker order execution’, and ‘results in low price of product’, as compared to units belonging to other surveyed industries. units from bicycle and bicycle parts industry do not consider that internet marketing is beneficial to them. significant differences have emerged among the units relating to various industries with respect to the various advantages of internet marketing. k-w statistics shows that there are significant variations among the respondents relating to various industries with respect to the advantages of internet marketing such as ‘paperless transactions,’ ‘lower manpower cost’, ‘elimination of middlemen’, ‘quicker order execution’ large coverage of the market’, ‘lower manpower cost’, ‘quicker order execution’, and ‘results in low price of product’ as the p-values are lower in all than the assumed p-value of 0.05. the responses relating to advantage of internet usage have also been analyzed across different age categories and are presented in table 8. international review of management and marketing, vol. 2, no.1, 2012, pp.43-51 48 table 8. advantages of using internet marketing (age-wise mean scores) advantages total a1 a2 a3 k.w. statistics p-value (a) paperless transactions 4.10 4.23 4.17 4.01 2.297 .317 (b) lower manpower cost 3.61 3.64 3.70 3.61 .667 .716 (c) elimination of middlemen 3.60 4.09 3.48 3.30 3.849 .146 (d) quicker order execution 3.52 3.61 3.48 3.50 .402 .818 (e) results in low price of product 3.43 3.52 3.42 3.36 .060 .970 (f) large coverage of the market 3.81 3.31 4.06 4.05 .023 .989 (g) any other 1.34 1.27 1.32 1.43 .636 .728 the table reveals that most of the respondents relating to different age categories agreed that ‘paperless transactions’ (mean score 4.10) is the main advantage of the internet marketing. however, the respondents belonging to age group a1 have given more importance to the advantages, such as ‘paperless transactions’, and ‘elimination of middlemen’, (mean scores being the higher). similarly, most of the respondents from category a2 and a3 agree that internet marketing has advantages like ‘paperless transactions’ and ‘large coverage of the market’ (mean score being more than 4). the other advantages such as ‘lower manpower cost’, ‘quicker order execution’, ‘results in low prices of products’(mean score being more than 3 in all) have also been agreed by most of the units relating to different age groups. it can be observed from the k-w statistics that there is no significant difference in the opinion of the respondents belonging to different age groups. further, the units relating to different age categories considered ‘paperless transactions’ and ‘large coverage of market’ as the most important advantages of the internet marketing. however, majority of the units from age group a1 also considered ‘elimination of middlemen’, lower manpower’, ‘quicker order execution’, and ‘results in low price of product’ as the main advantages of internet marketing in comparison to units from other age groups. table 9 shows the analysis of advantages of internet marketing given by respondents from different turnover groups. table 9. advantages of using internet marketing (turnover-wise mean scores) advantages total t1 t2 t3 k.w. statistics p-value (a) paperless transactions 4.10 4.28 3.83 4.34 3.657 .161 (b) lower manpower cost 3.61 4.11 3.41 4.08 6.986 .030* (c) elimination of middlemen 3.60 4.12 3.37 4.11 7.905 .019* (d) quicker order execution 3.52 4.02 3.38 4.12 10.509 .019* (e) results in low price of product 3.43 3.46 2.98 3.88 5.940 .051 (f) large coverage of the market 3.81 4.18 3.30 4.42 9.107 .011* (g) any other 1.34 1.35 1.24 1.44 .921 .631 the above table indicates that most of the respondents belonging to turnover groups t1 and t3 strongly agreed that ‘paperless transactions’, ‘large coverage of market’, ‘elimination of middlemen’ and lower manpower cost’ (mean score being more than 4) are the main advantages associated with usage of internet marketing. however, the units in the category t2 agreed towards internet marketing usage by small indian entrepreneurs: an exploratory study of punjab 49 the advantages like ‘paperless transactions’, ‘large coverage of market’, ‘elimination of middlemen’ and lower manpower cost’(mean score being more than 3). k-w statistics indicates that there are significant differences in the perception of the respondents belonging to different turnover categories with respect to various advantages associated with internet marketing. similarly, the respondents belonging to turnover groups t1 and t3 as compared to units from turnover group t2 ranked ‘paperless transactions,’ large coverage of the market’, ‘lower manpower cost’, ‘quicker order execution’, and ‘results in low price of product’ as the more important advantages of internet marketing. statistically, no significant difference exists among the respondents belonging to different age and turnover categories with respect to various advantages associated with internet marketing. (4) internet marketing problems the entrepreneurs of surveyed units were also asked to indicate the extent of internet marketing related problems being faced by them on five-point rating scale. kruskal-wallis test has been applied to know the differences among the respondents relating to different age and turnover groups with respect to different problems of internet marketing. the responses of the respondents are presented in the tables, 10, 11 and 12. table 10. internet marketing problems (industry-wise mean scores) problems total tx bbp fpb llp k.w.statistics p-value (a) technological or market access issues 3.44 4.12 3.22 3.63 2.78 17.371 .001* (b) shortage of skilled staff 3.68 4.53 3.20 4.19 2.78 37.679 .000* (c) inefficient services of the service provider 2.74 3.56 2.30 2.72 2.39 21.277 .000* (d) lack of knowledge 2.98 3.65 2.37 3.23 2.68 17.717 .001* (e) financial issues 3.16 3.51 3.17 3.33 2.59 17.334 .001* (f) any other 1.46 2.12 1.15 1.00 1.59 6.726 .081 note: * denotes significant results having p-value less than 0.05. table 10 exhibits that most of the units relating to various industries face internet marketing problems like ‘shortage of skilled staff’ (mean score 3.68), ‘technological or market access issues’ (mean score 3.44) and ‘financial issues’ (mean score 3.16) from moderate to some extent. industry-wise analysis reveals that the units belonging to textile industry have been facing internet marketing related problems such as, ‘shortage of skilled staff’ (mean score 4.53), ‘technological or market access issues’(mean score 4.12), to great extent and other problems like ‘lack of knowledge’(mean score 3.65), ‘inefficient services of the service provider’(mean score 3.56), and ‘ financial issues’(mean score 3.51) to moderate extent. however, the respondents from bicycle and bicycle parts have been facing problems in ‘technological or market access issues’ (mean score 3.22), ‘shortage of skilled staff’ (mean score 3.20) and ‘financial issues’ (mean score 3.17) from moderate to some extent and other problems like ‘lack of knowledge’, (mean score 2.37) and ‘inefficient services of service provider’ (mean score 2.30) to some extent. the units from food products and beverages face internet marketing related problems like ‘shortage of skilled staff’ (mean score 4.19) to moderate extent followed by problems such as ‘technological or market access issues’ (mean score 3.63), ‘financial issues’ (mean score 3.33), and ‘lack of knowledge’, (mean score 3.23) to some extent. further, units belonging to leather and leather products have been facing problems of internet marketing to a lesser extent (mean score being lower in all) as compared to other surveyed industries. k-w statistics reveals that there is significant difference among the units relating to different industries with respect to ‘technological or market access issues’, ‘shortage of skilled staff’, ‘inefficient services of the service provider’, ‘lack of knowledge’ and ‘ financial issues’ as the p-values are lower than the assumed p-value of 0.05 in the above mentioned problems associated with internet marketing. international review of management and marketing, vol. 2, no.1, 2012, pp.43-51 50 findings of the study also reveal that most of the units relating to various industries face internet marketing problems like ‘shortage of skilled staff’, ‘technological or market access issues’ and ‘financial issues’ to a moderate extent. comparatively, higher number of units belonging to textiles have been facing internet marketing problems like, ‘technological or market access issues’, ‘shortage of skilled staff’, ‘inefficient services of the service provider’, ‘lack of knowledge’ and ‘ financial issues’. the respondents from bicycle and bicycle parts have also been facing problems in ‘technological or market access issues’, ‘shortage of skilled staff’, ‘financial issues’, ‘lack of knowledge’, and ‘inefficient services of service provider’ from moderate to some extent. the units from food products and beverages face internet marketing related problems like ‘shortage of skilled staff’ to moderate extent followed by problems such as ‘technological or market access issues’, ‘financial issues’ and ‘lack of knowledge’, to some extent. the units belonging to leather and leather products are facing less number of internet marketing problems as compared units relating to other surveyed industries. statistically, significant differences have emerged among the units relating to different industries with respect to internet marketing problems. table 11 shows the information relating to internet marketing problems on the basis of different age groups. table 11. internet marketing problems (age-wise mean scores) problems total a1 a2 a3 k.w. statistics p-value (a) technological or market access issues 3.44 3.78 3.39 3.05 4.238 .120 (b) shortage of skilled staff 3.68 3.89 3.68 3.35 1.883 .390 (c) inefficient services of the service provider 2.74 2.96 2.78 2.32 4.828 .089 (d) lack of knowledge 2.98 3.28 2.93 2.65 3.710 .156 (e) financial issues 3.16 3.48 3.09 2.84 3.028 .220 (f) any other 1.46 1.63 1.43 1.27 .691 .708 it can be observed from the table most of the respondents belonging to different age groups have been facing internet marketing related problems such as ‘technological or market access issues’, and ‘shortage of skilled staff’ (mean being more than 3) from moderate to some extent.. however, the units from category a1 face internet marketing problems like ‘financial issues’ and lack of knowledge’ (mean score higher in both) to higher extent as compared to the respondents from age groups a2 and a3. however, the units in the category a2 encountering with the problem like ‘financial issues’ (mean score 3.09) to some extent. while the respondents from age group a3 as compared to categories a1 and a2 face problems of internet marketing to the lesser extent (mean scores being lower in all). k-w statistics shows that there is no significant variation in the opinion of units relating to different age groups regarding problems of internet marketing. it has also been found that units in the different age groups considered ‘technological or market access issues’, and ‘shortage of skilled staff’ as the main internet marketing problems. comparatively, more units belonging to age group a3 have been facing less number of problems as compared to units in the age groups a1 and a2. turnover group-wise responses of the respondents regarding internet marketing problems are given in table 12. turnover-wise analysis shows that respondents belonging to turnover group t1 have been facing internet related problems like ‘shortage of skilled staff’ (mean score 4.12) to moderate extent and other problems like ‘technological or market access issues’, ‘financial issues’, ‘lack of knowledge’, and ‘inefficient services of the service provider’ (mean score being more than 3) to some extent. the respondents from category t2 face problems of ‘technological or market access issues’ (mean score 3.26), ‘shortage of skilled staff’ (mean score 3.21) to some extent and other problems like ‘inefficient services of the service provider’, ‘lack of knowledge’, and ‘financial issues’ (mean scores less than 3) to less extent. however, the units relating to turnover group t3 also face problems of ‘shortage of skilled staff’ (mean score 3.35) and ‘technological or market access issues’ (mean score 3.05), to some extent. the table further reveals that the units relating to category t3 have been facing internet marketing usage by small indian entrepreneurs: an exploratory study of punjab 51 problems of internet marketing to a lesser extent as compared to units belonging to categories t2 and t3. table 12. internet marketing problems (turnover-wise mean score) problems total t1 t2 t3 k.w. statistics p-value (a) technological or market access issues 3.44 3.86 3.26 3.12 7.642 .022* (b) shortage of skilled staff 3.68 4.12 3.21 3.52 7.250 .027* (c) inefficient services of the service provider 2.74 3.17 2.33 2.57 7.947 .019* (d) lack of knowledge 2.98 3.35 2.69 2.78 3.603 .165 (e) financial issues 3.16 3.56 2.95 2.88 4.608 .100 (f) any other 1.46 1.80 1.19 1.28 4.611 .100 k-w statistics indicates that there is significant variation in the perception of units relating to different turnover groups regarding problems of internet marketing. further, relatively more units relating to category t1 are facing more internet marketing problems as compared to units belonging to categories t2 and t3. the units in the category t3 are stronger in ‘technological or market access issues’, and ‘financial issues’ than those from categories t1 and t2. statistically, there are no significant differences in the perception of units relating to different age and turnover groups with respect to internet marketing problems. 4. conclusion it has been observed that relatively more units relating to textile and food products and beverages industries feel that internet marketing has advantages as compared to units belonging to other surveyed industries. units from bicycle and bicycle parts industry do not consider that internet marketing is beneficial to them. findings of the study also reveal that most of the units relating to various industries face internet marketing problems like ‘shortage of skilled staff’, ‘technological or market access issues’ and ‘financial issues’ to a moderate extent. comparatively, higher number of units belonging to textiles has been facing internet marketing problems and units belonging to leather and leather products are facing less number of internet marketing problems as compared to units relating to other industries. in the era of internet, the more usage of web and internet marketing is required for large coverage of market and to meet the competition challenges. the small entrepreneurs have to understand the increasing role of computerization right from production to selling. the modern technology tools such as search engine marketing and e-marketing would play a pivotal role for dominance and success of small companies. moreover, service providers also need to provide trouble free and efficient services for the growth of industry. hence, the small entrepreneurs need to have computerization of their business processes and recruitment of trained and efficient staff to compete and sustain in the market. references harkar, d., akkeren, j.v. (2002), exploring the needs of smes for mobile data technologies: the role of qualitative research techniques, qualitative market research: an international journal, 5(3), 199-209. joseph, w.y., robert, w.k., rajshekhar, g.j. (2001), marketing on the web:how executive feel, what businesses do. business horizons, 44(4), 32-40. nicolas, e.n. (2006), e-marketing: a boon to small and medium enterprises. sedme, 33(4), 77-82. taylor, m.j., england, d. (2006), internet marketing: website navigational design issues. marketing intelligence & planning, 24(1), 77-85. trim, peter r.j. (2002), corporate intelligence and transformational marketing in the age of the internet. marketing intelligence & planning, 20(5), 259-268. tx_1~at/tx_2~at international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2016, 6(4), 1005-1012. international review of management and marketing | vol 6 • issue 4 • 2016 1005 total quality management practices and microfinance institutions performance in yemen: the resource based view theory perspective khor wei min1, abdo ali homaid2*, mohd sobri minai 3, ali yusob md zain4 1school of business management, college of business, universiti utara malaysia, kedah, malaysia, 2school of business management, college of business, universiti utara malaysia, kedah, malaysia, 3school of business management, college of business, universiti utara malaysia, kedah, malaysia, 4school of business management, college of business, universiti utara malaysia, kedah, malaysia. *email: a3hd2000@yahoo.com abstract the total quality management (tqm) practices in most of the organizations have proven to be the key strategic approach to ensure the peak performance of the firms. in the microfinance institutional (mfis) contexts, the contribution of tqm is undeniably importance. from a study that has been conducted in yemen, 125 usable questionnaires were collected using a self-administered technique and analyzed from the branch managers of the mfis operating in this country. it was done in 2014 at the early stage of the political crisis in the country where most financial institutions were not functioning at the optimum level. the analysis used the partial least squares approach, evaluating the research framework, the measurement model and the structural model. the results show that tqm has a significant effect on the mfis performance and supports the resource-based view theory, the underlying theory for the research that views the organizational resources as a source of sustainable competitive advantage. the findings provide useful insights into the practices and the contribution of the tqm to the mfis and could be the benchmark for the practices in the middle-east countries. keywords: total quality management, microfinance institutions performance, resource based view theory jel classifications: l5, g21 1. introduction companies begin to realize that their customer taste and preference are more challenging today compared to the past. this has somewhat made customer personal preference an international agenda across continents. this is partly due to the fact that customers are more knowledgeable especially with the advancement of technology and the ease to obtain information over the internet. customers begin to emphasize on quality and such a requirement is one of the factors that determine the success of the organization. quality is not limited to only one aspect but overall including products, service, communications and others. such traits could sustain the survival of an organization and provide the advantages especially in a highly competitive environment in business (demirbag et al., 2006; ghadiri et al., 2013). organization understands that providing better quality will not happen if nothing is changed. they also know that their competitors are also fighting to survive and will do anything to provide the best quality products and services. one of the approaches by the organization is to review and consider the business model which might have been practised since their inception as the transformation to meet the current environments and meeting customer’s needs are crucial (lam et al., 2011). with globalization, it is natural that demand will increase and this will also create stiff competition in the business requiring high quality products as well as services for their existing customers and hoping this will attract new customers in the long run. one of the most important actions is to determine a quality vision for the organization. the quality vision is not only meant for the white collar but for everyone in the organization including the bluecollar workers. most companies have also incorporated the quality vision as part of their company’s objective and mission statements. the key performance indicators (kpi) include the quality aspects min, et al.: total quality management practices and microfinance institutions performance in yemen: the resource based view theory perspective international review of management and marketing | vol 6 • issue 4 • 20161006 and with targets assigned normally by the management. having quality target in the organization does not imply benefit to customers only but in reality, having quality in an organization is giving a tremendous advantage to the organization. such continuous improvements initiatives will definitely provide value to the internal processes as well as to avoid scraps or reworking which are waste of resources and time (gharakhani et al., 2013). kumar et al. (2009) mentioned that quality improvements can satisfy both the stakeholders and also the customers. as most organizations started to incorporate quality in their day to day activities, the concept of “total quality management” (tqm) surfaces with the objectives to have a structured process of improvement in terms of superior quality. globally tqm has been accepted as a management tool for quality improvement and practised by many organizations throughout the world. it has been accepted as an effective tool as the system is able to recognise the changes needed in the organization to overcome challenges like new market or the new environment to continue to stay in business (el shenawy et al., 2007; irfan and kee, 2013). although there are many positive points, one of the set-backs of tqm is that it is conflicting with organizational performance as mentioned by nair (2006) therefore a further research study is necessary to confirm the understandings. this study to be carried out together on empirical investigation on microfinance which is limited or none at this point (homaid et al., 2015). although there are studies done on the results of tqm and organization performance, the majority is done on developed countries and very few in the arabic region (al-amri and bon, 2012; al-swidi and mahmood, 2012). the study of tqm in yemen is very limited or maybe the least compared to the developed countries. therefore, this research study is with intention to fill the gap as described above. from the above discussions, there is definitely a need to perform a test on the relationship between tqm and the organization performance in the microfinance industry with a focus on the microfinance institutions (mfis). roy and goswami (2013) state that these institutions are different from other organizations as they focus on both, the business and social objective. khaled (2011) strongly emphasize on the worthiness of adopting tqm in the microfinance sector and therefore, this research examines the impact of tqm on the mfis and share on the new findings and insights in this area. 2. literature review 2.1. underpinning theory the premises of resource based view (rbv) are based on the argument that the organizational performance is determined by the key resources it possesses. the resources of an organization can be categorized as tangible resources, knowledge resources, system and procedural resources; cultural values and resources, network resources and resources that may have dynamic capability features and finally intangible resources (mills et al., 2003). the resource-based view (rbv) theory has received a considerable attention as the major theory in the strategic management area (almarri and gardiner, 2014). in contradict; in the research study conducted by barney (1991), it is confirmed that not all tangible and intangible resources owned by an organization will contribute to the generation of sustained competitive advantage. further study confirm that both, the sustainable competitive advantage and superior performance will only have their impact and value when it holds valuable, rare, imperfectly imitable and non-substitutable resources of an organization (barney and clark, 2007). the concepts and philosophy of tqm have been accepted by many successful organizations and is recognize as a tool that continuously generating the improvements in quality and hence, provide the competitive advantage to the organization (munizu, 2013; kaur and sharma, 2014). organizations view this tool as very valuable, even though it may be limited and definitely to copy by competitions and the non-substitutable intangible resources is near impossible as each organizational needs for improvements vary. in the study done by homaid et al. (2015), it was also found that tqm is an important organizational resources and that both, the theoretical and empirical evidences support the idea that tqmoriented organizations create successfully barriers for competitors to copy or follow tqm practices while they obtain a sustainable competitive advantage. with the above description, the rbv theory is selected to be the underpinning theory for current study. 2.2. tqm from our study and reviewing the past literature, there is definitely no one common or universal consensus on the definition of quality. juran (1988) viewed quality as “fit for use” while feigenbaum (1983) defined quality as “the total composite product and service characteristics of marketing, engineering, manufacture and maintenance through which the product and service in use will meet of the expectations of the customer.” ishikawa (1985) defined quality as “quality does not mean the quality of the product only, but also of the quality of management or the reputation of the company.” by far, this is one where the customers’ needs and expectations are the key point in these definitions. thus, viewing quality as “the degree to which products and/or service delivered is consistently value-added and excellent that can reach customer satisfaction” is deemed appropriate. munizu (2013) states that quality is in fact defined differently by different scholars. jaafreh and al-abedallat (2012) state that the concept of quality has witnessed a significant evolution as influenced by the tqm originators like crosby, deming, juran, feigenbaum, ishikawa, for their popular contributions and prominent role in the prosperity of quality. for example, crosby (1979), defined quality as “conformance to requirements and quality is free” while deming (1986) defined quality as “satisfying customer beyond expectations.” it is a well-known fact that tqm implementation and practices vary from one organization to another, from one industry to another and definitely, also from one country to another (singla et al., 2011; fryer et al., 2007). with these findings, it is therefore important for organization to determine the critical success factors as the start of the process and determine the target and requirements for effective implementations (karuppusami and gandhinathan, 2006; khanna et al., 2011). it is also important to note the successful implementation of tqm requires basically identifying and ranking min, et al.: total quality management practices and microfinance institutions performance in yemen: the resource based view theory perspective international review of management and marketing | vol 6 • issue 4 • 2016 1007 of tqm practices (salaheldin, 2009; talib and rahman, 2010). the optimum number of tqm practices to be covered in any studies should range from 6 to 9 as recommended by talib et al., (2011). talwar (2011) strongly suggest that an organization can obtain a sustainable competitive advantage through adopting only a few of the quality principles where competitors may ignore. for this research study, homaid et al. (2015) suggested seven practices to study; (i) leadership management, (ii) customer focus, (iii) strategic planning, (iv) training, (v) continuous improvement, (vi) benchmarking and (vii) quality culture. 3. methodology 3.1. research framework and hypotheses development referring to literature review in the field of quality research, the tqm-performance link has been extensively examined in numerous studies using different performance measures such as financial, innovation, operation and quality performance (zehir et al., 2012). the majority of these studies adopted tqm as a single construct where findings proved that tqm has a positive and significant effect on the differentiation of organizational performance. examples of direct effect are given by munizu (2013), iqbal et al. (2012) and idris (2011) and examples providing for indirect effect are su et al. (2008) and demirbag et al., (2006). this research work on the composite construct format takes into consideration all the dimensions that represent tqm. the conceptual framework for this research work, linking tqm practices as a composite construct and the performance of mfis to propose that the greater application of the tqm the higher performance of the mfis. so, for this paper, the hypothesis that needs to be highlighted here is the following: h1: there is a significant positive relationship between tqm dimensions as a composite variable with the mfis performance. the hypothesis, once tested, reveals whether tqm has a positive and significant relationship with the mfis performance or otherwise as shown on figure 1. 3.2. data and measurements the sample involves 166 branches where branch managers were required to fill up the questionnaires. according to al-swidi and al-hosam (2012), the branch managers are the individuals who can provide reliable information regarding strategies adopted within commercial banks, which in this study, have a lot of similarity with the mfis. from the total of 166 branches, 125 branch managers responded to the questionnaires and were used for the final analysis. this reflects a 75% response rate, which is quite high, and enough to represent the population of the study. the partial least squares (pls) structural equation modeling was used in the data analysis to find the significant link between tqm and mfis performance. for this study, the performance of mfis is measured by the balanced scorecard (bsc) measurement system (kaplan and norton, 1996). as suggested by kipesha (2013) and roy and goswami (2013), the four components of the bsc perspectives, financial and non-financial, are covered plus the social perspective. the social component of the social perspective was added to the four business field perspectives of financial, customer, internal process, learning and growth for the business components as mfis focus on both business and social goals. 5-likert scale questionnaires type used in the study. the questionnaires follow the questionnaires by talib et al. (2013), wang et al. (2012), conca et al. (2004), brah et al. (2000) and lam et al. (2011). their questionnaires were validated in the context of service sectors; therefore this study used them. 4. analysis and findings for the purpose of evaluating the model of the study, the two-stage approach was employed to assess the model, the measurement and the structural model as recommended by valerie (2012) and hair et al. (2014). the construct validity and reliability of the variables measures were established through conducting three main tests, namely content validity, convergent validity and discriminant validity in the measurement assessment. to assess the structural model, three main tests were conducted, namely r-square value, predictive relevance of the model and the significance levels of path coefficient. 4.1. measurement model assessments as mentioned earlier, the measurement model assessment was tested using three main tests namely content validity, convergent validity and discriminant validity. following the suggestions of chin (1989) and hair et al. (2010), the factor loadings were employed to test the content validity. they suggested that an item’s outer loading on the related construct should be higher than all of its loadings on other constructs. table 1 showed that all items’ loadings were higher than the cross loadings indicating accepted content validity. for convergent validity, loadings, average variance extracted (ave) composite reliability (cr) and cronbach’s alpha were the criteria for this assessment. the item loadings should be highly loaded and statistically significant in measuring the constructs with 0.70 or above, 0.50 or above for each construct eva and 0.70 or above for both cr and cronbach’s alpha. in table 2 and figure 2, the results showed that the convergent validity was confirmed. to assess the discriminant validity, the fornell-larcker criterion was used where the square root of ave values should be compared with correlations of each latent construct as the requirement to figure 1: the research framework of the link between total quality management and monetary financial institutions performance min, et al.: total quality management practices and microfinance institutions performance in yemen: the resource based view theory perspective international review of management and marketing | vol 6 • issue 4 • 20161008 achieve discriminant validity. as shown in table 3, all the square root of the ave values exceeded the correlations of latent construct suggesting that the discriminant validity was established in the current study. therefore, it can be concluded that by establishing the content validity, convergent validity and discriminant validity, the measurement model of the study is supported. figure 2: item loadings and r2 value table 1: the content validity test co bm cf ci cp fp lgp lm pp qc sop sp tr bm1 0.912 0.144 0.302 0.180 0.288 0.249 0.320 0.031 0.103 0.186 0.478 0.555 bm2 0.924 0.261 0.356 0.176 0.342 0.241 0.387 −0.004 0.152 0.194 0.513 0.561 bm3 0.886 0.260 0.212 0.148 0.305 0.345 0.252 0.123 0.100 0.105 0.411 0.536 cf1 0.197 0.903 0.439 0.245 0.122 0.233 0.563 −0.098 0.417 0.046 0.543 0.354 cf3 0.242 0.890 0.366 0.225 0.187 0.288 0.385 0.081 0.432 −0.011 0.468 0.432 ci1 0.180 0.280 0.731 0.364 0.113 0.353 0.341 0.134 0.272 0.226 0.438 0.379 ci2 0.294 0.412 0.819 0.161 0.062 0.403 0.355 0.150 0.305 0.249 0.470 0.396 ci3 0.298 0.388 0.865 0.293 0.218 0.380 0.566 0.116 0.264 0.269 0.619 0.390 cp1 0.206 0.195 0.236 0.905 0.489 0.374 0.187 0.210 0.320 0.071 0.280 0.214 cp2 0.121 0.278 0.365 0.879 0.329 0.292 0.317 0.142 0.415 0.249 0.351 0.184 fp1 0.223 0.103 0.044 0.294 0.837 0.229 0.032 0.231 0.180 0.083 0.153 0.312 fp2 0.364 0.187 0.224 0.493 0.916 0.351 0.204 0.336 0.352 0.220 0.292 0.373 lgp1 0.224 0.202 0.371 0.335 0.304 0.895 0.232 0.521 0.278 0.108 0.236 0.316 lgp2 0.317 0.315 0.463 0.330 0.296 0.875 0.356 0.261 0.231 0.223 0.419 0.459 lm1 0.386 0.516 0.463 0.211 0.325 0.392 0.817 0.029 0.327 0.162 0.567 0.525 lm4 0.269 0.404 0.405 0.271 0.066 0.252 0.860 −0.078 0.332 0.197 0.644 0.368 lm5 0.244 0.430 0.489 0.230 −0.035 0.183 0.880 −0.124 0.243 0.154 0.612 0.249 pp1 0.031 −0.014 0.075 0.217 0.334 0.326 −0.092 0.881 0.071 0.083 −0.005 0.101 pp2 0.059 −0.008 0.212 0.134 0.248 0.463 −0.020 0.880 0.148 0.107 0.007 0.175 qc2 0.142 0.458 0.276 0.299 0.219 0.316 0.266 0.147 0.703 0.040 0.166 0.112 qc3 0.035 0.198 0.108 0.203 0.266 0.037 0.084 0.083 0.741 0.055 0.146 0.145 qc4 0.094 0.351 0.365 0.335 0.231 0.300 0.387 0.042 0.769 0.186 0.288 0.203 qc7 0.100 0.344 0.214 0.332 0.225 0.144 0.242 0.099 0.728 0.203 0.294 0.321 sop1 0.229 0.083 0.313 0.169 0.218 0.198 0.211 0.110 0.204 0.923 0.271 0.307 sop2 0.074 −0.066 0.228 0.139 0.094 0.123 0.139 0.080 0.098 0.862 0.171 0.143 sp1 0.561 0.413 0.541 0.251 0.313 0.380 0.538 0.037 0.240 0.214 0.828 0.574 sp2 0.451 0.429 0.443 0.258 0.166 0.235 0.703 −0.034 0.269 0.116 0.805 0.469 sp3 0.380 0.339 0.603 0.353 0.278 0.220 0.519 0.028 0.282 0.293 0.809 0.440 sp4 0.204 0.629 0.418 0.246 0.052 0.316 0.481 −0.034 0.205 0.180 0.704 0.301 tr1 0.565 0.306 0.180 0.107 0.252 0.311 0.366 −0.011 0.254 0.087 0.394 0.791 tr4 0.385 0.392 0.513 0.212 0.267 0.342 0.450 0.212 0.253 0.339 0.546 0.817 tr5 0.574 0.382 0.468 0.227 0.452 0.422 0.312 0.168 0.179 0.209 0.477 0.878 co: construct, bm: benchmarking, cf: customer focus, ci: continuous improvement, cp: customer perspective, fp: financial perspective, lgp: learning and growth perspective, lm: leadership management, pp: internal process perspective, qc: quality culture, sop: social perspective, sp: strategic planning, tr: training min, et al.: total quality management practices and microfinance institutions performance in yemen: the resource based view theory perspective international review of management and marketing | vol 6 • issue 4 • 2016 1009 4.2. structural model assessment as mentioned earlier, the structural model assessment used the r² values, predictive relevance of the model and the level and significance of the path coefficients as recommended by chin (2010), hair et al. (2011) and valerie (2012). table 3 shows that the r² value of mfis performance was 0.264 suggesting that 26.4% of the variance in the mfis performance can be explained by tqm. according to cohen (1988), the value of r² is considered substantial with value higher than 0.26, moderate with a value higher than 0.13 and weak with a value higher than 0.02. therefore, the r² value of the current model is considered substantial confirming the power of variable contained in the model to explain mfis performance. to assess the quality of the model, the values of cross-validated redundancy and cross-validated communality were generated by running the blindfolding technique in smart pls. according to fornell and cha (1994), the predictive quality of the model is confirmed when the cross-validated redundancy value is higher than zero. table 4 also shows that the cross-validated redundancy table 2: the convergent validity test construct items loadings cronbach’s alpha cra aveb benchmarking bm1 0.912 0.893 0.933 0.823 bm2 0.924 bm3 0.886 customer focus cf1 0.903 0.757 0.892 0.804 cf3 0.890 continuous improvement ci1 0.731 0.731 0.848 0.651 ci2 0.819 ci3 0.865 customer perspective cp1 0.905 0.743 0.886 0.795 cp2 0.879 financial perspective fp1 0.837 0.709 0.870 0.771 fp2 0.916 learning and growth perspective lgp1 0.895 0.724 0.878 0.783 lgp2 0.875 leadership and management lm1 0.817 0.812 0.889 0.727 lm4 0.860 lm5 0.880 internal process perspective pp1 0.881 0.709 0.873 0.775 pp2 0.880 quality culture qc2 0.703 0.721 0.825 0.541 qc3 0.741 qc4 0.769 qc7 0.728 social perspective sop1 0.923 0.750 0.887 0.797 sop2 0.862 strategic planning sp1 0.828 0.795 0.867 0.621 sp2 0.805 sp3 0.809 sp4 0.704 training tr1 0.791 0.773 0.868 0.688 tr4 0.817 tr5 0.878 bm: benchmarking, cf: customer focus, ci: continuous improvement, cp: customer perspective, fp: financial perspective, lgp: learning and growth perspective, lm: leadership management, pp: internal process perspective, qc: quality culture, sop: social perspective, sp: strategic planning, tr: training table 3: correlation and discriminant validity co bm cf ci cp fp lgp lm pp qc sop sp tr bm 0.907 cf 0.244 0.897 ci 0.324 0.450 0.807 cp 0.186 0.262 0.333 0.892 fp 0.344 0.171 0.167 0.463 0.878 lgp 0.303 0.289 0.469 0.376 0.339 0.885 lm 0.356 0.531 0.531 0.278 0.149 0.329 0.853 pp 0.051 -0.012 0.163 0.199 0.330 0.448 -0.064 0.880 qc 0.132 0.473 0.345 0.409 0.316 0.289 0.355 0.124 0.736 sop 0.181 0.021 0.308 0.174 0.184 0.185 0.201 0.108 0.176 0.893 sp 0.518 0.565 0.638 0.351 0.264 0.366 0.712 0.001 0.316 0.254 0.788 tr 0.607 0.437 0.479 0.224 0.393 0.434 0.454 0.157 0.274 0.264 0.574 0.829 co: construct, bm: benchmarking, cf: customer focus, ci: continuous improvement, cp: customer perspective, fp: financial perspective, lgp: learning and growth perspective, lm: leadership management, pp: internal process perspective, qc: quality culture, sop: social perspective, sp: strategic planning, tr: training min, et al.: total quality management practices and microfinance institutions performance in yemen: the resource based view theory perspective international review of management and marketing | vol 6 • issue 4 • 20161010 value was 0.079 for mfis performance. in conclusion, the values of r2 and cross-validated redundancy indicate that the study model has an adequate prediction quality. in order to examine the hypothesized relationships among the study, the pls algorithm and bootstrapping algorithm were run. the results shown in figure 3 and table 5 proved that tqm has a positive and significant relationship with mfis performance at the 0.001 level of significance (β = 0.514, t = 8.527, p < 0.001). this result has proved that tqm, comprised of seven dimensions including, leadership management, customer focus, strategic planning, training, continuous improvement, benchmarking and quality culture, improve the mfis performance. therefore, the hypothesis (h1) developed by the study is supported. 5. discussion and conclusion this study proposed and tested a model that establishes the relationship between tqm and mfis performance. this study contributes to the body of knowledge by examining the mentioned relationships in microfinance sector, focuses on both business and social objectives, which has not been given the deserved attention scholarly. on other words, the most of studies regarding tqm-organization performance linkage were carried out in manufacturing industry and there is a dearth of study in the service sector particularly in the microfinance sector. it also examined the effect of tqm as composite construct on the mfis performance in the view of the rbv theory. moreover, it provides a useful framework for tqm implementation for the management of mfis figure 3: significance of factor loadings and path coefficient and other stakeholders in yemen. it can raise the awareness among the practitioners about the significant role of tqm practices in obtaining better performance and competitive advantage. the results of the study proved that tqm is significantly associated with mfis performance at the 0.001 level of significance (β = 0.514, t = 8.527, p < 0.001). this finding is in agreement with previous studies which examined the tqm-organization performance association such as idris (2011), iqbal et al. (2012), munizu (2013), and homaid et al. (2015). this is also in line the premises of rbv theory, which views organization resources such as tqm as a requirement for fostering the performance of organization. therefore, it can be concluded that implementing tqm practices by mfis is an advantage that assist in obtaining superior performance specifically, financial, customer, operation, learning and growth and social aspects. although this study contributes significantly to the body of knowledge, there are many gaps that can be filled up by future studies. for example, the data of the study was collected from microfinance sector so that future studies can be carried out in other sectors. it can also examine the mentioned relationships in other developing or least developed countries for generalization the results. a longitudinal research approach can be carried to detect the changes in the environment and extending the current research framework with other organization resources such as market orientation, entrepreneurial orientation and learning orientation which can be employed as complementary resources. table 4: predictive quality indicators variable variable type r2 cross-validated redundancy cross-validated communality mfis performance endogenous 0.264 0.079 0.187 mfis: microfinance institutions table 5: hypothesis testing results number hypothesis path path coefficient se t p decision h1 tqm≥mfis performance 0.514*** 0.060 8.527 0.000 supported ***p<0.001. se: standard error, tqm: total quality management, mfis: microfinance institutions min, et al.: total quality management practices and microfinance institutions performance in yemen: the resource based view theory perspective international review of management and marketing | vol 6 • issue 4 • 2016 1011 6. acknowledgment the authors acknowledge the encouragement and great support obtained from mr. mohammed saleh al-lai, the chairman of the board of directors of cooperative and agricultural credit bank (cac bank) and the ceo of al-amal microfinance bank. references al-amri, a.a.h., bon, a.t.b. 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(2012), total quality management practices’ effects on quality performance and innovative performance. procedia-social and behavioral sciences, 41, 273-280. . international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2016, 6(4), 711-721. international review of management and marketing | vol 6 • issue 4 • 2016 711 effect of organizational structure, leadership and trust on job performance of employee: a case study on employee at universitas ternama bambang moertono setiawan1, i. made putrawan2, syliviana murni3, imam ghozali4* 1faculty of information technology and business universitas, teknologyyogyakarta kampus jombor, yogyakarta, indonesia, 2jakarta state university, jakarta, indonesia, 3jakarta state university, jakarta, indonesia, 4faculty of economics and business, diponegoro university, tengah, indonesia. *email: ghozali_imam@yahoo.com abstract the objective of the research is to obtain the direct effect of organizational structure, leadership and trust on the performance of employee of ternama university. the study was conducted at ternama university in 2010 by using a survey method with path analysis applied in testing hypothesis and 80 samples selected by simple random sampling. the finding of the research are: (1) there is a direct effect of organizational structure on trust; (2) there is a direct effect of organizational structure on performance; (3) there is a direct effect of leadership on trust; (4) there is a direct effect of leadership on performance; (5) there is a direct effect of trust on performance; (6) there is a indirect effect of organizational structure on performance through trust, and (7) there is a indirect effect of leadership on performance through trust. based on these findings, it could be concluded that any changing or variation occurred at performance might have been directly significant effected by trust and leadership, and also indirectly significant effected by organizational structure and leadership. therefore, when we want to minimize the variation which occurred in performance, these factors such as trust, leadership and organizational structure are necessary to be taken into account. keywords: organizational structure, leadership, trust and performance jel classifications: l2, l22, l25 1. introduction universitas ternama (ut) is the merger of three universities, which are stie “ternama” (stie “t”), akademi bahasa asing “ternama” (aba “t”), and sekolah tinggi manajemen dan informatika komputer “ternama” (stmik “t”). since the decree of direktorat jenderal pendidikan tinggi nomor 237/dikti/o/2002 was published on october 23, 2002, the three universities officially changed the name and form became ut. the main purpose of the integration of stie “t,” aba “t,” and stmik “t” becomes ut is to create synergy, effectiveness and efficiency by raising the resource sharing up so that the infrastructure and equipment can be increasingly utilized. the merger process of those three universities becoming ut has been running as the plan. this is indicated by the lack of major problems arising as the effect of the integration as well as the teaching and learning process that are running well. it also shows the existence of commitment and strong leadership at ut. the commitment on quality and the strong willing for always developing have been becoming the goal of the three integrating universities. after determining the vision, mission, and objectives, the next step to be conducted is to establish an agreement on the performance that is adjusted to the organizational structure and job description. norm, structure, and organizational value have become a part of main strategical planning for ut for achieving its long-term vision. as an educational organization that is prioritizing job performance using information technology-based system to support main activities of the organization, ut is improving the organizational structure emphasizing more lean structure and efficient with the setiawan, et al.: effect of organizational structure, leadership and trust on job performance of employee: a case study on employee at universitas ternama international review of management and marketing | vol 6 • issue 4 • 2016712 optimal effectiveness achievement. being supported with adequate information system, the lean structure of organization can support more the job performance’s efficiency and effectiveness based on the analysis that the basic problem at ut is both job performances of the organization and the individual cannot fully support to face the rapid business competition internally, externally, and globally. moreover, it is also not able to improve quality of the graduates. the job performance problem faced by ut is generally caused by several factors. internally, it is resulted by the personal factors of the employees and administrators of ut. in addition, externally, there is a changing of challenges and business condition in the education. in detail, the problem of job performance can be in the form of the low level of believe among the employees and administrators, enforcement of ethical professional is among academics, and also the impact of leadership in the management of ut. additionally, the imbalance organizational structure to support the increase of trust becomes on of causal factor causing job performance problem. in term of the extent of problem that influence the job performance at ut, the low level of trust should be restricted. for the information, thing that is influencing the low level of trust is leadership and organizational structure. based on discussions above, the problems of research can be elaborated as follows: 1. does the organizational structure have a direct effect on trust? 2. does the organizational structure have a direct effect on job performance? 3. does the leadership have a direct effect on trust? 4. does the leadership have a direct effect on job performance? 5. does the trust have a direct effect on job performance? 6. does the organizational structure have an indirect effect on job performance through the trust? 7. does the leadership have an indirect effect on job performance through the trust? 2. literature review 2.1. job performance job performance is a result or a creation from values of behavior shown by employees in conducting their jobs and responsibilities. concept of job performance is simply defined by hale (2004) as: “doing meaningful work in effective and efficient ways.” job performance is also elaborated by meyer (2002) as values brought to stockholder that is “performance as meeting requirements in the dominans of financial results, operations, performance for the customer, and learning and innovation.” relate in a company, job performance is able to be described as “meeting the requirements of diverse stakeholders groups and gauge performance by stakeholders’ appraisals of the firm’s performance.” job performance does not stand independently, it is integration of the target arrangement, comparison of the completion on target, and the measurement of shareholders value in company. based on ivancevich et al. (2008), job performance is “the desired results of behavior,” job performance is also function of: (1) capacity to do something that is related with the degree of relationship process of the individual should be relevant between job and skill, ability, knowledge, and experience, (2) opportunity to do something that is related with the availability of equipment and technology, and (3) willingness as the effort of achieving work performance. concept of job performance is elaborated by colquitt et al. (2009) as “the value of the set of employee behaviors that contribute, either positively or negatively, to organizational goal accomplishment.” based on colquitt et al. (2009), it is also defined by three factors which are: (1) task performance, (2) citizenship behavior as contribution of positive behaviour, and (3) counter productive behavior as contribution of negative behavior. task performance is influenced by factors of routine and adaptation, voluntary behavior is influenced by interpersonal and organizational factors, counterproductive behavior is influenced by the nature of the deviation factors, factors of production deviation, and deviation factor of political and personal aggression factor. performance affected by many factors such as drawn in figure 1 (colquitt et al., 2009). based on the figure 1, within an organization, job performance and organizational commitment is output of the organizational behavior process which is affected by individual mechanism in the form of: (1) job satisfaction, (2) stress, (3) confidence, (4) trust, fairness and ethics, and (5) learning and decision making. in addition to the individual mechanisms, the performance is also influenced indirectly by: (1) organization mechanism in the form of: (a) the organizational structure and (b) a description of the position; (2) group mechanism comprising: (a) leadership (style and behavior), (b) leadership (power and influence), (c) the process of the group, and (d) the characteristics of the group; (3) individual characteristics such as: (a) the personality and values of structures and (b) ability. according to sonnentag (2002) performance is defined as: “as behavior or action that is relevant for the organization’s goals and that can be scaled (measured) in terms of the level of proficiency (or contribution to goals) that is represented by a particular action or set of actions. performance is what employers (self or other) pay you to do, or what they should pay you to do.” according to nelson and quick, the performance was intended as a “task accomplishment,” that is seen from the outcomes and effort as a good performance. the accomplished work indicates that the performance related to employee behavior in doing their tasks with responsibility and skills that they have. accomplishment also illustrates the qualified results as part of their precision, accuracy and ability to do the job, as well as closely related to efforts in carrying out this responsibility in order to deliver a good performance. armstrong (2006) says “performance is often defined simply in output terms – the achievement of quantified objectives,” definition of the performance relates the work of the behavior. as a behavior, the job performance is a human activity that is directed to the implementation of organizational tasks assigned to him. setiawan, et al.: effect of organizational structure, leadership and trust on job performance of employee: a case study on employee at universitas ternama international review of management and marketing | vol 6 • issue 4 • 2016 713 briefing of the behavior performed by the organization through the work of reference. it is, usually in the form of regulations, description of work duties and functions, and the direction and authority of the organization.based on some previous brief elaborations, performance in this research is the value of a set of employee behaviors that contributes positively to the fulfillment of organizational goals. 2.2. trust employees who believe to the organization automatically may work quietly so that it can produce optimal performance. belief according to stephen and thimoty (2009) is “a positive expectation that another will not – through words, actions, or decisions – act opportunistically.” trust according to stephen and thimoty (2009) is a history that depends on process that underlying the relationship but with alimited sample of experience. trust involves personal sensitivity for example like when conducting good communication. stephen and thimoty (2009) also stated that there are five dimensions of trust, namely: (1) integrity, (2) competence, (3) consistency, (4) loyalty and (5) openness. according to muchinsky (2006) trust is defined as a belief that appears even though one cannot control the actions of others against himself, the person will remain profitable actor behave towards him. the trust based on research results of zolin and pamela (2004) is influenced by many factors, including by the number and quality of communication, perceptions of followers, risk, leadership, and formalization. while the trust effects on organizational transparency, and performance results of the process performance. according to mcshane and mary (2009), trust is “a psychological state comprising the intention to accept vulnerability based on positive expectations of the intent or behavior of another person.” in other books, mcshane and mary (2009) define trustas “a person’s positive expectations toward another person in situations involving risk.” the trust also means the fate of the other person or group. while colquitt et al. (2009) define trust as “the willingness to be vulnerable to an authority based on positive expectations about the authority’s actions and intentions.” according to colquitt et al. (2009) confidence influenced by, (1) the trust propensity which is a fundamental disposition of trust, (2) trustworthiness which consists of competency, character, and the benevolence, (3) feelings towards trustee. effect of trust in performance described by lusch and brown (1996) as shown in figure 2. in the approach to human resources, according to stone, the trust is defined as a measure of how much the desire of employees to share information, cooperate each other and not to take advantage. according to nelson and james (2006) trust is “the willingness to be vulnerable to the actions of another.” relation between trust and leadership, according to nelson and james is the followers’ confidence that their leaders will act in line with followers’ welfare purpose. shaw (1997) stated that trust supported by some key things like leadership practices, organizational design and organizational structure. according to greenberg (2010), the trusts “are referring to a person’s degree of confidence in the words and action of another.” greenberg divides trust into two parts, namely the belief that is calculus-based trust and identification-based trust. figure 1: integrative model of organizational behavior setiawan, et al.: effect of organizational structure, leadership and trust on job performance of employee: a case study on employee at universitas ternama international review of management and marketing | vol 6 • issue 4 • 2016714 based on the various opinions about the trust mentioned above, in this study, the trust that is intended is a desire to rely on an authority that is based on positive expectations for action and the attention of authority. 2.3. leadership some experts describe leadership differently. but most of them state that leadership relates to the leader behavior in influencing the member of organization to achieve the goal of organization. based on daft (2005), “leadership is influence relationship among leaders and followers who intend real changes and outcomes that reflect their shared purposes.” thus, leadership includes of: leader, follower, influence, purpose, responsibility and personal integrity, changes, and common goals. the direct effect of leadership on performance is illustrated by daft as in figure 3. slocum and don (2009) describe leadership as “a person who exhibits the key attributes of leadership – ideas, vision, values, influencing others, and making tough decisions.” leader is someone who shows the keys attributes of a leader that is the idea, the vision, values, influencing others and decision making. according to ivancevich et al. (2008), leadership is “using influence in an organizational setting or situation, producting effects that are meaningful and have a direct impact on accomplishing challenging goals.” this opinions supported by kinicki and robert (2008) by stating: “leadership is defined as a social influence process in which the leader seeks the voluntary participation of subordinates in an effort to reach organizational goals,” leadership involves more than taking advantage of the power and authority as well as showing the different levels. at the individual level, there involves mentoring, training/coaching, generating confidence and enthusiasm. at the group level, the leader builds groups, creates cohesion, and resolves conflicts, builds structures and eventually leader creates changes at the organizational level. mullins (2005) stated that there are many variables underlying the effectiveness of leadership in the organization of work, namely: the characteristics of the leader, the type of leader’s power, subordinate’s characteristics, the relationship between the leader of the group, the type and nature of the organization, the type of tasks that can be accomplished, technology, organizational structure and management system, the type of problem and the nature of the leader’s decision, characteristic and influence of the external environment, social structure and organizational structure, and also the influence of the national structure. this opinion is clearly explained how many variables that underlie the effectiveness of leadership. leader behavior is influenced by situational variables and intermediaries to leadership effectiveness. yukl (2010) describes causal relationships in multiple linkage model. leader behavior is influenced by situational variables as intermediary variables which subsequently neutralizing effect on the effectiveness criteria. meanwhile, greenberg (2010) stated that leadership is “the process by which an individual influences others in ways that help attain group or organizational goals.” according to crawford et al. (1997) that the following characters are consistently demonstrate the characteristics of effective leaders, namely: a sense of responsibility, importance of task completion, spirit, willpower, take risks, originality, confidence, capacity to handle the pressure, the capacity to influence, capacity coordinate the efforts of others in the achievement of goals. these characters indicate that leaders have a great responsibility towards his job so that he has a spirit, willpower, risk taking, confidence, and teamwork’s support. based on previous description, the leadership in this study is the behavior of a person to influence and direct subordinates in carrying out the work to achieve organizational goals effectively and efficiently. 2.4. organizational structure organizational structure according to nelson and james (2006) is “the linking of departments and jobs within an organization.” based on nelson and james, in the organizational structure, there are six dimensions, which are: (1) formalization which is the degree of the role of employees in the form of formal documentation such as procedures, job descriptions, guidelines and rules, (2) centralization is a level of decision made by the leaders of the organization, (3) specialization which is an arrowly defined job level and depends on the unique expertise, (4) standardization which is the activity level of work completed in a routine manner, (5) complexity, and (6) hierarchy of authority. the organizational trust mechanisms figure 2: model of trust and job performance figure 3: universalistic and contingency leadership setiawan, et al.: effect of organizational structure, leadership and trust on job performance of employee: a case study on employee at universitas ternama international review of management and marketing | vol 6 • issue 4 • 2016 715 structure has a direct impact on job performance, as elaborated by shani (2009) as in figure 4. based on the figure 4, organizational structure which is a form of the existing structure that adapts to the needs, whether to global competition or to the global innovation together with other factors such as the process of handling the transformation, human resources in the organization, objectives, context and process management that have direct impact on organizational performance, especially in terms of improving the productivity, quality, satisfaction and organizational growth. colquitt et al. (2009) organizational structures have substantial impact on the financial performance and ability to manage employees. the organizational structure is expressed as “how jobs and tasks are divided and coordinated between individuals and groups within the company.” according to colquitt et al. (2009), there are five dimensions in organizational structure, namely: (1) work specialization, (2) the chain of command, (3) span of control, (4) centralization and (5) formalization. based on stephen and thimoty (2009), an organizational structure is “how jobs tasks are formally divided, grouped, and coordinated.” elements of organizational structure according to stephen and thimoty are working specialization, departmentalize, chain of command, the level of supervision, centralization and decentralization, and formalization. strong organizational structure accordance with the needs of the organization and in line with the existing circumstances and conditions directly affects the performance of the organization as described by stephen and thimoty as in figure 5. according to greenberg (2010) organizational structure is “the formal configuration of individuals and groups with respect to the allocation of tasks, responsibilities, and authority within organization.” based on mcshane and mary (2009), organizational structure is defined as “the division of labor as well as the patters of coordination, communication, workflow, and formal power that direct organizational activities.” the elements of organizational structure are: (1) the context figure 4: factors influencing job performance of the organization control variances setiawan, et al.: effect of organizational structure, leadership and trust on job performance of employee: a case study on employee at universitas ternama international review of management and marketing | vol 6 • issue 4 • 2016716 level of supervision, (2) centralization, (3) formalization, (4) departmentalize. gibson (2009) explains organizational structure as “pattern of jobs and groups of jobs in an organization. an important course of individual and group behavior.” while, according to ivancevich et al. (2008) organizational structure is an organizational structure that is specifically based on decisions and actions of the managers. based on the previous theoretical studies, the organizational structure in this study is intended as a way in which the work obligations are formally divided, grouped and coordinated within the organization. 2.5. previous research these are results of previous studies that are relevant to this study: 1. research of zolin (2004) titled “trust in context: the development of interpersonal trust in geographically distributed work, in trust and distrust in organizations,” found that trust is influenced by many factors, including by the number and quality of communication, perceptions of followers, risk, leadership, and formalization. while, the confidence effects on organizational transparency, and performance results of the process performance. 2. research of chen et al. (2007) titled “the relationship between leader-member exchange (lmx), trust, supervisor support, and organizational citizenship behavior (ocb),” found that lmx affects the trust of the subordinates to supervisors and supported feeling by supervisors, and both mutually have positive effect on ocb. 3. research of ning and yan (2009) titled ‘the effects of trust climate on individual performance,” found that the climate of trust in the workplace affects individual performance. 4. research of greiling (2007) titled “trust and performance management in non-profit organizations,” found that, in a non-profit organization, there is a complementary relationship shown in three variations, namely: performance management as a basis for the belief system, the basic belief for performance management, and performance management as a safety device in the belief that regulates relationships. 5. research of lookman and fred (2005) titled “the joint effect of task characteristics and organizational context on job performance,” found that the existence of an influence, linking of task characteristics and organizational context, has a critical effect on organizational context variables towards the limited job performance. 6. research of jian and ming (2007) titled “the relationship of leadership, team trust and team performance,” found that, comparatively, there is a touching relationship with the leadership. before the team’s tasks are started, leaders need a clear communication with the team and ensure that the team has understood the jobs and task objectives. those will effectively help the performance of the team. 7. research of aronson et al. (2006) titled “the impact of leader personality on new product development teamwork and performance: the moderating role of uncertainty,” found that, there is the importance of teamwork as a connecting personality variables on the performance of organizational processes and confirming a direct relationship between the openness of leadership and performance, as well as indirect relationships through teamwork under a high degree of uncertainty. 3. methods 3.1. effect of organizational structure on trust organizational structure gives flexibility to the members of the organization for working in accordance with their expertise. on the other hand, the delegation of powers and duties to members of the organization at a particular position in the organizational structure shows the trust existence of organization to the members. the organizational structure is the way sharing, grouping and coordinating the work tasks formally. division and grouping according to the skills and interests as well as the ability of members will increase the bond of members to work within the organization. the will to do job performance well reflects the trust of employee on organization. while, the trust is defined as a willingness for relying on an authority that is based on positive expectations for action and attention of the authorities. trust may increase when members of the organization work within the appropriate structure as their ability and interests. based on that ideas, this is expected that organizational structure is influencing the trust. hypothesis 1: there is a direct effect of the organizational structure on the trust. 3.2. effect of organizational structure on job performance the organizational structure is one of the key factors that affect job performance. this can influence the job performance by its ability in managing people who are in the organization. organizational structure organizes the division arrangements of employees and also the patterns of coordination, communication, work flow, and formal power that directs organizational activities. good organizational structure will be able to improve job performance. based on that idea, it is expected that organizational structure influences job performance. hypothesis 2: there is a direct effect of the organizational structure on the job performance. 3.3. effect of leadership on trust in organization that has a strong leadership, leader’s influence is extremely important in order to bring the members in the process of figure 5: the determinants and outcomes of organizational structure setiawan, et al.: effect of organizational structure, leadership and trust on job performance of employee: a case study on employee at universitas ternama international review of management and marketing | vol 6 • issue 4 • 2016 717 approaching the goals. leadership is essentially a person-specific characteristics in influencing the members of the organization in order to achieve organizational goals. effective leaders will provide encouragement and direct the organization and its member to work diligently in term to achieve the desired goals. effect of the leader who directs the organization in achieving its goal will provide assurance to members of the organization for relying and acting in accordance with the given direction. trust itself is defined as a willingness to rely on an authority that is based on positive expectations for the action and intention of the authorities. strong trust of the members to organizations is affected by the leader’s ability to influence its members. based on that idea generation, it is expected that leadership may influence the trust. hypothesis 3: there is a direct effect of the leadership on the trust. 3.4. effect of leadership on job performance effective leader based on the perspective of followers include: placing the work appropriate with the context, develop the followers, lead by giving examples, and provide support. effective leaders must be able to support the work of the group, encourage sustainable development, empower group members, creating the confidence of group members to complete a given job, develope the group identity, manage conflict directly, and create change. meanwhile, the job performance is the result of work/performance that can be in the form of set of values which contributes positively to the achievement of organizational goals. to obtain a set of values, there is needed direction, coaching and development of members’ ability to be appropriate with the expected results. based on that idea generation, it is expected that leadership may influence the job performance. hypothesis 4: there is a direct effect of the leadership on the job performance. 3.5. effect of trust on job performance growing trust within the organization’s members gives the confidence to rely and work whole heartedly for achieving organizational goals. the work confidence and willingness for carrying out the task give an encouragement to achieve the optimal results. job performance that is expected by members of the organization will be stronger when the trust to the organization also increases. without trust in the organization, the resulted job performance will also decrease. based on that idea generation, it is expected that trust could influence the job performance. hypothesis 5: there is a direct effect of the trust on the job performance. 3.6. indirect effect of organizational structure on performance through trust the organizational structure also play a role in improving job performance. with the effective organizational structure, it is expected to increase the trust of organization’s members for performing well. organizational structure which is appropriate to the needs of the organization and in accordance with the capabilities and expertise of members of the organization will increase the trust of the organization’s members to the organization itself. trust can be improving the job performance of organization’s members during the working process. good organizational structure indirectly improves the job performance of organization’s members to work through the increase of their trust during conducting the working process. based on that thought, this is expected that organizational structure indirectly effects the job performance through the trust. hypothesis 6: there is an indirect effect of the organizational structure on the job performance through the trust. 3.7. indirect effect of leadership on job performance through trust leadership is an ability for influencing others, so the others want to work in order to achieve the goal. improved performance can be done by the leader that be conducted by increasing the trust of the organization’s members. trust is influenced by the ability of a leader to influence the members, so they will believe and rely on to the organization during the working process. based on that idea, this is expected that leadership has indirect effect on the job performance through the trust. hypothesis 7: there is an indirect effect of the leadership on the job performance through the trust. hypothetical model of this study can be described in figure 6. 3.8. population and sample the location of research was ut where is located in the city of yogyakarta, special province of yogyakarta. the method used was a survey method with causal techniques. then, for analyzing about whether there is existed or not the effect of one variable to another variable, it is used path analysis. the population in this study is all employees of universitas ternam a located in the city of yogyakarta, special province of yogyakarta. sampling frame in this study were 120 employees of ut, through a simple random sampling technique. there has been determined that the sample size for this study is 80 people. to capture the research data, there is used instrument that is in the form of methods of data collection with the scale of attitude. this item is developed by researchers and has been tested for figure 6: hypothetical model of the research setiawan, et al.: effect of organizational structure, leadership and trust on job performance of employee: a case study on employee at universitas ternama international review of management and marketing | vol 6 • issue 4 • 2016718 validity and reliability. measurement of the validity of the instrument is using the product moment correlation formula. while the reliability of the instrument is applying an alpha cronbach formula. the experimental results show that from the 40 points of job performance’s questions, there are 37 points which are valid by the calculation of instrument reliability performance of 0.95, items of the trust variable are 32 points and there are 28 points which are valid by the calculation of the trust instrument reliability was 0.93, items of the leadership variable are 30 points of questions and there are 27 points which are valid by the calculation of reliability of the leadership instrument was 0.95, and items of the organizational structure variables are 38 points of questions and there are 35 points which are valid by the calculation of reliability of the organizational structure instrument was 0.94. based on these results, there indicates that the four variables are very reliable and feasible to be used for collecting the data of research. 4. results and discussions 4.1. testing of model causal effect is calculated using path coefficient (pij). based on the path diagram below, there are five path coefficients, namely p31, p32, p41, p42 and p43 as well as five pieces of the correlation coefficient, those are r13, r23, r14, r24, and r34. the magnitude of the path coefficient is calculated either manually through excel, and using spss version 17 and lisrel 8.70, and there after for each path coefficient was calculated and tested using t-test statistics, obtained a summary of the results of all calculations are shown in table 1 and figure 7. based on the table 1, through the t-test, it is known that x4x1 path with the path coefficient p41 = −0.16 is not significance at p value 1%, so it is appropriate with trimming theory that the path must be removed and it is obtained by calculation of modified path coefficient are shown in figure 8 and table 2. 4.2. calculation of direct and indirect effects based on the results of the path coefficients calculation and hypothesis testing, the direct and indirect influence among variables is presented in table 3: 4.3. discussion results’ discussion of this study will link the research findings to relevant theories. 4.3.1. effect of organizational structure on the trust direct effect of organizational structure on trust (p31) has coefficient 0.51 and significance at p value 1%, it can be concluded that there is a significant direct effect the organizational structure on the trust. based on this empirical evidence, it can be stated that the findings shows organizational structure is one of the most important variables and directly affects the trust variable. figure 7: empirical model of structural relationship variables between based on the analysis results of initial path calculation table 1: summary of calculation result and path coefficient testing path path coefficient tcounted ttable α=0.05 α=0.01 x3x1 p31 0.51 5.28** 1.66 2.38 x3x2 p32 0.27 2.75** 1.66 2.38 x4x1 p41 −0.16 −1.35 ns 1.66 2.38 x4x2 p42 0.33 3.11** 1.66 2.38 x4x3 p43 0.51 4.22** 1.66 2.38 **p value 1%. ns: not significance table 2: summary of calculation result and path coefficient testing after trimming path path coefficient tcounted ttable α=0.05 α=0.01 x3x1 p31 0.51 5.28** 1.66 2.38 x3x2 p32 0.27 2.75** 1.66 2.38 x4x2 p42 0.29 2.84** 1.66 2.38 x4x3 p43 0.42 4.09** 1.66 2.38 **p value 1% setiawan, et al.: effect of organizational structure, leadership and trust on job performance of employee: a case study on employee at universitas ternama international review of management and marketing | vol 6 • issue 4 • 2016 719 theoretical representations of the direct influence of the organizational structure on the trust uses an integrative model of organizational behavior from colquitt et al. (2009), which illustrates that the organizational mechanism factors (including organizational structure) directly influences the individual mechanisms (such trust). in addition, research is also consistent with the shaw (1997) concept about trust is influenced directly by organizational architecture (also called organizational structure) organizational structure at ut that already exists today always considers the integrity, competence, loyalty and openness. this thing can increase the level of trust to the organization. from the theoretical description above and based on empirical evidence that is conducted in this research, proven that organizational structure directly influences the trust. 4.3.2. effect of organizational structure on job performance direct effect of organizational structure on job performance has coefficient value −0.16 and is not significance with p value above 1%, then can be declared that there is no direct influence of organizational structure on job performance. however, through the trust variable, organizational structure is proven has indirect effect with coefficient value 0.22 and significance at p value 1%. based on empirical evidence, the findings of this study show that organizational structure has no direct effect on performance, but through trust variable there is indirect effect on job performance. the results of this study differed with stephen and thimoty (2009) that stated a strong organizational structure in accordance with the needs of the organization and in line with the existing condition have direct effect on organizational performance. similar with shani (2009) that the organizational structure has a direct influence on performance. organizational structure at ut that exists today considers the task performance and citizenship behavior. however, it will be less able to improve the job performance if the integrity, competence, loyalty, and openness is not intended. from the theoretical description above and based on the empirical evidence in this research, it is proven that the organizational structure has not direct effect on performance, but through trust variables. 4.3.3. effect of leadership on trust direct effect of leadership on trust has coefficient value 0.27 and significance at p value 1%, it can be concluded that there is significant direct effect of the leadership on the trust. based on this empirical evidence, it can be stated that the findings shows that leadership is one of the most important variables and directly affects the trust variable. theoretical representations of the direct influence of the leadership on trust are stated by kinicki and robert (2008) that leadership is a process of social influence in which leaders seek voluntary participation of subordinates in an effort to achieve organizational goals. the same thing is also served by shaw (1997) that the participation of leadership is the key point of leverage that has direct effect on trust. these results are also in line with some of figure 8: empirical model of structural relationship variables between based on the analysis results of initial path calculation table 3: recapitulation of the effects of exogenous variables (x1, x2, x3) on the endogenous variable (x4) variable causal effect (p) direct indirect total organizational structure on trust (x1 towards x3) 0.51 0.51 organizational structure on job performance (x1 towards x4) 0.22 0.22 leadership on trust (x2 towards x3) 0.27 0.27 leadership on job performance (x2 towards x4) 0.29 0.11 0.40 trust on job performance (x3 towards x4) 0.42 0.42 setiawan, et al.: effect of organizational structure, leadership and trust on job performance of employee: a case study on employee at universitas ternama international review of management and marketing | vol 6 • issue 4 • 2016720 journals which are stating that leadership can affect trust. those are according to zolin and pamela (2004), chen et al. (2007), aronson et al. (2006). leadership at ut currently is considering the organizational power and the power of individuals. this turned out to increase the level of trust in the organization. from the theoretical description above and based on empirical evidence that is conducted in this research, it is proven that leadership directly influences the trust. 4.3.4. effect of leadership on job performance direct effect of leadership on job performance has coefficient value 0.29 and significance at p value 1%, it can be concluded that there is significant direct effect of the leadership on the job performance. through the trust variable, leadership has proven that it significantly and indirectly influences the job performance with coefficient value 0.11 and significance at p value 1%. based on this empirical evidence, it can be stated that the finding shows that leadership is one of the most important variables and directly affects the job performance variable. theoretical representations of the direct and indirect effect of the job performance on leadership as stated by daft (2005) that leadership is an influence of the relationship among leaders and followers who expect real change and the result is a common goal. similarly, as illustrated by ivancevich et al. (2008) who are stating that leadership directly affect the performance. these results are also in line with several journals which are stating that leadership is one of the most important variables, and it has the direct and indirect influence on the job performance variables. that are stated by aronson et al. (2006), leadership at ut currently is considering the organizational power and the power of individuals. this turned out to increase the level of trust in the organization. from the theoretical description above and based on empirical evidence that is conducted in this research, it is proven that leadership directly influences the job performance. 4.3.5. effect of trust on job performance direct effect of trust on job performance has coefficient value 0.42 and significance at p value 1%, it can be concluded that there is significant direct effect of the trust on the job performance. based on this empirical evidence, it can be stated that the finding shows that trust is one of the most important variables and directly affects the job performance variable. theoretical representations of the direct and indirect influence of trust are using integrative model of organizational behavior from colquitt et al. (2009) which illustrates that the mechanism of individual factors (including trusts) directly affect the individual out comes (job performance). besides that, the influence of trust on the job performance is also presented by lusch and brown (1996) which shows that trust is affected by the mechanism of trust and control variables. these results are also in line with several journals which are stating that trust can directly affect the performance, which are according to zolin and pameola (2004), trust that is formed at ut currently is considering the integrity, competence, loyalty and openness. this turned out to increase the level of employee’s job performance. from the theoretical description above and based on empirical evidence that is conducted in this research, it is proven that trust directly influences the job performance. 4.4. limitation as a scientific study to achieve optimal results, the writing process of this dissertation used the procedure in accordance with the procedures of the scientific method. however, due to certain limitation, the research is still far from perfection. the limitations in this research are: (1) the limited ability of researchers to analyze theories related to the research variables, (2) the process of data collection which is in the form of attitude perception can be doubtful, because researchers do not fully supervise the seriousness and honesty of respondents, and (3) this study only limited on organizational structure, leadership and trust on job performance, while there are many other variables that can be used as variables in further research in determining the trust and employee performance. references armstrong, m. 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(2005), human resources management. milton: john wiley & sons australia. yukl, g. (2010), leadership in organization. upper saddle river, new jersey: prentice hall. zolin, r., pamela, j.h. (2004), trust in context: the development of interpersonal trust in geographically distributed work. in: kramer, r.m., cook, k., editors. trust and distrust in organizations. new york: russell sage foundation. zolin, r., pamela, h., renate, f, raymond, e.l. (2004), interpersonal trust in cross-functional, geographically distributed work: a longitudinal study. information and organization 14:126. tx_1~at/tx_2~at international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2020, 10(5), 27-34. international review of management and marketing | vol 10 • issue 5 • 2020 27 effects of marketing mix on students’ selection of transnational top-up degrees in hong kong may yee melissa lau* the university of newcastle, australia. *email: melissamylau@yahoo.com received: 25 june 2020 accepted: 26 august 2020 doi: https://doi.org/10.32479/irmm.10163 abstract with fierce competition in transnational higher education (tnhe), marketing mix strategies should be adopted to attract students to study the transnational top-up degrees offered in hong kong. this research investigates the effects of service marketing mix on students’ selection of transnational top-up degrees offered in hong kong. understanding the perceptions of hong kong students can help institutions make informed decisions on what is important to students when delivering tnhe in hong kong. institutions can formulate strategic plans and allocate appropriate resources to solicit right partners and recruit target students. quantitative and qualitative methods were adopted in this research. the results reveal “qualifications are recognized in hong kong” is the most important factor that influences students’ selection of transnational top-up degrees offered in hong kong. recommendations are made for senior management of tnhe to design effective marketing mix strategies in hong kong. keywords: 7ps marketing mix, marketing strategy, student selection, top-up degree, higher education, program development jel classifications: m31, i21 1. introduction this article begins with an introduction to transnational higher education, top-up degrees, transnational top-up degrees in hong kong and marketing mix of tnhe in hong kong. in addition, it examines the development of transnational higher education, the demand and supply of transnational top-up degrees in hong kong and marketing mix of tnhe institutions. then, the research methodology is explained. after that, the findings of students’ selection of transnational top-up degrees in hong kong are discussed. finally, this article depicts the limitations of this study and concludes by emphasizing the most important factor affecting students’ selection. this research is to find out the important factors of students’ selection of transnational top-up degrees offered in hong kong from marketing mix perspective. the research is significant because transnational top-up degree is growing fast in hong kong. the main contribution of this research is to help senior management of higher education institutions identify the important factors of marketing mix for developing transnational top-up degree programs in hong kong and design appropriate strategies to recruit students. 1.1. transnational higher education tnhe, in this research, refers to the provision of educational qualifications in which the awarding institution is based in one country (home country), different from where students are located (host country) (caruana and montgomery, 2015; lawton and jensen, 2015). 1.2. top-up degrees a top-up degree is equivalent to the final year of a bachelor’s degree program. it allows graduates of foundation degree or other relevant qualifications to top up existing qualifications. students can complete the remaining courses to gain their bachelor’s degrees (bournemouth university, 2019). 1.3. transnational top-up degrees in hong kong transnational top-up degrees in hong kong refers to the final year of bachelor’s degrees of home countries operate in hong kong (host this journal is licensed under a creative commons attribution 4.0 international license lau: effects of marketing mix on students’ selection of transnational top-up degrees in hong kong international review of management and marketing | vol 10 • issue 5 • 202028 country). there are different types of transnational top-up degrees in hong kong. most of them are jointly run by home and hong kong institutions. some awarding institutions are not involved in any teaching and administrative work but committed to quality assurance. in this research, the home country is england whereas the host is hong kong. a student with a higher diploma or associate degree qualification can study a transnational top-up degree in hong kong. the qualification of transnational degree received in hong kong is the same as that obtained overseas. students have to meet the academic requirements of home institutions. 1.4. marketing mix of tnhe in hong kong when institutions offer transnational top-up degrees in hong kong, marketing mix strategies are applied to recruit target students. in higher education sector, the marketing mix are product, price, place, promotion, people, process and physical evidence. they are called 7ps of marketing mix (ivy, 2008). 2. literature review 2.1. the development of transnational higher education 2.1.1. the demand of transnational higher education the world population at the age of 15 to 24 will be 1.2 billion in 2050, among which 90% of them are estimated to come from developing countries. traditional wealthier countries will not be the nations to demand higher education in the world (population reference bureau, 2009). there is insufficient supply of degree places in many parts of the world leading to the increasing demand for tnhe programs, especially in africa (kunene et al., 2015), china and india (altbach, 2009). in addition, the rankings of local universities in some countries are lower than overseas universities. students look for high ranking universities with good reputations in their decision-making process (priporas and kamenidou, 2011). prestigious universities develop their tnhe programs across the globe to meet such needs. tnhe has increased rapidly worldwide. in western countries, tnhe helps generate income for institutions (jean francois, 2016) in a cost-effective way (wang, 2012). the growing trend of tnhe enables students to gain foreign qualifications without leaving their home countries. some research has been done on the factors of students’ choice of tnhe in hong kong and other countries. such factors included course and country characteristics (lawley and perry, 2015), reputation and credibility of higher education institutions (heffernan et al., 2018), push and pull factors (wilkins et al., 2012). 2.1.2. the supply of transnational higher education tnhe has evolved to absorb unmet demand for education. most of the tnhe institutions are supplied in east and south-east asia. however, due to prohibitive regulations, the supply of tnhe institutions in africa and malaysia are very limited. international providers may not consider african higher education institutions with weak profit-making capabilities as partners (nnazor, 2018). south africa may also fear that the overwhelming success of tnhe programs could have a detrimental effect on their own university systems (daad german academic exchange service, 2014). 2.1.3. the demand of transnational top-up degrees in hong kong in hong kong, there is an intense competition for senior places of local universities. the current education system of hong kong includes kindergarten education, followed by six years of primary education and six years of secondary school education before entering university. there were 54,922 secondary school graduates (education bureau, 2020) and only 18,367 university grants committee (ugc) funded local universities first-year-first-degree places in hong kong in 2018 (university grant committee, 2019). according to the statistics from the committee on self-financing post-secondary education (table 1), the number of sub-degree graduates including associate degree and higher diploma in hong kong was 24,094 in 2017-2018 (concourse for self-financing postsecondary education, 2019a). however, there were only around 5,000 senior year places (i.e. year 2 or year 3) of full-time ugc funded undergraduate programs in 2018-2019 (education bureau, 2019). competition for senior year places was very keen in hong kong. transnational top-up degree programs are emerging due to the insufficient funded senior year places for sub-degree graduates. 2.1.4. the supply of transnational top-up degrees in hong kong according to the information from the committee on selffinancing post-secondary education, the self-financing higher education institutions in hong kong offer either local degree programs or transnational top-up degree programs or both. some programs are accredited by hong kong council for accreditation of academic and vocational qualifications (hkcaavq). there has been a steady increase in the supply of self-financing degree programs in hong kong. there were 591 accredited self-financing bachelor and top-up degrees including local and non-local programs in hong kong in the academic year of 2018-2019. the number of programs had increased by 91% from 2014 to 2018 with an increase in the supply of places (concourse for self-financing post-secondary education, 2019b). 2.2. marketing mix of tnhe institutions 2.2.1. product of transnational top-up degrees in hong kong “product” of transnational top-up degrees in hong kong refers to the final year of bachelor degrees offered by home institutions and delivered in hong kong. tnhe curriculum must be appropriately designed for students that meet the required standard in hong kong. as the demand for tnhe increases, there is a concern for the quality assurance of overseas universities offering programs in hong kong. quality assurance in higher education institutions is considered an indicator of achieving academic excellence (ryan, 2015). quality assurance can provide benchmark and enhance table 1: number of graduates from ugc-funded, publiclyfunded and self-financing post-secondary programs in 2017-2018 academic year funding mode level of study total 2017-2018 ugc-funded sub-degree 1321 2017-2018 publicly-funded higher diploma 7931 2017-2018 self-financing associate degree 8460 2017-2018 self-financing higher diploma 6382 total 24,094 lau: effects of marketing mix on students’ selection of transnational top-up degrees in hong kong international review of management and marketing | vol 10 • issue 5 • 2020 29 confidence of employers and other local institutions in hong kong. such information can be used as a reference to determine whether the tnhe graduates’ qualifications meet the academic requirements for employment or further study. if tnhe graduates apply for a civil servant vacancy, hong kong government recognizes their qualifications accredited by hkcaavq. anctil (2008) stated that students and their families use university rankings to evaluate the reputation and quality for college choice. similarly, ranking is a widely accepted indicator used by prospective students who are not certain about the quality of institutions before making decision. therefore, brands are used by institutions to deliver clear distinctive competitive advantage to their stakeholders (chapleo, 2010). 2.2.2. price of transnational top-up degrees in hong kong “price” of transnational top-up degrees in hong kong refers to the availability of financial aid and scholarship, flexible tuition and payment time (dao and thorpe, 2015). previous research indicated flexible payment, available scholarships and financial aids are important factors that affect students’ decision making (garwe, 2016; yusof et al., 2008). moreover, past research showed that price is one of the most significant factors affecting students’ university choice (ivy, 2008). today, different types of financial aids such as grants and subsidies are available for students in hong kong. neves and hillman (2016) revealed that students do not want to pay additional tuition fees for famous teachers. universities setting tuition fees should consider their rankings and reputations. many universities with higher global rankings tend to set high tuition fees (west, 2019). the hong kong government provides different financial aids to local students for studying top-up degrees. eligible students can apply for loans through different schemes such as financial assistance scheme for post-secondary students (fasp) and extended non-means-tested loan scheme (enls) (student finance office, 2019b). a research on students’ perceptions of transnational education undergraduate programs offered in hong kong shows that 69 percent of top-up degree students had household monthly income of hkd 25,000 or below. they were less likely to afford the cost of studying abroad (forestier et al., 2013). the cost of studying in hong kong is much lower than studying overseas which involved additional costs such as air tickets and accommodation. local students in hong kong can find jobs to finance their tuition fees during the period of study. furthermore, many bachelor degree holders plan to study for a higher degree. local students completing transnational top-up degree programs in hong kong can save more money for their master’s degrees. 2.2.3. place of transnational top-up degrees in hong kong “place” of transnational top-up degrees in hong kong refers to the location where tnhe program is delivered. a university far away from home is less attractive as it will have additional costs of living (drewes and michael 2006). many students studying transnational top-up degrees in hong kong are from low income families (forestier et al., 2013). in the study of gibbons and vignoes (2009), lower income students consider commuting costs as an important factor when choosing universities. in hong kong, it is usually convenient to go from one spot to another within a short time as hong kong is a small city with a good transportation system. 2.2.4. promotion of transnational top-up degrees in hong kong “promotion” of transnational top-up degrees in hong kong refers to the use of various communication tools to deliver features, benefits and values of programs to influence decision making of prospective students. some researchers found that personal contacts with parents, relatives and friends have a great influence in promoting images of higher education institutions (andrlic et al., 2013). more than 50% of students believe that relatives and friends are the most influential information sources for making decision in the selection of tnhe institutions, followed by high school teachers. they are considered as trustworthy information channels. many students did not obtain enough information before they make decisions. students are unfamiliar with the trustworthy channels to find information about tnhe programs (fang and wang, 2014). successful graduates would disseminate positive messages and recommend the programs to their friends. higher education institutions can communicate to prospective students through e-marketing tools. khatri et al. (2015) stated that social media is largely a free-to-use medium which can rapidly reach potential students. contents on homepages should be consistent with the social networking sites (barnes, 2009). the best practices for social networks include showing videos, publicizing achievements, and updating the information frequently. in hong kong, there are regulations about the promotion of tnhe programs to protect the rights of students. advertisements for a tnhe program must have its course registration number. in addition, a statement “it is a matter of discretion for individual employers to recognize any qualification to which this course may lead” has to be included in any advertisements. education bureau will impose penalties on institutions if any false or misleading information is found on their advertisements (education bureau, 2018). 2.2.5. people of transnational top-up degrees in hong kong “people” of transnational top-up degrees in hong kong refers to all people involved in home and hong kong institutions to deliver services for meeting the needs of students. “teaching staff” refers to the flying faculty from home country or local academic staff delivering the modules in hong kong. famous teachers are those who are reputable, prominent, and well known by students. one of the most important factors affecting students’ perceptions of education quality is the qualifications of teaching staff. in a study by arnon and reichel, students’ perceptions for the qualities of ideal teachers are leadership, kindness, subject matter knowledge and attitude toward profession (arnon and reichel, 2007). one of the key components to design a successful educational service is to have right teaching staff to deliver subject knowledge to learners. in hong kong, many academics of local universities are working as part-time lecturers to teach transnational top-up degree programs in hong kong. the income lau: effects of marketing mix on students’ selection of transnational top-up degrees in hong kong international review of management and marketing | vol 10 • issue 5 • 202030 from outside practice will have to be split between the teaching staff and the university. “administrative staff” refers to the provision of administrative and supporting services enabling effective and efficient delivery of student services. arena et al. (2010) identified that the administrative staff of home and hong kong institutions need to provide services in a rapid and friendly manner and to provide guidance for students. the trained administrative staff need to determine students’ desire and guide them properly with information (tsinidou et al., 2010). students’ first exposure to universities may be through administrative staff of the registry and therefore high-quality services provided to students can make good impressions (kitchroen, 2004). employees acting responsibly within their roles can create a favorable image to the universities. a standardized complaint handling procedure and the response time to inquiries should be established. a strong administrative team can contribute to image enhancement and students’ satisfaction. 2.2.6. process of transnational top-up degrees in hong kong “process” of transnational top-up degrees in hong kong refers to the process that provide different administrative services to students by institutions. a good administration process for students includes a smooth process of accessing learning materials, submitting assignments and releasing academic results. many universities provide academic calendars that serve as an information source for students, academic and administrative staff. most students are concerned with the dates of releasing their academic results to apply for master’s degree programs in other institutions. good process strategies can improve the image of a university and attract more applicants. candidates usually apply for more than one university and these strategies are important to convert a potential candidate into a student. a smooth enrolment process can minimize the dissatisfaction of administrative staff and the candidates involved. hirvonen (2007) found that considering the needs of students is the concept of quality in higher education. regarding the feedback provision process, chen et al. (2007) found that interactive networking with student-faculty contact, which can help students focus on their studies, should be promoted. 2.2.7. physical evidence of transnational top-up degrees in hong kong “physical evidence” of transnational top-up degrees in hong kong refers to the facilities that deliver transnational programs in hong kong. the facilities give the first impression of service quality. higher education institutions in hong kong may build a new campus or rent places to deliver transnational programs. as the rent of office space is very high in hong kong, many tnhe providers rent a small office with limited facilities to operate their programs. learning environment is an influencing factor for students’ university choices. students prefer to have state-of-the-art facilities and modern learning environment and aesthetically pleasing buildings. in addition, students expect the availability of textbooks in bookstores to support their academic life (agrey and lampadan, 2014). mcburnie (2000) studied that library facilities are a longterm problem in transnational education. many tnhe providers do not have interlibrary loans. students are expected to access reference materials through public libraries. 3. methodology in this study, quantitative and qualitative research methods were carried out to examine the effect of service marketing mix on students’ selection of transnational top-up degrees offered in hong kong. this research was conducted over two years in hong kong. there was a total of 196 respondents. they are from the final year of business enterprise, marketing management and international hospitality and tourism management programs of a british university in hong kong in 2016 and 2017. there were 57 males and 139 females participating in this research. questionnaires were adpoted in this research, the questionnaire was divided into two parts. a likert scale with 42 items, scored from 1 to 5 (1=not important; 2=slightly important; 3=fairly important; 4=important; 5=very important), was used to design the first part of the survey questionnaire. the second part was to collect students’ opinions about the recommendations of transnational top-up degree programs to their friends. questions from previous literature were used as reference to develop items in the questionnaire of this research (briggs and wilson, 2007; maringe, 2006 and veloutsou et al., 2004). however, the previous research only covered part of the scope of this study and the questions may not be completely relevant for transnational top-up degrees offered in hong kong. therefore, a new questionnaire was designed. the questionnaires were distributed by teachers during lessons. students spent fifteen minutes to fill in the anonymous questionnaires before submitting them to the teachers. the teachers then gave the completed questionnaires to the researcher next day. semi-structured interviews were undertaken with fifteen participants randomly selected from three different transnational top-up degree programs. interviews were conducted in order to explore insights of the service marketing mix affecting students’ selection of transnational top-up degrees offered in hong kong. the interviews were conducted at the meeting room of participants’ institute in 2017 and the duration of each interview was thirty minutes. 4. results and discussions statistical findings of students’ selection of transnational top-up degrees offered in hong kong are shown in the appendix. 4.1. product of transnational top-up degrees in hong kong “qualifications are recognized in hong kong” is the most important item of product element. both male and female respondents rate “qualifications are recognized in hk” as the most important lau: effects of marketing mix on students’ selection of transnational top-up degrees in hong kong international review of management and marketing | vol 10 • issue 5 • 2020 31 factor (mean = 4.38, sd = 0.794). “courses taught by partner employed teaching staff” is the least important factor (mean = 3.91, sd = 0.862) among product items. students in this research prefer a qualification with local and overseas recognition. home institutions should establish a quality assurance system involving the procedures and requirements for the collaborative program. to maintain the competitive advantage of tnhe market, tnhe providers should promote the quality assurance with positive outcomes of the transnational top-up degrees in hong kong. tnhe programs should be registered from non-local courses registry in the education bureau of the hong kong government. if the tnhe programs are successfully accredited by hkcaavq, they will be recognized as meeting a comparable level of the hong kong qualifications framework. the accredited institutions and tnhe programs can help students can transfer their credits to other institutions for studying master’s degrees. according to the students’ qualitative feedback, they would refer their friends to study one-year transnational top-up degree programs in hong kong if the awarding institutions have good reputations. they perceived that a good recognition is associated with university and program rankings. one interviewee said, “flexible intake of the program suits my working schedule. if i miss the enrolment deadline, i can apply for next intake three months later. in addition, the lessons of each module are scheduled on five evenings and one weekend every three months so my work schedule is not affected. however, this fast-paced transnational top-up degree program does not provide any university life”. according to another interviewee, he said “the most important factor to select this tnhe top-up degree is that my working organization recognized this qualification”. he worked in a public sector and was not qualified to get promoted because he was not a degree holder. “if i receive a degree, i will have a chance to promote from within. this type of program becomes popular as students can complete it in one year.” he also mentioned “university ranking and qualifications recognized by local and overseas organizations are the selling points for this program”. these results are similar to what priporas and kamenidou (2011) found, which maintained that students seek top ranking universities with best reputations. 4.2. price of transnational top-up degrees in hong kong “lower tuition fee” of price element is an important item in both male and female respondents’ decision making (mean = 4.05, sd = 0.887). according to the qualitative feedback provided by some participants, they would recommend the transnational top-up degree programs to their friends because of low tuition fee and short duration of study (one year). when asked why one interviewee had chosen this transnational top-up degree, she commented that “i want to get a degree as soon as possible so that i can find a good job. my main concern is the tuition fee and the availability of government loan”. when she applied for this transnational top-up degree program, she had obtained a higher diploma with a part-time employment. the result makes the importance of the price element self-evident – offering programs with low tuition fees are likely to attract students to study transnational top-up degrees offered in hong kong. this finding is similar to what ivy (2008) had done that price is the most important factor affecting students’ choice. 4.3. place of transnational top-up degrees in hong kong “convenient public transport” is an important item of place element (mean = 3.70, sd = 0.946). according to the qualitative feedback, some students commented they would introduce their friends to study the transnational top-up degree in hong kong that can save the time and costs of their study. they indicated that convenience is the utmost important factor. with the development of the internet, online learning can be adopted as a part of the transnational top-up degree program. interactive and high-quality content should be created so students can access the learning materials through internet at any time. 4.4. promotion of transnational top-up degrees in hong kong “university prospectus” of promotion element is an important item in both male and female respondents’ decision making (mean = 3.88, sd = 0.847). “university website information” is also as important as “university prospectus” among female respondents (mean = 3.88, sd = 0.872). khatri et al. (2015) found that students made decisions for choosing institutions based on the information on online platforms such as twitter, facebook and youtube. the websites of both home and local institutions can display factual information about the top-up degree programs offered. home institutions should provide marketing guidelines and monitor marketing activities in hong kong. approval of marketing materials should be sought from home institutions before publishing. 4.5. people of transnational top-up degrees in hong kong “attitude of teaching staff” of people element is the most important factor (mean = 4.25, sd = 0.795). “famous teachers” is the least important factor (mean = 3.64, sd = .859) in both male and female respondents’ decision making. according to the qualitative feedback provided by some participants, students would recommend their friends to study because of professional attitude in teaching. students explained that teachers delivering top-up degrees in hong kong should possess the subject knowledge and teaching skills. according to an interviewee, when asked what factors of the “people element” she would consider for choosing this program, she expressed “the lecturers should demonstrate good pedagogical content knowledge. flying faculty from british university can guarantee the quality of teaching. i am interested in learning more british cases. professors from british university can widen my horizon. however, the flying faculty does not provide adequate face-to-face academic support to local students as they go back to britain immediately after they finish teaching”. students enrolled in transnational top-up degree programs in hong kong usually cannot meet the requirements to study at local universities. it is important to have teachers with good attitude to help these students as they need more guidance on how to do their assignments. 4.6. process of transnational top-up degrees in hong kong both male and female’ respondents rate “course administration” as an important factor of process element (mean = 4.01, sd = .780), lau: effects of marketing mix on students’ selection of transnational top-up degrees in hong kong international review of management and marketing | vol 10 • issue 5 • 202032 followed by “accurate assessment” (mean = 3.95, sd = .791). “fair and accurate assessment process” is an important factor for students’ choices. the qualitative feedback indicated that students would recommend their friends to the program because the lessons of each module were completed within one week. the process of service provision should be organized in a logical sequence. host institutions should simplify administrative procedures for enquiries, enrolment and payment. tnhe students in hong kong experiencing satisfaction of service delivered will show subsequent loyalty. for those students who need to take bridging modules in order to meet the entry requirement of transnational top-up degree programs, the bridging modules should be offered by host institutions and be aligned with the standard of home institutions. home institutions should also control the quality of assessments through the quality assurance process to ensure that the academic standards are equivalent to comparable programs in home country. 4.7. physical evidence of transnational top-up degrees in hong kong “clean and tidy learning environment” is considered an important item of physical evidence (mean = 4.12, sd = 0.795). cleanliness is conducive to learning so host institutions should endeavor to maintain clean and tidy environment of classrooms. the qualitative feedback indicated that both male and female hong kong students prefer equipment with advanced technology in spacious classrooms. free access to fast wireless internet will facilitate students’ learning with the use of tablets or laptops. students favor institutions in hong kong with advanced technical facilities inside well-managed buildings. home institutions should provide a reliable network for students to access online materials. due to covid-19 pandemic at the beginning of 2020, many classes were suspended. before class resumption, host institutions should take precautionary measures to prevent the spread of the coronavirus. 4.8. limitations in hong kong, there are many institutions offering transnational top-up degree programs. the sample of students from one particular tnhe institute was chosen so the findings of the research cannot be generalized. nonetheless, the results of this research can be used as a reference for comparison with other similar research in hong kong or other countries. 5. conclusion there is an increase in the number of tnhe providers but a decrease in the number of students in hong kong. in this research, “qualifications are recognized in hong kong” is the most important factor affecting students’ selection of transnational top-up degree programs in hong kong. both hong kong and home institutions should cooperate and seek 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(2008), a study of factors influencing the selection of a higher education institution. unitar e journal, 4, 27-40. lau: effects of marketing mix on students’ selection of transnational top-up degrees in hong kong international review of management and marketing | vol 10 • issue 5 • 202034 appendix the mean score on students’ selection of transnational top-up degree in hong kong male female total n mean sd n mean sd n mean sd qualifications are recognized in hong kong 57 4.40 0.704 138 4.38 0.830 195 4.38 0.794 qualifications are recognized overseas 57 4.28 0.921 138 4.30 0.805 195 4.29 0.838 attitude of teaching staff 57 4.23 0.887 138 4.26 0.757 195 4.25 0.795 courses taught by overseas university teaching staff 57 4.16 0.882 138 4.28 0.799 195 4.24 0.824 teaching quality 57 4.21 0.796 138 4.21 0.778 195 4.21 0.781 duration of study 55 4.15 0.819 137 4.19 0.809 192 4.18 0.831 university ranking 57 4.05 1.076 138 4.18 0.830 195 4.18 0.908 flexible intake through the year 56 4.14 0.819 138 4.12 0.846 194 4.12 0.836 clean and tide learning environment 57 4.04 0.844 138 4.15 0.801 195 4.12 0.813 academic qualifications of teaching staff 57 3.98 0.855 138 4.14 0.756 195 4.09 0.788 attitude of administrative staff 57 4.00 0.802 138 4.13 0.809 195 4.09 0.807 content and structure of the program 57 4.11 0.748 138 4.05 0.795 195 4.07 0.780 availability of bridging courses to fulfil top-up program 57 4.11 0.817 138 4.05 0.813 195 4.07 0.813 lesson begin at night 57 4.05 0.854 138 4.08 0.929 195 4.07 0.905 lower tuition fee 57 4.05 0.895 138 4.04 0.887 195 4.05 0.887 program ranking 57 3.96 0.886 138 4.06 0.723 195 4.03 0.773 quiet learning environment 57 4.04 0.823 138 4.03 0.810 195 4.03 0.812 course administration 57 4.07 0.884 138 3.99 0.735 195 4.01 0.780 courses fulfilling the market needs 57 3.91 0.969 138 4.04 0.823 195 4.00 0.868 safe learning environment 57 3.89 0.900 138 3.99 0.837 195 3.96 0.855 reputation of local partner institution 57 3.93 0.961 136 3.96 0.802 193 3.95 0.850 accurate assessment 57 3.98 0.813 138 3.93 0.785 195 3.95 0.791 course taught by partner employed teaching staff 57 3.88 0.867 137 3.93 0.863 194 3.91 0.862 financial aid and grant available 57 3.91 1.090 137 3.87 0.984 194 3.88 1.014 university website information 57 3.86 0.972 138 3.88 0.872 195 3.88 0.900 university prospectus 57 3.88 0.965 138 3.88 0.796 195 3.88 0.847 library and recreation facilities 57 3.75 1.005 138 3.90 0.804 195 3.86 0.867 use of advanced teaching equipment 57 3.65 0.896 138 3.91 0.818 195 3.83 0.848 scholarship available 57 3.77 1.018 137 3.82 1.049 194 3.81 1.038 size of venue in hong kong 57 3.60 0.821 138 3.77 0.882 195 3.72 0.866 convenient public transport 57 3.63 0.858 137 3.73 0.981 194 3.70 0.946 advices of sub degree program teaching staff 57 3.61 0.774 137 3.66 0.902 194 3.65 0.864 famous teachers 57 3.54 0.908 138 3.67 0.839 195 3.64 0.859 advices of alumni of top-up degree universities 57 3.51 1.020 138 3.61 0.875 195 3.58 .918 seminar about the program 57 3.53 0.908 138 3.54 0.864 195 3.53 0.875 advices of alumni of sub degree program 57 3.51 1.037 138 3.49 0.906 195 3.49 0.944 social media information about the program 57 3.46 1.001 138 3.49 0.795 195 3.48 0.858 class venue close to my home or work 57 3.32 1.038 137 3.47 1.001 194 3.43 1.012 advices of friends 57 3.30 1.117 138 3.43 0.966 195 3.39 1.011 education exhibition 57 3.39 .959 138 3.88 0.849 195 3.38 0.880 advices of parents 57 3.28 1.192 138 3.28 1.032 195 3.28 1.078 newspaper and magazine advertisement 57 3.28 1.130 138 3.25 1.010 195 3.26 1.043 . international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2017, 7(3), 17-24. international review of management and marketing | vol 7 • issue 3 • 2017 17 examining the link between spiritual values at work, learning orientation, human resources practices and organizational health: an indonesia case study ikhwan1*, achmad sudiro2, noermijati3, mintarti rahayu4 1doctoral student in business management, brawijaya university, malang, indonesia, 2,3,4doctoral program of management science, business and economics faculty, brawijaya university, malang, indonesia. *email : ikhwan_hs100@yahoo.co.id abstract the purpose of this paper is to present an in-depth analysis of the spiritual values at work (svw) and its influence on learning orientation (lo), human resources management practices (hrp) and organizational health (oh) in the financial sector. the foundations of svw, lo, hrp and oh were assessed using a validated questionnaire. a total of 139 branch manager from the indonesian financial sector participated in the survey. partial least square structural equation modeling was used to test the hypotheses. the empirical results indicate that two spiritual value dimensions were generated: the sense of community and well-being, and meaningful of work and values alignment. the results suggest that svw is highly adapted in the financial sector, and the svw measure was found to be a significant positive and moderate correlation with the lo, hrp and oh. although the outcomes lend support to the extended svw model, the results are derived based on cross-sectional and the object is limited to the financial sector. theoretical and practical implications are discussed. keywords: spiritual values at work, learning orientation, human resource practices, organizational health jel classifications: d23, l20, o15 1. introduction the phenomenon of fraudulent practices in the manipulation of financial information and insider trading scandal in several companies in earlier 1990 requires that practitioners draw up ethical standards in business. however, events of the last 20 years have continued to show that leaders and managers in business enterprises have a problem ethical dilemmas. the financial scandal is not just an issue of deterioration of values that are harmful to employees, but generally destabilizing capital market and political situation (giacalone and jurkiewicz, 2003). the continuation of the various cases of fraud and manipulation which then led to the global financial crisis in 2008 make disheartening considering the increased focus that has been placed on ethics (lowery et al., 2014). while the popular press is replete with articles bemoaning the absence of ethics in the business world, attention has also been given to value theory to explain the unethical behavior. management academics and practitioners shifted to the importance of value creation, not only in business ethics, but also corporate social responsibility, which is entirely focused on the core values of the company. a theme emerging in the management literature is the workplace spirituality, and there is a growing interest among corporate, academicians and researchers in this topics (dandona, 2013). despite interest in the spirituality in the workplace has many attentions in the last 10 years, the topic of the spirituality still has many weaknesses and gaps. firstly, it is about the conceptual and empirical evidence. many researchers have questioned the scientific basis in this topic (robbins and judge, 2011). from the order of theory and research in organizational behavior study is not much interested in the study of spirituality in workplace. spirituality regarded as “soft” or “sensitive and nonstrategic” by many academics. the term of “soft” and “sensitive” has resulted in a reluctance to explain, studying and analyzing the role of spirituality for the organization (gibson et al., 2008. p. 59). the second limitation is the impact of spirituality on economical perspective, “whether the spirituality of work has positive benefits for the organization?” and “whether the organization has the right to impose spiritual values in their employees?” the considerable amount of research seems to have focused on outlining the nature ikhwan, et al.: examining the link between spiritual values at work, learning orientation, human resources practices and organizational health: an indonesia case study international review of management and marketing | vol 7 • issue 3 • 201718 of workplace spirituality and suggested the need for researching on the consequences of workplace spirituality (milliman et al., 2003). the limitations of the study showed that the workplace spirituality is still in the development stage, the empirical evidence effort still needs further verification. since milliman et al. (1999) proposed spiritual values-based management model, research on the spiritual in the workplace has increased dramatically. however, most researchers try to link spirituality in the workplace with some behavioral attributes, such as commitment (milliman et al., 2003; crawford et al., 2009; kazemipour et al., 2012), self-esteem and psychological well-being (awan and sitwat, 2013); organizational citizenship behavior (kazemipour et al., 2012), intention to quit, intrinsic work satisfaction (crawford et al., 2009; gupta et al., 2014), job involvement (crawford et al., 2009; word, 2012). within the framework of this discourse, it has been attempted to relate workplace spirituality to a wide variety of organizational functions and practices (gotsis and kortezi, 2008). in the organizational context, the workplace spirituality has been associated with organization: organizational learning culture (sorakraikitikul and siengthai, 2014); organizational performance (albuquerque et al., 2014) and work-unit performance (duchon and plowman, 2005; petchsawang and duchon, 2012); team effectiveness (daniel, 2010); danbusiness ethics (corner, 2009). thus, in this study, the effects of one of the lesser studied organizational variables that might affect by spirituality in the workplace. the purpose of the present study is to increase knowledge of spirituality in the workplace, provides the latest empirical to the understanding how workplace spirituality can be adapted in management practices, especially in the indonesian financial institution. indonesia is the largest moslem country in the world with multicultural and multi multi-religious society, therefore it is an excellent setting for performing and reporting such a study. thus, the study is expected to provide a new insight on spiritual values from an indonesian perspective, while also exploring the relationship between spiritual values at work (svw) with human resources (hr) management (hrm) practices (hrp), learning orientation (lo) and organizational health (oh). 2. literature review and hypotheses 2.1. svw attention to the spiritual work is based on their desire to integrate and align organizational goals with human values. this is believed to help employees engage more with their job (word, 2012). svw or workplace spirituality has been defined from some perspectives. karakas (2010) notes that there are more than 70 definitions of spirituality of work, previously, in the “handbook of workplace spirituality and organizational performance,” giacalone and jurkiewicz (2003) noted that there are 14 different definitions of the construct of spirituality that developed between 1975 and 2000. however, in general workplace spirituality has been defined both from the organizational and individual perspective. from organizational perspective, spirituality in the workplace can be defined as “recognition that employees have an inner life which nourishes and is nourished by meaningful work taking place in the context of a community” (ashmos and duchon, 2000. p. 137). the definition implies that the recognition of the company on the inner life of employees who maintain and nourished by meaningful work in the context of the society/community. ashmos and duchon (2000) argues that adding a spiritual workplace indicated a workplace where employees experience a sense of joy and meaning in their work, see themselves as part of a community of trust, employees feel personal growth as part of their work community and the employees feel valued and supported, then the work place as it will lead to spirituality flourish. ashmos and duchon’s (2000) study indicated three component of spirituality at work as a “sense of inner life,” “meaningful work” and “community.” however, in an asiancontext, petchsawanga and duchon, (2012) proposed three components of spirituality are meaningful work, purposeful work, sense of community/interconnectedness and transcendence. giacalone and jurkiewicz (2003. p. 13) proposed definition of workplace spirituality is “a framework of organizational values evidenced in the culture that promotes employees’ experience of transcendence through the work process, facilitating their sense of being connected to others in a way that provides feelings of completeness and joy.” this definition implies that the workplace spirituality as a values framework that can be proven through a culture that promotes employee experience transcendence through work processes, facilitating a sense of connectedness among employees so as to give a sense of completeness and joy. from an individual’s point of view, mitroff and denton (1999) workplace spirituality emphasize the purpose in life, developing a connection with others and having alignment with organizational values. there is no consensus on workplace spirituality definition showed differences in the perspective of the researchers. however, the most widely accepted meaning, purpose, and connection to others (giacalone and jurkiewicz, 2003; ashmos and duchon, 2000). thus, the spiritual value of work in this study was defined as the recognition that employees have an “inner life” that nurtures and maintained meaningful work in the context of society (ashmos and duchon, 2000), reinforced by an organizational culture that promotes the experience of “sense of community” through the “alignment between organizational and individual value,” and “positive organizational purpose” (pawar, 2009) and gives a feeling of completeness and joy (giacalone and jurkiewicz, 2003). 2.2. spirituality values in the workplace and hrps hrp refer to all the practices in hrm activities to streamline the hr function in accordance with the objectives of the organization. the relationship between spiritual values and hrm practices based on the spiritual value based management developed by milliman et al. (1999). this model describes how spiritual values represent the views philosophical organization that represents the soul of the organization and reflects spirituality. the higher purpose of an organization is reflected in the values that directly affect the vision, mission and goals of the organization. in the end, these values underlying the company’s practices and how employees think, act and make decisions (integrated with the culture). ikhwan, et al.: examining the link between spiritual values at work, learning orientation, human resources practices and organizational health: an indonesia case study international review of management and marketing | vol 7 • issue 3 • 2017 19 workplace spirituality had benefited participants in all aspects of their personal and professional lives (karakas, 2010). these perspectives can provide hr practitioners and managers new ways to develop new hr approaches incorporating workplace spirituality. in the context of religion, hashim (2010) found no relationship between the islamic approach to hrp in malaysia. rees and johari (2010) expressed the view of respondents regarding hrm activities are supposed to have a relationship with the ethical, spiritual, and religious. therefore, we hypothesize that: h1: svw is positively related to hrp. 2.3. spirituality values in the workplace and lo lo is the extent to which organizations acquire and share information about customer needs, market changes, and the actions of competitors, as well as the development of new technologies to create new products or services are superior to the competitors (calantone et al., 2002. p. 516). theoretically, consideration of spiritual ideology offers an opportunity to reassess areas such as: the complexity and connectivity, meaning and purpose of work, individual identity and sense making, communities and collaborative behavior, dialogue, moral leadership and wisdom of spiritual capacity. howard (2002) provides a foundation for exploring and questioning the ontological assumptions about the relationship of spirituality to learning. through the study of literature, howard (2002) concludes that spirituality has an important role in the learning process. learning organizations drive performance and sustain competitive advantage to change more quickly in an environment that supports learning culture. learning involves the interaction of mental energy, spiritual and physical, and learning outcomes are not limited on new knowledge, but includes the structures mental, spiritual, emotional and new behavior at the individual level. learning can change an individual in many ways, ranging from the intellectual perspective of themselves and other people’s behavior and relationships between individuals (sorakraikitiku and siengthai, 2014). at the macro level, the exploration of the relationship between the dimensions of spirituality in the workplace and organizational learning capabilities have been proven empirically (kolodinsky et al., 2008; krishnakumar and neck, 2002; nur and organ, 2008; howard, 2002). some authors suggest that a positive relationship between organizational learning and spirituality in the workplace (sorakraikitiku and siengthai, 2014). deshpande (2012) concluded that spirituality in the workplace may affect the ability of a learning organization. hence, it is hypothesized that: h2: svw is positively related to lo. 2.4. spirituality values in the workplace and oh the first term of oh is to express on sustainability aspects organization. parsons et al. (1953), hoy and tarter (1997), and hoy and miskel (1991) gives the definition of organization health is the ability to adapt to the environment, to create harmony among the members and to achieve the goal (cite in korkmaz, 2004). some researchers see the similarities between the organization and the human, where an organization could be sick or health. as whole human organs so someone has to work in perfect harmony for the body to be healthy.as well as organization, all sub-systems have to work regularly, harmoniously for an organization to be healthy. a healthy organization is functional; function in an orderly and effective offering goods and service (cemaloglu, 2007). referring to the first opinions about the health of the organization presented by miles, a healthy organization is not only an organization that is still alive in its environment, but also has the ability to overcome difficulties structure in order to survive in the long term. the concept of health-oriented organizations is on the survival of the organization. term health of the organization proposed by hoy and tarter (1991), and hoy and miskel (1991): as an organization’s ability to successfully adapt to its environment, to create solidarity among its members and achieve its objectives. keyword in this definition is the adaptability of the organization. organizational heath is combination between coordination and practical of people to produce the expected performance (bruhn, 2001). health is a statement of the physical, mental, and social well-being and not merely the absence of disease. as an application of oh is a unity of body, mind and spirit. (1) body refers to the structure, organization design, process communication, and distribution of jobs. (2) the mind refers to how basic beliefs, goals, policies, and procedures are implemented, how the conflict can be solved, how the management changed, how the organization’s members were treated and how organizations learn. (3) describe the spirit of the central organization that can lead to passion and attachment. this can be measured by observation (bruhn, 2001). kriger and hanson (1999) describes the universal values sourced from the world’s great religions are the basis for creating a healthy organization. these values become important to develop economic and spiritual vision to grow in modern organizations. spiritual values will shape and guide the aspirations of the organization, influencing behavior and foster organizational norms. health principle is a combination of practice and coordination of the various sections within the organization to adapt to changes in the environment, then, the spiritual as a fundamental value can provide the basis to think, act and make decisions. spiritual values are integrated into management practices can provide directions. as a result, the extent of human feelings and perceived value of work is stronger. spirituality at work is an important factor associated with organizational performance (albuquerque et al., 2014), work-unit performance (duchon and plowman, 2005; petchsawanga and duchon, 2012); team effectiveness (daniel, 2010); dan business ethics (corner, 2009). it is therefore hypothesized that: h 3: svw is positively related to oh. 2.5. hrps and oh hrps is a process that consists of the acquisition, development, motivation, and maintenance of hrs. in the business complex, major tasks of hrp is to manage their employees well, with the goal of improving the psychological attachment to organization. hrps such as training and development, promotion, compensation, job security, recruitment and selection, and evaluation has a key ikhwan, et al.: examining the link between spiritual values at work, learning orientation, human resources practices and organizational health: an indonesia case study international review of management and marketing | vol 7 • issue 3 • 201720 component in realizing the vision and mission of the organization. daft (cite in budiharjo, 2011) states that the oh is an internal process approach within the organization. in this context, although the company has high profits and increasing, but if there is a conflict in the organization that is dysfunctional, there is no confidence (trust), the team does not work properly, it can be stated that the organization was not effective (unhealthy). the relationship between spiritual values in the workplace with hrps are based on the model of spiritual value-based management model (milliman et al., 1999), and then get empirical support from some researchers. however, the results of recent studies that examine the effect of spiritual values with hrps conceptualization has limitations, where a religious perspective dominates spiritual assessment in relation to hr practices (jui-min, 2012; rees and johari, 2010; hashim, 2010). hence, it is hypothesized that: h4: hrps is positively related to oh. 2.6. lo and oh based on the cultural perspective, learning is an organizational process to improve the insight, knowledge and understanding. in addition, learning helps organizations to continuously acquire, assimilate, and update their knowledge in addressing the business changes. through lo, the company can take advantage of opportunities and/or neutralize the threat in organization. for example: lo allowing the company is able to understand the needs of customers, ahead of its competitors, superior customer retention and profitability growth (slater and narver, 1995). empirical support in relationship between lo and oh dimensions conducted by mavondo et al. (2005), which examines the relationship between lo, market orientation, hrp and innovation and their relationship with the organization’s performance. the results showed that the lo has an indirect effect on product innovation, process, administrative, marketing effectiveness, operating efficiency, operating efficiency and financial performance through hrp. in line with mavondo et al. (2005), ismail (2013), which examine the effect of lo with confidence and impact on competitive advantage in small and medium enterprises in malaysia. lee and tsai (2005) proved the positive effects of lo in innovation and organizational performance. based on the theoretical foundation and the empirical evidence, the hypothesis is: h5: lo related to oh. figure 1 illustrates the conceptual model of this study and the hypothesized relationships of variables. 3. research methods 3.1. participants and procedure the first phase of this study involved five indonesian academics in a pilot testing of the focus group discussion to obtain their opinions on the spiritual issue in the workplace. the interviewees were indonesian muslims from several universities were selected through scientific considerations. all participants in the focus group discussion are a doctoral degree. the second phase of this study was quantitative study that involved a two-step process. in the first step the items were pilot tested. the process of item-generation is discussed in the measures section. the second step of the second phase involved two surveys. the first survey yielded 50 responses for the exploratory factor analysis (efa) and the second survey yielded 139 responses for the confirmatory factor analysis and partial least square-structural equation modeling (pls-sem). data collection took place during november to december 2016, in three provinces in indonesia: jakarta, west java and banten. a questionnaire was given to managerial level in two group, head of division and head branches office in financial sector (head operation and sales manager), yielding 139 valid questionnaires. the sample distribution by gender, age and educational level is shown in table 1. from the valid sample, average age was 38.3, ranging from 23 to 56. approximately 78% of respondents were male, with an average tenure of 11 years. respondents were well educated with 76% having completed bachelor degree and 18% in diploma. 3.2. measurement development the questionnaires were mainly adapted from relevant prior studies and carefully adapted to the object of study. expert judgment is used to access the content validity, followed by a pilot test to assess construct validity and reliability. a total of figure 1: conceptual framework table 1: percent sample distribution by gender, age, education and job tenure characterisitcs percent gender male 78 female 22 education diploma 18 bachelor 76 master 6 age average 38 max 23 min 56 job tenure average 11 max 2 min 27 ikhwan, et al.: examining the link between spiritual values at work, learning orientation, human resources practices and organizational health: an indonesia case study international review of management and marketing | vol 7 • issue 3 • 2017 21 50 respondents are used for pilot testing and 139 respondents in the second phase of the survey. spiritual value at work adapted from miliman et al. (2003) scale to measure the three spirituality dimensions: sense of community with four items, meaningful work with four items, alignment between organizational and individual values with three items, and additional dimensions from pawar (2009) is positive organizational purpose with two items. all items were completed on a five-point scale ranging from 1 (strongly disagree) to 5 (strongly agree). in contrast to the first scale, the initial efa revealed two factors with eigenvalues of over one. two items on the scale are eliminated because it does not meet the criteria of 0.50, leaving 11 items for the final results. these factors explained approximately 61% of the variance. the modified scale resulted in two dimensions: the sense of community and alignment values (cronbach alpha = 0.876) and meaningful work and positive purpose (cronbach alpha = 0.801). hrps are measured based on five indicators include; recruitment and selection (four items), training and development (four items), compensation and rewards (four items), performance appraisal (four items) and empowerment (four items) adapted from kuo (2011), fong et al. (2011). all items were completed on a five-point scale ranging from 1 (strongly disagree) to 5 (strongly agree). the results of initial efa revealed eight factors with eigen values of over one. all items had a loading of more than 0.50, and these five factors explained approximately 61.5% of the variance. cronbach alpha value ranges between 0.732 and 0.807 which shows adequate internal consistency levels. lo adapted from bakker and sinkula (1999), which classifies lo into three parts; commitment to learning, open-mindedness, and a shared vision. one additional indicator that is group learning adapted from lee and tsai (2005). the items were measured on a five-point likert scale, and were coded on a scale of 5 (strongly agree) to 1 (strongly disagree). the results of initial efa revealed one factor with eigen values of over one. these results differ from the initial scale that identifies four dimensions/factors. thus it can be stated that the 12-item on a scale of lo to be one-dimensional with explained approximately 60% of the variance. all the items have a loading factor >0.50 with cronbach alpha coefficient of 0.913. oh was measured with total 28-items adapted and modified from some empirical studies. five dimensions adapted from hoy and miskel, (2005) in the organization health index: resource support, initiation structure, the influence of top management/ leadership, judgment, and spirit. two dimensions of the direction and governance adapted from the australian public service commission (2011), and confidence (trust) and knowledge sharing adapted from budiharjo (2011). the results of initial efa revealed three factors with eigen values of over one. these three factors explained approximately percent of the variance. one item had a loading of <0.50 were removed. the remaining 27 items were loaded into three distinct factors, which explained 65% of the variance. the construct reliability was evaluated using cronbach alpha show that the three factors have adequate internal consistency (cronbach alpha ranging from 0.811 to 0.876). 3.3. data analysis the research model was evaluated by conducting pls-sem. since the covariance-based sem need some assumptions (i.e., normality, adequate sample size), the pls approach to sem offers an alternative, which is especially suited for situations when data is non-normal distributed. this study adopted henseler and sarstedt (2009) to determine and reported the results of pls-path. this two-step technique consists of: assessment of a measurement model (outer model), and (2) assessment of a structural model (inner model). 4. results and discussion 4.1. assessment of the measurement model (outer model) outer model assessment involves examining individual indicator reliabilities, the reliabilities for each construct’s composite of measures (i.e., internal consistency reliability), as well as the measures’ convergent and discriminant validities (hair et al., 2011). convergent validity as the degree to which items in the constructs truly represent the intended latent construct and indeed have the correlation with other measures of the same latent construct (hair et al., 2011). convergent validity was assessed by using the factor loadings, average variance extracted (ave) and composite reliability. reliability indicators for sem-pls are based on the value of the indicator standardized loadings ≥0.70, for exploratory research studies of 0.40 loadings are acceptable (hulland, 1999). as shown in table 2, the results of indicator reliability ranged from 0.51 to 0.95. the loadings for all items were above the recommended value of 0.40. internal consistency reliability is evaluated by composite reliability. the value of composite table 2: individual item reliability construct indicator mean±standard deviation loading svw svw1 4.15±0.52 0.92 svw2 4.26±0.52 0.90 hrp hrp1 3.66±0.62 0.81 hrp2 4.02±0.66 0.89 hrp3 4.07±0.61 0.88 hrp4 3.98±0.56 0.88 hrp5 4.04±0.48 0.64 lo lo1 4.26±0.59 0.77 lo2 4.24±0.61 0.74 lo3 4.22±0.67 0.75 lo4 4.04±0.71 0.79 lo5 4.13±0.64 0.72 lo6 3.98±0.72 0.68 lo7 4.00±0.70 0.78 lo8 4.29±0.61 0.74 lo9 4.33±0.54 0.71 lo10 3.96±0.66 0.78 lo11 3.96±0.69 0.51 lo12 3.78±0.70 0.63 oh oh1 4.28±0.51 0.95 oh2 4.20±0.55 0.94 oh3 4.07±0.58 0.93 svw: spiritual values at work, lo: learning orientation, hrp: human resources management practices, oh: organizational health ikhwan, et al.: examining the link between spiritual values at work, learning orientation, human resources practices and organizational health: an indonesia case study international review of management and marketing | vol 7 • issue 3 • 201722 reliability was in the range of 0.87-0.93 which surpassed the minimum cut-off point of 0.70 (hair et al., 2011) (table 3). this indicates appropriate internal consistency reliability of the measures. additionally, the value of ave was in the range of 0.58-0.73 which surpassed the minimum cut-off point of 0.50. in the next stage, we proceeded on testing discriminant validity. discriminant validity is met if each construct’s ave should be higher than its squared correlation with any other construct, and all measurement items load strongly with other constructs in the loading and cross-loading matrix (hair et al., 2011). tables 3 and 4 reported that the square roots of aves for each construct were greater than all the inter-construct correlations and all items load strongly with other constructs in the loading and cross-loading matrix (table 5). in total, the measurement model confirmed that both convergent validity and discriminant validity were established. 4.2. assessment of the structural model (inner model) the primary criterion for inner model assessment is the coefficient of determination (r²), which represents the amount of explained variance of each endogenous latent variable. the explained variance r² values of endogenous latent variables are evaluated as 0.75 (substantial), 0.50 (moderate) and 0.25 (weak) (hair et al., 2011). to test the predictive relevance of the research model, the stone-geisser’s q2 statistic was measured. according to cohen (2013), the q2 values are classified into three degrees of predictive relevance: 0.02 (small); 0.15 (medium); and 0.35 (large). the structural model reported the r2 values of 0.688 in hrp, 0.721 to lo, and 0.761 in oh, they can be described as moderate and substantial. based on table 6, all constructs of are reported to have a large predictive relevance as their q2 values are >0.35 (q2 = 0.89). this result signifies a large predictive relevance. table 6 summarizes the results of the hypothesis testing. the significance level of the structural model was assessed via plssem using the bootstrapping procedure with replacement method of 5000 bootstrap samples. all of the hypotheses were supported and significant in the pls-sem prediction. 5. discussion and managerial implication the results are shown in figure 2 and table 6. firms focusing spiritual values tended to achieve higher path coefficient on table 3: correlation of latent variables svw hrp lo svw 1.00 hrp 0.83 1.00 lo 0.85 0.85 1.00 oh 0.80 0.82 0.85 svw: spiritual values at work, lo: learning orientation, hrp: human resources management practices, oh: organizational health table 4: ave and composite reliability construct composite reliability ave square of av svw 0.90 0.83 0.91 hrp 0.91 0.68 0.83 lo 0.93 0.52 0.72 oh 0.96 0.88 0.94 ave: average variance extracted, svw: spiritual values at work, lo: learning orientation, hrp: human resources management practices, oh: organizational health table 5: factor structure matrix of loadings and cross-loadings scale items svw hrp lo oh svw1 0.92 0.82 0.80 0.78 svw2 0.90 0.68 0.74 0.68 hrp1 0.69 0.81 0.66 0.61 hrp2 0.74 0.89 0.72 0.69 hrp3 0.72 0.88 0.76 0.73 hrp4 0.71 0.88 0.79 0.79 hrp5 0.54 0.64 0.56 0.52 lo1 0.66 0.66 0.77 0.63 lo2 0.68 0.62 0.74 0.57 lo3 0.62 0.64 0.75 0.57 lo4 0.69 0.65 0.79 0.68 lo5 0.62 0.63 0.72 0.64 lo6 0.55 0.60 0.68 0.57 lo7 0.66 0.63 0.78 0.66 lo8 0.63 0.59 0.74 0.61 lo9 0.59 0.59 0.71 0.66 lo10 0.69 0.69 0.78 0.74 lo11 0.42 0.48 0.51 0.40 lo12 0.49 0.58 0.63 0.56 oh1 0.77 0.79 0.83 0.95 oh2 0.74 0.74 0.77 0.94 oh3 0.74 0.76 0.79 0.93 svw: spiritual values at work, lo: learning orientation, hrp: human resources management practices, oh: organizational health figure 2: path coefficients of partial least square-structural equation modeling table 6: testing the structural model hypothesis relationship original sample se t-statistics r2 h1 svw → hrp 0.83** 0.02 43.43 0.688 h2 svw → lo 0.85** 0.03 33.57 0.721 h3 svw → oh 0.19* 0.08 2.39 0.761 h4 hrp → oh 0.26** 0.09 3.05 h5 lo → oh 0.46** 0.12 3.90 q2=0.89. *represents t-value 1.96 using a significance level of 0.05, critical ratios that exceed 1.96. **represents t-value 2.56 using a significance level of 0.01, critical ratios that exceed 2.56. svw: spiritual values at work, lo: learning orientation, hrp: human resources management practices, oh: organizational health, se: standard error ikhwan, et al.: examining the link between spiritual values at work, learning orientation, human resources practices and organizational health: an indonesia case study international review of management and marketing | vol 7 • issue 3 • 2017 23 relationships between spiritual values and hrps (p1 = 0.83**); between spiritual values and lo (p2 = 0.85**); between spiritual values and oh (p3 = 0.19*). for the above results, it was shown that h1 and h4 are fully supported. thus, it can be stated that the better application of spiritual values, it will encourage the creation of an effective hrps, learning and healthy organization. spirituality values at work involves an attempt to find one’s primary goal in life, develops strong relationships with co-workers and others and has the consistency (or alignment) between a person’s core beliefs and values of their organizations (mitroff and denton, 1999). thus, the spirituality of work can be expressed as an acknowledgment that the employee has an inner life that nurtures and nourished by meaningful work in a community context. spiritual values will shape and guide the aspirations of the organization, influence behavior and foster organizational norms in hrps and learning. on the other hand, firms focusing on hrps and lo tended to achieve path coefficients on the relationships between hrps and oh (p4 = 0.26**); between lo and oh (p = 0.46**). these results indicated that firms emphasizing effectiveness of hrps related to oh, and lo whereas firms emphasizing learning strategy to improve the oh. to sum up, in order to strengthen the health of organization, managers should try to magnify its hrps and lo as an important factor forming healthy organization. from the above results, it is shown that h4 and h5 are fully supported. the above conclusions elicit several managerial implications. first, as many scholars have noted, the spiritual values will heavily affect hrps, lo and oh. it is extremely important for managers to apply spiritual values prevailing in society as basic values and norms in management practices. the sense of community and wellbeing, and meaningful work using values of alignment are the two components of spiritual values that can be used as a fundamental factor to drive the effectiveness of hrps, learning, and directs the organization to be healthier. in addition, lo that emphasizes commitment to learn, open-mindedness, shared vision and group learning can be a driving force to improve organizational heath. 6. conclusion, limitations and future research this study examines the extent to which the svw, hrps, lo and oh in indonesian financial corporate, while it examines the interrelated between them. the empirical results indicate that two spiritual value dimensions were generated: the sense of community and well-being, and meaningful of work and values alignment. the results suggest that spiritual values is highly adapted in the financial sector, and the spiritual values measure was found to be a significant positive and moderate correlation with the hrps, learning and oh. in addition, lo and hrps was also shown to positively related and significant with oh. although these research results are compelling, several limitations exist in this study. the cross-sectional research design, the sample, and the measurement are temper the results of this study. first, this study adopts the cross-sectional design that examines managerial level at one point in time. this design has a weakness in explaining the causality relationship between variables, suggested that future research using a longitudinal design. second, as the respondents of this study only consist of manager level at financial sector companies in three provinces. the generalizations from the study results should be limited to similar sectors. future study could use various sectors (such as manufacturing and education) and expand the study area. lastly, this study is a 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(2012), engaging work as a calling: examining the link between spirituality and job involvement. journal of management, spirituality and religion, 9(2), 147-166. international review of management and marketing vol. 2, no. 1, 2012, pp.1-9 issn: 2146-4405 www.econjournals.com smes going global: a comparison of the internationalization strategies of publishers and online social networks bettina lis gutenberg university of mainz, institute of media studies and communication mainz, germany. corresponding author. email: lis@uni-mainz.de heinz-werner nienstedt gutenberg university of mainz, mainz, germany. patrick proner gutenberg university of mainz, mainz, germany. gözde yalazi gutenberg university of mainz, mainz, germany. andreas mauch gutenberg university of mainz, germany. abstract: up to now, most research has been conducted on the internationalization strategies of large media companies and groups. but tapping new foreign markets is also relevant to smalland medium-sized enterprises (smes) of all media sectors. this paper therefore focuses on the internationalization strategies of different types of media smes. it aims at describing and comparing the motives for becoming an international player as well as the specific market selection, market entry, and market development strategies. furthermore, it focuses on the main organizational implications. on the basis of a multiple-case design we compare two german regional newspaper publishers with two german special interest publishers and two online social business networks. results show similarities and differences between these media sectors according to the nature of the media businesses. the cases also highlight the importance of international management skills also in the context of smes. keywords: internationalization; sme; media jel classification: l82; m16 1. introduction the liberalization and deregulation of the world markets brought opportunities as well as risks for all types of industries. one major opportunity is growth through additional revenues in foreign markets. in the last decade, economies in eastern europe, china, and india became major targets for western companies of all kinds (wirtz, 2005: 629). thus, many companies became players in these new markets and benefited from their growth. a major risk of liberalization, on the other hand, is the entry of international players into domestic markets constituting additional competition in largely saturated markets (beschorner and stehr, 2007: 315). both, opportunities and risks, also apply to media companies. the opportunities push them to become international players or enforce their international positioning and to apply internationalization strategies. plenty of research deals with internationalization strategies in general, some research deals with internationalization strategies for smalland medium-sized enterprises (smes) (e.g. armario et al. 2008; naldi and davidsson, 2008; etemad, 2004), and some deals with the internationalization of media companies. hollifield (2001) provides an overview over the research on the internationalization international review of management and marketing, vol. 2, no.1, 2012, pp.1-9 2 strategies of media companies from 1978 to 2000. later overviews, which focus on more special aspects, are done by gershon (2006) and sanchez-tabernero (2006). one implication is that media economic research is mostly focused on media conglomerates like bertelsmann, disney, news corporation, time warner and viacom. recently conducted studies examine e.g. the impact of the top 26 media companies’ product and geographical diversification activities on their financial performance (jung and chan-olmsted, 2005) or the diversification patterns of the top 7 global media conglomerates (chan-olmsted and chang, 2003). besides focusing on media conglomerates in general, favorite media economic subjects under study are the different aspects of internationalization of audio-visual media products and the video industry respectively (chan-olmsted et al., 2008; oba and chan-olmsted, 2007; shrikhande, 2001). on the other hand, the majority of media companies is smes and is spread over a wide range of media sectors. smes have different organizational preconditions compared to media conglomerates and therefore need a different strategic view (picard 2004: 72). this may also be true for their internationalization strategies. therefore their strategies in this field deserve own research. this paper aims at taking a step to close this research gap. we do not develop a new theory of internationalization here but explore how selected smes cope with typical challenges of internationalization well known from other research in this field. we describe and compare these smes’ reasons for becoming international players as well as their market selection, market entry, and market development strategies (wirtz, 2005: 622). furthermore, this paper focuses on organizational implications. specifically we compare the internationalization strategies of six smes from three different media sectors. using a multiple-case design (yin, 1994) we compare two german regional newspaper publishers with two german b2b publishers as well as two online social business networks, one being based in france, the other one in the usa. the study is based on published company information, which is typically limited for smes, as well as on personal interviews and one telephone interview conducted in 2006 and 2007 with the general managers and, in two cases, the directors responsible for the international businesses. we define an sme as having maximum revenue of €500m, but also by qualitative aspects like the close relation of ownership and liability as well as a high degree of managerial involvement of owners, eventually being the founders. pivotal is the overall independence from concerns. we define “internationalization” as entering or having entered a geographical market other than the national domestic market with an ongoing activity, which is relevant for the company’s business and may include export, licensing, direct investment by mergers and acquisitions, joint ventures and founding of companies abroad but also the off-shoring of certain elements of the value chain. the paper is subdivided into four sections. after having introduced the issues in section 1, we give a short overview of the theoretical framework that can be applied to the internationalization of smes (section 2). in section 3, we compare certain aspects of the internationalization strategies of six smes from three different media sectors. section 4 summarizes the main results and shows various implications. 2. theoretical concepts and research overview little has been published on the internationalization strategies of media smes. theories of internationalization generally refer to multinational enterprises (mnes) or transnational corporations (tncs). but frequently these strategies do not suit the special needs of smes, e.g. they do not account for their resource limitations (etemad, 2004: 2; bonaccorsi 1992). since the media is a special economic segment, it is not surprising that a theoretical concept for media smes has not yet been established. to put our study into a theoretical context, we mainly refer to etemad (2004) who integrated different studies on internationalization strategies of smes into a theoretical framework. the theoretical framework mainly consists of three parts: the first part contains so-called push forces. these are internal factors of a company that enable it to enter foreign markets, e.g. innovative products, services, and processes. referring to a vast amount of literature, etemad classifies the following components as push factors: characteristics of the founder/management, economics of operations, characteristics of competition and strategy, economies of r&d, innovation and technological change, characteristics of high-technology products and markets, and the strategic logic of international operations (etemad, 2004: 6-7). smes going global: a comparison of the internationalization strategies of publishers and online social networks 3 the second part of the theoretical framework contains the so-called pull forces. these are external factors, usually set by the environment and providing an incentive to internationalize. one such factor could be unfulfilled market demands in certain international markets or segments. main pull forces are the liberalization of international markets, advances in information, communication and transportation technologies, attraction and resources of partners, and the attraction of serving current buyers’ and suppliers’ needs (etemad, 2004: 7-8). thirdly, the model consists of mediating forces which can accelerate or decelerate the companies’ internationalization processes and therefore are referred to as enablers and deterrents. these interactive push-pull factors which are able to influence an smes’ internationalization process, are: industry characteristics and drivers, the smes’ need for financial resources, the dynamics of learning organizations, leveraging capabilities, products and resources, and internationalized needs of customers and suppliers (etemad, 2004: 9-10). besides the theoretical framework by etemad (2004), one major theoretical concept is the “stage theory of internationalization” proposed by the uppsala school of internationalization (e.g. gankema et al., 2000; cavusgil, 1982, 1980; johanson and vahlne, 1992, 1990, 1977; johanson and weidersheim-paul, 1975, see also etemad, 2004: 1). it assumes that a company gradually expands into foreign markets before becoming a full international player. it implies that factors like the size of the company (resulting from growth in the past) and experience of the management influence the extent of internationalization. a company may for example first enter geographically close markets to gain experience (stöttinger and schlegelmilch, 1998), or start with exports and later expand its activities through joint ventures and acquisitions (beschorner and stehr, 2007). 3. comparison of the internationalization strategies of media smes in the following section we will compare the internationalization strategies of six selected media smes from three sectors: regional newspaper publishers (rnps), b2b publishers (b2bs), and online social business networks (osns). we describe their activities by taking a closer look at their motives for going international, market selection strategies, applied market entry strategies, market processing and timing strategies, and the implemented practices for coordinating the international entities. furthermore, we will explain the reasons for applying a certain strategy. our view is rather sector-specific, comparing the three media sectors with each other. if any differences appear within a sector, we also point out the company-specific differences. to give the reader an idea of the companies, we will briefly introduce them in tables 1 to 3. generally, all data refer to the year 2007; other years are stated if required table 1. overview of the examined regional newspaper publishers (rnp) verlagsgruppe passau (vgp) rheinisch bergische verlagsgruppe (rbvg) domestic market de de international markets pl, cz, sk, at pl, cz, nl revenues € 404m € 400m international revenue rate 73% 30% employees 6,500 4,000 international employee rate 90% 50% domestic media products newspapers (dailies/weeklies), tv-supplements, city magazines newspapers international media products newspapers (dailies/weeklies), tv-supplements, city magazines newspapers international review of management and marketing, vol. 2, no.1, 2012, pp.1-9 4 table 2. overview of the examined special interest publischers (bsb) vogel business medien (vbm) deutscher fachverlag (dfv) domestic market de de international markets ch, at, nl, cz, pl, it, gr, hu, ua, ro, cn, th, my, sg, in, id cn, it, at, cz, pl, ru, tr, hu revenues € 165m € 124m international revenue rate 30% 19% employees 1,800 825 international employee rate 50% n/a domestic media products 50 magazines, various services around core products 90 magazines, various services around core products international media products 100 magazines, various services around core products 51 magazines, various services around core products table 3. overview of examined online social business networks (osn) viadeo linkedin domestic market fr us international markets* gb, it, es, pt, nl, ca, us, cn gb, id, es, fr ** revenues € 3m usd 33m** international revenue rate n/a 50% *** employees n/a 33** international employee rate n/a n/a, domestic media products online business platform, online business platform, diverse applications international media products online business platform, online business platform, diverse applications notes: * offices, ** in 2008, *** in 2004 3.1. motives for internationalization there are many motives to induce or force firms to internationalize their operations (dhingra, 1991). they include growth and risk management strategies. in markets in which the same resources can be used or even the same product may be sold without major changes, companies can realize economies of scope as well as economies of scale which theoretically lead to an increase in profits. in order to decrease costs, companies have off-shored parts of their value chain, e.g. by establishing printing plants in eastern europe. with regard to the three examined media sectors, the motives for implementing internationalization strategies have commons but also aspects which differ. all are looking for growth opportunities and want to develop a diversified risk portfolio. the german market for regional newspapers is largely saturated and circulation and advertising share of newspapers decrease. acquisition opportunities in the domestic market are limited especially because of the restrictions imposed by the german antitrust legislation for the press sector. international strategies were therefore implemented to enable growth. another aspect addressed by one of the rnps was the personality of its managing director who had already gained international experience in previous positions and did forcefully step into international opportunities (with regard to the influence of the management’s international experience on the internationalization behavior of smes see also reuber and fischer, 1997). the osns were also looking for growth opportunities, not because of market saturation, but rather because of wanting and needing a growth story for potential investors on which they as start-ups depended on. furthermore, they aimed at occupying market niches to generate economies of scale and to build market entry barriers for their competitors. surprisingly, the latter aspect was partially contradicted because they try to avoid a first mover strategy in foreign market (see chapter 3.2.). furthermore, viadeo was from the very beginning established as an international player, making smes going global: a comparison of the internationalization strategies of publishers and online social networks 5 internationalization a central part of its business model and there-fore being highly dependent on success in international markets. the b2bs’ interest in internationalization adds another aspect: they want and need to follow their advertising customers’ internationalization process and their advertising budgets which go international. engineering and machine construction companies for example were highly interested in entering markets like china and look out for communication there. since 85% of the b2bs’ revenues are advertising income, they were pulled into the new markets by their customers. 3.2. market selection strategies market selection strategies consider the economic attractiveness, risks and market entry barriers of geographical markets. the attractiveness reflects the benefit potential for each individual company and includes aspects such as market volume, market growth, price structures, cost structures, and infrastructure (wirtz 2005: 649). market risks reflect potential threats like political and legal risks as well as inflation and currency risks which are neither individual to a company nor to a specific economic sector, but are suited to describe the stability of a country. market entry barriers can be differentiated into institutional, market specific and company specific barriers. institutional market entry barriers can be tariff or non-tariff barriers like for example the obligation to obtain a permit or a license (albaum et al. 2004: 256-257). market specific barriers include the competitive situation in general, the consumer behavior as well as potentially difficult access to distribution systems and resources. besides general market entry barriers, there also exist media-specific ones like language and cultural specific barriers, institutional barriers like censorship, or small market volumes which do not suffice to establish economies of scale, especially if the product has to be modified (wirtz, 2005: 649-652). for all companies of the three media sectors, the potential markets have to be economically strong (i.e. large market volume and purchasing power) and offer a potential for further market growth. the most important aspect for rnps is geographical proximity which is realized by a concentric market selection around the domestic market. another applied rule is to choose markets that are not further away than a maximum of three hours by air in order to take into account the limited management resources and time. both of the rnps took the opportunity to invest into the emerging eastern european markets in the czech republic, poland slovakia after the fall of communism which fitted these criteria. for b2bs, the most important aspect was to follow the customer and his advertising budget. other aspects are the operational conditions, e.g. the organization of distribution. all print publishers point out the importance of sound legal protection and absence of censorship for engaging into license contracts or entering into joint ventures or acquisitions. nevertheless vgp entered the czech republic in a very early stage of transition from communism and therefore took a risk, whether these conditions would apply in the future. for the b2bs being pulled by the advertisers into markets like china also means a trade-off between economic attractiveness and institutional barriers like vague legal constructions and censorship. the osns mainly select those countries and regions with a large market volume in terms of potential users with access to the internet and especially broadband, e-commerce development (i.e. the willingness of the users to pay for certain goods and services obtained through the internet), and market competitiveness. furthermore they prefer entering those markets in which a certain organic growth had already taken place before building up new entities. the last aspect may be best explained by an example: although linkedin was only active in the us, many users from all over the world registered for the service because they considered the network as a helpful tool for maintaining business relationships with us citizens. therefore, although being solely us-based in the beginning, linkedin soon had 50% of international users. this circumstance facilitated entering a new market by export even before implementing an internationalizing strategy like adapting the platform to new languages or cultural as-pects. this phenomenon is specific for the internet in combination with english being the internationally acknowledged business language. further criteria of market selection for the osns were cultural proximity (linkedin first expanded to english-speaking countries like uk and india) and the ability to establish a management team. the latter aspect will be discussed in chapter 3.3. international review of management and marketing, vol. 2, no.1, 2012, pp.1-9 6 3.3 market entry strategies market entry strategies describe the mode in which a company enters and processes a foreign market. relevant strategies for media companies include exports, licensing, joint ventures, direct investments and acquisitions, and greenfield investments (wirtz, 2005: 630-644; albaum et al. 2004: 249-251). the rnps export a very small amount of their product to expatriates, i.e. people who live and work in a foreign country, but want to stay informed about what is going on in their home region. besides serving this tiny market, regional newspapers are obviously not suited to be exported or to license brands or content due to language barriers and narrow geographical relevance of the contents. in our case, the rnps acquire existing companies which publish established titles. as described by svetličič et al. (2007), the b2bs show organizational flexibility when entering an international market. this is also confirmed by the b2bs covered here. they found new publishing units from scratch, engage into joint ventures with local partners and acquire established titles or their companies. anyway full control is preferred. in principal they focus on those business sectors which are served in their domestic market. but their foreign subsidiaries may under certain conditions also establish or acquire new titles which do not exist in the domestic portfolio. some of their brands are suited to brand, format and con-tent licensing like the computer magazine chip, which is published by vbm. in this case, they prefer licensing for smaller markets. in bigger markets they enter into joint ventures or build up greenfield investments. furthermore, since the b2b publishers under consideration have titles in a variety of fields, they concentrate first on their flagship activities. the osns clearly prefer greenfield investments, i.e. founding a new company in the foreign market. the greatest obstacle when establishing a subsidiary is the formation of a team which is as highly motivated and sales-oriented as the founding team. this aspect is a major prerequisite for entering a market and significantly influences the market selection strategy. an alternative to greenfield investments are acquisitions of majority interests or even a 100% share of existing competitors if the market cannot be developed by the osn itself. viadeo, for example, acquired ictnet in spain. peltier’s (2004) statement, that m&a is the most preferred strategic tool of media companies, is in this research clearly supported by the rnps, but only to a limited degree by the b2bs and not at all by the osns. china is a special case: while the rnps have not entered this market, the b2bs and osns need respectively want to enter this country which is strong in terms of potential customers and growth rate and important for the b2bs’ advertising customers. viadeo, for example, established a joint venture with the chinese social business network tianji.com, increasing the member rate from 1.6m (europe) to 3m. the only way to enter china is to establish a joint venture with local companies and management teams. besides those legal aspects, a reason for partnering is the cultural distinctiveness of the market. 3.4 market processing strategies and timing strategies media companies have two basic strategic options to process a market. they either concentrate on one market or they diversify their activities throughout many countries in parallel (wirtz, 2005: 653). in our case, all companies prefer to concentrate their activities on the economically most important countries. in all cases, the major reason for following a concentration strategy is the limitation of the companies’ resources. having the most diversified portfolios, the b2bs did focus on the internationalization of their flagship titles and put all efforts in establishing these titles in the new market. concerning the osns, market processing strategies vary. viadeo emphasizes the importance of a physical presence in foreign market. this is because the product has to be adapted to local requirements which include the adjustment of language but also the adaption of the semantics. this can only be done by a local management team. in contrast, linkedin had centralized operations in the us, relying on a passive export through registered international users, at the time of the interviews. by 2008, linkedin also operated offices in different countries to promote its international operations. however, both osns keep the technological structures of the platforms unchanged and run them in their domestic market. another interesting aspect of timing is the importance of first mover strategies in these countries. while this is not a relevant question for the regional newspaper publishers, which in general smes going global: a comparison of the internationalization strategies of publishers and online social networks 7 acquire existing titles, b2bs prefer this strategy if there is an opportunity and a positive business case. viadeo, the osn, in contrast points out, that it prefers entering markets in which market awareness and an understanding of the subject of “social networks” in general and “business networks” in special already have developed. this understanding can be created by a related business model like friendster or a direct competitor like xing. the advantage of taking the position of a follower is the convenience to have to spend less marketing budget and effort for explaining new products, services, or technologies, since others have already taken over the role of ice breakers. on the other hand, however, there is still the danger of being only a follower and to meet a dominant player, especially in niche markets. 3.5 coordination of international entities one major challenge of going international is to keep control of the activities, especially when having deployed a local management team that does not necessarily know the companies’ and the founders’ culture. therefore, it is important to establish reporting structures and a flow of know-how into both directions. in our case, the rnps and b2bs have to coordinate both, business operations as well as editorial aspects, while the osns only had to establish a local management entity with a focus on marketing and sales. the rnps directly coordinate the foreign operations through the general managers. being hands on and having limited resources they did not establish a dedicated international management. in one of the two cases, international operations are supported by one additional investment manager. also the b2bs coordinate business operations through the general man-ager, the manager in charge for a certain title, or the publishing management for the domestic titles. with regard to the editorial side, the foreign entities of the rnps and b2bs are largely independent. the b2bs’ international entities are partly taking over content from the mother product. in one case, a worldwide editorial system and regular meetings of the editors-in-chief of the countryspecific titles have been established. as stated in chapter 3.4, the osns assess regional presence differently (see viadeo’s regional presence vs. linkedin’s centralized operations). 4. summary and findings the motives for internationalization, market selection strategies, market entry strategies, market processing strategies and timing strategies as well as the coordination of the international activities vary between the sectors, which we examined in this study, according to the different natures of the media businesses under consideration. this demonstrates the importance of a differentiated view on internationalization strategies depending on media sectors. table 4 presents an overview of the main results of the study in these respects. it is interesting to see that the variety of strategic choices known from large media conglomerates can be found also in the field of the smes which we analyzed. there is one big difference to media conglomerates: the concentration strategy on selected markets although for example vbm has an impressive number of countries in its portfolio and the hands on management of coordinating international activities by domestic general managers or line managers with no or very limited specialized international staff. both are due to the limited resources of smes. we see an impressive degree of internationalization also with smes in our case study. that has implications for the necessary skills of media managers who have to be prepared for international management not only if they enter the big conglomerates. interesting enough, we see that the osns as startups are already “born globals”, since international presence is part of their business model and the underlying distribution technology enables them to overcome all national borders. international review of management and marketing, vol. 2, no.1, 2012, pp.1-9 8 table 4. internationalization strategies of selected media sectors (dominant strategy elements in bold letters regional newspaper publishers special interest publishers online social business platforms motives for internationalization growth/domestic market saturation cost reduction (production) internationalization of advertising customers and the advertising budget growth/domestic market saturation growth/growth story occupation of market niches economies of scale market selection strategies geographical proximity/ concentric market potential legal stability/free press follow-the-customer market potential market competitiveness ability to process the market (organization of distribution, generation of business addresses) market potential market structure (stage of development of internet and broadband penetration, ecommerce, online advertising market) autarkical and self-sustaining growth team building geographical and cultural proximity market competitiveness market entry strategies majority interest export (to expatriates, very limited) licensing joint ventures greenfield investment greenfield investment export acquisition/majority interest market processing and timing strategies concentration strategy concentration strategy first mover strategy (countryspecific) concentration strategy localization of the platform coordination of international entities management coordination: managing director no central management department for foreign entities editorial coordination: independence management coordination: title manager domestic publishing department editorial coordination: high independence partial take-over of content regular meetings of editors in charge worldwide coordinated editorial system management organization: marketing and sales references albaum, g., strandskov, j., duerr, e. 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(2005), medienund internetmanagement. wiesbaden: gabler. yin, r.k., 1994, case study research: design and methods. 2nd edition, sage. tx_1~at/tx_2~at international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2020, 10(5), 172-178. international review of management and marketing | vol 10 • issue 5 • 2020172 the role of hr practices on turnover intentions directly and through organizational citizenship behavior in the banking sector of malaysia syed haider ali shah1*, shakeel sajjad2, najla abdallah mohammed ahmed3, bilal arshad4, munaza kazmi4, rab nawaz4 1business studies department, bahria university islamabad, pakistan, 2department of management sciences, bahria university, islamabad, pakistan, 3faculty of economics and administration, university of malaya, malaysia, 4department of management sciences, bahria university, islamabad, pakistan. *email: haidershah11@gmail.com received: 08 august 2020 accepted: 28 september 2020 doi: https://doi.org/10.32479/irmm.10760 abstract in the recent years, the banking industry of malaysia has grown rapidly and the roles of employees are undeniable. in todays, dynamic environment banking industry is striving hard to retain the employees in the organization. employee provides the basis for organization to be successful. the aim of this paper was to investigate the role of hr practices on turnover intentions directly and indirectly through organizational citizenship behavior in banking sector of malaysia. data collected through 510 questionnaires from top five banks (by capital) branches in kuala lumpur, malaysia. in order to investigate the hypotheses, this study applied structural equation modelling (amos). findings of this study portray that hr practices had negative effect on turnover intentions while the interesting finding is that indirect effect of hr practices through organizational citizenship were also significant. the results are beneficial for top management of banking sector of malaysia in order to keep motivating employees and to retain them through proper implementation of ocb. to build and align the hr practices and ocb which results in reducing turnover intentions of employees. keywords: human resources practices, organizational citizenship behavior, turnover intentions, structural equation model jel classifications: h11, s12. 1. introduction banking industry serves the economy and country as the lifeline. banking industry enhances the growth of economy and helps in establishing the new horizon. banking industry also helps in creating employment and new opportunity for millions of people. nowadays, banking sector of pakistan is competing with other banking sectors around the world. similarly, the services of banking sector are also very important which mostly depends on the services provided to customers and most importantly the quality of services matter more which results in enhanced performance and productivity, the quality of such services are purely based on the employees. therefore, it is the employees whose role are so important in the success of the banking sector. number of studies have also mentioned the importance of the employees in banking sector (benjamin, 2012; khatri et al., 2001; newman et al., 2011; koh and goh, 1995). employees are properly guided and directed by the hr practices. popular studies have also mentioned the influence and importance of hr practices on employee performance as well as their intentions to quit. study by the nanayakkara, (1999) advocated in “changing paradigms in human resource management” that in sector the major key player is the employee and their success is directly depends on their employees’ performance towards delivery to customers. furthermore, this study advocated that hr practices not only maximize the performance but also reduces the cost in terms of employees’ turnover. another study by brooks, (2000) this journal is licensed under a creative commons attribution 4.0 international license shah, et al.: the role of hr practices on turnover intentions directly and through organizational citizenship behavior in the banking sector of malaysia international review of management and marketing | vol 10 • issue 5 • 2020 173 mentioned in the “why loyal employees and customers improve the bottom line” that customer loyalty and customer satisfaction highly depends on employee-customer relationship. hr practices shape the employees’ behavior and performance towards customer and enhance the overall performances of the organization. moreover, the study by kamesam (2004), emphasized on the role of hrd in banking sector and its impact of the organizational performance and customer satisfaction, the study provided the deep insight regarding the relationship of organizational performance and the role of hrd particularly for banking industry. technology and other assets are completely replaceable but human capital is something which cannot be replaced completely. this is the reason why many researchers paid their attention towards the human capital development and to enhance the value and quality of human capital the role of hr practices is crucial. furthermore, there are multiple of hr practices available; the most important part is the selection of appropriate hr practices. as discussed earlier, the importance of the hr practices, the discussion related to importance of hr practices are important to elaborate importance of employee turnover intentions. employee turnover rate is capable of breaking or making the any organization. employee turnover has direct and indirect heavy costs which an organization has to incur if employees quit the job. hr practices enhance the employee performance and reduces the turnover intentions. in banking sector, when employees quit the job it hinders the performance and overall productivity of the organization. the most important factor in banking industry is the customer satisfaction which highly depends on employees, when employees leave the current organization it has detrimental effects on the customer satisfaction as well as on the overall performance. hr practices can be further boost up the organizational citizenship behavior. there are multiple definitions organizational citizenship behavior exits in academic field. studies like organ (1990) and organ (1988, p. 4) defined the organizational citizenship behavior as the “individual behavior that is discretionary, not directly or explicitly recognized by the formal reward system and that in aggregate promotes the effective functioning of the organization.” ocb history is comparatively short. the span of its history is over 20 years and it gained much of popularity in academic world and numbers of articles have been published in this area (kang et al., 2015; tarigan and ariani, 2015; parry, 2008; zopiatis et al., 2014). moreover, podsakoff et al. (1997) advocated summarized the number of reasons why the ocb remained to be influential among academic and practitioners. reasons which are summarized are the following that it may enhance the management efficency, it assists in an integration of multiple groups in any organization moreover, it can enhance the retention of employees and attraction of new employees. organizational citizenship behavior is the results of attractive workplace, organizational performance is stable way and adaptation to the environmental change. numerous scholars (kuean et al., 2010; mathieu and zajac, 1990; somers, 1995; chen and francesco 2000) have mentioned the consequences of such behavior. the role of ocb is considered important in triggering the employee behavior which lead to customer satisfaction by delivering services. the role of hr practices is undeniable in enhancing the organizational performance and reducing turnover intentions. increased employee turnover rate has significant impact on the losses of skills and knowledge, profitability, quality and productivity (park et al., 2014). because of the new employee’s lack of skills, knowledge and technical skills, it has a determinantal effect on customer and employee relationship (kuean et al., 2010; saeed et al., 2014; nosheen et al., 2020; shah et al., 2016). by implementing the appropriate hr practices, it can enhance the employee behavior and performance which leads to customer satisfaction and success of banking industry. this study is filling the gap by investigating all these practices in one framework in the banking industry. as per researcher’s knowledge, these variables were not investigated together in one frame work in banking industry of malaysia. this is the contribution of this study that it integrates the scholastic work together. this study is an attempt to investigate the five hr practices which can lead to reduce the turnover intentions, moreover the mediating role of organizational citizenship behavior. 2. literature review 2.1. turnover intentions turnover intentions remained a major issue, even though numerous studies have been conducted in order to find out the antecedents and consequences of turnover intentions. what causes the employee to leave the organization? how employees’ turnover intentions can be lowered down. what factors lead to employee’s quitting behavior. employees’ turnover intentions still need further investigation as it has not been decreased (park et al., 2014; kang et al., 2015). literature describes two types of employee turnover intentions which are involuntary and voluntary turnover intentions. one starts from the employee side which is called as voluntary turnover and another one starts from employer’s side which is called involuntary turnover. studies like mobley, (1982) has advocated that turnover has detrimental effects on organizations and heavy costs for any organizations in terms of new recruitment, selection, training, hiring and replacing cost and incurring losses due to the suspension of work which directly lead to reduction in overall productivity. various studies have explored the number of hr practices with intentions to quit (allen et al., 2003; mobley et al., 1979). turnover intentions are considered to be leaving the current job due to any reasons while the actual turnover intentions is the rate of employees who already left the job in the organization (chen et al., 2011). to deter the actual turnover of employees (mobley et al., 1979; rasch and harrell 1990), the best predictor is the employee turnover intentions (chen et al., 2011; steel and ovalle, 1984). different researchers advocated the strong relationship of turnover intentions and the various hr practices (veloutsou and panigyrakis, 2004; benson, 2006; nassani et al., 2020; singh, 2012; liou, 2009; kumar and singh, 2012). 2.2. organization citizenship behaviour ocb concept is not that old as compare to other similar concepts. researchers paid attention to the ocb since two decades after the organ presented the definition in 1988. since then various studies have been conducted to explore its effect on the employees’ performance and its role in reducing the turnover intentions. ocb is considered as the forms of behavior at the workplace. this behavior can be in the form of supporting colleagues, tolerance figure 1: conceptual framework shah, et al.: the role of hr practices on turnover intentions directly and through organizational citizenship behavior in the banking sector of malaysia international review of management and marketing | vol 10 • issue 5 • 2020174 towards excessive work, helping the new hired employees, taking the organizational steps in positive manner and providing the frame of positivity at workplace. the basis of such positive frame of mind is provided by social exchange theory. moreover, borman and motowildo (2014), advocated that ocb could be enhanced through supporting the learning environment, providing promotion opportunity and development opportunities. as advocated by the lavelle (2010), that ocb is the result of personal motivation not based on the intentions to get something on return. the strong link has been established by the morrison (1994) between the hr practices and employee retention. this study further demonstrated that it is hr philosophy and hr practices which build longterm employee relationship with the organization. furthermore, employees reciprocate to organization in better performance which is doctrine of social exchange theory. ocb is highly based on the set theory, this theory lead to pave way for researchers to understand the phenomena that how ocb can be further boost up and which results in better performance, productivity and overall organizational environment including the workforce. set suggest that giving the socio and economic values the employees’ are going to be more efficient and effective while developing the notion that organization care for them and work for employees’ better which of course build the strong connection of employees’ with organization. 2.3. human resource practices hr practices role have immense importance on the performance of organization has been explored by number of researcher and remained as a corner stone in the field of business management. different hr practices exists in literature such as selection and recruitment, compensation, reward system, organizational commitment, performance appraisal which has huge impact on the employees performance (salanova et al., 2005; wright et al., 2003; shahzad et al., 2008). as advocated by wright et al. (1994), organizations apply hr practices to obtain the desired result in the behavior of employees. according to huselid (1995), demonstrated that hr practices boost up mainly two main kinds of behavior: first is to enhance the motivation and second is to enhance the skills. furthermore, author mentioned that training, selection, professional development practices are more related to skills enhancing while the compensation, rewards, recognition practices are more inclined to increase the motivation, which in turn shape the behavior of employees which results in improved productivity. there are numerous hr practices available in the literature, however, the blend of hr practices must obtain the balanced hr practices which can lead to motivation as well as skills enhancing of employees. researchers advocated that employee recognition is an important while lowering down the turnover intentions (beh and shah, 2016; shah et al., 2017). similarly, the salary, job security is also one of major hr practices which has significant role in boosting ocb and workload, performance feedback employees. various researchers have established the strong relationship of hr practices and had also significant impact on employees’ turnover intentions. (juhdi et al., 2013; houkes et al., 2001; beh and shah, 2016; shah et al., 2016; khan et al., 2014; shah et al., 2017; shah and beh, 2016; shah et al., 2018a; shah et al., 2017; beh and shah, 2018). 2.4. relationships between hr practices, organizational citizenship behavior and turnover intentions hr practices has strong relationship with the turnover intentions (beh and shah, 2017; beh and shah, 2016; shah et al., 2013; juhdi et al., 2013). hr practices lead to reduce the turnover intentions of employees. various researchers have established the strong relationship of hr practices and ocb by conducting the empirical studies (podsakoff et al., 2009; huang et al., 2012), they advocated that hr practices lead to strengthen the ocb. furthermore, studies mentioned a link between ocb and the employees turnover intentions (wei et al., 2010), they mentioned that ocb led to reduce the turnover intentions (podsakoff et al., 2009; meyer et al., 2002), studies further mentioned that individuals with strong ocb trigger the feeling of employees in a way about their organization which lead to better performance, productivity and which ultimately result in reducing turnover intentions (podsakoff et al., 2009; khalid et al., 2013). hr practices boost up the ocb and ocb leads in reducing the turnover intentions of employees (rasch and harrell, 1990; podsakoff et al., 2009; cotton and tuttle 1986). studies have proved the relationship among them. conceptual framework of the study is presented in figure 1. shah, et al.: the role of hr practices on turnover intentions directly and through organizational citizenship behavior in the banking sector of malaysia international review of management and marketing | vol 10 • issue 5 • 2020 175 3. methodology and data collection instruments employees working in banking industry of top five banks by capital according to world bank group, global knowledge and research hub in malaysia, (2017). banks which were included in this study were the following maybank, public bank, cimb bank, rhb bank and hong leong bank. data were collected through questionnaire by random sampling technique. 510 questionnaires were distributed and 435 questionnaires were usable. hr practices questions have been adopted from akhtar et al. (2008), spector and jex (1998), tremblay et al. (1997), isaksson et al. (1998), lawrence and jordan (2009), gardner et al. (2011). ocb items were adopted from (organ et al., 2006; smith et al., 1983; bateman and organ, 1983; organ 1988; williams, 1988) and turnover intentions items were adopted from the studies by farh et al. (1998). to analyze the measures five-point likert scale were used. 4. data analysis tools spss was employed for descriptive analysis (table 1). this research employed sem (amos) to check hypothesis. to investigate the constructs validity and reliability, this study employed several parameters were employed and those were cronbach’s alpha, construct reliability, factor loadings and average variance extracted (ave), the discriminant validity and convergent validity which has been portrayed in tables 2 and 3. confirmatory factor analysis (cfa) were employed to investigate the appropriate level of goodness of fit. cfa results portrayed that inappropriateness of the model. for proper level of goodness of fit, the researcher removed the items of hr practices, organizational citizenship behavior and turnover intentions whose factor loadings low. the initial model fitness was [gfi = 0.589; cfi = 0.576; rmsea = 3.411; χ2/df = 19.352] and after removal all the appropriateness of model fitness was achieved and new summery were [gfi = 0.941; cfi = 0.939; rmsea = 0.055; χ2/df = 5.353] according to hair et al., (2009). hypotheses of the study are as follow: h1: there is a negative relationship between hr practices and turnover intentions h2: organizational citizenship behavior mediates the relationship between hr practices and turnover intentions 5. results of structural equation modeling and discussion as per findings the hypothesis h1 is accepted, results are similar to like huselid (1995) found a negative relationship of hr practices on employees’ turnover intentions. similarly, beh and shah, (2016) found that hr practices had negative relation on employees’ turnover intentions, this study was conducted in malaysia. furthermore, shah et al., (2016) examined the impact of hr practices on turnover intentions and they found a negative relationship between them in banking sector of pakistan. moreover, juhdi et al., (2013), investigated the impact of hr practices on turnover intentions and found the negative relationship. similarly, various another studies like khan et al., 2014; beh and shah, 2017; chib, 2016; podsakoff et al., 2009; yadav and punia, 2013; malik et al., 2013; huang et al., 2012 also examined and their study portrayed a negative relationship. to investigate the mediation effect, h2 was formed. this study adopted the procedure of mediation analysis described by preacher and hayes, (2008) in which the structural model is run two times, first without mediator and secondly with mediator and then calculated the indirect effects which is −0.58 and significance was 0.003 (table 4). goodness of fit of direct relation results are presented in table 5. as shown in table 6, significance of the indirect value was checked through bootstrapping as postulated by preacher and hayes, (2008), with 1000 iteration to test the p-values. hypothesis h2 is accepted as per findings. this showed that there was a partial mediation (baron and kenny, 1986), can be seen in table 6. moreover, goodness of fit of indirect relation can be seen in table 7. similar findings of other studies like rasch and harrell, (1990) which mentioned that ocb had a key role in reducing turnover intentions. similarly, another study table 1: descriptive statistics variables mean maximum minimum number sd hr practices 3.50 5 1 435 0.986 ocb 3.48 5 1 435 0.901 turnover intentions 3.07 5 1 435 0.684 table 2: construct validity construct number of dimension factor loading ave cr cb alpha hr practices hr 1 0.61 0.60 0.82 0.79 hr 4 0.58 hr 6 0.69 hr 9 0.73 hr 10 0.75 hr 11 0.66 hr 12 0.67 hr 13 0.69 hr 14 0.65 hr 15 0.65 organization citizenship behavior ocb1 0.73 0.52 0.84 0.83 ocb 2 0.61 ocb 3 0.60 ocb 5 0.59 ocb 6 0.58 ocb 8 0.71 ocb 9 0.78 ocb 6 0.73 turnover intentions ti1 0.79 0.72 0.91 0.86 ti2 0.73 ti3 0.63 ti4 0.85 shah, et al.: the role of hr practices on turnover intentions directly and through organizational citizenship behavior in the banking sector of malaysia international review of management and marketing | vol 10 • issue 5 • 2020176 conducted by podsakoff et al., (2009) advocated that ocb had a negative relationship with turnover intentions, moreover, khalid et al., (2013) also mentioned the similar results from there study. similarly, empirical study conducted khan and rashid, (2012) and saoula, (2016) found a mediating role of ocb. same is postulated by dwivedi, (2017) that ocb is a strong mediator. 6. conclusion from the above discussion and results, it has been concluded that hr practices have a significant impact in reducing turnover intentions, which gives clear indication that appropriate hr practices have a great deal of influence on reducing turnover intentions. this indicated that ocb should be promoted in banking sector of malaysia. these empirical results are important for the top management of the banking sector to incorporate the ocb and these hr practices in reducing the turnover intentions. as same is postulated by number of studies like dwivedi, 2017; khalid et al., 2013; podsakoff et al., 2009). the findings provide empirical evidences for banking sector of malaysia to further strengthen the employee and employer relationship by incorporating proper implementation of ocb along with these hr practices which strengthen employees’ notion about the job security, recognition system, reward system, performance feedback and workload that organization does care about them and which ultimately increase the quit intentions. findings are important for banking industry particularly for higher management to incorporate the hr practices properly. the proper hr practices can be meant as the rightly bundled practices which are exclusively related to banking industry as bundling itself is the core issue for any organization. this study provided the right bundle of hr practices not only to boost up the ocb but also reduce turnover intentions. the banking industry must find the proper practices to cultivate ocb in employees which is the source of binding of employees’ to the organization. as described in literature, ocb is the prime factor in reducing turnover of employees,’ so top management must align the hr practices with ocb which in turn build the intention to stay with the current organization. this study revealed the important findings related to hr practices along with ocb in the banking sector of malaysia. this study also has some limitation. the first limitation is that this study includes all kind of employees working in banking sector, future studies can target the particular level of employees’ like higher management, middle level management. second limitation is that this study is cross sectional, longitudinal study is recommended. the same framework of this study can also be used in other services sectors such as education, health etc. the framework can be modified by incorporating other hr practices and investigate the role of ocb on turnover intentions of employees.’ references akhtar, s., ding, d.z., ge, g.l. 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(2014), job involvement, commitment, satisfaction and turnover: evidence from hotel employees in cyprus. tourism management, 41, 129-140. . international review of management and marketing | vol 6 • special issue (s6) • 2016 141 international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2016, 6(s6) 141-146. special issue on "management of systems of socio-economic and legal relations in modern conditions of development of education and society” issues of legal forms of the mediated implementation of the right of public property and self-financing anna a. kulikova* institute of service and business (branch) dstu, shakhty, russia. *email: mail@sssu.ru abstract the article considers the nature of the relationship mediating the right of public ownership. the author studies the legal status of a public enterprise, its place in the system of legal forms of indirect realization of the right of state and municipal property. depending on the type of property rights pertaining to the interrelation of state and municipal property the unitary enterprises are divided into types: based on the principle of operational management and based on the principle of economic management. the article critically examines the question of the necessity of the right of economic management, because of the wide scope of rights of the enterprises towards public ownership. also attempted to define criteria for distinguishing between the scope and functional purpose under consideration of limited real rights in the sphere of state and municipal sectors of the economy. according to the results of the study conclusions are formulated about the absence of objective necessity of the existence of legal reality in two types of unitary enterprises due to lack of legal regulation of the essential differences of their tasks. the author proved that the legal form of corporations is not suitable for public property rights in those areas where the foreground is implementation of public interests but not a profit making. keywords: legal forms, right of public property, self-financing, public ownership, property rights jel classifications: d23, h82, k11 1. introduction the essence of public property is shown in the relations of domination, assignment and distribution of material benefits for satisfaction of public interests (mazayev, 2004). unlike a private property public property (part of which has two forms – state and municipal) has the known purpose – the purposes of its use are derivative of the purposes of the corresponding public institution. g.a. gadzhiyev fairly notes that the purpose of objects of public property and also volume and content of its forms (public property) is predetermined by the tasks of maintaining common causes facing the state (gadzhiyev, 1996). at the same time public interests which satisfaction is provided as a result of use of public property aren’t limited by economic sphere but can be found practically in any plane of social life. in particular, it is about the social and political purposes consisting in ensuring the forward balanced development of society which level allows institutes of democracy to function normally; about the social purposes expressing influence of economic activity on a structure of society, its condition and a standard of living of his members; at last, about the cultural purposes connected with preservation and reproduction of cultural wealth and formation of material conditions of growth of spiritual capacity of society and each member of it (kulikova, 2012). 2. main part poly-functionality of public property causes a legal polyformism of its implementation; at the same time each legal form of implementation of public property has to be subordinated to the solution of a specific objective (or group of uniform tasks) within the common system purposes through prism of which their efficiency is subject to an assessment. a public property is presented by two components. one of them is in the legal regime of the state treasury extending to the property which isn’t assigned to the state legal entities; the similar norm is provided in the relation “the part of municipal property which kulikova: issues of legal forms of the mediated implementation of the right of public property and self-financing international review of management and marketing | vol 6 • special issue (s6) • 2016142 isn’t distributed.” it is, mainly, about means of the relevant public budgets that follows from literal interpretation of articles 214, 215 of the civil code of the russian federation (further – the civil code of the russian federation) (the state duma of the russian federation, 2013), though d.l. komyagin fairly notes that a participation of the state treasury in a property turn brings it for a concept framework actually of property because confirms investment with a quality of the subject of the corresponding legal relationship. the implementation of rights of the state and municipal ownership for the property which is in the mode of treasury is carried out by authorized bodies of the government and local government within the legal relationship regulated by the budget legislation (komyagin, 1999). other part of public property is distributed between the state and municipal organizations of legal entities, forming a material basis of implementation of the functions by them; depending on legal form of the legal entity the corresponding property is in the mode of the right of economic maintaining or the right of operational management. the unitary enterprises founded on the right of economic maintaining are among subjects of the first ones; a number of the second ones are state enterprises, establishments (autonomous, budgetary, state) (alekseeva et al., 2010). as the enterprises and institutions are allocated with the status of the legal entity and independently act in civil circulation so far as they can be defined as forms of the mediated implementation of the right of public property. besides economic companies of 100% or other prevailing participation of the public owner and also the state corporations and state companies can be also legal forms of the mediated implementation of the right of public property. feature of the property regime of these legal entities is that the property acquired as a result of their activity or property transferred to them as a contribution is equal belongs to them on the property right; i.e., this property is not state or municipal from legal point of view. despite essential external differences of legal regimes of functioning of the property belonging to the unitary enterprises and establishments as economic maintaining and operational management respectively, on the one hand, and economic companies, state corporations, state companies, being legal entities of property with other intrinsic prerequisite of their association in the general category of legal forms of the mediated implementation of the right of public property, the fact that all listed institutes are legal forms mediating the economic relations of the split (divided) property. the emergence of the latter one is explained by the complication of economic relations at a certain stage of which a degree of concentration of the capital causes requirement of separation of possession of the capital from process of management of production therefore legal entities of property are pushed the background, and the operating group begins to carry out their functions (rubanov, 1987); representatives of the latter are allocated with the volume of the economic power, necessary for implementation of the corresponding functions which was “undividedly” belonging to owners. this process is objectively characteristic of any economic system of an appropriate level of development, however a set of legal forms by means of which the problem of a legal mediating of the relations of the split property is solved can’t be formed by specifics of national legal systems. this model of the economic relations has a name of the divided (split) property; this splitting is not on the “horizontal” characteristic of classical models of the general property (condominium and co-tenancy), and forms subordinated option of structure of the relations of property at which each of subjects is incomplete, but nevertheless the valid owner, having competences, various character and volume (venediktov, 1948; mozolin, 1992). the main problem of legal registration of relations of the divided property is in the conditions of domestic legal system, in our opinion, consists that the classical principle of the roman property right is the basis for a paradigm of a legal regulation of the relations of property – “each thing can have only one owner” (malykhina, 2004). this model which is quite meeting requirements of civil circulation of ancient rome but absolutely unsuitable for a modern level of development of system of the economic relations, has received legal fixing in the current civil code of the russian federation. it is natural that in these conditions the legislator has been forced to stack legal regulation of the relations of the divided property of real and liability laws. the latter has been adapted for legal registration of the relations of the divided property couldn’t express fully economic essence of the last therefore the legal models created by them have been de-balanced from the point of view of a ratio of interests of subjects of these relations. today there are two main groups of the legal forms mediating the relations, uniform by the economic nature of the split property differentiated by criterion of the formal owner. the economic companies, the state corporations and the companies designated by a positive law as owners are the first group; the unitary enterprises and establishments which are allocated with public property on the basis of the limited real rights are the second (kulikova, 2012). the concept of development of the civil legislation of the russian federation in part 6.3 of the third section of this document defines economic companies with 100% or other decisive participation of public institutions in their property as a priority form of the “mediated” implementation of public property. the problem of legal registration of separation of the capital from the capital property is solved here within obligations and legal model at which a company admits the uniform and only owner of the property is irrespective of its sources (deposits to authorized capital, the income from business or other activity), and participants are allocated with the known set of the rights in relation to company which when using a classical dichotomy of property rights are estimated as obligations; the general set of the rights is listed in article 67 of the civil code of the russian federation. according to g.s. shapkina, pointing out obligation character of the relations of the shareholder and company the civil code and the law “on joint-stock companies,” eliminates a wrong definition in article 11 of the law of rsfsr “on the enterprises and business activity” where it was said that the property of closed joint stock company (which, besides was unreasonably identified with the kulikova: issues of legal forms of the mediated implementation of the right of public property and self-financing international review of management and marketing | vol 6 • special issue (s6) • 2016 143 limited liability company) belongs to its participants on the right of common ownership» (mozolin and maleina, 2005). as a result of use of such approach the positive law creates, at first sight, consistent legal model of corporation with the property mode and the scheme of legal communications, quite clear for “classical” civilians. actually it is consistency of “transcendental object”; having looked at her through a prism of those tasks for which solution she has been created, we find a deep contradiction between essence of the economic relations and a legal regime, urged to mediate them. legal designs of corporations in modern russian civil law simply ignores a “proprietary” element in legal status of their participants, reducing them to a role of creditors, and the creditors protected less than creditors in the “usual” civil obligation. the model of corporation realized in the existing russian legislation “overturns upside down” all system of the economic relations of joint-stock property: the companies created only for management of property of shareholders of a “magic” image find the status of owners as shareholders as v.p. mozolin said “on position of their owners,” are forced “to be content” with the legal status of the creditor in the obligation. natural result of the similar decision is the problem of insufficient legal security of participants from unfair actions of the executive bodies realizing often in the activity not interests of participants (mozolin and maleina, 2005). in the conditions of market economy, the joint-stock company regulated by the existing civil legislation is considered as the private-law institution not subject to control from the state of the activity which is carried out within operation of the law. there is a problem of harmonization of a functional purpose of public property and use of a legal regime mediating it legal forms of the state corporation and state company as types of noncommercial legal entities. a standard basis of their existence are in article 7.1, 7.2 of the federal law “on non-profit organizations.” as v.p. mozolin fairly notes any nation-wide purposes and functions which are going beyond purely business activity, integrally connected with need of receiving have arrived joint-stock company with the pro-state or municipal interests, from the point of view of the current law in attention cannot be accepted. in the conditions of market economy, the joint-stock company regulated by the existing civil legislation is considered as the private-law education not subject to control from the state of the activity which is carried out within operation of the law (mozolin, 2010). told demonstrates that the legal form of corporations is unsuitable for implementation of the right of public property in those spheres where there is an implementation of public interests, but not generation of profit. from the point of view of told it is necessary to estimate critically the idea of total replacement of the unitary enterprises expressed in point 6.3 of the third section of the concept of development of the civil legislation of the russian federation, including the state enterprises of territorial subjects of the russian federation and the municipal state enterprises and economic companies with 100% or other decisive participation of public educations in their property without the corresponding legal correction of legal designs of corporations. the matter is that according to paragraph 1 of article 7.1 of the federal law “on non-profit organizations” the ownership of the property given to the state corporation by the russian federation belongs to the state corporation; the question of what subjective rights the russian federation has for this property the current legislation leaves open. essential lack of legal statuses of the state corporations and companies is the total uncertainty of their property mode. the matter is that according to paragraph 1 of article 7.1 of the federal law “on non-profit organizations” the ownership to the property transferred the state corporation by the russian federation belongs to the state corporation; the question of what subjective rights for this property the russian federation has, the current legislation leaves open. in the opinion expressed in literature, unlike “classical” corporations, splitting of property in this case occurs, and two types of state ownership on the same property are created: property of russia as the states – the subject of civil law and property of the state corporations as legal entities – also subjects of civil law (mozolin, 2010). meanwhile, it is obvious that the property right in his classical understanding to property of the state corporation at the russian federation is absent; for an explanation of the nature of these legal relationship v.p. mozolin offers complicated one-object model of the property right. unfortunately, the answer to a question of the maintenance of the property right of russia to property of the state corporation remains open, and his statement is removed the remark on that, “during existence of the state corporation the right of russia for the state property transferred by her stops. it is restored on the property transferred to corporation and got by the state on the property newly created and acquired by the state corporation during its action” (mozolin, 2010). comparison of volume of authority which current laws about the state corporations (companies) give to the russian federation allows to draw a conclusion that their set is similar to the rights of participants of economic societies (the current legislation doesn’t contain uniform model of management in the state corporations and the companies. structure of governing bodies and their power are defined by the federal law on the basis of which each of the specified legal entities is created). as a result, difference of the state corporation and company from the last consists, mainly, in their reference to number of non-commercial legal entities and, as a result, – investment with special legal capacity. comparison of volume of authority which current laws about the state corporations (companies) give to the russian federation allows to draw a conclusion that their set is similar to the rights of participants of economic societies. as a result, difference of the state corporation and company from the last consists, mainly, in their reference to number of noncommercial legal entities and, as a result, – investment with special legal capacity. it is necessary to recognize that such approach corresponds to a problem of management of public property to a large extent, however in the conditions of the approach to the mechanism of creation of the state corporations and kulikova: issues of legal forms of the mediated implementation of the right of public property and self-financing international review of management and marketing | vol 6 • special issue (s6) • 2016144 companies embodied in the current legislation only on the basis of the federal law and extreme uncertainty of their property mode it is difficult to estimate the last as legal forms of implementation of the right of public property which will be able to become real practical alternative to both economic societies, and “traditional” for domestic legal system organizational and legal to forms of the enterprises and establishments. the legal mechanism of “splitting” of property in the last is based on formal preservation of the property right to property of the legal entity for his founder; the unitary enterprise and establishment receive “share” of the economic power in the form of so-called secondary (or limited) the real rights presented in modern russian legal system by the right of economic maintaining and the right of operational management. keeping of the last is based on a triad of competences, characteristic of the “classical” property right, but with one essential reservation – if for the first limits are set only by the law, then for the secondary real rights the limiter – will of the owner is entered additional. the analysis of legal status of the last both in absolute legal relationship of property, and in relative legal relationship with the enterprise (establishment) demonstrates that the maintenance of the property right to the property which is object of the secondary real rights is exposed to considerable transformation, moving from direct impact on a thing to the influence mediated by behavior of subjects of the specified rights. the criterion of a type of the limited real right mediating the property isolation is the cornerstone of division of the unitary enterprises into types. the federal law “on the state and municipal unitary enterprises” (further – the law on the unitary enterprises) creates a legal basis of activity of two types of the unitary enterprises – based on the right of economic maintaining and based on the right of operational management (the state enterprises). differentiation of legal persons not owners by criterion of level of the public owner (the russian federation, the subject of the russian federation, municipality), reflecting the developed structure of public property caused by factors of political property doesn’t exert special impact on their civil status). the criterion of a type of the limited real right mediating the property isolation is the cornerstone of division of the unitary enterprises into types. the federal law “on the state and municipal unitary enterprises” (further – the law on the unitary enterprises) creates a legal basis of activity of two types of the unitary enterprises – based on the right of economic maintaining and based on the right of operational management (the state enterprises) (the state duma of the russian federation, 2013). the first step towards restoration of a public component in legal status of the unitary enterprises has been made with restoration in system of subjects of civil law of the enterprises founded on the right of operational management, which have received the name of state plant (factory, economy). it should be noted that this form at the first stage had character of the economic sanction applied to the federal enterprises for violations in the property sphere and unsatisfactory economic activity within 2 years; subsequently in legal regulation of such subjects other tendency is found – the state enterprises receive certain privileges in the sphere of the state orders, this form at the first stage had character of the economic sanction applied to the federal enterprises for violations in the property sphere and unsatisfactory economic activity within 2 years; subsequently in legal regulation of such subjects other tendency is found – the state enterprises receive certain privileges in the sphere of the state orders, etc. the introduction of the civil code of the russian federation of 1994 “marks” a final legal recognition of the state enterprises as “normal” subjects of civil legal relationship, at the same time existence not only the state enterprises of federal level of property, but also the state enterprises of territorial subjects of the russian federation and the municipal state enterprises is provided; the right of operational management has taken the independent place in system of the real rights. these rights as legal institutes significantly differentiate legal regimes of use of public property to the economic sphere; have been constructed on uniform methodological approach, which cornerstone the idea of introduction additional is (in comparison with the property right), of restrictions by means of which the owner provides realization of the interest; as in this case it is about the owner as whom public education so far as it is correct to speak not about interest of the owner, and about public interest which expresses the last acts. the system of the specified restrictions is shown in categories of a subject and the purposes of activity of the unitary enterprise, and also institute of control by the owner of target use and the order by the enterprise by the separate types of property assigned to him (first of all immovable) in the form of consent on his alienation; concerning the state enterprise the set of such restrictions extends due to inclusion in their number of obligatory tasks of the owner. is result not only “narrowing” of the right of operational management of volume of competences forming the contents in comparison with the right of economic maintaining which is shown in the plane of the legal relationship of the state enterprise mediating realization of this right with the third parties but also essential features of legal status of an economic entity in the “vertical” relations with participation of the government and municipal bodies exercising the rights of the public owner of property of the enterprise. the existence in modern economical and legal system of russia of two types of functionally identical forms of legal entities causes need of definition of spheres of their application for public sector of economy. many of the scopes of each of the specified forms established by this norm are completely identical (use of property concerning which there is a privatization ban, production withdrawn from circulation or it is limited transferable, activity for the solution of social tasks); others, differing in their verbal formulations, don’t find differences of substantial property. the deep reason of a similar situation – in the functional unity of both legal forms predetermined by uniform essence of public property (kulikova, 2012). the category of object of activity of the unitary enterprise expressing a certain sphere of functioning of the last not a state to give a clear idea of criteria of differentiation of scopes of each of his types as each of them (certain spheres of use of public property) keeps quality whole, shown at the level of his essence. therefore, specification of this essence expressed by the all-system purpose of realization of public interest as reflections of general welfare at the level of a concrete element of economic system (enterprise) by means of category of object of activity won’t allow to find objective criteria for the solution of an objective. kulikova: issues of legal forms of the mediated implementation of the right of public property and self-financing international review of management and marketing | vol 6 • special issue (s6) • 2016 145 the solution of the latter one lies in the plane of a way of the organization of satisfaction of public interest, directly appearing in a funding mechanism for activity of the unitary enterprises. as it has been noticed earlier the differentiation of legal statuses of the types of the enterprises based on public form of ownership is shown in the property and administrative plane: the enterprises on the right of economic maintaining within the object of activity determined by the charter are rather free, independently organizing the activity at the expense of own income; activity of the state enterprises is subordinated by will of the owner by means of institutes of orders, obligatory for the enterprise, and estimates of the income and expenses. self-financing is the back side of economic freedom; the principle of self-financing can’t be in a basis of activity of the state enterprises, on allocated with economic freedom in that degree which is necessary for independent generation of profit. we will allow such principle only concerning the public enterprises on the right of economic maintaining and that with some reservations. there is a position of d.v. petrov who has offered the economic forecast of the corresponding type of social and useful activity as criterion of the choice of a concrete form of economic use of public property: the possibility of extraction during her implementation of the profit sufficient for self-sufficiency, means admissibility of implementation of such activity in the form of the enterprise of which property isolation is the cornerstone (“right of economic maintaining and operational management”, 2002). unfortunately, a closer examination becomes obvious that this criterion isn’t capable to resolve finally a problem of differentiation of scopes of types of the unitary enterprises because it only reduces degree of legal definiteness in the matter, but doesn’t eliminate her finally: it is obvious that any concrete forecast of economic results will be always based on value judgment of his authors. meanwhile, the stated position clearly demonstrates defects of the legal designs of the unitary enterprises created by a positive law. as we specified earlier, profitability of social and useful economic activity can’t be the basis for system of an assessment of efficiency of activity of the legal entities founded on public form of ownership; we believe that similarly it can’t be also criterion (at least, the basic) differentiations of scopes of their concrete legal forms. from paragraph 4 of article 8 of the law on the unitary enterprises it is easy to see that the most part of the bases of creation of both types of the unitary enterprises of kinds of activity included in “sets” doesn’t belong to economic spheres for which profitability or unprofitability are a priori inherent qualities. a striking example is the sphere of housing and communal services: depending on the size of a tariff for services of the housing and communal services organization her activity makes profit (and considerable – in view of that the activity connected with operation of municipal networks and infrastructures belongs to natural monopolies), and can be unprofitable and be subsidized from the relevant budget. on the other hand, there are examples of quite profitable activity which public importance excludes their implementation by the commercial organizations – health care, education, etc.; inadmissibility of use of criterion of profitability is obvious to an assessment of efficiency of such activity. 3. conclusions we believe that the majority of types of socially useful activity can be organized as on commercial (based on self-sufficiency at the expense of profited) and on the noncommercial basis; at the same time gratuitousness of the related activity can be a public interest for the sake of which the state (municipal) enterprise is created. from our point of view, we believe obvious a conclusion about lack of the objective factors causing need for the russian economical and legal system of existence of two types of the public enterprises because distinctions of the legal regimes of economic use of the state and municipal property mediated by the corresponding legal forms aren’t defined by differentiation of the tasks realized by public institutions in the economic sphere. an increase of independence of the public enterprises by investment with their right of economic maintaining has been directed to increase an efficiency of a social production, however it was acceptable only in the conditions of the organization of the last on the basis of public (state) property or during the period, transitional to market economy. in the conditions of the developed market economy based on a private property, “private” subjects of business activity have to carry out the corresponding functions. expansion of economic freedom for the public enterprises inevitably attracts decrease in level of a subordination of the relations between the owner and the enterprise that doesn’t allow to integrate the latter into the uniform control system of public property subordinated to the purpose of realization of public interests fully. on the other hand, change of legal status of the state enterprises because formal positioning of it is a positive law as commercial legal entities are in the known contradiction with problems of public property is necessary and it leads to the emasculation of essence of a legal form of its management. references alekseeva, d., andreyev, l., andreyev, v. 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(1948), state socialist ownership. moscow, leningrad: publishing house of the academy of sciences of the ussr. . international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2016, 6(4), 851-856. international review of management and marketing | vol 6 • issue 4 • 2016 851 1. introduction the indian retail industry has emerged as one of the most dynamic and fast-paced industries due to the entry of several new players. it accounts for over 10% of the country’s gross domestic product (gdp) and around 8% of the employment. india is the world’s fifth-largest global destination in the retail space. india’s retail market is expected to nearly double to us$ 1 trillion by 2020 from us$ 600 billion in 2015, driven by income growth, urbanisation and attitudinal shifts. while the overall retail market is expected to grow at 12% per annum, modern trade would expand twice as fast at 20% per annum and traditional trade at 10%. the industry has long way to go as there is a huge opportunity in streamlining the sector. indian retail sector is gradually inching its way towards becoming the next boom industry. within retail, the emerging sectors would be food and grocery, apparel, electronics, e-commerce, fashion and lifestyle. incorporation of technology in the organised retail segment has been something to reckon with in the past few years. use of computers for merchandise planning and management, control of inventory costs and supplies and replenishment of goods done electronically, internal store billing, etc., has changed the face of product retailing. currently india constitutes only 8% of organized retail and remaining 92% is left unorganized, which may grow much faster than traditional retail. it is expected to gain a higher share in the growing pie of the retail market in india. various estimates put the share of organized retail as 20% by 2020. the growing middle class is an important factor contributing to the growth of retail in india. by 2030, it is estimated that 91 million households will be “middle class,” up from 21 million today. also by 2030, 570 million people are expected to live in cities, nearly twice the population of the united states today. the growing disposable income in the country is resulting in increasing consumer spending habits. a large young working population with median age of 24 years, nuclear families in urban areas, along with increasing workingwomen population and the impact of service quality on customer satisfaction: a study on selected retail stores in india mohammed wamique hisam1, shouvik sanyal2*, moinuddin ahmad3 1dhofar university, salalah, oman, 2dhofar university, salalah, oman, 3dhofar university, salalah, oman. *email: shouvik@du.edu.om abstract shopping in india has undergone a revolution with the introduction of modern formats, multiple channels and huge shifts in consumer buying behavior. modern retailing has entered into india as is observed in the form of sprawling shopping centers, multi-storied malls and the huge complexes that offer shopping, entertainment and food all under one roof. several studies have shown that customer satisfaction in retailing depends to a large extent on the perceived quality of service offered by the retailer. managing perceived service quality means that the firm has to match the expected service and perceived service to each other so that consumer satisfaction is achieved. this paper aims to understand the importance and impact of service quality on the satisfaction of customers in selected retail stores in 3 indian cities using servqual and gap models. the paper also looks at the various service quality models and tries to assess their relative importance in successfully measuring service quality. weighted averages and analysis of variance is applied in relevant places in order to critically examine the customers’ perception towards service quality which will ultimately contribute information for the growth of performance of the organized retail outlets. keywords: customer satisfaction, quality, reliance, service, servqual jel classifications: m30, m31 hisam, et al.: the impact of service quality on customer satisfaction: a study on selected retail stores in india international review of management and marketing | vol 6 • issue 4 • 2016852 emerging opportunities in the services sector are going to be the key factors in the growth of the organized retail sector in india. service quality is a critical component of customer perceptions about the service. customers perceive services in terms of its quality and how satisfied they are overall with their experiences (zeithaml, 1988). as thus, service quality is defined as customers perception of how well a service meets or exceeds their expectations (czepiel, 1990). in the retail context, perceptions of service encounters accumulate over time and a customer’s relationship with an organization depends on continuation of exchanges or interactions in present or future (czepiel, 1990). when customers evaluate retail service, they compare their perceptions of the service they receive based on their expectations. customers are satisfied when the perceived service meets or exceeds their expectations and vice versa. thus in retail service, it is necessary to look at quality from the perspective of services as well as goods and derive a set of items that accurately measure this construct (mehta, 2000). for this reason, dabholkar et al. (1996) developed and empirically validated the retail service quality scale (rsqs) to capture dimensions important retail customers based on the triangulation qualitative research using three different methodologies: phenomenological interviews, exploratory depth interviews, and tracking the customer through the store. combining these qualitative findings with the existing literature and servqual, dabholkar et al. (1996) proposed that retail service quality has a hierarchical factor structure comprising five basic dimensions, namely, physical aspects’, reliability’, “personal interaction,” “problem solving,” and “policy,” with first three basic dimensions having two sub-dimensions each and overall service quality as a good order factor. the sub-dimensions of the basic dimension “physical aspects” are: “appearance” and “convenience;” the sub-dimensions of the basic dimension “reliability” are: “promises” and “doing it right” and the sub-dimensions of the basic dimension “personal interaction” are: “inspiring confidence” and “courteousness/helpful.” three servqual tangible items are used for measures of appearance. studies assessing the applicability of the rsqs have reported encouraging results. dabholkar et al. (1996) replicated their own study and found all the rsqs dimensions and sub-dimensions to be valid in the u.s. mehta et al. (2000) found the rsqs scale was superior within the context of a “more goods and less services” environment, i.e., a supermarket, while survperf was better for a retailing context where the service element becomes more important, i.e., an electronic goods retailer. kim and jin (2002) report the rsqs a useful scale for measuring service quality of discount stores across two different cultural contexts of u.s. and south korea, though they did not find distinct policy dimension. boshoff and terblanche (1997), in a replication of the dabholkar et al. (1996) study, report highly encouraging results for the rsqs applicability in the context of department stores, specialty stores and hypermarkets in south africa. however, the applicability of the rsqs or other scales has never been tested in the context of transition economies. there has been a continued research on the definition, modeling, measurement, data collection procedure, data analysis etc., issues of service quality, leading to development of sound base for the researcher to conduct this study. 2. review of literature sulieman (2013) in his study basic dimensions of the servqual model and its impact on the level of customer satisfaction found that there is an impact of the basic dimensions of the servqual model on the level of customer satisfaction at different levels. the study recommends the need for continuous improvement of services provided to customers, through consumer behavior studies, and work to predict customer expectations to ensure the provision of better services. rakesh (2012) in his study “quality assessment of banking industry using servqual” found that managers in the service sector are under increasing pressure to demonstrate that their services are customer-focused and that continuous performance improvement is being delivered. given the financial and resource constraints under which service organizations must manage it is essential that customer expectations are properly understood and measured and that, from the customers’ perspective, any gaps in service quality are identified. amiri and faghani (2012) in their research service quality and customer satisfaction (application of servqual model) examined the relationship between services strategies and customer satisfaction and studied the quality of the mobile banking services rendered by the banks in iran. the researcher has used the customer satisfaction as the dependent variable and the five dimensions of service quality; namely, tangibles, reliability, responsiveness, assurance and empathy, as the independent variables. a joint study by kumar and kumar (2011) on “growing prospective of retail industry in and around india” critically examined the global retail scenario with special reference to india. the authors have pointed out that, retailing has played a major role in the global economy. in developed markets, retailing is one of the most prominent industries. the study has concluded that retailing in india is gradually inching this way towards becoming the next boom industry. the whole concept of shopping has altered in terms of format and consumer buying behaviour, ushering a in a revolution in shopping india. modern retail has entered india as seen in sprawling shopping centers, multi-storied malls and huge complexes offer shopping, entertainment and food all under one roof. upadhyay and singh (2008) in their research work entitled “measuring customer perceived value of different retail formats” opined that superior customer value gives an edge in the market. they also found that entertainment aspect of retailing or entertaining is increasingly being recognized as a key competitive tool. the study also indicates that consumer perceive hypermarkets at par with general retail outlets in delivering exchange value to them. parikh (2006) concentrated on the assessing the internal reliability of the retail service quality instrument by evaluating the validity of the scale. further, the study has concentrated on the gap analysis and identification of areas for improvements in retail service quality. the study found that the gap mode of service quality does hisam, et al.: the impact of service quality on customer satisfaction: a study on selected retail stores in india international review of management and marketing | vol 6 • issue 4 • 2016 853 not perform as well as the perceptions based performance measures of service quality in terms of its factor structure. the author has opined that the retail stores in india will have to improve the quality of their services significantly in order to compete successfully in the global market place. objectives of the study are as follows: 1. to ascertain the services offered by the reliance fresh and spencer retail stores in kolkata, varanasi and ranchi cities. 2. to gauge the impact of quality gaps and its impact on customer satisfaction on several dimensions of the servqual model. 3. methodology data collection has been done through a questionnaire based on the servqual model. random sampling technique has been used. respondents are the customers visiting the retail stores of reliance fresh and spencer retail. sample size is 300 respondents. 30 stores in 3 indian cities viz., kolkata, varanasi and ranchi have been randomly selected for the study. the gap scores in the servqual have been analysed and ranked. 3.1. service quality models the researcher in the present study considers the following service models in the light of the changed business scenario. the models are presented using a standard structure, i.e., covering brief discussion and the major observations on the models for above parameters. the brief discussions on the models are as under: 1. technical and functional quality model a firm in order to compete successfully must have an understanding of consumer perception of the quality and the way service quality is influenced. managing perceived service quality means that the firm has to match the expected service and perceived service to each other so that consumer satisfaction is achieved. the author identified three components of service quality, namely: technical quality; functional quality; and image. 1. technical quality is the quality of what consumer actually receives as a result of his/her interaction with the service. 2. functional quality is how he/she gets the technical outcome. this is important to him and to his/her views of service he/she has received. 2. servqual (gap) model parasuraman et al. (1985) proposed that service quality is a function of the differences between expectation and performance along the quality dimensions. they developed a service quality model (figure 1) based on gap analysis. the various gaps visualized in the model are: • gap 1 is the difference between consumers’ expectation and management’s perceptions of those expectations, i.e., not knowing what conumers expect. • gap 2 is the difference between management’s perceptions of consumer’s expectations and service quality specifications, i.e., improper service-quality standards. • gap 3 is the difference between service quality figure 1: servqual (gap) model hisam, et al.: the impact of service quality on customer satisfaction: a study on selected retail stores in india international review of management and marketing | vol 6 • issue 4 • 2016854 specifications and service actually delivered i.e., the service performance gap. • gap 4 is the difference between service delivery and the communications to consumers about service delivery, i.e., whether promises match delivery? • gap 5 is the difference between consumer’s expectation and perceived service. this gap depends on size and direction of the four gaps associated with the delivery of service quality on the marketer’s side. an exploratory research was refined with their subsequent scale named servqual for measuring customer’s perceptions of service quality (parasuraman et al., 1988). measuring the quality of a service can be a very difficult exercise. unlike product where there are specific specifications such as length, depth, width, weight, and colour, etc. a service can have numerous intangible or qualitative specifications. in addition there is there expectation of the customer with regards the service, which can vary considerably based on a range of factors such as prior experience, personal needs and what other people may have told them. this model indicates that there are five determinants of service quality viz., tangibility, reliability, responsiveness, assurance and empathy. the model indicates that consumer perceptions of quality are influenced by five gaps occurring in the internal process of service delivery. the basic premise is that service quality can be defined as the difference between expected service and perceived service. 3.2. servqual score obtained from field survey with reference to reliance and spencer retail outlets the following table shows the perceptions of the customers with reference to the various statements made in order to determine the servqual score for 5 dimensions of servqual. the responses are quantified and presented in the table 1. 3.3. gap score for reliance retail and spencer retail a highest value of 1500, i.e., (300 × 5 (strongly agree)) is assigned for expectation score, and the score is compared with perception score obtained in table 2. 4. findings from the study the analysis is focused on the five dimensions of service quality using gap model. the tangibility, reliability, responsiveness, assurance and empathy dimensions were integrated to all the three retail companies in the select cities. the research has calculated the gap score and weighted averages were integrated to observe the gaps in the service quality in the select cities. from tables 2 and 3 it is observed that with reference to the “tangibility” dimension, the average gap score (−734.25) is very much higher than the average servqual score (−594.78). hence it is observed that majority of the customers of reliance have opined tangibility dimension has to be improved. further, it is clear that the retail outlets features are not visually appealing and retail outlets reception desk employees are not appearing neatly. whereas the customers opinioned that retail outlet has modern looking equipment and material associated (like brochures and pamphlets) are available as an effective source of information to the customer. with reference to “reliability” dimension, the average gap score (−527.4) is lower than the average servqual score (−594.78). hence it is observed that majority of the customers of reliance have opined reliability dimension is up to the mark. further, it is clear that the when the retailer promises do to something by a certain time, they do so and they perform the service right at the first time and they also insist on error free transactions. but, when a customer is having a problem, it is not taken as a seriously to resolve the problem. hence, it can be a deficiency to the company and lower the quality of service, thus resulting in the dissatisfaction of a customer. with reference to “responsiveness” dimension, the average gap score (−547.75) is lower than the average servqual score (−594.78). hence it is observed that majority of the customers of reliance have opined responsiveness is effective. further, it is clear that the employees in the retail outlet are promptly attempt to the request and queries of customers, which is a good sign of service attitude. but there is a lack in informing to the customer exact time of transaction completion, and their willingness to help the customers are not impressive, thus resulting in not delivering a prompt service to the customer visiting the retail outlet. with reference to “assurance” dimension, the average gap score (−477.5) is lower than the average servqual score (−594.78). hence it is observed that majority of the customers of reliance have opined that assurance dimension is quite effective. further, it is clear that the behavior of the employees instill the confidence in the customers and as well as the knowledge level of employees is high, resulting in a favourable opinion of the customers. on the other hand, courteousness and making the customer convenient in terms of safety and secure are lacking, which may result in losing customers in the long run. with reference to “empathy” dimension, the average gap score (−687) is higher than the average servqual score (−594.78). hence it is observed that majority of the customers of reliance have opined that empathy dimension is tampering the quality of services of retailer. further, it is clear that the operating hours are not so convenient and employees are lacking in serving and assisting the customers, which is diluting the opinion on retailer thus leading to dissatisfaction. but the survey results shows that, employees show a best interest at heart and they are always ready to listen and they understand clearly what customers need and asking for with individual attention. this results in customer’s interest in visiting the store as well as helps in making a positive reinforcement to visit the store again. hisam, et al.: the impact of service quality on customer satisfaction: a study on selected retail stores in india international review of management and marketing | vol 6 • issue 4 • 2016 855 5. suggestions and conclusion from the analysis on servqual score of reliance outlets, it is recommended that, reliance retail outlets must concentrate on the features which are visually appealing to the customers. further, it is also advised that, the retail outlet’s employees at reception desk must be fair and neat appearing in order to attract the customers and so that customers can freely exchange the required information with the reception desk employees. the reliance retail outlets must concentrate on providing customer friendly information to the queries and problems of customers. with regard to responsive dimension, the retail company must train the employees to be more accountable for giving information about the services that can be performed to the customers. further, the employees must be willing in order to help the customers. the retail outlets must provide trust to the customers with regard to safety, further, the retail outlets must provide best interest at hear to show more empathy to the customers. table 1: servqual score for reliance retail and spencer retail statement perception total total scorestrongly agree (5) agree (4) neutral (3) disagree (2) strongly disagree (1) tangibility the retail outlet has modern looking equipment 13 32 121 83 51 300 773 the retail outlets features are visually appealing 17 33 107 79 64 300 760 the retail outlet’s reception desk employees are neat appearing 20 29 111 67 73 300 756 material associated with the service (such as pamphlets or statements) are visually appealing at the retail outlet 19 22 132 68 59 300 774 reliability when the retail outlet promises to do something by a certain time, they do 53 101 49 61 36 300 974 when you have a problem, the retail outlet shows a sincere interest in solving it 51 97 46 59 47 300 946 retail outlet executes the transaction right the first time 49 112 51 54 34 300 988 the retail outlet provides its service at the time it promises to do so 47 108 54 58 33 300 978 the retail outlet insists on error free transactions 43 116 53 51 37 300 977 responsıveness employees in the retail outlet tell you exactly when the transactions will be performed 33 104 73 59 32 300 950 employees in the retail outlet give you prompt service 34 112 67 46 41 300 952 employees in the retail outlet are always willing to help you 28 109 74 53 36 300 940 employees in the retail outlet are never too busy to respond to your request 30 116 78 43 33 300 967 assurance the behaviour of the employees in the retail outlet instills confidence in you 76 94 57 49 24 300 1049 you feel safe in your transactions with the retail outlet 63 102 54 51 30 300 1017 employees in the retail outlet are consistently courteous with you 62 97 48 56 37 300 991 employees in the retail outlets have the knowledge to answer your questions 71 99 52 48 30 300 1033 empathy the retail outlet gives you individual attention 23 36 107 83 51 300 797 the retail outlet has operating hours convenient to all its customers 30 40 97 86 47 300 820 retail outlet has employees gives you personal service 25 43 110 79 43 300 828 the retail outlet has your best interest at heart 24 37 102 88 49 300 799 the employees of the retail outlet understand your specific needs 29 44 96 81 50 300 821 hisam, et al.: the impact of service quality on customer satisfaction: a study on selected retail stores in india international review of management and marketing | vol 6 • issue 4 • 2016856 references amiri, a.s.f., faghani, f. (2012), service quality and customer satisfaction (application of servqual model). international journal of management and business research, 2(4), 351-361. boshoff, c., terblanche, n.s. (1997), measuring retail service quality: a replication study. south african journal of business management, 28(4), 123-128. czepiel, j. (1990), service encounters and service relationships: implications for research. journal of business research, 20(1), 13-21. dabholkar, p.a. (1996), consumer evaluations of new technology-based self-service operations: an investigation of alternative models. international journal of research in marketing, 13, 29-51. kim, j. (2002), service quality in the thai telecommunication industry: a tool for achieving a sustiable competitive advantage. management decision, 40, 693-701. kumar, s.s., kumar, s.p. (2011), growing prospective of retail ındustry in and around india. advances in management, 4(2), 58-62. mehta, e. (2000), a service quality model based on ideal value standard. international journal of service industry management, 3(3), 18-33. parasuraman, a., zeithaml, v.a., berry, l.l. (1985), a conceptual model of service quality and its implications for future research. journal of marketing, 49, 41-50. parasuraman, a., zeithaml, v.a., berry, l.l. (1988), a multiple – item scale for measuring consumer perceptions of service quality. journal of retailing, 64, 12-40. parikh, d. (2006), measuring retail service quality: an empirical assessment of the ınstrument. vikalpa management journal, 31, 45-52. rakesh, r. (2012), quality assessment of banking ındustry using the servqual model. indian streams research journal, 2(2), 1-4. sulieman, a. (2013), basic dimensions of the servqual model and its ımpact on the level of customer satisfaction. european business review, 22, 5-24. upadhyay, y., singh, s.k. (2008), measuring consumer perceived value of different retail formats. the indian journal of commerce, 61(4), 49-67. zeithaml, v.a. (1988), consumer perception of price, quality, and value: a means-end model and synthesis of evidence. journal of marketing, 52(3), 2-22. table 3: relative ranking of the quality dimensions dimensions overall gap score rank tangibility −734.25 v reliability −527.4 ii responsiveness −547.75 iii assurance −477.5 i empathy −687.00 iv table 2: gap score for reliance retail and spencer retail dimension statement number expectation score perception score gap score tangibility 1 1500 773 −727 2 1500 760 −740 3 1500 756 −744 4 1500 774 −726 average tangibility gap score −734.25 reliability 5 1500 974 −526 6 1500 946 −554 7 1500 988 −512 8 1500 978 −522 9 1500 977 −523 average reliability gap score −527.4 responsiveness 10 1500 950 −550 11 1500 952 −548 12 1500 940 −560 13 1500 967 −533 average responsiveness gap score −547.75 assurance 14 1500 1049 −451 15 1500 1017 −483 16 1500 991 −509 17 1500 1033 −467 average assurance gap score −477.5 empathy 18 1500 797 −703 19 1500 820 −680 20 1500 828 −672 21 1500 799 −701 22 1500 821 −679 average empathy gap score −687.00 average servqual score −594.78 tx_1~at/tx_2~at international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2020, 10(4), 161-169. international review of management and marketing | vol 10 • issue 4 • 2020 161 a comparative study on corona virus pandemic – what do figures indicate? annamalai alagappan1, sampath kumar venkatachary2*, leo john baptist3, ravi samikannu4, jagdish prasad5, anitha immaculate6 1department of software engineering, faculty of computing, botho university, botswana, 2 grant thornton, aumen park, fair grounds, gaborone, botswana. 3department of network and infrastructure management, faculty of computing, botho university, botswana, 4department of electrical, computers and telecommunication engineering, botswana international university of science and technology, palaype, botswana, 5amity school of applied sciences, amity university rajasthan, jaipur, rajasthan, india, 6department of chemistry, holy cross college (autonomous), trichy, tamil nadu, india. *email: sampathkumaris123@gmail.com received: 01 may 2020 accepted: 20 june 2020 doi: https://doi.org/10.32479/irmm.10320 abstract coronavirus disease 2019 (covid 19) is recognized as one of the most significant outbreak in recent times given the spread across the nations. it has affected over 185 countries across the globe and is still expanding significantly. this paper aims to compare the data on two counts and a detailed descriptive analysis is presented in the paper. given the threat level and the classification of the disease as a pandemic, an attempt is made to analyse the data based on a linear regression estimation and predict its evolution. the statistical results indicate that the death and the recovery rate are influenced substantially by the facilities available in the form of hospital beds, patient-physician and nurse ratio. keywords: corona virus, statistical, severe acute respiratory syndrome, middle east respiratory syndrome jel classifications: i0; i1; i2; c0 1. introduction the impact of covid-19 has been a problem for most of the nations. world health organisation was compelled to declare covid-19 as a pandemic on 11 march 2020 (who, 2020) due to its rapid spread across nations. the apparent impacts in asia and africa are probably going to be more than the rest of the world. the reasons are due to the lack of infrastructure development in critical fields like health. the vulnerability to communicable diseases is magnified manifold due to numerous factors that influence the countries like the concentration of populations, conflicts, and so on. covid-19 pandemic likewise has uncovered the vulnerability of health infrastructures across the globe. it not only has left the most of the countries unprepared to respond to the pandemic, but also has tested some of the worlds best healthcare systems like italy, switzerland, the united states and so forth. as the pandemic advances, it is probably going to test many concerning nations like romania, african nations like nigeria, south africa, botswana, south american nations like brazil, peru, asian nations like pakistan, bangladesh, sri lanka, india and so on to give some examples which are viewed as high or specific hazard (gherghel and bulai, 2020). this hazard can be ascribed numerous variables like the postcolonialism or socialism, delay in executing changes, defilement, the proportion of patient to a specialist, government shakiness, economies, and so on (gherghel and bulai, 2020; instabilitate guvernamentală cronică, 2017). although scientists have so far identified only six coronaviruses in the coronavirus family, it is believed that only two viruses sars and mers have been known to transmit between human population. apart from the above two, the newly discovered covid-19 is also now designated as a communicable disease this journal is licensed under a creative commons attribution 4.0 international license alagappan, et al.: a comparative study on corona virus pandemic – what do figures indicate international review of management and marketing | vol 10 • issue 4 • 2020162 and is of the highest concern among the scientific community. covid-19 is also known for its severity in the form of causing severe pneumonia in people. though it affects all kinds of people irrespective of race, it is known to be severe on people with the weaker immune system such as diabetic, hiv positive individuals especially among the older people (bradburne et al., 1967; bradburne and somerset, 1972; monto, 1974; patrick et al., 2006; lieberman et al., 2010; nickbakhsh et al., 2016; jiang, 2020) with who providing strict guidelines on various aspects of social life like prohibiting mass gatherings, social distancing as a measure of containment and affected countries strictly enforcing, it remains to be seen, if the countermeasures have been effective. the major reason for the spread has been the travellers as careers in many countries as in the case of iran, italy, spain and many other countries (pullano et al., 2020; arab-mazar et al., 2020; gherghel and bulai 2020; biscayart et al., 2020; rodriguezmorales, et al., 2020). against this backdrop, this paper aims to study and provide an insight into the various influential factors. section 2 reviews the pandemic. section 3 discusses data modelling, while section 4 provides the statistical analysis. section 5 discusses the result with section 6 concluding the paper. 2. overview of pandemics covid-19 or coronavirus 2019 first came to light in the city of wuhan on 12 december as reported by the wuhan health corporation, hubei province in the peoples republic of china (biscayart et al., 2020). though initial traces were narrowed down to the wuhan wet market (lu et al., 2020; zhou et al., 2020; biscayart et al., 2020) the scientific community is now revisiting to ascertain its primary source. what was initially a problem to the wuhan city, had become a global problem. thanks to the chinese new year, during which time, most chinese people travel to china to celebrate. with many returning or travelling to countries, after the festival, the world witnessed the emergence of the latest outbreak of zoonotic pathogen in the form of international transmission with china issuing a new confirmation on the human to human transmission. (rodriguez-morales, et al., 2020a; rodriguez-morales, et al., 2020b). by the time the chinese government had enforced a clampdown on the towns, the disease had spread significantly to the other areas (eder et al., 2020). wuhan, which was the initial epicentre after the outbreak, slowly became insignificant with the usa now topping the number of infections outside of china. with the total cases across the globe now nearing 2.2 million, this pandemic is here to stay for the next couple of months if not years (johns hopkins school of public health, 2020). 2.1. impacts of covid-19 tables 1-4 provides an insight into sars, mers and covid-19 cases. as against the total global cases tested as reported accounted for covid-19 stood at 2399849 as on april 9, 2020. when comparing it with the data as on july 20, 2020, the number of cases had increased to 14741412. while the recovery percentage was 25% as on april 9, 2020, the recovery percentage as on table 1: sars 2003 cases (who, 2004) sars 2003 total registered cases total cases recovered cases total death total recovery percentage total death percentage 8096 7352 744 90.81027668 9.18972332 table 2: mers case update as of january 2020 (who, 2020) mers total registered cases total cases recovered cases total death total recovery percentage total death percentage 2519 1653 866 65.62127829 34.37872171 table 3: abstract of total covid-19 cases as on april 19, 2020 (who, 2020) covid-19 total registered cases total cases recovered cases total death total recovery percentage total death percentage 2399849 615674 164939 25.65469744 6.872890753 total active cases active cases serious cases percentage of serious cases 1619236 54215 3.348183958 cases with results total cases recovered death recovery percentage death percentage against outcome 780613 615674 164939 78.87057992 21.12942008 july 20, 2020 stood at 60% indicating that the recovery rate has doubled. similarly, when comparing the death percentage, which stood at 7% as on april 9, 2020, it has substantially come down to 4% as on july 20, 2020. the outcome of the total cases stood covid-19 as on july 20, 2020 total registered cases total cases recovered cases total death total recovery percentage total death percentage 14741412 8792382 610747 59.64409651 4.143069877 total active cases active cases serious cases percentage of serious cases 5338283 59701 1.118355846 cases with results total cases recovered death recovery percentage death percentage against outcome 9403129 8792382 610747 93.50485354 6.495146456 alagappan, et al.: a comparative study on corona virus pandemic – what do figures indicate international review of management and marketing | vol 10 • issue 4 • 2020 163 at 780613 cases as recovered with a recovery percentage of 79% as on april 9, 2020 and 93% as on july 20, 2020. the overall mortality rate thus has been lower at 6.4% (as on july 20, 2020 in the case of covid-19 when comparing it with sars (9%) and mers (34%). (bradburne et al., 1967; bradburne and somerset, 1972; monto, 1974; patrick et al., 2006; lieberman et al., 2010; nickbakhsh et al., 2016; jiang, 2020). the world has encountered more than 20 scourges and pandemics from measles, zika to ebola, sars, mers and the current covid-19. the present pandemic has caused largescale interruptions with numerous nations enforcing social standards like frequent handwashing, using masks, social distancing, school closures, lockdowns etc. as we witness the nations react and enforce aggressive policies as means to flatten the spread curve and improve the population immunity, which is a known method of controlling the pandemic spread, it is seen as a hindrance among the general public. adding to the problem is the community’s approach towards health workers and the affected. the contemptuous behaviour of some people in the community is causing more trauma to the health workers who are overwhelmed by the crisis. this insolent behaviour is likely to mentally impact the health workers and the infected people at large. the likeliness of neurological disorders during a lockdown could be as high as 3-4% as noticed after boston bombings (guerriero, 2014). as governments across the globe embark on isolation to protect its people, these measures may be acceptable during the instance such as terrorist attacks, natural disasters etc. still, they could prove otherwise in the current scenario where the mental stress is already at stake (fagan, 2003). there is also a need for awareness among the health care workers on the patients neurological and psychological condition of the patient testing positive for covid 19 (jeong et al., 2016) (torales, 2020). the other impact is the isolation and disconnection from societal care with some shocking consequences as the dying are “barriered” from the loved ones. the pandemic so far has been disproportionately affecting all segments. the epidemic also led to widespread panic across the communities, including panic buying, stocking up, and so on. though it is too early to comment on the social impacts, it is noticeable across the communities. the impact of social media on covid 19 pandemic has also contributed enormously negatively and impacted the public and the health workers alike. this is primarily due to the incomplete information dissemination from the government. with information flooding the social media groups in the form genuine, misleading, and fake messages, the stress levels and the anxiety levels, unjustified fear among the public, in general, is high. this flood of misleading information could lead to discrimination, stigmatisation, which in turn could lead to other problems in the form of social bullying etc. (purgato, 2018; mowbray, 2020). it is estimated that close to 1.5 billion children are affected by the pandemic due to the closure of schools (who, 2020). according to the world bank, the resultant impact of covid-19 in the world low and middle-income countries could have far-reaching implications for millions of people who live in poverty or have only emerged from it. it is estimated that east asian countries and africa could be the worst impacted and may lose half of gdp with food, drug, unemployment and investment problems even before the countries face the full wrath of the disease (world bank, 2020; sullivan and chalkidou, 2020). 3. data modeling and methodology data selection (global reported, death and recovered cases) for analyzing the impact were collected from the john hopkins table 4: total reported, death and recovery for covid-19 for the top 25 countries as on april 4, 2020 country/region confirmed cases 9 apr deaths 9 apr recovered 9 apr beds: patients physicians: patients nurses and midwives: patients death percentage recovery percentage united states 461437 16478 25410 1338.1 1197.34 3945.29 3.57 5.51 spain 153222 15447 52165 459.67 623.48 847.42 10.08 34.05 italy 143626 18279 28470 488.33 587.88 842.98 12.73 19.82 france 118781 12228 23413 772.08 384.24 1150.83 10.29 19.71 germany 118181 2607 52407 980.90 497.39 1559.60 2.21 44.34 china 82883 3339 77679 348.11 147.99 191.24 4.03 93.72 iran, islamic rep. 66220 4110 32309 99.33 75.49 123.83 6.21 48.79 united kingdom 65872 7111 359 184.44 184.82 545.93 10.80 0.54 turkey 42282 908 2142 114.16 74.44 111.22 2.15 5.07 belgium 24983 2523 5164 154.89 83.03 277.34 10.10 20.67 switzerland 24051 948 10600 113.04 101.89 415.67 3.94 44.07 netherlands 21903 2403 278 102.94 76.81 243.22 10.97 1.27 canada 20654 503 5162 55.77 53.91 204.59 2.44 24.99 brazil 18092 950 173 39.80 38.90 175.64 5.25 0.96 portugal 13956 409 205 47.45 46.55 88.93 2.93 1.47 austria 13244 295 5240 100.65 68.13 108.31 2.23 39.57 korea, south 10423 204 6973 119.86 24.66 72.68 1.96 66.90 russian federation 10131 76 698 83.07 40.66 87.34 0.75 6.89 israel 9968 86 1011 30.90 32.07 51.88 0.86 10.14 sweden 9141 793 205 23.77 49.36 105.52 8.68 2.24 india 6725 226 620 4.71 5.23 14.17 3.36 9.22 ireland 6574 263 25 18.41 20.29 93.97 4.00 0.38 norway 6211 108 32 24.22 28.78 112.57 1.74 0.52 australia 6108 51 1472 23.21 21.91 77.33 0.83 24.10 alagappan, et al.: a comparative study on corona virus pandemic – what do figures indicate international review of management and marketing | vol 10 • issue 4 • 2020164 school of public health data portal (johns hopkins school of public health, 2020). the data for the physicians and nurses were collected from the world bank data. the collected data was then segregated for data analysis using excel to build a time series data. of the data for 185 countries were compared against the data of physicians and nurses/midwives and were selected for performing an analysis using cox regression model. 4. model comparison, analysis and results figure 1 shows the increasing prevalence of difference between each previous day of the global cases reported to who as captured by john hopkins school. that is the difference is computed as follows ∑ (yc–yp) equation 1 the trend showed a non-constant increase in the total number of reported cases for each of the 185 countries. a brief descriptive analysis of the data was performed to analyse the pattern of newly reported or confirmed cases. figures 1-4 shows the global confirmed cases, death rate and recovery rate as of april 9, 2020 and july 20, 2020. as seen in figures 1-3, and tables 4 and 5 the us has registered the highest number of cases with 461437 with a recovery per cent of 5.51% as against the death rate of 3.57% as on april 9, 2020. while comparing the same as on july 20, 2020, the recovery rate had improved significantly. it is interesting to note that death to recovery rate stood at 64% as on april 9, 2020, indicating a positive recovery rate. while italy had the highest death rate of 12%, spain, the netherlands, united kingdom, belgium all had a near similar death rate of 10-11% indicating clearly that the overall death percentage rate is likely to be higher for most of the countries as on april 9, 2020. the same countries witnessed a significant improvement on recoveries as on july 20, 2020 and the reported cases had fallen drastically. the reason that could be attributed to initial high death rates in these countries perhaps could be attributed to the elderly population based on the regions. however, when analyzing death versus recovery percentage, the united kingdom had the least recovery per cent of <1% as on april 9, 2020 and on par with the uk were ireland, brazil, portugal, sweden, with marginal differences. china and south korea are the only two countries that had reported a positive recovery rate of over 60% given the trend. while performing analysis on data for april 9, 2020, for 185 countries, it can be seen that the recovery rate largely depends on various factors. it is worthwhile to note that south korea (3%), australia (3.46%), china (4.30%), germany (5%), chile (4.47%) have been effective in controlling the spread of the disease indicating that the social distancing, lockdown methods have been effective. that is technically, the countries have been effective in curtaining the movement of the people across the region. when comparing the data for july 20, 2020 it can be seen that most countries that were in the top 25 countries as on april 9, 2020 had significantly dropped in ranking, while countries like india, brazil, russia, south africa which had witnessed smaller numbers reported significant raise in the number of cases and moved up the ranking order standing in the top 5 countries. this figure 1: top 25 countries – reported cases, recoveries, deaths as on july 20, 2020 0 5,00,000 10,00,000 15,00,000 20,00,000 25,00,000 30,00,000 35,00,000 40,00,000 45,00,000 u ni te d s ta te s b ra zi l in di a r us si an f ed er at io n s ou th a fri ca p er u m ex ic o c hi le s pa in u ni te d k in gd om ir an , i sl am ic r ep . p ak is ta n s au di a ra bi a ita ly tu rk ey b an gl ad es h g er m an y c ol om bi a fr an ce a rg en tin a c an ad a q at ar ir aq in do ne si a e gy pt , a ra b r ep . 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 total cases total deaths total recovered alagappan, et al.: a comparative study on corona virus pandemic – what do figures indicate international review of management and marketing | vol 10 • issue 4 • 2020 165 16 47 8 15 44 7 18 27 9 12 22 8 26 07 33 39 41 10 71 11 90 8 25 23 94 8 24 03 50 3 95 0 40 9 29 5 20 4 76 86 79 3 22 6 26 3 10 8 51 39 45 .2 9 84 7. 42 84 2. 98 11 50 .8 3 15 59 .6 0 19 1. 24 12 3. 83 54 5. 93 11 1. 22 27 7. 34 41 5. 67 24 3. 22 20 4. 59 17 5. 64 88 .9 3 10 8. 31 72 .6 8 87 .3 4 51 .8 8 10 5. 52 14 .1 7 93 .9 7 11 2. 57 77 .3 3 0 2000 4000 6000 8000 10000 12000 14000 16000 18000 20000 deaths 9 apr beds : pa�ents physicians : pa�ents nurses & midwives : pa�ents figure 3: top 25 countries death, patient-bed, nurse perhaps could be attributed to number of initial cases recorded and reported and influence of various other factors like social distancing, testing ratio, lockdown effects etc. that influence the spread of the disease. figure 2: top 25 countries reported cases from january 22, 2020 to april 9, 2020 0 200000 400000 600000 800000 1000000 1200000 1400000 1600000 australia norway ireland india sweden israel russia korea, south austria portugal brazil canada netherlands switzerland belgium turkey united kingdom iran alagappan, et al.: a comparative study on corona virus pandemic – what do figures indicate international review of management and marketing | vol 10 • issue 4 • 2020166 the comparative results for april 9, 2020 and july 20, 2020 is tabled in table 6. from table 6, it can be analysed that almost all nations have reported significant recovery percentage and substantial decrease in death percentage, indicating that the nations are ensuring sufficient effective steps and mechanisms to bring the virus under control. the rise in recovery percentage also reflects in ensuring herd immunity. 4.1. estimating and analysis using linear regression and bivariate correlations based on the observations, the data for april 9, 2020 was fed into the spss package for analysing the samples. the analysis provides a deep insight into the various aspects of the countries. the regression analysis indicates that there is a positive correlation when assessing the recovery and death rates reported in each of the countries. 4.2. regression – does number of beds influence the death rate and recovery rate? to ascertain if the beds to patients ratio influenced the recovery and the death rate in the pandemic covid-19, an linear and bivariate analysis were carried out in spss. the data indicated that 70% of both recovery and death rate had a significant relationship to the number of beds in the hospital for all nations. the regression equation for the recovery and death is as follows. equations recovery = y = 0.005x + 5.084 death = y = 0.036x + 5.084 figure 4: top 25 countries recovered, patient-bed, nurse 25 41 0 52 16 5 28 47 0 23 41 3 52 40 7 77 67 9 32 30 9 35 9 21 42 51 64 10 60 0 27 8 5 16 2 17 3 20 5 5 24 0 69 73 69 8 10 11 20 5 62 0 25 32 1 47 2 13 38 .1 7 45 9. 67 48 8. 33 77 2. 08 98 0. 90 34 8. 11 99 .3 3 18 4. 44 11 4. 16 15 4. 89 11 3. 04 10 2. 94 55 .7 7 39 .8 0 47 .4 5 10 0. 65 11 9. 86 83 .0 7 30 .9 0 23 .7 7 4. 71 18 .4 1 24 .2 2 23 .2 1 recovered 9 apr beds : patients physicians : patients nurses & midwives : patients table 5: total cases, recoveries, deaths as on july 20, 2020 for top 25 countries country total cases total deaths total recovered death % recovery % united states 3,901,026 143,321 1,802,550 3.67 46.21 brazil 2,100,112 79,535 1,371,229 3.79 65.29 india 1,127,281 27,628 707,523 2.45 62.76 russian federation 777,486 12,427 553,602 1.60 71.20 south africa 364,328 5,033 191,059 1.38 52.44 peru 353,590 13,187 241,955 3.73 68.43 mexico 344,224 39,184 217,423 11.38 63.16 chile 330,930 8,503 301,794 2.57 91.20 spain 307,335 28,420 n/a 9.25 #value! united kingdom 294,792 45,300 n/a 15.37 #value! iran, islamic rep. 276,202 14,405 240,087 5.22 86.92 pakistan 265,083 5,599 205,929 2.11 77.68 saudi arabia 253,349 2,523 203,259 1.00 80.23 italy 244,434 35,045 196,949 14.34 80.57 turkey 219,641 5,491 202,010 2.50 91.97 bangladesh 207,453 2,668 113,556 1.29 54.74 germany 202,901 9,163 187,800 4.52 92.56 colombia 197,278 6,736 91,793 3.41 46.53 france 174,674 30,152 79,233 17.26 45.36 argentina 126,755 2,260 54,105 1.78 42.68 canada 110,338 8,852 97,051 8.02 87.96 qatar 107,037 159 103,782 0.15 96.96 iraq 92,530 3,781 60,528 4.09 65.41 indonesia 88,214 4,239 46,977 4.81 53.25 egypt, arab rep. 87,775 4,302 28,380 4.90 32.33 alagappan, et al.: a comparative study on corona virus pandemic – what do figures indicate international review of management and marketing | vol 10 • issue 4 • 2020 167 table 6: comparison of data for july 9, 2020 and july 20, 2020 country july 20, 2020 april 9, 2020 raise in case% decrease in death % raise in recovery %total cases july 20, 2020 total deaths july 20, 2020 total recovered july 20, 2020 total cases april 9, 2020 total deaths april 9, 2020 total recovered 9-7-2020 united states 3,901,026 143,321 1,802,550 461437 16478 25410 88.17 3.25 45.56 brazil 2,100,112 79,535 1,371,229 18092 950 173 99.14 3.74 65.28 india 1,127,281 27,628 707,523 6725 226 620 99.40 2.43 62.71 russian federation 777,486 12,427 553,602 10131 76 698 98.70 1.59 71.11 south africa 364,328 5,033 191,059 1934 18 95 99.47 1.38 52.42 peru 353,590 13,187 241,955 5256 138 1438 98.51 3.69 68.02 mexico 344,224 39,184 217,423 3181 174 633 99.08 11.33 62.98 chile 330,930 8,503 301,794 5972 57 1274 98.20 2.55 90.81 spain 307,335 28,420 n/a 153222 15447 52165 50.14 4.22 #value! united kingdom 294,792 45,300 n/a 65872 7111 359 77.65 12.95 #value! iran, islamic rep. 276,202 14,405 240,087 66220 4110 32309 76.02 3.73 75.23 pakistan 265,083 5,599 205,929 4489 65 572 98.31 2.09 77.47 saudi arabia 253,349 2,523 203,259 3287 44 666 98.70 0.98 79.97 italy 244,434 35,045 196,949 143626 18279 28470 41.24 6.86 68.93 turkey 219,641 5,491 202,010 42282 908 2142 80.75 2.09 91.00 bangladesh 207,453 2,668 113,556 330 21 33 99.84 1.28 54.72 germany 202,901 9,163 187,800 118181 2607 52407 41.75 3.23 66.73 colombia 197,278 6,736 91,793 2223 69 174 98.87 3.38 46.44 france 174,674 30,152 79,233 118781 12228 23413 32.00 10.26 31.96 argentina 126,755 2,260 54,105 1795 72 365 98.58 1.73 42.40 canada 110,338 8,852 97,051 20654 503 5162 81.28 7.57 83.28 qatar 107,037 159 103,782 2376 6 206 97.78 0.14 96.77 iraq 92,530 3,781 60,528 1232 69 496 98.67 4.01 64.88 indonesia 88,214 4,239 46,977 3293 280 252 96.27 4.49 52.97 egypt, arab rep. 87,775 4,302 28,380 1699 118 348 98.06 4.77 31.94 regression tables model summary model r r square adjusted r square std. error of the estimate 1 0.839a 0.704 0.700 81.0268 anovaa model sum of squares df mean square f sig. 1 regression 2714537.625 2 1357268.812 206.733 0.000b residual 1142368.305 174 6565.335 total 3856905.930 176 a. dependent variable: bedspatients b. predictors: (constant), deaths9apr, recovered9apr coefficientsa model unstandardized coefficients standardized coefficients t sig. b std. error beta 1 (constant) 5.084 6.272 0.811 0.419 recovered9apr 0.005 0.001 0.330 6.235 0.000 deaths9apr 0.036 0.003 0.592 11.170 0.000 4.3. regression – does the number of physicians in the hospital influenced the death rate and recovery rate? the data indicated that 82% of both recovery and death rate had a significant relationship to the number of physicians attending to the covid-19 patients in the hospital for all nations. the regression equation for the recovery and death is as follows. equations recovery = y = 0.002x + 1.932 death = y = 0.040x + 1.932 model summary model r r square adjusted r square std. error of the estimate 1 0.906a 0.820 0.818 51.3195 anovaa model sum of squares df mean square f sig. 1 regression 2087803.327 2 1043901.663 396.365 0.000b residual 458262.014 174 2633.690 total 2546065.340 176 coefficientsa model unstandardized coefficients standardized coefficients t sig. b std. error beta 1 (constant) 1.932 3.972 0.486 0.627 recovered9apr 0.002 0.001 0.131 3.173 0.002 deaths9apr 0.040 0.002 0.818 19.807 0.000 alagappan, et al.: a comparative study on corona virus pandemic – what do figures indicate international review of management and marketing | vol 10 • issue 4 • 2020168 4.4. regression – does number of nurse/midwife in the hospital influenced the death rate and recovery rate? the data indicated that 58% of both recovery and death rate had a significant relationship to the number of the nurses or midwife attending to the covid-19 patients in the hospital for all nations. the regression equation for the recovery and death is as follows. equations recovery = y = 0.003x + 9.216 death = y = 0.102x + 9.216 model summary model r r square adjusted r square std. error of the estimate 1 0.766a 0.586 0.581 222.7877 anovaa model sum of squares df mean square f sig. 1 regression 12162267.109 2 6081133.555 122.519 0.000b residual 8586744.272 173 49634.360 total 20749011.382 175 coefficientsa model unstandardized coefficients standardized coefficients t sig. b std. error beta 1 (constant) 9.216 17.296 0.533 0.595 recovered9apr 0.003 0.002 0.066 1.053 0.294 deaths9apr 0.102 0.009 0.722 11.509 0.000 4.5. bivariate correlations correlations deaths9apr recovered9apr beds patients deaths9apr pearson correlation 1 0.628** 0.799** sig. (2-tailed) 0.000 0.000 n 184 184 177 recovered9apr pearson correlation 0.628** 1 0.701** sig. (2-tailed) 0.000 0.000 n 184 185 177 beds patients pearson correlation 0.799** 0.701** 1 sig. (2-tailed) 0.000 0.000 n 177 177 177 physicians patients pearson correlation 0.900** 0.644** 0.943** sig. (2-tailed) 0.000 0.000 0.000 n 177 177 177 nursesamp midwives patients pearson correlation 0.764** 0.519** 0.945** sig. (2-tailed) 0.000 0.000 0.000 n 176 176 176 correlations physicians patients nursesamp midwives patients deaths9apr pearson correlation 0.900 0.764** sig. (2-tailed) 0.000 0.000 n 177 176 recovered9apr pearson correlation 0.644** 0.519 sig. (2-tailed) 0.000 0.000 n 177 176 beds patients pearson correlation 0.943** 0.945** sig. (2-tailed) 0.000 0.000 n 177 176 physicians patients pearson correlation 1** 0.952** sig. (2-tailed) 0.000 n 177 176 nursesamp midwives patients pearson correlation 0.952** 1** sig. (2-tailed) 0.000 n 176 176 **correlation is significant at the 0.01 level (2-tailed) the variables the patient to hospital beds has a positive influence of 70%. that is, the number of beds in the hospital decided the outcome of the patient’s recovery, while the converse on death is also visible. similarly, the result of the physicians and nurse treating the covid 19 cases had a profound influence of 81% and 58% respectively. this indicated that the countries with good infrastructure with an adequate number of physicians and nurse made a huge difference in the recovery of the patient. though these factors play a vital role, the other influential factors namely, the intensive care provided to the patients in terms of giving proper attention, medication, ventilators, had a decisive role to play. this study is limited to the analysis of understanding the relationship of what factors influenced based either the recovery or the death. 5. discussion the mapping and analysis of the total coronavirus cases against data indicated some exciting results. notably, countries with high infrastructure facilities like the us, spain, italy all had been rated to have fared in containing the pandemic. however, the results indicated that there are other influential factors that influenced the recovery percentage. the us had a recovery rate of 5.51% and nearly on par with the death rate of 3.58%, while spain, switzerland and numerous other countries had a better recovery rate as indicated in table 4. though it is too early to provide complete information, the early detection of covid-19 is crucial to prevent the spread. however, it should be noted that the infrastructure facilities and better healthcare professionals played a vital role in the process of recovery. as the second wave of onward transmission is active, it potentially risks the weaker health systems across the globe and as indicated the infrastructure facilities need to be attended to with high priority and the nations need to establish more temporary healthcare facilities to contain the pandemic. many asia and african nations are likely to be impacted more due to alagappan, et al.: a comparative study on corona virus pandemic – what do figures indicate international review of management and marketing | vol 10 • issue 4 • 2020 169 the infrastructure facilities available in the countries. however, the response of many african countries towards the pandemic has been more positive and have managed the crises well so far. it is also essential that nations support each other in both monetarily and aid in providing assistance in the form of sending professionals under the “doctors/nurses without borders.” 6. conclusion results indicate that there is a strong correlation between the selected variables when analysing the trend. the study indicated that the model is statistically significant at this point due to data on patient-bed, hospital-physicians, nurse ration influence the death and recovery process duly. it is also essential to note that these variables are influenced by other the dependent variables in the form of available ventilators, medications, safety equipment, it can be concluded that the model will result in a significant finding when the data for the reported cases, death and recovery stabilise. references arab-mazar, z., shah, r., rabaan, a.a., dharma, k., rodriguezmorales, a.j. 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(2020), discovery of a novel coronavirus associated with the recent pneumonia outbreak in humans and its potential bat origin. biorxiv, 2020, 914952. tx_1~at/tx_2~at international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2020, 10(5), 127-137. international review of management and marketing | vol 10 • issue 5 • 2020 127 the never-ending story teller – a narratological genealogy of storytelling in marketing and management jan c. l. könig* leuphana university, germany. *email: jan@koenig.sc received: 28 june 2020 accepted: 25 august 2020 doi: https://doi.org/10.32479/irmm.10187 abstract storytelling has become remarkably important in marketing and in numerous other areas in the discipline of management and organization studies. while recent studies have only focussed on details, narratological theories, unlike other popular approaches, offer the chance to observe storytelling from a structuralist or functionalist view as a systematic phenomenon that follows specific rules. these basic rules can be combined in a step-by-step blueprint that permits the creation and advancement of stories that pertain to the needs of marketing and management. in this research, the most important aspects of narrative theory have been compiled, from literature and language studies of the post pragmatic turn with modern ideas regarding screenwriting, archetypal characters, and brand management. the results reflect the need to develop a concept that can detect major problems with coherent storytelling. while storytelling has become of major interest in marketing and management, the phenomenon has not been sufficiently discussed from the perspective of narrative theory, the field in which it is originally rooted. hence, many specific story elements have not been examined. this article collects the most important approaches to framework stories and consequently presents the possibility of creating a concept of storytelling based on narrative elements, with both contributions to further research and practical implications. keywords: story teller, narratological theories, marketing, management jel classifications: m1, m31 everything you look at can be turned into a story, and you can make a tale from everything you touch. (hans christian andersen, the elder-tree mother) 1. introduction the phenomenon of storytelling as a tool for brands, marketing, and business has become surprisingly important to both professionals and researchers in recent years: “today, scientific research has laid the foundations for a sound empirical understanding of storytelling […] as way of recognizing and identifying with brands of any type” (herskovitz and crystal 2010. p. 21). keeping academic statements like this in mind, it may not surprise that rather professional experts even try to create a new definition of marketing, such as seth godin postulates: “marketing is no longer about the stuff you make but about the stories you tell” (cohen, 2011 and rangel and rosso, 2015. p. 1). even special issues of journals (such as psychology & marketing; cf. woodside, 2010) prove the importance of addressing the subject from various perspectives and with different research methods, and numerous studies have discussed storytelling from the perspective of marketing and management (cf. lundqvist et al., 2013 and visconti, 2015). nevertheless, the more that researchers try to observe the phenomenon and apply methods for analysing, elucidating, and operationalising it – that is, qualitative and quantitative methods and methodologies – the more it becomes obvious that storytelling is to be discussed in various scientific disciplines. as a matter of fact, popular publications on storytelling in marketing and management seem to come from writers with a rather practical orientation. works such as these cannot withstand the expectations of both marketing researchers and professionals, for they ignore research that has been performed this journal is licensed under a creative commons attribution 4.0 international license könig: the never-ending story teller – a narratological genealogy of storytelling in marketing and management international review of management and marketing | vol 10 • issue 5 • 2020128 for decades or even centuries. this becomes obvious when we consider that storytelling is an original purpose of literature and hence narratology and must be essentially considered from this perspective; furthermore, storytelling is also the subject of other disciplines, such as linguistics and psychology. all of those perspectives have a rather different background from disciplines that primarily address brands and business. nevertheless, if we assume that the stories that we refer to with the terminus technicus of storytelling (i.e., stories as a tool of marketing and management by all means) have created a literary genre of their own, research must both incorporate the qualitative methods used in the humanities and face the theories and academic criticisms behind them to meet contemporary standards. this paper seeks to first localise storytelling in the field of philology and therefore narratology, providing established and proven theories and techniques of literature and linguistics, rather than the previously used and more popular literary approaches, to build a conceptual framework for the specific characteristics that stories in the field of business storytelling address. for this concept, which can be called a blueprint for storytelling in marketing and management, it is mandatory to ask where and how meaning is produced in a story, which obviously also requires a linguistic and semiotic approach from the beginning. the intended framework will offer both an overview of the necessary and reliable theoretical backgrounds of contemporary humanities and other disciplines and feasible methods for analysing stories with the specific demand of creating meaning, concentrating on the core elements of storytelling from a narrative point of view. 2. discovering storytelling for marketing and brands if you stop thinking about it, you’ll have to admit that all the stories in the world consist essentially of twenty-six letters. the letters are always the same, only the arrangement varies. from letters words are formed, from words sentences, from sentences chapters, and from chapters stories. (michael ende, the never-ending story) discovering storytelling for marketing and brands also means discovering a remarkably valuable communication tool: “whether you are dealing with product brands or company brands, storytelling is essential to successful branding, since your brand is the sum of all your corporate behaviors and communications that inform your customers’ experiences with your product or company” (herskovitz and crystal, 2010. p. 21). starting from here, those academic approaches should be introduced more intensively which cover traditionally a narratoligical point of view to observe the mechanism of stories: “narrative theory informs the development of propositions of storytelling behavior by providing understanding and description of story enactments and content” (woodside, 2010. p. 534). to determine the main modules for blueprinting the phenomenon of stories, it is necessary to first examine the original background of storytelling and observe the main approaches. doing so leads to the theories and concepts of the humanities, such as literary studies, followed by the framework of logic and effect, which can be found in the fields of rhetoric and semiotics. 2.1. storytelling in marketing and management as the interest in storytelling in marketing and management has grown, it has usually been discussed in an empirical context, despite its natural roots in the field of the humanities. however, the qualitative-analytical perspective is so lacking in reflection that popular and accessible structures or rather fundamental exegeses on the other hand are often chosen (e.g., fog et al., 2010 for a discussion from the practitioner’s view; gabriel, 2005, li et al., 2013, and hsu et al., 2013 for a marketing and management science focus; gottschall, 2012 as an example of the more prominent types of essays; and boyd 2009 for the philosophers’ anthropologic contributions), missing the numerous profound pragmatic approaches and reflections of literary and other types of studies that can be subsumed by the philosophy of narratology and narrative theory. 2.2. narratives of storytelling in brand and marketing management narrating stories seem to meet the core needs of any brand creation and marketing efforts: “whether you are dealing with product brands or company brands, storytelling is essential to successful branding, since your brand is the sum of all your corporate behaviors and communications that inform your customers’ experiences with your product or company” (herskovitz and crystal, 2010. p. 21). creating brand stories, however, is a complex venture: “the brand owner […] has to navigate its brand content through the consumer-generated content to ensure that consumers’ brand stories remain as close to as the brand owner’s desired story” (singh and sonnenburg, 2012. p. 190). besides empirical studies and content analyses (just as examples: janssen et al., 2011 and spear and roper, 2013 as well as megehee and woodside, 2010 and chiu et al., 2012) rather hermeneutic approaches again start to discuss the phenomenon for marketing communication (e.g. singh and sonnenburg, 2012 and grodal and kahl. 2017; cf. also hansen et al., 2013). while remaining a minority in marketing, approaches from a structuralist or functionalist view have been introduced in organizational research in the past 20 years (e.g. weick, 1995; wahren, 1996; gabriel, 2000; czarniawska-joerges and gagliardi, 2003; boje, 1991; 1995; 2008; and 2014). still, striving for provable generalizations, the “relationship between academic research and storytelling has been ambiguous” (gabriel, 2000. p. 3). 2.3. first narratoligical turns: early approaches in literary criticism even earlier, demanding discussions from the later 20th century, e.g., those led by barbara b. stern (stern, 1989; 1995; russell and stern, 2006; also see brown, 2015) focussed on popular literary criticism rather than evaluating the approaches of literature and language studies of the post pragmatic turn (passalacqua and pianzola, 2011), already deploring its standing in marketing and brand research: “although literary theory is a valued member of marketing’s conceptual cast list, it performs in a supporting capacity rather than the starring role” (brown, 2015. p. 446). with respect to these discussions in the humanities, a story’s medium figure 1: the nutshell of business storytelling könig: the never-ending story teller – a narratological genealogy of storytelling in marketing and management international review of management and marketing | vol 10 • issue 5 • 2020 129 is definitely linked to its context. this means that the traditional assumption of narrative prose is not sufficient for business storytelling, nor is the traditional definition of storytelling itself: “storytelling is usually referred to as the telling of a story without the aid of the printed page, pictures, or any properties which would break the magnetic flow between the listener and the teller” (chesin, 1966. p. 212). this statement cannot apply to storytelling in marketing and management as a general definition, and it marks a notable indication: while the term had been used in the sense of narrating orally in earlier decades only, its meaning is broader by now. the term storytelling, referring to the use of composed stories as a marketing and management tool, is a metonym for both a range of narrative texts in, from, and about the specific field of business, including marketing, management, brands, and other related areas and for the production of these texts. storytelling in this sense surely contains aspects of (once oral) tradition, but in fact, storytelling in the field of business comes with the possibility of quite different media options: a story told in a commercial spot refers to a moving image; a company’s history as a written narrative may be published in a printed document or virtually on the internet; and a story used as a management tool can be presented orally. this variety of media leads to the need to include theories and methods from different disciplines: not only literature and linguistics, but film, media, and other appropriate schools of narrative theory. it is obvious that the inclusion of fundamental approaches such as these will require some effort and certainly several studies, and they cannot be simplified without omitting major fields of academic research. 2.4. towards a narratology of storytelling to make a profound start to this approach without ignoring the complexity of including fundamental fields, it is recommend finding the major shapes first that allow a grounded approach to stories in business storytelling. these shapes can be found in the major aspects that all stories used for business storytelling have in common (cf. also boje, 2014. p. 3): first, there is a narrative hitch that differentiates narrative stories from all other texts and is surrounded by narrative characters and narrative elements of style. second, these messages contain characteristics, attributes, or intentions – briefly: issues – that are illustrated and transported via a story and that are eventually meant to have a specific effect, i.e., persuasion, in the rhetorical sense. third, these composed narrative stories are created within specific institutions (i.e., business corporations) with the intention of illustratively delineating specific issues regarding the institution with the help of narration: “[…] what is necessary [in sensemaking]? […] something that preserves plausibility and coherence, something that is reasonable and memorable, something that embodies past experience and expectations, something that resonates with other people, something that can be constructed retrospectively but also can be used prospectively, something that captures both feeling and thought, […] something that is fun to construct. in short, what is necessary in sensemaking is a good story” (weick, 1995. p. 60f.) as aimed to present a grounded philological approach to storytelling in marketing and management, this reseach will start by discussing the first major link, a narrated event of change that leads a character to a problem whose solution is challenged by a conflict. this characteristic differentiates narrative stories from all other forms of texts (abbott, 2010. p. 43; bal, 2009. p. 189-201; abbott, 2013. p. 20-24); hence, we may call it the first core element of story. it is followed by characters and motives and by wording and style. the graphical framework below illustrates the idea that is supported here: a narrative story in the context of business storytelling is a nutshell, a tool for transmitting issues related to a specific business corporation or an aspect of it (cf. figure 1). the phenomenon of story can hence be described as a medium for messages and, in this sense, as a complex semantic structure (cf. volli, 2002. p. 93-147) with specific elements that create a nutshell whose dimensions produce detailed semantic meaning and eventual transmitting issues. therefore, the task of any philological approach is to enable the analysis and identification of the elements that comprise the semantic framework for the specific issues. consequently, if we want to establish the assumption that stories in business storytelling are a semantic framework for specific issues, we must first legitimise this approach from an aesthetic point. 2.5. narrative effects and aesthetics: storytelling from a rhetorical point of view discussing storytelling in marketing and communication from a narrative perspective must also cover the aspects of rhetoric and persuasion: “[…] storytelling also plays a role in persuasion, because the best way to persuade someone is by telling a compelling story“ (delgado-ballester and fernández-sabiote, 2016. p. 116). whenever we propose that storytelling may be used to transmit specific issues (which can be interpreted) for the purpose of producing specific effects (which can be predicted), we immediately encounter various established theories of the humanities that challenge these assumptions. even when they are short, narrative (and hence poetic) stories are complex semantic structures with broad meanings and codes and a distinctive “aesthetic function,” which is used to “purposely manipulate the surface expression of a text to rupture the automatism of reception as well as the referential meaning” (volli, 2002. p. 97; own translation). thus, both interpretations and predictions depend on hermeneutic processes that are neither exact nor generally valid. this is even more true because a storyteller is an author and therefore an encoder, but the reader (or listener) is könig: the never-ending story teller – a narratological genealogy of storytelling in marketing and management international review of management and marketing | vol 10 • issue 5 • 2020130 the one who decodes with her or his specific abilities to do so: “if the construction of a text’s meaning demands the participation of the reader, who has to recognise the provided structure for generating the meaning, one may not forget that the reader is always outside the text” (iser, 1994. p. 246; own translation). a story has to influence this position outside the text to lead the reader’s point of view in specific directions. faced with the problem of readers’ different abilities and capabilities, a story as a complex semantic framework cannot be interpreted, and its effects cannot be predicted with universal validation. this conclusion reveals the dilemma that arises if we only have the text – the narrative story – available for an analysis. the solution can be found in aesthetic theory regarding narrative texts: “the aesthetics of effect determine reception from the point of view of the text” (turk, 1976. p. 7; own translation). if we assume that the author uses different elements to purposefully equip a text to create a narrative story containing a conflict, characters, and other elements of “aesthetic function” (v.s.), we can determine all those elements in the text itself and connect them semantically (with respect to the presented framework); furthermore, we may also describe them as the story’s intended reception (cf. könig, 2011. p. 26). this approach refers to a structuralist view, a perspective of “making sense” and “sense-giving attempts” (søderberg, 2003. p. 8), of storytelling being a “process of making sense of actions, events and objects, or of explaining the relationships between them” (ibid: 6, cf. weick, 1995. p. 60f.). if we want to analyse stories concerning those intended elements, these assumptions lead to a combination of standard methods of narration on the one hand and the aesthetic approach and methods of rhetorical text analysis on the other hand (cf. e.g., abbott, 2013. p. 40-54; phelan, 2010. p. 203-216; plett, 2001; lausberg, 1990). while this approach focuses on storytelling as a textual object which is specifically designed by a sender, there is also research on the effect of this design regarding the recipient’s perception and behavior. könig et al. (2018) proved empirically that the success of a luxury brand story depends on how it is designed according to narratological rules. other examples of empirical research in marketing and management provide, among others, janssen et al. (2011); spear and roper (2013) as well as megehee and woodside (2010) and chiu et al. (2012), however usually not referring to the empirical effect of certain narrative elements. other research approaches are discussed e.g. by schrøder (2007), reflecting the effect of narrative elements within a discourse, and by boje (1991), using conversation analysis for qualitative research. boje also compiled several pragmatic research methods for analysing storytelling; among these are critical, ontological, post-positivist and epistemic pragmatic storytelling methodologies (boje, 2014. p. 225-319). 3. a concept for a storytelling blueprint if we assume that philologists established the groundwork for literature and narratology, we must determine how they approach the phenomenon of storytelling – and therefore narration. it is remarkable that, for instance, german and french narratologists are mainly concerned about the act of narrating and hence perspective, time, setting, and the connection between those elements. plots and characters receive hardly any attention (cf. martinez and scheffel, 2012). in the anglo-saxon tradition, we may discover greater interest in the plots and characters; this interest has increased in recent studies of plot in us research that links former european concepts with new, original approaches, either in traditional research (e.g., campbell, 2004 and mark and pearson, 2001) or especially in film studies (and usually in a rather practical context), regarding suspense and arc (e.g., mckee, 1999 or field, 1994). in comparison, the phenomenon of character is approached from a rather practical point of view (cf. schmidt, 2001 or mark and pearson, 2001) and in other disciplines, such as psychology, with valuable results (cf. lászló, 2008). in the following, the conceptual framework of storytelling on the basis of narratological approaches will be established first. then, the paper determines which concepts contribute to the different dimensions of plot, character, and style, and how they are used as tools for storytelling in marketing and management against the backdrop of the narratological approaches. in terms of the value of this study, it can be reported how those elements support specific meaning in the field of marketing and management. 3.1. a conceptual frame of storytelling elements while the presented nutshell breaks down all modules into the very basic elements of plot, character, and style, those dimensions can be filled with various approaches and theories that support an understanding of the construction of stories. it is both simple and consequential that the term storytelling combines two main thoughts about the phenomenon of narration: first, it refers to the story as a specific type of narration itself, and second, it sums up all possibilities for narrating the story with the term telling. while the term story can be divided into the two basic components of plot (aspects concerning the driving content and structure) and character (the people whose experiences are narrated), the term telling, referring to the style of narration, may be broken down into the various different aspects of designing the story, such as the perspective, time, setting, and ornate (cf. figure 2). from a narratological point of view, storytelling can also be divided into the different perspectives of observing the narrated world (what?) and representing (how?) the narrated world (cf. martinez and scheffel, 2012). in these two classifications, characters and setting (and plot, to a lesser extent) mainly belong to the concept of the narrated world, although the setting may be discussed against the backdrop of its contribution to the story’s design, while the plot generally refers to logic and semantics. perspective, time, and the ornate represent the story. these elements can be easily added to the presented concept, as described above. 3.2. the first dimension: plot there are various options for determining what a text must look like to become a narrative and how narration becomes a story. a story may be defined, for example, in terms of the “aesthetic function” of the language (volli, 2002. p. 97; own translation), the classes of social systems (cf. lotman and uspenskij, 1984), the difference between textualised and grammaticalised cultures (and thus between texts and stories), or on the basis of the figure 2: conceptual framework of storytelling dimensions könig: the never-ending story teller – a narratological genealogy of storytelling in marketing and management international review of management and marketing | vol 10 • issue 5 • 2020 131 fabula arrangement as a semantic determination (cf. abbott, 2013. p. 16-27). in this context, greimas’ actantial model (1984. p. 174-185 and 192-212) has to be mentioned as well, being a popular semiotic approach relating elements of action. in this paper, another narratological perspective is chosen: namely, every story contains a problem that has to be solved, and solving the problem is connected to a conflict that influences (the ability to obtain) the solution. as a basic condition, the problem occurs because of a change in the situation. this simple approach allows us to distinguish narrative stories from most other texts, and indeed, the definition is the core proposition of dramatic theory, which is rooted in the ideas of aristotle (1995), and has been expanded by researchers and poets such as freytag (2003). according to dramatic theory, a plot’s structure may also be described as: “the bme narrative genre is defined by a style that is abstract, a function that generalizes, and a form that tries to annihilate living stories’ content. bme is beginning, middle and end” (boje, 2014. p. 3). arranging an event of change and the affected aspects within this structure may be considered the main task of storytelling. this arrangement leads to concept of narrative plot, meaning the turn of a fabula into a sjuzet (cf. propp, 1968, shklovsky, 1965; abbott, 2013. p. 18, bal, 2009. p. 75-77): a plot in this context is the “artful construction of story,” and therefore, the “artful disclosure of story” (abbott, 2010. p. 43), referring to “that combination of economy and sequencing of events that makes a story a story and not just raw material” (ibid.). an additional literary approach towards plot may be found in the works of campbell (2004), who observed numerous myths and legends of different cultures and developed the idea that stories circulate suspense but reveal borders to be crossed and a plot-flow, corresponding with all previous models of the basic structure of story. in fact, all the different theories on story structure are comparable in terms of their major elements (cf. table 1). in contemporary approaches, the phenomenon of plot is also developed in the discipline of narratology and film. this development has been extensively discussed by mckee (1999), field (1994) from a rather professional perspective and, for example, by hickethier (1996), monaco (2000), faulstich (2013), bordwell and thompson (1997), and many more studies in the field of film research. the event of change, which contains the problem and conflict, is usually referred to as the plot point in this context: “the plot point is an incident or even, that ‘hooks’ into the action and spins it around into another direction. it moves the story forward” (field, 1994. p. 11). plot points are events in narration that change a situation, causing the problem and hence the conflict a character must solve. they have been part of stories – in the aesthetic sense – since aristotle proposed his philosophy of drama. german poet friedrich schiller called those events punctum saliens (jumping points), and they may be regarded as the neuralgic elements that drive a narration towards a specific direction, serving as peaks in a story’s curve of suspense (cf. könig, 2005. p. 26-30). plot points (in both drama and film aesthetics, we have come to expect two major types: one that delivers the problem and one that delays its solution; cf. field, 1994. p. 9 and freytag, 2003. p. 94f.) are the most important element of story; they are the precondition for narrating stories, and they allow the transmission of specific meaning (issues). when the plot points within a story are detected, directly (or indirectly) offered meaning can also be detected. hence, regarding business storytelling, the plot points of the story must be of core interest. consequently, a narrative turn (plot point) that produces a conflictladen problem leads to a challenge for a character. the character’s response to the challenge and the actions he or she takes to solve the problem discloses the character’s stance (attitude) towards the conflict. in this logical chain, every story reveals a message, and in the way a character solves the problem and discloses his könig: the never-ending story teller – a narratological genealogy of storytelling in marketing and management international review of management and marketing | vol 10 • issue 5 • 2020132 or her attitude, we may expect a moral evaluation of the narrated action (cf. van dijk, 1980. p. 140-144 and lászló, 2008. p. 16). thus, all stories – and all storytelling – are based in the logic of semantics. the events arranged in a plot do not (just) present a joined-together overview of what and when the events happened but why they happened: why a situation changed, why a character was challenged to act, why an ostensible obstacle turned out to be surmountable, why the character acted the way he or she did, and why the solution payed off (or did not). thus, stories instantly give us a simple but qualified explanation of the world that we are forced to believe (cf. herman, 2002. p. 38-50 and van dijk, 1980. p. 140-144): “[…] consumers are complicit in marketing. consumers believe stories” (godin, 2009. p. 18). 3.3. the second dimension: character a story’s hero, his or her friends and enemies, and other people may be referred to as its characters. characters comprise the second dimension of core story elements. in the context of story, a character is “a literary figure; that is, an artistic product or artifice constructed by an author for some purpose” (margolin, 2010. p. 66); the protagonists (heroes) “display different features” (bal, 2009. p. 133) that represent different specific personality types. these characteristics are linked to motives and point to specific motivations to solve a conflict: “insertion necessitates motivation” (ibid.: 41). this approach corresponds with the theory of narrative psychology: characters act according to their personality, in their individual way, and again, we can expect the represented causality of a logic chain: “responsibility implies choice. in narrative, we seek intentional stances that underlie action; they are motives or reasons […]” (lászló, 2008. p. 16). the psychological term stance can be easily compared with the phenomenon of attribute in marketing and management. regarding storytelling, attributes are linked to specific issues that the author (or storyteller) would like to communicate. hence, the creation of characters follows the same rules that krappmann described in his theory of social interaction (krappmann, 2010). identities emerge within social interactions, vulgo: how a character addresses a problem and interacts with other characters reveals his or her personality to the audience. consequently, this idea equates with field’s assumption about story characters, their arrangement, and their ability to interact: a character’s personality is narrated by his or her experience of conflict, by his or her interaction with other characters, and by his or her interaction with himor herself (field, 1994. p. 28f.). thus, a qualitative analysis should focus on these three characteristics to identify stories’ characters, their motives, and the narrated issues. the already mentioned (semiotic) actantial model by algirdas julien greimas can enhance this approach by adding another dimension: it describes the relation between the interacting actors within a story, concluding how the relation leads to a plot (cf. herman, 2000. p. 260). in this sense, the model represents how character action creates a plot within a storyline, being “a grammar of action, a syntax of doing” (ibid.). hence, by applying greimas’ model, this paper’s dimensions of plot and character can be related to each other, defining protagonists and antagonists, supporters and enemies, desires and fears (cf. rimmon-kenan, 1983. p. 35). additional information can be found using an interdisciplinary psychological, literary, and marketing-oriented approach. while archetypes in the tradition of c.g. jung have been well known and used in psychoanalysis for a long time (cf. jacobi, 2012, tepes, 2013), they have recently been rediscovered for interpreting and creating characters in narrations and brands (cf. mark and pearson, 2001, roberts, 2010, cooper et al., 2010). as a special characteristic, recipients implicitly understand archetypal figures and are able to feel affective empathy or identify with them: […] grounded in the premise that product brands, like archetypes, reflect the ways in which humans interpret their relationships with their way of life, and thus serve to provide symbolic meaning that consumers around the world may use for identity construction (tsai, 2006. p. 250). considering that archetypes comprise most important characters in many legends, myths, fairy tales, and other traditional stories (cf. kaye, 1995) and that there are approaches to creating whole brands that are based on archetypes (cf. häusel, 2014), it is logical to create stories in marketing and management that also refer to specific, corresponding literary archetypes. 3.4. the third dimension: style the last core dimension of storytelling, which consists of meaning and is hence able to create and transmit certain issues, can be identified as the style of a story. style comprises all of the other modules involved in narrating a story: “in narrative, we usually have a steady stream of literal renderings” (abbott, 2013. p. 165). usually, narratological theory can be divided into two main fields of table 1: basic story structures acts changes climax ending suspense aristotle de poetica (e.g. 1995) 3-5 peripety peripety (act 2/3 or 3/5) katastrophe linear; going up – peripety –falling down freytag technik des dramas (e.g. 2003) 5 katastese (erregendes moment), retardation (retardierendes moment) climax (act 3) katastrophe linear; going up – climax –falling down campbell the hero with a thousand faces (2004) 3 (17 stages) crossing the threshold, crossing the return threshold the ultimate boon (act 2, stage 11) freedom to live circulating fieldscreenplay (1994) 3 event/conflict; plot point i, plot point ii climactic struggle (act 3, cf. hant, 1999) resolution linear; going up – climactic struggle – falling down könig: the never-ending story teller – a narratological genealogy of storytelling in marketing and management international review of management and marketing | vol 10 • issue 5 • 2020 133 interest: the focus on what is narrated (the narrated world) and how it is narrated (the representation of the narrated world). the third dimension, therefore, refers generally to the design of narrating, hence, how a story is told in terms of the perspective (narrative situation), time (and narrative structuring in terms of time), the setting (spatial structuring and locations), all of the interdependent connections of those aspects, and, finally, the linguistic (or pictorial) design in terms of rhetorical ornaments, such as figures and tropes (and the corresponding elements of the moving image). in literary studies, especially in the german and french traditions, the form of narration and its limitations play a major role: if narratology […] were to be divided into just two major parts, then narration and focalisation would be very suitable candidates. narration is the telling of a story in a way that simultaneously respects the needs and enlists the co-operation of its audience; focalisation is the submission of […] narrative information to a perspectival filter (jahn, 2010. p. 94). genette (1983) and stanzel (2010) are especially pertinent for narration and focalisation – or narrative situation in general – and distinguish among various types of narrating. while these approaches are literary and hence refer to structure and aesthetics, recent studies indicate the specific relevant impact of narration and focalisation on perception and credibility (cf. e.g., lucaites and condit, 1985, warnick, 2004, manson and o’neill, 2007). hence, the type of narrators and their focalisation play a significant role in what information can be delivered and how, and studies indicate that credibility and therefore trust depend on this role. 3.5. meaning and message: values as issues of marketing and management mckee differentiates between two different types of ideas regarding narrative stories: “premise, the idea that inspires the writer’s desire to create a story, and controlling idea, the story’s ultimate meaning expressed through the action and aesthetic emotion of the last act’s climax” (mckee, 1999. p. 112). within this concept, the second type of idea may also be considered in terms of issues, including one or more issues, and may be presented not only through the last act’s climax but through the three dimensions of storytelling described previously. these elements, alone or in combination, reflect specific values and form a specific message: “for most companies, storytelling is about using stories to communicate messages that reflect positively on the company brand” (fog et al., 2010. p. 34). there are numerous issues a company could seek to address through a story: issues of brand personality, issues of sustainability, or issues of value. value in particular seems to be an issue that can be introduced into this concept exceptionally well: “a strong brand builds on clearly defined values, while a good story communicates those values in a language easily understood by all” (ibid.: 23). to allow for comparable results, the identification of values should not be managed just by intuition and description but on the basis of an established model. such a model can be found in contemporary studies of marketing and management, such as those by sweeney and soutar, who differentiate emotional value, social value, functional value (price), and functional value (performance/ quality) (sweeney and soutar, 2001. p. 211f.), or that of wiedmann et al. (e.g., 2007, 2009), which differentiates among financial value, functional value, individual value, and social value (wiedmann et al., 2007. p. 5) in terms of luxury values. these specific types of value must be identified within the three dimensions of storytelling if the aim is to detect the issue value as a narrative message of a story. 4. discussion after establishing an original conceptualisation for marketing and management based on the fundamentals of narratology, we can now discuss the accessibility implications against the backdrop of the existing research. in the following, it is firstly shown how the previously established ideas can lead to a step-by-step storytelling blueprint and secondly this paper’s limitations and future implications are discussed. 4.1. a storytelling blueprint for marketing and management the following drawing board for storytelling in marketing and management is a general approach based on the previously discussed narratological theories regarding story and narration. this blueprint may be applicable to various stories in various situations and for various purposes, which need to be determined. depending on these prerequisites, we have derived the basic questions a storyteller has to answer to complete a story with respect to the narrative conditions discussed above (cf. table 2). first, the main character must be defined: who is the story’s hero (protagonist), and what is his or her personality in terms of addressing problems – and why? second, the character has to face a problem that arises because of a change in his or her situation. this event challenges the hero and evokes a desire, and the satisfaction of that desire is linked to a conflict the hero faces. however, the hero has an table 2: a storytelling blueprint concept who? who is your hero? what? what happens? what is changing his or her world? what effect? how does the hero solve the problem? • what is his or her personality? • what is his or her archetype? • what is the problem? • what is the hero’s desire? • what is the conflict to reach the desired goal? • what is the hero’s motivation? what is the incentive? • what delays the solution secondly? • what is his or her attitude hence? • what is his or her moral? • what is your message? increasing suspense increasing causality increasing design • who is the hero’s enemy? • who is the hero’s friend? • how and why is the enemy against the hero? what is his or her character? • how and why is the friend supporting the hero? what is his or her character? • what kind of basic plot is chosen – and why? • who is telling the story? and how? • what frame supports the message? • what style supports the message? könig: the never-ending story teller – a narratological genealogy of storytelling in marketing and management international review of management and marketing | vol 10 • issue 5 • 2020134 inner motivation and other incentives to overcome the conflict, solve the problem and satisfy the desire. this package of character and event leads to the last central story modules, which are represented by how the hero finally solves the problem (we know already why he or she decides so) and what effect the solution creates. usually, basic plots delay the solution with a second plot point that forces the hero to act more decisively (and enhances the story’s suspense). the solution and its effect also describe the hero’s attitudes and set up a moral for the story by evaluating the outcome as positive or negative. we may call this evaluation the story’s final message. after we have met all of the major story demands, we can enhance the story’s representation and enhance the message’s validity: for example, by adding enemies who want to foil the hero’s intentions, which can enhance suspense and underline the moral evaluation, or by adding friends who may motivate the desired rightness. furthermore, those accompanying characters also have personalities that explain their own motivations and actions. regarding storytelling (especially in marketing and management), we must still research what types of typical confrontations and plot sets create specific basic story genres, though it might be good to be aware of existing general approaches (cf. tobias, 2012). in the end, the story can be finalised with respect to the narrative situation (who is telling the story and from which perspective?), the framework for its narration (in terms of the setting and other aspects, such as the focus), and the style of language (or the aesthetics of the pictures in moving images), always keeping in mind the questions of if, why, and how those applications support the story’s message and eventually its expected effect. this storytelling blueprint should be combined with determinations of the company, brand, or product that provides the context of the story (cf. table 3). certainly, it is necessary to answer basic questions about the brand to know about the basics of the context, followed by the more story-related questions of how and why the story is linked with the brand. there are various possibilities for representing the brand in a story, ranging from simply using the story as a tool to solve the problem via represented values to using the hero’s character to represent a brand’s identity. the prerequisites – meaning the context in which the story is told, and for what effect – finalise this framing marketing and management step, forging a bridge to the previously described blueprint. 4.2. limitations and implications although the presented approach is based on various established theories and discussions of narratives, not all aspects could be covered that might be relevant to conceptualising storytelling in marketing and management. this is certainly because research on the phenomenon is still limited, and narratology does not deal (yet) with some of the perspectives that are relevant to the topic in this specific context. still, there is no structural classification of stories in marketing and management that can also refer to the specific media that are needed for specific genres and contexts. while archetypal characters have been the object of some popular discussion, there is a lack of concise research-based reflection on these types of characters. furthermore, other approaches to personality may also contribute to understanding why and how specific characters work better in specific contexts. this paper also lacks empirical studies regarding whether stories (and their messages) are fully understood by the audience as they were intended – a question that would very valuable to answer given that the understandable message should be the core value of a story. we also still know little about the matter of narrative perspective and its credibility, but certainly it makes a difference whether a story is told auctorially or by an i-narrator. the phenomena of narrative perspective should definitely be a research focus in the future, in addition to the questions of how different perspectives change the possibility of what can be told, which stories from which perspectives are remembered better, and what happens if they are retold (which, again, offers the possibility of discussing appropriate narrative perspectives and situations). furthermore, we have already touched on matters of story and suspense. presumably, a more suspenseful story gathers more attention, is remembered better and is more likable. still, these assumptions lack both empirical evidence and a qualitative approach to enhancing suspense in storytelling (which would naturally be needed if the hypotheses are true). consequently, such research will also lead to questions regarding whether we can identify general master plots for general problems in marketing and management. regarding limitations and implications for the field of professional marketing and management, it is also suggested discussing how to represent specific issues in a story. as stated above, brand and story may be linked in different ways, but we know little about which links work better in what context. finally, all of those approaches, including the presented blueprint concept, need to be evaluated in praxi to determine whether they are practicable and how future research may help to understand other phenomena and problems in this context. 5. conclusion 11:55, almost midnight. enough time for one more story. one more story before 12:00, just to keep us warm. (john carpenter, the fog) storytelling as a metonym for stories, their production and their potential in a business-related field is becoming increasingly important to both researchers and professionals in marketing and management: “this is a whole new way of doing business. it’s a fundamental shift in the paradigm of how ideas spread. either you’re going to tell stories that spread, or you will become table 3: brand context sheet what kind of brand? brand within the story? why? • what is the company’s tradition and heritage? • who is the company’s customer? • who is the company’s competitor? • how does this company differ and why? • why is the brand represented • as a direct tool? • in values? • in characteristics of the hero’s character? • why are there other references to the brand in the story? • what is the occasion/ motivation to tell the story? • what is the desired effect? • who is the story’s audience? • where and how is the story to be told? könig: the never-ending story teller – a narratological genealogy of storytelling in marketing and management international review of management and marketing | vol 10 • issue 5 • 2020 135 irrelevant” (godin, 2009. p. 1). nevertheless, applicable and established approaches from the philologies and other disciplines in general and from narratology, linguistic, and psychology specifically are rarely introduced and applied. this paper presented a brief overview of typical approaches that, when combined, offer a proper qualitative approach towards stories that takes into account the standards and critiques in this specific area of academic research. the particular value of this study is that it enables a discussion of a popular phenomenon, leading to a distinguished blueprint concept developed against the backdrop of established literary theories and observations. by classifying different perspectives and arranging them as core elements of storytelling, a collection of story dimensions could be designed to help with both understanding and creating stories. while value research is already established in the field of marketing and management and is even mentioned in relation to narrative stories and storytelling, a qualitative approach that allows comparable results and consecutive quantitative studies has been missing, even though “a good story communicates […] values in a language easily understood by all” (fog et al., 2010. p. 23). this paper presents a conceptual framework that closes this gap. from a research perspective, the findings strongly support the use of established theories, which future research could enhance by focussing on the storytelling in marketing and management that are still poorly understood, such as credibility, message effectiveness, suspense, and personality types. for professionals in brand management, the presented approach already offers a rather accurate and distinguished concept. nevertheless, it will be essential in the future to use the feedback of professionals to improve the concepts for praxis needs. it was also the aim to consider a combination of qualitative and quantitative methods in the field of storytelling to allow the use of different approaches and to produce a broader range of consecutive results. the conceptual framework presented in this paper and the blueprint concept are first steps towards this effort. eventually, it becomes clear that stories are not just made out of 26 letters, and storytelling demands more than just converting 26 letters into numbers of correlation. however, the effort pays off, for stories not only represent our world, they create it: don’t you know that fantastica is the realm of stories? a story can be new but telling about ancient times. history is emerging from it. 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(2010), brand-consumer storytelling theory and research: introduction to a psychology and marketing special issue. psychology and marketing, 27(6), 531-540. irmm_028.indd international review of management and marketing | vol 6 • special issue (s6) • 2016 169 international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2016, 6(s6) 169-173. special issue on "management of systems of socio-economic and legal relations in modern conditions of development of education and society” features of the purposes formation of the education management system aleksey i. pykhtin1*, olga v. ignatyeva2, arkadiy n. silenko3, marina v. melnichuk4, anatoly i. chernykh5 1southwest state university, kursk, russia, 2moscow state university of mechanical engineering, moscow, russia, 3national research nuclear university mephi (moscow engineering physics institute), moscow, russia, 4financial university under the government of the russian federation, moscow, russia, 5kuban state technological university, krasnodar, russia. *email: sephiroth_kstu@mail.ru abstract the article presents the analysis of purposes statement in higher education management. currently, the ideas, about the economic education content, having received which, the person is able to continue to plan the career, are changing. the increasing recognition gets approach within which formation of key competences, design type of thinking, analytical skills, motivated aspiration to continuous self-education, self-improvement becomes the main objective of teaching and educational process that provides formation of competent experts with economic education and possibility of their further professional growth. innovative processes in the economy in the last decade, stimulated in russian society, the development of skills needs at all levels in the fi eld of economy, capable of practical creative activity, initiative, enterprising, ready to solve non-standard tasks, problems and objectively analyzing the supply and demand in a market economy. the education management system objectives should be focused on addressing global psycho-pedagogical, didactic and methodological problems. keywords: education management, marketing, hierarchy of management, economic education, professional competence jel classifi cations: i29, i20, m11 1. introduction management in education is the specifi c branch of management science, which incorporates the origins of pedagogy, psychology, sociology, organization, management and marketing. education management has its own specifi c and unique laws. professional knowledge management are responsible for awareness of managers associated with the formation of three different management instruments: • the organizations, hierarchies of management, the main means here is the person impact from above by means of motivation, planning, organization, control, stimulation and so forth • management culture, i.e., the developed and recognized by the society, the organization, the group of people’s values, social norms and installations, features of behavior • the market, the market relations, i.e., the relations based on the balance of the seller and the buyer interests. setting the education goals in general and the management of the educational process should ensure support, a sense of challenge and the joy of made development steps. the ongoing process of learning, aimed at developing the skills and knowledge is the most important tool of every modern manager, because the one-time events rarely cause the desired changes in behavior, so the work in this direction should be systematic. the unique, inaccessible to human engineering ability to quickly orient themselves in a diffi cult situation can be realized only when it has suffi cient qualifi cations and the necessary information (egorshin, 2005; chueva et al., 2016). the creation of such an “information service” is the main task of the control system. pykhtin, et al.: features of the purposes formation of the education management system international review of management and marketing | vol 6 • special issue (s6) • 2016170 the core of the problem-functional management is the focus, coordination and resolution of specifi c problems. integration efforts of team members is not possible without control of translation based on coordination. large-scale economic reforms are carried out in russia in the conditions of low effi ciency of the economic system functioning, multi-scale economic crises, the fast raising need of the country citizens’ welfare and satisfaction of their increasing requirements, social tension, and the need of elimination of serious lag for development of our economy from the leading world powers. in this regard, economic education of all levels experts, in the course of which economic knowledge is systematized, is of particular importance, the understanding of economic laws and processes of the economic transformations happening in our country is formed. the extensive experience, gained by the economics science, testifi es that without comprehension of such economic laws as the demand law, the supply law, the decreasing profi tability law, the increasing limit costs law, the requirements eminence law and some other; it is impossible to fi nd today talent and ability to the purposes development, to defi ne the reference points, to coordinate the workers’ tasks and functions of any activity fi eld. therefore, for the development and effective solutions to economic problems in the future professional work is necessary in the course of the educational process to create conditions for the formation of key competences of future economists-managers. competence content includes the system of knowledge and skills of information technology activities in the economic profession, and a formed willingness to solve professional problems, provided a positive attitude towards information technology activities in the economy sphere, the presence of a certain intelligence level and personality traits, assimilation cultural and ethical conduct in society and in the workplace. these requirements make creating pedagogical conditions of the key competencies formation in the training process of the future specialist with economic education. the labor market has high requirements not only to the level of theoretical knowledge of the future economist-manager, but to the professional preparedness for effective practice in enterprises and institutions with different organizational-legal form of ownership. today the special place in the content of the education management takes a willingness to use new information technologies and management process and implementation of educational process. thus, it is necessary to consider that in the conditions of prompt development and expansion of the information technologies availability, simple broadcast of ready knowledge by the teacher to the student cannot lead to the demanded result. it also causes requirement of updating of the contents, methods and means of the teaching organization and educational process. now economic education maintenance ideas, having received, which, the person is capable to plan the professional activity, further independently, change. the increasing recognition gets approach within which formation of key competences, design type of thinking, analytical skills, motivated aspiration to continuous self-education, selfimprovement becomes the main objective of teaching and educational process that provides formation of competent experts with economic education and possibility of the further professional growth. 2. literature review education is one of the most important subsystems of the state social sphere providing the systematized knowledge, skills for their effective use in professional activity. the education system is a diffi cult social, economic, scientifi c, and technical complex of the russian national economy. in the sphere of russian education 22% of the russian population are directly occupied, over 76 thousand educational institutions, the number of teaching structure more than 2,2 million people, total number of the studying more than 29 million people; annual graduation is more than 2,9 million people. training has become one of the most important factors of economic progress. the quality of decision-making skills of managers and specialists of enterprises and organizations largely determine productivity, production effi ciency and the rate of economic growth in russia. traditionally, the russian offi ce heads of educational institutions occupied by the engineers or the humanities, and their lack of knowledge of modern management, marketing and economics defi ned the trends shaping the corresponding demand for professional education market. problems of the education management successfully studied such scholars as the egorshin alexander petrovich-doctor of economic sciences, professor, honored worker of science of the russian federation, rector of the nizhny novgorod institute of management and business, well-known scientist in the fi eld of management and education. trained in the large foreign companies and the leading business schools in the usa, great britain, germany, spain, belgium, italy, china. a.p. egorshin is the author of more than 280 publications, including 14 textbooks and manuals, 9 monographs. the most known works: “human resource management” (1997, 1999, 2001, 2003, 2005), “management, marketing and economy of education” (2001, 2004), “motivation of work” (2003, 2006), “strategic management: region, city, enterprise” (2004, 2005), “ethics of business relations” (2005). kucherenko vladimir ilyich-doctor of engineering, professor of marketing department of the nizhny novgorod institute of management and business since 1996. the author of more than 230 scientifi c and methodical developments, including the textbook “management, marketing and economy of education” (2001, 2004), “marketing” (1999), “behavior of consumers” (2001). the executor of research development “market research of professional education” (1999-2004) (litvinova, 2006; kobersy et al., 2015; kobersy et al., 2016; valencia and cázares, 2016). the references analysis showed that in recent years a number of researches in the fi eld of economic education in the following directions is executed: • models creation of the process organization of economic education in secondary schools • youth focus on economic specialties • training of the future experts of the economic profi le in the higher educations • the expert personal development in the economy sphere. based on the literature analysis and the experience in the economic education fi eld, it is possible to conclude that it is based on the idea of the need to design such pedagogical learning environment (egorshin, 2000; koç et al. 2016), in which the content of the pykhtin, et al.: features of the purposes formation of the education management system international review of management and marketing | vol 6 • special issue (s6) • 2016 171 educational process would be focused on the professionally signifi cant qualities development of the person: competence, responsibility, mobility, fl exibility, adaptability, competitiveness. 3. materials and methods innovative processes in national economy stimulated in the russian society the development of need for all levels qualifi ed specialists in the fi eld of economy, capable to practical creative activities, non-standard tasks, initiative, enterprising, ready to the decision, the arising problems and objectively analyzing supply and demand in the conditions of market economy. the management system purposes of education have to be directed on the solution of global psychology and pedagogical, methodological and didactic tasks, such as: 1. future specialist at the polytechnic institute in the design of educational activity must obtain not only the necessary set of knowledge, skills and experience, but to master the professional competence through the formation of key information technology competencies, allowing to provide socialization and confi dent entry into the self-employed life. 2. solution of the formation problem of key information technology competencies economics graduate polytechnic institute requires the purpose definition of the experteconomist, the selection principles of the training maintenance, the establishment of functions and pedagogical conditions of the process, the teaching disciplines development of information and support systems of the technological cycle. 3. professional specialist training should be based on the humanization idea of the educational process of the polytechnic institute, directed not only to master the professional knowledge and skills (oleinikova et al., 2016), but on the formation of motivational and valuable relation to the chosen profession, the personal qualities of the future expert in economics. the leading idea is the orientation of the educational process in the development of the economic profile future expert in the process of preparation for professional work. thus, it is meant that any quality of the personality possesses property of integrity and represents the diffi cult system that is responsible for performance of the corresponding functions in activity of the person. 4. formation of information-technological competence of the student is defi ned as the individual holistic property, focused on continuous self-improvement, self-education, intellectual and practical activities. the structure of the key informationtechnological competence consists of four interrelated components: content-evaluation, motivation and strongwilled, socio-cultural, professional and personal. 5. formation of key information and technological competences needs to be carried out according to the developed and tested scheme, for example, to three stages. at the fi rst stage students adapt for the studying conditions of new information technologies, they learn to find necessary information, to apprehend it, to process and keep. higher quality of information and technological preparation is provided at the second stage. it is characterized by higher level of professional qualities of the personality. at this stage, the development of informative abilities of the student allows to acquire independently the necessary knowledge and to investigate objectives with use of computer technologies. there is a commitment and a practicality, abilities to analyze the gained knowledge and to apply them in future professional economic activity develop. at the third stage of formation of the key information-technological competences ability to independent, creative work, ability to model, plan the activity and to solve practical problems develops. use of the personal computer and computer programs imitating real professional situations of future practical activities develops creative thinking. 6. it is necessary pedagogical conditions of formation of key information-technological competencies in the design and training activities of the polytechnic institute, which is a system of teaching psychological and pedagogical, organizational and pedagogical conditions, allowing step-bystep to achieve learning objectives. 7. when developing technological model of the information and technological preparation process, it is necessary to use the following principles of the educational process organization (weichbrodt, 2015): professional orientation, subjectivity, problematical character, communicativeness, active training, interdisciplinary. it will determine the process effi ciency of formation of key information technological competences, and the training compliance of the graduate by requirements to professional economic activity in market conditions. 8. it is necessary to develop the criteria and indicators system for assessing the effectiveness of the key components formation of the information and technological competence of the future manager economist. thus it should be taken into account: the attitude to the chosen profession (professional interest, ability to overcome barriers to professional activity); volume, depth of knowledge, strength, mobility, breadth of professional knowledge transfer (banslova, 1999); degree of professional activity skills formation; readiness for professional collaboration; awareness of social status and professional image of the economic profi le, the presence of a highly professional-signifi cant qualities of the economist. 9. during the educational process planning, it is necessary to determine the content of the formation level of the key information-technology specialist competence in economicslow, medium and high. the high level is determined by the pronounced interest in professional activities, the desire for professional development, understanding of the priorities and guidelines of future profession. a student, who has reached this level, has in-depth fundamental knowledge of economic laws, categories, the modern economy rules and the ability to use them; extensive use of economic knowledge in the conditions close to actual professional activity; he formed an integral relation to economic reality, a high level of economic thinking, he is focused on the use of new information technology programs, samples, models, so such expert can be competitive on the labor market. 4. results and discussion depending on the system level, there are the following management types in education: pykhtin, et al.: features of the purposes formation of the education management system international review of management and marketing | vol 6 • special issue (s6) • 2016172 • strategic management of education (education goals control) • process management (development management, operation management, innovation management, etc.) • organizational management or control of structural reforms. the main modernization principles of the russian education system in the modernization concept have been identifi ed and claimed the next three, namely, increase: • quality (of education) • availability (of education) • effectiveness (of educational system). respectively, the following has to become the modernization main directions of the education control system: • quality management • management of availability • management of effi ciency. effective educational process is impossible without constant development of teaching methods, process management training and education of the student, without the formation of general and professional competences. the formation criteria of key information technology competence of the modern manager must refl ect the basic laws of the identity formation process. furthermore, using criteria determined communication between all components of the system under study with the proviso that the quantitative indicators should concretize quality indicators. criteria have the general character in comparison with indicators; indicators are closely connected with procedures of concrete measurements. the system of criteria and indicators of formation of key information technological competences of the economic profi le future experts offered by usmanagers was developed based on the estimation system-rating. such components are: substantially-estimated, motivationalvolitional, socio-cultural and professional-personal. proceeding from this logic, we also presented structure of information and technological competence in the form of four integrated blocks or components: substantially-estimated, motivational-volitional, socio-cultural and professional-personal. when forming such structure, we proceeded not only from requirement to simplify the results assessment procedure of our activity, and increase its reliability, but the correlation need of the assessment criteria of the student educational activity accepted in system he (knowledge level, student abilities, interaction with participants of educational process, etc.), with criteria of the employee activity assessment on production (availability for service, discipline, enthusiasm for work, independence in the solution of the tasks set by the management, etc.). in this case the content that we defi ned earlier, somewhat differently distributed between the blocks of the new structure. substantially-estimated component (block) of information technological competence of the economic profi le future expert-the manager includes the following: the information and technological knowledge system necessary for continuation of education, professional development, retraining; abilities to use the gained knowledge in the training course and in practice; experience of creative search, assimilation and application of special knowledge. this component defi nes: the profi ciency level in the economic theory, knowledge of economic and information and technological categories, laws, rules of modern economy, ability of their transfer from one object of activity to another; possession of the latest methods for carrying out economic monitoring by means of the computer; possession of interdisciplinary knowledge; ability to forecasting; fl exibility and variability economic and informationtechnological thinking. the socio-cultural component of the information-technological competence maintenance represents the valuable relations system to the society important purposes and expresses degree of formation of the general and professional culture, intelligence of the personality in the course of professional formation. readiness for professional cooperation represents important part of the contents socially-a cultural component of professional competence and includes the following: ability of business and interpersonal communication (ability to defi ne a social psychological state of collective, ability to listen and listen attentively); ability to warn and resolve the confl icts (ability to defi ne and anticipate confl ict situations, to reduce aggression); ability of cooperation (organization of joint activity, assessment and analysis of activity results). understanding of the social status and image by future expert-the economist-the manager is confi rmed by existence of formation of the making key information and technological competences and includes labor, intellectual, analytical, common cultural qualities, and positive image of the expert. the professional-personal component of the information and technological competence formation expresses the degree of the trainee need to update the knowledge for continuous selfimprovement, and its ability to application of new knowledge in practice. the professional-personal component defi nes: the priority directions of knowledge assimilation, aspiration creatively to apply the acquired abilities and experience, to update and fi ll up the gained experience, economic knowledge (vankina and kucherenko, 2006); readiness to keep accounting and the activity analysis of the economic subject, the organization and management of the entity economic activity, control implementation and auditing activity, fi nancial condition estimation of the economic subject; ability to use modern means of information technological communications; skills of drawing up fi nancial and in-house documents using a computer. the motivational-volitional competence component characterizes the belief in the need to acquire the knowledge, skills, focus on tasks and solve them in practice, mastering the skills of creative approach to the knowledge application. the motivationalvolitional component determines competence: value attitude to the chosen profession (professional interest, the ability to overcome barriers to professional activity); volume, depth, strength, mobility, breadth of transfer of professional knowledge (economic theory, economic categories, laws, rules of the modern economy, information technology knowledge and skills); degree of the professional activity skills formation; readiness for professional pykhtin, et al.: features of the purposes formation of the education management system international review of management and marketing | vol 6 • special issue (s6) • 2016 173 collaboration; awareness of social status and image specialist economic profile. the motivational-volitional component is characterized by relevance to the future profession, which is associated with the decision realization correctness to become the economist; professional interest formation; rationality of action in the choice of the future profession economist; the ability to make a rational contribution to economic activity in the specialty; the ability to overcome obstacles in their professional activities. to be noted that, fi rst, the formation of each of the interconnected components occurs in the single training-educational process; second, the formation of each of the components takes place in several stages at each of which certain tasks are solved. having defined stages and structure of the contents of the information-technological competence we can come to the criteria defi nition. criteria will be the formation degrees substantiallyestimated, motivational-volitional, socio-cultural and professionalpersonal components. these criteria we will call local. integrated criterion is the degree of the information-technological competence formation in general. it is defi ned by the set of local criteria. more precisely, we cannot defi ne integrated criterion since it submits the qualitative characteristic of the student identity and is not the simple algebraic sum of the local criteria. however, we can establish an integrated indicator through the algebraic sum of local indicators. the local indicator of the local criterion is the ratio of students who have reached a certain level of formation of content-evaluation, motivational-volitional, socio-cultural or professional-personal components of information-technological competence, the total number of trained students (actually took part in the pedagogical experiment). introduction of indicators creates the preconditions for the quantitative evaluation of the results. however, before the start it needed to determine the content level of development of the information-technological competence individual components. 5. conclusion the management purposes in education are the national specifi cs, can change according to regional, temporary, profi le features. many things depend on the concrete level of training programs. therefore, the management in professional education realized in higher education institutions and colleges can be directed on increase of the development effi ciency by the students of various applied skills. if it is about the educational process at comprehensive school, introduction corresponding the appropriate management practices can be caused by need of more effective expenditure of budgetary funds-for example regarding purchase of materials, working hours’ distribution. the application purpose of these or those administrative approaches can be caused by need of innovations introduction for the education system. this initiative most often is followed by a certain expected positive results. most often involvement of innovative methods of pedagogical management is connected with the solution of this or that problem, which is characteristic for the education system in general, of the specifi c training program or refl ects specifi cs of separate educational institution. it is quite possible that the purposes of the pedagogical management concepts introduction will be localized, that is directed on achievement of result within a concrete lesson, a series of occupations or the training program of separately taken s ubject. references banslova, v. (1999), research of the services market in the field of business education and development of the promotion tools. saint petersburg: ipk spbgiea. chueva, t.i., niyazova, g.m., metsler, a.v., shkurkin, d.v., aznabaeva, g.h., kim, l.i. (2016), approaches to the development of endowment funds in russia as an instrument of mixed fi nancing of the social sphere. international review of management and marketing, 6(1), 261-266. egorshin, a. (2000), the forecast (about education prospects in russia). the higher education in russia, 4, 17-30. egorshin, a. (2005), human resource management: the textbook for higher education institutions. 5th ed. nizhny novgorod: nubus. kobersy, i.s., karyagina, a.v., karyagina, o.v., shkurkin, d. (2015), law as a social regulator of advertisement and advertising activity in the modern russian information space. mediterranean journal of social sciences, 6(3s4), 9-16. kobersy, i.s., khasiyeva, l.g., yakhina, v.d., ignatyeva, o.v., goloshchapova, l.v., shkurkin, d.v., sadykova, l.r. (2016), approaches to implementation of motivation as the complex conditions of increase of effi ciency of social and labor relations: international experience. international review of management and marketing, 6(1), 208-217. koç, t., turan, a.h., okursoy, a. (2016), acceptance and usage of a mobile information system in higher education: an empirical study with structural equation modeling. international journal of management education, 14(3), 286-300. litvinova, v. (2006), content analysis as pedagogical means of organizational and methodical diagnostics of educational process of average professional educational institution. yelets: yelets state university named after ivan bunin. oleinikova, s.a., kravets, o.y., zolotukhina, e.b., shkurkin, d.v., kobersy, i.s., shadrina, v.v. (2016), mathematical and software of the distributed computing system work planning on the multiagent approach basis. international journal of applied engineering research, 11(4), 2872-2878. valencia, a.v., cázares, m.c.t. (2016), academic and research networks management: challenges for higher education institutions in mexico. international journal of educational technology in higher education, 13(1), 1-7. vankina, i. kucherenko, v. (2006), marketing of education university book. moscow: logos. weichbrodt, j. (2015), safety rules as instruments for organizational control, coordination and knowledge: implications for rules management. safety science, 80, 2 21-232. << /ascii85encodepages false /allowtransparency false /autopositionepsfiles true /autorotatepages /all /binding /left /calgrayprofile (dot gain 20%) /calrgbprofile (srgb iec61966-2.1) /calcmykprofile (u.s. web coated \050swop\051 v2) /srgbprofile (srgb iec61966-2.1) /cannotembedfontpolicy /warning /compatibilitylevel 1.4 /compressobjects /tags /compresspages true /convertimagestoindexed true /passthroughjpegimages true /createjdffile false /createjobticket false /defaultrenderingintent /default /detectblends true /detectcurves 0.0000 /colorconversionstrategy /leavecolorunchanged /dothumbnails false /embedallfonts true /embedopentype false /parseiccprofilesincomments true /embedjoboptions true /dscreportinglevel 0 /emitdscwarnings false /endpage -1 /imagememory 1048576 /lockdistillerparams false /maxsubsetpct 100 /optimize true /opm 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/untaggedcmykhandling /leaveuntagged /untaggedrgbhandling /leaveuntagged /usedocumentbleed false >> ] >> setdistillerparams << /hwresolution [2400 2400] /pagesize [612.000 792.000] >> setpagedevice . international review of management and marketing | vol 6 • special issue (s6) • 2016104 international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2016, 6(s6) 104-111. special issue on "management of systems of socio-economic and legal relations in modern conditions of development of education and society” institutional features of cluster development in the russian federation tatiana p. maksimova1*, konstantin v. milyaev2 1plekhanov russian university of economics, moscow, russia, 2plekhanov russian university of economics, moscow, russia. *email: tpmaksimova@mail.ru abstract the paper has presented the author’s views on the subject of conceptual approaches to research the features of reformations in the agrarian sphere of economy. it has paid attention to the fact that an objective compelling reason for an essential reformation of the agrarian sphere of national economy is to promote national food security. the authors think that one of the best ways to change business forms and patterns is to generate agro-industrial clusters in russia. the authors of the paper believe that agro-industrial clusters have the potential to become in the current context an adequate response in choosing future paths to reform the agrarian sphere of the russian federation economy considering the common inner instability within the country as well as the constantly changing foreign-economic challenges, including food sanctions. the authors consider some theoretical aspects of creating agro-industrial clusters in the system of national economy, pay their attention to historical aspects of dialectic development of the cluster theory, analyze a possibility of exploiting advantages of clusters in relation to the agrarian sphere of national economy, carry out a development of the author’s hypothesis of an official functionally structured modeling of organization of agro-industrial clusters and offer to consider agro-industrial clusters as a possible way of the reformation of business patterns in economy of the russian federation. special attention is paid to agro-business holding companies as to key elements of creating subject agro-industrial clusters. the paper emphasizes relevance of the arrangement of necessary institutional conditions to create effective agro-industrial clusters in russia. keywords: agro-industrial clusters, investment attractiveness, quality of life jel classifications: e22, c38, q13 1. introduction the most important objective is the development of the strategy for economic and social equalization of the regions. this objective is urgent not only for the russian federation. it assumes large scales in the brics countries and other developing countries. developed countries have not solved the issue concerning regional development. nowadays, development of an agro-industrial complex experiences both positive and negative changes. the embargo on import of food products among a number of the countries of europe and america, and also sharp deviation of an exchangevalue of ruble in relation to the main world currencies had serious impact on food prices that demonstrates the weakness and instability of an agro-industrial complex in food, materials and equipment. the endogenous factors which characterize unstable development of the infrastructure of agriculture and functional depreciation of the funds greatly influences the generation of agro-industrial clusters in russia. together with an adverse social and economic situation in rural territories, it makes the state to develop the cluster policy in the regions by more rapid pace. however, these methods could become fundamental in solution of the questions connected with investment into agro-industrial complex. absence of incentives to development influences the investment appeal and technological modernization of a complex necessary for expansion of reproduction in a complex. maksimova and milyaev: institutional features of cluster development in the russian federation international review of management and marketing | vol 6 • special issue (s6) • 2016 105 2. materials and methods while writing this paper as an outcome for intermediate research of forming agro-industrial clusters aspects depending on investment attraction analysis in various regions of russia, the authors chose to use the following research methods: abstractlogical, monographic, analysis and synthesis method, along with the statistic and investment analysis methods. the informational support of this research is based on the data of the federal service of state statistics, the rf ministry of agriculture together with national and foreign reference and scientific literature. the data were processed with the help of software packages such as spss, microsoft office. some single results of the research were presented at the second political and economic congress of the commonwealth of independent and baltic states (may 2015, moscow), at international and regional scientific conferences (russia: moscow, ufa; the republic of slovenia). theoretical and methodological approaches in the research of agroindustrial clusters in the economic system of russia requires, in the first place, to define more precisely the basic concept – “agroindustrial cluster.” the input in the economic turn, the common term “cluster” is usually referred to m. porter (2005). m. porter (2005) associated this concept with geographical concentration of transactors, bound by one, and the same type of economic activity as one of the mechanisms of competitive advantages for such activity. however, initial sources determine essential characteristics of this particular definition were observed in the works of j. thunen and a. marshall. long before using the term “clusters,” j. thunen researched the main principles of this economic concept. j. thunen per se is the founder of the location theory (or the theory of production localization – authors’ editing) by the example of agriculture (blaug, 1994). undoubtedly, many j. thunen’s theses on discovering the objective laws of localizing an agriculture production, which are formulated in his “isolated state” in modern perception may seem quite abstract. especially this concerns the issues on localization zones of agriculture activities around urban establishments because of the isolation from outer relations with an official economic model. it is important, however, that at present there is a relevance of the issue of production forces localization in agriculture as one of their determinant of stable development of rural regions. a. marshall focused his attention on the issues of production organization, which also indirectly concerns the essential cluster characteristics (marshall, 1984). along with this, a. marshall’s algorithm to examine the advantages of organization may be presented in the form of a logical chain: natural organization of people in a society – the process of division of labor – specialization of an educational process – usage of the advances of the technological progress – territorial specialization of production (authors’ editing). in chapter 10 of his “principles of economics,” where a. marshall explores the issues of concentration of specialized industries in separate regions, he practically describes the essential characteristics of the category “cluster,” although he is not using the very term “cluster” but “location” instead (marshall, 1984). interestingly enough, a. marshall, while studying production location issues, refers to agrarian sphere of russian economy. in particular, he wrote: “in russia the accretion of family groups up to the size of a rustic establishment generates the emergence of localized productions, along with this there are innumerous villages, each of which produces only one kind of produce, or even a part of a produce.” additionally, it is important that the main reasons for localized productions, both in the times of a. marshall and in modern conditions, are first of all “natural conditions – character of the climate and the soil, richness in minerals and wall stone in the given region or within striking distance on land or in water” (marshall, 1984). at the beginning of the 20th century based on the statistic method, b.s. yastremskiy explored clusters in russia. in particular, he determined the criteria to group different regions depending on the kind of activity: “in agricultural regions such criterion was land plottage, in cattle breeding – the amount of cattle” (lindqvist et al., 2015). the issue of clusters in agro-industrial complex in their modern interpretation has relatively recently became the subject of analysis for many academic economists of russia. for instance, in the last few years’ different aspects of agro-industrial clusters were studied in the works of a.m. ableeva, v.v. demichev and others (maksimova, 2013). adapting the accumulated knowledge on the theory of clusters and the practical experience of economic management, the writes mark out the following chief features of forming modern agroindustrial clusters: firstly, production specialization in local economic regions depending on soil and climate conditions as well as geographical features of a region. secondly, the features of production organization based on a large-scale specialized form of management. thirdly, the differences in the criteria of specialization for agriculture and cattle breeding. based on the above mentioned feature, the writers distinguish clusters resulting from a geographical and climatic formation of enterprises, suppliers and sales companies, inside of which there is a complete food production cycle, personnel training, making supplementary products. along with this, there is an emphasis on the competitive ratio in such integrated unification, which is important in the systematic analysis of investment attraction of agro-industrial clusters. 3. theoretical determinants of development of the cluster theory nobel laureate on economics e. ostrom wrote that “it is impossible to understand the basic principles which are the cornerstone of a set of different features observed in various situations without a theory” (ostrom, 2010). however, it is obvious that “when the predictions of a theory and empirical observation come into conflict, it is necessary to correct a theory …. if the theory will not be limited in time with its direction to solution of empirical riddles, theoretical work can start moving by inertia reflecting maksimova and milyaev: institutional features of cluster development in the russian federation international review of management and marketing | vol 6 • special issue (s6) • 2016106 the empirical world fewer and fewer” (ostrom, 2010). to the same end it is possible to point out a. marshall’s statement that “development of a theory has to go hand in hand with research of the facts, and the newest facts have the greatest value for consideration of the majority of modern problems” (marshall, 1984). this approach in analysis of processes of reformations of the agrarian sphere of economy of the russian federation has special value. the twenty-year period of reformations of the agrarian sphere of the russian economy testifies to the preservation of a steady character of the existing contradictions: in property relations, business results, issues of reproduction. and, the issues of reproduction in the agrarian sphere of economy over the last one and a half-two years of “sanctions” opposition between the western economies and the system of national economy became the most urgent and demand serious reconsideration both in the field of carried-out reforms and by using theoretical underpinning of further reformations. the analysis shows that the search for ways of solution of specified contradictions regarding scientifictheoretical underpinning of further reformations objectively causes attention to the issues of adaptation of the cluster theory potential for the organization of production and effective business in the agrarian sphere of economy. in fact, positive practices of the countries which get in the way of intensive innovative development testify to active use of a new model of the organization of economy by using the basic principles of the cluster theory. according to experts, by now clustering has already covered more than a half of the world’s economies that provides them the stability of economic development in general (shokhina, 2013). in russia the generation of clusters is at the initial stage of development. one of the reasons of it consists, first of all, in “washing” of meanings when using the concepts “cluster,” “location theory,” “growth pole,” “economic agglomeration.” distortion of the essence and value of use of reasonable theoretical advantages of clusters is a logical consequence of such a variety of approaches specifying the conceptual and categorical framework. nevertheless, in practice more and more attention is recently paid to agro-industrial clusters as a determinant of stable development of the agrarian sphere of national economy. the introduction of the term “cluster” into the sales volume is usually connected with m. porter who associated this concept with geographical concentration of economic entities interconnected by the same type of economic activity as one of the mechanisms of competitive advantages of such activity (porter, 2005). the definition of “clusters” formulated by porter can be considered now as the most universal though j. thunen and a. marshall see the prerequisites of the cluster theory formation. long before use of the term “clusters” the basic principles of this economic concept were investigated by j. thunen with whom the formation and development of the location theory (localization) on the example of agriculture are associated (blaug, 1994). of course, many thunen’s provisions when revealing the regularities of the agricultural production location which are formulated in “the isolated state” in the modern sense can seem quite abstract. especially, it concerns the issues concerning location zones of various types of agricultural activity round city settlements in view of isolation of a formal economic model from external relations. however, now the issue concerning the location of productive forces in agriculture as one their determinant of stable development of rural territories remains important. over the last years there is increasing scientific interest in research of the essence and advantages of clusters. for example, the issues of the cluster theory are an object of research of one nobel laureate on economics in 2008 p. krugman. in russia, speaking about the cluster theory, it is possible to mention the publications of a.g. granberg, g.b. kleyner, a.a. migranyan, t.v. mirolyubov, v.p. tretiak, t.v. tsikhan, and others. these matters should not be also considered for the agrarian sphere of national economy as absolutely new. both in the times of a. marshall and in modern conditions the various reasons lead to the production localization, but, first of all, the main ones are the natural environment – the climate and soil, the existence of mineral deposits and natural stone in this region or within reach on land or sea” (marshall, 1984). it should be also noted that in russia in 1920 b.s. yastremsky has investigated in his work “relation between the elements of pheasant economic management in 1917 and 1919” clusters using a statistical approach on the examples of management in the agrarian sphere of economy. he has allocated criteria of grouping areas depending on a kind of activity: “in agricultural areas such a criterion was the area of land plots, in animal husbandry – the cattle number” (yastremsky, 1920). thus, it can be said that the issues of agro-industrial clustering in theoretical aspect are indirectly considered in parallel with the origin and development of the cluster theory in general. if the basic principles of j. thunen (about the location of productive forces), a. marshall on production localization (use of advantages of the climate and soil), weber on the standards (or agglomerations, namely, the expediency of the production location in its concentration places), m. porter (on geographical concentration and specialization) and other researchers of the cluster theory will be integrated and adapted to modern realities of the transformation of business forms in the agrarian sphere of national economy, functionally structured modeling of agro-industrial clusters, where well developed agro-business holding companies are considered as an organizational kernel of agro-industrial clusters, will be possible (figure 2). according to this model, agro-business holding companies which are interconnected with small business forms functioning on the geographical cluster territory thanks to the system of contract relations are the center of a cluster. this system assumes use of the methodology of modern institutional theories and is widely used in practice in the developing economies. it allows two main business forms-large and small ones-being developed in parallel and without serious consequences. a bright example of solution of the problems of stable development in an agrarian sector of economy is the experience of brazil where agro-business holding companies are engaged in processing, and peasant farm enterprises (pfe)-in production providing raw materials for agro-business holding companies. much attention was paid to this practice of interaction during the gaidar economic forum in january 2015 (moscow) where scientists-agrarians and analysts discussed on the features of “super consolidation” in the form maksimova and milyaev: institutional features of cluster development in the russian federation international review of management and marketing | vol 6 • special issue (s6) • 2016 107 territories where they are engaged in the performance of the main operations function. small business forms, proceeding from the management practice, are presented on the scheme not only by pfe, but also family farms (ff), personal subsidiary farms, individual entrepreneurs (ie), and others. thus, small business forms in order to avoid their economic “pressure” and absorption on the part of agrobusiness holding companies can form cooperative ties as one of the organizational ways of the stability in the competitive fight against large business forms. that is, the cooperation is represented by the author as an additional structural element in the general system of the contractual relationship of an agribusiness holding as a local economic system. besides, the presented way will be coordinated with the general principles of mechanism of creating clusters according to which “one or several firms reaching competitiveness in the world market expand influence on the immediate environment: suppliers, consumers and competitors. in turn, the environment success has positive impact on the further growth of competitiveness of this company. as a result, “cluster” as a community of firms, closely related branches which are mutually promoting increasing competitiveness of each other ере is the points of the growth of the domestic market and a base of international expansion” (migranyan, 2002) is formed. this way of the formalized model, in the author’s opinion, allows to find out, on one hand, which business forms will be the center of a cluster and the points of its growth and which ones are urged to provide the performance of support functions. the model presented by the author allows to express the schematic conceptual feature of agro-industrial clusters in the system of national economy – expediency of the preservation of small business forms in each geographically localized cluster. it is proved by the fact that small business forms (pf and ie, pse, ff, and in some cases country farms) are not only the subjects of production, but also a basis of a specific rural way of life, cultural and historical appearance, carriers of implicit knowledge, national values. that is, small business forms are a basis of the formation of informal institutes in the system of agrarian relations which are considered by the author as one of the dominants of stable development of agrarian economy (maksimova, 2013). therefore, during associations it is important to keep both already created universal values and a parity of interests of various business forms, having secured against absorption by large industrial agrobusiness holding companies. on the other hand, large business forms, more approximate to a technological way, provide a transfer of innovations, technologies and knowledge to small business forms with elements of a patriarchal way. mainly, in modern conditions only large enterprises are capable to use and realize nbik-technologies which now are considered in the world as the major factors of increased production efficiency and competitive advantages in the world markets. the transfer and exchange of knowledge (both obvious and implicit) in a cluster are urged to become the factors of stable development and competitiveness of agro-industrial clusters and agricultural production in general. a complex of circumstances considered above causes the need to define a synergetic effect of a role of agrobusiness holding companies as the starting points of figure 1: formal and organizational structure of the first model of an agro-industrial cluster (author’s drawing) figure 2: formal and organizational structure of the second model of an agro-industrial cluster (author’s drawing) figure 3: formal and organizational structure of the third model of an agro-industrial cluster (author’s drawing) of agro-business holding companies and the prospects of their development. agro-business holding companies are a quite new phenomenon to the russian economy, but are on the upswing (maksimova, 2013). by the economic nature and functional filling in existing forms, in fact, they are integrated mini-cluster formations, considering that: • specialize on the release of certain products taking into account the territorial, geographical and climatic features; • interact with small independent business forms in the form of pfe; • indirectly or directly perform social functions on those rural maksimova and milyaev: institutional features of cluster development in the russian federation international review of management and marketing | vol 6 • special issue (s6) • 2016108 the growth in agrarian cluster formations with the use of positive practices, saved-up traditions and experience of various business forms. it should be also noted, despite the saved-up theoretical “baggage” on the development of the cluster theory, that now russia sees the contradictions de-jure and de-facto to analyze the concept of agro-industrial clusters as there are no legislatively registered basic rules of behavior both in clusters and while interaction among themselves and with state institutes. but it is obvious that by the favorable scenario of the development agro-industrial clusters have to use the social and economic capacity of rural territories of the regions. in turn, agro-business holding companies, despite discrepancy of their origin and certain informational “closeness” in modern conditions, actually are a basis for the points of the generation and growth of agro-industrial clusters. besides, it should be once again noted that the presented way of functionally structured modeling of organization of a local agro-cluster allows to use, on one hand, the obvious potential and advantages of large enterprises. on the other hand, it gives a chance for the preservation of the historical principles of multi-structurality of the agrarian sphere of national economy. 4. features of the russian practices of creating cluster structures in the russian federation the projects on the creation of territorial formations possessing production factors for the purpose of increasing efficiency of concrete branches are realized at length. the federal law on special economic zones (sez) from 22 july 2005 forms the main legislative and regulatory framework (the federal law from 22 july 2005 n 116-fz (revised on 13 july 2015) “on sez in the russian federation,” 2005). according to it, “a sez – a part of the territory of the russian federation which is determined by the government of the russian federation and where there is a special regime of the implementation of business activity, and also a customs procedure of a free customs area can be applied.” also the law formalizes the concepts “cluster” and also describes the key points necessary for understanding of the structure of the sez management. the key objectives of the sez creation are: • procurement of direct foreign capitals, advanced technologies of production of goods and services. • now work creation for the highly skilled personnel. • development of an export base. • import substitution. • access to the infrastructure. • development of the territory. according to the legislation, sez can be created on land plots which are in state or municipal ownership including given to citizens or legal entities in possession and (or) in use and also on land plots which are in ownership of citizens or legal entities. the specified land plots have to belong to a category of lands of the industry, power, transport, communication, broadcasting, television, informatics, lands for space activity, defense and safety lands or lands of another special purpose or lands of settlements. tourist and recreational sez can be also created on land plots belonging to a category of lands of especially protected territories and objects or lands of the forest fund, lands for the agricultural purpose. it is allowed to include land plots where there are buildings, constructions which are in state or municipal ownership including given to citizens or legal entities in possession and (or) in use, and also land plots where there are buildings, constructions which are in ownership of citizens or legal entities in borders of sez. however, it should be noted on the territory of sez it is impossible to place objects of housing properties. the law assumes that sez can be a basis or a component of “clusters.” legal practice determines this concept as a set of sez of one type or several types which is determined by the government of the russian federation and its control is exercised by one management company. however, in scientific practice of the last years, “cluster” is not perceived as a component of sez. in law this definition of the concept is quite unstable and not consistent with reality at least because it is extremely difficult to find two and more sez in the close proximity from each other within the russian federation. meanwhile, the territorial proximity and certain concentration of the factors of production are the specific features of a cluster. in proof of our statement, if to use definitions of “cluster” from other nla: • a research and production cluster – a contractual form of organizations’ cooperation providing and carrying out purposeful activities for the development, production and nanotech industry product promotion to domestic and foreign markets of hi-tech production (the resolution of the government of the russian federation from 23 april 2010 n 282 “on the national nano-technological network” of 2010); • a pharmaceutical cluster is a group of geographically localized interconnected innovative firms – developers of pharma drugs, production companies; suppliers of equipment, accessories, specialized services; objects of the infrastructure: research institutes, higher education institutions, science and technology parks, business incubators and other organizations supplementing each other and strengthening competitive advantages of separate companies and a cluster in general. a distinctive feature of effectively operating clusters the yield of innovative products (the decree of the government of the russian federation from 01 october 2010 n 1660-p “on the approval of the concept of the federal target program development of the pharmaceutical and medical industry of the russian federation for the period till 2020 and future prospect,” 2010); • centers of the cluster development for subjects of small and medium business are created for decision-making and coordination of the projects providing the development of innovative clusters of subjects of small and medium business and increasing competitiveness of the region of the location of maksimova and milyaev: institutional features of cluster development in the russian federation international review of management and marketing | vol 6 • special issue (s6) • 2016 109 corresponding innovative clusters and cooperative interaction of participants of a cluster among themselves. moreover, the specified documents widely use the terms “innovative territorial clusters,” “innovative hi-tech clusters,” “territorial and production clusters,” “hi-tech clusters,” “technological branch clusters,” “subject innovative clusters.” the subject ministries have issued various methodical recommendations on the cluster policy realization in the subjects of the russian federation which are directed to the development of cluster initiatives in the regions of russia. the methodical recommendations are prepared taking into account the concept of long-term social and economic development of the russian federation approved by the order of the government of the russian federation from 17 november 2008 no. 1662-p and contain the basic provisions concerning the cluster policy realization in the regions of russia (the decree of the government of the russian federation from17 november 2008 n 1662-p. “on the concept of long-term social and economic development of the russian federation for the period till 2020”, 2008; the decree of the government of the russian federation from 17 november 2008 n 1663-p. on the statement of key activities of the government of the russian federation for the period till 2012 and a list of the projects on their realization, 2008).. according to the mentioned document, territorial clusters present a set of enterprises, suppliers of equipment, accessories, specialized producer and maintenance services, research and educational organizations connected by relations of the territorial proximity and functional dependence in the sphere of production and realization of goods and services. thus, these clusters can be located in the territory of one or several subjects of the russian federation. here there is a clear legal collision. the federal law is of top priority in law-enforcement practice. however, its last edition has no changes which were reflected in the latest decrees and orders. it visually describes one of the main problems of the cluster policy in our country – the lack of a unified legislative base where the whole arch of nla will not clash with each other and represent the unified system which investors, businessmen, and power in the regions and municipalities wishing to create in the territories both sez and clusters could be guided by. then, the analysis of practices of management over sez should be conducted. the main function is carried out here by the management company determined by the law as “the public jointstock company which implements e agreements on the creation of sez and which hundred percent of shares belongs to the russian federation, or the economic society which is created with participation of such the open joint stock company for mentioned purposes, or another economic society which signed the agreement on management over a sez with the federal executive authority authorized by the government of the russian federation.” the management conducts the following functions (the federal law from 22 july 2005 n 116-fz (revised on 13 july 2015) “on sez in the russian federation,” 2005): 1. promotion of the creation of objects of the infrastructure of a sez and other objects intended to provide operations of a sez according to the agreement on the creation of a sez; 2. support of operations of objects of the infrastructure of a sez and other objects intended for support of operations of a sez; 3. attraction of residents and investors to sez for the implementation of activities for the reation of objects of the infrastructure of a sez; 4. a development plan for a sez and its validation. this example presents the main line of the whole institutional development of such formations as clusters, sez, and so on – strict statutory control and performance of the general state economic policy in general. this model has both positive and negative moments, but, according to experts’ views, the most critical is that fact here that these territorial economic formations are spearheaded by the state, their realization is connected with direct inner management. this feature mostly contradicts cluster theories and theories of the production location (the decree of the mit of the russian federation from 23 october 2009 n 965 “on the adoption of the strategy of the pharmaceutical industry development of the russian federation for the period till 2020”, 2009; guseinov, 2014). of course, there are also other forms of the organization. if to reject all national features and more widely generalize country models, we will receive three institutional models. 5. institutional models of the development of agro-industrial clusters in the russian federation now, it is possible to point out three models of the cluster development in the territory of the russian federation, proceeding from a number of factors of the development of a branch in the region and legislation. the first model presents clusters as a part of the state expressed in the form of, for example, state corporations and/or public jointstock companies (such as sez) with complete statutory control (figure 1). according to the second model, clusters can be generated on the basis of agro-business holding companies, various corporations possessing resources for production and sales of goods. in this model the center of a cluster – a large enterprise – in our case, agribusiness holding company which concentrates much smaller organizations around. according to this model, agro-business holding companies which are interconnected with small business forms functioning on the geographical territory of a cluster thanks to the system of contractual ties are the center of a cluster. this system assumes the use of methodology of modern institutional theories and is widely used in practice in the developing economies. the third model is the classical concept based on theories of competitive advantages of porter, non-profit organizations, maksimova and milyaev: institutional features of cluster development in the russian federation international review of management and marketing | vol 6 • special issue (s6) • 2016110 unions, associations, non-profit partnerships created in legal form (figure 3). the general leveling strategy for the development of a branch, agriculture as well, in the country with such large-scale regional differentiation and “failures” in certain spheres of social and economic life, causes great mistrust and a set of questions which answers do not increase optimism of experts and professionals of branches of economy of the russian federation. the role of the state policy concerning not only regional differentiation stabilization consists in the setup of working mechanism supporting positive moments of the development and constraining negative ones. the creation of the unified arch of concepts and laws will allow to create more clear and effective regional policy, will help to create “the unified rules of game,” the unified institute of regional economic systems. 6. forecasting activity and trends from the point of view of the arrangement of emphasizes for further studying of the problem, it is possible to make an assumption demanding analysis and carrying out researches being that there are three scenarios of forecasting activity of the development for these three models of the cluster development in the country including agro-production. we can make an assumption that the second model of the cluster development with a center in one large company corresponds to forecasting of the short-term efficiency. in the current economic situation, the performance to this model will certainly allow to increase the volume of food staples and by-products output in the immediate future by the concentration and growth of agro-business holding companies due to oppression of smaller organizations, however, there will the growth of monopolistic competition occur that is extremely dangerous in the field of food as it will actually allow monopolies to control prices and an access to food staples for the population. the scenario of the medium-term efficiency is guided by the first model which is at the moment the most priority for the current country leaders. the nationalization of commercial enterprises, encouragement of agro-business holding companies, small and medium organizations whose cooperation will be expressed, for example, in the form of non-profit partnerships will demand strict control and creation of additional bodies which are responsible for these cluster partnerships. the made plans of production as an integral part of government agencies will allow to increase the food stuffs production a little bit longer than in the first case and also to open a new source of tax revenues and direct income from the realization by non-profit partnerships of agricultural industry products to the state. however, the russian economy is mostly engaged in the world economic system, and due crisis will reveal the weakness of the model of state clusters and the planned system of food stuffs output. the third estimated forecasting of the long efficiency is based on a classical model of the cluster economy providing the large-scale development of small and medium business in the regions, of course, when ensuring necessary state support. the development of regional clusters with the inclusion of the pse, small farms, enterprises, plants, organizations for transportation, storage and pack of products, the inclusion of a regional retail and the system of food markets was already several times approved in the countries with the developed and developing economy. however, in each certain case, and in case with our country, the issue on an individual approach to the implementation of a concrete model of the development in a certain country and even in a certain region of the country is of interest to further researches. an emphasis on so-called “real economy” especially in the russian conditions is extremely important in the system of the stable economy development. 7. conclusion the results of the present research demonstrate that both in theory and in action the issues on agro-industrial clusters formation are up-to-date and require further consideration and development. based on the analysis investment attraction and potential possibilities of russian regions, it can be claimed that, firstly, in a range of russian regions there are cluster initiatives in the agroindustrial complex necessary to form agro-industrial clusters. high indices of infrastructure, production, investment attraction as well as climatic conditions compose a basis for stable development. secondly, such regions should be given prioritized consideration, especially when government institutions allocate financial resources for agricultural development of the russian federation economy. the suggested mechanism of allocation will help in creating agro-industrial clusters, whose stable development will become a growing point for a common economic development of separate regions. the analysis of the modeling results has demonstrated that on the territory of the russian federation at present there is a process of formation of agro-industrial clusters of various specializations in 27 regions. the creation of regional agro-industrial clusters will allow on the whole to increase investment attraction both of branches and regions. moreover, the implementation the existing potential possibilities of now forming agro-industrial clusters into action will permit to provide national food security in the russian federation economy. in many respects agro-industrial clusters can determine the development of agrarian relations in russia. they assume more effective method of adaptation to market conditions and mostly correspond to an institutional basis of enterprises that is especially important for agriculture of russia. the base created by political economists during the 19th and 20th centuries, has found its application in many countries with various economic systems. methodologies of system analysis covering sociological practices, economy, geography and now biology and chemistry, which are key ones for agriculture, have defined importance of the political economic theory in the development of cluster initiatives. maksimova and milyaev: institutional features of cluster development in the russian federation international review of management and marketing | vol 6 • special issue (s6) • 2016 111 today, in many respects the efficiency of territorial clusters is determined by interaction of organizations and enterprises representing business, science and power. interaction of these groups of participants in economic literature received is called the mechanism of “a threefold spiral” which existence within a cluster is considered as obligatory for creating full cluster formation. projects of the cluster development can be offered by one of these parties. the initiatives “from below,” namely, by forming separate projects and programs initiated by local business or scientific community are called cluster ones. a significant factor constraining innovative activity in agriculture is the fact that use of innovations has a seasonal character and demands the skilled personnel. besides, the sales market of products and making a profit in most cases have a seasonal character as well. these features can be an obstacle for selffinancing of agricultural enterprises’ innovative activity. especially it concerns enterprises which invest its own means to the expensive projects and the newest technologies acquired on import. competition between a set of organizations in an agro-industrial cluster can be reached only by means of a wide range of measures which includes the modernization of productions and the application of innovative technologies in an agrarian and industrial complex, the concentration of fixed assets, and also supply with skilled workers. without these conditions clustering cannot be reached. for this reason it is important to develop a methodology that will allow to estimate the potential of creating agro-industrial clusters, and also to formulate the provisions of state support. 8. acknowledgment the paper was prepared on a grant of the russian humanitarian science foundation for scientific project n15-02-00560 “model of forming agro-industrial clusters in the economy of the russian federation: best variants and institutional conditions.” references blaug, m. (1994), economic thought in retrospective view. 4th ed. moscow: business. p720. guseinov, a. (2014), key directions of the development and approaches in the regional economic theory in developed western countries. fundamental research studies, 8-1, 124-132. lindqvist, g., ketels, c., solvell, o. (2015), the cluster initiative greenbook 2.0. stockholm: ivory tower publishers. maksimova, t. (2013), business forms in an agrarian sector of national economy: the contradictions de-jure and de-facto. questions of economics and law, 66, 129-134. maksimova, t. (2013), questions of the methodology, theory and practice of institutional transformation of business forms in an agrarian sector of national economy. news of osau, 2(40), 192-195. marshall, a. (1984), principles of political economy. 3rd ed. moscow: progress. p416. migranyan, a. (2002), theoretical aspects of creating competitive clusters in the countries with transitional economy. krsu bulletin, 2(3), 30-34. ostrom, e. (2010), carrying out control over the general: evolution of institutes of collective activities. moscow: irisen-thought. p447. porter, m. (2005), competition. moscow: williams. p608. shokhina, e. (2013), clusters wisely, but not in fashion. expert online. available from: http://www.klasteryi-po-umu-a-ne-po-mode. [last retrieved on 2016 apr 07]. the decree of the government of the russian federation from 17 november 2008 n 1662-p. “on the concept of long-term social and economic development of the russian federation for the period till 2020”. (2008), srs consultantplus. available from: http://www. consultant.ru. [last retrieved on 2016 apr 08]. the decree of the government of the russian federation from 17 november 2008 n 1663-p. on the statement of key activities of the government of the russian federation for the period till 2012 and a list of the projects on their realization. (2008), srs consultantplus. available from: http://www.consultant.ru. [last retrieved on 2016 apr 10]. the decree of the government of the russian federation from 01 october 2010 n 1660-p. on the approval of the concept of the federal target program “development of the pharmaceutical and medical industry of the russian federation for the period till 2020 and future prospect. (2010), srs consultantplus. available from: http://www. consultant.ru. [last retrieved on 2016 apr 10]. the decree of the ministry of economic development of the russian federation from 16 february 2010 n 59. on measures for the realization of activities for state support of small and medium business in 2010. (2010), srs consultantplus. available from: http:// www.consultant.ru. [last retrieved on 2016 apr 10]. the decree of the mit of the russian federation from 23 october 2009 n 965 “on the adoption of the strategy of the pharmaceutical industry development of the russian federation for the period till 2020”. (2009), srs consultantplus. available from: http://www.consultant. ru. [last retrieved on 2016 apr 10]. the federal law from 22 july 2005, n 116-fz (revised on 13 july 2015). on special economic zones in the russian federation. (2005), sps consultantplus. available from: http://www.consultant.ru. [last retrieved on 2016 apr 06]. the resolution of the government of the russian federation from 23 april 2010 n 282. on the national nanotechnological network. (2010), sps consultantplus. available from: http://www.consultant. ru. [last retrieved on 2016 apr 07]. yastremsky, b. (1920), relation between the elements of peasant economic management in 1917 and 1919. vestnik of statistics, 9-12, 8-52. . international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2017, 7(1), 363-372. international review of management and marketing | vol 7 • issue 1 • 2017 363 the effect of human resource management practices on employees’ work engagement and the mediating and moderating role of positive psychological capital meryem aybas1*, ahmet cevat acar2 1department of management, faculty of economics and administrative sciences, kafkas university, kars, turkey, 2turkish academy of sciences, ankara, turkey. *email: meryemaybas@gmail.com abstract this study proposes and investigates a model of psychological capital as a mediator and moderator in human resource (hr) practices-employee work engagement relationship. although there have been a lot of researches on the relationship between hr practices and individual and organizational outcomes, how occur this relationship is still unclear. in order to advance our knowledge about this relationship, there is need to investigate possible mediating and moderating variables that effective on it. to test developed model, we collected data from 590 white-collor employees who are working in private companies from different sectors in turkey. as a result of this study the effects of motivation and skill enhancing hr practices on work engagement are significantly partial mediated by psychological capital but not moderated. on the other hand the effects of opportunity enhancing hr practices and working conditions on work engagement are significantly partial mediated and moderated by psychological capital at the same time. keywords: human resource management practices, work engagement, positive psychological capital jel classifications: m12, m50, m54 1. introduction in competitive business environment, organizations have faced with human capital challenges and uncertain economic conditions. this article highlights the fact that the current competitive environment has made employee engagement a priority issue for organization. it has become a more important concept to consider when dealing with changes at work and sustainable performance (schaufeli and salanova, 2007). the majority of studies support the idea that need for engagement. previous studies have demonstrated the existence of positive and significant relations between employees’ work engagement and their performance (salanova et al., 2005; macey and schneider, 2008; christian et al., 2011, gruman and saks, 2011). work engagement also positively related to service climate, customer loyalty (salanova et al., 2005), commitment (hallberg and schaufeli, 2006) and, negatively related to turnover intentions (schaufeli and bakker, 2004). although there is a great deal of interest in engagement, there is no universal definition of it. engagement has been conceptualized in different ways by academic researchers and consultancy companies. in academic literature, engagement was first described by kahn (1990) as “the harnessing of organization members selves to their work roles: in engagement, people employ and express themselves physically, cognitively, emotionally and mentally during role performance” (p. 694). an alternative definition of engagement is describes work engagement as a “positive, fulfilling, work related state of mind that is characterized by vigor, dedication and absorption” (schaufeli et al., 2002). according to schaufeli (2013), although work engagement and employee engagement are used interchangeably, work engagement refers to the relationship of employee with his/her work, whereas employee engagement may include the relationship with the organization. we prefer to use “work engagement” as an engagement construct in this study because of its specific work-related definition. job demand-resource (jdr) model presents a conceptual framework of engagement (demerouti and bakker, 2007). in jdr model, engagement is associated with job demands and job resources. the demands refer to “those physical, psychological, social, or aybas and acar: the effect of human resource management practices on employees’ work engagement and the mediating and moderating role of positive psychological capital international review of management and marketing | vol 7 • issue 1 • 2017364 organizational aspects of the job that require sustained physical and/or mental effort or skills and therefore associated with certain physiological and/or psychological costs” (p.312). job demands are associated with increased burnout. on the other hand, job resources may reduce job demands and are associated with increased engagement (crawford et al., 2010). in jdr model, work engagement has two main predictors, job resources and personal resources. although there is a great deal of interest in work engagement, relatively little is known about how work engagement can be affected by hr practices. another gap is in this issue is that, how personal differences have influence on the relations between hr practices and work engagement. the current study is concentrated on hr practices as job resources and positive psychological capital as a personal resource. we try to fill these gaps in the current research by examining whether hr practices and psychological capital influence to work engagement, and whether psychological capital mediates and moderates the hr practices-work engagement relationship presented in figure 1. in line with jdr model, in the current study, positive psychological capital is adopted as a mediator and moderator in human resource management (hrm) practices and engagement relationships. to our knowledge, no other research has examined the mediating and moderating role of positive psychological capital on this relationship. in the following part, the model of the study and hypotheses are discussed. after this, the methodology of the study and the results are presented. and the final part points out the limitations and the implications of the study and further research directions. 2. literature review 2.1. hrm practices and employee work engagement work engagement is found to be positively related with job resources (salanova et al., 2005). resources are defined as anything perceived by the individual to help attain his or her goals by halbesleben et al. (2014). they state that resources serve as a valuable connection point for conservation of resource (cor) theory within the broader array of motivation theories. job resources refer to physical, psychological, social or organizational aspects of the job. it can be classified at organizational level (e.g. salary, career opportunities), interpersonal level (e.g. supervisor and coworker support), the specific job position (e.g. role clarity, participation in decision making), and at the level of task (e.g. skill variety, task identity, task significance, autonomy and performance feedback) (demerouti and bakker, 2011). according to hakanen et al. (2006), job resources may stimulate personal growth, learning and development and be functional in achieving work goals. hr practices may affect work engagement positively through enhancing the necessary skill, motivation, opportunity and proper working condition. in this situation, employees will be more likely to engage in working activities due to a personal enjoyment rather than because of feeling coerced into them. according to may et al. (2004) study, engagement level of employees was enhanced in circumstances where increased psychological meaningfulness, psychological safety and their psychological availability. psychological availability is defined as an individual’s belief that the physical, emotional or cognitive resources to engage the self at work (kahn, 1990). additionally according to salanova et al. (2005), organizational resources are “facilitators” in workplace, because they seem to have potential motivating functions to increase the level of work engagement. demerouti and bakker (2011) claim since because resourceful work environments facilitate employees work engagement, organizations should offer their employees sufficient job resources, including feedback, social support, and skill variety. in consistent with skill, motivation and opportunity enhancing hr practices and proper working conditions can be considered as facilitator job resources which could be affected on work engagement level. previous research has demonstrated that employees who perceive effective management, such as organizational and supervisory support and justice are more likely to be engaged in their work (ang et al., 2013; may et al., 2004; saks, 2006). in “amo” model of individual performance (huselid, 1995); hr systems influence the abilities (a), motivations (m), and opportunities (o), to perform of individual employees. every hr system works its impacts on the skill and knowledge of individual employees, their willingness to exert effort, and their opportunities to express their talent in their work (boxall and macky, 2009). in line with social exchange theory, alfes et al. (2013) state that hrm practices is one way for an employer to signal their willingness to invest in and support their employees, therefore perceived hrm practices may be linked with employee engagement. according to social exchange theory, employees who perceive that their organization has consistently and fairly implemented hr practices related to skill, motivation, opportunity enhancing hr practices and given proper working conditions should have greater work engagement. on the other hand, inconsistent and poor implementation of hr practices may cause higher levels of disengagement (ang et al., 2013). ang et al. (2013) found that the mediating effect of employee engagement on the relations between high performance work systems (hpws) and affective commitment. also, alfes et al. (2013) have indicated employee engagement as a mechanism which accounts for the relations between hrm practices and individual behavior. according to this study, employees who have a positive perception of the hrm practices in their organization are more likely to be engaged with their jobs (alfes et al., 2013). in latest study, conway et al. (2015) found that employee voice mechanisms may act as a resource in enhancing engagement and reducing deleterious effects of emotional exhaustion. therefore, according to social exchange theory, cor theory, job resource-demand model and previous researches, hypotheses can be formulated as follows: figure 1: the research model aybas and acar: the effect of human resource management practices on employees’ work engagement and the mediating and moderating role of positive psychological capital international review of management and marketing | vol 7 • issue 1 • 2017 365 hypothesis 1a: the skill-enhancing hrm practices are positively related to the employee work engagement. hypothesis 1b: the motivation-enhancing hrm practices are positively related to the employee work engagement. hypothesis 1c: the empowering-enhancing hrm practices are positively related to the employee work engagement. hypothesis 1d: the working condition is positively related to the employee work engagement. 2.2. the mediating and moderating role of psychological capital in line with positive psychology approach, positive psychological capital focuses on strengths within individuals and can be seen as a personal resource with the ability to enhance an individual’s success within a challenging and uncertain working environment (avey et al., 2010). positive psychological capital is defined as “an individual’s positive psychological state of development that is characterized by: (1) having confidence (self-efficacy) to take on and put in the necessary effort to succeed at challenging tasks; (2) making a positive attribution (optimism) about succeeding now and in the future; (3) persevering toward goals and, when necessary, redirecting paths to goals (hope) in order to succeed; and (4) when beset by problems and adversity, sustaining and bouncing back and even beyond (resilience) to attain success” (luthans et al., 2007. p. 3). previous research indicated that psychological capital has a positive association with commitment (luthans et al., 2008), performance (walumbwa et al., 2010), job satisfaction (luthans et al., 2007; ozer et al., 2013), well-being (avey et al., 2010). meta analytic reviews support positive relations between positive psychological capital and employees work attitudes and behaviors (avey et al., 2011). engaged employees have several personal resources that can be differentiate them from less engaged employees. in jdr model, another main predictor of work engagement is personal resources such as self-efficacy, optimism and resiliency. in combine with we may accept positive psychological capital as a personal resource. in previous research positive psychological capital also was found to be related to work engagement (avey et al., 2008; xanthopoulou et al., 2009; teo et al., 2014). xanthopoulou et al. (2007), proposed that personal resources may function either as moderators or as mediators in the relationship between environmental factors and (organizational) outcomes, or they may even determine the way people comprehend the environment, formulate it, and react to it. gupta (2014) investigated psychological capital as a mediator and moderator in relationship between hpws and employee creativity theoretically. also brouze (2014) empirically investigated psychological capital as a moderator and mediator in jdr framework. these studies argued that psychological capital as a moderator has buffering effect in stressful working conditions and as a mediator has a motivational potential. some studies have investigated the personal resources as mediators (xanthopoulou et al., 2007). these studies mainly focus on the fact that existence of environmental resources (job resources) may activate personal resources and in turn may result in positive psychological and organizational outcomes. according to sweetman and luthans (2010), psychological capital is positively related to job resources. furthermore, each psychological capital dimensions leads to energetic and dedicated, in other words engaged employees. psychological capital (as a personal resource) may be seen to function as a mediator to extent that it accounts for the relation between the predictors, hr practices (as job resources) and criterion, work engagement (baron and kenny, 1986). taken together theoretical framework job resources and personal resources facilitate engagement at work. in addition, luthans et al. (2008) study indicated that supportive organizational climate have a facilitator role in building employees psychological capital. when considered jdr model, as hr practices can be viewed as job resources, and psychological capital can be viewed as a personal resource, it is hypothesized that psychological capital will have the ability to affect the level of engagement affected by hr practices, thereby mediating the relations between hr practices and work engagement. individual’s positive psychological state is helpful to gain job resources and personal resources serves as the antecedents in predicting work engagement. according to xanthopoulou et al. (2007) employees who have sufficient job resources will feel efficacious, important to organization, optimistic about their future, and consequently stay engaged in their work. also, in reciprocal relationship, psychological capital may facilitate to take advantage of job resources (peng et al., 2013). psychological capital may have positively relation with hr practices and in turn may facilitate to accumulate hr practices. xanthopoulou et al. (2007) state personal resources may moderate the relationship between job resources and work engagement. while investigating the role of personal resources (such psychological capital) as moderators, studies have mainly examined the relationship between undesirable work characteristics and negative outcomes. in line with cor theory (hobfoll, 2002), these studies argued that employees with high levels of personal resources have greater mastery that helps them to deal more effectively with demanding conditions, and in turn prevent them from them negative outcomes. referring to empirical studies for psychological capital as a moderator, cheung et al. (2011) found that under high emotional stress, employees who have high in psychological capital reported lower level of cynicism and high level of job satisfaction than their counterparts who have low level psychological capital. in addition, grau et al. (2001) investigated the moderating role of professional self-efficacy on the relationship between stress and strain. they found that when role conflict was high, individuals with low professional self-efficacy displayed greater levels of cynicism compare to those individuals with high professional self-efficacy. similarly, roberts et al. (2011) tested the moderating effect of psychological capital on the relationship between job stress and incivility. they found that psychological capital buffers the effect of job stress on incivility. another study was made by lehner et al. (2014) on the moderating role of psychological capital which revealed that the positive relationship of relational contracts with performance become when psychological capital is high and the negative relationship of contract breach with creativity was also become weaker when psychological capital is high. also aybas and acar: the effect of human resource management practices on employees’ work engagement and the mediating and moderating role of positive psychological capital international review of management and marketing | vol 7 • issue 1 • 2017366 erkutlu (2014) found that the moderating effect of psychological capital with regard to the relationship between narcissism and psychological wellbeing. additionally, according to ozer et al. (2013), employees who reflect positive states in organizations can affect positive organizational outputs better than others. in their research, they found the moderating effect of employee perception about organizational climate and supportiveness on the relation between psychological capital and job satisfaction. a moderator is a variable that affects the direction and or strength of relation between a predictor variable (hr practices) and a criterion variable (work engagement) (baron and kenny, 1986). in this study, an individual’s level of psychological capital is hypothesized to affect the strength of the relation between hr practices and work engagement. according to the motivational process, the availability of job resources leads to work engagement. job resources, due to their motivational potential, foster employees to meet their goals. in turn, employees may become more committed to their job, because they derive fulfillment from it (xanthopoulou et al., 2007). employees whit high levels of psychological capital have psychological resources that can produce positive behaviors. when people have more psychological capital, they have more psychological resources for preserving and succeeding when facing setbacks and challenges (roberts et al., 2011; teo et al., 2014). additionally, demerouti and bakker (2011) proposed that employees may be particularly engaged in their work and flourish if job demands and job resources are high, if their personal resources, such as resilience and hope, are high as well. according to xanthopoulou et al. (2007), employees who have high level of psychological capital will focus more on job resources than on job demands, and as a result they will experience lower level of exhaustion and higher level of work engagement. in line with literature, we expect that in particular individuals with higher levels of psychological capital will demonstrate higher levels of engagement than those with low level of psychological capital. the relations between hr practices and engagement will be stronger for those with high level of psychological capital than low level of psychological capital and we can formulate the following hypotheses. hypothesis 2a: the relation between skill-enhancing hrm practices and work engagement is partial mediated and moderated by the positive psychological capital. hypothesis 2b: the relation between motivation-enhancing hrm practices and work engagement is partial mediated and moderated by the positive psychological capital. hypothesis 2c: the relation between empowering-enhancing hrm practices and work engagement is partial mediated and moderated by the positive psychological capital. hypothesis 2d: the relation between working condition and work engagement is partial mediated and moderated by the positive psychological capital. 3. methods 3.1. participants the present empirical study was carried out among a sample of full-time white-collor employees who are working in private companies from different sectors in turkey. a convenience sampling method was used and the voluntary participants completed the questionnaires anonymously. a total number of 590 questionnaires were returned. because of the missing information and irrelevant response, in total 555 usable questionnaires were obtained. 46% of the respondents were female and 54% were male. 20% of the respondents were aged between 18 and 25, 42.9% between 26 and 32, 24.9% between 33 and 39, 10.3% between 40 and 46, and the rest were older than 46. 58.6% of respondents were single, the rest were married. regarding education, 47.7% of respondents had undergraduate degree, 37.7% had graduate degree, and the rest had high school. 3.2. measures 3.2.1. hrm practices hr practices scales were occurred to base on ability, motivation and opportunity approach (amo) (gardner et al., 2011) and hpws (lepak et al., 2006; takeuchi et al., 2007; bae and lawler, 2000; wu and chaturvedi, 2009). all items adapted from established scales on hr systems and practices presented table 1. hr practices were investigated as four dimensions: skill enhancing hr practices (selective staffing, extensive training programs), motivation enhancing hr practices (internal career opportunities, employment security, incentive and fair compensation and result oriented appraisals), opportunity enhancing hr practices (clear job descriptions, participation, information sharing and empowerment) and proper working conditions. there were 48 items. in this study, hr practices were examined as employee-rated and assessed employee perceptions of hr practices (wu and chaturvedi, 2009). the response scale ranged from 1 (“strongly disagree”) to 5 (“strongly agree”). according to previous studies on hpws, using an additive measure of hpws was suggested table 1: hr practice scales s. no. hr practices source 1 selective staffing (sun et al., 2007; singh, 2004; yu and egri, 2005), 4 item 2 internal career opportunities (sun et al., 2007; delery and doty, 1996; singh, 2004), 6 item 3 extensive training programs (edgar and geare, 2005; vanhala and ahteela, 2011; delery and doty, 1996), 6 item 4 results oriented appraisals (delery and doty, 1996; singh, 2004; yu and egri, 2005), 7 item 5 incentive and fair compensation (singh, 2004; sun et al., 2007), 4 item 6 employment security (tsai, 2006), 2 item 7 clear job descriptions (delery and doty, 1996; singh, 2004; vanhala and ahteela, 2011), 4 item 8 participation (delery and doty, 1996), 4 item 9 information sharing (paré and tremblay, 2007), 5 item 10 empowerment (tsai, 2006), 3 item 11 working conditions (edgar and geare, 2005), 3 item hr: human resource aybas and acar: the effect of human resource management practices on employees’ work engagement and the mediating and moderating role of positive psychological capital international review of management and marketing | vol 7 • issue 1 • 2017 367 (takeuchi et al., 2007; bae and lawler, 2000; wu and chaturvedi, 2009). in consistent with literature, because four dimensions of hr practices were highly correlated, these practices were combined into one aggregate index reflecting all hr practices and, cronbach’s alpha coefficient of aggregate measure was α = 0.96. additionally, skill enhancing hr practices cronbach’s alpha coefficient was 0.91, motivation enhancing hr practices was 0.93, opportunity enhancing hr practices was 0.89 and working condition was 0.73. all hr practice scales demonstrated good internal consistency reliabilities because they exceed the recommended level 0.70 for organizational research studies (nunnally and bernstein, 1994). 3.2.2. work engagement work engagement was measured using the shortened nine item version of the utrecht work engagement scale (uwes-9) (schaufeli et al., 2006). the shortened version of the scale as a single construct was showed good fit in several empirical studies (balducci et al., 2010; nerstad et al., 2010; de bruin and henn, 2013). this scale in line with uwes-17, consists of three underlying dimensions, which are measured with three items each vigor, dedication and absorption. the response scale ranged from 1 (“never”) to 5 (“always”). internal consistency cronbach’s alpha coefficient was α = 0.90. it demonstrated good internal consistency reliabilities because exceed the 0.70 recommendations for organizational research studies (nunnally and bernstein, 1994). 3.2.3. positive psychological capital psychological capital was measured with the 24 item psychological capital questionnaire (pcq) developed by luthans et al. (2007). each dimension of psychological capital was represented by 6 items: self-efficacy, hope, optimism, resilience. higher order factor representation of psychological capital was used for hypothesis testing. participants indicated their agreement with each item on a 5-point likert scale (1 = strongly disagree, 5 = strongly agree). in current study the cronbach’s alpha coefficients was α = 0.91 for complete measure of 24 items. it demonstrated good internal consistency reliabilities because exceed the 0.70 recommendations for organizational research studies (nunnally and bernstein, 1994). 3.3. analysis before hypothesis testing, a confirmatory factor analytic model was performed using amos 18 to assess the structure of variables and their convergent and discriminant validity relative to each other. model testing followed the two step approach of first specifying and assessing the measurement model, then specifying and assessing the structural model (anderson and gerbing, 1988). models were estimated using single indicators for each construct except working condition (bagozzi and edward, 1998). the latent skill enhancing hr practices were indicated by selective staffing and extensive training programs. the latent motivation enhancing hr practices were indicated by internal career opportunities, employment security, incentive and fair compensation and result oriented appraisals. the latent opportunity enhancing hr practices were indicated by clear job descriptions, participation, information sharing and empowerment. the working condition had three-item indicators. the latent work engagement was indicated by vigor, dedication and absorption. the latent psychological capital was indicated by self-efficacy, optimism, hope and resilience. to assess the measurement model of the study’s variables of interest hr practices, psychological capital and work engagement confirmatory factor analysis (cfa) was performed. a measurement model exhibited good psychometric properties. all observed indicators were specified to load on their respective latent constructs and no observed indicator was allowed to crossload. model fit statistics were selected to capture aspects of absolute, incremental, and parsimonious fit. model modifications are often needed in structural equation modeling (sem) in order to the fit of the model. in current cfa model, on the basis of modification indices, by allowing one pair of errors to correlate from opportunity enhancing hr practices, it yielded acceptable fit statistics. the chi-square test was significant (χ2 = 593.138, df = 162, p < 0.01); however, this result was expected, as our sample consisted of 555 cases and the chi-square test is sensitive to sample sizes over 200 (marsh et al., 1988; iacobucci, 2010). all other indices examined demonstrated acceptable fit to the data (cmin/df = 3.661, root mean square error of approximation [rmsea] = 0.06, comparative fit index [cfi] = 0.93, tli = 0.92, standardized root mean square residual (srmr) = 0.06). to check for the potential influence of common method variance, harman’s singlefactor test was performed through cfa. this test is based on the assumption that common method variance is a serious problem when a single factor will account for the majority of the covariance among the measures (podsakoff et al., 2003). this test involves a cfa in which all variables were allowed to load onto one general factor. according to the result for single-factor model, the model exhibited very poor fit (χ2 = 1940.823 df = 104, goodness of fit index = 0.62, cfi = 0.67, rmsea = 0.179, srmr = 0.13), which showed a good indicator that a single factor did not account for the majority of variance in research data. in the analysis about the relations between hr practices and employee’s work engagement we focused for positive psychological capital as a mediator and moderator at the same time. the analyses were carried out with the spss 17 and amos 18. four path analyses were used to simultaneously test to hypotheses. preacher et al. (2007) express that a variable m (in current study psychological capital) can be investigated to determine whether it serves as a mediator, a moderator or both. according to model 1, the effect of m (psychological capital) on y (work engagement) is moderated by the independent variable x (hr practices), but this model can also be understood as one in which the path linking x (hr practices) to y (work engagement) (c’ or direct effect [de] of x [hr practices] on y [work engagement]) is moderated by m (psychological capital). instead of using separate mediation and moderation analyses, such investigations could theoretically be conducted on the basis of a single path analysis (preacher et al., 2007). our statistical model was in presented figure 2. any missing data was handled using em method. to create interaction term and reduce the likelihood of multicollinearity between predictor variables, which could influence the results, aybas and acar: the effect of human resource management practices on employees’ work engagement and the mediating and moderating role of positive psychological capital international review of management and marketing | vol 7 • issue 1 • 2017368 all main predictors (hr practices, psychological capital) were standardized before entering the path analyses (cohen et al., 2003). the generalized least square method of estimation was used because inclusion of a product term may violate multivariate normality assumption (cortina et al., 2001; olsson et al., 2000). 4. results table 2 presents correlations between variables, means, standard deviations, scale reliabilities, construct reliabilities and average variance extracted (ave) values. all variables were significantly correlated with each other. hr practices were positively correlated with work engagement (r = 0.50, p < 0.001) and psychological capital (r = 0.476, p < 0.001). in addition, psychological capital was positively correlated with work engagement (r = 0.64, p < 0.001). all measures in the analysis demonstrated good construct reliabilities, with estimates that ranged from 0.847 to 0.956, and thus exceed the 0.80 minimum recommendations for organizational research studies such as ours (nunnally and bernstein, 1978; carmines and zellar, 1979). assessment of convergent validity showed that all items loaded significantly on their respective factors with the ave for each latent construct exceeding 0.50 (fornell and larcker, 1981). additionally, the ave for each latent construct must exceed the respective squared correlation between factors to provide stringent evidence of discriminant validity (fornell and larcker, 1981). results from the cfa met fornell and larcker’s (1981) guidelines and are presented in table 2. 4.1. de results of the path analyses are presented in table 3, consistent with h1 (a, b, c, d), each of hr practices (skill enhancing, motivation enhancing, and opportunity enhancing, working conditions) was positively related to work engagement in all models tested. of all hr practices (in other words job resources) tested, working conditions showed relatively to be the weakest predictor of work engagement (β = 0.18, p < 0.001). on the contrary, opportunity enhancing hr practices were the strongest predictor of work engagement (β = 0.287, p < 0.001, table 3). opportunity enhancing hr practices model explains 47% and working condition model explains 40% variance through psychological capital in work engagement. furthermore, psychological capital was positively related to work engagement and of all models tested, the relatively strongest effect was relatively in working conditions model. additionally skill enhancing and opportunity enhancing hr practices models explained 17% variance of psychological capital, whereas working condition explained only 9% variance of psychological capital. 4.2. the mediating and moderating effects of psychological capital the model predicted that hr practices would have direct and indirect effects on work engagement with employee’s psychological capital mediating the relationship between hr practices and work engagement. in regression equation without the mediator, the estimates of the causal paths from all hr practices to work engagement were significant. in addition, in all cases, chi-square difference tests showed that the fit of the models with partial mediation, was significantly better than the models with full mediation. results of the moderated and mediated sem presented in table 3, provided support about partial mediation in all models. whereas moderation was only significant in opportunity enhancing hr practices and working conditions models. as can be seen in table 3, results support hypothesis 2 (c and d) by demonstrating that the de of opportunity enhancing hr practices and working conditions on work engagement were particularly less effective under conditions of high psychological capital level. all models presented in table 3, showed reasonably good model fit according to sem fit statistics. figure 2: the statistical research model table 2: descriptive statistics variables m±sd α cr ave 1 2 3 work engagement 3.72±0.78 0.90 0.87 0.691 0.831 psychological capital 4.02±0.50 0.91 0.847 0.584 0.642 0.764 hr practices 3.26±0.72 0.96 0.956 0.846 0.503 0.476 0.92 the square root of the ave is shown in bold on the diagonal of the matrix and the correlation coefficient on the lower triangle, cr: construct reliability, ave: average variance extracted, hr: human resource aybas and acar: the effect of human resource management practices on employees’ work engagement and the mediating and moderating role of positive psychological capital international review of management and marketing | vol 7 • issue 1 • 2017 369 to see the direction of the effects, graphical representations of the interaction effects were presented in figures 3 and 4. for the significant interactions, opportunity enhancing hr practices and psychological capital interaction was significant and negative (β = −0.09, p < 0.01), indicating a stronger relationship between perceptions of opportunity hr practices and work engagement for low psychological capital than high psychological capital (figure 3). in the same way, working conditions and psychological capital interaction was significant and negative (β = −0.10, p < 0.01), indicating a stronger relationship between perceptions of working conditions and work engagement for low psychological capital than high psychological capital (figure 4). 5. discussion the purpose of this study was to investigate how hr practices affect employees work engagement and whether psychological capital has the mediating and moderating role on the relation between hr practices and work engagement. the hypothesized model was partially confirmed. the results provided support for partial mediational processes specified in the model and revealed that hr practices had de on work engagement. it means that employee work engagement can be increased by hr practices. this study contributes to social exchange theory. hr practices have been investigated, may be used as incentives in social exchange relationship. also the results of this study provide support for the universalistic hrm practices approach which have directly and positively related to employee attitudes and behaviors (guest, 1999; wu and chaturvedi, 2009). in addition, results demonstrated the influence of hr practices on work engagement as partially indirect through psychological capital. it has confirmed much of the literature around cor theory and mediating role of psychological capital as a personal resource which can increase employee’s work engagement (demerouti and bakker, 2011; xanthopoulou et al, 2007). table 3: results of moderated and mediated structural equation modelling (n=555) predictor psychological capital work engagement fit upc (se)/spc upc (se) spc cmin/df gfi cfi rmsea srmr skill enhancing hr practices (de) 0.412 (03) 0.414*** 0.564 (0.08) 0.263*** skill enhancing hr practices (ie) 0.211*** skill enhancing hr practices (te) 0.473*** psychological capital 1.096 (0.09) 0.508*** skill enhancing hr practices×psychological capital 0.101 (0.06) 0.058 r2 0.172*** 0.42*** 4.085 0.98 0.93 0.07 0.02 motivation enhancing hr practices (de) 0.327 (0.04) 0.329*** 0.549 (0.08) 0.255*** motivation enhancing hr practices (ie) 0.167*** motivation enhancing hr practices (te) 0.423*** psychological capital 1.101 (0.08) 0.509*** motivation enhancing hr practices×psychological capital −0.077 (0.07) 0.04 r2 0.11*** 0.42*** 4.270 0.98 0.93 0.07 0.02 opportunity enhancing hr practices (de) 0.410 (0.03) 0.412*** 0.617 (0.08) 0.287*** opportunity enhancing hr practices (ie) 0.193*** opportunity enhancing hr practices (te) 0.48*** psychological capital 1.014 (0.08) 0.47*** opportunity enhancing hr practices×psychological capital −0.179 (0.07) −0.094** r2 0.17*** 0.47*** 4.836 0.98 0.91 0.08 0.02 working conditions (de) 0.298 (0.04) 0.301*** 0.393 (0.08) 0.184*** working conditions (ie) 0.162*** working conditions (te) 0.346*** psychological capital 1.163 (0.08) 0.539*** working conditions×psychological capital −0.199 (0.07) −0.10** r2 0.09*** 0.403*** 3.959 0.98 0.93 0.07 0.02 de: direct effect, ie: indirect effect, te: total effect, the df of all models is 6, upc: unstandardized path coefficient, spc: standardized path coefficient, gfi: goodness of fit index, cfi: comparative fit index, rmsea: root mean square error of approximation, srmr: standardized root mean square residual. *p<0.05, **p<0.01, ***p<0.001 figure 3: the moderating effect of psychological capital on the opportunity enhancing human resource practices-work engagement relationship aybas and acar: the effect of human resource management practices on employees’ work engagement and the mediating and moderating role of positive psychological capital international review of management and marketing | vol 7 • issue 1 • 2017370 the current study has predicted that all perceived hr practices (skill, motivation, empowerment enhancing and working conditions) would predict work engagement through psychological capital. in consistent with to literature (luthans et al., 2008), psychological capital had a (partial) mediating role. advancement opportunities and supporting to motivational process were positively related work engagement but some part of these relations occurred through psychological capital. mediation findings indicate that hr practices directly increase both work engagement and psychological capital, in addition hr practices increase work engagement via psychological capital indirectly. also, according to the findings, psychological capital effect on work engagement was stronger than the de of hr practices on work engagement. it may be explained in the context of jdr model framework. our results are consistent with crawford et al. (2010) meta-analytic study findings. accordingly, they state that decisions to adjust levels of demands to influence employee’s engagement are more complex and depend on the type of the demands being considered. accordingly, the relationships between job demands and engagement vary as a function of the nature of the demands with respect to how it tends to be appraised by employees. psychological capital is negatively associated with cynicism, stress, and anxiety (avey et al., 2010). psychological capital may these decisions. the results of analyses did not provide strong support for the predicted moderating effects. these findings are made probably the most interesting theoretical contribution of this study. psychological capital has a significant moderating effect on opportunity hr practices-work engagement and working condition-work engagement relationships. but surprisingly, directions were not positively. these results may be explained in cor theory. with regard to cor theory, losses at work will have more important than similarly valued gains. according to primacy of resource loss principle, it is psychologically more harmful for individuals to lose resource than it is helpful for them to gain the resources that they lost. resource loss is more salient than resource gain. another principle of cor theory claims that lack of resources leads to defensive attempts to conserve remaining resource (hobfoll, 2002; halbesleben et al., 2014). in addition, according to halbesleben et al. (2014), the value of resource can vary significantly depending on the context. resources may be substituted for one another to obtain the same goal (halbesleben et al., 2014). in that vein, when hr practices influence on engagement was low, psychological capital effect on engagement was high relatively. in other words the resources substituted each other. 5.1. implications for theory and practice in today’s competitive business environment, many organizations are placing a greater emphasis on their hrm practices as a means of generating positive individual and organizational outcomes. as scholars suggested, considering the effects of hrm practices on employee-level outcome variables is important (alfes et al., 2013). employee’s work engagement and positive psychological capital have become more important concepts to consider when dealing with changes at work and sustainable performance. this study suggests that producing individual performance may be achieved by following this type of hr practice to increase employee work engagement. according to our findings, the establishment and maintenance of the working environment which fosters job resources including skill, motivation and opportunity hr practices and proper working condition is very important. skill enhancing, motivation enhancing, opportunity enhancing hr practices and proper working conditions increase to employees’ work engagement through psychological capital. if organizations apply to these types of hr practices, they may get more engaged employees who have higher work performance, commitment, life satisfaction and lower turnover intentions. in addition the moderating role of psychological capital on hr practiceswork engagement relationships need to be investigated in other samples in future research. person-job fit, person organization fit and stressful working conditions may have an impact on these relationships. they should also be considered for further research. 5.2. limitations and future research the current study has some limitations that need to be mentioned. first of all, the findings come from a study of cross-sectional design. therefore it is not possible to draw final conclusions about the causal relations. it would be more appropriate to complement these measurements with different methods. in order to draw causality more correctly, longitudinal and experimental study designs are needed in examining proposed model. a second limitation is that all the data were based on self-reports and because of this reason results may be contaminated the common method variance. although performed statistical analysis revealed that common method variance was not a major concern, results may be contaminated by potential effects of common method variance. future studies should gather data from multiple sources to prevent such a problem. finally, this study can only be generalized across a limited and defined population. the application of these findings to a wider population needs cautious. references alfes, k., shantz, a.d., truss, c., soane, e.c. 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(2005), human resource management practices and affective organizational commitment: a comparison of chinese employees in a state-owned enterprise and a joint venture. asia pacific journal of human resources, 43(3), 332-360. tx_1~at/tx_2~at international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2020, 10(5), 46-49. international review of management and marketing | vol 10 • issue 5 • 202046 women and digital financial inclusion in indonesia as emerging market subiakto soekarno, indra yudha mambea, marla setiawati* institut teknologi bandung, indonesia. *email: patriciamarla601@gmail.com received: 04 june 2020 accepted: 25 august 2020 doi: https://doi.org/10.32479/irmm.10212 abstract digital financial inclusion is digital access to and use of formal financial services. this paper aims to examine the significance of gender dimension in digital financial inclusion in indonesia as an emerging market. by using surveys, we expect to relate women and digital financial inclusion. the ordinal logistic regression model was used as a method to model one of the key variables, gender. the result concluded that women as the gender we concerned gives a significant impact to behavioral intention that represents the digital financial inclusion. keywords: women digital financial inclusion; financial services; gender dimension jel classifications: g4, i20 1. introduction better and more effective financial inclusion will help to reduced gender inequality. that fact leads us to concern whether women and financial inclusion can be related to each other. financial inclusion ensures that all groups of society can have access to regulated financial products and services, even those with the lowest income without gender gaps. digital technology has already emerged in many sectors as a game-changing enabler and is now beginning to have a significant impact on financial services. digital financial services have the potential to have a significant impact on financial inclusion. research in the area of financial inclusion has been widely performed. in tanzania, 17.3% of adults had bank accounts in 2011, rising to 39.8% in 2014. allen et al. (2015) concluded that lower transaction costs, greater access to financial intermediaries, stronger legal rights, and a more politically secure climate are related with greater financial inclusion. kim et al. (2018) found that financial inclusion has had a positive impact on economic growth in oic (islamic cooperation organization) countries, where data on the use of financial services such as deposits, credit and insurance are key indicators for calculating financial inclusion, while gdp is a variable for economic growth. asian development bank researched and found that digital financial inclusion could play a key role in bridging financial inclusion gaps. in this technology era, focus of financial inclusion is moving to digital financial inclusion. digital financial inclusion (dfi) is the digital access to and use of formal financial services and products. ozili (2018) stated digital finance by fintech providers has positive effects on financial inclusion in emerging and developed economies, and that the convenience of digital finance for lowand variable-income individuals is often more significant. ouma et al. (2017) concluded that it is important to support those who use mobile financial services. according to the un study, women make up nearly 50% of the world’s population, do almost 67% of the world’s jobs, earn just 10% of the world’s income, and own <1% of the world’s land. the world bank study (world bank, 2001) confirms that gender-based societies are paying the cost of higher poverty, slower economic growth, poorer governance, and lower living standards for their people. referring to these facts, indonesia needs to address this journal is licensed under a creative commons attribution 4.0 international license mailto:patriciamarla601@gmail.com soekarno et al.: women and digital financial inclusion in indonesia as emerging market international review of management and marketing | vol 10 • issue 5 • 2020 47 the role of women in the particular field of inclusion in digital finance. women continue to have a lower proportion than men in any specific field of financial inclusion. the risk of gender discrimination cannot be neglected. the sustainable development goals (sdgs) number five claimed that gender equality means that women will play the same role as men now and in the future. indonesia as an emerging market has a low rate of financial inclusion, which is even lower for women. based on the global gender gap report (2016), indonesia ranks 88 out of 144 countries in the global gender gap index with a score of 0.682 (0 for inequality and 1 for parity). in 2016, indonesia ranks 89 out of 144 countries for the literacy rate. based on the central bureau of statistics (2018) the percentage of women population in indonesia is 49.76% compared to men at 50.24%. the number of residents who have mobile phones according to the ministry of communication and information technology (the number of indonesians active as smartphone users) is more than 100 million, which is more than 40% of the total population of indonesia. these findings promotes work on digital financial inclusion for women in indonesia. digital financial inclusion is one research that is very rare in indonesia. women continue to be financial managers in the family, although the gender gap in access to finance (gender and development unit, 2013) is one field where inequality is relatively common and is attracting attention. the gender gap is troubling as the absence of women from economic activities means that their significant contribution to the economy will be ignored. economic transition is definitely the most critical and perhaps most dynamic of all economic issues in indonesia. financial inclusion for women helps to turn them in order to improve the economy of the country. this gender disparity can be reduced by digital access to financial technology. based on ozili (2018), one of the advantages of digital financial inclusion is to raise the gdp of digitalized economies by rising aggregate expenditure. women with direct access to financial services may increase their prospects to become entrepreneurs, thereby suggesting their individual incomes and chances of being more independent. we conducted the survey to women in indonesia in 2019. the research aims to examine the significance of gender dimension in digital financial inclusion in indonesia as emerging market. the remainder of the paper is organized as follows: section 2 provides the literature review. section 3 describes the data and methodology. we analyze and discuss in section 4 and conclude the paper in section 5. 2. literature review 2.1. tam and utaut2 beside women as main variables, we use models that represent technology acceptance of digital financial inclusion. between various theoretical models representing acceptance of technology, the technology acceptance model (tam) was the most commonly used by many researchers and google scholar. it had more than 7000 citations. in predicting the adoption of information systems by a person, tam proved to be a robust and parsimonious model (davis and davis 1989). davis and davis (1989) developed this model to describe the influence of external variables on individual beliefs and attitudes towards the information system, the two variables reflecting an attitude towards use are perceived of use and an information system’s perceived usefulness. originally, davis and davis (1989) developed tam to test the acceptance of word processor technology by ibm employees. nevertheless, tam has recently provided solid empirical evidence to explain e-commerce, mobile trading, personal computers, telemedicine technology and the world wide web (mathieson, 1991; igbaria et al., 1997; chen et al., 2002; vijayasarathy, 2004; chen, 2008). tam has been widely used as a research model to predict and describe the adoption and actual use of atms, telephone banking, mobile banking, and internet banking. for three reasons, tam is common among researchers. first, tam is designed to explain the adoption of information systems or information technology in different organizations, cultures, technology contexts, and different levels of expertise. second, tam has strong measurement scale validity and is effective in its theoretical literacy. third, the results of specific empirical studies that have fully supported their explanatory power using tam (yousafzai, foxall, and pallister, 2010). despite its popularity, there are few limitations to using tam that is linked to its extensibility and explanatory power. therefore, to the extent of the tam, many researchers have proposed additional variables to make the model more powerful (quan et al., 2010). some scholars suggest that tam cannot provide practitioners with sufficient consequences (benbasat and zmud, 1999). in addition, evidence suggests that this model does not capture the inhibiting influence and personal control factors that may impact adoption behavior, such as consumer unconscious habits and time of adoption (mathieson and keil, 1998; taylor and todd, 1995). furthermore, tam has been criticized for neglecting the importance of social issues, especially subjective standards related to perceived social pressure, whether or not it has been involved in certain behaviors. in addition, tam was intended to be used in the conduct of computer use (davis and davis 1989). because of these shortcomings, some researchers consider tam to be too table 1: main variables variables definition gender 0 female 1 male behavioral intention intent to continue using mobile financial services in the future frequently perceived usefulness positive effect, users will adopt new system if they perceived that it more useful than previous system performance expectancy positive effect, users likely to adopt mobile financial services if they perceive that it is beneficial to their job performance. habit positive effect, users likely to adopt mobile financial services if the perceive that using mobile financial services is a must. effort expectancy positive effect, users likely to adopt mobile financial services if they perceived that it is easy to use edu have at least bachelor’s degree soekarno et al.: women and digital financial inclusion in indonesia as emerging market international review of management and marketing | vol 10 • issue 5 • 202048 general and therefore cannot support a reasonable understanding of the use of advanced mobile services and technologies (bouwman and van de wijngaert, 2009; salimon et al., 2017). the next model that we used in this research is the theory of acceptance and use of technology 2 (utaut2). from this model, there are four variables that significant in explaining the behavioral intention and the actual use of technology. those variables are performance expectancy, effort expectancy, social influence, hedonic motivation, and facilitating conditions. table 1 shows us the variables that we used. by using both models we can examine the factors that influence mobile financial service adoption by women in indonesia. 2.2. women and digital financial inclusion kemal, atika (2015) said that the expansion of mobile banking empowers women in certain ways to achieve financial inclusion. there are several obstacles that women face in terms of financial inclusion in the gender economic equality study (2018). there are therefore three sets of recommendations to promote business growth through the use of financial services, cross-cutting concerns required to support women’s financial inclusion, and to determine how to close the gender gap by promoting the participation of financially excluded non-banked women. we are concerned to explore the importance of the gender aspect of digital financial inclusion in indonesia as an emerging market. as lusardi and mitchell (2014) have noted, many people around the world are financially illiterate, including women. icrw (2017) reported that the number of research studies related to digital financial inclusion is smaller than that of financial inclusion itself. this void is leading us to do this work. 3. data and methodology to investigate 622 respondents are used. we concentrate on the use of mobile financial services, also known as digital financial inclusion, by significant women. we use ordered logistic regression to explore the determinant of the adoption model. the logistic regression model analyzes the ordinal outcomes. 4. empirical results table 2 summarizes the results of this research. there are four variables that positive significant to behavioral intention, namely performance expectancy, habit, effort expectancy, and gender. we show the dependent variable is behavioral intention. behavioral intention means the users tend to use mobile financial services in the future frequently. this behavioral intention represents digital financial inclusion. gender has significant toward the behavioral intention. it means that women in indonesia tend to have digital financial inclusion in their daily life. performance expectancy means that digital financial inclusion is beneficial to the user and comfortable to use. habit explains to us that digital financial service has become natural to use. effort expectancy means that ease of use of the digital financial service makes the respondent eager to use it, it includes the friendly and clear interface of the application. 5. conclusion generally, there is a gender gap and this gap confirms in emerging economies. this study was designed to examine the significance of gender dimension in digital financial inclusion in indonesia as emerging. the empirical results show that first, gender have a positive significant effect to user behavior. second, by using tam and utaut as the reference of the variables included, there are other variables that significant, namely performance expectancy, habit, and effort expectancy. digital financial services deliver a number of benefits, such as convenient access, flexible and real-time services. on the basis of these advantages, digital financial services are projected to be more widely implemented in order to increase financial inclusion. mobile financial services can also be more convenient and affordable compared to traditional banking, which can help users manage their money on a daily basis, especially women as financial controllers in their families who tend to plan for the future, compare financial products and keep them informed. one way for women in indonesia to achieve digital financial inclusion is through digital financial education. this is significant in research on understanding that greater digital financial inclusion will contribute to greater financial stability. hopefully, this work would lead the banking industry to realize that women have a positive effect on consumer behaviour. this will strengthen the banking industry to help women in indonesia become more involved in digital financial inclusion. bank may develop table 2: empirical result ordered logistic regression number of obs 622 wald chi square (12) 291.23 pro > chi square 0.0000 log pseudolikelilihood −542.32179 pseudo r2 0.3547 bi coef robust std. err. z p > |z| (95% conf. interval) sig pu 0.0251424 0.167176 0.15 0.880 −0.3025165 0.3528013 pe 0.3503524 0.1876201 1.87 0.062 −0.0173763 0.718081 * habit 1.059617 0.1560628 6.79 0.000 0.7537399 1.365495 *** ee 1.596308 0.2114586 7.55 0.000 1.181857 2.010759 *** gender 0.7955858 0.4554839 1.75 0.081 −0.0971462 1.688318 * employ 0.1558359 0.347212 0.45 0.654 −0.5246836 0.8363625 edu 0.1310233 0.3119771 0.42 0.675 −0.4804405 0.7424872 gender#edu 0.0371066 0.3667177 0.1 0.919 −0.6816469 0.7558601 ***,**,*refer to the significance level from 1%, 5%, to 10%, respectively soekarno et al.: women and digital financial inclusion in indonesia as emerging market international review of management and marketing | vol 10 • issue 5 • 2020 49 variations on the platform to attract women. it needs to be studied for further analysis. references allen, f., demirguc-kunt, a., klapper, l., soledad, m., peria, m., allen, f. 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(2017), financial inclusion for women: impact evaluation on islamic microfinance to women’s empowerment in indonesia. in: financial inclusion and poverty alleviation. cham: palgrave macmillan. p81-140. . international review of management and marketing | vol 6 • special issue (s6) • 2016 207 international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2016, 6(s6) 207-213. special issue on "management of systems of socio-economic and legal relations in modern conditions of development of education and society” marketing management in the sphere of hotel and tourist services natalia ye. goryushkina1, dmitry v. shkurkin2*, antonina s. petrenko3, sergey y. demin4, natalia s. yarovaya5 1southwest state university, kursk, russia, 2eldirect llc, nevinnomyssk, russia, 3don state technical university, rostov-on-don, russia, 4national research nuclear university mephi (moscow engineering physics institute), moscow, russia, 5don state technical university, rostov-on-don, russia. *email: dmitry.shkurkin@gmail.com abstract the relevance of marketing activity management study in the hotel and tourism business organizations is urgent due to increased competition for customers among the organizations of the industry and the tourism industry in general. deepening competition among hotels hotel industry leads to the fact that the object of the competition is not only on accommodation rates, but also new kinds of proposals to stimulate and motivate consumers, quality, variety of programs to encourage repeat customers’ discounts, bonuses, etc. this action leads to the following actions, which greatly increases the importance of marketing research the hospitality industry, allowing identifying trends and areas for further development, management policy, and implementation of key performance indicators of the complex as a whole. therefore, before each of the domestic hotel, a global hotel business there is a problem of search marketing management techniques that would strengthen a long time, and ensure its own stable position in the competition for the customer. policy management marketing business hotel and tourist business of the country, the world’s states and territories of the resort specialization in their methodology defines essential for efficient operation of a hotel-tourist complex full satisfaction of the needs of consumers of travel services, which suggests them in the necessary production and sales volume, range and quality required with the application of marketing concepts. keywords: marketing, services, management, competition, innovation jel classifications: m31, m10, m12 1. introduction hospitality is considered to be one of the basic concepts of human civilization in modern society. as its formation, development, formation, providing welcoming services to people who find themselves, for whatever reasons, outside the house, turned into a profession for a growing number of people who have not yet turned into an industry-hotel and tourist business. under hospitality industry is considered a business, a converted visitors to supply people with housing, tourist, traveler, travel staff-food, as well as for the organization of their leisure time, recreation, temporary stay. hospitality industry links all similar industries, specializing in serving people traveling through specialized companies: hotels, restaurants, travel agencies, national parks, parks of culture and recreation, etc. hospitality is formed in an ever evolving hospitality industry. hotel business-a business hotel enterprises, independent economic entities with the main purpose of making a profit, as well as meet the needs of users of this service and the achievement of the main objectives of management. the objects of the hotel industry represent people accommodation facilities. accommodation facilities-it is not otherwise as objects that give tourists occasionally or regularly accommodation services, lodging, spending the night on a commercial basis, contained in treaty form. the main element is the hotel accommodation facilities, a hotel, etc. goryushkina, et al.: marketing management in the sphere of hotel and tourist services international review of management and marketing | vol 6 • special issue (s6) • 2016208 hotel is an organization of collective tourist accommodation facility that provides accommodation and services required to meet the benefits. according to many users, the hotel is an institution that gives the right to reside in the commercial-contractual basis and offering its facilities and services. accommodation is divided into the following types according to different criteria: • the level of service, range and price of services: class “luxury” hotels, 1st class, economy class hotels with a narrow service (bed and breakfast) and cheap type of student dormitories • the location: the city (central, outlying), transit (for highways), suburban, rural, and hotels located near the geographical features (rivers, lakes, seas, oceans, mountains, etc.) • for natural placement areas (forests, mountains, deserts, etc.) • the operation of the time a year-round and seasonal. systematic hotel sets the scene of a hotel on the hotel market, in its criteria and characteristics, the level of competitiveness in the market, facilitates the customers and experts-professionals to immediately get an idea, and the overall picture of a guaranteed set of services that can be shown the hotel of a certain class (osipenko, 2014). hotels, hotels, associations systematized on the basis of their certification, which, in turn, can be carried out both at national and at the international and global level. hotel product services is a set of services expressed by the hotel and contains the following elements: • provision of services related to the accommodation, overexposure to the night • the likelihood of eating • the likelihood of the acquisition of additional services • separate standards • a mandatory fee in terms of value for services rendered. hotel services are short-living the hiring of public houses, buildings, rooms, places to stay and places for tents or caravans and assistance within the boundaries of the object of related services to meet the needs of man and society. more services, implementing hotel companies, complexes may also be provided to institutions of different profile, for example, gastronomic enterprises. characteristic features of the hotel product: • synchronization of production and consumption of services () • c o m p l e m e n t a r i t i e s o f s e r v i c e s , e . g . t h e i r m u t u a l complementarities for the missing criteria • the dependence of the quality of the hotel product and service provided by the hotel staff its service quality and competence • immeasurability hotel product is a service has a cost index only after its delivery and not always immediately • complexity is a product formed from a smaller or larger number of services provided by the hotel enterprise, complex • flexibility may have to take shape, according to the needs of consumers, world standards of service. for more society use the hotels, difficulties are what is known under the name “derived demand” because a few stops or eat in the hotel for a well-established reputation, or “name” of the hotel complex. the main reasons for hotel services are covered in consumption causes a temporary visit or a long period of a particular area or time of it in some special way (sozinova and fokina, 2014). demand for hotel services, terms and conditions presented an unstable business data depends on the time of year and is subject to seasonal fluctuations; especially it concerns the resort areas. this requires the use of additional staff in the season, which often has no interest in providing timely and quality services to consumers. in addition, the lack of funds for fixed costs impairs the quality of the hotel product. selling of a hotel product depends not only on the hotel staff, but also on internal quality hotel product (facilities, comfort, culture, level of service, the hotel’s image). hospitality and hotel product realization thus require high professional skills, art of strategic and operational management, high spiritual culture, the best human qualities and high training of personnel. 2. materials and methods theoretical and methodological basis of writing was the work of the classics, economic and management publications in the definition of marketing management, marketing as a science, marketing, hotel business, domestic and foreign scholars, human resource management, capacity, overall organizational training hotel companies and destinations, the economic processes of internal and foreign policy activity of hotels (gupta, 2012). the research methodology is based on the dialectical method, system and strategic approaches to the analyzed objects. scientific provisions, conclusions and recommendations made in the paper are based on the use of combined methods of historical and logical analysis, comparison and synthesis, induction and deduction, economic-statistical method and expert assessments. information base of research were the laws of the russian federation, the official publication of the state statistics, management of social and labor relations in the sphere of tourist business of employment agencies, hotel complex, the international labor organization, thematic collections and directories (nadtochy et al., 2016), information published in scientific publications and periodicals, internet resources. when writing operation using data characterizing development trends of the organizational and social and labor relations in the system of hotel complexes, marketing research, both external and domestic labor market. goryushkina, et al.: marketing management in the sphere of hotel and tourist services international review of management and marketing | vol 6 • special issue (s6) • 2016 209 3. discussion the desire to achieve, success, business development becomes a daily concern and a concern for many market participants, on behalf of managers, personnel, marketing service of hotel services. in order to stand the competition of the modern market of hotel services and expand the existing scale of the territory, staff, hotel companies need the most important and essential tools: revenue and profits. and so every day increases the need for effective hotel management methods, the use of new technologies such as management costs (winer, 2000; silnov, 2016), and the introduction of the newest development and personnel management techniques, allowing achieving high results and creating a competitive advantage in the domestic market and the world of services. currently, the main guarantor for success is to find a hotel enterprise needs and target markets needs of consumers and the supply of the desired customer satisfaction, more efficient than the competition, ways of providing services. for this effective hotel management process (zakharov et al., 2016) is necessary to correctly apply and use the basic management policy of the enterprise marketing and managerial personnel services. management and marketing are two complementary and interrelated spheres of business enterprises. today, the evolution of marketing associated with the trend of modern market for manufactured and supplied products, in particular, with the growing importance of such factors as the quality of goods and services, their compliance with international standards (chen, 2016), the attachment of consumers to the brand and the companybranded commitment to consumers, unwinding global reservation systems of services, focus on innovative technologies, strategic alliances, ethical standards in the enterprise, etc. the current concept of marketing leads to the problem of the value of the enterprise, facing the achievement of the final result-profit while maintaining or strengthening the well-being of the consumer and society as a whole. this concept encourages a balance of three factors: the desire for maximum profit, accounting for the needs of consumer goods to meet their public interest and tourism. in the context of global change, sanctions, political games changed the very definition of the tourism industry (oleinikova et al. 2016). the one-dimensional concept of tourism that is linked primarily to tourists, travelers, vacationers, with the process of organization of tourist trips, giving way to a multi-dimensional concept-hospitality industry, during which binds all related sectors of the economy, based on the service maintenance people through specialized companies: hotels, restaurants, transport companies and travel agencies, entertainment, sports, cultural, entertainment and gambling establishments. it now works and operates one in six people of working population of our planet. increased growth of the total number of tourists in separate corners of the world space, the national territory has the necessary impact on the development and improvement of tourism infrastructure and its most important component-the hotel sector, competitive market for the hotel industry-seeking to get their share of the business and are trying to persuade customers to release their cash accumulation on receive hotel services available to them as much as possible in a larger complex, presented in the hospitality industry (balachandran, 2004). dominant role in the hospitality industry are the hotel corporation, which lasted a network around the world and draw in its service hundreds of millions of people. establishment of global hotel chains and alliances mean quite the newest formulation of emphasis in the hospitality industry, this innovative world of implementation technologies, trends techniques. in modern conditions of hotel complexes and the scope of their activities run into fierce competition, which allow them to seek out and apply for new ways, methods and techniques for the implementation of its services on the market (mudie et al., 2006). competition intensifies under the influence of such important factors as the development of absorption and consolidation strategies (for example, the purchase of the american chain motel-6 the french company accor, days inn joined the holiday franchise systems, etc.). the appearance on the market of newly hotel complexes that have the latest technology to provide the services of the service makes to develop competition to an even greater extent the existing businesses, implementing its activities. in this case, already on the market of hotel complexes has to implement the marketing strategy of development, encouraging the client system fixed base visits, in order to strengthen its position in the competitive environment and does not involve its activities in the bankruptcy stage in a changing political, economic and market reality (chung, 2000). in order to implement their work with a high level of competitiveness of the hotel service should and must develop unique and your own marketing plan, based on the data previously obtained in the implementation of activities, namely information about products sold on the consumer market, on the state of the market, on the selected target customer segments, the creation of short-term and long-term framework to attract and retain customers. in general, the marketing plan contains the following items shown in figure 1. creating a marketing plan, and the planning highlights points of hotel business activity is applicable not only in large complexes, as well as in hotels and small scale. efficient and competent marketing plan takes into account the three main directions of the hotel business: to implement the right products and services to the right market at the right time. for the successful application and implementation of the plan should include the establishment responsible for its implementation in full of persons and set a defined period during which the hotel hopes to reach the planned figures presented in the prescribed plan. goryushkina, et al.: marketing management in the sphere of hotel and tourist services international review of management and marketing | vol 6 • special issue (s6) • 2016210 main fields of application allows the marketing manager and the head to look and to consider the functioning and work of the most graphically hotel as a commercial enterprise on the part of the consumer. this requires an assessment of satisfaction with the quality of guest services, maintenance, and determines the effectiveness of impact assessment on further activity of visitors. the workers of marketing departments are involved in defining and establishing pricing policies, as well as make suggestions on the development of the hotel improve the market competitiveness of the services strategies are crucial to achieving the goals and objectives of the hospitality industry, as well as the main result is, of course profit. the main objective of marketing is the preliminary study of the market to include the identification and establishment of the maximum capacity of the hotel on the market, as well as the location or choice of alternatives already available, options. the process of market research is needed to determine the market segment that will be most favorable for the particular hotel and it represented and sold product, but major efforts have to be focused on the promotion of goods, services and selling at the most competitive price. every hotel business entity shall determine the type of clients that will be acceptable to him, which is necessary and logical to engage on the basis of the location and characteristics of the hotel, so the work of marketing employee begins long before the opening of the hotel (mamycheva et al., 2016), and even the development of a plan of its creation. market research group of individuals set combining existing or potential customers, creating them on various parameters: the geography of the major source markets, the purpose of visit, solvency and behavioral characteristics. in the future, the division into segments follows from dividing by customers who are primarily oriented to price, and those for which the price is not critical in the choice of purchasing services. the main purpose of segmentation is an addictive activity of the hotel complex to the needs of the largest group of customers and the establishment of the price of services promotion strategy in order to be most beneficial in the implementation and implementing the plan. the most acceptable is believed that the scope of hotel business covers three main segments based market, which in turn gives the company a minimum of 80% of revenues (morse and smith, 2015). but not a few important still is the seasonality of demand, which normally leads to the fact that the influence of the individual segments of the market for the hospitality industry may vary depending on the time of year. thus, the marketing has been putting in the proper form, standardscompliant products in this area of the hotel business marketing is no different from other consumer marketing consumer products company. yet there is a certain difference of hotel products and general consumer goods, hence the marketing policy also has its own uniqueness and originality of the activities. h o t e l s , a s w e l l a s r e s t a u r a n t s , s e l l t a n g i b l e p r o d u c t s (accommodation, meals, etc.) and intangible services (hospitality). there is a visible difference between marketing products and services provided by the hotel business. the product can be shown, and the visitor is able to determine its value quickly. lodging marketing is more complex due to the immateriality of the concept of “service” (bursk, 1967). 4. results the unique feature of marketing and hospitality industry can be seen from the above discussed and characterized features of the hotel product and services, its fixity in time to market arena. the presence of the most important products of the hotel-hotel rooms-is a constant criterion of choice of the customer. it becomes sometimes impossible to change the number of rooms, to increase in a short period of time, to save their original form for future sale or to follow the constantly changing needs of visitors and privileges. therefore, the demand for this type of hotel business is constantly fluctuating product. sometimes the hotels can sell their work without profit-empty, or vice versa at the peak of the season to experience overcrowding and an overabundance of hotel visitors. all of these trends, the factors to be considered in the implementation of business activities, but also need to take into account the nature of the investments, cash receipts hospitality figure 1: the main points of the marketing plan goryushkina, et al.: marketing management in the sphere of hotel and tourist services international review of management and marketing | vol 6 • special issue (s6) • 2016 211 industry. by the number of such income can be: investment in land, buildings and property inside the building. the three key factors in the success of the hotel are: the right location, the required capacity and the high level of use. hotel marketing can be analyzed as a cycle, which occurs with an assessment of existing and potential markets for hotel products. the next element of the marketing cycle is the formulation of what should be the product and its development. with sufficient information about the market, you can pinpoint specific market segments. product development in includes both the range and type of hotel services, and pricing in order to achieve compliance with its chosen segments. the final element of the marketing cycle is the monitoring of performance indicators and their consideration. at this stage, the comparison of actual results with the plans and the budget, evaluation of the effectiveness of marketing activities in order to provide an information basis for the changes in the market and in the hotel policies (frolova, 2014; frolova et al. 2016). if the hotel marketing is conducted professionally (rutherford and o’fallon, 2007), its image and position in relation to competitors become so obvious, and the specificity of services-so recognizable that the customer perceives the logo or trademark of the hotel as a guarantee of a certain quality level. hospitality in essence must take into account every nuance associated with the guest stay, justifying and even somewhat exceeding his expectations. it should reflect the individuality, the development of which begins with the atmosphere formed by controlling personality, and manner of service completes inherent personnel. key strategies of hospitality industry include: • price leadership strategy is the strategy minimize costs, that predict undeniable factor in this strategy is the implementation of the additional costs of better tourist services, design and provision of high standard services • differentiation strategy allows to acquire a competitive advantage by producing unique services that have no analogues that do not produce competitors: for example, we can talk about the unique characteristics of the services: the highest quality of service, presented in a mini-hotel (which by definition is adopted level of service below than at 5*); numbers fast and easy reservation form at any time of the day on the hotel’s website • there is another strategy for the development and competitiveness of enterprises hospitality industry, the so-called focus strategy. but do not lead to a competitive advantage in these conditions in the market of hotel services focusing only on a narrow segment. strong development of the global hotel industry over the last 2-3 decades has led to fierce competition for markets hotel product. in the ensuing struggle for the client (visitor, tourist) in the last decade become a winning marketing strategy competition used for each set individually (liang, 2012). another factor contributing significantly to the formation of the current situation in the market of hotel services, is the strategy of branding-brands-receiving in recent years more and more widespread, and the concept of crowding hotel services, which had its not a small value a few years ago. implementation of a select successful hotel development strategy will lead to the strengthening of the competitive advantages and increase the value represented by the business. a modern hotel business industry has a lot of risk, various types of resources, limited in cost and geographical location, and the rapidly changing situation on markets, consumer-oriented, shrinking in recent years, due to internal and external economic factors. therefore, for hotels, especially mini-hotels are difficult to survive in the reality of political differences (shih et al., 2016). rising competition is one of the major reasons for the development of marketing policy and its application in the hotel industry. sale of internal services is a broad field for the hotel business. there are many probabilities to attend to customers in restaurants, stores, and in the provision of various additional services. payment rates customers is a significant part of income, so the marketer, as well as the department as a whole should make efforts weight in order to maintain and not lose regular customers base and newly found (seric et al., 2016), using all possible means to attract and distribution of advertising available services. the incumbents in hotel sales and marketing services, has to know everything about the hotel and its potential clients. marketing course of categories are just one of the steps that the hotel business is used to increase the efficiency of their business in the market. implementation of the company’s restructuring, one of the ways to increase competitiveness, as one of the bases of the existing hotel complex saint-petersburg defined scope of work has been assigned to each manager. up to 30 people-parallel, additional staff, which required doubling back office were hired, round the clock call-center was established on the basis of the reservation department, whereas before treatment and after 21 h to 9 am is not accepted. the company also realigned work with global booking systems galileo, amadeus, worldspan, and sabre. its hotels are present in their bases from the beginning of 2015, it rinaldi paid him 15% of the cost of each booking. approximately two-thirds of this amount, the tour operator translated retailers-travel agencies-as an agency fee (bell, 1993). but sometimes the failures occurred. a year later, rinaldi was replaced by a connecting partner (it was the company “nota bena”), which provided a more transparent control over the transaction. today, the global system has become the main sales channel. about 80% of clients come in rinaldi through travel agencies, and network load, thus increased to 78.6%. various channels of promotion: participation in exhibitions, promotion of the network through the global reservation system, enabling the flow of foreign customers, hotels own website online, contextual advertising, placement of information on relevant goryushkina, et al.: marketing management in the sphere of hotel and tourist services international review of management and marketing | vol 6 • special issue (s6) • 2016212 websites and partner sites. since 2003, he engaged in the help hotel russia, which reveals the appearance of a network in a certain region. it works with “snark” network book, as publishing advertising in publications sold there, the sponsor of the concert hall at the finland station. the main task is to cover all the possible “space” where a potential customer may search for information for an upcoming visit to st. petersburg. with regard to the anti-crisis measures, it is, first of all, the price offer. for example, the price was set at a flat in most hotel chains, excluding the hotel premium category-1600 rub for a single room and 2000-for a double. the ability to prompt decision on prices for rooms is an important priority of the mini-hotel. it is planned to rebrand-rinaldi hotels group to become rinaldi group. under this brand you prefer to operate business centers, maintenance of buildings and facilities, catering. in the near future it is planned to organize your own laundry, which will, in addition to the services of hotels, also provide commercial services. the structure of the whole organization is so constructed that it is possible to offer a full range of services, which guests may need: transfers, the development of sight-seeing tour, tickets for cultural events, as well as search for an interpreter. the management company, having in the active travel company with the operator’s license for the development of regions, for example, can offer a package of services, including hotel accommodation on more favorable terms, as well as sightseeing tours. thus, the hotel complex is currently focused on the st. petersburg market, expanding its activities. at the forefront of the city and to the european market of tourist services. that is the main strategy of the company is a market development strategy. hospitality, in its essence, must take into account every nuance associated with the guest stay, justifying and even somewhat exceeding his expectations. it should reflect the individuality, the development of which begins with the atmosphere formed by controlling personality, and manner of service completes inherent personnel. thus, the state of the modern hospitality industry can be described as a sphere, which is affected by a variety of factors internal and external business environment. the latter circumstance explains the importance attached by recent market research, based on which further every hospitality enterprise builds its own strategy for the promotion and sales. 5. conclusion modern hotels offer consumers not only the services of accommodation and food, but also a huge variety of entertainment, transport, communications, excursions, as well as sports, medical services, beauty salons, etc. service set varies depending on the class of the hotel. such a variety of services is dictated by the significant competition in the hospitality industry. the owners of the hotel are compelled to follow the changing preferences of customers and strive to fully satisfy them. therefore, the success of the hotel industry depends largely on meeting customer needs and service quality of the staff involved in this area. to a greater or lesser extent, hotels restaurants, bars and other services can also be used by the local population, but the hotel’s main function is to provide people who are away from home overnight and ensuring their basic needs. the work of hotel marketing can contribute by analysis to assess the demand, with which you can determine the appropriate market opportunities, the location or choice of alternative sites, as well as to create the most suitable concept. also marketing can implement a continuous process of market research, product development, its promotion, marketing, monitoring and verification. for hotels it is important that each service provided corresponds to the client’s expectations, which the hotel hopes to attract. visitors hotel estimate provided services to them in style to communicate with them by phone and in person; by the way they greet and solve their problems in obtaining services. that is why marketing makes each employee, as the administrative and support staff to think about the client and to do everything possible to build and maintain the representation of the client that he-the highest value in the hospitality industry, the needs of which must be as best as possible to meet. if the hotel marketing is conducted professionally, its image and position in relation to competitors become so obvious, and the specificity of services, so recognizable that the customer perceives the logo or trademark of the hotel as a guarantee of a certain quality level. references balachandran, s. 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(2016), cloud service for data analysis in medical information systems using artificial neural networks. international journal of applied engineering research, 11(4), 2917-2920. international review of management and marketing vol. 1, no. 3, 2011, pp.30-42 issn: 2146-4405 www.econjournals.com an empirical investigation into the construct of higher education service quality jaroslav dado matej bel university, faculty of economics tajovskeho 10, 974 01 banska bystrica / slovakia e-mail: jaroslav.dado@umb.sk janka taborecka petrovicova matej bel university, faculty of economics tajovskeho 10, 974 01 banska bystrica / slovakia e-mail: janka.petrovicova@umb.sk dejan riznic university of belgrade, technical faculty in bor vojske jugoslavije 12, 19210 bor / serbia e-mail: driznic@tf.bor.ac.rs tamara rajic university of belgrade, technical faculty in bor vojske jugoslavije 12, 19210 bor / serbia e-mail: trajic@tf.bor.ac.rs abstract: the paper addresses the issue of higher education service quality measurement and stresses the need of devising psychometrically as well as diagnostically sound measurement instruments, suitable to the context being investigated. the study builds upon the servqual scale, the inventory successfully tried and tested across a broad spectrum of service industries. notwithstanding significant resemblance with the original five dimensions of service quality, research findings indicate six-dimensional structure of the construct of higher education service quality. study performed on a sample of engineering management students reveals perceptions falling short of expectations across all of the determinants of service quality. the largest negative gap between students’ perceptions and expectations has been discovered concerning the potential for future career development, whereas research findings indicate the same dimension to be the most important predictor of students’ future behavioral intentions. in an attempt to inspire further interests in this field, managerial implications and directions for future research have been discussed. key words: higher education, service quality measurement, servqual jel classifications: l84, m31 1. introduction western economies have witnessed rapid growth of service sector over the previous several decades. adding up to more than 70% of gdp in some oecd countries, nowadays services are seen as the major driver of economic growth and development. whereas service-related jobs absorbed about 55% of work force in 1980s, more than 70% of employees in some of the oecd countries have been engaged in service-related activities at the beginning of new millennium (oecd, 2000). due to numerous positive consequences of quality discovered in the area of physical goods manufacturing and growing importance of service industries academics and practitioners alike have exhibited considerable interest in the field of service quality measurement and improvement. service quality has been recognized as a strategic weapon in widening the gap between service leaders and their merely good competitors. according to heskett et al. (1994) internal service quality leads to employees' an empirical investigation into the construct of higher education service quality 31 satisfaction, their retention and productivity. satisfied employees deliver valuable services to customers, which positively influences customer satisfaction and loyalty. due to experience-curve effects customers who remain with the company can be served more efficiently. being pleased with the service and treatment they are willing to buy additional products and services and by spreading positive word-of-mouth loyal customers bring in new ones, which ultimately affects company's future growth and profitability (reichheld, 1996; reichheld, 2003). services dominate contemporary economies and the rising trend is expected to continue with the proliferation of information-intensive services. transition towards knowledge-based society, whereas the key strategic resource necessary for prosperity is knowledge itself, requires quality human capital. therefore, over the previous two decades higher education service quality has gained the status of major concern among academic communities worldwide. the interests in the field have also been fueled up by prevailing trends in the area of higher education. whereas in the past most universities served regional needs, modern technology erases geographical barriers and makes yesterday's potential entrants, such as virtual and foreign for-profit educational service providers, today's reality. in such a case, incumbent's image of high quality service provider might serve as a strategic asset, difficult for bypassing by newcomers. besides global competition higher education has also been affected by massification and higher rates of participation (sursock and smidt, 2010). massification of higher education and public purse not being able to support growing demand have brought about changes in funding formulas of higher education. students and their families expected to assume rising share in the costs of education become more demanding consumers and call for responsible and quality provision of educational services. today's universities find additional source of much needed revenue through tuition-paying students, usually mature students with previous work experience, who are due to time and financial constraints less tolerant of poor educational services. thus, identifying the main factors influencing students' attitudes represents a step that all universities must take if they are to sustain their market position (ford et al., 1999:186). australian response to calls for quality assurance and accountability has been the development of course experience questionnaire, which has been mailed to every university graduate since the year of 1993. students' feedback is expected to assist higher education institutions to enhance and improve their processes and consequently students' experience. the results of surveys are also used for ranking of academic institutions and are publicly available through more commercial material such as good universities guide (griffin et al., 2003). concerns for quality have been also expressed by academic communities constituting european higher education area. they have undergone significant changes in order to harmonize educational systems which is expected to enhance international competitiveness of european system of higher education. unlike unified australian approach, standards and guidelines for quality assurance in european higher education systems are not intended to dictate practice or be interpreted as prescriptive and unchangeable (enqa, 2009). due to diversity of socio-cultural and educational traditions, aspirations and expectations of constituting parties, they are rather generic principles that provide the framework for quality assurance and enhancement. according to the standards and guidelines, provision of quality higher education services lies within the responsibility of providers of higher education whereas the interests of all the beneficiaries of higher education should be safeguarded. it is stated that all higher education institutions should be dedicated to improvement and enhancement of the quality of education, although in order to preserve academic authonomy concrete steps towards the aim have been left to the resolution of academic institutions. therefore, this study aims to gain deeper insights into the construct of higher education service quality. knowledge of the attributes and dimensions that constitute the construct of quality and company's performance on those determinants is very important as a practical basis for directing quality improvement efforts. this study builds upon the servqual scale and takes into consideration students' viewpoint. by no means does it imply that the perspectives other then students' are not important for quality management undertakings in higher education context. in order to make the examination convenient, the focus on students' perspective has been chosen. the authors acknowledge the perspectives of other stakeholders of higher education, as will be highlighted in the following section. this will proceed with a detailed overview of the servqual scale and the results of its previous applications across variety of service industries. after the outline of research international review of management and marketing, vol. 1, no. 3, 2011, pp.3-42 32 3 methodology and results managerial implications as well as limitations of the study and directions for future research will be discussed. 2. conceptual background 2.1 the construct of higher education service quality while there is a common agreement concerning importance of higher education service quality, among the major challenges facing today's education providers is to identify and implement the most appropriate measurement instrument. the complexity stems from considerable and up to now unresolved debates on how best to define the construct of higher education service quality (becket and brookes, 2006). cheng and tam (1997:23) claim that education quality is rather vague and controversial construct. they further argue that different people may hold various conceptions, wheareas some emphasize the quality of inputs to the education systems, others prioritize process or output quality, which add up to the multi-dimensional nature of the construct and absence of one single indicator of quality in higher education. numerous disputes have revolved around the question whose perspective should guide quality management actions in the area of higher education. almost two decades ago sines and duckworth (1994:2) claimed that it was high time for educational providers to face two facts, that they were in a competitive battle for students and that students were customers. the authors highlighted the necessity of academic institutions to investigate the practice of commercial businesses in the area of customer service and apply it in the context of higher education. this perspective is also supported by kanji et al. (1999) who claim that people who pay for the service, as is the case with rising number of students who directly participate in the costs of education, should be treated as customers. in the total number of students enrolled to the first level of higher education studies in serbia in 2009, according to the statistical office of the republic of serbia, 57,7 per cent was self-financed. in comparison with 2007, there was a rise of 8,9 per cent in number of tuition-paying students in 2008 and the rise of 17,8 per cent in 2009 in comparison with 2007. the notion of student-as-customer has originated within tqm movement, which has started to gain certain popularity among academic institutions in light of funding and management changes in higher education context. though its basic principles, such as customer delight, people-based management, continuous improvement and management by facts, have strong common sense, educational institutions have lagged behind manufacturing counterparts in the adoption of this paradigm. studying the practice of us, uk and australian higher education sectors cruickshank (2003) among barriers to tqm implementation recognizes organizational culture, academics' scepticism towards management fads and reluctance of educational communities to treat students as customers. svensson and wood (2007:22) claim that marketing metaphors are inappropriate in higher education sector and that the relationship between students and universities should not be treated as a customer-supplier relationship. the authors argue that money may let one purchase a car, but money alone should not let one purchase a university degree. regarding students as customers and conducting students' evaluations of teachers and teaching practice, according to emery et al. (2001), result in lowering of academic standards. whereas in the private sector the issue of customer is clear and unambiguous, in the context of public services it is difficult to define customers and the term itself may be inappropriate. individuals, government agencies and society as a whole may as well be regarded as customers. more often than not the interests of those diverse sets of customers are in conflict, which further complexifies the issue of addressing those requirements and proper allocation of scarce resources in quality improvement interventions (wisniewski and donelly, 1996). there are many beneficiaries of higher education and thus it is claimed that defining and managing quality in higher education call for less controversial term, such as stakeholders. it is clear that the interests of students and their families should not be neglected. in addition, interests of prospective employers who are looking for quality human capital should be safeguarded, as well as requirements of funding bodies seeking for good return on investments and job satisfaction of the employees of higher education sector. society as a whole should also be taken into consideration since better-educated workforce is expected to lead to stronger economy (srikanthan and dalrymple, 2003; redding, 2005). according to harvey and green (1993) quality is, like freedom or justice, a slippery construct. although we all intuitively understand what quality means, it is difficult to define it. higher education service quality is a stekeholder-relative construct. it means different things to different people and just like beauty it is in the eyes of a beholder. although it is important to address the perspectives of diverse set of an empirical investigation into the construct of higher education service quality 33 beneficiaries, this study, due to time and financial constraints, takes into account student population as beholder of higher education service quality. 2.2 servqual framework service quality conceptualization and measurement have gained the status of most debated and controversial topics in the literature of services marketing to date and are still considered unresolved and far from conclusive issues. generally, various approaches have revolved around two schools of thought, european and north-american perspective. according to the former, whose representatives are lehtinen and lehtinen and gronroos, service quality is a three-dimensional construct. whereas the dimensions revealed by lehtinen and lehtinen (1991) on a sample of restaurant customers are physical quality, interactive quality and corporate quality, gronroos (1984) claims that service quality dimensions can be classified as technical quality, functional quality and corporate image. however, the differences among these approaches are more of a semantic than intrinsic nature. technical quality refers to the outcome of customer's interaction with service provider, functional quality perceptions are based on the manner of service provision whereas corporate image acts as a sort of perceptual lens, filtering customers' perceptions of functional and technical quality. parasuraman, zeithaml and berry (1985), originators of north-american paradigm, acknowledge gronroos's perspective and the importance of technical quality, but focus their future studies on functional part of customers' perceptions. perceived service quality, i.e. the discrepancy between customer's perceptions and expectations, serves as a building block of both schools of thought. however, with few exceptions striving to reconcile these two perspectives (brady and cronin, 2001; kang and james, 2004) researches have genarally been more inclined towards servqual scale and north-american school of thought. a conceptual foundation for the servqual scale derives from extensive explorative investigation comprising customers and executives of service companies operating in the field of retail banking, credit cards, securities brokerage and product repair and maintenance (parasuraman et al., 1985). on the basis of group discussions with clients and in-depth interviews with managers of service businesses authors devised gap model of service quality. the most important gap from customers' point of view is gap 5, defined as perceived service quality. gap 5 relates to the degree and direction of discrepancy between customers' expectations and their perceptions of service delivery. it is consumer's judgement about an entity's overall excellence or superiority (parasuraman et al., 1988:15). perceived service quality is a function of differences between customers' expectations and management perceptions of those expectations (gap 1), discrepancy between management perceptions and service quality specifications (gap 2), differences between service specifications and actual service delivery (gap 3) as well as discrepancy between service delivery and what was promised to customers by means of exteral communications (gap 4). services are considerd as acts, deeds, efforts (rathmell, 1966), they are performances rather than objects (parasuraman et al., 1985). due to their distinctive characteristics, such as intangibility, heterogeneity and inseparability of production and consumption, service quality cannot be measured in an objective way. comprehensive qualitative and quantitative research conducted by parasuraman et al. (1985, 1988) yielded servqual, a multipleitem scale for measuring consumers' perceptions of service quality. in its basic form the instrument comprises two sets of 22-items, relating to customers' expectations and perceptions, that measure service quality along five dimensions, reliability, responsiveness, assurance, empathy and tangibles. reliability refers to the ability of service provider to perform the service dependably and accurately. responsiveness relates to the willingness of service employees to help customers and provide prompt service, assurance addresses knowledge and courtesy of service personnel. empathy relates to individualized attention service company provides its customers, whereas tangibles refers to the appearance of service personnel, equipment and physical facilities. service quality, as perceived by consumers, stems from a comparison of what they feel service firms should offer., i.e. their expectations, with their perceptions of performance of firms providing the service (parasuraman et al., 1988:). the construct of service quality is thus operationalized as a mean difference between perceptions and corresponding expectations items. in addition, quality along each of the service quality dimensions can be assessed by calculating average difference scores on statements making up the dimensions. international review of management and marketing, vol. 1, no. 3, 2011, pp.3-42 34 3 according to parasuraman et al. (1988) servqual is a concise scale that can be used for service quality evaluations across a wide variety of service industries. many subsequent studies have invoked servqual scale, but numerous replications have failed to confirm the five-dimensional structure of service quality. thus, dimensional instability is among major criticisms directed towards the servqual framework. results from the study conducted by bowers et al. (1994) on a sample of patients suggest that they define and evaluate health care service quality in terms of empathy, reliability, responsiveness, communication and caring. consequently, the authors advise health care administrators to determine the attributes which are important for patients' quality evaluations and use modified version of servqual scale for future quality measurements. evaluating hospital service quality by means of adapted servqual scale wu et al. (2004) reveal the same service quality dimensions as suggested by parasuraman, zeithaml and berry. analysing service quality gaps in health care industry on a sample of recent users of services provided by five hospitals rohini and mahadevappa (2006) argue that servqual is consistent and reliable measurement instrument. in the study performed on a sample of business travellers in turkey, akbaba (2006) identified fivedimensional structure of service quality. however, the findings indicated service quality dimensions to a certain extent different in comparison with those addressed by the items of original servqual scale. the author claimed that the scale should be adapted to the specific service environment, as well as to the cultural context within which it is used. study of it service quality, conducted on a sample of employees of australian university, revealed two-dimensional structure of the quality construct being studied (kang and bradley, 2002). the authors argue that servqual can be regarded as effective instrument for it service quality evaluation. on a sample of customers of four different retail types finn and lamb (1991) examined the usefulness of servqual scale in retail settings. results of the study do not conform to the five-dimensional structure proposed by parasuraman, zeithaml and berry. the authors suggest that servqual items might not capture the essence of service quality construct in retailing. they further argue that servqual scale was developed on samples of customers of appliance repair and maintenance, retail banking, long distance carriers and credit cards, which are different than goods retailing and fall closer to pure service end on a continuum of service (in)tangibility. finn and lamb (1991) thus argue that customers might rely on different attributes when they evaluete pure service offers in comparison to more tangible services. higher education however exhibits all of the distinctive characteristics of services. it certainly is intangible, since it cannot be seen, tried or tested prior to purchase. production and consumption of educational services are inseparable and the services are mainly perishable, in spite of the appearance of modern technology. educational services are also labour intensive and heterogeneous, quality varies among teachers as service providers and also the performance of one provider varies among classes and different circumstances. educational services are also intensive in credence attributes, i.e. features that customers find difficult to evaluate even after service provision (cuthbert, 1996; owlia and aspinwall, 1996). calling the audience to rethink classical marketing practice and concepts shostack (1977) argues that the more intangible market offer is, the greater the divergence from product marketing approach should be. the author stresses education as a typical representative of intangible services. thus, unique features of higher education services lend support for the application of servqual as a generic scale devised to be used in a wide range of service categories. in spite of numerous applications of servqual scale in variety of service settings its replications in the context of higher education have been scant. results of the study applying modified servqual scale on a sample of business and management students of a uk university indicate that students' perception of service quality are shaped along three dimensions, requisite, acceptable and functional attributes (oldfield and baron, 2000). wright and o'neill (2002) applied revised servqual battery to examine the construct of on-line library service quality. analysis performed on a sample of australian students revealed four dimensions of quality, those being contact, responsiveness, reliability and tangibles. examination of the construct of service quality in business education in the middle east, conducted by sohail and shaikh (2004), on the basis of inventory corresponding to five dimensions of servqual scale, resulted in six dimensions of higher education service quality, such as contact personnel, physical evidence, reputation, responsiveness, access to facilities and curriculum. studying students' and staff' perceptions in it service quality within university setting smith et al. (2007) discover four-dimensional structure of quality and conclude that servqual has many benefits as an effective measurement instrument that could help higher an empirical investigation into the construct of higher education service quality 35 education institutions to improve quality of their services. according to the authors application of servqual in the public sector can produce different factor structure in comparison with private service sector. among the rare exceptions that replicated five service quality dimensions proposed by parasuraman et al. (1988) is the study performed by barnes (2007) on a sample of chinese postgraduate students studying in the uk. according to the author servqual has proven to be a useful tool for measuring higher education service quality. it is argued that many service companies fail to satisfy customers' expectations not due to lack of service attitude, but simply because they fail to recognize what their customers value. it is thus important to gain deeper knowledge of the attributes deemed to be of importance to student population. what attributes constitute quality and along which dimensions serbian students shape their perceptions of higher education service quality will be dealt with in the following section. 3. research methodology and results 3.1 sample and data collection field research has been conducted in two stages. following the recommendations of parasuraman et al. (1988) that the adaptation of scale items to specific service context is advisable, the focus of qualitative stage has been on rewording the inventory. whereas the original version of the scale contains a number of items with general nouns such as „employees“, qualitative study began with their substitution with more specified nouns „professors“, in order to make the statements relevant for student population. translation of the scale into native language of respondents, altogether with initial rewording and back translation, preceded group discussions with students. students of bachelor course in engineering management at small state faculty in serbia participated in the study. they were initially asked to comment on the construct of higher education service quality. findings indicated that students had vague perceptions of the construct. although they were able to articulate what they expect as a result of the process, they obviously lacked clear opinion of what should be expected of a process itself. as one of the participants at first year of studies put it „never before have i been a student nor have i studied somewhere else to know what i should expect now“. after they have been presented with the reworded version of the scale students agreed that all of the statements addressed the process itself, but were not of equal importance for their service quality evaluations. however, group discussions revealed certain attributes referring to the outcome of higher education that have not been included in the original version of the scale. those attributes were related to graduates' capability for practical application of knowledge, gaining good foundation for future career development, competence to work in leading global companies and competence for higher-level studies at leading universities abroad. thus, reworded original version was supplemented with four additional items. group discussions proceded with quantitative research. in order to make the study as representative as possible sample comprising students of all years of undergraduate studies have been included in the analysis. data collection was performed in co-operation with teaching staff whose permission was sought to utilize twenty minutes of their lecture time. objectives and rationale of the study were explained in brief to to the students and they were asked to indicate their level of agreement with two sets of statements, expectations and corresponding perceptions statements included in the modified version of servqual self-complete questionnaire. in addition, students were asked to rate their overall perception of service quality and behavioral intentions, in line with the measures proposed by zeithaml et al. (1996). respondents were asked to indicate their willingness to recommend the faculty to friends and family members and to imagine themselves into the situation of choosing faculty again and then indicate how likely they would be to choose the same higher education service provider. responses were collected on a 7-point likert-type scale ranging from strongly disagree (1) to strongly agree (7) with no description for the points between the opposites of the scale. participation in the survey which was both voluntary and anonymous, altogether with the explained personal approach, resulted in high response. in total, 261 respondents participated in the study. statistical package for the social sciences v. 18 was used for data analyses. 3.2 reliability and validity analysis in line with the purpose of this study and following churchill's (1979) paradigm for developing better measures of marketing constructs, the focus of the analyses at first was on underlying dimensionality, scale's reliability and construct validity. investigation into the construct of international review of management and marketing, vol. 1, no. 3, 2011, pp.3-42 36 3 higher education service quality calls for reduction of larger number of observable variables to a smaller number of underlying factors and thus principal component analysis was performed on gap scores of quality attributes. however, prior to the analysis factorability of correlation matrix of manifest variables was tested by means of bartlett's test of sphericity and kaiser-meyer-olkin (kmo) measure of sampling adequacy (hair et al., 2009). bartlett's test of sphericity tests the null hypothesis that correlation matrix is an identity matrix, i.e. the variables are not correlated among themselves in which case factor analysis would not be an appropriate method. bartlett's test yielded a value of 2820,786 and associated level of significance less than 0,001. thus the null hypothesis was rejected. lower bound of kmo measure to proceed with factor analysis should be 0,5. in this case test revealed kmo measure of 0,877; indicating meritorious degree of common variance among the variables. principal component analysis with varimax rotation was carried out on a total sample. all communalities were higher than 0,4 attesting to reliability of the indicators. in line with kaiser's rule factors with eigenvalues greater than one were extracted and subjected to rotation (hair et al., 2009). absolute values of factor loadings less than 0,40 were suppressed. analysis yielded six factors of higher education service quality which account for 60 per cent of the variation in the data. rotated component matrix summarized in table i reveals clusters of items, implied by factor loadings, which differ from the a priori clusters, i.e. five generic dimensions of service quality proposed by parasuraman et al. (1988). this pattern suggests a reconfiguration of 26 service quality attributes into six dimensions. coefficient alpha, according to churchill (1979:68) should be the first measure one calculates in order to assess the quality of the instrument. it tests the homogeneity of the items making up a construct, i.e. the extent to which a set of items is consistent in what it intends to measure (cronbach, 1951). the coefficient takes values from 0 to 1, its widely acceptable cut-off value is 0,70; although lower tresholds such as 0,60 are deemed acceptable in exploratory studies (hair et al., 2009). reliability coefficients calculated for the perception-minus-expectation scores of items representing newly discerned factors range between 0,607 to 0,904 and indicate acceptable internal consistency of the sub-scales. two factors with the least number of items have somewhat lower alpha scores which indicates the need to add items to the scale in future studies. cronbach's alpha coefficients are represented within brackets in table i. in accordance with factor loadings the following labels were imputed to new dimensions: career prospects (f1), care for students (f2), tangibles (f3), understanding of students (f4), assurance (f5) and timeliness (f6). since internal consistency is said to be necessary, but insufficient condition for construct validity (churchill, 1979) it was necessary to test construct validity before further analyses and drawing conclusions on the basis of new dimensions. construct validity pertains to the extent to which a scale fully and unambiguously captures the underlying construct it is intended to measure (parasuraman et al., 1988:28). face validity is rather subjective criterion which relates to the meaningfulness of the scale's items to the context in which it is applied. group discussions with students as well as discussions with teaching staff provide support for the scale's face validity. however, it's worth noting that some distinctions appeared in students' and staff' attitudes. whereas teaching staff recognize scientific research as one of the most important antecedents of higher education service quality and basically as a raison d'etre of universities, professors' scientific results were not of primary interest to students. this obviously points out to the different views and calls for bringing into line diverse expectations of stakeholder groups. unlike face validity, which is necessarily assessed qualitatively, convergent and discriminant validity were assessed empirically by examining correlation coefficients between service quality dimensions, overall perception of service quality and students' behavioral intentions. correlation matrix is summarized in table ii. convergent validity relates to the similarity, i.e. convergence between the measures that should theoretically be similar, whereas discriminant validity refers to the distinctiveness of two conceptually similar constructs (hair et al., 2009). correlations among service quality dimensions and linkages between the dimensions and overall rating of service quality which are uniformly higher than cross-construct correlations, i.e. associations between service quality dimensions and behavioral intentions provide support for discriminant and convergent validity, and hence construct validity of the scale. results of factor analysis, summarized in table i, reveal that service quality dimensions discovered in this study do not correspond to generic service quality dimensions, i.e. assurance, responsiveness, empathy, reliability and tangibles. an empirical investigation into the construct of higher education service quality 37 table i. rotated component matrix and reliability coefficients of quality dimensionsa components f1 f2 f3 f4 f5 f6 career (0,904) g50-24 ,844 g51-25 ,832 g49-23 ,831 g52-26 ,750 care (0,790) g27-1 ,676 g36-10 ,672 g28-2 ,611 g31-5 ,576 g37-11 ,513 g43-17 ,488 ,436 ,444 tangibles (0,766) g39-13 ,752 g33-7 ,735 g38-12 ,728 g34-8 ,541 g35-9 ,471 understanding (0,763) g40-14 ,714 g42-16 ,629 g41-15 ,627 g47-21 ,421 ,538 g48-22 ,431 ,526 g46-20 ,523 assurance (0,607) g45-19 ,761 g44-18 ,641 g32-6 ,499 timeliness (0,654) g30-4 ,793 g29-3 ,746 eigenv. 3,579 2,896 2,889 2,825 1,815 1,663 % of variance 13,767 11,138 11,113 10,865 6,981 6,397 cumulative % 13,767 24,905 36,019 46,884 53,865 60,262 anumbers within brackets are reliability coefficients; the grouping of expectation items in the a priori categorization of the instrument was as follows: assurance (q1, q6, q18, q19); responsiveness (q2, q4, q16, q17); empathy (q5, q8, q20, q21, q22); reliability (q3, q10, q11, q14, q15); tangibles (q7, q9, q12, q13) and additional dimension (q23, q24, q25, q26) literature review indicates that numerous replication studies have also failed to conform to five-dimensional structure of the construct. other researchers have reported factor structures varying from single to sixteen service quality factors (ekinci et al., 1998:63). however, there are certain similarities between newly discovered and generic dimensions. three out of four assurance items load significantly on the same factor, whereas first item a priori classified into assurance group loads heavily on second factor, together with responsiveness, empathy and reliability items. in the study of parasuraman et al. (1991:440) responsiveness and assurance dimensions show considerable overlap and according to previously mentioned authors numerous replication studies imply even greater overlap among responsiveness, assurance and empathy. international review of management and marketing, vol. 1, no. 3, 2011, pp.3-42 38 3 table ii. correlation matrix career care tang unders assur time osq bi career 1 care ,439 1 tang ,466 ,419 1 unders ,407 ,535 ,571 1 assur ,410 ,487 ,409 ,524 1 time ,210 ,301 ,334 ,427 ,239 1 osq ,468 ,316 ,319 ,335 ,365 ,224 1 bi ,248 ,124 ,175 ,166 ,176 ,059 ,400 1  correlation is significant at the 0.01 level (2-tailed)  correlation is significant at the 0.05 level (2-tailed) three out of six items comprising f4 relate to empathy, which has again shown to have something in common with responsiveness and reliability. consequently, an issue worthy of further study would be the examination of antecedence relations among quality dimensions, particularly whether empathetic behavior of professors leads to students' perceptions of responsive attitude of teachers and as a result students' impressions that their educators are reliable. an intriguing finding of the current study is also the second factor. it comprises all the a priori classified tangibles items plus one empathy item dealing with individual attention given to students by their professors. one plausible explanation for the relatedness of those theoretically dissimilar traits lies in the practice of the higher education institution included in the study. this faculty is a small one, dislocated from the capital and oriented toward fulfillment of regional educational needs. as such, and in line with prevailing change of higher education funding formulas, professors' attention towards students might be perceived by the students as visible as it were tangible. faced with low promotional budget, the faculty relies heavily on positive word-of-mouth of its current students in recruitment of new ones. whether it is living up to its students' expectations will be discussed in the following section. 3.3 gap analysis in order to establish whether students' perceptions differ significantly from their expectations mean scores for expectation and perception items along service quality dimensions were calculated. series of paired-sample t test were performed on expectation and perception scores. significant positive discrepancy between perceptions and expectations would imply that students' expectations are exceeded, whereas significant negative difference indicates unsatisfactory service. results of the analyses are presented in table iii. findings suggest that the faculty is underperforming along all dimensions which shape students' perceptions of service quality. students are most concerned with the provision of services at the promised time and that they are informed by the professors when the services will be performed. on the other hand, professors do not behave as expected from the point of view of students. even more disturbing from students' perspective are career prospects, according to the largest negative discrepancy. as future graduates, students expect to be competent to apply gained knowledge in practice, to be capable of finding a job and developing career in leading international companies and also expect solid foundation for prospective higher level studies at some of leading universities abroad. closer inspection of the ratings reveals that students have rather high expectations. as for the an empirical investigation into the construct of higher education service quality 39 perceptions, although they are lower than expected, it can be noticed than on a seven-point scale perceptions do in fact fall in the range of neutral to good and even slightly higher in the case of timeliness. therefore, an avenue worthy of further study would be examination of students' zone of tolerance, i.e. comparison of perceptions with minimally acceptable and desired expectations, and behavioral consequences of service quality. table iii. paired-sample t test of expectation and perception scores mean expectations mean perceptions p-i t-value sign. (2-tailed) career 5,98 4,49 -1,49 14,618 ,000 care 5,57 4,67 -0,9 11,992 ,000 tangibles 5,36 3,90 -1,46 16,239 ,000 understanding 5,54 4,60 -0,94 11,878 ,000 assurance 5,85 5,02 -0,83 11,080 ,000 timeliness 6,22 5,22 -1 11,107 ,000 n=261 stodnick and rogers (2008) argue that continual improvement of service quality is likely to generate higher levels of customer satisfaction and loyalty, which will manifest itself in higher retention of current student population and together with their positive word-of-mouth the ultimate effect will be decreased costs of attracting new students. scarce resources are prevailing reality of today's higher education institutions which calls for informed choices in the area of quality improvement. priority areas of service quality improvement for the faculty included in this study have been investigated by means of multiple regression. behavioral intentions as dependent variable was regressed on factor scores of revealed service quality dimensions. results of stepwise regression are summarized in table iv. table iv. model summary and coefficientsa standardized beta coefficients t sig. career ,224 3,696 ,000 care ,083 1,368 ,172 tangibles ,031 ,503 ,616 understanding ,072 1,195 ,233 assurance ,112 1,849 ,066 timeliness ,005 ,074 ,941 adj. r square ,047 a dependent variable: behavioral intentions findings indicate that career prospects, the dimension with largest negative gap, is the only significant predictor of behavioral intentions. as expected, this dimension is associated positively with behavioral intentions and the higher the perceptions of chances for career development, the more inclined is student population to recommend the faculty and more convinced are the students that they have made the good choice when they decided to enroll this faculty. rather low adjusted r square value implies that there are other factors, not included in the model, which explain 95 per cent of the variation in students' behavioral intentions. thus, future research is needed to identify additional factors that influence students' behavioral intentions. it is however worth highlighting that students' international review of management and marketing, vol. 1, no. 3, 2011, pp.3-42 40 4 perceptions of career prospects are actually not made on their direct experience. since the respondents included in the study have all been undergraduate students at the moment of interviewing, and as such have not yet experienced the process of looking for a job or studying at higher level studies abroad, it would be interesting for future studies to examine the influence of expectations on perceived performance. notably, whether high expectations, shaped by positive word-of-mouth, have negative influence on perceptions. if their perceptions are based on observing obstacles their graduate colleagues are facing in looking for a job, the question also remains as to what extent finding a good job is the sole consequence of sound academic knowledge. are there other factors, besides academic achievement, necessary for obtaining desired employment, such as social and emotional intelligence, and if the problem lies in the lack of those skills should proper training in desired behavioral traits be incorporated in educational institutions' curricula and in what manner? 4. discussion and conclusions in spite of the widespread agreement among academics on the importance of higher education service quality, a consensus on its conceptualization has not been reached yet. consequently, the best way to measure service quality is still regarded an unresolved issue. one thing is indisputable, quality will not improve unless it is measured and appropriate corrective actions are taken. however, constrained budgets of higher education institutions call for informed choices in the area of resource allocation and therefore reliable, valid and diagnostically sound measurement instruments. this study has attempted to gain deeper insights into the construct of higher education service quality. generic scale adapted to the context of higher education has been applied and research findings indicate sixdimensional structure of the construct. group discussions with students revealed the importance of technical dimension of service quality, which has later been confirmed by factor analysis. thus, this study bridges the gap between nordic and american perspective of service quality indicating that both technical and functional attributes shape the perceptions of undergraduate students. however, it does not intend to be prescriptive and it certainly raises more questions than it gives answers. the battery used in this study should not be regarded as a final answer, but rather a good starting point for future undertakings in the area of higher education service quality management. gathering both students' expectations and perceptions has its drawback in the length of the inventory and needed effort of the respondents to fill in the questionnaire, but it offers the possibility to spot particularly troubling areas before they become critical. although higher education differs in comparison with commercial businesses in the way that it is not as easy for unsatisfied customer to switch the supplier, in new educational environment spurious loyalty is not an option anymore. this study reveals that students' perceptions fall short of expectations across all service quality dimensions. probing into the causes of discrepancy would require additional qualitative research. however, one plausible explanation lays in the structure of the sample, i.e. relatively higher proportion of students attending first year of study. secondary education environment differs substantially from university setting and expecting the same treatment would be unrealistic and a step towards dissatisfaction. however, organizing introductory courses for newcomers university administrators could help students to comprehend what is reasonable to expect and also what is the desired behavior. the latter applies to the students of all years of study, due to the specific nature of higher education and the fact that customers provide vital input into the process and thus their adeqate participation is a necessary precursor for desired outcome of the process. the study has been performed on a convenient sample of students of one faculty. thus, due to the very nature of the study its results should not be generalized. however, future studies should include more randomized samples of students and besides full-time students, expectations and perceptions of part-time students should be addressed also. in addition, an area worthy of further study would be dimensional stability of the construct in a cross-cultural study. the main drawback of the study is definitely its one-sided perspective. however, in order to make the study feasible the authors have chosen to focus on students' perspective only, but do acknowledge that including the perspectives of other stakeholders, such as teaching staff one would get deeper insights into potential discrepancies among students' expectations and service personnel' perceptions of students' expectations. moreover, the study could be supplemented with qualitative studies focused on revealing potential hindrances and obstacles that prevent front-line employees in the delivery of high quality service. measurement instrument supplemented with eventual additional items, that would be revealed during more thorough an empirical investigation into the construct of higher education service quality 41 qualitative research, would be the most useful if it were implemented on a longitudinal basis, for tracking trends in students' expectations and perceptions. comparing expectations and perceptions of students attending different years of study could also yield additional fruitful information for better direction of quality improvement actions. another beneficial application of the instrument 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(1996), the behavioral consequences of service quality. journal of marketing, 60, 31-46. . international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2017, 7(1), 34-42. international review of management and marketing | vol 7 • issue 1 • 201734 real value of advertising value equivalent in sport sponsorship sebastian kot1,2, michał kucharski3* 1czestochowa university of technology, the management faculty, poland, 2north-west university, faculty of economic sciences and it, south africa, 3faculty of management of sports and turism, the jerzy kukuczka academy of phisical education in katowice, mikołowska 72a, 40-065 katowice, poland. *email: m.kucharski@awf.katowice.pl abstract conducted examinations were aimed at examining to what degree formal values of the advertising value equivalent (ave) are ahead of their real value. the reason behind setting the real amount of the ave is that many sponsoring entities supporting sport treat this factor as the main determinant in evaluation of their sponsoring campaign, even though there are justified doubts about its credibility (hagyari et al., 2016). during the implementation of studies a thesis was adopted that the official value of the ave is elevated, and hence distort the process of evaluation of sponsorship. conducted research involved determining number of visual contacts of respondents with logotypes of chosen sponsors while watching video material with volleyball matches. research process was based on an eye-tracker. obtained data was used to determine real values of ave obtained by each brand. obtained findings allowed to accept the thesis, as applied innovative test procedure confirmed that real value of the ave, which had been set, was significantly lower in case of every examined enterprise: differences between the official and real value of the ave fluctuated from 57% to 96%. sponsoring enterprises shouldn’t base the evaluation of their sponsorship campaigns on official ave as obtained data may lead to erroneous conclusions. keywords: advertising value equivalent, sports sponsorship, eye-tracker jel classifications: m31, o32 1. introduction conducting a business activity one should make every effort to generate benefits to companies and entrepreneurs during taken actions. this principle regards large, average, small as well as micro enterprises and spreads through all areas of their functioning. that is in case of conducting promotional campaigns, being one of principal components of activity in the area of marketing. these benefits, according to principles of the realization of the managing process that can be based on benchmarking (goncharuk et al., 2015), should be verified at the stage of control and can assume different form depending on established purposes of a promotional campaign and effectiveness of their realization. diversity of purposes accomplished with the promotion and different manners of their realization used in economic practice (grzegorzek, 2010), based on principles of integration of the promotion (pabian, 2009), force seeking methods allowing for obtaining the reliable information about achieved benefits. in case of promotional measures, in the opposite to other aspects of organization’s functioning, additional difficulty in the identification and measurement of benefits achieved thanks to it comprises concomitance of indirect and final promotional effects (czarniewski, 2010). it will not also be possible to directly express all benefits coming from applying the promotion in a material way. a consequence of the described situation are diverse methods of monitoring of get effects, which appear in the literature, as well as in practice economic associated with marketing activity. one of these methods intended for the promotional actions unrelated to the advertisement is establishment of the advertising value equivalent (ave). functioning for years, this method waited numerous discussions on pages of scientific journals, and its application was called by many authors into question (macnamara, 2000; watson, 2012; watson, 2013; xuening and pieter, 2012; safiullah et al., 2016). yet it is still used in economic practice for the measurement of results of promotional measures (kot and kucharski, 2015; wright et al., 2009). due to it was decided as part of own examinations to bring up issues of the credibility of the ave. examinations presented in the present article constitute the part of wider examinations devoted to the measurement of the kot and kucharski: real value of advertising value equivalent in sport sponsorship international review of management and marketing | vol 7 • issue 1 • 2017 35 effectiveness of the sports sponsorship (demir and söderman, 2015), in frames of which it was aspired to make multi-criterial study of methodology of its establishing. setting the real value of the ave based on the test procedure with the application of eyetracker was one of mentioned aspects. the principle of examinations concerned the effectiveness of sponsorship campaign constituting one of available methods of conducting the promotional activity. therefore also the verification of the legitimacy of using data concerning the ave in the evaluation of promotional campaigns will be based on sponsorship activity of selected companies. reducing the research trial in the aspect of enterprises using the ave resulted from purposes put before the integrity of quoted examinations, but was also justified with findings conducted in 2012 (halemba et al., 2013). then research amongst polish volleyball clubs appearing in the highest male and female league was being made. one of adopted purposes of research was getting to know criteria, which enterprises sponsoring these clubs took into consideration by evaluation of their commitment to the cooperation with the given club. from 20 clubs appearing then in both leagues, 16 made up their mind for the participation in the examination. out of them 13 clubs showed that they knew factors affecting the level of the satisfaction of their sponsors and in frames of the opened question named these factors. in 9 clubs replies the value of the ave appeared directly or assumed the form of the factor affecting this value, like e.g., number of tv broadcasts. in other question respondents were asked for assessment (in the scale from 1 to 7) of factors listed by authors of the examination, which can be significant for their sponsors at the evaluation of the result of committing themselves to sports sponsorship. representatives of male volleyball clubs participating in the examination assigned maximum values to tv broadcasts (4.4) and ave (4.3). frequency of indicating ave by polish volleyball clubs as one of crucial factors of the evaluation of the sponsorship campaign fulfilled by enterprises cooperating with them, became an essential reason of research works aiming at setting its real amount. in consequence people managing sponsorship campaigns, as well as campaigns exploiting other forms of the promotion, will get confirmation or negation of the legitimacy of using the ave for assessing effects of these campaigns. 2. literature review possibility of exploiting the measurement of the ave in the research on the effectiveness of promotional campaigns, including sponsorship campaigns. the ave may be defined as the index expressed in money which tells how many means one should allocate for the purchase of traditional forms of advertising in order to get the effect generated by the time and places of the exhibition of the given mark logotype associated with media reports from events, which the given brand is being exhibited in (kee and hassan, 2006). at establishing the ave one should be based on exhibitions appearing in the media, which it is possible to describe as effective. in case of data concerning value of the ave presented in the present article a condition of treating the given exhibition as effective was a time of its appearance (not shorter than the second) and high percentage value of the area of the clearly and apparently taken logotype (over 80). setting the number of effective exhibitions of logotypes of sponsors during the broadcast of matches polish male and female, first-class volleyball league is being fulfilled by the research agency, which serves plps in this matter and applies quoted criteria for establishing effective exhibitions. the number of effective exhibitions is one of factors taken into consideration at the determining the value of the ave by this agency. the detailed scheme presents itself as follows: we=le×lw×wd×cpt(30) (1) descriptions: we: value of ave le: number of effective exhibitions lw: number of people watching the given broadcast (in thousand) wd: rate of the length treated as the quotient of the length of the exhibition of the logotype of the brand long up to 30 s, i.e., to duration of the standard advertising spot cpt(30): cost of reaching up to 1000 spectators for 30 s advertising spot. by inserting following exemplary data to the above formula: 10 effective exhibitions of length rate equal to 0.25, 5 thousand spectators, in which cpt(30) amounts 20 pln, we receive the following value of the ave: wm=10×5×0.25×20 pln=250 pln (2) expressing the ave in money makes it possible to use it for the evaluation of conducted promotional measures and for establishing their effectiveness. it is at the stage of the control, carried out in a final stage of the management process, having cognitive-adaptation character (kuc, 2002) the comparison of achieved results with accepted standards, the drawing of conclusions and implementing correcting action, should be made (kotler, 2005; kuc, 2009; kuchta, 2011). within control of actions carried out by enterprises in the area of marketing it is possible to distinguish the following analyses: effectiveness, market share, sale, the corporate image, marketing costs, budget, profitability, net profit, satisfaction of customers and the communication with them (kowal, 2010). in the context of this deliberations concentrating on the concept of the effectiveness out of her numerous kinds, amongst which it is possible to distinct productive, technical, adaptive, understood is the sense of pareto, price, cost, organizational and the x-effectiveness concept (puczkowski, 2014), productive effectiveness will be included, which can be also determined as cost-effectiveness (pawłowski, 2014). the assessment of it is based on correlating effects generated by the commitment to the sports sponsorship with the expenditure incurred on reaching these effects (puczkowski, 2011). carrying on deliberations, on the base of which we got the model value of the ave on the level of 250 pln and assuming that the model enterprise incurred the costs associated with the considered exposition of their brand at the given medium equal to 200 pln we will receive the effectiveness of taken action on the level 1.25% or 125% (250 pln/200 pln = 1.25). the simplicity of establishing the effectiveness at using the ave constitutes the temptation of basing undertaken promotional measures on this method of estimation. but bearing in mind numerous voices kot and kucharski: real value of advertising value equivalent in sport sponsorship international review of management and marketing | vol 7 • issue 1 • 201736 surrendering the legitimacy of using the ave into the doubt, one should think, whether indeed it is worthwhile making decisions about continuing or ceasing of given campaign on the base of the effectiveness established at exploiting it. were decided to clarify this doubt as part of presented own examinations for the enterprises involved in the sports sponsorship. sponsorship is a part of promotional activities of organizations that can be used in achieving various benefits. it is possible to divide company’s benefits on: (1) these associated with social awareness, relations with the government, investing in the society and perceiving the company by it, providing entertainment for customers, financial relations, the corporate image, rivalry with other companies and associated with the affair with employees; (2) marketing benefits, i.e. reaching target markets, business relations, sale growth, brand positioning; and (3) media benefits, to which belong i.e. brand positioning, presence in the media, strengthening and standing out advertising campaigns carried out at the same time (nufer, and buhler, 2010). other classification divides benefits connected with the sponsorship on these referring to the company, its image, the local communities and customers (datko, 2012). scope of benefits possible to achieve by the organization depends on adopted purposes and the degree of the commitment to the cooperation with the sports entity (full, medium-strong engagement in the sponsorship or a need of cooperation in part of the patronage) (zinger, and o’reilly, 2010). completion of the sponsorship campaign should run according to principles of the process of managing (sznajder, 2012), which comprise its individual functions (griffin, 2013; kisielnicki, 2011; mintzberg, 2012; stoner et al., 2011). a sign of such an approach to issues of the completion of the sponsorship campaign is to lead them on the base on the prepared sponsorship program (redwan, 2004). preparation of a well-prepared program by an organization without experience in conducting sponsorship campaigns that would probably base on bench marketing (goncharuk et al., 2015), should constitute the brightly worded sponsorship actions plan, in frames of which targets put before the campaign, its budget, the subject or subjects with which it is going to be cooperated with and the geographical reach of target markets, are being marked (waśkowski, 2007). next the sponsorship program should contain the instruction concerning the manner of the implementation of operations associated with the sponsorship, of integration of taken action with a comprehensive marketing strategy of the enterprise (buczkowska, 2007) and of principles of establishing effects of investing in this form of the promotion (datko, 2012). in frames of the last exchanged points of a sponsor program one should make a decision, whether the control of effects of the commitment to the sports sponsorship will be using the method consisting in the determining the value of the ave. 2.1. using eye-tracking in scientific researches by using eye-tracker researchers can identify places, at which the examined looked in the space researchers are interested in (mobile eye-trackers) or in material possible to be shown on monitors (stationary eye-trackers). the possibility of getting into the process of the attention of the observer constitutes one of main premises being behind an application of eye-tracker in researches, but also in marketing (duchowski, 2007). it is possible to single numerous areas of using eye-trackers out, to which it is possible to rank psychology, medicine, neurophysiology, social sciences, analysis of advertisements, sport researches etc. (wawer, 2014). the entire research process using eye-tracker-type devices is based on the sense of sight, which anatomical and physiological aspects of functioning are described in numerous specialist studies (e.g.: drake et al., 2010; krechowiecki and czerwiński, 2009; netter, 2011; rohen et al., 2012). from the point of drawing inferences from eye-tracking examinations a knowledge of the theory associated with the human memory is also significant (zimbardo, and gerrig, 2012; kosslyn and rosenberg, 2006). articles being based on an application of eye-tracker turn up in contemporary literature in two essential aspects. one group of studies concentrates on describing of findings, which purpose is getting to know possibilities of contemporary eye-trackers and aspiring to formulation of principles of their correct application (nyström et al., 2013; scurr et al., 2014; wyatt, 2010). the second group of examinations concentrates on the application of eyetrackers for realization of research goals corresponding to interests of individual areas of sciences. in this place examinations carried out in the area of marketing will be quoted, because this area corresponds with the application of eyetracker in the framework of own examinations presented in this article (brasel, and gips, 2008; thomas-smith, 2011; vidal et al., 2013). examinations using eye-tracker aspire mainly to the analysis of the move of eyeballs in the following areas: fixations places of stopping the eyesight, cascade irregular moves, moves of heading (scan paths) and aois areas of interest areas being an object of the interest of watching people (papenmeier, and huff, 2010). in case of the fixation their length is being measured, however in case of aoi it is to be set how often the given area was situated in the focus of attention of examined people. on the base of the data set get thanks to examining the chosen attempt, which minimum number in case of examinations using eye-tracker is not significant and in cases of quality researches hesitates from 7 to 20, and in case of quantitative examinations takes 20 and more people out (pasikowska, 2009), it is possible to begin the stage of the verification of constructed hypotheses and the drawing of inferences. 3. methodology being aware of stipulations appearing in terms of the legitimacy of using the ave as the measure of results achieved by promotional campaigns and having data showing that despite these stipulations many polish companies doing the promotional activity in the area of the sports sponsorship are based on this size, as part of own examinations it was aspired to achieve objective data concerning values of the ave. the main purpose (cg) put before examinations was setting the real amount of the discussed equivalent, and hence getting to know the difference between its official and real value. thanks to the realization of the assumed purpose data will be accessible, which will confirm or negate doubts associated with using the ave by enterprises aspiring for knowing results of their promotional measures. for the main purpose proposed this way a thesis was suggested, which (with reference to the opinion of researchers skeptically set for using the ave) assumes that the official value of the ave is raised, and hence misinforms those responsible for assessment of undertaken promotional actions. the realization of cg, thanks to delivering of data concerning real kot and kucharski: real value of advertising value equivalent in sport sponsorship international review of management and marketing | vol 7 • issue 1 • 2017 37 values of the ave, will enable the accomplishment of the support purpose (cp), in frames of which it was aspired for establishing effectiveness of the promotional campaigns based on the sports sponsorship for enterprises taken into account as part of own examinations. aiming at cg accomplishment the test procedure was to be based on the application of eye-tracker. using it enabled to set the actual number of contacts of people watching video material shown during examinations with logotypes of enterprises chosen for setting the real amount of the ave. knowing described above principles of establishing the level of the ave, this number constitutes the basic criterion enabling the formal value to verify it. it is caused by the fact that the procedure of calculating the ave is based on a number of effective exhibitions and the number of people watching the given broadcast, not taking into account, whether a given person will whether will not notice the given exhibition. therefore with consequence of applying the procedure enabling to set the actual number of contacts of watching people with individual effective exhibitions, there is a possibility of setting the real value of the ave being based on a number of eye contacts with a logotype of a given brand. it can be done by the following scheme: rwe=we×ok (3) where, ok=rk/(le×b)×100% (4) descriptions: rwe: real values of ave in thousand pln we: official value of ave in thousand pln le: number of effective exhibits ok: percentage of contacts of tv viewers with the logotype of the brand appearing in the analyzed material rk: sum of contacts with a logotype of a given brand all people examined by using eye-tracker b: number of people examined by using eye-tracker. as can be seen from the quoted model, for the calculation the formal value of the ave data concerning the real value of the ave and number of effective exhibitions are essential, which data constitutes data set coming from secondary sources. data generated as part of the own examinations based on the application of eye-tracker are: the sum of contacts with the logotype of the brand of all examined people and the number of them. additional data set essential for the accomplishment cg and cp is associated with the need of getting to know costs incurred by enterprises in relation to promotional measures carried out and the number of recipients, to which the given form is addressed. gathering above data is a factor determining the possibility of the realization of put purposes of research. in case of own examinations it was decided to set the real amount of the advertising value equivalent (rwe) and effectiveness of a promotional campaign carried out at using the sports sponsorship for 14 enterprises sponsoring mks dąbrowa górnicza club 2013/2014 season. the condition of including the brand of the sponsoring enterprise in the group of categorized brands qualified for examinations was a possibility of obtaining the access to the full collection of required data. in relation to the clause of the confidentiality, universally turning up at sponsorship agreements in the reality of polish sports market, categorized brands will not be given by name so that assigning the value of sponsorship agreements to the given brand will be impossible. so brands included in examinations will be named as sponsor and indicated with letters from a to n. all needed secondary details were obtained on the basis of the interview conducted with the representative of the club. their source, apart from values of sponsorship agreements, were marketing reports made available to volleyball clubs through the company managing the most important volleyball games in poland, i.e., professional volleyball league s.a. value of sponsorship agreements for the 2013/2014 season was set on the basis of an analysis of records of these agreements. additionally together with the representative of the club television broadcasts of matches, which were included in examinations, were chosen. in 2013/2014 season mks dąbrowa górnicza played 27 matches as part of national games aiming at selecting the polish women’s volleyball champion. 18 of them were played during the first round, remaining 9 during the play-offs. in the analyzed season volleyball players of this club occupied 4 place. out of all matches exclusively 8 was broadcasted on television by polsat sport, which is a main sports channel of the station having exclusiveness to broadcasting discussed games. due to this as part of own examinations it was decided to consider all video materials from all 8 matches, from which mks dąbrowa górnicza played 5 as host, and 3 remaining as the guest. the table 1 presents all data from secondary sources essential for the realization of purposes of research. value of sponsorship agreements of individual sponsors relates to the amount, which sponsoring enterprise handed over to the mks dąbrowa górnicza in 2013/2014 season. diversifying the value is connected with all sorts of sponsorship packages offered by the club (possibility of the lack of the exhibition of the logotype od a given brand during away-from-home matches) and with uneven period of the cooperation, what is connected with the beginning of it by 5 sponsors already during the season. the consequence of it is a different number of people watching sports events with the participation of the club falling for individual sponsors. sponsors, which cooperated with the club for the entire season and had right to the advertising during away-from-home matches were shown during all 8 matches taken into account in examinations. altogether almost 930 hundred thousand persons watched these matches on tv. remaining sponsors could show their logotypes exclusively during matches played by the club as the host. from this group of companies exclusively 2 brands were present at every such matches, thanks to it they got the accumulated number of viewers in front of tv sets on the level of 560 hundred thousand people. remaining brands depending on the number of matches, in which they were shown, got total number of spectators on the level of 248 or 43 hundred thousand people. in the framework of presented examinations eye-tracker was used for setting the actual number of eye contacts of examined people with logotypes of chosen sponsors presented during watched kot and kucharski: real value of advertising value equivalent in sport sponsorship international review of management and marketing | vol 7 • issue 1 • 201738 sports events. the data set of this type is essential for the sp accomplishment. a principle was adopted that every categorized film footage qualified for examinations had been introduced to 25 people what crosses the threshold of the minimal research attempt adequate to conduct quantitative examinations by 5 people at using eye-tracker device (pasikowska, 2009). every time examining was preceded by the process of the calibration of device, during which people qualified for examinations followed 5 points shown on the display screen with their eyes. after the verification and accepting results of the calibration, based on which the device encodes, which fragment of the monitor the examined person is looking at in the given time, presentations of material containing the analyzed sports show were being started. consciously a purpose of research was hidden from examined people in order not to provoke respondents for conscious and unnatural turning of the attention to logotypes turning up at presented material. in this way is aspired for minimizing the risk of obtaining distorted data. every respondent has participated exclusively once in examinations at using eye-tracker, what marks that he had an opportunity of watching exclusively one broadcast of the sports show. after examining 25 people for one transmission generating the data set allowing for setting the number of actual contacts of examined people with analyzed sponsors’ brands was being started. it was held at using software supporting eye-tracker, through which aoi areas were being established, and next statistics were being set for every aoi taking the number of the examined, who had a contact with the given area and a length of these contacts, into account. the number of aoi areas for a given brand of the analyzed sponsor corresponded to official figures passed on to polish volleyball clubs through plps in the scope of the number of effective exhibitions of the logotype of the given brand during the analyzed sports show. one should understand determining the effective exhibition as the exhibition lasting at least for a second, containing minimum 80% of the space of the logotype and being characterized with the clarity and the good visibility. setting the number of effective exhibitions of logotypes of sponsors during the broadcast of matches polish male and female, first-class volleyball league is being fulfilled by the research agency, which serves plps in this matter and applies quoted criteria for establishing effective exhibitions. selecting respondents to own examinations it was decided to rely on findings conducted in 2012 to the order of plps, which goal was characterizing the fan of the volleyball in poland. since form directed by brands sponsoring polish volleyball clubs is being addressed to fans of this sports discipline, it was been found advisable to invite people corresponding to the profile of the fan of this discipline to the group of respondents. quoted examinations say that fans of the polish volleyball are both women (50.1%) as well as men (49.9%), people in the age from 19 to 59 years with over 30% participation of people in the age up to 29 years, having mainly secondary or higher education (87.2%) representing different geographical areas of the country and occupations1. 4. results and discussion in table 2 presented below data for individual brands of sponsors in the percentage of contacts of viewers with the logotype of the brand appearing in analyzed material (ok.) established on the basis of results of own research carried out with eye-tracker were presented. having the value of ok. and relying on data placed in table 1 at the same time it was possible using suggested methodology to establish the real value of the advertising value equivalent (rwe). these values for each of analyzed sponsors were also presented in table 2. ok. values described in the table 2 are collective values taking into account all sports shows analyzed as part of examinations and consist weighted average of ok. value get by individual sponsors as part of every individual show. one should understand this value as the percentage of eye contacts of people watching analyzed sports shows with effective exhibitions of the logotype of given sponsor. for example a sponsor was exhibited during 4 of analyzed sports shows. number of its effective exhibitions in frames of the i match were 23, of the ii 11, of the iii 11 and of iv match 14, what altogether give 59 effective exhibitions. individual matches attracted the following number of spectators in front of tv sets: i match – 187.32 thousand, the ii – 83.65 thousand, the iii – 1 profile of a volleyball fan in poland. report from quantitative research conducted by pentagon research in 2012. table 1: secondary data essential to calculate the real value of the ave (together for 8 matches) and effectiveness of the sports sponsorship sponsor’s indication official value of ave (thousand pln) number of people watching sport shows (thousand) number of effective exhibitions value of sponsorship agreement in 2013/2014 season (thousand pln) a sponsor 30.34 435.62 59 16.35 b sponsor 182.83 928.32 364 50 c sponsor 118.63 928.32 254 100 d sponsor 15.76 248.3 43 20 e sponsor 37.90 560.69 72 50 f sponsor 499.86 928.32 1083 800 g sponsor 46.94 248.3 127 60 h sponsor 1.46 42.69 8 21 i sponsor 192.80 928.32 417 200 j sponsor 46.18 560.69 101 30 k sponsor 5.31 42.69 29 181.5 l sponsor 154.06 928.32 318 110 m sponsor 261.1 928.32 567 1500 n sponsor 99.77 928.32 201 100 ave: advertising value equivalent kot and kucharski: real value of advertising value equivalent in sport sponsorship international review of management and marketing | vol 7 • issue 1 • 2017 39 121.96 thousand, the iv 42.69 thousand; altogether all matches with the participation of a sponsor watched 435.62 thousand people. in frames of each of matches a sponsor could assume to get the limited number of eye contacts of tv spectators with its logotype. this number is being set on the basis of the product of the number of effective exhibitions in the given match and of the number of people watching a given match and it presents itself as follows: match i 4308.36 thousand, the ii 920.15 thousand, the iii 1341.56 thousand, the iv 597.66 thousand. altogether sponsor a could count on 7167.73 thousand of contacts of this type. in table 3 data allowing for setting ok. average rate for a sponsor will be presented. similar calculations were conducted for each of analyzed sponsors, which effect are ok. values presented in table 2. the consequence of the determining of ok. value for individual sponsors was a possibility of calculating rwe value for them. again for the example an equation allowing for the rwe establishment for a sponsor will be presented. during its calculation, expressed above model will be used: rwe a sponsor=30.34 thousand pln×42.57%=12.92 thousand pln (5) after substituting data referring to all sponsors to the assumed pattern results placed in table 2 were received, which constitute the accomplishment of the main purpose of examinations described in the present article and allow for the verification of the main hypothesis. from the accepted methodology of setting the real value of the ave resulted that it could not be higher than its official value. therefore the maximal ok. value could amount 100%, what would mark that all effective exhibitions of the logotype of the given mark would be noticed by all people watching the given material. how findings show, getting such stat in the area of the advertisement connected with the realization of sponsorship campaigns is to say exquisitely difficult (it is possible to risk a claim that it is even impossible). an average ok. value equal to 25.76% at the standard deviation of 10.4% get by analyzed certificates it. achieved ok. values directly submit themselves on the possibility of the verification the real value of ave. table 4 confronted values of official and real ave with each other and set differences between both values for each of sponsors. last column of table 4 presents the level of raising formal values of ave with regard to its value verified on the basis of findings. table 2: values of ok. and rwe for analyzed sponsors sponsor’s indicator ok. (%) rwe (thousand pln) a sponsor 42.57 12.92 b sponsor 29.76 54.40 c sponsor 16.53 19.60 d sponsor 13.82 2.18 e sponsor 3.43 1.30 f sponsor 35.65 178.21 g sponsor 28.41 13.34 h sponsor 32.00 0.47 i sponsor 17.88 34.47 j sponsor 27.00 12.47 k sponsor 34.90 1.85 l sponsor 25.70 39.60 m sponsor 33.18 86.64 n sponsor 19.80 19.75 table 3: data and calculations for a sponsor used for the determination of ok. value for all analyzed matches match indication number of the examined (b) number of effective exhibitions (le) b*le real number of contacts of the examined (rk) ok.=rk/(b*le) (%) maximum number of contacts of spectators with the logotype real number of contacts of spectators with the logotype including ok. match i 25 23 575 246 42.78 4308.36 1843.23 match ii 25 11 275 102 37.09 920.15 341.29 match iii 25 11 275 129 46.91 1341.56 629.31 match iv 25 14 350 139 39.71 597.66 237.36 sum: 7167.73 sum: 3051.19 ok. weigted average=3051.19/7167.73=42.57% table 4: comparison of the value of official and real ave get by analyzed sponsors during of chosen sports shows (in thousand pln) sponsor’s indication official value of ave real value of ave difference between official and real value of ave a sponsor 30.34 12.92 17.42 b sponsor 182.83 54.40 128.43 c sponsor 118.63 19.60 99.03 d sponsor 15.76 2.18 13.58 e sponsor 37.90 1.30 36.6 f sponsor 499.86 178.21 321.65 g sponsor 46.94 13.34 33.6 h sponsor 1.46 0.47 0.99 i sponsor 192.80 34.47 158.33 j sponsor 46.18 12.47 33.71 k sponsor 5.31 1.85 3.46 l sponsor 154.06 39.60 114.46 m sponsor 261.1 86.64 174.46 n sponsor 99.77 19.75 80.02 ave: advertising value equivalent kot and kucharski: real value of advertising value equivalent in sport sponsorship international review of management and marketing | vol 7 • issue 1 • 201740 in every case inflating is at the level of over 50%, in some cases exceeds even 90% what forces adaptation of the main hypothesis and orders to acknowledge that formal values of the ave are raised, and hence misinforms those responsible for the evaluation of taken promotional measures. these people get information about it, how many their exhibition at the given medium could be worth, if all people, which use it paid attention to it. and so it is value not-corresponding to reality, because only conducting examinations with eye-tracker shows, what percentage of people, which have a possibility of the confrontation with the logotype of the given mark by using the given medium, will indeed have contact with it. in the context of cp realization establishing the effectiveness of the sports sponsorship for individual brands will be carried out at using the scheme: real value of the ave/costs of the sponsorship agreement = effectiveness of the sponsorship. this type of view constitutes a great simplification in establishing the effectiveness, because do not take into account effects different from the ave, which a sponsor can get on account of made sponsorship campaign and which were introduced in in the earlier part of the article. however being aware that during control activities many enterprises are not making up their mind to make the effort of getting to know other effects achieved thanks to sponsorship campaigns, condemning themselves this way to establish the effectiveness on the basis of the media value, they decided on cp realization. data letting for establishing effectiveness of conducted sponsorship campaign based on the official and real value of the ave was presented in table 5. investigating above data one should be aware that since real values of the ave for every sponsor were lower than its formal values, each of analyzed sponsors also got lower real effectiveness of the sponsorship campaign run by oneself. one should also take into account that presented values of the ave refer exclusively to 8 analyzed matches, without taking into account alternative sources of the value of the equivalent so as retransmissions of matches, matches in other games than the ones which were considered, press photographs, articles on websites, etc. therefore one should not treat described values of the effectiveness as ultimate values for individual sponsors, achieved by them in the 2013/2014 season. the balance sheet in table 5 was presented in order to pay attention to the fact that being based on formal values of the ave higher, often very beneficial effectiveness results are being achieved. however this situation change, when we take into account actual benefits get on account of the sponsorship in the contact of viewers with the logotype of the brand. then the effectiveness often lowers in the significant way the way how it is in case of a, c, j, l or n sponsors. in these cases campaigns, which on the basis of official figures should be treated as effective (result over 100%), after considering findings become ineffective in some cases reaching the level of the effectiveness at only 20%. 5. recommendations for further research, practical implications and restrictions presented examinations included exclusively promotional measures carried out by using the sports sponsorship. on their base one should confirm that the ave is not an authoritative indicator of results of promotional measures. however continuing research works and including in it other media used by organizations as part of the promotion, like websites, social media, press, the advertisement based on the product placement it will be possible to establish, which from these forms generates the higher probability of getting eye contacts of people, to which it is addressed. in this way drawing the specific ranking of media in the scope of effective reaching target markets will be possible. from the point of view of those responsible for conducting the promotional activity of the organization, in it also for the realization of sponsorship campaigns, the most important message coming from presented examinations is a need of seeking methods of establishing results of undertaken promotional actions not based on the number of achieved exhibitions and of people, who may or not may be reached by the given message. applying methods of this type can contribute to incorrect interpreting the effectiveness of individual actions and continuing them in spite of not-achieving deliberate objectives by the organization. in consequence organizations will be losing time and money as well as will be seeking causes of market failures in other areas of table 5: effectiveness of sports sponsorship based on the real value of ave sponsor’s indicator official value of ave (thousand pln) real value of ave (thousand pln) value of sponsorship agreement (thousand pln) official value of the effectiveness (%) real value of the effectiveness (%) a sponsor 30.34 12.92 16.35 186 79 b sponsor 182.83 54.40 50 366 109 c sponsor 118.63 19.60 100 119 20 d sponsor 15.76 2.18 20 79 11 e sponsor 37.90 1.30 50 76 3 f sponsor 499.86 178.21 800 62 22 g sponsor 46.94 13.34 60 78 22 h sponsor 1.46 0.47 21 7 2 i sponsor 192.80 34.47 200 96 17 j sponsor 46.18 12.47 30 154 42 k sponsor 5.31 1.85 181.5 3 1 l sponsor 154.06 39.60 110 140 36 m sponsor 261.1 86.64 1500 17 6 n sponsor 99.77 19.75 100 100 20 ave: advertising value equivalent kot and kucharski: real value of advertising value equivalent in sport sponsorship international review of management and marketing | vol 7 • issue 1 • 2017 41 their activity. it does not mean of course that one should entirely give up establishing the ave; however it should constitute one of elements of a wide range of used methods. one should however mark; against the popularization of examinations being based on an application of eye tracker stand their cost and the time consumption. eye-tracker-type devices use to examine one person in the given time. under the assumption that an analyzed material is a broadcast of the sports event, which can last for several dozen minutes till even a few hours, is it is possible to estimate that very 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(2010), an examination of sports sponsorship from a small business perspective. international journal of sports marketing and sponsorship, 11(4), 283-301. microsoft word penpece and celik1.doc international review of management and marketing vol. 1, no. 1, 2011, pp. 8-13 www.econjournals.com the effect of communication medium and container location on paper recycling: a case study dilek penpece cag university, faculty of economics and administrative sciences, mersin, turkey. email: dilekpenpece@cag.edu.tr onur celik cag university, faculty of economics and administrative sciences, mersin, turkey. email: onurcelik@cag.edu.tr abstract: the global resource consumptions are in advanced day by day nevertheless world has limited sources, which should be used for boundless needs of humanity. due to the fact that governments and the firms are try to find the way to make the sources sustainable. recycling is one of the best ways to make sources renewable. for this purpose, the main aim of the study is to determine the effect of container location and communication medium on waste paper quantity. experimental design was performed in two tiers to achieve this aim. the study was applied in cag university and ttest was conducted to the obtained data. according to the score of t-test results h1 and h2 are statistically significant. based on these results, the proximity of containers and the use of communication medium are positively effect on the waste paper quantity. keywords: paper recycling, communication medium, container location 1. introduction the importance of recycling is becoming greater in scientific researchers in last years, due to the fact that benefits of recycling are concerned both for the general public and the economy (www.printcountry.com). recycling is needed more than bygone due to the growing the global resource consumption. by increasing the recycling it is possible to reduce the amount of waste that goes to incineration or landfills as it enables the creation of new products from old materials, hence benefiting both the environment and the economy (vicente and reis 2008:1). informing the consumers is one of the essential points to increase recycling. the benefits of recycling and how to recycle is an important strategy designed to promote involvement in recycling (austin et al. 1993: 355–368). the individuals have different tendencies towards recycling. age, gender, type of residence, the area lives (urban etc,.), legal arrangement, the obtained information and the medium that used for informing individuals are all the factors can affect the recycling level. 2. recycling “recycling can be defined as the collection and separation of materials from waste and subsequent processing to produce marketable products” (davies et al., 2002:31). according to parsons and kriwoken (2010:473) recycling is, “the redirection of materials from the waste stream into the manufacturing, agricultural, horticultural and construction sectors for use in the creation of new products”. to sum up the definitions, it is possible to say that recycling is an effective resourcerecovery mechanism with significant economic and environmental benefits (valle et al., 2004:505). the key strategy to minimization of waste is recycling which offers three benefits (tam et al., 2009:167):  reduction in the demand for materials made from virgin resources;  reduction in the use of energy to transport waste and produce virgin materials;  diversion of waste that would otherwise occupy landfill space. to have these benefits there should be a perfect process, which might be complex and complicated. it can involve (www.recyclingnearyou.com.au): the effect of communication medium and container location on paper recycling: a case study 9  waste materials are collected through kerbside collection or drop-off centers  these materials are sorting a materials recovery facility  those materials substitute for virgin material (for example recycled glass cullet, or pelletized plastic)  and the last step is, to make a new and useful products manufacturers are using these sorted materials. there are various types of recycled materials such as glass, paper, textiles and non-ferrous metals; aluminum and ferrous metals; steel, and to a much smaller extent plastics. besides of this, garden and kitchen waste which are putrescible waste can be composted. glass is fairly the basic material for recycle; the number of times a glass container can be recycled without limit. newsprint on the other hand has been subject to major recycling material. aluminum is another recycled material which is essential for environment. plastics have definitely the lowest recycling rate, because they are difficult to recycle (davies et al., 2002:31). on the other hand it is considered that the paper recycling is the most popular subject among recycling materials. barriers of recycling to recycle the materials there are so many important barriers. one of the most important barriers of recycling is lack of equipment and technology. lack of material to recycle and lack of consumer awareness are the other strategic barriers to recycle (larney and aardt 2009:2). if we look on the households perspective, not recycling were ‘don’t have enough time to sort, save, and transport materials’ (76.9%) and ‘don’t have enough room in my home to store materials’ (73.6%) (murad and siwar, 2007:8). according to tam et al. (2009:173); the major barriers encountered on the use of recycled materials in construction activities are:  low landfill charge for waste tipping;  relatively high transportation costs;  restrictions from the local councils and state government on construction use;  inferior recycled material properties;  lack of knowledge and experience in structural applications. knowledge in recycling the general tendency to behave positive attitude toward to recycle are older, better-off and more educated people. on the other hand some of the groups argue that younger groups/families are more proactive (davies et al., 2002:52). people, who are better informed about recycling, have a greater tendency to participate in recycling (vicente and reis 2008:8). better education opens the facility of an individual having a greater capability to understand ecological problems by the way tendency to recycle (meneses and beerlipalacio, 2005:840). to become proactive and having positive attitude towards to recycling are all come from the point of well informed. informing the individuals so many ways can be used. according to the target group characteristic the medium and the contents of the information should be designed. brochures, fly sheets, billboards, tv and radio commercials, conferences, symposiums can be the effective ways to inform the individuals. on the other hand having the requisite knowledge and ability to recycle does not always mean an individual will definitely recycle. recycling is a decision which is low involvement, habits and inertia may block behavior change. recyclers are generally better educated and married (davies et al., 2002:102). according to this context to give information to individuals about the benefits of recycling is the key-stone for sustainability. recycling in turkey recycling has been a longstanding commercial activity in turkey. glass and paper recycling have been conducted at industrial scales since the 1950s. (metin et al., 2001:3). the importance of recycling is advanced by government, firms and individuals in 20th century in turkey. it is considered that the given importance to this subject can be based on regulation applied by government. in turkey the potential of recyclers are too high that cannot be disregarded. because of the fact that the young generation population is higher than europe and america, it is important to give information related with recycling to young people. especially, if the young generation can be informed with the correct content through the accurate medium, it is possible that recycling rates can be increased. international review of management and marketing, vol. 1, no. 1, 2011, pp.8-13 10 3. methodology and results the main aim of the exploratory study is to determine the effect of container location and communication medium on waste paper quantity. experimental design was performed in two tier to achieve this aim. hypothesis that developed for measuring the research questions including null and alternative hypothesis are as seen below: ho: the waste paper quantity has no difference in terms of proximity of containers from central to local. hypothesis 1 (h1): the waste paper quantity has statistically significant difference in terms of proximity of containers from central to local. ho: the waste paper quantity has no difference in terms of communication medium. hypothesis 2 (h2): the waste paper quantity has statistically significant difference in terms of communication medium. one group with pretest-post test before test model was used in the study. in a one group pretest-post test study, the dependent variables (q1 and q2) are measured or observed before and after introduction of the independent variables (x1 and x2). in order to explore the role of containers location the dependent variable q1 (waste paper quantity) is measured before and after introduction of the independent variable x1 (location of containers). containers locations were changed from central to local areas in this context h1 tested. in order to explore the role of communication medium the dependent variable q2 (waste paper quantity) is measured before and after introduction of the independent variable x2 (the use of communication medium). posters were chosen as a communication medium because of the fact that the other media would be difficult to apply such an experimental design. posters were used to test h2. the experimental design is shown below in chart 1 and 2 visually. chart 1. experimental design-1 q1a x1 q1b waste paper proximity of waste paper quantity containers quantity chart 2. experimental design-2 q2a x2 q2b waste paper the use of waste paper quantity communication quantity medium the experimental design that was examined in this study has distinctive limitations. the applied study that was carried out in cag university shouldn’t generalize because of the experimental design nature. participants and setting the participants (n=388) were students of preparatory school of cag university at march 2010. based on the idea that the attitudes in young people would be easier to develop relatively, the sample group of 18 years was chosen. the attitude developed in young age is thought to be permanent. recycling awareness acquired in this age would last for the rest of the subject’s life. for purposes of the study, the building was divided into two environments: (a) classrooms including 19 classrooms; (b) holes including 2 holes. the research was conducted in all areas of the preparatory school building except closets, bathrooms and cleaning room. a yellow container was the effect of communication medium and container location on paper recycling: a case study 11 used for central and classroom recycling (35x67x30). these containers are obtained from akdeniz municipality-mersin. a better understanding the role of communication medium in recycling behavior is crucial to enhance consumer involvement in paper recycling. we conducted experimental design for the aim of this study. experimental design lasted 3 weeks. in order to understand the central role of container we locate 2 containers in two holes in first week. 19 containers placed of classrooms in the second week. posters were put up to 19 classrooms walls in the last week. fist week and second week were compared with each other to test h1. second week and last week were compared with each other to test h2. subjects didn’t know the experimental design in all of tree weeks. this situation prevented the deliberate acts. subjects acted all naturally on decision of paper recycling. posters used for experimental design were colorful and nearly 59x42 size. four posters as a communication medium were located each classroom. two of the posters were colorful and only shaped. the other posters were not colorful but information based. the posters placed two wall excluding windows and blackboard at eye level for attraction of attention. one information based and one colorful poster is bringing together for each wall. the containers are placed exit of classroom. measurement papers get involved in the containers were collected everyday systematically. containers in this environment were emptied the end of the day from an observer. primarily an observer look up the container and gathered the waste, subsequently the second observer look up the container and independently recorded the presence or absence of containers. so containers were scored completely. measures were obtained monday through friday; on every day that students were present. data collection began after the work day ended, usually after 5:00 p.m. and never before 4:30 p.m. all the waste papers gathered daily from whole containers and marked regularly. daily waste papers were emptied and sorted in a small room and weighed according to days in balance. a total of 15 measures were scored throughout the study. 200 containers content combined for 15 work days. 10 container measurement gathered for first week and 95 measurement gathered for each week rest. due to the fact that the form of hole is like ‘l’ two containers were used for each day in first week. measurements that obtained from each week are presented on a daily basis (see chart 3 and chart 4). chart 3. the comparison of first two weeks chart 3 and 4 also show that the continuous changes were seen. while shapes are examined, the most striking result was the presence of continuous increase even in central location. according to this situation we could say that events related to recycling was needed in experimental environment. the cause of why emergence of more waste paper on friday was the studying lessons practice based that day. the course of 4 items within 19 classrooms doesn’t exist on thursday. the situation that figures of the thursday’s waste papers were relatively low should be considered while interpreting the table. therefore as shown in figure.3 and figure.4 the continuous increase of collected waste paper according to days didn’t observed on thursday. international review of management and marketing, vol. 1, no. 1, 2011, pp.8-13 12 chart 4. the comparison of second and last week results repeated measure design was used for one group in this study for detecting the effect of the independent variable, even when that effect is small. in order to determine whether there is a significant difference between two scales in a group about container proximity scales, independent sample t-test was used. on the other hand in order to determine whether there is a significant difference between two scales in a group about the use of communication medium, independent sample t-test was used too (p < .05). the results of these tests showed significant differences between two scales about container proximity when compared to first and second week. the significant differences between two scales about the use of communication medium are seen when compared to second and third week. the items related to these results are presented in table 1 and table 2. table 1. t-test result-1 location mean n std. deviation sig (2-tailed) central location 0,422 5 0,194 local location 0,693 5 0,248 0,003 table 2. t-test result-2 communication medium mean n std. deviation sig (2-tailed) local location without communication medium 0,693 5 0,248 posters 1,065 5 0,475 0,024 according to mean scores about paper recycling the lowest mean score is belong to central location. the highest mean score of experimental design is belonging to the use of posters as a communication medium. only 2,112 kilograms was recycled in the central container condition, but when recycling containers were placed in close proximity to participants, 3,466 kilograms was recycled. on the other hand only 3,466 kilograms was recycled in classrooms, but when posters hold the walls, 5,325 kilograms was recycled. when we look over the significance value about h1 is statistically significant. on the other hand according to the score of t-test result h2 is statistically significant. as a result the null hypotheses are rejected. based on these results, the proximity of containers and the use of communication medium are positively effect on waste paper quantity. the effect of communication medium and container location on paper recycling: a case study 13 4. conclusion informing the consumers is one of the essential points to increase recycling. the benefits of recycling and how to recycle is an important strategy designed to promote involvement in recycling. as an information tool posters were used to achieve the main aim. on the other hand, the container proximity from central to local was used to analyze according to the purpose of the study. based on the score of t-test result h1 and h2 are statistically significant. this study found that providing recycling containers in close proximity to work areas resulted in a substantial proportion of paper recycling. the use of communication medium is positively effect on the waste paper quantity. references austin, j., hatfield, d., grindle, a. and bailey, j. (1993), “increasing recycling in office environments: the effects of specific informative cues”, journal of environmental systems, 6, 355–368. davies janette, foxall gordon r. and pallister john (2002), “beyond the intention–behaviour mythology an integrated model of recycling”, marketing theory, 2(1), 29-113. metin e., eröztürk a. and c. neyim, (2003), ‘’solid waste management practices and review of recovery and recycling operations in turkey’’, waste management, 23, 425–432. larney m. and aardt van a.m., (2009), “case study: apparel industry waste management: a focus on recycling in south africa’’, waste management & research, 28, 36-43. murad m. w. and siwar c. (2007), “waste management and recycling practices of the urban poor: a case study in kuala lumpur city, malaysia”, waste manage research, 25, 3–13. meneses g. d. and beerlipalacio a. (2005), “recycling behavior a multidimensional approach”, environment and behavior, 37(6), 837-860. parsons s. and kriwoken l. k. (2010), “report: maximizing recycling participation to reduce waste to landfill: a study of small to medium-sized enterprises in hobart, tasmania, australia”, waste management & research, 28, 472-477. vicente p. and reis elizabeth (2008), “factors influencing households’ participation in recycling”, waste management & research, 26, 140-146. tam vivian w.y., kotrayothar d. and loo yew-chaye (2009), “on the prevailing construction waste recycling practices: a south east queensland study”, waste management & research, 27, 167-174. valle p. o. d., reis e., menezes j. and rebelo e.(2004), “behavioral determinants of household recycling participation the portuguese case”, environment and behavior, 36(4), 505-540. http://recyclingnearyou.com.au/education/what-is-recycling.cfm (09.05.2011). http://printerinkcartridges.printcountry.com/printcountry-articles/inkjet-recycling-and-buybackrecycled-empty-cartridges-related-articles/the-importance-of-recycling-and-how-we-canhelp-environment (11.05.2011). . international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2016, 6(4), 807-813. international review of management and marketing | vol 6 • issue 4 • 2016 807 methodical review of the social and economic development rankings of the region based on primorsky krai tatyana v. terenteva1, tatyana v. varkulevich2, marina e. vasilenko3, ekaterina g. shumik4*, kseniya v. smitskih5 1vladivostok state university of economics and service, 41 gogolya street, 690014, vladivostok, primorsky krai, russia, 2vladivostok state university of economics and service, 41 gogolya street, 690014, vladivostok, primorsky krai, russia, 3vladivostok state university of economics and service, 41 gogolya street, 690014, vladivostok, primorsky krai, russia, 4vladivostok state university of economics and service, 41 gogolya street, 690014, vladivostok, primorsky krai, russia, 1vladivostok state university of economics and service, 41 gogolya street, 690014, vladivostok, primorsky krai, russia. *email: kshumik@mail.ru abstract the article describes the use of the regional development ranking based on a separate territory of the russian federation. the far east becomes the area of implementation of many major investment projects; therefore, the government is trying to attract foreign investors. in this paper, we purported to look how primorsky krai looks like from the perspective of a potential investor not familiar with the peculiarities of the policy of the far eastern federal district government; how the major infusions in the territory development affected its position in the major rankings, and to draw conclusions about the necessity and complexity of the rankings used. the authors have also examined the shortcomings of existing methods and proposed the ways for improving the evaluation methods used in the ranking system. keywords: primorsky krai, ranking, development effectiveness, free port jel classifications: с13, o10, o15, o16, o18 1. introduction in today’s world, during the decision making process, the potential investors pay attention not only to the development statistics of the territory’s economy, but also to its positions in a number of the major rankings reflecting both the complex socio-economic status of the territory and more narrow, specific aspects. at the same time, as a rule, russia is estimated as a single region in large international studies, but its geographic, economic and social diversity is so great that the potential investor simply cannot assess the prospects for the development of the specific regions. in our study, we would like to draw attention to primorsky krai, based on existing rankings, to assess its current position, to determine the prospects for further development of the region, and to define the extent of its attractiveness from the investor’s point of view according to the existing rankings. primorsky krai was selected as the object of the study due to the following reasons: firstly, the region is a strategic area in russia’s relations with the asia-pacific countries (apc) due to its geographical location; secondly, its economy is characterized by a number of structural features and is largely based on the use of natural-resource potential; thirdly, the “peripherity” of the area is one of its economic and geographical features. currently, in order to ensure a competitive breakthrough for integration and closer cooperation with the apc, and improving socio-economic development of the region, the relevant laws have been developed and adopted, including the federal law no. 473-fz dated december 29, 2014 “concerning the territories of advancing socio-economic development in the russian federation” (federal’nyy zakon ot december 29, 2014 no. 473-fz) and the federal law no. 212-fz dated july 13, 2015 “on the vladivostok free port” (federal’nyy zakon ot july 13, 2015 no. 212-fz). these terenteva, et al.: methodical review of the social and economic development rankings of the region based on primorsky krai international review of management and marketing | vol 6 • issue 4 • 2016808 laws establish a special legal regime for entrepreneurial activity, determine preferences and tax incentives, provide for the creation of favorable conditions for investors, provide the accelerated socio-economic development and the creation of favorable living conditions for the population in primorsky krai. 2. methods we think all these features have a significant impact on the trend of socio-economic development of the region under study, and as a consequence on its position in various rankings. in the modern sense, “ranking” means a comprehensive assessment of the subject state, which allows referring it to some class or category (burak et al., 1998). a number of measures for information monitoring, collecting and processing was implemented in the ranking development. rankings of higher education institutions have gained great popularity. today, more than 30 higher education ranking systems exist all over the world (fowler 2014, november 19). one of the most well-known studies, which gave rise to the ranking evolution of investment and economic development of regions was the study of the harvard business school, based on an expert range, including the most relevant aspects of doing business in the region from the investor’s point of view, namely: legislative conditions, capital export possibility, the status of the national currency, the political situation in the country, inflation, etc. (stobaugh, 1969). russian authors are actively using the possibilities of ranking systems. korovina (2008) proposes to use the economy ranking based on the balance score card, as well as the systematization of the financial and non-financial component values using ishikawa diagrams, and involves the use of the following criteria: the management level, time factor, binding to a specific business entity, completeness of the indicators coverage, business entity activities, and types of goals. sedych (2004) applies the model of evaluation of sectoral priorities in the industry that allows to carry out an initial assessment of the attractiveness of the various spheres of the enterprise capital application. the ranking of territories is performed in this basis. for the comparative characteristics of the economic and social efficiency of development both in the region in general, and in the aspect of municipalities, mezentseva (2012) proposes to build ranking based on the calculation of integrated-tiered index, consisting of particular indicators of social and economic efficiency. the particular indicators of social efficiency include: the number of workplaces, labor compensation, and availability of infrastructure for trade and consumer services of unprotected social groups. the economic evaluation can be represented by indicators such as gross regional product; industrial output; sales volume, payment of taxes and fees from business activities to the budget system. the author thinks that the use of the integrated evaluation of the socio-economic development allows to compare the level of entrepreneurial potential in the regions, thereby stimulating the overall socio-economic development of certain areas. in turn, the articles by various authors are devoted to the problem of ranking assessments, based on the calculation of integrated indicators. for example, azizov (2010) uses a method of calculating the integral indexes by the number of tactical tasks in the framework of the strategic goals for the territory development. obolenskiy and sidorova (2012) consider the technique of a complex evaluation of the development efficiency, including: calculation of private integral indicators in the reporting and base period for each subject of the federation; determination of the absolute deviation of each indicator of the reporting year, compared with the base one. in the evaluation of socio-economic efficiency at the regional level, davydyants (2002) applies an integrated index, which is the specific value of the entity functioning effect per one capital turnover and one employee. he thinks that for the socio-economic system the economic objectives must be subordinated to the social ones. at the regional level, the content of the socio-economic efficiency criteria can be defined as an increase in the duration of human life on the basis of improving the well-being and free, all-round development of every member of the society. according to slobodchikova (2011), a wide variety of natural and climatic conditions of the far eastern territories contribute to broad development of the business, but she believes it necessary to provide the state stimulation of entrepreneurial development. filobokova (2004) generally supports the opinion of slobodchikova, but considers it necessary to take into account the region’s proximity to the borders with the apc. she thinks that the features of the economy development in the far east and in particular in primorsky krai primarily depend on the raw material supply of the apc. having conducted a comparative study of the development of small businesses in various sectors of the economy of the far eastern subjects, yagovitina and lyuft (2008) concluded that in the far east namely primorsky krai is an agricultural region. this is primarily due to its favorable economic and geographical position and climatic and natural conditions. according to vorozhbit et al. (2010), the development of the region’s economy is possible with a detailed study and identifying factors of macro-environment, which, in turn, have a global national, regional, local and industry specificity-the economic, scientific, technological, political, legal, socio-cultural, natural and geographic, and demographic ones. on this subject, latkin (2009) rightly pointed out that the factors can be both contributory to and impeding the activities of most of the market participants. if the proportion of interfering factors increases, it has a negative impact on business activity, which in turn has a significant impact on the effectiveness of the socio-economic development of regions. in our view, the rankings used to assess the socio-economic development of the region should adequately reflect the positive or negative influence of factors on the region’s economy. currently in russia, the ranking evaluation and grouping of regions by the effectiveness of economic and political development, terenteva, et al.: methodical review of the social and economic development rankings of the region based on primorsky krai international review of management and marketing | vol 6 • issue 4 • 2016 809 performed by various non-governmental organizations, also take on special significance. moreover, the place of russia and its regions in the international rankings is also actively monitored. the most well-known international rankings include the following: doing business represented by the world bank, the international innovation index (international innovation index) used by the boston consulting group, the national association of manufacturers and production institute of independent research center, affiliated with the nap to measure the level of innovation in the country, the global competitiveness index, which is presented at the annual report of the world economic forum (competitiveness rankings), the economic freedom index, estimated by wall street journal and the heritage foundation research center in most countries of the world. the russian rankings include the ranking of the socio-economic status of the russian federation constituent territories, built by the experts of the “ria rating” ranking agency, the ranking of the investment attractiveness of the russian regions built by the “expert ra” agency, the ranking of russian regions in terms of the quality of life built by the “ria rating” ranking agency, and others. to determine the position of primorsky krai we investigated the rankings focused on the aspects of business development, as the main potential of the areas development and reflecting the quality of life of the region’s population, meeting the requirements of: • publicity, i.e., the results of the research should be obtained by recognized independent experts and published on the internet • openness of the ranking calculation methodology • scope, i.e., the ranking shall represent more than 50% of the russian regions • correspondence to the 2013-2014 analysis period. as a result, the following rankings were selected: doing business, the ranking of the socio-economic status of the russian federation constituent territories built up by the “ria rating” ranking agency, the ranking of the investment attractiveness of the russian regions built by the “expert ra” agency, the ranking of russian regions in terms of the quality of life built by the “ria rating” ranking agency, and the “obschestvennoe mnenie” foundation, “georanking” agency, and the “opory rossii” ranking. 3. results according to the world bank’s doing business research, as of 2014 russia ranks 64th in the ranking of the countries’ economies. in 2012, the world bank studied 30 russian cities for ease of doing business. the ranking of the socio-economic status of the russian federation constituent territories, built by the experts of the “ria rating” ranking agency, is based on the aggregation of the key indicators of regional development. for this purpose, the indicators characterizing various aspects of the socio-economic situation in the russian federation constituent territories shall be calculated, such as: economy scale, economics efficiency, and fiscal and social sphere (reyting sotsial’ no-ekonomicheskogo polozheniya sub” ektov rf, itogi 2013 goda). the “expert ra” agency uses two characteristics to build up the ranking of investment attractiveness of russian regions, namely: investment potential and investment risk. potential shows what proportion the region reserves on the national market, and the risk shows what could be the extent of one or other problems in the region for an investor. the total potential consists of nine separate ones, namely: labor, financial, industrial, consumer, institutional, infrastructure, natural resources, tourist and innovation. the integral risk consists of six separate risks: financial, social, administrative, economic, environmental, and criminal. the contribution of each particular risk or potential in the final indicator is estimated on the basis of questioning of the expert, investment, and banking community representatives (raspredelenie rossiyskikh regionov v reytinge investitsionnogo klimata v 2014 godu). the ria rating ranking agency builds up the ranking of the russian regions by the quality of life on an annual basis. in the ranking calculation, the analysis of 61 indicators is performed, which are combined into 10 groups, describing the main aspects of the quality of life in the region: the income level of the population; the living conditions of the population; provision with the social infrastructure items; environmental and climatic conditions; security of residence; demographic situation; health and education level; utilization of the territory and the development of transport infrastructure; the level of economic development; the level of development of small business (reyting rossiyskikh regionov po kachestvu zhizni 2014). in contrast to the previous one, the ranking of social well-being of the regions of russia, prepared by the “obschestvennoe mnenie” foundation, uses “georating” survey data of the “obschestvennoe mnenie” foundation. the survey was conducted on april 1528, 2014. the selection criteria were 60,500 respondents from 85 regions of russia. the statistical error does not exceed 1%. the rating scale of 1-100 points is used in the regions ranking. the regions with the score above 65 were included in the first group “very high ranking,” from 65 to 55 in the second group, “high ranking,” from 55 to 45 in the third group, the “average rating,” and <45 in the fourth group, “below the average ranking.” thus, the regions obtain not only the numerical score, but the group index. often, the level of administrative barriers is crucial for the development of small business. typically, an entrepreneur faces the administrative barriers at the stage of registration of necessary documents for opening a business. “indeks opory rsbi” is the health index in the segment of micro, small and medium-sized businesses. it reflects the views of the russian entrepreneurs in general, as well as by the size of business, industries and individual study regions, and continued the “business climate in russia” project: the “opora’s” index, which was implemented since 2006. the index is measured on a quarterly basis and is based on a survey of smes’ owners. according to the results of the 3rd quarter terenteva, et al.: methodical review of the social and economic development rankings of the region based on primorsky krai international review of management and marketing | vol 6 • issue 4 • 2016810 of 2014, in russia at average the index has been fixed at 49.7, reflecting a reduction of business activity of the sme segment entrepreneurs. as for the fefd, only primorsky krai was included in the studied regions, its value amounted to 47.7. according to the ranking scale, the index value below 50 indicates a decline in business activity. at the regional level, the state support in the form of creating a favorable business climate is of fundamental importance in boosting of entrepreneurial activity. as noted above, since 2006 “opora rossii” implements “the business climate in russia: opora’s index” research project. the main objective of the study is a comprehensive assessment of the conditions for development of small and medium business in the regions of russia. the ranking of the regions was based on the “index of conditions for the development of small and mediumsized businesses,” which included five components: “real estate and infrastructure,” “human resources,” “financial resources,” “administrative climate and security,” and “system of vendors.” according to the doing business ranking vladivostok ranks 15th in the list of 30 cities, with the term of completion of all procedures for the business registration for 21 days. the data shown indicate the ease of starting a business, and quite substantial problems in the development of entrepreneurial structures. thus, vladivostok, and, therefore, primorsky krai will be considered as a troubled region by the potential investors, relying on the results of this study, with a lack of attractiveness for the business organization. based on the ranking of socio-economic status of the constituent territories of the russian federation, four of the nine regions of the far eastern federal district, including primorsky krai are in the top half of the list. this fact positively characterizes the territory, confirming the conclusion of the ranking authors. it should be noted that the analysis of the relationship of the regions in terms of development of small business in 2013, and the ranking of the socioeconomic situation of the russian federation constituent territories based on the results of 2013 showed that primorsky krai, occupying the highest position in the ranking of business development of the regions of the far eastern federal district, is in the second place in the district in terms of socio-economic development. a more detailed analysis performed by the authors based on the correlation of the results of the above rankings confirmed the thesis about the existence of the relationship between the development of the entrepreneurship level, and socio-economic situation in the region. in 2014, the analysis of the distribution of the russian regions in the investment climate ranking showed that primorsky krai is a region with low potential, but a moderate risk. the ranking of social well-being, unlike the previous ones, is based not on statistical data, but on the results of the survey of population living in the regions. in primorsky krai, the population estimates its position better than the statistics shows. it is worth noting that the findings of rankings of social well-being of russian regions and that of business development are the same. the research of “opora rossii” as of 2012 showed that primorsky krai is in the central position in the list (22 of 40), and is far ahead of other fefd regions. 4. discussion in summary, it should be noted that the studies conducted mostly assign to primorsky krai the ambiguous evaluation either of medium or low level. thus, the problem of the need for improvement of the existing political and economic situation in the territory emerges. we believe that it can be achieved in two ways, firstly, by improving the efficiency of the entrepreneurial development, especially the small and medium ones, and secondly, by increasing the transparency and investment attractiveness of the ongoing large-scale projects. the first path is mostly connected with the improvement of the strategic management of the entrepreneurial development, which must be based on the principles of: strategic partnerships; information availability; consistency of institutional support; inclusion of stakeholders and feedback (droshnev and masyuto 2015). but this trend is a significant and independent aspect of the authors’ study. studying the second path, it should be noted that vladimir putin during his speech at the plenary session of the eastern economic forum highlighted the development of the far east as the main objective relying on the region’s economic growth and infrastructure, creating new industries and jobs. in his speech, he identified the future of the region as one of the key centers of social and economic development of the country, which should be effectively integrated into the fast-growing asia-pacific region. the provision of the free port status to vladivostok with the lighter tax regime shall serve as a basis for the implementation of these goals. the vladivostok free port regime provides great opportunities for the development of entrepreneurial activity in primorsky krai. tax incentives and preferences contribute to the implementation of business projects in a shorter period, as well as their effective development in the future, ensuring the competitiveness of business entities due to the maximum reduction of the cost of production (services), and profitability increase. expert expectations for the introduction of a new economic regime are quite high. the territory of the vladivostok free port includes all the key ports of primorsky krai from pos’et to nakhodka, and knevichi airport. according to the current legislation, an individual entrepreneur or a legal entity being the commercial organization, whose place of state registration is the territory of the vladivostok free port, and who have concluded an agreement on the implementation terenteva, et al.: methodical review of the social and economic development rankings of the region based on primorsky krai international review of management and marketing | vol 6 • issue 4 • 2016 811 of activities and included in the register of residents of the vladivostok free port, may be the residents of the vladivostok free port. but at the moment, only 9 companies for a total investment of 33.4 billion rubles have received the status of the free port residents. such a small number of residents can be explained by the fact that the main preferences of the law on free ports have not yet entered into force (duty-free and tax-free importation of foreign goods, non-stop operation of checkpoints). at this stage, the laws and regulations on the vladivostok free port regime are at the stage of completion, specification, and clarification of certain provisions. the available information on the possibilities provided and requirements for residents is rather fragmented, not always clear and accessible, it requires systematization and complex analysis, in view of which at the moment for the applicants for residency status it is difficult to understand what rights will be granted to them and what obligations will be imposed on them in the future. thus, in our opinion, in order for the law on the free port to become a really effective mechanism, it is necessary to develop guidelines and comments, approved at the legislative level. the customs procedure of a free customs zone (fcz), established by the agreement on the free (special) economic zones in the customs territory of the customs union and the fcz procedure dated june 18, 2010 are applied in the territory of the vladivostok free port. according to the federal law on the vladivostok free port, the customs procedure of fcz can be performed either at the port or in the logistics areas of vfp, or at the vfp resident area, which is one of the privileges of the new regime which will reduce the cost of cargo movement. however, to date the requirements of the legislation as of how exactly the vfp resident area must be furnished and equipped, has not yet been approved; therefore, a vfp resident cannot take the opportunity of the customs procedures on its area. all discrepancies of legislation cause the appearance of additional administrative barriers and, therefore, the project, with all its potential, is not of interest to foreign investors. the study of the above rankings allows us to make another conclusion on the need to develop the scientific and methodological support of the ranking, which is based on a comprehensive, systematic, inter-regional assessment and comparative analysis of socio-economic development of regions. the scientific and methodological support should include: definition of information sources; substantiation of the methods and principles of the ranking assessment; the development of the ranking assessment algorithms; the development of scales for the results assessment and interpretation; making recommendations to public and self-government authorities in the field of legal regulation of social and economic development of the region and improvement of the efficiency of its functioning. in our opinion, the ranking assessment that most fully reflects the development of the region should include the following components: • commercial effectiveness characterizing business interests • financial and budget efficiency from the perspective of the goals and objectives of the regional development • social efficiency, reflecting the system of values of the local population • assessment of the status and development of public control in the region. from the operational point of view, the indicators of business efficiency shall reflect on the context the development of the territory and characterize, firstly, the cyclicity of changes in market conditions; secondly, the return on investment in production modernization; thirdly, the level of training and qualifications of the labor force. indicators of financial and budgetary efficiency should focus on the characteristics of the growth of the entrepreneurial potential; of the investment climate in the region; the formation of the budget resources for the further development of the territories. social efficiency should include: firstly, the production and availability of goods and services consumed by the population; secondly, the participation of entrepreneurs in the work of government; thirdly, the implementation of social programs. the latter group should be focused on the analysis of the interest of all participants in the implementation of ria procedures, and the development of public control. poor development of this aspect of the functioning of the territories could negatively affect the further development of the business. in the ranking building, it is advisable to use the complex integral index based on rankings of the above components with the use of expert methods as a method of simple ranking and weighting factors (lukinskiy 2008). in our view, the computation of the ranking the use of weights obtained with the participation of professional experts in the person of representatives of local authorities, business organizations and independent experts in the field of consulting on the management of small and medium-sized business would be the most correct method. using the integral index allows comparing the level of potential of the regions, which contributes, as a whole, to stimulation of their economic and social development. 5. conclusion the issues of development and testing have been better disclosed in several publications (shelomentsev et al. 2015). the papers concluded that the complex development of primorsky krai has a higher ranking score than presented in the rankings, taking into account certain aspects of the region, as the following conclusions also were made: business conditions are under improvement; the business increases the staff, currently increases and is ready to increase wages in the future; entrepreneurs are optimistic about the increase in the client base. in general, local companies are willing to invest in ongoing projects and cooperate with foreign enterprises. terenteva, et al.: methodical review of the social and economic development rankings of the region based on primorsky krai international review of management and marketing | vol 6 • issue 4 • 2016812 thus, in our opinion, the challenges on the development of specific areas in order to improve their socio-economic situation may be resolved through: the use of ranking assessment tools; adaptation of the previously proposed ranking score, reflecting in an integrated manner the economic and geographic characteristics of a particular territory, and the popularization of the ranking system in the international community. 6. acknowledgments the study was conducted in the framework of research “socioeconomic factors and innovative mechanisms for implementation of the policy of dynamic development of the far east” (research project of ministry of education and science of russian federation no 2014/292). references azizova, e.a. 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(1969), how to analyze foreign investment climates. harvard business review, 47(5), 100-108. terenteva, et al.: methodical review of the social and economic development rankings of the region based on primorsky krai international review of management and marketing | vol 6 • issue 4 • 2016 813 vorozhbit, o.y., zubova, n.v., koren, a.v. (2010), ekonomika i upravlenie narodnym khozyaystvom.struktura predprinimatel’skoy sredy: opredelyayushchie factory [economics and management of a national economy. the structure of the business environment: determinants]. vestnik togu, 4(19), 121-128. yagovitina, a.v., lyuft, n.p. (2008), razvitie malogo predprinimatel’stva v primorskom krae [development of small business in primorsky krai]. voprosy ekonomicheskikh nauk, 2, 112-115. tx_1~at/tx_2~at international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2020, 10(5), 50-62. international review of management and marketing | vol 10 • issue 5 • 202050 understanding consumer information use in small businesses: the determinants and performance outcomes david eshun yawson* business school, ghana institute of management and public administration, p.o. box ah 50, achimota, accra, ghana. *email: dyawson@gimpa.edu.gh received: 12 june 2020 accepted: 23 august 2020 doi: https://doi.org/10.32479/irmm.10272 abstract the intense competition that small businesses encounter in business has elicited interventions and supports for small and medium enterprises (smes) to engage in marketing with cutting-edge consumer information which will enable them compete in their markets. however, since sme marketing differs from large companies, their use of consumer information is not clear. this study examines consumer information utilisation in smes by conceptualising it as consisting of consumer information for changing the user sme’s knowledge and understanding of market issues (knowledge enhancing utilisation); effecting policies and strategies (action-oriented instrumental utilisation) to examine the determinants and performance outcomes. using qualitative and quantitative approaches, determinants of consumer information utilisation were identified as information functional and technical qualities, interaction between provider and user, and the market environment. the results illustrate that, in the right circumstances consumer information influence sme performance. its use for policy making and strategy directly enhance sme financial outcomes, decision-making ability, and improve new products creation and processes. it also, provides evidence of symbolic use of consumer information by smes; guidance for policy makers and sme business facilitators in implementing consumer information interventions for smes. keywords: small businesses, small and medium enterprises, small and medium enterprises marketing, consumer information use, action-oriented use, symbolic use and knowledge-enhancing use jel classifications: l2, m1 1. introduction small businesses today operate in an environment of intense competition, rapidly changing consumer segments and markets associated with increased risk to firm survival. businesses which therefore strive to understand their consumers to exploit new market opportunities and expand their consumer base, have a better chance of survival (baker and sinkula, 2009). thus, understanding consumer information use in small business is an important research issue of individual and economic relevance to agri-food smes, policy makers and business development partners (parrot et al., 2010). extant literature in smes marketing acknowledges the traditional view that stresses the importance of knowledge, information related factors and resources in improving firm performance (miocevic and crnjak-karanovic, 2011). in this paper, we argue that understanding consumer information use, its determinants and performance outcomes in small business in the current business environment provide insight for interventions for managing, developing and / or supporting these businesses. developments in marketing have made information about consumers one of the building blocks for knowledge about potential consumers in structuring thinking and decision making (donnelly et al., 2012; stone et al., 2007; mauri, 2003). there is a general recognition that an organisation’s understanding of its markets and consumers assists in the creation of superior customer value (kotler and armstrong, 2009; kotler, 2003). fortunately, information on consumers is now increasing being made available this journal is licensed under a creative commons attribution 4.0 international license yawson: understanding consumer information use in small businesses: the determinants and performance outcomes international review of management and marketing | vol 10 • issue 5 • 2020 51 through new augmented databases of consumers and retailer loyalty card schemes (donnelly et al., 2012; felgate et al., 2011; plimmer, 2010; humby et al., 2007) but which is mostly been used by large businesses (florin et al., 2007, ziliani and bellini, 2004). be that as it may, marketing literature reveals a consensus that effective and efficient utilisation of information about consumers is a source of competitive advantage (miles and darroch, 2006; glazer et al., 1992), a prerequisite for market orientation (kohli and jaworski, 1990; jaworski and kohli, 1996; kohli et al., 1993; cadogan and diamantopoulos, 1995) and a lead up to competitive strategy development (hunt, 2011; miles and darroch, 2006). information on consumers in addition has represented a bridge between a business and its environment (palmer and hartley, 2006), and a means by which an image of changing consumer demand can be built up within a business (kotler, 2003). meanwhile, management in an sme context has been known to be different from management in large organisations (morris et al., 2002; gilmore et al., 2001; jocumsen, 2004). the uniqueness of small business management (burns, 2007; reynolds, 2002; stokes, 2000) and their small size is a significant factor influencing marketing planning processes (gilmore et al., 2001; o’dwyer et al., 2009; donnelly et al., 2012). although it gives them relatively little impact in terms of modifying their markets thus making them dependent on a small consumer base (jones and rowley, 2011). their smaller size however enables them to form closer relationships and networks with customers, providing flexibility in operations and responsiveness to change (moriarty et al., 2008; arnett and badrinarayanan, 2005). simpson et al. (2006) observe that small business marketing is not the same as in large organisations, that attempts to adapt and apply traditional marketing models to smes have been unsuccessful and attempts at definition or discussion often link marketing with entrepreneurial behaviour (walsh and lipinski, 2009; simpson et al., 2006; reynolds, 2002). marketing literature however, bemoans the dearth of research that examines how small and medium enterprises (smes) use consumer information to enhance firm performance (donnelly et al., 2012; cacciolatti et al., 2012), the relationship between information use and sme performance (parry and song, 2010; williams, 2003), and the relationship between information use in decision making in small business (lybaert, 1998; citrin et al., 2007; souchon and diamantopoulos, 1996; neslin et al., 1994; cacciolatti et al., 2009). thus, the nature of marketing in smes presents an opportunity to examine the utilisation of information from consumers in the informal unstructured environments found in sme (carson et al., 1995). in this paper we use the dunnhumby database which is considered to provide consumer insight of the uk market as it contains the supermarket panel data of the largest uk retailer (felgate et al., 2011; plimmer, 2010; humby et al., 2007); and combines the benefits of both the store-level scanner data and panel data from 1800 tesco stores in the uk (felgate et al., 2011). accordingly, this paper therefore examines the following research questions a) what are the factors that influence consumer information utilisation in smes? b) how does consumer information utilisation influence sme performance? this paper is structured as follows: first, a theoretical underpinning of the concepts related to the research from literature. this is followed by the conceptual development which includes the research hypotheses. the research design is then explained. the methodology used in the research is then stated and the results presented. the result is then discussed in terms of theoretical and managerial implications. finally, the limitations and suggestions for further research are presented. 2. the nature of sme marketing literature attests to the uniqueness of sme marketing and management (burns, 2007; stokes, 2000). consequently, although the agri-food sector consists of a significant number of smes, they operate differently from the few large businesses that dominate the agri-food sector. carson et al (1995) and burns (2007) argue that the inherent characteristics of smes and the impact on formal marketing approaches largely determine marketing management decision-making activities of smes. marketing is often seen as peripheral to sme requirements and hogarth-scott et al. (1996) adduce reasons for this difference as the credibility gap between when smes obtain sales and profits without planning their marketing activities. 2.1. consumer information utilisation: the concept and types of utilisation in this study we use consumer information to refer to information generated by the activities of the consumer; examples being how different demographic groups purchase products; purchase of consumers with different lifestyles and differences in terms of consumption activities; interest and opinions based on consumer attitude/or values. the literature in scanner studies and database marketing use consumer information to describe information generated by the activities of the consumer. these are key measures of sales (e.g. quantities of product sold, prices, purchase rate, customer penetration, frequency of purchases and category share), individual consumer behaviour, customer segmentation and profile. consequently, consumer information can generally be classified into two types: (a) information sought by the consumer (kiel and layton, 1981) and (b) that generated by the consumer (evans, 1999). the two main sources of consumer information can further be classified by type, format and sources. besides, the field of information utilisation is dominated by two main perspectives of utilisation (toften and olsen, 2003; diamantopoulos and souchon, 1997; 1996). first and foremost, its study is placed largely in an organisational or systems context and on the other hand a user-oriented paradigm context; both of which can be viewed as a process and an outcome (e.g., moorman et al., 1993 deshpandé and zaltman, 1987). secondly, the extent (degree) of information utilisation also depends on the conceptualisation of “use” which specifies the nature of utilisation. literature on information utilisation reveals the actual process of utilisation can be categorised into generic classifications referred to as dimensions of utilisation (moorman, 1995; menon and varadarajan, 1992; souchon and diamantopoulos, 1997).the three broad dimensions of information use are instrumental use, conceptual use and symbolic use (rich, 1997; oh, 1996; moorman, 1995). menon yawson: understanding consumer information use in small businesses: the determinants and performance outcomes international review of management and marketing | vol 10 • issue 5 • 202052 and varadarajan (1992) provided an alternative typology in their marketing knowledge use model which is currently the most extensive typology of information utilisation. we preferred this model for this study because it is an improvement over the souchon and diamantopoulos (1996) classification and present a comprehensive typology of utilisation in the organisational context. in view of the fact that it is possible for all three forms of utilisation to take place in a particular utilisation context, the extent of utilisation may vary across context of utilisation. the menon and varadarajan (1992) marketing knowledge use model acknowledges the multidimensional nature of utilisation with multiple outputs; and the dearth of research in the area of consumer information utilisation in smes require the use of a comprehensive classification. we present this comprehensive conceptualisation of consumer information and discuss it based on the main component variables action-oriented use, knowledgeenhancing use and affective use (menon and varadarajan, 1992). action-oriented use is evidenced by changes in the user’s activities, practices, or policies that can be directly linked to the findings and implications of the information. actionoriented use is classified into two broad uses: action-oriented instrumental and action-oriented symbolic uses. action-oriented instrumental use of information directly relates to policy making and strategies, and forms a major part of the overall action-oriented use. action-oriented symbolic uses are when information users use information in their decision making for the sake of appearance rather than for any of the information’s intrinsic qualities (strieter et al., 1999). menon and varadarajan (1992) further classified symbolic use into three uses: benign, cynical and positive. the benign form of symbolic use occurs when information users use information to make another party feel included in decision making. cynical use occurs when users use information without seeing the value in it but thinks other parties may see value. positive symbolic use occurs when information users utilise information, not for its value, but to send a positive message within the firm (strieter et al., 1999; rich, 1997; menon and varadarajan, 1992). knowledge-enhancing use is akin to conceptual use which results in changes in the user’s knowledge, understanding of the issues and themes of the information (menon and varadarajan, 1992). it has two facets: knowledge enhancement due to the final product (i.e., the results) and knowledge enhancement due to the research process (i.e., conduct of the research study) (strieter et al., 1999). affect is a broad conceptual category that includes both emotions and moods. emotions and moods differ in their specificity, intensity, and duration (hayton and cholakova, 2012). affective use of information is therefore a difficult dimension of use to measure because it is related to general levels of satisfaction or dissatisfaction, confidence or lack thereof, and trust or mistrust. however, these general psychological states can be outcomes of use as well as dimensions of use. to distinguish the affective dimension of use from affective outcomes of use, menon and varadarajan (1992) propose that the affective dimension be viewed as use of information with the intent of “feeling good.” like knowledge-enhancing use, affective use has two sub-dimensions: product-based affective use and process-based affective use. this paper therefore seeks for the 1st time to examine the determinants of the use of consumer information in small business and how the types of uses relate to sme outcomes, which will for the 1st time deconstruct general consumer information use and to elucidate the relationship with small business outcomes. 2.2. conceptual development of consumer information utilisation in smes from the review of available literature consumer information utilisation is influenced by organisational, information specific, relational, and environmental factors. this research therefore posits that in a general resource-based competition of agri-food small businesses, four main factors organisational culture and structure (mcclure, 2010; matlz et al., 2006); information quality (van birgelen et al., 2001); relational (moorman et al., 1992; matlz et al., 2006: deshpandé and zaltman, 1987) and environmental factors (palmer and hartley, 2006; arnett et al., 2000) will influence the four consumer information utilisation processes/ dimensions (action-oriented instrumental, action-oriented symbolic, knowledge-enhancing and affective utilisations) in an agri-food small business (menon and varadarajan, 1992; arnett et al., 2000). the premise underlying this perspective is that the characteristics of the firm either inhibit or facilitate utilisation (maltz et al., 2006; beyer and trice, 1982). marketing literature in general identifies organisational culture and structure as main organisational variables affecting information use (toften, 2006; williams, 2003; toften and olsen, 2003, 2006; souchon and diamantopoulos, 1997; 1996). nonetheless, small business literature further argue that small businesses leverage competitive advantage with speed to respond to customers, wants and needs to enable them operate in their chosen markets (li et al., 2008; bjerke and hultman, 2002). in small business literature therefore the important variables are the market-oriented organisational culture and organisational structure (blankson and omar, 2002; mccartan-quinn and carson, 2003; moriarty et al., 2008; baker and sinkula, 2009). 2.2.1. market-oriented organisational culture from an organisational point of view, organisational culture has been defined in various ways in market and management literature (gebhardt et al., 2006; deshpandé and webster, 1989). however, in main stream marketing literature market orientation is conceptualised as a behavioural construct based upon the generation of marketing intelligence relating to the needs of current and future customers, the dissemination of this intelligence throughout the firm, and the strategic market response (kohli and jaworski, 1990). this definition implies acquiring information from buyers and competitors in the target market and disseminating this information throughout the company. underlying this is having the cultural values and norms, to enable the acquisition of information from buyers and competitors in the target market, and its dissemination throughout the company (narver and slater, 1990). the underlying assumption is that only market-oriented actions affected firm performance. we, can, therefore, hypothesise the following relationship between market-oriented organisational culture and types of consumer information: h1: market-oriented organisational culture is positively associated with (1) affective consumer information utilisation, yawson: understanding consumer information use in small businesses: the determinants and performance outcomes international review of management and marketing | vol 10 • issue 5 • 2020 53 (2) knowledge-enhancing consumer information utilisation, (3) action-oriented instrumental consumer utilisation, and (4) action-oriented symbolic consumer information utilisation. 2.2.2. organisational structure organisational structure has been known to influence information utilisation in an organisation (liberti and mian, 2008; souchon and diamantopoulos, 1996). liberti and mian (2008) posit that the greater hierarchical distance (structure in organisation) between a subordinate and his boss makes it more difficult to share abstract and subjective information in decision making. organisational structure as an organisation variable consists of two dimensions; formalisation and centralisation. formalisation measures the extent to which jobs are codified, the degree to which rules are observed and the extent to which specific tasks are stated. centralisation measures participation in decision making and hierarchy of authority. smes are small independent organisations with non-formal organisational structures (simpson et al., 2006; gilmore et al., 2001; carson and gilmore, 2000). therefore, this sme characteristic will affect organisational forms to determine structures, coordination and cooperation of the business (liberti and mian, 2008). these organisational processes determine the small business’ primary processes (production, marketing, sales and customer relations management) therefore impacting small business outcomes (hill, 2001; carson et al., 1995). we can, therefore, hypothesise the following relationships: h2: organisational structure is positively associated with (1) affective consumer information utilisation, (2) actionoriented symbolic consumer information utilisation, and negatively associated with (3) knowledge-enhancing consumer information utilisation, and (4) action-oriented instrumental consumer information utilisation. 2.2.3. information quality related factors the direct relationship between the quality of information used by a decision maker and decision-making performance has been well established (toften and rustad, 2005; van birgelen et al., 2001; o’reilly, 1982). however, this relationship has been researched with different conceptualisations and schema. van birgelen et al. (2001) therefore proposed four types of informationrelated quality for evaluating information use as: quality of contents, quality of form, actionability and acceptability of the information. literature attests to the fact that quality information allows a decision maker to justify the basis of the decision to others, arguing that if the information used is timely, accurate, and reliable, then any decision made is likely to be a good one (plimmer, 2010; stone et al., 2007; humby et al., 2007; toften, 2006). o’reilly (1982) noted that “quality” is not an objective dimension; since perceptions of the accuracy and reliability of information from a given source may vary according to decision makers’ experience, goals, or personal preferences. therefore, quality will differ from one small business to the other. it is, therefore, conceivable that consumer information utilisation will be affected by the technical and functional quality attributes for a small business. therefore, we, conceived that functional quality, whether or not its status quo is being challenged, will influence consumer information utilisation. we therefore, hypothesise the following relationships: h3: consumer information functional quality is positively associated with (1) affective consumer information utilisation, (2) knowledge-enhancing consumer information utilisation, (3) action-oriented instrumental consumer utilisation, and (4) action-oriented symbolic consumer information utilisation. furthermore, higher levels of the technical quality of consumer information sought by smes influences consumer information utilisation and, therefore, we can hypothesise the following relationships: h4: consumer information technical quality is positively associated with (1) affective consumer information utilisation, (2) knowledge-enhancing consumer information utilisation, (3) action-oriented instrumental consumer utilisation, and (4) action-oriented symbolic consumer information utilisation. 2.2.4. provider-user interaction relationships between providers and users of information factors have been known to associate with information utilisation (van birgelen et al., 2001; moorman et al., 1993). deshpandé and zaltman (1987) identified and conceptualised this relationship as interaction between information producers and users highlighting it as a very critical to the utilisation of information. this relationship was affirmed by moenaert and souder (1996), who found the effect of the quality of the relationship on the user’s perception of information credible and comprehensible for use. marketing literature identified the underlying variables in these relationships as involvement, communication intensity, credibility and trust (maltz et al., 2006; kirk, 2002; feldman and march, 1981). since these factors affect information utilisation via the user’s relation, it is conceivable that these factors will affect consumer information utilisation. therefore, the interaction between consumer information providers and users will positively influence consumer information utilisation. consequently, we present the following hypothesis: h5: provider-user interaction of consumer information providers and users is positively associated with (1) affective consumer information utilisation, (2) knowledge-enhancing consumer information utilisation, (3) action-oriented instrumental consumer utilisation, and (4) action-oriented symbolic consumer information utilisation. 2.2.5. market environmental factors the market environment in which businesses operate can have a remarkable effect on a firm’s need for information (arnett and badrinarayanan, 2005). miles and darroch (2006) posits that the use of consumer information provides new opportunities for demand and competitive analysis for smes in the agri-food sector to enable them move away from the emphasis placed on ad hoc, informal, often hasty information gathering, and “intuitive” use of information. low and mohr’s (2001) observed that the more unstable the market environment, the greater the information processing that is required to cope with the instability. marketing literature measures this with an aggregate construct termed market turbulence (low and mohr, 2001; arnett et al., 2000). market turbulence refers to the rate of change and degree of volatility in an industry (low and mohr, 2001) and measures the level of change in a firm’s market environment. furthermore, jaworski and yawson: understanding consumer information use in small businesses: the determinants and performance outcomes international review of management and marketing | vol 10 • issue 5 • 202054 kohli (1993) argue that turbulence can also arise from changes in technology and in customer preferences. therefore, it is expected that the more turbulent the market place becomes, the more small business will seek useful consumer information to enable them to react to environmental conditions to exploit opportunities and react to adverse market conditions. we can therefore hypothesise: h6: usefulness of consumer information in turbulent external market environment is positively associated with (1) affective consumer information utilisation, (2) knowledge-enhancing consumer information utilisation, (3) action-oriented instrumental consumer utilisation, and (4) action-oriented symbolic consumer information utilisation. 2.3. the consequences of consumer information utilisation on sme outcomes small business marketing which has been designated as marketing at the marketing/entrepreneurial interface fits with a number of theoretical frameworks e.g. resource-based theory, transaction cost theory, strategic adaptation theory (hunt and arnett, 2003; hunt, 2000). however, morris et al., (2002) argue it is especially consistent with resource-advantage (r-a) theory. they argue that replacing the assumptions underlying the economic theory of perfect competition with a much more realistic set of conditions (e.g. demand is assumed to be heterogeneous and dynamic; resources are heterogeneous and imperfectly mobile; information is imperfect and costly), each firm in an industry is a unique entity in time and space as a result of history (hunt and morgan, 1997). also, contrasting the view that the firm is a production function that combines homogeneous, perfectly mobile factors of production, the resource-based view holds that the firm is a combiner of heterogeneous, imperfectly mobile entities that are labeled resources. these heterogeneous, imperfectly mobile resources, when combined with heterogeneous demand, imply significant diversity as to the sizes, scopes, and levels of profitability of firms within the same industry (hunt and madhavaram, 2006; hunt and morgan, 1997). therefore, an instrumental application of consumer information will affect the organisational process and determine a higher desired outcome. an action-oriented instrumental utilisation is expected to change marketing activities processes positively to yield the desired financial and nonfinancial performance improvement outcomes for the sme (citrin et al., 2007; maltz et al., 2006; morris et al., 2002). for this reason, the following hypothesis can be drawn: h7: action-oriented instrumental consumer information utilisation positively associates with (1) sme financial outcomes, (2) improved new products creation and production outcomes, and (3) decision-making ability outcomes. on the other hand, a symbolic application will not yield the desired financial and nonfinancial performance improvement outcomes expected by the small business (vyas and souchon, 2003; menon and varadarajan, 1992). we, therefore, posit: h8: action-orient symbolic consumer information utilisation negatively positively associates with (1) sme financial outcomes, (2) improved new products creation and production outcomes, and (3) decision-making ability outcomes. also, the utilisation of consumer information to change user knowledge and understanding of the issues in the firms concerning a product and/ or process (knowledge-enhancing utilisation) will result in an increase in sme knowledge to proactively leverage innovation and manage risks throughout marketing processes (hunt, 2011; parry and song, 2010; citrin et al., 2007; toften 2006; pulendran et al., 2003). this will involve creating, communicating and delivering value to customers (keefe, 2004). smes will also be in a position not only to innovate to meet the expressed needs of their current customers but will leverage the innovation of products, to exploit new market opportunities, with the view to satisfy unmet and latent needs of existing and new customer groups (miles and darroch, 2006). the relationship can, therefore, be hypothesised as: h9: knowledge-enhancing consumer information utilisation positively associates with (1) sme financial outcomes, (2) improved new products creation and production outcomes, and (3) decision-making ability outcomes. affective consumer information utilisation is deemed to occur when information users utilise consumer information with the sole purpose as “just to feel good” about decisions for a product or process (strieter et al., 1999). menon and varadarajan (1992) argue that affective utilisation of information is a difficult dimension of use to measure because it is related to general levels of satisfaction or dissatisfaction, confidence or lack thereof, and trust or mistrust. however, these general psychological states can be outcomes of use as well as dimensions of use. they may have a general negative effect on the small business and its performance outcome as the sole purpose is to feel good and not the intended insight about the consumer it is meant to deliver (strieter et al., 1999. therefore, we can hypothesise the relationship between affective information utilisation and entrepreneurial marketing orientation as: h10: affective consumer information utilisation negatively associates with (1) sme financial outcomes, (2) improved new products creation and production outcomes, and (3) decisionmaking ability outcomes. 3. research methodology consumer information utilisation relationships in small business have remained a largely unexamined area. therefore, in researching this area, qualitative and quantitative methods were employed. this mixture of methodologies enables methodological triangulation to be carried out to increase the credibility of the work by minimizing research bias (gill and johnson, 1991). complementary data was acquired from a qualitative study (focus group) and a quantitative study (survey) (creswell, 2009). the findings of the focus group in conjunction with the literature reviewed provided an understanding of the utilisation processes to inform the relationships proposed and operationalising the measures developed in this research. the qualitative study was followed with a quantitative study. a post-test-only quasiexperimental research design was used because of the exclusivity of the phenomenon of consumer information utilisation in smes. for this study, agri-food smes were provided with dunnhumby database information (an example of consumer information in the uk agri-food retail sector) through a series of workshops held through a 3-year project by the university of kent and the food north west (uk) project. the smes were then surveyed yawson: understanding consumer information use in small businesses: the determinants and performance outcomes international review of management and marketing | vol 10 • issue 5 • 2020 55 and the consumer information utilisation processes demarcated and their unique contribution on the sme performance outcome captured. the dunnhumby database is considered to provide consumer insight of the uk market for users because it contains the supermarket panel data of the largest uk retailer (felgate et al., 2011; humby et al., 2007); and combines the benefits of both the store-level scanner data and panel data (felgate, 2011). 3.1. sample design and data collection in this research the definition of smes was based on the 2003/361/ec recommendation of the commission of the european communities and selected firms were with 10 and 249 employees that do not exceed the turnover limits outlined in the recommendation. sampling was limited to smes in the agrifood industry in the north west of england which participated in workshops that provided consumer information through food north west/kent business school consumer information project for a valid sample frame to test the phenomenon being researched. a list of 120 companies attended 30 workshops over a 3-year period to use the information in the company marketing plans. to reduce sample selection bias, the list of companies which attended the workshops were contacted by phone. twenty companies could not be contacted due to relocations, change of businesses, or had gone out of business. the final list of 100 companies constituted the sample frame. all the companies were then surveyed to ensure enough cases were represented in the responses (dillman et al., 2009) and 5 companies were selected for the focus group study (stewart et al., 2009). in the quantitative survey, 76 useable responses were collected from a sample of 100 smes resulting in a 76% response rate overall. agri-food smes which completed the survey were from the following sectors of the industry: manufacturing 49% (37), retailing 14% (11), wholesaling 13% (10), primary production (agriculture) 13% (10) and other sectors 11% (8). the majority of the companies 73.7% have an annual turnover below £1 million and only 2 companies (2.6%) have an annual turnover of over £10 million. the majority of the companies, 57.9%, have up to nine full-time employees and the rest had up to nine part-time employees. all the responding companies are, therefore, small and medium enterprises in the food and drink industry. 4. results and discussion a series of multiple linear regression techniques were used to examine the hypotheses. in discussing our results, key findings from the focus group and survey studies are triangulated. 4.1. influence of market-oriented organisational culture on consumer information utilisation the result of the regression did not support any of the hypotheses (h12, h13 and h14) for a positive association of market-oriented organisational culture with any of the consumer information utilisation types. therefore, market-oriented organisational culture of speed, innovation and openness appears not to influence the utilisation of consumer information. the result is contrary to expectation in marketing literature (kohli and jaworski, 1990; zaltman, 1986). mcclure (2010) stated that evidence suggested that certain organisation culture types by nature enhance the process of information utilisation and market orientation. however, participants in the focus group ranked innovativeness and creativity as critical in sme organisational culture. nevertheless, innovation and speed culture in smes were inhibited by other organisational characteristics peculiar to smes. this is exemplified by one of the participants who stated. “we do not seem to be massively innovative but because we are in a period at the moment whereby there is no new product development going on we have to turn to management of other core parts of the business. we do not have a big new product development section within the company or a dedicated team. so we have not been terribly innovative in terms of new products based on the data.”participant 4 how another participant provided a contrary view … “when i got the information from you after attending the workshop, to work on it i studied it quickly eh... a company of our size is very flexible when we get information as this which is relevant to our strategy and markets. we will want to use it in our marketing plan, development plan (and) we will work on it very quickly. our time scale will be 3 months to create a new product especially in our marinades and sauces categories. it will take about the same time to get it to the market.”participant 5 this mixed views and the non-significant relationship reported confirmed that agri-food smes may not show strong organisational culture of speed, innovation and openness. in addition, deshpande and farley (2004) argued that, in practice, their results indicate that the importance of each type/ dimension of organisational culture differs significantly across countries in a pattern related to the key attributes of the national culture. arnett et al. (2000) found in their research on smes, speed culture has a “zero-sum” effect on competitive intelligence, innovative culture had a detrimental effect on competitive intelligence usage, and openness had no effect. the result is, however, supported by the findings in moorman (1995) study which found none of the market-oriented cultures (adhocracy, market, hierarchy and clan cultures) have statistical significant relationships with organisational market information processes in 200 companies drawn from services and industrial sectors; thus making market-oriented organisational culture less important for predicting information utilisation. this further provides evidence of the differences between the influences of market-oriented organisational culture on consumer information utilisation in agri-food smes and large organisations, as most of the evidence in mainstream marketing literature is from large organisations (stone et al., 2007; yoon and lee, 2005; kohli and jaworski, 1990). in as much as these results may be surprising, they tend to add to the argument of the differences in smes and large organisation information utilisation behaviours (carson et. al., 1995), since yawson: understanding consumer information use in small businesses: the determinants and performance outcomes international review of management and marketing | vol 10 • issue 5 • 202056 most of the studies such as homburg and pflesser (2000) are developing and reporting measures of marketoriented cultures in the large organisation context which are not applicable in smes. 4.2. influence of organisational structure on consumer information utilisation the regression results did not support any of the hypotheses (h22, h23 and h24) for a negative association of organisational structure with any of the consumer information utilisation types. this result shows organisational structure measured using formalisation and centralisation is not significantly related to consumer information utilisation (kirca et al., 2005; pelham and wilson, 1996). this may be due to the characteristics of the agri-food smes. however, participants in the focus group provided evidence of lack of formal structures and centralised nature of sme structure on decision making as … “for most of the companies i have worked with they do not have a large marketing team, or category team, or consumer analysts. in the main it tends to be me and the company ownermanager…” participant 2 “the information was good so i shared it with my other commercial colleagues, marketing and anyone with a customer facing role. i share the information with them.” participant 5 these quotes provide further evidence to support the findings from the survey results of the inability of organisation structure to influence consumer information utilisation in agri-food smes since participation in decision making and hierarchy of authority were least important in determining their use of the consumer information in the sample of agri-food smes. the research findings are contrary to some results reported in marketing literature (deshpandé and zaltman, 1987) which have reported results from large and medium companies from different industries. however, the current result is further collaborated by sme literature which is elucidated by carson et al. (1995) where they had stated … “small firms have non-sophisticated, flexible and organic organisational structures, which exhibit few of the structural characteristics of the bureaucratic organisation (which are usually large organisations).” (carson et al., 1995: 66-67) from these, characteristics of smes do not normally exhibit the complicated, sophisticated structure and the managerial hierarchies found in large organisations. the flexible working practices and organic organisational structures present smes as those of a problem-solving team (carson et al., 1995:67). since organisational knowledge in sme and problem-solving teams have also been known to be acquired through low-involvement learning or knowledge accretion (weiss, 1981), the result confirms organisation structure does not have a relationship with consumer information utilisation in sme. therefore, the organisational structure is not considered as important in knowledge-enhancing consumer information utilisation in sme (carson and gilmore, 2000; pelham and wilson, 1996). in addition, since action-oriented consumer information utilisation is demonstrated by changes in the organisation’s activities, practices or policies that can be linked directly to the findings and implication of the information, an sme acting as a problem-solving team’s organisational structure will be less important in acting to influence action – oriented instrumental or symbolic utilisations (toften, 2006) in these final outcome activities (arnett et al., 2000; menon and varadarajan, 1992). 4.3. influence of information functional quality on consumer information utilisation the results found information functional quality to positively associate with knowledge-enhancing consumer information utilisation (h32). this implies how acceptable the consumer information is to decision makers for practical implementation of decisions arising from understanding of issues using consumer information influences its utilisation. the result is important as it is consistent with o’reilly’s (1982) argument of subjectivity of information utilisation quality on the user. it is also important in sme literature, since the result introduces organisational functional quality attributes of acceptability and ability to implement a decision as part of the qualifications required for consumer information utilisation (carson and gilmore, 2000). these findings in sme consumer information utilisation can be attributed to the limited resources and the unique pragmatic ways in which they are managed (mccartan-quinn and carson, 2003). giving credence to the carson and gilmore (2000) argument that marketing in smes is about how to implement actions; and sashittal and jassawalla’s (2001) observation that sme marketing is more functional than their real-time decision to redeploy their energies and resources. and also appears to influence systematic changes in the design of marketing activities (consumer information utilisation) to shape the firm’s behaviour in the marketplace. this is further supported by the participants in the focus group... “quality consumer insight is costly so it is not surprising that small businesses like ours rely on gut feel. no longer does this have to be the case because now we can freely obtain information about our market”participant 1 “we considered the benefits the information will bring to our business and how to understand it before anything else.” participant 3 in addition, the results found information functional quality (acceptability and actionability) to positively influence actionoriented symbolic consumer information utilisation (h34). a result that means acceptability of consumer information for actionable decision-making influences the use of information in decision making for the sake of appearance rather than the information’s intrinsic qualities in agri-food smes. this result supports the conceptualisations of symbolic use of information (souchon et al., 2003; souchon and diamantopoulos, 1997) and contradicts toften’s (2006) contention of symbolic information utilisation. this result is also important since it confirms action-oriented symbolic consumer information utilisation in smes, which is not attributed to “generic” influences (“notably the inability to deal with large volume of information;” souchon et al. (2003:120) but as a considered yawson: understanding consumer information use in small businesses: the determinants and performance outcomes international review of management and marketing | vol 10 • issue 5 • 2020 57 decision taken with the view of higher satisfaction in a framework of organisational understanding and beliefs (souchon et al., 2003; souchon and diamantopoulos, 1997). this is evidence that smes do engage in the action-oriented symbolic consumer utilisation (mccartan-quinn and carson, 2003). this is supported by expectation from the focus group participant, which dwelled more on the source of the information than the intrinsic value of the information … “i think there is something else you should know, i guess will be…when we went to tesco to present their own internal information. i didn’t get the impression that eh…that data carries a lot of attention. that i want to understand a little bit more whether this type of information is what tesco buying team want to see? is it because they are familiar with it? i am not sure” participant 2 4.4. influence of information technical quality on consumer information utilisation the results reported information technical quality (content and form) to have a negative influence on action-oriented symbolic consumer information utilisation (h44). this implies higher technical quality of consumer information (content and form) reduces the utilisation of consumer information in decision making for the sake of appearance rather than the intrinsic qualities. first, this result is important for smes, since sme marketing it is argued in sme literature as been less complex (jocumsen, 2004) and the entrepreneurial nature (schindehutte et al., 2009; giroux, 2009) provides pragmatic use of consumer information. however, the result is contrary to mainstream marketing literature were high-quality information have generally been attributed to influence good corporate decision making (kotler and armstrong, 2009; toften and rustad, 2005; this assertion is confirmed by participants in the focus group discussion … “quality consumer insight is costly so it is not surprising that small businesses like ours rely on gut feel. no longer does this have to be the case because …”participant 1 the mainstream marketing literature was further contradicted with technical quality not having statistically-significant relationships with action instrumental and knowledge-enhancing utilisations (i.e. use of information to affect strategy and policy making; and the use of information to change a user’s knowledge). secondly, information technical quality had a negative relationship with consumer information showing negative coeffieciencies for both significant and non-significant relationships (h42 [β = −0.108], h43 [β = −0.171] and h44 [β = −0.443]). although the results appear to contradict mainstream literature, it can be argued that in the agri-food sme context, complexity of information appears to discourage utilisation (souchon and diamantopoulos, 1997). thirdly, in contrast to the positive coefficient of functional quality (acceptability and actionability) of consumer information on utilisation; the results support kang (2006) argument that evaluation of information service quality should include both sets of functional and technical attributes to ensure better predictive utilisation. this is a very important finding for agri-food sme. in addition, the result is contrary to the argument made in literature that smes symbolically use information due to the inability or limited processing capabilities (kang, 2006; vyas and souchon, 2003; souchon and diamantopoulos, 1997). this is because the results confirm information technical quality as influencing actionoriented symbolically consumer information utilisation. 4.5. influence of provider-user interaction on consumer information utilisation the results shows provider-user interaction has a positive influence on action-oriented instrumental consumer information utilisation (h53). provider-user interaction consisted of involvement, credibility and communication intensity (maltz et al., 2006; moenaert and souder, 1996; deshpandé and zaltman, 1982; 1984). the result implies the strength of the information provideruser interaction, as indicated by the consumer information user organisation engagement with the information; the user organisation’s perceived accuracy and technical soundness of the information and the frequency with which key organisation users of information communicate both formally and informally influence the direct application of consumer information to policy making and strategies in the organisation. the results also brought to the fore moorman (1993) observation of the complex relationship of perceived integrity as the most important predictor for information users as stated: “we use the information because it came from a credible source … an independent credible source; you know the quality of the data was robust…” participant 2 importance of provider-user interaction to the agri-food sme is manifest in the fact that the greater the interaction between the user organisation and the information provider, the more the former know about the consumer information provider and what to expect (menon and varadarajan, 1992; deshpandé and zaltman, 1987). the interaction also provides insights about how best to structure the information content and form to meet the expectation of the user sme making it acceptable and actionable within the resource capabilities of the sme to enhance utilisation (arnett et al., 2000). this interaction can take the form of workshops and seminars, formal and informal feedback and discussions to serve as important determinants for consumer information utilisation. the importance of this relationship was acknowledged by the focus group: “i think it (workshops and communication with information providers) will be more beneficial because there is a lot of data… i for instance, when i got the information have to call back to get more explanations even though i have attended the workshop. this i think will be all over. the workshop was good for understanding what was available from food north west. that was good and informative and we trust food north west to deliver support as members. it was also good for networking.”participant 3 yawson: understanding consumer information use in small businesses: the determinants and performance outcomes international review of management and marketing | vol 10 • issue 5 • 202058 provider–user interaction provides more practical and pragmatic opportunities to both apply and demonstrate utilisation of complex consumer information in sme marketing. this is confirmed with the highly significant coefficient and single most important influence (β = 0.454, p = 0.000) on action-oriented instrumental consumer information utilisation. 4.6. influence of market environment on consumer information utilisation market environments have an important positive influence on knowledge-enhancing consumer information utilisation (h62). the result also shows that market environment was the largest, most important for influence on knowledge-enhancing consumer information utilisation. the results confirm that market environment factors, indicating market turbulence and usefulness of information in the business environment for the agri-food sme affect changes in the understanding of their market (palmer and hartley, 2006; arnett and badrinarayanan, 2005). this was simply confirmed by the smes in the focus group as: “this information helps smaller businesses to identify their market” and “what consumers are purchasing at the tills” participant 2 “the consumer information explains people’s shopping behaviour” participant 1 the implication of the results is that environmental changes and usefulness of consumer information in the business environment influence the use of consumer information in the understanding of issues and themes in sme marketing decision making (parrot et al., 2010; pulendran et al., 2003; low and mohr, 2001). thus, the utilisation of action-oriented instrumental consumer information is important in sme marketing, which is characterised with a shorter decision-making process, changing environment, little formal or informal approaches to management (burns, 2007; collinson and shaw, 2001) and focus on exploiting opportunity (wickham, 2006). agri-food smes can, therefore, use consumer information to enhance their understanding leading to; identifying new opportunities and improved effectiveness and efficiency in sme marketing in general competition in the agri-food sector (burt and sparks 2003; calantone et al., 2003; sashittal and jassawalla, 2001). knowledge-enhancing consumer information utilisation will enable agri-food smes to incorporate the volatility in their markets indicated by the market turbulence (low and mohr, 2001) in their marketing. market turbulence which can arise from technological and customers’ preferences when incorporated into sme marketing will enable agri-food smes to develop their business in the increasingly complex uk agri-food sector. this argument was confirmed by the focus group: “the information … it is important for consumer engagements, competitions, offers which is specifically based on the customer base on the product.”participant 5 also, this finding is important as it indicates the important relationship of the usefulness of the consumer information in a market environment and the knowledge-enhancing consumer information which is in agreement with mainstream marketing literature (kotler and armstrong, 2009; stone et al., 2007; blattberg et al., 1994). 4.7. performance outcomes of consumer information utilisation sme performance measurements have been measured by financial and non-financial criteria although financial measures have been given most attention in marketing literature (walker and brown, 2004). mainstream literature has pursued an objective of the firm to maximise profits and follows that the performance measures advocated are largely based upon this theory (reijonen and komppala, 2010; javis et al., 2000). javis et al. (2000) argue that the seemingly unproblematic notion of business performance needs to be closely linked to the objectives of the firm as defined by the sme owner-manager, since sme owner-managers are known to pursue a range of goals as well as profit maximisation. owner-managers of smes juggle a range of objectives continually arranging and rearranging them within what they perceive as changing constraints internal and external to the enterprise. to give credence to the arguments of javis et al. (2000) most of the participants in the qualitative study did not directly associate the use of the information to an increase in financial measures but to their own goals. a participant makes it clear when he stated: “the use of the data was not directly linked to company’s revenue targets, market share, profitability goals but we hope it will help in finding opportunities for new product creation… and may boost sales growth” participant 5 “we cannot give you any figures on sales but can tell you we have used it to help us redesign our package for one of our products and hope to improve sales in the coming months” participant 3 therefore, a series of regressions were performed in the quantitative study to examine the relationship between consumer information utilisation and sme performance outcome variables. the results show regression models for action-oriented instrumental consumer information utilisation and financial outcomes, new product creation and production, and decision-making ability indicating adequate significant relationships at p < 0.1. first, the significant (f2, 73 = 4.121, p = 0.046) relationship between financial outcomes and action-oriented instrumental consumer information utilisation, and a positive significant coefficient of action-oriented instrumental consumer information (β = 0.230, p = 0.046) supports the hypothesis (h71) and provides evidence of a linear relationship. therefore, the results reveal a linear relationship between financial outcomes and action-oriented instrumental consumer information. the result is interpreted as the utilisation of consumer information in the direct application in policy and strategy making positively associate with sme financial outcomes. secondly, the adequately significant (f2, 73 = 3.066, p = 0.084) relationship between new product creation and production and action-oriented instrumental consumer information utilisation, support (h72) and shows a positive significant coefficient of action-oriented instrumental consumer information utilisation (β = 0.199, p = 0.084). the result is interpreted as the utilisation of consumer information yawson: understanding consumer information use in small businesses: the determinants and performance outcomes international review of management and marketing | vol 10 • issue 5 • 2020 59 in the direct application in policy and strategy making positively associate with new product creation and production. third, the very highly significant relationship between decision making ability and action-oriented instrumental consumer information utilisation, also shows a positive very highly significant coefficient of action-oriented instrumental consumer information utilisation (β = 0.615, p = 0.000) supporting (h73). the result is interpreted as the utilisation of consumer information in the direct application in policy and strategy making positively associate with decision making ability. these result supports the hypothesis (h7 [h71, h72, h73]) that suggested action-oriented instrumental consumer information utilisation positively associates with financial outcomes, improved new products creation and production outcomes and decision-making ability outcomes of smes. in addition, regression models for knowledge-enhancing consumer information utilisation only show significant relationship with decision-making ability. result shows a very significant (f2, 73 = 13.589, p = 0.000) relationship between knowledgeenhancing consumer information utilisation and decision-making ability; and a very significant positive coefficient (β = 0.394, p = 0.000) for knowledge-enhancing consumer information utilisation; a result that support (h93) and provide evidence of a linear relationship. the results support the well-established relationship of use of consumer information to change a user’s knowledge and understanding of the markets (parry and song, 2010; stone et al., 2007; greenyer, 2006). the knowledge acquired is used to improve agri-food smes’ processes and products (citrin et al., 2007; neslin et al., 1994), target the customer base (montgomery, 1997) and improve decision-making abilities of management (reijonen and komppula, 2010; lustri et al., 2007). to illustrate this relationship, one of the participants in the qualitative study gave an account of how they used the information: “we have developed two basic products whole and ready spatchcocked poussin. we wanted to better understand which region in the uk has the strongest market for these products and what type of people were most likely to be purchasers. through food north west, we attended the workshop and made a request for dunnhumby database information. we received a detailed report from the kent business school/ food north west consumer insight project. after painstakingly going through the report we understood the two main highlights. first, the charts in the report show that the market for the products is heavily concentrated in london in particular. it appears that the product is not appealing to large centres of the population in lancashire, yorkshire and the north east, suggesting there is an opportunity for the business. secondly, the report also showed that the products appeal most to the older groups including pensioners and older families. the charts were indicating that there are some significant differences in the life stage of people who buy the different products. we were then able to target our products to the appropriate markets. we are making contacts to supply outlets in the london area and also looking at developing the emerging market in the borders area. it will take time to develop and the financial gains will not be instant but we have longand medium-term plans for this new development. we are now armed with quality information that can be used to identify opportunities for the business. we can now target specific products to different groups of people and have greater confidence we are meeting a real market need which will ultimately help us to increase our sales”… participant 4 these results further illustrate new and untested relationships in marketing literature and provide further empirical evidence for the mechanism which explains action-oriented instrumental, knowledge-enhancing consumer information utilisation and sme performance outcomes. however, all the other hypotheses (h8 [h81, h82, h83]) for action-oriented symbolic consumer information utilisation were not statistically significant and h10 was not tested. 5. implications for practice this article confirms consumer information utilisaton in agri-food smes improves performance. this is evidenced in improvement in decision-making ability, improvement in new product and processes, and financial outcomes of agri-food smes. since a high provider-user interaction, functional and technical qualities have a positive relationship with consumer information utilisation; schemes with the objective of improving sme marketing with consumer information can improve results with involvement in workshops, feedbacks and engagement of smes. also to further improve consumer information utilisation in smes the facilitators must selected information sources with high functional and technical qualities. as a high technical quality suppresses the use of the information just for appearance and not the intrinsic value; whereas a high functional quality will enhance the use of the information for understanding the market to improve the smes decision-making ability. this also provides evidence of symbolic use of consumer information which must be identified in utilisation evaluation. the current popular typology used of instrumental/ conceptual does not account for symbolic information utilisation and therefore not comprehensive (diamantopoulos and souchon, 1999; moorman, 1995). sme business facilitators and policy makers involved in consumer information-related interventions for smes are therefore, required to include measures that will indicate and enhance smes ability to implement decisions from consumer information and consider the turbulence of the markets for the industry to ensure success of utilisation. theoretically, this article presents a new perspective of consumer information utilisation in industry as multi-dimensional (knowledge-enhancing, action-oriented instrumental and actionoriented symbolic) and uses an emerging information processing phenomenon of deriving information, knowledge and insights from a complex overlay of databases on consumers of retailers. it presents a more specific information source than market information, and is more comprehensive than panel data, electronic point of sale information and store-level information sources (felgate et al., 2011; humby et al., 2007). yawson: understanding consumer information use in small businesses: the determinants and performance outcomes international review of management and marketing | vol 10 • issue 5 • 202060 6. conclusions and recommendations in conclusion, the study provides evidence of the utilisation of consumer information in improving small business outcomes in a general industry resource-based competition; the factors that influence the utilisation and the attended benefits to agri-food smes. the utilisation in small business is determined by the agri-food smes’ ability to implement the business processes of consumer information application to a higher overall satisfaction acceptable to decision makers. based on the quality of the content and form of the information, their engagement with the consumer information, their perceived accuracy and technical soundness of the information, and the frequency with which they communicate both formally and informally with the providers of the information, the market turbulence in the industry, and usefulness of the information in the business environment. that in small business application of consumer information in policy and strategy enhanced financial outcomes, improvements in new products and processes and decision-making ability. also, there is a level of consumer information utilisation in policy and strategy which is purely for symbolic purpose. nonetheless, consumer information for knowledge-enhancement improves decision-making ability. we recommend that since context is important in utilisation research (rich, 1997) this study be replicated in other industries with different industries and using both cross-sectional and longitudinal approaches. also, since affect consumer utilisation could not be tested due to measurement validity this can be pursued in future research. references arnett, d.b., badrinarayanan, v. 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(2004), retail micro-marketing strategies and competition. international review of retail, distribution and consumer research, 14(1), 7-18. tx_1~at/tx_2~at international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2020, 10(5), 85-91. international review of management and marketing | vol 10 • issue 5 • 2020 85 effectiveness of social media platform: a perspective of customer purchase intention through social networking in the pakistani context irsa mehboob1*, mubbsher munawar khan2 1institute of business administration, university of the punjab, lahore, pakistan, 2hailey college of banking and finance, university of the punjab, lahore, pakistan. *email: irsa_mehboob@hotmail.com received: 08 june 2020 accepted: 27 august 2020 doi: https://doi.org/10.32479/irmm.10449 abstract the purpose of the study is to explore the association among the social media practices which effect the purchase intention of the consumers in the pakistani context. the study is helpful for all the practioniers and profit earning organizations as it gives a deep overview of the social media and their practices applied nowadays. the study also examines the mediating role of brand loyalty in these relationships. paper, as well as electronic questionnaires, were used to collect data from 1000 consumers who use social channels to make a purchase. structural equation modeling technique (sem) was applied to test the hypothesized model. the results reflects that all the independent variables have a significant impact on purchase intention (dependent variable) keeping brand loyalty as the mediating variable. the results of the research are beneficial for all those firms and marketers who are targeting the social networking platforms to reach out to their target customers. this study explores the factors of brand loyalty in relation to social media in a unique way, but having few limitations to research such as the use of convenience sampling .future directions can help the marketers to aim their consumers very precisely implying these social media studies. keywords: social media, brand loyalty, social networking, community engagements, impression management, brand use, purchase intention jel classifications: m1, m3 1. introduction social media is considered as a substantial mean which not only support the consumers but the firms also to have a good mean of interaction and developing everlasting bond with the consumers. social media is defined as the online platform facilitating the users to interact, collaborate and even share information among each other (grantham-mcgregor et al., 2007). the reputation of brand is directly proportional to its social media influence nowadays (bae et al., 2010). social networking means that individuals having similar interests and characteristics come together at one single platform or source or any channel sharing their ideas ,reviews and interacting with people of same nature. socializing is done through various means such as sending messages, sharing photos, blogging, web links, websites and discussion channels (harris and parker, 2009); and for this interaction there are various applications present like facebook, whatsapp, instagram, twitter etc. the debate over the brand-building activities of any company by utilizing digital platforms which can lead to consumer purchase intentions is an ongoing one. some academics and researchers are of this viewpoint that only social media gives a unique platform to businesses and brands helping their consumers to develop long term bond with their brands while others doesn’t agree with this theory (harris and parker, 2009). taking this perspective forward, this research caters to variables namely social media, community engagement, impression management and brand usage to predict purchase intentions through customer loyalty status with the this journal is licensed under a creative commons attribution 4.0 international license mehboob and khan: effectiveness of social media platform: a perspective of customer purchase intention through social networking in the pakistani context international review of management and marketing | vol 10 • issue 5 • 202086 mediating effect of brand loyalty. past brand loyalty studies just explored the customer centered model explaining the bond between the focal customer and their desired brand, any company or any product using social channels (schau et al., 2009). however, this research will study the effects of predicating antecedents like social media, community engagement, and impression management, brand use to enhance long term customer relationships through brand loyalty which fully mediates value creation practices on purchase intention of the consumers. social media growth enables customers to modify themselves from passive receivers to active co-creators of brand messages in response to marketers’ persuasion tactics of using social media platforms (ramiz et al., 2014). firms and business have started noticing the importance of social media marketing channels and results explored that 47% of companies use social media to connect to their customers (cvijikj and michahelles, 2013). as marketing insider group (2017) reported, that brand community has shown significant business benefits when the system is shifted from conventional to online having benefits such as: (1) a decrease in customer support costs; (2) enhanced brand exposure and credibility; (3) help to get knowledge of new products or service; (4) showcasing products before their official presentation. communities developed online and interacting via social channels provide a platform to users to come together at one unified point and have a discussion about various brands, items or products. nowadays various firms and businesses realizing the potential of social media have started supporting the developed communities and social platforms. such channels can help in better development of their respective brands financially, ethically and emotionally (most et al., 2001). such communities develop a bond between the firm and their respective customers (kim et al., 2007). through impression management, the users come across the latest news, brand proficiency, standards of various brands matching their levels and likeness. 2. literature review 2.1. social networking and purchase intention social networking provide a chance for marketers to gather the information from the customer to have a record maintained (hensel and deis, 2010). a general rule explains that with the passage of time, social networking users become more inclined in sharing their private information. data mining organizations are gathering data from individual posts and applications. an organization called “colligent” gathers such free data, mines it and offers factual information to record mark organizations (hall et al., 2009). peng et al. (2008) suggest that social network marketing can be advantageous to the business in many ways. schlaile et al. (2018) suggests that focusing the final outcome being advantageous using social media marketing, firms take into account the steps starting from their initial commercials broadcasting online, developing clear defined goals and in the last collecting the results to be beneficial or not. social networking is powerful source because of its two-way correspondence (nisar and whitehead, 2016). ellis-chadwick and chaffey (2012) propose numerous organizations take an initiative venture enabling online networking members to communicate and many have discovered achievement in utilizing the insight of the group to answer their business issues. indian and grieve (2014) suggested the two stages to gain customer confidence is first to give honor to the customer and second to make marketing programs that upgrade clients. social media networking in a way is one of the most effective utilization of marketing expenses (krasnova et al., 2010; nisar and whitehead, 2016), which is essential for even small and medium enterprises (smes) as they have to make do with smaller spending plans than the bigger organizations. firms utilize social media networking to discover new consumer as well as to keep up and hold their current consumer (kim et al., 2018). h1: there exists a positive relationship between social networking practices and purchase intention. 2.2. community engagement and purchase intention community engagement proposes that individuals are keen on helping different individuals, taking part in joint exercises and acting in cooperative ways until the group underwrites the proposal and when that upgrade eventually culminates into practice, the group’s esteem is aggrandized, not only for themselves, but also for other groups and subsequently, the brand itself. social interaction/ user-participation is alluded to as “partaking,” one takes part when one has added something, either straightforwardly or in a roundabout way, to the group (shang et al., 2006). thompson and sinha (2008) inspected the impacts of brand conscious people upon those who are not brand conscious. muniz and o’guinn (2001) find that long-haul individuals have a tendency to appreciate higher status inside the brand community and that their participation is viewed as more honest. hence, longer-term participation in a brand community ought to lead to a more grounded social recognizable proof with that brand community. furthermore, long-haul participation lead to learning purchasers’ assessments of new offerings, aggressive marketing and promotion activities, et cetera; and to augment chances to draw in and work together with very faithful clients (ohern and rindfleisch, 2010). within consumer relationship toward brand and brand networking, the brand loyalty acts a very crucial and vibrant role (ismail, 2017). buyer’s impression of the brand community’s outward requests on a man to connect and coordinate inside the group. these requests are gone to by some of the time plain however regularly verifiable pressure to adjust to the community’s standards, ceremonies, and goals (algesheimer et al., 2005). brand communities, however, have not possessed the capacity to manage the entire hover, from starting associations with clients to the change of promoting efficiency. rather, the exploration center has been on assorted ranges, for example, the impact of demeanors toward brand communities on brand (solem and stalenhoef, 2016; sasmita and suki, 2015). brand community duty and breaks down the impact of trust and influence toward a brand community. the significant connections amongst trust and duty and amongst influence and mehboob and khan: effectiveness of social media platform: a perspective of customer purchase intention through social networking in the pakistani context international review of management and marketing | vol 10 • issue 5 • 2020 87 responsibility have been identified in past brand administration contemplates (stokburger-sauer, 2010; goh, 2013). hence the proposed hypothesis is: h2: there exists a positive relationship between community engagement practices and purchase intention. 2.3. impression management and purchase intention customers involve themselves in such selfless activities or to gain higher status within their communities/society which results in providing an esteemed impression. people don’t bother about the motivation behind, but just observe the impression to develop their status within the society (laroche et al., 2012). from a behavioral viewpoint, the practice of engaging consumers can be viewed as a consumer’s behavioral manifestation toward a company’s brand (gignac and szodorai, 2016). secondly, consumer engagement can be hypothesized as a psychological state that occurs in combination with a customer’s interactive experience with a focal (core) brand, accompanied with consumer attitude formation as a multidimensional construct comprised of emotional, cognitive and behavioral dimensions (zebrowitz and montepare, 2015). impression management plays a vital role in organizational research that is inclusive of political accomplishment (riegelsberger et al., 2007). impression management helps to achieve beneficial results while making hiring decisions, performance evaluations and career development (yen and tseng, 2013). staff workers hope to be treated well by their upper management; for this purpose, impression management performs a vital part in managing the controller’s impressions to increase staff workers’ productivity. when supervisors use impression management the staff workers feel the supervisors are in their favor (proudfoot et al., 2018). different theories proved that use of impression management helps to achieve great success in career (fuller et al., 2007) and builds good relations between staff workers and supervisors (harris et al., 2007). impression management is a theory to be paid attention to. it has the authority and impact to create a promising public recommendation of a noteworthy person; it can harm an individual’s social status, and, it can reestablish a harmed guise. also, impression management has the aptitude to regulate a person’s status in the social order. a relative position of a person can also effect impression management (merkl-davies et al., 2011). hence the proposed hypothesis is: h3: there exists a positive relationship between impression management practices and purchase intention. 2.4. brand usage and purchase intention brand use practices are the consumer’s ability to help each other with novel and better means to utilize any main brand. these comprise essentially about the valid knowledge/know how by one user to another focusing the usability of brands as per the basic needs. these practices can also be related to the feelings of one person in an attempt to help or assist another who is new into the community. brands use practices include developing, nurturing and custom tailoring the brand as per their user demand. such practices results in best use and liking towards the brand (schau et al., 2009). social media can enhance brand usage practices by keeping brand dedication and increasing followers by connecting and sharing brand information and knowledge. along with all these value addition practices, it is assumed that brand community pointers can openly impact these practices (laroche et al., 2012). ahmad et al. (2011) worked on determining the influence of brand positioning on consumer purchase intention among different products using eight variables; brand credibility (signaling variable), brand image (signaling variable), brand prestige (signaling variable), consumer purchase intention, perceived value, perceived quality, perceived risk and product involvement on consumer purchase intention. results revealed that all brand signaling variables impact positively on consumer purchase intention through perceived value for money, perceived quality, and information costs saved, and perceived risk. brand positioning variables have great impact on high involvement product rather low. marketers and advertisers use this study to outline operational strategies and increase effectiveness. thus, the study postulates the following hypothesis: h4: there exists a positive relationship between brand use practices and purchase intention. 2.5. brand loyalty and purchase intention hidayanti and nuryakin (2018) explained the impacts of brand practice and brand trust to enhance brand loyalty and brand commitment. brand experience support to brand commitment and brand loyalty. loyalty is a way through which customers show their contentment towards the enactment of product or facilities given to them (bloemer and kasper, 1995). brand loyalty is also distinguished as “keeping a particular product or service desirable” (khraim, 2011). loyalty is based on different variables but the most important fact is the practice of use (edosomwan et al., 2011). consumer’s check the brand for their satisfaction that inaugurates a good and long relationship with that brand (woodcock et al., 2011). brand loyalty is elemental for every firm to gain competitive advantage in order to attract more customers and gain more profit (iglesias et al., 2011). every firm wants to get high customers loyalty towards the brand. however, all brands cannot achieve high customer loyalty. every company’s marketing plan is designed to focus on growth and preservation of consumer’s brand loyalty, specifically in the marketplaces having tough opposition and high impulsiveness and less item variation (ismail, 2017). chaudhuri and holbrook (2001) had indicated brand loyalty as a constructive and steady frame of mind and characterized it by the client through attitudinal loyalty and behavioral loyalty to the brand. brand loyalty alludes to the propensity of being reliable to a brand and can be an inclination of customers to purchase a brand as the main decision indicated loyalty to a specific brand. mehboob and khan: effectiveness of social media platform: a perspective of customer purchase intention through social networking in the pakistani context international review of management and marketing | vol 10 • issue 5 • 202088 hence it is proposed that h5: brand loyalty has mediating effect among independent variables (social networking, community engagement, impression management, brand use) and purchase intention. 3. methodology the current study assumed the positivist philosophy as the nature of the research to undergo the factors of purchase intention using social media and branding. this study utilized quantitative (survey-based) methodology being cross sectional in nature. in the present study, target population refers to all those consumers using internet facilities and social media platforms and online networking in pakistan. currently, the total population of pakistan is 200 million as per world meter. out of this population 18% or precisely 35 million are regular internet users while 31 million or 16 % are the active social media users.1200 questionnaires were distributed and out of which 1000 came out fully filled and duly acceptable to run the tests with response rate of 83% .in measuring variable social networking is leading the concept of socializing and interaction and was developed by hsieh et al. (2005). a thirteen item scale from one (strongly disagree) to five (strongly agree) was used which was developed by hsieh et al. (2005). community engagement means social interaction and it was measured by 30 items scale from from one (strongly disagree) to five (strongly agree) developed by algesheimer et al., 2005. impression management is the practice used by people to give directions to alter their developed image towards any brand by schau et al. (2009). a fifty item scale from one (strongly disagree) to five (strongly agree) developed by schau et al. (2009) was used. brand loyalty is the affirmative approach towards a brand and it was measured by 6 items scale from one one (strongly disagree) to five (strongly agree) developed by delgado-ballester et al. (2003). brand usage is the level to calculate the purchase of any brand in priority to alike brands and it was measured by 5 items scale from one (strongly disagree) to five (strongly agree) developed by schau et al. (2009). purchase intention is the preference of consumer to buy the product or service and it was measured by it was measured by 9 items scale from one (strongly disagree) to five (strongly agree) developed by singh et al. (2012). 4. results and analysis demographic results revealed that 519 are female buyers with majority as compared to 481 male buyers being the minority. age level of the respondents in between 18 and 23 years are in majority with 658 respondents while rest age groups ranges such as 24-29 years are 250 respondents, 30-34 years are 49 while above 35 age limit are 43 respondents. similarly for the education bachelor level is in majority with 666 responses, master level is 208 and mphil level is 84 while phds are 42 respondents. table 1 explains the relationship among the variables. it explains the variables have significant relationship with each other at the level of 0.01 and 0.05.the lowest correlational was 0.429 in brand use with community engagement while the highest correlation was 0.638 in between purchase intention and brand loyalty. means and standard deviation are also mentioned in the table ranging from 3.49 to 3.89 and 0.391 to 0.541 respectively. reliability of each variable are also shown in the table 1 while the overall reliability is 0.885. table 2 demonstrated the fitness summary of the model and variables. all the values showing that the constructs are fit for the analysis. the variables have the values above the threshold level donating fitness and validity of the constructs. standard regression weights also have 0.3 estimate values showing the acceptable range to retain the variables. table 3 shows the p values through which hypotheses are accepted or rejected. according to the results of p values, first relationship of social networking (sn) with purchase intention (pi) has not been accepted. all others hypothetical relationships have been accepted shown in table 3. to test the mediation, bootstrapping technique is used. it is also useful to verify both the direct as well as the indirect effects of the model. as mentioned in table 4 and according to it there are table 1: correlational matrix mean st. deviation 1 2 3 4 5 6 cronbach’s alpha social networking (sn) 3.6610 0.39117 1 0.616 community engagement (ce) 3.4907 0.41846 0.536** 1 0.812 impression management (im) 3.5684 0.45882 0.516* 0.616** 1 0.744 brand use (bu) 3.8982 0.54123 0.474** 0.429** 0.436** 1 0.720 brand loyalty (bl) 3.7839 0.53520 0.496** 0.475** 0.501* 0.579** 1 0.685 purchase intention (pi) 3.6379 0.50490 0.432** 0.499** 0.540** 0.488* 0.638** 1 0.742 table 2: fitness summary varibales cmin/ df cfi gfi rmsea social networking (sn) 0.122 1.00 1.00 0.000 community engagement (ce) 2.565 0.981 0.989 0.040 impression management (im) 2.780 0.983 0.993 0.042 brand use (bu) 1.00 1.00 1.00 0.310 brand loyalty (bl) 1.805 0.998 0.992 0.046 purchase intention (pi) 2.649 0.993 0.992 0.066 table 3: regression weights (group number 1-default model) estimates p-value pi. <--sn. 0.214 0.027 pi. <--im. 0.344 *** pi. <--ce. 0.089 *** pi. <--bu. 0.297 *** mehboob and khan: effectiveness of social media platform: a perspective of customer purchase intention through social networking in the pakistani context international review of management and marketing | vol 10 • issue 5 • 2020 89 partial mediation present in first, second and fourth path. first path is community engagement with brand loyalty and purchase intention. second path is impression management with brand loyalty and purchase intention. while the fourth path is brand use with brand loyalty and purchase intention. third path is showing no mediation among the variables (social networking with brand loyalty and purchase intention). figure 1 explains the model showing the impact of independent variables; social networking (sn), community engagement (ce), impression management (im), brand use (bu) on the dependent variable purchase intention (pi) and with the mediation effect of brand loyalty (bl). 5. discussion and conclusion the purpose of the study was to examine the mediating role of brand trust between the relationship of social networking, community engagement, impression management, brand use and purchase intention in the developing world of social media and internet within the pakistani context. social networking, community engagement, impression management, brand use were the independent variables and purchase intention was the dependent variable. brand trust was the mediating variable in the study. five hypotheses were crafted to examine the relationship between the variables. data was collected from 1200 social media users who use social chains and internet medium to make the purchase out of which 1000 were usable respondents. majority of the population was female to make online purchase (n=519) which was 52% of the total respondents. most users were of the age group 18-23 years and belonged to the bachelor level of education having 666 responses. mean value of brand use was highest (m=3.898, sd=0.541). cfa indicated that the data were collected fit for the hypothesized measurement model along with sufficient factor loadings. in correlational matrix all the variables were positively correlated with one another and fitness summary showed that all the variables were fit for the analysis with standardized regression weights above the threshold level (>0.3). for the hypothesis testing, the first hypothesis was the relationship of social networking and purchase intention. it showed estimate 0.003 which was insignificant p=0.027 and it showed that there is no positive relationship among social media and purchase intention reflecting that with the development of social media the purchase patterns of the consumers doesn’t change. second hypothesis was the positive association between community engagement and purchase intention which denoted the estimate 0.089 and significant relationship between them. communities living together and people effect each other a lot while making any purchase. third hypothesis was the positive association between impression management and purchase intention which denoted the estimate 0.344 and significant relationship between them. people prefer to purchase while making an impression on other individual about any brand. furthermore, fourth hypothesis was the positive association between brand use and purchase intention which denoted the estimate 0.297 and significant relationship between them. in the mediation analysis only social networking showed no mediation effect among the relationship between social networking and purchase intention with brand trust. brand trust has the partial mediating effect in three relationships of community engagement, impression management and brand use. 6. implication and limitation this study provides deep understanding for the marketers and practitioners. the world is moving from conventional buying to online modes and socializing. thus, in today’s world of social media and interaction it is vital to pay attention to the social channels and platform while making purchases. social media practices are crucial in today’s world of businesses and it leads the companies to have better knowledge about their customers. the likings and interests of consumers for any brand can be accessed using social media and their channels. in such way, the decision makers in corporate world will get a better picture about the brands to develop the sense of brand trust and long term loyalty relationship among its consumers. people can get better knowledge about the brands and the information available online and have deep understanding about respective desired products instead of the old traditional mall shopping scenario. it not only saves times while doing online purchase for both the customers but also this step is beneficial for the firms to cut down the cost of outlets maintenance and people hiring as selling agents. shifting your business online can improve the chances of social networking. this can not only help business to business marketing but business to customers will have more improves results. the interaction with potential buyers of the brands will be more easy and to share the products using social platforms will improve the table 4: bootstrapping strategy paths standardized total effect standardized direct effect standardized indirect effect results ce-bl-pi 0.157*** 0.115*** 0.047*** partial mediation im-bl-pi 0.228*** 0.184*** 0.076*** partial mediation sn-bl-pi 0.003(ns) 0.163*** 0.067*** no mediation bu-bl-pi 0.095*** 0.372*** 0.153*** partial mediation figure 1: conceptual model and hypotheses testing mehboob and khan: effectiveness of social media platform: a perspective of customer purchase intention through social networking in the pakistani context international review of management and marketing | vol 10 • issue 5 • 202090 user flow. people are highly active on these forums, they develop their impression about the product or brand by knowing the views of other fellows who are using these networks. so, by walking on same impressions, they start using the particular product and attempt to purchase online such thing. so, by handling these things efficiently and effectively, their online sale could be increased positively and not only they can raise their sales but also they can sustain it too. the study also has theoretical contribution as well as the model is novel and significantly contributes in the literature. theory is also tested in the study which strengthen the generalizability of existing studies. there are very less study in this area specifically in the context of pakistan so this study create a trend of testing online purchase intentions of customers and try to fill a gap in the literature related to pakistani context. the limitations of the study are as follows, which can be might fulfilled using the future suggestions by the study. as the data is analyzed in a specific period of time and being cross sectional in nature it can be done to different time scale and patterns. the following study only worked upon analyzing the mediating effect in relation to dependent and independent 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(2015), faces and first impressions. in: mikulincer, m., shaver, p.r., borgida, e., bargh, j.a., editors. apa handbook of personality and social psychology. vol. 1. united states: american psychological association. p251-276. tx_1~at/tx_2~at international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2021, 11(3), 49-57. international review of management and marketing | vol 11 • issue 3 • 2021 49 dear customer, thank you for your review: the service failure-recovery dyadic interactions in the restaurant industry inda premordia1*, timea gál2 1faculty of economics and business, university of debrecen, debrecen, hungary, 2institute of marketing and commerce, university of debrecen, debrecen, hungary. *email: inda.premordia@econ.unideb.hu/gal.timea@econ.unideb.hu received: 01 february 2021 accepted: 24 april 2021 doi: https://doi.org/10.32479/irmm.11257 abstract the advent of web 2.0 has encouraged restaurant customers to post online reviews, and oftentimes, not in favor of the company. when a service failure occurs, the customer may voice their complaints publicly online. the company, on the other hand, has the opportunity to respond to these complaints and use it as a part of their service recovery strategy. while some companies are responding to negative reviews, only a few have the knowledge on how to do it effectively. built on perceived justice framework: distributive, procedural, interactional; and service failure severity type: outcome-process, major-minor, present study intends to understand different resolution styles adopted by the company to varying types of customer complaint. the findings outline: (1) the vast majority of the company exhibits only a low level of responsiveness to complaints; (2) there seems to be a correlation between physical and psychological loss with time loss, severe emotions and switching intentions; (3) however, different strategies depending upon service failure severity are yet to be implemented by the company; (4) while components in interactional justice are mostly performed, rude responses are also frequently applied. further elaboration of the findings and insights for marketing practice are discussed in the text. keywords: service recovery, service failure severity, online customer reviews, restaurant industry jel classifications: l83, l84, z33 1. introduction “dear manager, we were just at your restaurant and we ordered large goulash soup, paprika chicken and wine. my family and i felt very humiliated and insulted by the waiter at that time around 7 pm. we had asked for an extra bowl for the soup so our young daughter can try and he flat out refused, told us to order an extra bowl of soup and at the end just said “just eat it” and walked away. we felt very offended and felt he was treating us extremely poorly especially since this is not an outrageous request. is this the way you treat your customers locally or to tourists like us? this experience has given us a very negative impression of your restaurant and i hope you will consider this matter seriously. i am also sharing our experience with other potential customers to ensure they consider this before visiting your restaurant. hope you will improve the level of service and avoid waiters with such poor ability.” response from the owner “i feel very offended that you write such lies and steal my time with the answer. i know the problem is: no free water. why don’t you write this? hope your kid is smarter.” the above customer complaint-company response interaction appeared on google reviews, one of the most prominent third-party online customer review (ocr) platforms that accommodates both the company and customer in the hospitality and service industry. despite the benefits of multiple reviews on ocr platforms, company’s online exposure is also increasing as the company is exposed to negative reviews that are virtually apparent to local and global audience. it can be seen from the above interaction this journal is licensed under a creative commons attribution 4.0 international license premordia and gál: dear customer, thank you for your review: the service failure-recovery dyadic interactions in the restaurant industry international review of management and marketing | vol 11 • issue 3 • 202150 that a customer encountered a service failure at a restaurant. the disappointment of the service quality prompted the customer to voice an online complaint in real-time. moreover, the complaint was addressed to the restaurant management, but at the same time, it also encouraged potential customers to re-evaluate their considerations before making a final decision. the restaurant management, on the other hand, did not show an intention to retain its existing customer or to gain trust of the potential customers. in a business context, the base-value of the marketing concept is customer satisfaction. to increase business growth, it is fundamental for marketers to be able to identify customer needs and to strive to satisfy these needs. the extended effects of customer satisfaction have also been assumed to have a close linkage with customer loyalty. however, as with most things with two polar opposites, customer satisfaction comes with a downside; it is prone to fall to the opposite side of the sphere: dissatisfaction. customer dissatisfaction, oftentimes, leads to more complicated layers than that of customer satisfaction. dissatisfied customers who have encountered with service failures are likely to seek redress (i.e., repair, exchange, refund or other compensations); engage in negative word-of-mouth behavior that has the potential to discourage other customers to purchase; decrease the volume or frequency of purchase; pledge to never re-patronize and switch to competitors; or completely exit the market. with that being said, it is wise to say that the thorough implementation of marketing concept includes the ability of marketers to resolve service failures and turn customers to a state of satisfaction. fornell and wernerfelt (1988) introduced the term “defensive marketing” that deals with the protection of one company’s market share from its competitors. while service failure is inevitable, specifically in the service industry, the company may have the opportunity to respond to service failures. such response is acknowledged as service recovery. grönroos (1988) suggested that “service recovery refers to the actions a service provider takes in response to service failure”. the term “the recovery paradox” even proposes that a highly effective service recovery may lead to higher satisfaction and loyalty rates than if the service failure had never occurred in the first place (mccollough and bharadwaj, 1992). nowadays, the market dynamic is changing its shape as a result of globalization and technology disruption. it expands a wider range of interaction between marketers and customers or customers and their peers, at and through multiple touchpoints. the integration of web 2.0 into our day-to-day lives has had a profound effect on the way marketers and customers excessively rely on social media platforms to communicate than what they do in the faceto-face settings (kujath, 2011). thus, the ubiquity of social media and its significant importance as a communication channel must be utilized by marketers to further develop their marketing communication strategy (abney et al., 2017). extant research posits that social media platforms have the ability to disseminate information that is larger in audience size and proximity (hennigthurau et al., 2014; purnawirawan et al., 2012; jeong and jang, 2011; hennig-thurau et al., 2004) and to impact purchase intention (tata et al., 2019; zhu and zhang, 2010; jansen et al., 2009; liu, 2006). further, it has also been shown that today’s customers use social media as a complaint tool (schaefers and schamari, 2016). the company is aware of the widespread utilization of social media to voice complaints as well as the nature of its virtual presence that they “reluctance of publicly handling complaints” (einwiller and steilen, 2015; p.7). prior research suggests that company’s service recovery effort by responding to negative online customer reviews (ocrs) signals a commitment to improve service quality and affects potential customer’s trust toward company credibility; subsequently it influences their purchase intention (olson and ro, 2020; sparks and bradley, 2014; pantelidis, 2010; ye et al., 2008). while the company in the hospitality and service industry is becoming aware of the importance to manage negative ocrs, these companies are still unsure how to best respond to customer complaints (sparks et al., 2016; schaefers and schamari, 2016; sparks and bradley, 2014; xie et al., 2014). in the recent years, there has been a growing interest in these critical areas of service management. a number of scholars have called for more research to examine service recovery effectiveness to re-gain customer confidence and influence purchase intention (olson and ro, 2019; sparks et al., 2016; sparks and bradley, 2014; min et al., 2014) as there are still output discrepancies in the existing literature. furthermore, there has yet ample evidence in the methodological variations in measuring service recovery antecedents, processes and outcome (michel, 2001). the author further stressed that the critical incident technique has been widely used in hospitality and service research, however this technique may cause recall bias as a result of the time lag between a service failure occurrence and the interview. experimental design using scenarios is also a popular method and it may increase the internal validity, but as it lacks customer emotion’s as opposed to what they feel in a real setting, it often decreases the external validity. the thirdmethod that is also used regularly employs customer complaint database addressed directly to the company (e.g., point-of-sales complaints, guests satisfaction survey, comment cards). an advantage of this method is that the data is based on real customer complaints expressing actual service failures. however, only a small number of customers who actually write complaints at the point-of-sales. this present study intends to address the gap and extends prior research by building it upon an empirical research using a content analysis on a third-party website that is also based on actual customer complaints and company responses. using online complaints as a database will not only deal with the interactions between the dissatisfied customer and the company, but also its potential effects on future customers. further, this study serves as a preliminary study in the production of service recovery guidelines in formulating an effective compensation strategy as well as the appropriate response to negative ocrs, specifically in the hospitality and service industry. the contribution of this study is twofold. first, from an academic standpoint, the study advances theoretical understanding of service recovery. second, this study presents insights for marketing practice to optimize ocrs including the negative ones as a part of their company multichannel footprint and communication strategy. premordia and gál: dear customer, thank you for your review: the service failure-recovery dyadic interactions in the restaurant industry international review of management and marketing | vol 11 • issue 3 • 2021 51 2. theoretical background 2.1. how do customers utilize ocr platforms to push-and-pull information? with the rise of virtual communities, a new type of online wordof-mouth has gained its popularity, which is referred to as online customer reviews (ocrs). formally, ocrs can be defined as an aggregation of user-generated evaluations of the company, independently from those companies. in other words, customers articulate their opinions on third-party websites (beuscart et al., 2016; mudambi and schuff, 2010). previous studies have found that ocrs are more credible and trustworthy than professional reviews or even firm-generated information (senecal and nantel, 2004; bickart and schindler, 2001). the source credibility of ocrs is also noted in several number of studies (e.g., ruiz-mafe et al., 2018; kim et al., 2017; beuscart et al., 2016; elwalda and lu, 2016). according to park et al. (2007), potential customers trust ocrs as references in their decision-making process as the customer usually provide honest information based on their experience with the product or service. in addition, as the barriers to voice negative experiences on ocr platforms are low, ocrs have become more popular as a complaint tool. ocrs does not only enable the dissatisfied customer to avoid direct confrontations with the company when a complaint is raised (hong and lee, 2005), but also enables the customer to receive the conformity from their peers who have experienced similar problems. derived from these arguments, a pre-test study is thus conducted to cross-examine the attitudes of restaurant customers in hungary toward ocrs. a self-completion survey with non-probability sampling was carried out through social media from november 2020 to january 2021. a total number of 185 hungarian residents (locals and foreigners) as well as non-residents which comprised of male and female; aged 18 and above; across different occupations; and financial well-being status were participating in the survey. quota sampling was set on a natural fall-out basis to be reflective of market share. table 1 demonstrates restaurant customer attitudes toward ocrs in hungary. based on the empirical evidence that has been gathered, only around 30 per cent of dissatisfied customers were likely to engage in negative ocrs. these negative ocrs, however, could influence the number of potential customers who trusted and relied on ocrs when selecting a restaurant which almost double in size (t2b=56.8%). it is also important to note that while good reviews or ratings were important for potential customers (t2b=53.5%), effective service recovery in response to negative reviews was more fundamental to increase customer confidence toward a restaurant (t2b=64.9%, p < 0.05). 2.2. developing service failure severity versus perceived justice frameworks a stream of research has demonstrated that a successful service recovery management is the cornerstone in building foundation for a long-term relationship with the customer who has encountered service failures (maxham, 2001; smith et al., 1999; tax et al., 1998). however, service failures can range from the ordinary cases to more major cases (goodwin and ross, 1992; berry and parasuraman, 1991; gilly and gelb, 1982) and perceived severity of cases has been identified as the mediating factor of an effective service recovery (mccollough et al., 2000; smith et al., 1999; limbrick, 1993; zeithaml et al., 1993; bell and ridge, 1992). it is also found that service failure severity has a significant strong effect on service recovery satisfaction (olson and ro, 2020). service failure severity refers to a customer’s perceived intensity of a service problem. the more intense or severe the service failure, the greater the customer’s perceived loss (weun et al., 2004; p.135). further, grönroos (1988); parasuraman et al. (1985) suggested that service quality depends on both the outcome and the process of the service itself. thus, customer loss may also occur along these two factors. smith et al. (1999); gilly and gelb (1982) explained that outcome failure causes a direct monetary loss, while process failure does not have a direct impact on monetary loss (e.g., time loss). against this backdrop, this study divides service failure severity type into outcome-process if the complaint is constructive, and major vs. minor if it does not contain a description of the problem. outcome loss will be measured through two different constructs: financial loss and physical loss. process loss will cover psychological and time loss constructs. whereas, major failure refers to the major incidents that lead to frustration or anger, minor failure refers to the non-catastrophic incidents leading to unpleasantness. accordingly, objective 1 is thus posited: • objective 1 to identify varying levels of service failure severity leading to negative ocrs in service recovery research, justice theory has been widely used as a theoretical framework (e.g., ha and jang, 2009; smith et al., 1999; sparks and mccoll-kennedy, 1998; tax et al., 1998). prior research suggested that in returning the dissatisfied customer to a state of satisfaction and repurchase intention, the outcome is mainly affected by customer-perceived justice in the service recovery process (ha and jang, 2009; kim et al, 2009; mccoll-kennedy and sparks, 2003). based on the perceived justice framework, table 1: restaurant customer attitudes toward ocrs in hungary item base (n=) t2b % t3b % mean (sd) dissatisfied customer perspective a to voice complaints on ocr platforms 185 28.6 51.3 4.36 (1.788) b to exit (stop doing business with the restaurant) 70.8a 86.5 5.86 (1.403) potential customer perspective c importance of ocrs as a reference 185 56.8 82.2 5.38 (1.447) d importance of an overall good review/rating 53.5 80.5 5.34 (1.413) e importance of service recovery 64.9d 82.2 5.72 (1.439) 7-point likert scale; a–e : denotes significant difference at 95% confidence level among group. t2b: top two boxes (strongly agree; agree). t3b: top three boxes (strongly agree; agree; somewhat agree) premordia and gál: dear customer, thank you for your review: the service failure-recovery dyadic interactions in the restaurant industry international review of management and marketing | vol 11 • issue 3 • 202152 service recovery justice is defined as the fairness of the way service failures are managed from three dimensional approaches: distributive justice; procedural justice; and interactional justice (gelbrich and roschk, 2011; orshinger et al., 2010; ha and jang, 2009; mccoll-kennedy and sparks, 2003; blodgett et al., 1997). distributive justice reflects the tangible outcome of the service recovery (i.e., redress), procedural justice concerns the procedures used to reach the outcomes (i.e., assurance), while interactional justice deals with the way the customer is treated during the service recovery (i.e., acknowledgement) (wang et al., 2011; tax et al., 1998; blodgett et al., 1997; lind and tyler, 1988; thibaut and walker, 1975). using distributive, procedural and interactional justice constructs, objective 2 is then formulated: • objective 2 to identify different service failure resolution styles adopted by restaurant establishments during service recovery process. 2.3. study design in accordance with the two objectives proposed in this study, relevant empirical study with the use of a content analysis was undertaken in the restaurant industry, specifically restaurants operating in larger cities located in hungary. the content analysis comprises solely ocrs posted on google reviews. google reviews was selected considering that based on the findings of a survey conducted by brightlocal (2018), “it consistently gains the highest number of new reviews” in comparison to other online review platforms (e.g., tripadvisor, facebook, yelp, foursquare). during the sampling and data collection phase, restaurants were methodically selected. first, they were categorized according to price range and star rating. a total number of 150 full-service restaurants across hungary, ranging from price range $ to $$$$ and had a star rating with an upper bound five-star and a lower bound one-star were identified. the selected restaurants then stratified based on the price range and star rating groups. in the final data, there were 50 restaurants which had a star rating equal to or higher than 4.5 (coded as top-rated); 50 restaurants with a star rating in a range of 4.0 to 4.4 (coded as moderate); and 50 restaurants were rated lower than 3.9 (coded as bottom-rated). in the price range breakdown, there were 75 restaurants in a price range of $ to $$ (coded as low-priced); and 75 restaurants ranging from $$$ to $$$$ (coded as high-priced). for the analysis, only ten randomly selected reviews per restaurant were included in order to maintain a more robust data. these reviews were sorted by the lowest rating to ensure they were contained of one or more complaints. for coding purposes, a codebook that captured pre-developed constructs and other elements in the customer complaint-company response interactions was created. all (n=1500) selected reviews were coded based on the codebook, and computed into the data set using excel and then further analyzed using spss statistics 24. significant test among each group was performed with a two-tailed z-test to determine if the differences that were present between variables were significant at 99%, 95% or 90% confidence level. a z-test is used if: (1) the test statistic of each sample comes from a normal distribution; (2) the sample size is large and the population variance is known (sprinthall, 2011). 3. results the results of service failure severity analysis revealed that based on the total number of complaint case, the highest frequency of service failure found to occur at the bottom-rated restaurants (580 cases) in the low-priced range (858 cases), being financial loss; psychological loss; and the major incidents as the most frequent failures. however, these high scores do not necessarily correspond to the severity level. table 2 presents the full details of service failure severity and its classification. customers who reported that they would not recommend or would not go back appeared to be significantly higher for the low-priced restaurants (37%, p < 0.01) in moderate (39%, p < 0.05) and bottom-rated (39%, p < 0.05) categories. the significant score in low-priced category was pulled-down by psychological loss score in which its significance was also found in moderate category. restaurants along lower price levels in moderate category were significantly superior in a number of complaints related to psychological loss among peers (32%, p < 0.05), while those in bottom-rated category were superior in receiving complaints linked to physical loss (56 of 500 or 10%, p < 0.05). psychological loss measures the frontline staff and management attitude (i.e., rude, impolite, unfriendly behavior) when delivering the service and handling issues which reflects customer mental well-being during service encounter. physical loss, on the other hand, represents poor quality of food that causes a decrease in customer’s physical health; in some cases, the issues can be major. it should also be noted that the number of customers who experienced frustration/anger was significantly high at the same time where frequency of complaints about physical loss was also high. furthermore, although there was no significance different between the low-priced and high-priced categories, time loss emerged as significant within restaurants in moderate (62 of 500 or 11%, p < 0.05) and bottom-rated (54 of 500 or 9%, p < 0.05) categories; subsequently, it added to the disappointment toward the overall service quality. this finding suggests that if physical loss and psychological loss were supported by time loss and the incidents that triggered frustration/anger (157 of 500 or 27%, p < 0.05) it could lead to discouragement for potential customers to try and switching intentions. the causal relationship between service failure and behavioral outcomes as well as perceived loss and emotion, however, were not statistically tested in this study. with regard to the severity level of service failure, low-priced restaurants under moderate and bottom-rated categories clearly have produced the most severe service failures, while other restaurants have only caused common failures that did not influence behavioral outcomes. restaurants in high-priced category received most complaints about financial loss (22%, p < 0.01) which were on parity among star rating group (a=19%; b=20%; c=18%), whereas top-rated restaurants (28%, p < 0.05) in low-priced category (23%, p < 0.01) have only caused unpleasantness due to very minute ordinary service failures. financial loss represents customer disappointment toward the actual price they need to pay as compared to how much they are willing to pay for the overall experience, it includes additional service tax and gratuity. the low premordia and gál: dear customer, thank you for your review: the service failure-recovery dyadic interactions in the restaurant industry international review of management and marketing | vol 11 • issue 3 • 2021 53 perceived price justice could be explained by the large gap between customer expectations and company performance. intuitively, this makes sense as the larger the gap, the higher the disappointment and the perceived loss. in regard to company response to customer complaint, results indicated that on average, only around 21 per cent of complaints received a reply from the company. overall, the frequency of reply scores across categories and groups were consistent, with the exception of bottom-rated restaurants which performed below average (8%, p < 0.05). the similar pattern also emerged in the total response within each category, the bottom-rated category’s score appeared to be the lowest in comparison with the other categories (31%, p < 0.05). based on the total frequency with the value equal to or above 5 per cent, timeliness (11%) showed the highest in procedural justice construct. of the total complaint the customer sends and gets a reply, all companies responded in a timely manner (timeliness/total replies=100%). assurance that represents a statement in expressing a promise to not repeat the failure made up 5 per cent of the total responses. in interactional justice approach, courteous manner (12%); expression of regret (7%); and explanation of process (5%) were enacted more frequent. these numbers showed that the baseline in common apologies have been applied by the company. while the proportion of corrective action in distributive justice was relatively small (2%), the inclusion of complimentary was expected to be under careful consideration as it should be dependent upon the problem and whether comping is possible. however, as significant differences between groups in most dimensions were not observed signify inconsistency of responses given by the company. in other words, different strategies depending upon the severity of the problem were omitted. table 3 illustrates different resolution styles adopted by the company within perceived justice framework. interestingly, a high-frequency response did not necessarily associate with an effective service recovery as there were companies responded in a confrontational manner despite the severity of the complaint, specifically top-rated restaurants (9%, p < 0.05) in low-priced category (6%, p < 0.10), which accounted for a total of 5 percent. these findings highlight that some companies had a lack of awareness on the importance of service recovery for the longevity of their business. sensibly, top-rated restaurants may be defensive toward negative ocrs as it is more difficult to sympathize with the minority of which their voices challenge the conformity from majority voices that is already manifested as valid. while these companies may not be aware of the importance of service recovery, they may be aware of the effects of negative ocrs, hence the effort to rectify the situation from escalating to viral scope. in contrast, other companies seemed to be unwilling to get into the game and disregarded those negative ocrs that may partly due to a lack of knowledge on how to deal with it effectively. furthermore, as moderate restaurants in low-priced category received more severe complaints among peers, these restaurants appeared to be the most effective in responding to customer complaints, even though there was still a low number of rude or defensive responses (b=3%, p < 0.05; d=6%, p < 0.10). restaurants in moderate category were likely to resolve service failures with courteous manner (14%, p < 0.05), expression of regret (9%, p < 0.05), explanation of process (6%, p < 0.05) and social presence (5%, p < 0.05). the results also demonstrated that the higher rate restaurants in high-priced category were inclined to express their responses with courteous manner (a=14%; b=14%, p < 0.05) and social presence (a=6%; b=5%, p < 0.05). in this study, social presence is defined as the response of the transgressor with a name and job title. according to hess et al. (2009); gunawardena (1995), the objective of social presence is to provide a sense of human contact, sensitivity and being real in communication. 4. discussion and conclusion the main goal of this research is to gain insight into service failure-service recovery dyadic interactions on ocr platforms. table 2: service failure severity by star rating and price range service failure severity total top-rated moderate bottom-rated low-priced high-priced base 1500 500 500 500 750 750 type description (t) (a) (b) (c) (d) (e) count (%) count (%) count (%) outcome financial loss 316 (19) 101 (19) 109 (20) 106 (18) 138 (16) 178d (22) physical loss 102 (6) 27 (5) 19 (3) 56ab (10) 52 (6) 50 (6) process psychological loss 391 (23) 96 (18) 177ac (32) 118 (20) 216e (25) 175 (21) time loss 139 (8) 23 (4) 62a (11) 54a (9) 61 (7) 78 (10) major frustrations/anger 413 (25) 139 (26) 117 (21) 157b (27) 192 (22) 221 (27) minor unpleasantness 312 (19) 152bc (28) 71 (13) 89 (15) 199e (23) 113 (14) total 1673 (100) 538 (100) 555 (100) 580 (100) 858 (100) 815 (100) would not recommend/would not go back* 494 (33) 100 (20) 197a (39) 197a (39) 274e (37) 220 (29) one complaint/sample can contain one or more cases. *tallied per each complaint/sample – adds up to 100%. a-e: denotes significant difference at 99% confidence level among group. a-e: denotes significant difference at 95% confidence level among group premordia and gál: dear customer, thank you for your review: the service failure-recovery dyadic interactions in the restaurant industry international review of management and marketing | vol 11 • issue 3 • 202154 specifically, this study examines different resolution styles adopted by the restaurant in responding to varying levels of customer complaint on google reviews. some key takeaways from this study underline that in general, the vast majority of the company exhibits only a low level of responsiveness to negative ocrs regardless of the issue; the most severe complaint cases affect behavioral outcomes are linked to psychological and physical loss with time loss as moderating factor. on top of that, major incidents lead to frustration/anger also play an important role; however, different service recovery strategies upon service failure severity are yet to be implemented; and while the baseline in common apologies (i.e., courteous manner, expression of regret, explanation of process) is mostly performed, confrontational responses are also vigorously applied by the company. summarizing, it is noteworthy that the majority of restaurants in hungary are yet to fully embrace the benefits of social media—specifically ocr platforms—as an important touchpoint to establish their interactions with the customer. the unwillingness of the company in responding to complaints was in line with previous research. result of a study by einwiller and steilen (2015) showed that nearly half of the complaints voiced on facebook and twitter did not receive any corporate response. beuscart et al. (2016) examined the reception of negative ocrs in the restaurant industry from the supply side of the business. results from this study explained that most restaurants consider negative ocrs which came from the lay judgments as harsh and difficult to cope with as it was a major challenge to figure out how to reply in an appropriate manner so that they were reluctant to deal with such reviews. as a matter of fact, it is a conventional wisdom that in returning customer confidence, providing responses in the favor of dissatisfied customers are better than no responses. tomlinson et al. (2004) proposed that in expressing an apology, the transgressor acknowledges the unfortunate events which more effective than no apologies. in the reference to the pretest study, the number of participants who reported the importance of service recovery when selecting a restaurant was significantly higher compared to positive reviews with no occurrences of service failure. in other words, proper responses to complaints should yield higher satisfaction toward service quality. the company must synergize their efforts and online airtime on social media with those of the customer’s (song et al., 2016). however, the high number of rude responses observed in this study contradicts prior research which indicated that defensive responses were rarely or even zero-applied due to the awareness of the dire impacts. this seems counterintuitive and is a valuable finding in the service recovery context as, in fact, more companies are becoming aware of negative ocrs in leading public sentiment that it creates an entirely new industry involving firms that specifically deal with social media crisis management (gellman, 2014). some restaurants evaluated in this study may not be aware of the impacts of their rude responses or they may accept complaints as a personal attack that it is hard to compose their emotions when reading the negative reviews. it could also be explained by different individualism/collectivism between cultures as noted by liu and mcclure (2001). nevertheless, this study brings about an insight for marketing practice. existing literature review demonstrated that positive results will be produced more when the responsibility of a transgression is acknowledged by the transgressor than if the transgressor deflects or denies the responsibility (e.g., kramer and lewicki, 2010; schlenker and darby, 1981; scott and lyman, 1968). research also showed that a poor recovery process (no responses and rude responses) can decrease sales revenue (temkin group, 2017). a poor recovery process may have an impact on a lost customer and subsequently, it leads to a loss of profits. as an illustration, lost customers from the table 3: service recovery in perceived justice framework by star rating and price range service recovery/justice framework total top-rated moderate bottom-rated low-priced high-priced base 1500 500 500 500 750 750 construct dimensions (t) (a) (b) (c) (d) (e) count (%) count (%) count (%) no replies 1182 (43) 357 (34) 365 (35) 460ab (69) 579 (42) 603 (44) distributive corrective action 43 (2) 12 (1) 18 (2) 13 (2) 24 (2) 19 (1) procedural timeliness 318 (11) 143 (13) 135 (13) 40 (6) 171 (12) 147 (11) assurance 128 (5) 53 (5) 56 (5) 19 (3) 65 (5) 63 (5) acknowledgement of responsibility 38 (1) 13 (1) 19 (2) 6 (1) 22 (2) 16 (1) interactional positive courteous manner 341 (12) 153c (14) 145c (14) 43 (6) 157 (11) 184 (13) expression of regret 191 (7) 63 (6) 98c (9) 30 (4) 109 (8) 82 (6) explanation of process 139 (5) 56 (5) 66c (6) 17 (3) 79e (6) 60 (4) social presence 118 (4) 61c (6) 47c (5) 10 (1) 43 (3) 75d (5) customer engagement 88 (3) 32 (3) 45 (4) 11 (2) 39 (3) 49 (4) probe into the issue 50 (2) 26 (2) 14 (1) 10 (1) 24 (2) 26 (2) negative rudeness/defensiveness 144 (5) 92bc (9) 27c (3) 10 (1) 77e (6) 52 (4) total responses, exclude ‘no replies’ 1598 (57) 704c (66) 670c (65) 209 (31) 810 (58) 773 (56) total replies* 318 (21) 143c (29) 135c (27) 40 (8) 171 (23) 147 (20) responses between dimensions can be overlapping. *tallied per each reply/sample – adds up to 100%. a-e: denotes significant difference at 95% confidence level among group. (x) a-(x) e: enotes significant difference at 90% confidence level among group premordia and gál: dear customer, thank you for your review: the service failure-recovery dyadic interactions in the restaurant industry international review of management and marketing | vol 11 • issue 3 • 2021 55 poor handling of negative ocrs can be estimated by multiplying total complaints, number of dissatisfied customers who are likely to voice complaints and number of complainants who vow to stop doing business with the company. furthermore, concerning the implementation of different strategies depending upon the severity of the problem, the result challenges findings from prior research (e.g., abney et al., 2017; weun et al., 2004) which found that customer satisfaction with the service recovery was significantly affected by service failure severity. considering the importance to adopt different recovery strategies to be effective, the result, thus, presented an opportunity for the restaurant to convert. at its essence, lewicki et al. (2016) has demonstrated that neither undercompensating nor overcompensating is effective, the restaurant may take service failure severity into account. in light of complimentary or redress, if not implemented considerably it may have an impact on sales in the long run. referred to the findings, the restaurant could focus on major incidents related to physical loss, for instance food poisoning as well as if the wait time to receive orders reaches a certain time period. however, haesevoets et al. (2013) also proposed that compensation has to be provided along with an apology as it can better preserve the ongoing relationship with the customer than compensation without an apology. issues that deal with the frontline staff attitude could be redeemed by sending a proper apology consisted of relevant components in perceived justice framework as results elicited that some components are yet to be optimized in the company responses. according to van laer and de ruyter (2010), the more severe the problem is, the more components have to be included in the apology. further, the high number of unconstructive criticisms emphasized that issue probing should be incorporated in the structure. darby and schlenker (1989, p. 354) stated that what component is to be included in the structure recognizes the transgressor’s intensity of remorse, the more complete the response is, the more they “may seem to suffer remorse.” as in any research, this study has to be acknowledged with certain limitations. first, this study did not measure the effect of different resolution styles on the actual sales. second, the impact of ways the company responds on the complainant and potential customer’s trust and purchase intention was also not examined. these bear an opportunity for future research to carry out an experimental study using scenarios and control variables to be able to capture its effects on those factors. in addition, future research could also explore the depth of service recovery issues in the restaurant industry particularly in hungary and/or throughout europe to answer the ‘whys’ from the company point of view. references abney, a., pelletier, m, ford, t.r., horky, a. 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(2010), impact of online consumer reviews on sales: the moderating role of product and consumer characteristics. journal of marketing, 74(2), 133-148. tx_1~at/tx_2~at international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2020, 10(5), 74-84. international review of management and marketing | vol 10 • issue 5 • 202074 how servant leadership affect the organizational trust with mediating role of technological innovation? muhammad imran hanif1, zarbakht baloch2*, salman baig2 1putra business school, university of putra malaysia, malaysia, 2institute of banking and finance, bahauddin zakariya university, multan, pakistan. *email: zarbakht01ibf@gmail.com received: 08 june 2020 accepted: 27 august 2020 doi: https://doi.org/10.32479/irmm.10183 abstract the main objective of this paper is to investigate how servant leadership affects organizational trust with the mediating role of technological innovation. in this paper we discussed that technological innovation played a vigorous role in all types of organizations and leadership having the qualities of a servant also played a vital role in achieving the trust because trust is the most crucial element for an organization. a descriptive crosssectional survey design was used in conducting the study. the data for this study was taken from public and private organizations that are engaged in providing products and services to their customers. 370 questionnaires were distributed among different respondents. 310 useable respondents were selected and the questionnaire includes close-ended questions related to leaders, organization and technological factors. cross-sectional quantitative research design was adopted. the purposive sampling technique was used for this study. findings of this study shows that the mediating the variable “technological innovation” strengthens the affiliation among autonomous “servant leadership” and “organizational trust” dedicated to their work, and this is so beneficial to the organisation. implications based on these finding, the study enticement the attention of mangers concerning the role of servant leadership, trust in the organization and flourishing the employee creativity with the help of technological innovation. this study suggests that servant leadership is an important factor that influences organizational trust because trust is the most crucial component and technological innovation with servant leadership qualities emerged to achieve trust. keywords: servant leadership, technological innovation, organizational trust jel classifications: m1, 03, m0 1. introduction the theory of servant leadership was first provoked by robert green leaf in 1997 in his paper titled “servant role as a leader” (washington et al., 2006). the alter pyramid model can be considered as the essence of servant leadership. now-a-days in advanced countries organizations in different sectors would attract from talent like a workforce (franco et al., 2020). the organizations assumed that workforce is the way through which organizations accomplished their targets with the help of valued and unique knowledge and workforce also facilitated in competing in an all-out war (martin et al., 2005). lopes (2009) described that servant leadership symbolizes as a leader whose priority to serve others and have a passion to work for the organizations and their workforce and to do so with authentic generosity that puts other’s interests ahead of self-interest also in organizational interest. sl may be a concept that is attracting a broader audience throughout all types of organizations today. this growing interest is fuelled by many changes happening within the workplace as well as in society at large (raton and florida, 1981). the basic objective of servant leadership is to raise the high level of motivation. now a days the organization have a big edge about the technological innovation, this edge support the leadership to motivate their employees and achieve the high level of satisfaction of employees (karatepe et al, 2018). sl can be a ideology and collection of activities intended to improve people’s lives, develop stronger institutions and eventually construct a more just and this journal is licensed under a creative commons attribution 4.0 international license hanif, et al.: how servant leadership affect the organizational trust with mediating role of technological innovation? international review of management and marketing | vol 10 • issue 5 • 2020 75 compassionate environment. this takes considerable account of the value of trust in a social, cultural, and political organization. in studies, organizational trust is referred to as a fundamental factor and thus the researchers conclude that organizations should build trust in their workers while organizational justice includes considering the perceived fairness of social or economic transactions affecting individuals in their relationships with superiors and organizations as a social structure. the most important aspect of making a successful organization, according to schneider (1987), is that people incorporate followers (i.e., staff and evacuees) as well as members. eva et al. (2019) has recently introduced new concepts and ideas about servant leadership while servant leadership is a: • other focused approaches to leadership • demonstrated by one-on-one discussing the individual needs and desires of followers • outward reorientation of their self-concern towards those within the company and thus towards the wider community the concepts of leadership attempt to clarify and organize the dynamics of the character of leadership and its implications (bass and bass, 2008). the implicit connection between ethics and leadership has been the focus of several leading scholars over the years. an emerging new field of study and leadership philosophy related to ethics, values and morality acts as sl (graham, 1991; lanctot and irving, 2010; parolini et al., 2009; russell, 2001; whetstone, 2002). 1.1. purpose of the study the rudimentary purpose of this study is to demonstrate the mediating role of ti (technological innovation)between sl and ot. explanatory research was used for this research, as it is the initial base of research on this theoretical framework taking sl as an independent variable, ot as a dependent variable and ti as a mediating. 1.2. research objectives the elementary objective of the research is to inspect how servant leadership affects organizational trust with the mediating role of technological innovation. firstly, inspect the influence that how technological innovation strengthens the relationship between servant leadership and organizational trust. secondly, a conceptual framework and hypotheses are developed. third, the method practiced to test these hypotheses is defined, tracked by the analysis and results. lastly, implementations, limitations, and directions for further researchers are discussed. 1.3. scope and background of the study sl’s significance cannot be ignored, as it has become one of leadership’s most critical features. leadership may be a ability used to motivate a company’s followers to be passionate about particular commonweal goals. (barrow, 1977; cyert, 2006, plsek and wilson, 2001). it is studied that servant leadership is previously discussed by many researchers and it has been founded that by doing servant leadership, a trustworthy environment can be created in the organization because the level of trust on the leader by the employees will increase due to such environment which shows that these variables have a significant influence on each other with strong bonding. this study has been done to know what type of factors affecting their relationship and with which variables their relation can become stronger or weaken. 2. literature review 2.1. sl (servant leadership) the importance of leadership in any organization is known by everyone. it cannot be denied as it has become a compulsory part of today’s society and organizational culture. servant leadership has now become one in all the foremost leading characters of the leadership; it has been implemented through many centuries and works because of the most successful leadership figures. sl described the panache in which a leader motivates those in the management process to efficiently thru the management process, also encourages subordinates to create prospects, trains minions to be excellent service providers, and finally benefits the organization (greenleaf, 1977; bande et al., 2016; eva et al., 2019). the sl’s top priority has to serve others. sl provide career development guidance for employees and provide opportunities also have a positive impact on employees, work attitude, behaviour, and performance (panaccio et al., 2015). servant leadership has the following important dimensions: • emotional rebuilding • empowering • helping supporters to grow • priority to help their followers • conceptual abilities • creating values for the community • behaving ethically. sl gives feedback and challenges obligations, offering empathy, moral encouragement, suggestions and resources. sl placed the fulfillment of the followers’ needs at the center ground of their efforts, before their own needs, creating an atmosphere where followers felt appreciated and empowered to do more and do more. (chiniara and bentein, 2016). sl theory emphasizes service to others and recognizes that the role of organizations is to make people who can create a better future resonate with scholars and practitioners who respond to the perception that corporate leaders have become selfish and try a viable theory of leadership to help solve the challenges of the first 21st century. even though sl was invented in 1970 by greenleaf over the past three decades, it remains recognized but still exercised prominently in boardrooms and corporations (bass and bass, 2008) (spears, 2005). it gained considerable coverage in the mainstream press (e.g., fortune magazine and dateline) and leading organizational managers addressed the beneficial impact of servant leadership on corporate income and employee satisfaction; see max depree (leadership is an art, 1989), stephen covey (principle-based leadership 1990), peter senge (the fifth discipline: the art and styles of the learning). ehrhart (2004), the seven aspects of servant leadership were described. he claims that the first element of servant leadership is to build relationships with employees by spending time with them hanif, et al.: how servant leadership affect the organizational trust with mediating role of technological innovation? international review of management and marketing | vol 10 • issue 5 • 202076 and filling the contact gap with them. according to the second dimension, the leaders of the servants will inspire followers by, for example, cooperating with them to consider their views and thoughts in any organizational decision. he explained in the third dimension that these leaders support the workers by giving them opportunities to improve their skills. in the fourth dimension of sl empowering, determining the degree to which the leader entrusts accountability, flexibility, and authority in decisionmaking to followers. sl act responsibly and obey their promises for the display of true principles. these leaders demonstrate their conceptual know-how through a daily routine. in the fifth dimension, servant leadership helps subordinates develop and flourish, capturing to what degree the leader helps followers achieve their full potential and flourish in their careers. they put their followers/employees first, according to the sixth dimension, to improve their capabilities and for their advancement. the servant leaders then, according to the last paragraph, establish values for staff in external activities by involving them in community services rather than in organizational services. sl are those who can concentrate first on their customers than on employees than on management and who, in contrast to conventional leadership, focus more on themselves than on employees than on our customers. if the leadership has servant efficiency that is so legatee for the organizations and workers to attain the competitive advantages. sl use the knowledge to consciously seek to please their followers, they must bring out the simplest in their followers and encourage them to realize their potential (tang et al., 2016). sl is not about contrasting workers’ inferior abilities to their superiors, but it does offer organizational superiors a challenge. this definition believes every individual within the organization has equal dignity (jaiswal et al., 2015). everybody is a member of an organization and every viewpoint is important to the company because they all work for their organization’s sake. servant leadership thus brings trust, ethical use of resources, cooperative atmosphere and the idea of service to others (lee, 2004). the sl’s basic goal is to increase the high degree of motivation. the company now has a big advantage over technical advancement for a few days, this advantage helps leadership in empowering its employees and maintaining a high level of employee satisfaction (karratepue et al., 2019). 2.2. ot (organizational trust) the importance of trust is considered significant in all economic, political and social organizations. organizational trust is now known as an ultimate feature and according to the researchers; organizations must create trust in their workforces (baried and amand, 1995). organizational trust has been defined previously by many researchers (max depree, 1997). trust is the atmosphere which is designed by the organization’s managers. trust is the most essential component for all natures of organizations to work smoothly. trust atmosphere is molded when the mangers are fully concerned with their commitments and then their actions and reactions played a vital role in achieving success for organizations. russell (2014) supposed that trust is the essence of servant leadership. greenleaf also claims that servant leadership can be supposed as the commencing and bear fruit of organizational trust (bobble et al, 2014). the best role-play of servant leadership in an organization is offering crucial and necessary context including inspiring the members positively, articulating support and care to their overall staff, consideration about their status as well as establishes a sense of trust among the employees. yamamoto (1990) suggests trust is a vital part of social life. individuals in the communities are in regular communication with each other as a direct result of their anticipation of positive outcomes from these experiences (yamamoto, 1990). such experiences result in trust-based relationships in which individuals behave in such a way as to maintain potential positive experiences, instead of acting out of self-interest (gambetta, 1988). coffa (2007) explained that there are seventeen different meanings of trust depending upon various departments like management, psychology, economics, sociology, international relation, automation, computing and networking and it can be measured individually and organizationally (table 1) coffa, wahlsten., (2007). according to gopinath and becker (2000), the organizations during which the amount of trust is low, there always exists communication gaps that fade the bond of relationship and this leads to less worthy resolutions. in such organizations, there all along occurs lack of innovative ideas because everyone thinks that their thoughts would lead to the failure of organization and due to that fear, they do not reveal their ideas that might be unique ones and can benefit organizations in some aspects. robbins (2002) said trust in an organization is very important because trust not only affects the quality but it also badly affects the output given by the members working in the organization. one simply cannot work efficiently and effectively if there is a lack of trust in the working table 1: trust in different department discipline meaning of trust sources philosophy chancy actions were taken by a personal, moral association between two objects lahno (1999) economics expectations on chancy actions under ambiguity and ignorance based on considerable incentives for the actions james (2002) sociology particular probability on which other parties will take action and will not ruin any interest under uncertainty gambetta (1988) psychology cognitive learning experiences that would come from social-based expertise’s on the values of trusting behavior rotter (1980) management ready to take actions and risk for the betterment of the organization mayer et al. (1995) international relation attitudes and behavior where one mediator will achieve another mediator’s target where a dented acquaintance is given lee et al. (2006) automation projected subjective probability in which object parades reliable behavior for certain operations under the condition of risk cho et al. (2011) organizational trusttechnologicalinnovation servant leadership figure 1: theoretical framework hanif, et al.: how servant leadership affect the organizational trust with mediating role of technological innovation? international review of management and marketing | vol 10 • issue 5 • 2020 77 era. organizational trust enhances the level of job satisfaction of employees and satisfied employees always give the best of them to their firms (robbins, 2002). 2.3. technological innovation tech innovation is the term used to describe the implementation of new technology and equipment that is incorporated into specific products, services or processes to increase the efficiency and performance of an organization (yoonghong et al., 2005). nieto (2004) proposes a specific concept of technological innovation, the process through which technical innovations evolve and improved through which the obstacles faced by the organization and the market overcome efficiently and also strengthen the relationship between employees and organizations as well as customers and organizations. wang (2009) explained that nowadays, in global organizations with advanced technical creative arrangements, knowledge sharing is the term that is commonly discussed since knowledge sharing (ks) refers to an employee or group of employees who share or discuss information and experience related to working within or across organizations across different networkssuch as networks for seminars, meetings, exchange of perspectives, knowledgebase, etc. improvement is an essential factor for all natures of organizations to attain their rivals in the market, and technical innovation is also the curial reason for organizational survival (tamer cavusgil et al., 2003). organizations need to improve their current structure to tackle environmental instability, and their advanced technological technologies and skills also play a significant role in enhancing organizations and employees’ efficiency (lin, 2007). several researchers described that innovation has a direct relationship with organizational performance as well as employees’ trust in an organization. organizations are seen as an adaptive approach that brings a change in their system to deal with uncertainty and carry out their functions efficiently. pressures coming from the internal environment and as well as external environment, these pressures forced the organizations to innovate them and ensure adaptive behavior and these innovations tend to move toward the success of the organization (damanpour and avellaneda, 2009). (damanpour, 1997) build the technical advances are essentially structured strategies the define the use of new technologies, devices, equipment, designs, procedures, processes or systems that improve the organization’s ability to meet consumer demands and often contribute to the invention of new goods, facilities, processes and the continuation of old or current ones at a much lower cost with innovation (normaa and daanny, 2002). technological innovation reacts to internal and external environmental factors such as technical expertise, e-commerce capacity, willingness to change/rate response to new technologies, identification of technological opportunities, consumer focus, responsiveness to competitive/consumer conditions, technological feasibility perceptions, e-skills growth mechanisms, and uncertainty market conditions (kim, 2010). ti is exemplified by four idiosyncratic elements that involve body tools and equipment, an authentic component of expertise, an interpersonal component of skills, and a structured component of methods through these rudiments, the company achieved a major business victory (haines and sharif, 2006). the involvement of a lower-level workforce in the process of technological innovation is productive because the lower level workforce played a significant role in the process of production and meet up with the demands of customers (daft, 1987). furthermore, technical advancement is classified into gradual and critical developments important developments concentrate on evolving, innovative new technologies, markets and business models that are changing the world. incremental innovation is the invention practice that seeks to increase the existing structures and goods to make them stronger and more powerful, meaner or sharper, depending on the degree and level of the invention (kim et al., 2012). (kim, 2010) argued that technological innovation is not only used to address technical problems and impediments but also has a deep-rooted connection with the adoption of new technology to develop innovative goods and services, as well as promoting the development of new markets. 2.4. theoretical framework and research hypothesis based on the above literature review, the following model is purposed taking sl as an independent relationship and ot as dependent variable with the mediating effect of ti (figure 1). 2.4.1. relationship between independent variable and mediating in the theoretical context ti is occupied as a mediator. there are both internal and external paybacks to technical advancement. external benefits include compact production costs, higher profits, and epochs of curter distribution (daamanpoour, 2010), while external benefits include distinguished goods and services (porter, 1985). if the leader sustenance the technology than it is quite comfortable for the organization to compete their opponents efficiently and accomplish extraordinary turnover. ti frolicked an imperative role to take a position in the marketplace and attain the extreme profit for the organization. such great earnings, however, had not been planned to last long as rivals would reproduce. ti empowers an organization to develop, refresh and adapt technological means as the multinational organization nowadays confirms that technological means are the competent way to attract consumers and produce value from their goods with the aid of varioustechnological means and also to demonstrate and reassembledtimely responsiveness and rapid and flexible products and services innovation to attract the clients (teece et al, 1997). the progressive technologies will placate customer demands and satisfaction and through this the organizations get sustainability and sustainability results high outcomes. if technological innovation and sustainability unite than organizations easily enhance loyalty factors toward their valuable customers (pratali, 2003). technological innovation has various outcomes, one of the hanif, et al.: how servant leadership affect the organizational trust with mediating role of technological innovation? international review of management and marketing | vol 10 • issue 5 • 202078 most important outcome are increasing and enhancing the quality of products and services with the help of innovativeness from this the organizations attract a high volume of customers. technology empowers organizations to diminish the labor cost, labor hours, raw materials, energy and other resources and improve the quality of work efficiently (haines, 2004). through their studies, most previous researchers demonstrate that technological innovation is positively related to organizational efficiency, operational efficiency, cost performance, flexibility, production performance, quality performance, and innovative performance (srgolzaei et al., 2019). h1: there is a significantly positive relationship between servant leadership and technological innovation. 2.4.2. relationship between technological innovation and organizational trust in the theoretical framework the technological innovation taken as mediating and organizational trust are taken as a dependent variable. there is a significantly positive relationship between ti and ot because if the organization well-appointed with advanced technology then it is fairly easy for the organization to achieve the trust of employees if the organization achieves the trust of employees then the organization becomes selfassured to accomplish their target and strive their opponents (udin, 2020). ti aids organizationsto generate, renew the existing and adjust technological resources to demonstrate and reconstructtimely to attract their customers (divya and suganthi, 2018). the progressive technologies will placate customer demands and satisfaction and through this the organizations get sustainability and sustainability results high outcomes. if technological innovation and sustainability unite than organizations easily enhance loyalty factors toward their valuable customers (pratali, 2003). according to gopinath and becker (2000), the organizations in which the level of trust is low, there always exists communication gaps that fade the bond of relationship and this results in less worthy resolutions. in such organizations, there all along occurs lack of innovative ideas because everyone thinks that their thoughts would lead to the failure of organization and due to that fear, they do not reveal their ideas that might be unique ones and can benefit the organization in some aspects as compared to those organization in which trust level is high, there are wonderful cooperation and positive bonding between organization and employees and this bonding enable an organization to adopt latest technologies for their employees to compete their competitors in the marketplace. h2: there is a significantly positive relationship between technology innovation and organizational trust. 2.4.3. relationship between independent and depended variable the sl and ot have a good relationship. most of the previous researchers explained and clarified that these two variables are closely related to leadership and organizational trust. this research explains that sl and ot have positively influenced each other and they have a direct relationship taking sl as an independent variable and ot as a dependent variable. previously this study has also been proven by some other researchers such as according to (bennis and depree, 2002), leaders are selected and persist based on their behaviours and attitude toward their employees and organization. trusties the concept that shows the relationship among the leader and an employee if the employees trust their leader than the leader have a positive impact on employees and organization and create a positive environment in an organization thus, the terminology of sl works positively for creating a trustworthy environment in organizations (laub, 1999; nyhan, 2000). in the relationship between sl and ot trust is determined principally by the action and performance of the leader toward their organization. this shows that how much a leader is cooperative, communicative and supportive with their employees. the communicative, cooperative and supportive behaviour of leaders has a positive influence on the efficiency and effectiveness of the employees and also enhances their level of trust in the leader that would be very helpful for the organization to achieve their selected target. the trust played an important role in the organization if the employees have positive behavior and having trust on their leader and the management of organization than the employees become self-motivated toward their management and work efficiently for their organization and give their best in achieving the organizational target and if the employees have not to trust on their leader and management of organization then they do not work efficiently for their organization and this dissatisfaction of employees have a negative impact on organization because due to this the organization did not achieve their organizational target (dennis, 2004) h3: there is a significantly positive relationship with the independent variable and dependent variable. 3. research methodology for the current study, the following research design was used: 3.1. research design a cross-sectional quantitative inquiry method (close-ended questions) was adopted. this required concise and empirical research designs to decide how the mediating variable influences the relationship between independent variable and dependent. the design was used because in a given time span, data about the variables could be collected once. 3.2. type of study this research is explanatory, as it tests the hypothesis and describes the relationship between sl and ot in accordance with the ti as a mediating variable for reasons. 3.3. time setting it is a cross-sectional study because the approach to the respondent was only once and the data was collected by approaching the respondent for only 1 time. 3.4. unit of analysis this study’s unit of analysis had been individual. as the data was obtained from the workers employed in various organizations. collecting data from doctors, specialists, physicians, nurses, teachers, bank workers, workers working in different organizations and so on may be dyad. hanif, et al.: how servant leadership affect the organizational trust with mediating role of technological innovation? international review of management and marketing | vol 10 • issue 5 • 2020 79 3.5. study population, sampling technique and size the purposive sampling technique was used for this study. the population of this study is all the employees of different organizations whether they belong to any class or any position in the organization. this population was asked to fill the questionnaire. the respondents who were taken into account in terms of gathering information were randomly selected. the selected sample size was 310 respondents. 3.6. data collection employees from different organizations were surveyed using an instrument of a questionnaire for data collection. a close-ended questionnaire was used for the collection of data. three hundred sixty questionnaires were distributed to the employees. a total of three hundred usable questionnaires were obtained and used for analysis. 3.7. measures/scale sl; sl’s scale was taken from earlier research (van dierendonck and nuijten, 2010). the respondents valued their impressions of servant leadership by their organizations that they are operating on a five-point likert-type scale (1 = strongly disagree with 5 = strongly agreed). ot; a previous research (cevat celeb and ozge eler yilmazturk, 2012) also adopted the ot scale. based on the five-point likerttype scale (1 = strongly disagree with 5 = strongly agree), the respondents measured their sense of confidence based on their organizational experiences. ti; the scale of tc was also adopted from a previous study (abdullah et al., 2016). the sample size is 310 through which we can easily measure the perception of employees toward their specific organization because kaiser-meyer-olkin value and cronbach’s alpha value are satisfactory. 4. data analysis and results according to the results of statistical analysis which are done with the help of the statistical process of social science (spss) version 22. means of the variable were obtained as “servant leadership 13.4677,” “organizational trust 33.7452,” “technological innovation 29.4387.” the median of the variable is “sl 14.0000,” “ot 34.0000,” “ti 30.0000.” the mode is “sl 15.00,” “ot 36.00,” “ti 32.00.” moreover the standard deviation of variables is “servant leadership 3.09670,” “organizational trust 5.46032,” “technological innovation 4.82051” (table 2). table 2: mean, median, mode, std. dev n valid 310 310 310 missing 0 0 0 sl ot ti mean 13.4677 33.7452 29.4387 median 14.0000 34.0000 30.0000 mode 15.00 36.00 32.00 std. deviation 3.09670 5.46032 4.82051 table 3: correlation correlations sl ot ti sl pearson correlation 1 0.476** 0.397** sig (2 tailed) 0.000 0.000 ot pearson correlation 0.476** 1 0.496** sig 2 tailed 0.000 0.000 table 4: kmo and bartlett’s kmo and bartlett’s sphericity test kaiser-meyer-olkin measure of sampling adequacy 0.891 approx. chi-square 3667.299 bartlett’s test of sphericity df 465 sig. 0.000 4.1. correlation we may also explore the pearson correlation for explaining variables relationships. the relationship between sl and ot in this situation is important and positive(r = 0.476**) also the relationship between the sl and ti is significant and positive (r = 0.397**). in the second case the relationship between the ot and sl is significant (r = 0.476**) also the ot has a significant relationship with ti (r = 0.496**). moreover the ti dependent variable have also significant relationship with sl dependent variable(r = 0.397**) and also ti has significant and positive relationship with ot (r = 0.496**). all the variables are partially highly correlated with each other with the significances value 0.000 which is smaller than 0.05 therefore there is no multicollinearity exist between the variables (table 3). 4.2. factor analysis kmo and bartlett’s sphericity test is a sampling adequacy test that is recommended to check the case to the variable-ratio for the study being carried out. kaiser-meyer-olkin (kmo) check is a calculation of how well the data are suited to factor analysis. the check tests sampling appropriateness for each model variable and the complete model. the statistic is a measure of the proportion of variance among variables that might be common variance the following table 4 shows that the sample size is apposite, as the value of the kmo is >0.7 which is the normal value of kmo and in our study, the value of the kmo is 0.891, the meaning value must be lower than 0.5 and in our study result, the meaning value is 0.000. the component matrix described that the following questions are reliable and these questions are successfully perceived by our respondents which are shown in table 4 and those questions which are not perceived by our respondents are deleted from the date, the reason is to make the analysis result appropriate. in table 4, component matrix the questions which are deleted from variable servant leadership (independent variable) are sle1, sle2, sle3, sle7, sle8, slh9, slhu11. from variable organizational trust (dependent variable) the question is ottm10. from variable technological innovation (mediating variable) the questions are ti-pe4 and ti-at5. the purpose to delete the question to make the questionnaire more reliable and filter for future results (table 5). figure 2: confirmatory factor analysis hanif, et al.: how servant leadership affect the organizational trust with mediating role of technological innovation? international review of management and marketing | vol 10 • issue 5 • 202080 confirmatory factor analysis (cfa) is a special type of factor analysis, most widely used in social cases (table 6). it is used to check whether a construct measures are consistent with a researcher’s perception of the essence (or factor) of that construct. as such, the purpose of confirmatory factor analysis is to check whether the data fits into a hypothesized model of measurement. 4.3. reliability test cronbach’s alpha is a reliability test that is conducted with statistical package for social sciences (spss) to measure the internal consistency of measuring instruments. it is a commonly used method when the questionnaire is adopted using multiple likert scale statements and to check that the scale is reliable or not. to test the reliability of the questionnaire we used cronbach’s alpha for each variable which is clearly shown in the following given table 7. the standard or reliable value of cronbach’s alpha is 0.7 or above and if the calculated alpha value is >0.7 than it is clearly shown the high credit questions and questionnaires are reliable and the results are completely satisfactory. it was also observed in this analysis of cronbach’s alpha value to evaluate the variables’ reliabilities. according to the study of reliability it was discovered that all scales have strong alpha values of cronbach as; sl (α = 0.706), ot (α = 0.842), ti (α = 0.830) (table 7). 4.4. one-sample t-test with the help of the t-test we can identify that our hypothesis is significant or not. according to our analysis results the sig value is 0.000 which is <0.05 its means that the hypothesis we made is proved and there is a significant positive relationship between variables. hence our hypothesis is proved with our result (table 8). 4.5. simple linear regression before simple linear regression we can compute our variables one by one and after computing the variables we can start simple table 5: component matrix component matrix component 1 2 3 ot_twt1 0.760 ot_twt4 0.683 ot_twt2 0.677 ot_twt3 0.653 ot_tws6 0.629 ot_tws7 0.593 ot_tws5 0.572 ot_tws8 0.548 ot_tm9 0.456 ti_8 0.758 ti_pp9 0.724 ti_pp10 0.720 ti_a7 0.675 ti_at3 0.606 ti_a6 0.593 ti_at2 0.590 ti_at1 0.434 sls5 0.840 sls6 0.777 slh10 0.573 sle4 0.474 hanif, et al.: how servant leadership affect the organizational trust with mediating role of technological innovation? international review of management and marketing | vol 10 • issue 5 • 2020 81 table 6: reliability statistics variables no. of items cronbach’s alpha value servant leadership 4 0.706 organizational trust 9 0.842 technological innovation 8 0.830 linear regression analysis. simple linear regression is a statistical method that allows us to summarize and study the relationship between two variables. the table 9 labeled that the predicted value is 25.7962 minimum and 39.2320 maximum which is greater than the residual value of the following table 8. this shows that the residual statistics results are satisfactory. this move is done to expose the mediator role of ti in the relationship between sl and trust in the organization. to this end, we used hierarchical regression analyses according to the three-step model by baron and kenny (1986). in the first step the relationship between sl and ot should be important. in the second stage the relationship between sl and ti should be important. in the last step, ti and ot to be significantly related. guebuza (2019) explored that the model turns to meaningless (sig >0.005) it is called full mediation while if the model keeps significant (sig <0.005) but the beta value of the sl is weakened it is appreciated as partial mediation. in our analysis result it is clearly shown that the sig value is smaller than 0.05. durbin watson value means that there should be many other factors that could affect the dependent variable but there are not the part of our study its means that this research study has future discussion and this study is not limited we can easily research this with multiple independent variables. 4.6. frequency analysis for demographics using frequencies and percentages for data presentation, this section describes the demographic profile of respondents, including gender and education level of 310 respondents. the detailed information is explained as follow (tables 11 and 12). this result suggests that at least half of the respondents had a history at university. but to develop their skills and abilities the respondents need to be motivated to continue their studies. training plays an important part in enhancing the organization’s reputation and efficiency. 4.7. mediation analysis in this regard we can also perform mediation analysis, which is a mechanism that is done to designate the relationship between the independent variable and the dependent variable. this analysis illustrates that the relationship between the independent variable and the dependent variable is strong and explained or there is an issue or weakened the relationship. this analysis is done to predict the effect of the outcome. mediation analysis is done with the help of a process developed by andrew f. hayes. in the mediation analysis, we can check the total effect of x and y which is 0.3918 that value divided by the direct effect of x and y value which is 0.4437 and answer is multiplied by 100 and the answer is 88.30% its means that mediation variable has 84%explained relationship between independent and dependent variable. hence our hypothesis is proved that “there is a significant positive relationship between the independent variable and mediation as well as there is a significant positive relationship between mediation and dependent variable.” it is also proved that “there is also a significant relationship between the independent variable and dependent variable.” table 7: t-test measures t df p-value gender 55.715 309 0.000 servant leadership 76.573 309 0.000 organizational trust 108.811 309 0.000 technological innovation 107.524 309 0.000 table 8: residual statistics parameters minimum maximum mean std. deviation n predicted value 25.7926 39.2320 33.7452 2.60111 310 residual -16.79263 11.64772 0.00000 4.80097 310 std. predicted value -3.057 2.109 0.000 1.000 310 std. residual -3.492 2.422 0.000 0.998 310 table 9: multiple linear regression hypothesis 1: the first step of regression dependent variable: organizational trust independent variable beta t sig. durbin watson servant leadership 0.476 18.337 0.000 1.635 r square f sig. 0.227 90.408 0.000 hypothesis 1: the second step of regression dependent variable: technological innovation independent variable beta t sig. durbin watson servant leadership 0.397 18.775 0.000 1.611 r square f sig. 1.57 57.489 0.000 hypothesis 1: the third step of regression dependent variable: organizational trust independent variable beta t sig. durbin watson sl, ti 0.332, 0.364 8.283 0.000 1.720 r square f sig. 0.339 78.645 0.000 hanif, et al.: how servant leadership affect the organizational trust with mediating role of technological innovation? international review of management and marketing | vol 10 • issue 5 • 202082 table 10: frequency analysis for gender gender frequency percent valid percent cumulative percent valid male 266 85.8 85.8 85.8 female 43 13.9 13.9 99.7 other 1 0.3 0.3 100.0 total 310 100.0 100.0 table 11: frequency analysis of educational qualification educational qualification valid frequency percent valid percent c-percent under graduate 53 17.1 17.1 17.1 graduate 166 53.5 53.5 70.6 mphill/ms 86 27.7 27.7 98.4 ph.d 5 1.6 1.6 100.0 total 310 100.0 100.0 5. discussion of results in our research study we proved that servant leadership has a positive impact on the organization as well as employee’s trust. servant leadership is those who can first focus on their customers than employees than management and that itself as compared to traditional leadership they first focus on its self than management than employees than our customers. if the leadership has a quality of servant that is so legatee for the organizations and employees to achieve the competitive advantages. in our analysis it also proved that the mediator variable technological innovation has an eighty-four percent 84% effect on servant leadership as well as organizational trust. if the technological innovation is advanced and approved and leadership has the quality of servant leadership that it is quite easy for the organization to achieve success and move the organization on the way to success. hence the hypothesis is proved that “technological innovation has a significant positive relationship with servant leadership.” the second hypothesis is also proved that technological innovation has a significant positive relationship with organization trust. with the aid of research performed on spss tools, this hypothesis is confirmed. this research explains that sl and ot influence each other positively and that they have a clear relationship taking sl as an independent variable and ot as a dependent variable. trusties the concept that shows the relationship among the leader and an employee if the employees trust their leader than the leader has a positive impact on employees and organization and creates a positive environment in the organization thus, the terminology of servant leadership works positively for creating a trustworthy environment in organizations. if the leader supports the technology than it is quite easy for the organization to compete their competitors and achieve high profit. ti played an important role to place in the market place and achieve a high profit for the organization. however, such high profits were not expected to last for a long time as rivals would imitate. ti is characterized by four distinct elements which include physical tools component, a codified knowledge component, a human skills component, and a systemized methods component through these elements the organization achieved the valuable success in the marketplace. there is a substantially positive relationship between these two variables because if the organization is equipped with advanced technologies then it is very easy for the organization to gain employee confidence. technological advancement enables the growth, reconstruction, and adaptation of technical tools to demonstrate and restore timely responsiveness and rapid and versatile product innovation to attract customers. 6. conclusion in the research report the researcher has demonstrated the relationship between sl and ot and ti mediate the relationship independent variable and dependent variable. technological innovation strengthens the relationship between sl and ot. after performing the analysis on spss (statistical process of social science) completely with the help of organized questionnaire techniques the whole research concluded that the technological innovation played a vital role and helps in strengthening the relationship between sl and ot. these variables are highly combined and also interlinked with each other. if one of these variables is skipped then the relationship between variables becomes weak and the result would also affect them. in conclusion, the current study has made a significant contribution to leadership research by explaining the crucial role of servant leadership and behaviors in the organization. 6.1. managerial implications, limitation and future study the present research is unique in providing objective evidence for a distinct type of leadership. it will be a positive contribution to research into leadership. a couple of practical implications are established from this analysis. firstly, organizations should integrate this style into their programs of training and development. it would better prepare the boss to deal with organizational problems. second, managers should regularly contribute to the detection of workers who are working under pressure to balance the situation. third, managers with dual leadership skills are best reinforced to render the workplace a stress-free environment. this research study has several limitations. the limitation is called those characteristics or methodologies that have influenced your research study and the results get disturbed. this research has several limitations, the most important is that the independent variable in our theoretical framework is one that affects the relationship between independent and dependent variable. if the independent variable is more than one than in simple linear regression analysis the regression value will boost up. the other limitation in our research study is that the respondent is employees they cannot focus while answering the questionnaire that also affects our results. future studies may expand this research to study different individual outcomes that could be modulated by implementing service elements and behaviors of transformation leadership. a new model of leadership may be settled by utilizing other servant aspects and types of transformational leadership. the future study is also present in the research study that we can future research on visionary leadership and solution based hanif, et al.: how servant leadership affect the organizational trust with mediating role of technological innovation? international review of management and marketing | vol 10 • issue 5 • 2020 83 leadership and relates to organizational performance. these two leadership patterns are novel and not so debated too much. in the current scenario, the leadership played a significant role in the organization and if the leadership is visionary than it is so beneficiary for the employees because visions take the organization on the way to success and the solution based leadership has also importance because day by day there is new and sudden problems are emerging in the organization. the organizational leader must have that quality through 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(2005), impact of technological innovation on growth trajectory of enterprise’s technological capability: a theoretical analysis. singapore management review, 27(2), 81-101. tx_1~at/tx_2~at international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2021, 11(3), 58-72. international review of management and marketing | vol 11 • issue 3 • 202158 influencing factors affecting young people’s attitude towards online advertising: a systematic literature review ivan de battista*, franco curmi, emanuel said faculty of economics, management and accountancy, university of malta, malta. *email: ivan.debattista.19@um.edu.mt received: 16/03/2021 accepted: 16/05/2021 doi: https://doi.org/10.32479/irmm.11398 abstract young people are constantly targeted by online advertisements. this systematic literature review aims to identify the principal factors that influence young people’s attitude towards online advertising. it seeks to understand if the influence of online advertising is dependent on gender and age differences in young people. the methodology involves the systematic review of empirical studies published from 1994 to 2020 and identifies the factors that impact young people’s attitude towards online advertising. the review commences with a scoping study and follows the prisma structure, which includes identifying studies, screening and evaluation, the analysis and synthesis of studies, and the presentation of the final studies. this work reveals two main observations from a thematic content analysis of the appraised studies. the first relates to the principal factors influencing young people’s attitude towards advertising. these factors comprise informativeness, entertainment, irritation, credibility, personalisation, and interactivity. in general, studies show that when informativeness, entertainment, credibility and interactivity are present, the more positive the attitude towards advertising is, while irritation fosters an unfavourable attitude. studies provide a dichotomous stand on personalisation. the second relates to young people’s age and gender. our review notes that earlier studies lack focus on audiences predominantly between 10 and 15 years. keywords: attitude towards online advertising, advertising value, young people jel classifications: m31, m37 1.introduction young people total more than 1.8 billion, or 23.7 per cent of the world’s population (unfpa, 2020). eurostat (2020) revealed that almost 94 per cent of young people in europe surf the internet daily. in this light, young people have become an important audience for many online advertisers (bitner and albinsson, 2017). indeed, adolescents are now the primary target of today’s robust and personalised online advertising (cardoso and cardoso, 2012). technology allows advertisers to change course from traditional mass advertising to more direct and personalised marketing, delivering more accurate and customised advertising that suits individual needs (baek and morimoto, 2012). advertisers can reach and influence many target users at a significantly lower marketing cost, making this tool one of the most powerful and persuasive of all forms (kafka and molla, 2017). internet accessibility has made online advertising a vital tool for many marketers to generate awareness, instil desire, provide information, and influence customer attitudes (duffett, 2017). online advertising involves many types of marketing messages shown by or on the internet, via a search engine, on social media sites, websites, mobile devices, or email, among others. nonetheless, the traditional media platforms used for advertisement by marketers have shifted mainly to social media (lee and hong, 2016). research progressed at a rapid pace in this area; it has moved from conventional marketing methods to online strategies. one aspect which studies focused on is the individual’s attitudes towards advertising. understanding the consumer’s attitude towards online advertising is becoming increasingly important for marketers, particularly young people. ajzen and fishbein (2000) identified attitude as “a disposition to respond with some degree of favourableness or unfavourableness to a psychological object and are expected to predict and explain human behaviour” (p.16). wilkie (1994) this journal is licensed under a creative commons attribution 4.0 international license de battista et al.: influencing factors affecting young people’s attitude towards online advertising: a systematic literature review international review of management and marketing | vol 11 • issue 3 • 2021 59 adds that this tendency of favourite and unfavourite manner can be attributed to advertising in general. schlosser et al. (1999) state that consumer attitudes towards advertising play a crucial role as they “likely influence consumers’ exposure, attention, and reaction to individual advertisements” (p.35). we analyse the factors that influence young people’s attitude towards online advertising by reviewing earlier published studies. indeed, our study seeks to answer two research questions: rq1: which are the principal factors that influence young people’s attitude towards online advertising? rq2: how do these influencing factors affect the attitude of young people towards online advertising? 2.theoretical background in addressing our research questions, we started with a scoping study that helped us build reliable search strings for use in our systematic review based upon an outline of a broad subject (peterson et al., 2017). during our scoping study, we explored literature that informed us of online advertising characteristics, the nature of retargeting, young audiences, attitude towards advertising, and the value of advertising. following this, the factors were explored, and principal constructs were defined. 2.1. online advertising the first web banner advertisement featured on hotwired.com in october 1994 (adams, 1995). it was the starting point of a vital marketing tool – online advertising, which in turn, expressively expands and enhances the perception and vision of a product (or brand) with a strong, positive impact on sales (ahmed et al., 2019). goldfarb (2014) classifies online advertising into three groups, comprising search, classified and display advertising. search advertising is the one that appears on the screen when an individual searches for something on a search engine. classified advertising runs on web pages that do not have other “media content or an algorithmic search” (goldfarb, 2014, p.117). display advertising does not pertain to search engines, taking the form of banner advertisements and social media advertisements, for example. internet convenience aided online advertising to be an essential medium for advertisers to create awareness, generating enough interest, and impact customer attitudes (ariffin et al., 2018). online advertising is different from any other form of advertisement due to its flexibility and targetability (sajjacholapunt and ball, 2014). nevertheless, if an online advertisement does not grasp the internet user’s attention, it will instil an unfavourable attitude towards it, with an ineffective effort to raise awareness and shape consumers’ perception (maughan et al., 2007). online advertising reaches out to existing consumers, forms new ones by locating them and offers information and insights to channel advertisers to acquire more knowledge and expand their customer base (ariffin et al., 2018). being an incremental innovation of traditional advertising, retargeting exposes online audiences to repeated online advertisements that users would have seen online in earlier searches or encountered while visiting a website (goldfarb, 2014). retargeting is an enhancement of online advertising. when users show interest by visiting a website or enabling a video, a tracking cookie embeds on the browser of the device being used, and it tracks the user’s behavioural trail and sites accessed after that. repeated advertising exposure is believed to distribute the correct personalised messages sent by the advertiser to the right individual at the appropriate time, implicating that people perceive it as more relevant and consistent with their goals and interests (cho and cheon, 2004). 2.2. young people and the online environment unicef (2019) declares that adolescents are individuals between 10 and 19 years, while teenagers are individuals between 13 and 19 years. the united nations (un) (2013) also recognises that different countries or groups (e.g. the african youth charter) consider youths in different age groups, even up to 35 years. the world health organisation (who, 2019) interpret youths as individuals with ages from 15 to 24 years, and young people are aged between 10 and 24 years, combining adolescents and youths. hence, this study used “young people” as an umbrella term to collect all the keywords that identify individuals from 10 to 24 years. young people’s judgemental and rational abilities would be still at a development stage, with their capability to discern and assess the advertising techniques and persuasion strategies not fully matured (zarouali et al., 2016). indeed, maturity plays an essential role in the influence, effect, and impact of advertisements on teens (kuppuswamy and narayan, 2010) and the online environment. the online environment, predominantly social media sites, provide an integral aura where young people can express themselves and relish their attitudes (steeves and regan, 2014). more negative effects can entrench young people and put them in a vulnerable position (kuppuswamy and narayan, 2010), as generation z youths are the internet generation, and they are getting information and news primarily from the web. an adolescent watching an advertisement on tv can take it passively and uses zipping and zapping capabilities to overcome such infiltration. however, young people can be immersed in a fully branded internet atmosphere for an extended period of time, with the fine line between real content and advertising becoming blurry (cai and zhao, 2013). websites and social media sites are inundated with advertisements; hence young people are coming across these advertisements every minute of online usage. young people are the early adopters of new media technology and are being targeted aggressively by advertisers using “specialised marketing” techniques (story and french, 2004, as cited in cardoso and cardoso, 2012, p.23). young people are living in an online environment for several hours, with brunborg and burdzovic andreas (2019) suggesting that they spend an average of two and half hours daily on social media sites. 2.3. attitude towards advertising attitude towards advertising is very sensitive and need to be appropriately nourished as 97 per cent of consumers surf over the internet to collect information so they can form their judgement and decide on their evoked set (knight, 2010). several studies were conducted to understand the attitude towards advertising de battista et al.: influencing factors affecting young people’s attitude towards online advertising: a systematic literature review international review of management and marketing | vol 11 • issue 3 • 202160 (e.g. mehta, 2000). mackenzie and lutz (1989) suggest that the attitude towards advertising employs a significant influence, along with numerous variables. fishbein and ajzen (1975) developed the theory of reasoned action (tra), where this theory predicts that behavioural intent is formed by an individual’s attitudes, opinions, and subjective norms. an extension to tra, the theory of planned behaviour (tpb) added the perceived behavioural control to the original model (ajzen, 1991). likewise, another influential model created by davis et al. (1989), the technology acceptance model (tam), predicts that an individual’s ability is based upon the acceptance of the technology. the five major constructs of tam are attitude, intention, use, and ease of use, and perceived usefulness. hence, both tam and tpb acknowledge that ultimately, attitudes form intentions, and intentions shape the buying behaviour. the attitude towards advertisement regulates the efficiency and effectiveness of advertising, the purchase intent and attitude towards the brand (mackenzie and lutz, 1989). attitude employs a significant stimulus along with four variables – credibility, perception, attitude towards the advertiser and mood (mackenzie and lutz, 1989). these models and concepts have been related to online advertising, mainly social media (e.g. kim and han, 2014). the significance of the attitude towards online advertising has been proved several times by different researchers when they found that it positively influences product and brand, ultimately impacting the purchase intent (e.g. kola and akinyele, 2010). in 1993, pollay and mittal constructed the belief factor model in which they factorised seven beliefs that drive attitudes. these beliefs were grouped according to personal utility and the socio-economic effects. the personal utility is made up of “product information”, “social-image information”, and “hedonic amusement”, while the socio-economic effects comprise of “good for the economy”, “fostering materialism”, “value corruption”, and “falsity/no-sense” (pollay and mittal, 1993, p.99). nonetheless, some factors which pollay and mittal (1993) worked upon, as most of the socio-economic effects are “predictive tools for the future” (laforet and limahelu, 2009, p.168), and can be difficult for the collection of information. 2.4. advertising value two years after pollay and mittal (1993) model, ducoffe (1995) formulated the three starting-point factors defining how consumers value advertising and form an attitude towards an advertisement. the three constructs are informativeness, irritation, and entertainment. his study came amidst a wave of negative articles placing advertising in a bad light (e.g. alwitt and prabhaker, 1992). ducoffe (1996) states that if an advertisement features when the consumer does not need a product, it would be a wasted advertisement. ducoffe’s (1995) initial idea was to turn the advertising tool into one which is worth and can be utilised by the consumer; advertising value is a measure for advertising effectiveness and the attitude towards advertising, and “may serve as an index of customer satisfaction with the communication products of organisations” (p.1). ducoffe constructed his model on the uses and gratifications theory (ugt). ugt is an approach to understand mass communication and places the individual in the spotlight rather than the media. hence it is what an individual does to the media rather than the contrary (katz, 1959). in this model, the cognitive, affective, personal, and social needs are the uses and gratifications factors. established on this, ducoffe (1995) formed the advertising value model by placing informativeness under the cognitive group and irritation and entertainment constructs under the affective category. hence, based on the notion coined by houston and gassenheimer (1987), the idea of value in marketing is constructed on the premise that something worth and valuable can be exchanged between two entities. it is derived from the belief and perception formed about the offering, based upon the experiences that accompany the exchange and behavioural engagement to acquire the exchange (ducoffe, 1996). informativeness and entertainment can aid consumers’ attitudes towards advertisement to drive them to instil the desire and ultimately purchase, while irritation can enact adverse effects. 3.research methodology in our systematic literature review, we follow the prisma structure as a guideline to ensure that our review is conducted with rigour, a systematic and reproducible approach is adopted, and transparency and freedom of bias are guaranteed (moher et al., 2009). a prisma flow-chart (figure 1) plots the identification, screening, eligibility, and inclusion stages. the review involved five stages. first, a scoping study helped to outline the research area of study, identify the overarching research question, classify the keywords that could be associated with this study, and develop basic categories and an analysis structure. from the outset, we noted that different scholars focused their study on online advertising in general. the second stage involved identifying works eligible for this review. we collected the articles for this study from academic journals starting from january 1994 until december 2020. the articles were collected from 1994, since the first online advertisement was featured on the internet in october 1994. the period was long enough to identify changes and observe any paradigm shifts from the outset until the time of writing. we used an open-string policy to capture all papers and minimise the risk of leaving anything out. when the search was tested using the main words in the research question – ‘attitude’, ‘advertising’ and ‘adolescents’, the results indicated that many papers had been omitted due to either non-detection of words or based on different topics. as webster and watson (2002) suggest, the literature search should not be based only on a limited series of journals. hence, to download a wide array of articles, four online databases were searched: taylor and francis social science and humanities library with one database, capturing 2848 articles; ebsco with 21 different databases, and downloading 2252 articles; proquest, containing 34 databases, and collecting 7245 articles; and springerlink with only one central database, capturing 3953 articles. all databases were accessed simultaneously, with all the de battista et al.: influencing factors affecting young people’s attitude towards online advertising: a systematic literature review international review of management and marketing | vol 11 • issue 3 • 2021 61 papers filtered to capture peer-reviewed articles and searching everywhere, not only in title or abstract. the keywords used were set in eight batches. the terms: adolescent or adolescents or teen or teens or teenager or teenagers or “young adult” or “young adults” or “young people” were used as constant variables, and then shifted only the other keywords, using “retargeting”, “retargeted”, “remarketing”, and all the derivations of the following: “optimised advertising”, “advertising optimisation”, “repeated advertisement”, “internet advertisement”, “digital advertisement”, “digital marketing”, “online advertising”, “online marketing”, “social media 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 2 3 3 4 4 9 0 1 2 3 4 5 6 7 8 9 10 vietnam uk taiwan sweden spain south africa romania portugal pakistan netherlands malaysia italy iran germany france egypt belgium bangladesh mexico turkey china south korea india usa number of studies c ou nt ry figure 2: studies by country (source: authors) figure 1: prisma flowchart (source: moher et al., 2009) de battista et al.: influencing factors affecting young people’s attitude towards online advertising: a systematic literature review international review of management and marketing | vol 11 • issue 3 • 202162 advertising”, “social network advertising”. the terms “young adult/s” were included in the string after a test was conducted without the term during the scoping phase and resulted in very few results. this could have hindered the scope of the study and render it impractical. twenty-two additional records were identified, using scholar.google.com, academia.edu and researchgate.net; all three websites were set with an online prompter, and when a paper of high interest was uploaded or published in any of these respective databases, a notification was received. the third stage involved all the articles being uploaded on rayyan qcri (qatar computing research institute) system designed by mourad et al. (2016). initially, titles of articles and abstracts of studies located through the literature searches were screened. this was a large task, with 16,298 articles and 22 articles from other sources, out of which more than 23 per cent were duplicates. when wrong study area papers were omitted, 501 articles were identified for eligibility screening in relation to the study (figure 1). the fourth stage included the laborious screening of all the 501 articles, which were read and scrutinised individually. out of these articles, 468 were excluded. the exclusion criteria included all those articles that were not directly in the scope of the study (n = 367), book chapters or reviews (n = 14), conference papers (n = 6), editorial columns (n = 7), and papers which were exclusively children-related (n = 9). studies that focused on adults (n = 18) were excluded and so did to literature reviews and meta-analysis (n = 14) and methodologicalbased articles (n = 19). papers with no methodology or no data collection included (n = 2), and no indication of journal or publisher (n = 2) were also excluded. two (n = 2) papers were omitted as the researchers did not reply with submitting their work for analysis, and these could not be obtained after multiple attempts. finally, eight (n = 8) papers were excluded from the list as the studies focused on other platforms, such as sms, tv, and in-app advertisement. thirty-three studies met the inclusion criteria and were involved in the analysis and synthesis phase (table 1). ducoffe’s (1995) advertising value model was used as the theoretical foundation, and all studies were chosen with at least two factors for comparison purposes. it is to be noted that ages that surpassed the 10-24-year bracket were included on the premise that they would account for more than 60 per cent of the whole study and not older than 35 years as per un (2013) decisions. all the papers were scrutinised using mendeley software v1.19. 3.1. data extraction and synthesis an integral part of the process was the data extraction process, the synthesis of all the included papers, and the systematic literature review writing phase. the fifth and final phase was conducted using the qualitative analytical instrument nvivo v.12, in which all studies were carefully allotted in folders for segregation and individually tagged for double-checking purposes. although the initial target date for the collection of data was from 1994, the first valid study retrieved was in 1995. the papers included in the synthesis were extracted from 26 different journals, with four journals having two papers each and one journal has four peer-reviewed studies. as expected, the journals pertain to different disciplines since the study is multidisciplinary and subsets marketing, psychology, computer sciences, and social behaviour (table 2). the journals included in this study ranged from the international review of management and marketing to computers in human behaviour journal. the inclusion phase used articles from sustainability, social behaviour and personality, vision, and an english-written study from a portuguese journal. all the studies were scrutinised meticulously. the included studies were conducted worldwide (figure 2), with the majority, 45 per cent of the studies conducted in asia and 18 per cent in north america. europe had only three exclusive studies. there were two studies conducted with african consumers and two with south american consumers. there were five studies which were conducted transnationally, with four studies involving two continents; a study held in asia and north america (an and kim, 2007), another one in europe and north america (van der goot et al., 2018); and two in asia and europe (wang and sun, 2010; deraz, 2019). another study was conducted in asia but across india, south korea, and china (islam, 2017). in general, two perspectives were identified. they were categorised as studies focusing on a) the attitude towards advertisements based on different streaks of online marketing, such as online advertising (e.g. ching et al., 2013), social media advertising (e.g. saxena and khanna, 2013), and email advertising (e.g. baek and morimoto, 2012), with the influences that affect it (ariffin et al., 2018) and b) the comparison of attitude towards advertisement between different cultures (e.g. islam, 2017), media (e.g. logan et al., 2012), and generations (e.g. van der goot et al., 2018). 4. discussion of results following a thematic content analysis of the papers and the key topics discussed in the theoretical background, two main themes emerged: (1) the principal factors affecting attitude, and (2) how young people are affected based on their age and gender. 4.1. principal factors affecting attitude six principal factors were identified as the most influential among young people, affecting their attitudes towards online advertising. moreover, these factors were present in the different studies that were chosen. informativeness appeared in 31 studies, while entertainment was involved in 32 studies out of 33. twenty-four papers included irritation, whereas credibility or trust was used in 20 studies. personalisation and interactivity appeared in five studies each. different researchers mentioned other factors but were not included with the principal factors either because they were chosen by few or deemed not effective. table 3 provides a whole list of the implications from the studies as per their respective authors. ducoffe (1996) defines informativeness as the ‘content’ part of the advertisement, which is an essential determinant of advertising effectiveness. the entertainment value is in accordance with the ability to fulfil audience needs for “escapism, diversion, aesthetic de battista et al.: influencing factors affecting young people’s attitude towards online advertising: a systematic literature review international review of management and marketing | vol 11 • issue 3 • 202163 st ud y st ud y ti tl e c ou nt ry r es ea rc he d pl at fo rm r es ea rc h m et ho d sa m pl e si ze a ge (s am pl e) (% ) g en de r (f em al e % ag e) f ac to rs a ffe ct in g a tt it ud e d uc off e (1 99 5) h ow c on su m er s as se ss th e va lu e of ad ve rt is in g u sa a dv er tis em en t m al lin te rc ep t su rv ey 47 7 g en er al n /a in fo rm at iv en es s/ d ec ep tiv en es s/ e nt er ta in m en t/i rr ita tio n d uc off e (1 99 6) a dv er tis in g v al ue a nd a dv er tis in g on th e w eb u sa w eb a dv er tis in g su rv ey 31 8 m ag e= 32 29 in fo rm at iv en es s/ e nt er ta in m en t/ ir ri ta tio n b ra ck et t a nd c ar r ( 20 01 ) c yb er sp ac e a dv er tis in g ve rs us o th er m ed ia c on su m er v er su s m at ur e st ud en t a tti tu de s u sa w eb a dv er tis in g su rv ey 42 1 st ud en ts 47 in fo rm at iv en es s/ e nt er ta in m en t/ ir ri ta tio n/ c re di bi lit y a n an d k im (2 00 7) a f ir st in ve st ig at io n in to th e c ro ss c ul tu ra l p er ce pt io ns o f i nt er ne t a dv er tis in g: a c om pa ri so n of k or ea n an d a m er ic an a tti tu de s so ut h k or ea / u sa in te rn et a dv er tis in g se lf a dm in is te re d su rv ey 20 0 (k or ea ) 21 8 (u sa ) m ag e= 21 54 /5 9 in fo rm at iv en es s/ en te rt ai nm en t/ ir ri ta tio n (o ff en si ve ne ss )/ tr us tw or th in es s w an g et a l. (2 00 9) e xa m in in g b el ie fs a nd a tti tu de s to w ar d o nl in e a dv er tis in g a m on g c hi ne se c on su m er s c hi na o nl in e a dv er tis in g q ue st io nn ai re 20 2 18 -2 5 78 e nt er ta in m en t/i nf or m at io n se ek in g/ c re di bi lit y/ v al ue c or ru pt io n/ e co no m y w an g an d su n (2 01 0) e xa m in in g th e r ol e of b el ie fs a nd a tti tu de s in o nl in e a dv er tis in g: a c om pa ri so n b et w ee n th e u sa a nd r om an ia u sa / r om an ia o nl in e a dv er tis in g q ue st io nn ai re 19 6 (u sa ) 3 81 (r om an ia ) st ud en ts 45 /5 0 e nt er ta in m en t/i nf or m at io n/ c re di bi lit y/ v al ue c or ru pt io n/ e co no m y c ar do so a nd c ar do so (2 01 2) a do le sc en ts ' a tti tu de s to w ar d in te rn et a dv er tis in g po rt ug al in te rn et a dv er tis in g se lf a dm in is te re d su rv ey 22 0 13 -1 7 62 in fo rm at io n/ e nt er ta in m en t! tr us tw or th in es s/ ir ri ta tio n b ae k an d m or im ot o (2 01 2) st ay a w ay fr om m e: e xa m in in g th e d et er m in an ts o f c on su m er a vo id an ce of p er so na liz ed a dv er tis in g u sa pe rs on al is ed a dv er tis in g (e m ai l) se lf a dm in is te re d su rv ey 44 2 m ag e= 20 73 ir ri ta tio n/ pe rs on al is at io n l og an e t a l. (2 01 2) fa ce bo ok v er su s te le vi si on : a dv er tis in g v al ue p er ce pt io ns a m on g fe m al es u sa fa ce bo ok a nd t v a dv er tis in g o nl in e q ue st io nn ai re 25 9 12 -3 0 10 0 e nt er ta in m en t/i nf or m at iv en es s/ ir ri ta tio n c hi ng e t a l. (2 01 3) n ar ra tiv e o nl in e a dv er tis in g: id en tifi ca tio n an d it s e ff ec ts a n a tti tu de t ow ar d a pr od uc t ta iw an o nl in e a dv er tis in g o nl in e q ue st io nn ai re 81 6 <2 030 (9 2) 53 in te ra ct iv ity /v iv id ne ss / e nt er ta in m en t/s el fre fe re nc in g sa xe na a nd k ha nn a (2 01 3) a dv er tis in g an s oc ia l n et w or k si te s: a s tr uc tu ra l e qu at io n m od el lin g a pp ro ac h in di a so ci al m ed ia a dv er tis in g o nl in e q ue st io nn ai re 18 9 st ud en ts 29 in fo rm at io n/ e nt er ta in m en t/ ir ri ta tio n sa ad eg hv az iri et a l. (2 01 3) w eb a dv er tis in g: a ss es si ng b el ie fs , a tti tu de s, p ur ch as e in te nt io n an d b eh av io ra l r es po ns es ir an w eb a dv er tis in g q ue st io nn ai re 41 6 <2 5 (8 3) 53 in fo rm at iv e/ h ed on ic (e nt er ta in in g) /f al si ty (m is le ad in g) /i rr ita tio n/ v al ue c or ru pt io n/ m at er ia lis m /s oc ia l r ol e k im a nd h an (2 01 4) w hy s m ar tp ho ne a dv er tis in g a ttr ac ts c us to m er s: a m od el of w eb a dv er tis in g, f lo w , a nd pe rs on al iz at io n so ut h k or ea m ob ile a dv er tis in g su rv ey 25 6 <2 030 (8 2) 71 in fo rm at io n/ e nt er ta in m en t/ c re di bi lit y/ in ce nt iv es /i rr ita tio n/ pe rs on al is at io n d ao e t a l. (2 01 4) so ci al m ed ia a dv er tis in g v al ue : t he c as e of t ra ns iti on al e co no m ie s in so ut he as t a si a v ie tn am so ci al m ed ia a dv er tis in g q ue st io nn ai re × 2 29 5 (b ot h st ud ie s) 18 -2 2 70 /6 0 in fo rm at iv en es s/ e nt er ta in m en t/ c re di bi lit y ta bl e 1: l is t o f s el ec te d ac ad em ic s tu di es (s ou rc e: a ut ho rs ) (c on td ... ) de battista et al.: influencing factors affecting young people’s attitude towards online advertising: a systematic literature review international review of management and marketing | vol 11 • issue 3 • 2021 64 st ud y st ud y ti tl e c ou nt ry r es ea rc he d pl at fo rm r es ea rc h m et ho d sa m pl e si ze a ge (s am pl e) (% ) g en de r (f em al e % ag e) f ac to rs a ffe ct in g a tt it ud e a m ja d et a l. (2 01 5) e xa m in in g a tti tu de s an d b el ie fs to w ar ds o nl in e a dv er tis in g in pa ki st an pa ki st an o nl in e a dv er tis in g q ue st io nn ai re 28 0 18 -4 0 (p re do m in an tly 18 -2 9) ) 35 e nt er ta in m en t/i nf or m at io n/ c re di bi lit y/ e co no m y/ v al ue c or ru pt io n/ c ul tu ra l a sp ec t/a d c lu tte r b el ie f ( ir ri ta tio n) /g oa l im pe di m en t b el ie f c el eb i ( 20 15 ) h ow d o m ot iv es a ff ec t a tti tu de s an d b eh av io rs t ow ar d in te rn et a dv er tis in g an d fa ce bo ok a dv er tis in g? tu rk ey in te rn et a dv er tis in g / so ci al m ed ia a dv er tis in g q ue st io nn ai re 14 0 21 -2 3 (6 0) 62 in fo rm at io n/ e nt er ta in m en t/ in te rp er so na l u til ity / in va si ve ne ss z ha e t a l. (2 01 5) a dv er tis in g v al ue a nd c re di bi lit y tr an sf er : a tti tu de t ow ar d w eb a dv er tis in g an d o nl in e in fo rm at io n a cq ui si tio n c hi na w eb a dv er tis in g q ue st io nn ai re 33 1 18 -3 0 (8 5) 48 in fo rm at iv en es s/ e nt er ta in m en t/ c re di bi lit y m ur ill o (2 01 6) a tti tu de s to w ar d m ob ile s ea rc h a ds : a s tu dy a m on g m ex ic an m ill en ni al s m ex ic o m ob ile s ea rc h a dv er tis in g pa pe r s ur ve y w ith s ce na ri o q ue st io n 12 15 /3 15 17 -2 4 (9 5) 37 in fo rm at iv en es s/ e nt er ta in m en t/ ir ri ta tio n/ c re di bi lit y k im e t a l. (2 01 6) to c lic k or n ot to c lic k? in ve st ig at in g a nt ec ed en ts o f a dv er tis em en t c lic ki ng o n fa ce bo ok u sa fa ce bo ok a dv er tis in g o nl in e su rv ey 75 8 m ag e= 21 64 in fo rm at iv en es s/ ir ri ta tio n/ e nt er ta in m en t/i nt en si ty o f u sa ge m ur ill o et a l. (2 01 6) t he a dv er tis in g v al ue o f t w itt er a ds : a s tu dy a m on g m ex ic an m ill en ni al s m ex ic o so ci al m ed ia a dv er tis in g o nl in e su rv ey 63 0 15 -2 4 (9 5) 55 in fo rm at iv en es s/ e nt er ta in m en t/ ir ri ta tio n/ c re di bi lit y a kt an e t a l. (2 01 6) w eb a dv er tis in g v al ue a nd s tu de nt s’ a tti tu de t ow ar ds w eb a dv er tis in g tu rk ey w eb a dv er tis in g su rv ey 41 3 18 -2 2 (8 0) 54 e nt er ta in m en t/i nf or m at iv en es s/ ir ri ta tio n/ c re di bi lit y a yd in (2 01 6) a tti tu de s to w ar ds d ig ita l a dv er tis em en ts : t es tin g d iff er en ce s b et w ee n so ci al m ed ia a ds a nd m ob ile a ds tu rk ey so ci al m ed ia a dv er tis in g/ m ob ile a dv er tis in g 2 q ue st io nn ai re s 48 9/ 28 1 1) < 19 -2 4 (8 8) 2) < 19 -2 4 (7 4) 59 /5 1 in fo rm at iv en es s/ e nt er ta in m en t/ c re di bi lit y/ ir ri ta tio n d eh gh an i et a l. (2 01 6) e va lu at in g th e in flu en ce o f y ou tu be a dv er tis in g fo r a ttr ac tio n of y ou ng c us to m er s it al y so ci al m ed ia a dv er tis in g q ue st io nn ai re 31 5 m ag e= 23 55 e nt er ta in m en t/ in fo rm at iv en es s/ c us to m is at io n (p er so na lis at io n) /i rr ita tio n l ee a nd h on g (2 01 6) pr ed ic tin g po si tiv e u se r r es po ns es to so ci al m ed ia a dv er tis in g: t he r ol es of e m ot io na l a pp ea l, in fo rm at iv en es s, an d c re at iv ity so ut h k or ea so ci al m ed ia a dv er tis in g q ue st io nn ai re 41 5 m ag e= 24 37 e m ot io na l a pp ea l (e nt er ta in m en t) / in fo rm at iv en es s/ c re at iv ity is la m (2 01 7) c ap tu ri ng c on su m er a tti tu de t ow ar d m ob ile a dv er tis in g: a n e m pi ri ca l in ve st ig at io n a m on g d iff er en t n at io na l c ul tu re s in di a/ k or ea / c hi na m ob ile a dv er tis in g o nl in e/ o ffl in e su rv ey s 33 0 15 -2 4 (6 0) 38 e nt er ta in m en t/ in fo rm at iv en es s/ c re di bi lit y/ in te ra ct iv ity /i rr ita tio n/ c ul tu ra l in flu en ce s va n de r g oo t et a l. (2 01 8) m ed ia g en er at io ns a nd t he ir a dv er tis in g a tti tu de s an d a vo id an ce : a s ix -c ou nt ry c om pa ri so n g er m an y/ sp ai n/ u k / u sa /f ra nc e/ n et he rl an ds v ar io us a dv er tis em en t m od es in cl . o nl in e c ro ss n at io na l su rv ey 57 84 17 -8 1 (h ig h % ag e 17 34 n et g en er at io n) 43 in fo rm at iv en es s/ e nt er ta in m en t/ tr us tw or th in es s/ in tr us iv en es s/ ir ri ta tio n a ri ffi n et a l. (2 01 8) h ow p er so na l b el ie fs in flu en ce c on su m er a tti tu de to w ar ds o nl in e a dv er tis in g in m al ay si a: t o tr us t o r n ot to t ru st ? m al ay si a o nl in e a dv er tis in g q ue st io nn ai re 25 0 18 -3 5 (8 3) 52 in te ra ct iv ity /e nt er ta in m en t/ in fo rm at iv en es s/ ir ri ta tio n/ so ci al im ag e/ tr us t ta bl e 1: (c on tin ue d) (c on td ... ) de battista et al.: influencing factors affecting young people’s attitude towards online advertising: a systematic literature review international review of management and marketing | vol 11 • issue 3 • 2021 65 st ud y st ud y ti tl e c ou nt ry r es ea rc he d pl at fo rm r es ea rc h m et ho d sa m pl e si ze a ge (s am pl e) (% ) g en de r (f em al e % ag e) f ac to rs a ffe ct in g a tt it ud e a ro ra a nd a ga rw al (2 01 9) e m pi ri ca l s tu dy o n pe rc ei ve d v al ue an d a tti tu de o f m ill en ni al s to w ar ds so ci al m ed ia a dv er tis in g: a s tr uc tu ra l e qu at io n m od el lin g a pp ro ac h in di a so ci al m ed ia a dv er tis in g se lf a dm in is te re d q ue st io nn ai re 47 8 18 -2 3 (6 7) 44 in fo rm at iv en es s/ e nt er ta in m en t/c re di bi lit y/ in ce nt iv es /i rr ita tio n/ pe rs on al is at io n d ae m s et a l. (2 01 9) t he e ff ec t o f a d in te gr at io n an d in te ra ct iv ity o n y ou ng t ee na ge rs ’ m em or y, b ra nd a tti tu de a nd p er so na l d at a sh ar in g b el gi um o nl in e a dv er tis in g e xp er im en t/ q ue st io nn ai re 57 6 11 -1 4 47 in te gr at ed (i nf or m at iv e an d e nt er ta in in g) /i nt er ac tiv ity g ab er e t a l. (2 01 9) c on su m er a tti tu de s to w ar ds in st ag ra m a dv er tis em en ts in e gy pt : t he r ol e of t he p er ce iv ed a dv er tis in g v al ue a nd p er so na liz at io n e gy pt in st ag ra m a dv er tis in g se lf a dm in is te re d q ue st io nn ai re 41 2 15 -2 8 (6 7) 63 in fo rm at iv en es s/ e nt er ta in m en t/c re di bi lit y/ pe rs on al is at io n/ ir ri ta tio n d er az (2 01 9) fa ct or s c on tr ib ut in g to c on su m er s’ a ss es sm en t o f a dv er tis em en t v al ue on s oc ia l n et w or ki ng s ite s: a c ro ss c ul tu ra l f oc us g ro up s tu dy in di a/ sw ed en so ci al m ed ia a dv er tis in g tw o fo cu s g ro up s 11 m ag e= 29 33 /6 0 in fo rm at iv en es s/ e nt er ta in m en t/c re di bi lit y/ in te ra ct iv ity /i rr ita tio n/ m ot iv at io n/ so ci al in flu en ce / c ul tu re d uff et t (2 02 0) t he y ou tu be m ar ke tin g c om m un ic at io n e ff ec t a n c og ni tiv e, a ff ec tiv e an d b eh av io ur al a tti tu de s am on g g en er at io n z c on su m er s so ut h a fr ic a y ou tu be a dv er tis in g se lf a dm in is te re d q ue st io nn ai re 37 50 13 -1 8 51 k no w le dg e (i nf or m at io n) / l ik in g (e nt er ta in in g) /i nt en tio n to p ur ch as e m us ta fi an d h os ai n (2 02 0) t he r ol e of o nl in e a dv er tis in g on pu rc ha se in te nt io n of s m ar tp ho ne s: m ed ia tin g e ff ec ts o f f lo w e xp er ie nc e an d a dv er tis in g v al ue b an gl ad es h o nl in e a dv er tis in g q ue st io nn ai re 28 1 <2 024 (9 5) 25 in fo rm at iv en es s/ ir ri ta tio n/ e nt er ta in m en t/c re di bi lit y/ in ce nt iv es ta bl e 1: (c on tin ue d) de battista et al.: influencing factors affecting young people’s attitude towards online advertising: a systematic literature review international review of management and marketing | vol 11 • issue 3 • 202166 enjoyment, or emotional release” (mcquail, 1983, as cited in ducoffe, 1996, p.23). irritation can be defined as the degree to which the advertisement content is disorganised, not polished, and annoying to users (eighmey and mccord, 1998). credibility comprises a consumer’s confidence in the ‘truth’ behind the advertising message and its believability (chowdhury et al., 2006). peppers and rogers (1997) define personalisation as the process of acquiring information about the consumer and then deliver a targeted solution directly to the consumer. finally, interactivity is the level that a consumer can “act on and react to a particular source” (florenthal and shoham, 2010, p.30); how engaging the advertisement is. 4.1.1. informativeness, entertainment, credibility, and irritation the initial study that analysed the advertising value and how this can affect the attitude towards an advertisement, in general, was that of ducoffe (1995). a year later, ducoffe (1996) issued another paper, investigating advertising on the internet platform. ducoffe (1995) examined informativeness, entertainment and irritation as the three factors that can ultimately affect the attitude towards advertising. ducoffe’s (1996) study showed that although internet advertising is valuable, respondents found it more informative and less entertaining than its value. in his study, respondents did not consider advertising as irritable while staying neutral on the beneficial aspect of internet advertising. brackett and carr (2001) built upon ducoffe’s (1995) study and added credibility with the factors. contrary to ducoffe’s (1996) study, their surveyed college students showed that internet advertising is irritating, and insults people’s intelligence. brackett and carr (2001) confirmed that informativeness, perceived entertainment, irritation and credibility of an advertisement affect the advertising value and consumer’s attitude towards advertisement. nonetheless, credibility added supremacy to ducoffe’s (1995) model and was established as one of the main factors that affect attitude. an and kim (2007) carried out studies in asia and north america and found that respondents held negative attitudes towards receiving internet advertisements or perceiving advertisement online, respectively. two years later, wang et al. (2009) examined young chinese people’s beliefs and attitudes towards advertising. the information-seeking belief was found to be a strong predictor of the attitude towards online advertisement, while entertainment and credibility were not significant. wang and sun (2010) used the same experimentation and compared it with american and romanian students’ beliefs and attitudes towards online advertising. it transpired that information and entertainment were the strongest predictors of the attitude towards online advertisement. when consumers believe that an advertisement is honest and credible, it also enhances the effect on the attitude (wang and sun, 2010). zha et al. (2015) reiterates this, by claiming that credibility is a crucial determinant. in a study conducted with portuguese adolescents, cardoso and cardoso (2012) confirmed that if the advertising factors are adequately employed, they will result in a more positive attitude towards internet advertising. saadeghvaziri et al. (2013) confirmed that young iranian people’s attitude is significantly and positively influenced by the information of a product, the entertaining value and social role. dao et al. (2014) suggested that perceived value can be positively affected by information, entertainment, and credibility in social media advertising. kim et al. (2016) focused on facebook advertising and reflected on the relationship between constructs and behaviour towards social media advertising. they claimed that entertainment, information, and facebook intensity, affect consumers’ attitudes and behaviours towards the advertising and the platform, favourably. they agreed on informativeness as being the most important construct that affects consumers. those advertisements that consumers perceive as irritant are less likely to click on them. in their comparative study on social media and television advertising, logan et al. (2012) claimed that ducoffe’s (1995) model does not offer a healthy fit for measuring advertising value. entertainment, information, and irritation did not predict the attitude towards both tv and social media advertisement among females. conversely, saxena and khanna (2013) argued that advertisement value is enhanced when entertainment and information are provided in an advertisement showing on social media, while irritation reduces it. aktan et al. (2016) surveyed turkish students to examine their attitude towards online advertisements. the results showed that information, credibility, and non-irritant online advertisements are high predictors of advertising value and affect their attitude. however, their study revealed that the entertainment factor did not have a directly influence online advertising value. lee and hong’s (2016) findings corroborate with aktan et al. table 2: number of articles per journal (source: authors) journal name articles behaviour and information technology 1 cogent business and management 1 computers in human behavior 4 direct marketing: an international journal 1 european journal of business and management 1 global business and management research: an international journal 1 international journal of advertising 2 international journal of information management 1 international journal of research in businessstudies and management 1 international journal of scientific and engineering research 1 international marketing review 1 international review of management and marketing 1 internet research 1 journal of advertising i journal of advertising research 2 journal of contemporary marketing science 1 journal of current issues and research in advertising 1 journal of economic and administrative sciences 1 journal of international consumer marketing 1 journal of internet banking and commerce 1 journal of research in interactive marketing 2 review of business management 1 revista potuguesa de marketing 1 social behavior and personality 1 sustainability 1 vision 2 de battista et al.: influencing factors affecting young people’s attitude towards online advertising: a systematic literature review international review of management and marketing | vol 11 • issue 3 • 2021 67 authors implications ducoffe (1995) information, entertainment, and irritation affect the advertising value ducoffe (1996) · more informative · less entertaining · not irritable brackett and carr (2001) information, entertainment, credibility, and irritation affect the advertising value an and kim (2007) · negative attitudes and perceptions towards advertising · online advertising less irritable than traditional adverts wang et al. (2009) · information is a strong predictor of the attitude towards online advertisements · entertainment and credibility are not significant wang and sun (2010) information, entertainment, economy, credibility, and value corruption are strong predictors of the attitude towards online advertisements cardoso and cardoso (2012) · entertainment, information and trustworthiness showed positive correlations with the attitude towards online advertising · irritation revealed a negative correlation with the attitude towards online advertising · female adolescents consider online advertising more informative than male adolescents · male adolescents consider online advertising less irritating than female adolescents baek and morimoto (2012) · personalisation in advertisements alters its credibility · perceived personalisation in advertisements makes consumers less resistant to adverts · personalisation reduces scepticism towards online advertisements · if the perceived advertisement irritation is high, the higher is the avoidance of personalised advertising logan et al. (2012) · ducoffe’s advertising value model does not provide a good fit for assessing advertising value in social media advertising · entertainment is valued more in social media advertising than traditional advertising · informativeness is valued less in social media advertising than traditional advertising ching et al. (2013) the higher the interactivity, vividness, entertainment, and self-referencing in online narrative advertisements, the more favourable attitude consumers have towards a product saxena and khanna (2013) · entertainment and informativeness enhances the advertisement value when present in social media advertising · irritation reduces the advertisement value when present in social media advertising saadeghvaziri et al. (2013) information, entertainment, and social role are strong predictors of the attitude towards online advertisements kim and han (2014) · personalisation is a strong predictor of informativeness, entertainment and credibility · personalisation is negatively associated with irritation dao et al. (2014) informativeness, entertainment and credibility have positive effects on consumers’ perceived value of social media advertising amjad et al. (2015) · credibility, information, economic system and entertainment are essential predictors of consumers’ positive behaviour towards online advertising · young people have a more significant attitude towards online advertisements celebi (2015) · positive information and entertaining value positively affect the students’ attitude towards social media advertising · perceived intrusiveness of social media advertising negatively affect the students’ attitudes and behaviours zha et al. (2015) · credibility is the key determinant of the attitude towards online advertising · perceived informativeness and perceived entertainment influence the attitude towards online advertising murillo (2016) · perceived informativeness will aid both genders to click more on search advertisements · entertainment has a strong effect on both gender judgement of advertising value · irritation has a significant negative effect on perceived advertising value among males but no effect among females · credibility has a weak impact on the judgement of advertising value kim et al. (2016) · the likelihood to click on social media advertisements that are perceived as informative is higher than advertisements that are perceived as irritating · personalisation is thought to be appealing but may be perceived as irritating and intrusive murillo et al. (2016) · informativeness has the most substantial effect on advertising value on social media advertisements · entertainment comes second in the effect on advertising value for social media advertisements · credibility is the third strongest in the effect on advertising value for advertisements on social media advertisements · irritation resulted as the weakest predictor of advertising value aktan et al. (2016) · credibility is the most significant influence on the creation of advertising value and the attitude towards online advertisement · informativeness and irritation are the second and third most significant influence on the creation of advertising value and the attitude towards the online advertisement · non-irritating advertisements that are credible and informative greatly optimise advertising value aydin (2016) · overall, attitudes towards both mobile app advertisements and social media advertisements are unfavourable · social media users are more irritated by advertisements than mobile app users · informativeness is the least important factor that affects attitudes towards advertisements · perceived entertainment and credibility of the advertisements have the strongest effect on attitudes towards advertisements table 3: implications of all selected academic studies (source: authors) (contd...) de battista et al.: influencing factors affecting young people’s attitude towards online advertising: a systematic literature review international review of management and marketing | vol 11 • issue 3 • 202168 (2016) results regarding informativeness and entertainment. they tested emotional appeal instead of entertainment among south koreans, which symbolised almost the same traits of this construct. the researchers added creativity as another construct and found that this can be engaging for consumers. lee and hong (2016) confirmed that online advertising is useful and valuable, as there is a strong relationship between the advertisement, its value and attitude towards it. aydin (2016) conducted two surveys to test social media advertisement and mobile advertising in turkey and found that informativeness appeared to be the least important factor affecting attitude. ninety per cent of his respondents held unfavourable attitudes towards facebook advertisements. compared to mobile advertisements, respondents felt that facebook advertisements are irritable. his results suggested that perceived entertainment of social media and mobile advertisement are the most influential factors that affect them. on the other hand, murillo et al. (2016) found that informativeness and entertainment were the strongest predictors to impact the perception of advertising value amongst mexican twitter users. during the same year, murillo (2016) conducted another study on mexican millennials, focusing more on mobile search advertisements. third of his respondents admitted that they would click on a mobile-sponsored search result only if informative. entertainment had a significant positive impact on the advertising value notion, while a substantial adverse effect with irritation. duffett (2020) urges organisations to generate trustworthy, entertaining, and informative youtube content to elevate advertising and increase awareness among generation z consumers. four years earlier, dehghani et al. (2016) focused on youtube and young italian people. they demonstrated the strong effect that youtube advertising has on customer purchase intention and that entertainment, customisation (personalisation), and information play a crucial role in enhancing brand awareness and the formation of purchase intent. irritation is an adverse driver and can affect the drive to purchase intent. mustafi and hosain (2020) argued that the association between irritation and purchase intent could be facilitated by advertising value and flow experience. celebi (2015) found that undergraduate turkish students hold a positive attitude towards internet advertising and facebook advertising. it occurs when the advertisement carries positive information with entertaining value. conversely, the perceived intrusiveness of social media advertising negatively affected their attitudes and behaviours towards social media advertising, particularly facebook. one study conducted for different media platforms, spread across six different countries, over two continents and three generational cohorts revealed that different generational segments are attached to their traditional medium (van der goot et al., 2018). the “net generation”, which are the younger generation, are more positively inclined towards advertisements than the other authors implications dehghani et al. (2016) · perceived entertainment and personalisation (customisation) has the strongest effect on advertising value for advertisements an youtube · personalisation (customisation) indirectly influences informativeness, credibility, and entertainment on advertising value · irritation is an adverse driver and negatively related to advertising value lee and hong (2016) informativeness and advertising creativity are crucial drivers of favourable behavioural responses to a social media advertisement. islam (2017) · perceived informativeness, credibility and interactivity are strong predictors of favourable perceptions about the advertising value · no significant relationship between irritation and the attitude towards mobile advertising van der goot et al. (2018) the net generation has a more positive attitude towards advertising in general ariffin et al. (2018) · entertainment, interactivity, and irritation are significantly influential on the consumer attitude towards online advertising · irritation is found to have a significant negative influence on attitude towards online advertising. irritation may be impacted by credibility and trust arora and agarwal (2019) · personalisation has not been found as a significant predictor of social media advertising value · credibility is a significant determinant in affecting social media advertising value daems et al. (2019) brand interactivity drives the consumer to become more aware of the organisation’s selling intent and product-/ brand-related recognition gaber et al. (2019) · personalisation is not a vital factor in influencing consumer attitudes towards social media advertisement · consumers’ perception of informativeness, entertainment, credibility and the absence of irritation are crucial and related to their attitudes towards social media advertisements deraz (2019) · for the indian participants, informativeness is the main factor when assessing the advertising value of social media advertisements. they feel more comfortable with these advertisements · for the swedish participants, credibility is the main factor when they assess the advertising value of social media advertisements. they feel more deceived by these advertisements · most of the social media advertisements are not entertaining to both indians and swedish participants · interactivity is valuable for the indians but not valuable for the swedish duffett (2020) relevant information and entertainment in social media marketing resulted in favourable attitudes towards advertisement and higher purchase intentions mustafi and hosain (2020) · informativeness, entertainment, credibility, and incentives have positive and significant effects on consumers’ purchase intention · the relationship between the irritation levels and purchase intention can be mediated by flow experience and advertising value table 3: (continued) de battista et al.: influencing factors affecting young people’s attitude towards online advertising: a systematic literature review international review of management and marketing | vol 11 • issue 3 • 2021 69 generational cohorts (van der goot et al., 2018, p.289). as the net generation grew in an online world immersed in advertisements, the researchers suggested that advertisements for young people are an ordinary matter and not unfriendly. hence, young people had a positive attitude towards advertisement, irrespective of the medium. amjad et al. (2015) determined both credibility, information and entertainment are the critical predictors of positive behaviour towards online advertising. 4.1.2. personalisation baek and morimoto (2012) was the first group of researchers in our list that introduced personalisation as another factor. twopronged perspectives dominated the field of study when it comes to personalisation. this factor was found to be positive and could alter an advertisement’s credibility (baek and morimoto, 2012). they carried out a study focused on targeted, personalised advertisements of business e-mails, and direct mail, and their results suggest that scepticism towards advertisement is lower if a personalised advertisement is sent to a specific customer. kim and han (2014) and dehghani et al. (2016) proved that personalisation was a strong predictor of informativeness, a significant precursor of entertainment and credibility, and negatively associated with irritation. kim and han (2014) were the first researchers to analyse five constructs from the six principal factors. not all studies found personalisation as crucial. kim et al. (2016) argued that although personalisation might seem appealing, this could be regarded as irritative and intrusive. hence, the researchers connected both personalisation and irritation, as one is a precursor to the other. gaber et al. (2019) confirmed that personalisation was not an essential factor in influencing egyptian instagram users’ attitudes. however, the consumers’ perception of informativeness, entertainment, credibility and the absence of irritation were crucial and related to their attitudes towards advertisements. even arora and agarwal (2019) concluded that personalisation was not a significant predictor of the social media advertising value. however, the researchers found that credibility is a determinant in affecting the advertising value. 4.1.3. interactivity ching et al. (2013) added another factor – interactivity, and tested it on the taiwanese online platform, using an online questionnaire. they confirmed that a higher level of interactivity in online narrative advertisements led to more positive attitudes. islam (2017) used this factor and compared it between indian, south korean, and chinese consumers and tallied with ching et al. (2013) results. cultures can be a game-changer, and islam solidified this argument through his study. his results infer that advertisers should employ diverse marketing strategies and tactics when catering to different cultures. daems et al. (2019) concentrated on the brand interactivity used in advertising messages and how these interrelated with young teenagers. their findings confirm that interactivity drives the consumer to become aware of the organisation’s selling intent behind the advertisement. it directs young people to a “less critical processing of the stimulus and to a more positive brand attitude and more personal data sharing” (daems et al., 2019, p.252). a malaysian study by ariffin et al. (2018) suggested that entertainment, interactivity, and irritation are significantly influential on consumer attitude. irritation was found to be impacted by credibility and trust. interactivity can differ from one culture to another. this was strongly felt in the study done by deraz (2019), where two focus groups were conducted in asia and europe, respectively. it was found that interactivity in an advertisement is valuable for indian customers but not valuable to swedish. in this case, even informativeness and credibility differed, where indians feel more comfortable with informativeness in advertising, while the swedish feel deceived by advertising. 4.2. young people and gender advertising can have a pervasive influence on young people, with some adverse effects impacting them (kuppuswamy and narayan, 2010). nonetheless, it was noted that exclusive research that focused on the influencing factors affecting young people’s attitude towards online advertising were few. this notion was evident in the selected studies and even among all the other articles that were part of the screening phase. no study focused only on the whole age range of young people, from 10 to 24 years. still, different papers focused on ranges within the young people bracket (e.g. dao et al., 2014). nevertheless, only six studies included young people under the age of 16. it was observed that ages between 10 and 15 are the least investigated. for example, daems et al. (2019) researched the targeted advertising in an online environment, specifically on young teenagers between 11 and 14 years, with a particular focus on the effects of advertising integration and interactivity and how they affect their memories. ducoffe (1995) did not specify the age in the study, although three studies stated that the research was conducted with college students (brackett and carr, 2001; saxena and khanna, 2013; wang and sun, 2010). ducoffe’s (1996) study involved participants with an average age (mage =32). this study was included as it was part of the pioneering work by ducoffe. other studies covered a part of the age group in their study, either as part of a cultural comparison study (e.g. islam, 2017) or to focus on different generations (e.g. van der goot, 2018). the gender was balanced across almost all studies. overall, female respondents account for 53 per cent. in logan et al. (2012), only the females’ advertising value perceptions were examined; no males were involved in the study. on the other hand, there were studies that female users were in the absolute minority – mostly from india (e.g. saxena and khanna, 2013) and pakistan (amjad et al., 2015). other studies focused more on gender differences but included only adolescents as part of their extensive study. dao et al. (2014) argue that gender difference in young people had an immaterial effect, although the findings suggest that a significant positive effect of user experience exists on online purchase intent. cardoso and cardoso (2012) claimed that although there was a consensus between males and females on entertainment and credibility, females regarded online advertising as more informative and irritating. murillo (2016) partially corroborated with cardoso and cardoso (2012) study, as he de battista et al.: influencing factors affecting young people’s attitude towards online advertising: a systematic literature review international review of management and marketing | vol 11 • issue 3 • 202170 argued that both genders are strongly affected by entertainment on the valuation of advertising value. however, the irritation does not affect females and impact the perceived advertising value negatively among male respondents. murillo et al. (2016) claimed that credibility in advertising demonstrated effects on gender, as it was more important for female millennials than males. saadeghvaziri et al. (2013) found that males are more positive than females in their attitude towards online advertising, but no variances in their behaviour. 5. conclusion this systematic literature review has brought forward a collection of papers about the factors that influence the attitude towards online advertising. this study reviews earlier studies in this area through a systematic approach and evaluation of the emerging two main research themes. this research aims to identify and examine the significant factors influencing young people’s attitudes towards online advertisements and how these factors influence their attitudes. from this study, it was concluded that six influential factors affect the attitude towards advertising. almost all the chosen academic studies found a relationship between more than one factor and the attitude towards advertising. the studies have predominantly placed information, entertainment, and credibility as the most significant predictors of the attitude towards online advertisements for young people. irritation was placed as the factor that has a significant negative influence on attitude towards online advertising. hence, the studies showed that the more the three positive factors are present, the more favourable the attitude towards advertising is, while the more irritative the advertisement is, the more present the negative attitude is. on the other hand, there are mixed perspectives when it comes to personalisation. some studies found that personalisation reduces scepticism towards online advertisements (e.g. baek and marimoto, 2012). adversely, other studies claim that it deters consumers, as it may be perceived as intrusive (e.g. kim et al., 2016). the most recent studies show that the online audience is generating a more obscure perception towards personalisation. this may be the result of heightened privacy concerns and widespread knowledge about advertising. interactivity is found to be positive and can foster connectedness between young people and online advertisement. only one study showed that interactivity might not be perceived as valuable by some participants (deraz, 2019). there was no academic paper that linked all the factors altogether in one study, but few incorporated five factors out of six (e.g. islam, 2017; gaber et al., 2019). nine studies had the four constructs depicted by brackett and carr (2001), focusing on informativeness, entertainment, irritation, and credibility. all the studies included young people, but not necessarily targeting only them. no study included the full age range of young people solely. even more, the younger cohort of young people was the least studied. this may be due to ethical concerns and parental consent, apart from the problem of access. it revealed a lacuna in the studies regarding the understanding of the young people’s attitude towards advertising. 5.1. limitations although much care was given to the range and criteria of the corpus, this literature review still has some limitations. first, as with all systematic literature reviews, the study was based on the search strings employed and the databases that were chosen. nonetheless, the chosen studies provided a robust understanding of the factors that affect young people’s attitude towards online advertising. second, this study excluded grey literature and speculative papers as it was imperative to base all the study on solid grounds, devoid of any assumptions or opinions. furthermore, we restricted our choice to publications written in peer-reviewed journals rather than reviewing documentation in conference papers or chapters in edited books. 5.2. future research a significant gap in the current knowledge is that few papers are explicitly focused on the entire age range of young people and their attitudes towards online advertising. even fewer studies are focused on the younger bracket of young people, ages between 10 and 15 years. future research needs to be conducted strictly on young people, even more, when one considers that around 92 per cent of young people in eu countries use the internet daily on their mobile phones (eurostat, 2020). another critical lacuna in the knowledge that emerged in this review is the dearth of academic literature on retargeted advertisements. as zarouali et al. 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(2015), advertising value and credibility transfer: attitude towards web advertising and online information acquisition. behaviour and information technology, 34(5), 520-532. tx_1~at/tx_2~at international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2020, 10(5), 19-26. international review of management and marketing | vol 10 • issue 5 • 2020 19 social media usage, overload and exhaustion: a performance perspective nida kamal1*, sajeela rabbani2, hina samdani1, sobia shujaat1, mubashir ahmad3 1bahria business school, bahria university, islamabad, pakistan, 2riphah school of leadership, riphah international university, pakistan, 3northern university nowshera, pakistan. *email: nidakamal.buic@bahria.edu.pk received: 19 june 2020 accepted: 25 august 2020 doi: https://doi.org/10.32479/irmm.10190 abstract this study is focused on investigating the negative consequences of social media usage at work through overloads that are a cause of exhaustion and ultimately impact performance. performance of employee is taken as criterion of exhaustion. three categories of overloads social overload, communication overload and information overloads serve as mechanism of negative consequences of social media during working hours. a sample of 300 employees of telecom sector of pakistan contributed in the study. data was analyzed by using partial least squares structural equation modelling technique. results revealed that excessive use of social media positively influence information, communication and social overload. information and communication overload were also found to have an enhanced effect on exhaustion of social media while social overload could not. performance of employee was also found to be negatively influenced by exhaustion of social media. study limitations and future directions are also discussed. keywords: performance, social media, exhaustion, telecom sector jel classification: d89 1. introduction employees are considered to be assets of an organization. their job performance has always remained center of interest for organizations as well as organizational researchers (austin and villanova, 1992; campbell, 1990). performance is an employee outcome in any form like sales, customer satisfaction and revenue generation (riva et al., 2019; ali-hassan et al., 2015; janssen and van yperen, 2004; scott and bruce, 1994). it can be considered as the quality of work of an employee (nayak and sahoo, 2015). performance is an essential aspect of organizational life because it is directly related to the behaviour of employees (sparrowe et al., 2001) and it is believed that without having good performance of employees, the organizational sustainability and endurance is impossible (al hammadi and hussain, 2019). performance is predicted by several aspects including external and internal to the individual. the level of knowledge, behaviour and skills of employee are internal factors while working environment, organizational structure, flexibility in tasks and working hours and given incentives are the external factors. conventionally, one of the best tools used by an organization to get best performance from an employee is through employee engagement that can be sustained (pinto and thalgaspitiva, 2017; shamir, 1990). similarly, leadership also affects employee performance significantly through motivation and appreciation (walumbwa et al., 2008). stress (altindag, 2020) and fear of higher authorities (anderson, 2002) has also been identified as contributing factor towards low employee job performance. stress of several natures has also become interesting in predicting performance. kim et al. (2012), concluded that employee providing front-line services can get emotionally disturbed due to the social stress created by the customers. stress adversely affects employee outcomes and of various natures. one of its form is technology associated termed as techno stress. a domain of researchers has also made efforts to investigate the impact of techno stress on the employees’ this journal is licensed under a creative commons attribution 4.0 international license kamal, et al.: social media usage, overload and exhaustion: a performance perspective international review of management and marketing | vol 10 • issue 5 • 202020 performance in information communication technology aspect (ahuja et al., 2007; hung et al., 2015; shi et al., 2020). technology has also become a vital contributor towards performance of employees (petter et al., 2008). it enables employees to perform better by knowledge sharing, motivation and improved morale (singh et al., 2019) however, technology also contributes adversely towards employee outcomes like nonworkplace disturbance and health issues (thomée et al., 2011). most of the health issues arise from psychological disturbance and stress due to high usage of technology (chesley, 2005). consequently, it disturbs the performance level that is required by the organization to meet the required outcomes (moqbel et al., 2013). stress due to technology becomes techno stress (brod, 1984). it leads to the decrease in sustainable practices that impact the performance outcomes of employees (tarafdar et al., 2015). it can be said that negative changes in attitudes, thinking patterns, unproductive behavior are the consequences of techno stress (trarafdar et al., 2015; weil and rosen, 1997). a recent face of technology usage is in the form of social media. it is a platform available to the people to communicate with a single or several people while using internet (cox and rethman, 2011). social media consists of a number of tools and applications used anywhere like at home or workplace (ali-hassan et al., 2015). several activities can be carried out by the individuals on social networking sites (hantula et al., 2011; hou et al., 2014; ndasauka et al., 2016), like gathering information, sharing information, time killing, communication and entertainment (liu et al., 2016). social media helps employees in communicating with others and feeling a bit relaxed form the tiring task performance at the work place (ou and davison, 2011). however, the habit of using social media at workplace can result in various problems like distracting an employee from performing tasks and causing time wastage (bright and logan, 2018; li, 2019; turel et al., 2019). thus, the present study tries to dig out the negative impacts of excessive social media usage on performance of employees. excessive social media usage involves excessive and prompt notifications and people at workplace are distracted again and again by these notifications (salo et al., 2019; larose et al., 2014). we conceptualize these notifications as overloads. different types of overloads are created by the connections made on virtual communities such as information, communication and social overload (misra and stokols, 2012). the communication overload and social overload are mainly caused by excessive use of social media (tarafdar et al., 2019). researchers have linked up information overload and techno stress to lower job performance and satisfaction (shi et al., 2020). in this context, this study analyses the effect of excessive social media usage on overloads and exhaustion of social media towards performance under the light of transactional theory of stress and coping. previous studies have used techno stress to assess the relationship of stressor and outcomes in perspective of professional technology (tarafdar et al., 2015). it has also been investigated that the technology characteristics are involved in creating techno stress, but the research didn’t involve the level of usage in prior investigation. the current study used the level of usage as a predictor of stress created by the use of social media that creates stress. on the basis of theory of stress and coping, this study proposed a framework of stressor (overloads), strain (anxiety) and outcome (performance of the employee) that will help in understanding the mechanism of techno stress created by the extreme usage of social networks (tarafdar et al., 2019). according to previous researches, this problem of too much usage of social media at workplace has not been addressed sufficiently in information and communication researches (yu et al., 2018). we investigated our framework in information and communication technology sector of pakistan. it is one of the most important sectors of pakistan with a large number of employees but insufficient in research on performance of employees. this research work will directly measure the impacts of social media usage on employee performance by taking the impact of three types on loads including information overload, communication overload and social overload on the employees as a result of social media usage on the work place. 2. literature review 2.1. usage of social media and over-load social media including social network sites and other platforms have changed peoples’ life with their high growth and spread in a couple of decades (chang and hsiao, 2014). a number of studies have discussed the positive aspects like communicative and informational use of social media at workplace (yu et al., 2018; nisar et al., 2019). researchers have also stated that people do use social media to interact with working partners and to gain knowledge related to their work to become more expert and efficient (landers and schmidt, 2016). it is important to consider that a significant amount of time is dedicated by individuals at organizations to social media websites like twitter and face book to remain updated (clark, 2010; ngai et al., 2015). it was explored by sheer and rice (2017), that at workplace and after workplace employees increasingly use mobile instant messaging to contact their work contacts. various professional platforms have also been launched that helps in sharing expertise and recruitment purposes (leader-chivee et al., 2008). it has hence, become inevitable to use social media even at workplace for various reasons by employees (koch et al., 2012). in general, the balanced usage of social media is helpful for improving the performance (ali-hassan et al., 2015; kang et al., 2012; wang et al., 2016). if it is used for information sharing, finding solution to problems, improve organization communication and developing alliance with colleagues, then improves performance of the employees (landers and schmidt, 2016). on the contrary, researchers suggest that frequent use of instant messaging at workplace leads to a decrease in performance and final results are unfavorable (warnakula and manickam, 2010; mansi and levy, 2013). researchers like kirschner and karpinski (2010), have argued that constant usage of social media at workplace declines the performance of the employees due to constant interruptions. moreover, excessive usage of social media leads to techno stress that directly reduces the productivity of the employees (kirschner and karpinski, 2010). kamal, et al.: social media usage, overload and exhaustion: a performance perspective international review of management and marketing | vol 10 • issue 5 • 2020 21 an individual may get exposed to a large amount of information uses social network sites to interact such that it becomes impossible to cope with and it will lead to information over-load on employee (whelan et al., 2020; edmunds and morris, 2000). it can be called as technology over-load (karr-wisniewski and lu, 2010) and it leads to the social media fatigue (bright et al., 2015). scholars have described this overload phenomenon in several ways like social networking sites’ addiction (choi and lim, 2016), the dependence on social media or social media dependency (wang et al., 2015), excessive use (hou et al., 2014). the theory-based studies on excessive use of social media are rare as compared to the other studies. in the previous studies made on it, social media usage is just studied as a problematic use or just a habitual thing (ursavas, 2014), but studies made on the significances of the social media overload at workplace are still scarce (cao and sun, 2018). continuing the same domain of research, this study has proposed that excessive usage of social media creates information, communication and social overloads as psychological mechanisms towards employee outcomes. the following hypotheses are proposed: h1a: excessive use of social media at workplace has significant positive impact on creating information overload h1b: excessive use of social media at workplace has significant positive impact on creating communication overload h1c: excessive use of social media at workplace has significant positive impact on creating social overload. 2.2. stress as exhaustion of social media a person’s exposure to overload created due to social media results in the psychological stress. research on information systems have used exhaustion to represent the stress faced by a person to relate the psychological reactions. schaufeli et al., (1995) concluded that stress is the mental association of a person with long term engrossment in demanding situations. while working on social networking sites exhaustion, weinert et al., (2015) said that social exhaustion is created due to social overload. in this study we measure the effects of these three overloads on social media exhaustion for the individuals at work. exhaustion in this context represents the feeling of being tired mentally and physically due to the use of social media. the concept of techno stress was initially used by brod (1984) and then it was redefined by weil and rosen (1997) stating that any adverse effect on the behavior or attitude created directly or indirectly due the use of technology is techno stress. social overload takes the person to a level where the feeling of excessive use begins and results in exhaustion which makes a stressful environment and effects psychologically (dhir et al., 2018). researchers have used the theory of social support and concluded that social overload is that part of social media usage which shows the dark side of it (weinert et al., 2015; maier et al., 2015). following the theoretical basis of theory of stress and coping we hypothesized the following relationships among overloads and social media exhaustion: h2: information overload has significant positive impact on exhaustion of social media h3: communication overload has significant positive impact on exhaustion of social media h4: social media overload has significant positive impact on exhaustion of social media. 2.3. exhaustion of social media and performance researchers have made efforts to investigate and suggest conclusions on the impact of techno stress on the employees’ performance (whelan et al., 2020), in information communication technology aspect (sarabadani et al., 2020). studies have identified the impact of techno stress on the performance of employees like decreased performance, lessen job engagement, increase in turnover ratio and decreased organizational commitment hung et al., 2015; srivastava et al., 2015). stress leads to the critical reduction in outcomes of an employee caused (palmer et al., 2004). previous researches have focused on the impact of psychological stress on the performance on the employee. like, kim et al. (2012) concluded that employee providing front-line services can get emotionally disturbed due to the social stress created by the customers and it adversely affects their performance. the outcome of an employee is important as organizations want to justify the investment made in the form of resources employed for their employees (ali-hassan et al., 2015). this phenomenon can be explained under the context of theory of stress and coping (folkman et al., 1987). this theory explains stress as operation between the environment and an individual (lee et al., 2016). thus, this study tries to investigate the impact stress on the performance of the employees created due to the excessive use of social media. hence the following relationship is anticipated in the figure 1 given below. figure 1: research model kamal, et al.: social media usage, overload and exhaustion: a performance perspective international review of management and marketing | vol 10 • issue 5 • 202022 h5: exhaustion of social media has significant negative impact on performance. 3. research methodology this research is based on empirical testing of hypotheses, with structured surveys as the primary strategy of research. the data was collected from the employees of the telecommunication sector in pakistan by employing the krejcie and morgan (1970) approach for deciding the appropriate sample size for this study. it was confirmed that the targeted participants are those who use social media during working hours. all the participants were explained briefly about the purpose of research and the context of study. primary data was collected by using questionnaire. telecom service providers in pakistan employees were mainly focused as they are more exposed to the usage of social media due the facilities provided to them at workplace. a total set of 480 surveys had been distributed from which 300 surveys were attained completed in all aspects. response rate was 62.5%. the respondents were explained that use of social media includes instant messaging services like whatsapp, imo, snapchat etc., social networking sites like face book, instagram, linkedin, etc., entertainment websites like youtube, daily motion, etc., informational websites (other than facebook) like news channels, micro blogs like twitter. the measurement of excessiveness of the use of social media at work is adopted from that of caplan (2002) and caplan and high (2006). study of karr-wisniewski and lu (2010) was used for the scale of communication overload and information overload from the scale suggested by maier et al., (2015) and adopted for social overload construct. exhaustion of social media is measured with the help of the scale proposed by ayyagari et al., 2011). employee performance was measured with 8 items obtained from janssen and van yperen (2004). a likert scale with 5 points of measurements was used to measure the entire above-mentioned items. responses range from 1 for strongly disagree to 5 for strongly agree. table 1 given above shows that the frequency of use of social media at workplace is quoted high. 59.16% of the employees use social media more than 10 times in days and about 24% use from six to 10 times a day. this frequency is enough to interrupt their work performance as using social media more than ten times by highest number of respondents shows that they get continuously by the demands of social media and their work got affected due to again and again interruptions created by the demands of social media. else that it also shows their own interest level in using social media during working hours that means they easily get diverted from their job responsibilities using different kinds of social media. normally working hours are 8 in a day out of which 43.58% employees showed that more than an hour in collective is wasted on using social media including social sites micro blogs. that can be taken as a big time to decline the performance of employees during working hours. 4. data analysis and results measurement model includes tests of convergent validity; construct reliability and discriminant validity along with the conduction of confirmatory factor analysis spss and smart partial least square (pls) were used. if the composite reliability and cronbach’s alpha are greater than 0.70 reliability is considered as valid (fornell and larcker, 1981). to assess the convergent validity the loadings of items for the related constructs should be high enough. according to fornell and larcker (1981) and bagozzi and yi (1988). the value of average variance extracted must be greater than 0.50 and value of item loading must be greater than 0.60. from table 2 it can be seen that the value of the average variance extracted (avf) for excessive social media use at work is 0.73, for information overload it is 0.64, for communication overload it is 0.58, for social overload it is 0.65, for exhaustion of social media it is 0.64 and for job performance it is 0.69. thus, the valued of avf is greater than 0.50 for all the constructs. cronbach’s α is greater than 0.70 for all the constructs and the values of composite reliability is also greater than 0.70. as the values of all the measures meet the standard levels recommended, it shows that reliability is established. when the correlation between the constructs is less than square roots of average variance extracted for each construct the discriminant validity is shown. table 3 given below represents that the correlation among the constructs is less than the square root of average variance extracted for each construct. hence, the discriminant validity is supported as indicated by the findings. interdependence of variables affects the results of research. there should be no or very less interdependence among the variables. this interdependence is named as multicollinearity statistically. possibility of high multicollinearity is always a serious threat to the research works. variance inflation factor (vif) is used in this study to check the possible multicollinearity of independent variables. hair et al., (2011) explained that the value of vif should be <5. the calculated vif for the research of 2.38 which is acceptable level of multicollinearity as it is <5. hence, the risk of multicollinearity is eliminated from this research. table 1: demographics demographics items percentages gender male 68.28 female 31.72 age 20-25 36.58 26-35 46.79 35 and above 16.63 education bachelors 46.63 maters and above 53.37 tools of social media instant messaging 40.38 social sites 53.69 micro blogs and others 5.93 daily frequency of use rarely 3.4 1-5 times 13.67 6-10 times 23.77 above 10 times 59.16 time spent daily rarely 2.1 <30 min 15.89 <1 h 38.43 1 h and more 43.58 kamal, et al.: social media usage, overload and exhaustion: a performance perspective international review of management and marketing | vol 10 • issue 5 • 2020 23 table 2: construct reliability and validity construct items mean sd loadings cronbach α cr ave excessive use of social media at work (eusm) eusm 3.06 1.09 0.87 0.83 0.9 0.73 eusm 2.87 1.13 0.91 eusm 2.82 1.1 0.82 information overload (iol) iol1 3.2 1.05 0.83 0.76 0.86 0.64 iol2 2.75 1 0.86 iol3 3.04 0.93 0.77 communication overload (com) com1 2.73 0.99 0.8 0.73 0.83 0.58 com2 3.4 1.06 0.69 com3 2.8 0.96 0.78 com4 3.24 0.92 0.71 social overload (sol) sol1 2.77 1.02 0.8 0.85 0.89 0.65 sol2 2.98 1.05 0.76 sol3 2.63 1.03 0.79 sol4 2.71 1.05 0.8 sol5 3.03 1.04 0.79 social media exhaustion (sme) sme1 2.91 1.02 0.76 0.84 0.89 0.64 sme2 2.7 0.98 0.84 sme3 2.8 1.08 0.84 sme4 2.63 1 0.86 job performance (sjp) jp1 3.72 0.79 0.82 0.84 0.9 0.69 jp2 3.78 0.77 0.83 jp3 3.73 0.81 0.83 jp4 3.83 0.94 0.82 table 3: discriminant validity and correlations construct mean sd eusm iol com sol sme jp emsu 2.92 0.91 0.88 iol 2.95 0.82 0.43 0.83 com 3.06 0.71 0.49 0.71 0.73 sol 2.87 0.83 0.53 0.47 0.42 0.77 sme 2.73 0.85 0.34 0.65 0.61 0.31 0.81 jp 3.78 0.67 0.02 −0.16 −0.09 −0.11 −0.33 0.87 4.1. structural model and results the structural model that was constructed in theoretical framework portion was tested by using pls graph. figure 2 given below is representing the outputs of the pls graph. as per the results of the graph, it is concluded that the model of the research is significantly supported by the data. only h4 is not supported by the findings. information overload is affected significantly by the extreme usage social media at work (β = 0.48, t = 6.83). communication load is also affected by the excessive usage of social media at workplace (β = 0.46, t = 7.21). results also show that social overload is also influenced by the extreme use of social media at workplace (β = 0.56, t = 7.21). from the above-mentioned hypothesis of study i.e. h1a to h1c are supported. results of information overload communication overload i.e. (β = 0.37, t = 4. 41) and (β = 0.33, t = 4.09) respectively, shows that these both are significantly affecting the exhaustion created by social media by having a positive relationship among them. this validates proposed hypothesis i.e. h2 and h3. but contradictory to the results of above-mentioned independent variables, results of impact of social overload over social media exhaustion were different. as per the obtained results (β = −0.04 t = 0.59), there was no significant impact of social overload on the social media exhaustion. so h4 has been rejected. h5 is supported strongly by the results (β = −0.32, t = 4.70). negative β shows that there is strong negative relationship figure 2: structural model between job performance and exhaustion created by social media. this represent that exhaustion created by social media decreases the performance of the employees. the variance of information overload is 20%, communication overload is 22%, social overload is 31%, and social media exhaustion is 45%. 5. discussion and conclusion this study intended to investigate effects of excessive use of social media on the performance of the employees from the techno stress prospective. these three were supposed to enhance the exhaustion and level of stress on an individual created by the usage of social media excessively on workplace. this research supports the argument according to which excessive usage of social media at workplace leads to reduced job performance of the employees as it boosts stress that psychologically disturbs a person also prompts negative perceptions. this result was contradictory to arguments of ou and davison, 2011 and van zoonen et al., (2017) that social media usage enhances performance. the results disclosed different findings. first, it shows that emotions and psyche of individuals are negatively disturbed due to the excessive usage of social kamal, et al.: social media usage, overload and exhaustion: a performance perspective international review of management and marketing | vol 10 • issue 5 • 202024 media. results show that regularity of usage of social media play an important role in developing social overload on the individual as it exposes them to many social connections. this outcome is same as the previous findings on extreme usage of information and communication technology which argues that high use of it leads to overload (karr-wisniewski and lu, 2010; weinert et al., 2015; maier et al., 2015). secondly, the overloads of information and communication significantly enhance the stress created by the excessive usage of social media, but the impact of social overload on the exhaustion is not supported. one reason behind this could be that the loads related to communication and information demands to be immediately replied during work hours even due to the socially built up relations and links with working groups while social overload is based on the personal activities mainly that can be handled after the completion of tasks or after working hours. mostly when an individual thinks that social requests are getting difficult to handle at workplace or during completion of tasks it tries deal with them after working hours. moreover, some previous studies like sun and shang (2014) and ali-hassan et al., (2015) showed that the social related use can be helpful in making social capital and enhancing performance. thirdly, the outcomes of exhaustion of social media on the performance are investigated in this study. the results of the data collected indicate that the afore-mentioned variables are strongly connected negatively with each other. it means that both have negative relationship increase in social media exhaustion decreases the performance. the excessive usage of social media occupies the emotional resources, time and energy of the employees and they get exhausted. the exhausted individual cannot use its resources efficiently and result in low performance. the third finding of the study is also in line with the findings of brooks and claiff (2017) that suggested the negative impact of techno stress created due to the usage of social media on the performance of employee. 6. implications and future research the current study uses the theory of stress and copying (lazarus, 1966) in relation to the excessive use of social media at workplace. this study proposed and extended the model using techno stress created by excessive social media usage while taking habit of using different tools and applications of social media as stressor, stress of social media and performance as outcome. this research will contribute to the previously done work in understanding the concepts and relation of the variables. first of all it differentiates from the previous studies in way that most of the studies tried to find out and support the optimistic impact of social media related to working place context for example the studies of ou and davison (2011) and ali-hassan et al., (2015). the current study is an attempted to highlight the other side of it. the increased level of usage of social media can generate too many problems. therefore, this study suggests that use of social media beyond the optimum and its negative outcomes should not be ignored. use of social media beyond the optimum level can expose employee to the negative results. organizations should be well aware of the consequences of social media use at workplace in fact the negative consequences that ultimately decrease performance. for this the organizations should make different strategies to, control the habit of employees of using social media to release their stress. future research may explore other underlying mechanisms through which excessive use of social media impacts sustainable employee performance. we have used telecom industry as target population for this study; this industry is inherent with usage of internet and online resources. thus, to validate the proposed framework, it can be applied in other industries where internet usage is rarely a part of work environment. cross sectional study design could be another limitation, a longitudinal 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(2018), excessive social media use at work. information technology and people, 31(6), 1091-1112. tx_1~at/tx_2~at international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2020, 10(5), 117-126. international review of management and marketing | vol 10 • issue 5 • 2020 117 the impact of logo shapes redesign on brand loyalty and repurchase intentions through brand attitude muhammad rashid rafiq, rai imtiaz hussain, shahbaz hussain* department of management sciences, university of okara, pakistan. *email: rai.hussain@uo.edu.pk received: 19 june 2020 accepted: 01 september 2020 doi: https://doi.org/10.32479/irmm.10308 abstract the present research intends to investigate the effect of logo shapes redesign on brand loyalty and repurchase intention. the analysis also explores the mediating role of brand attitude between logo shapes redesign, brand loyalty, and repurchase intentions. this analysis utilized convenient nonprobability sampling and gathered statistics from 452 students and teachers of the university of okara, pakistan. the data collected for the study were analyzed using smart pls3.0 and reliability/cronbach’s alpha was undertaken to determine the question’s accuracy and validity. the logo shapes redesign reviews significantly effect on brand attitude, further on brand loyalty and also on repurchase intention. noticeably, logo shapes redesign is strongly related to brand loyalty and repurchase intentions both directly and indirectly. brand attitude significantly mediates the connection between redesign logo shapes, brand loyalty, and repurchase intentions. very few studies have explored the relationship between the redesign of logo shapes and brand attitude. relevantly, the research is the first to demonstrate that a brand’s features (e.g. logo) may have a differential effect on consumer reaction based on brand loyalty and repurchase intentions to such an extent those loyal consumers often respond more positively than redesigned logos and repurchase product. moreover, the research offers prolific implications for loyal customers in the study context. keywords: logo shapes redesign, brand attitude, brand loyalty, repurchase intentions jel classification: m310 1. introduction the logo has become one of the crucial aspects of the company in establishing its brand value. the logo, which consists of graphic and typographic aspects, can give brand and product characteristics that consumers can recognize instantly. a logo that has visual markers, such as color combination, graphic icon and the font size has been proven to help consumers to remember brands better than logos that do not have images. however, some companies that change their logos have received different responses from their customers. when users are pleased with a particular brand, they tend to repeat the brand’s purchase. recently, the increase in buyer perception has helped customers would like to repurchase their trusted and preferred product. if corporations need to beat their rivals, consumers would have to be aware of buying their brand and goods. today is the era of competition, and it is everywhere for products to be repurchased between firms or between customers. it means consumers buy related services or goods frequently from associated vendors. while repurchase intention is the person’s choice to continue the purchase in a similar organization (ariffin et al., 2016). repurchase intention is different from the intention to purchase because repurchase signifies more than twice the purchasing of an object and implies dissimilar signals (chi et al., 2009). hence, repurchase intention is taken as the dependent variable in the study. the vital factor leading the consumer to buy the goods is brand loyalty. owing to brand loyalty, he cannot remember the entire decision procedure; he relies only on his past practice then purchases a similar item. danish et al. (2018) believe that increased brand awareness will lead to more significant sales of this brand. brand loyalty is the capability to repurchase and suggest the this journal is licensed under a creative commons attribution 4.0 international license rafiq, et al.: the impact of logo shapes redesign on brand loyalty and repurchase intentions through brand attitude international review of management and marketing | vol 10 • issue 5 • 2020118 desired product to others (liang et al., 2018). loyalty means repeated buying of a good or service from customers. brand loyalty seems to be the determination and the right attitude to buying a similar brand in their potential purchasing situation in a lasting way (arani and shafiizadeh, 2019). according to the latest survey of 2,000 customers in the u.s by michelle bitran head of content at yotpo (november 10, 2019), approximately 9 out of 10 participants said that their brand loyalty has either stayed steady or improved significantly, about a quarter (24.8%) said they were more loyal to the brand this year than they were last year. when asked to describe their brand loyalty, surveyed consumers overwhelmingly described it as repeat purchases (67.8%), followed by brand love (39.5%) and eventually, given price preference (37.7%). accordingly, brand loyalty is adopted as the study dependent variable. the brand attitude will say what people think of goods or services, whether the product responds to a customer’s needs and how much the consumer wants the product. effective attitudes consisting of thoughts, moods, and emotions, have a massive impact on loyalty (rajumesh and uiversity, 2014). the available literature indicates a strong correlation between brand experience and brand loyalty (mathew and thomas, 2018). the brand attitude seems to be the best way to develop the foundation for customer behavior and is the peak of the brand relationship (anwar et al., 2012). hence, brand attitude is adopted as mediation between logo shape redesign, brand loyalty, too repurchase intention in the present study. traditionally, the basic concept linked to logos has concentrated on distinguishing and differentiating the brand from its rivals (kilic et al., 2009). nevertheless, a logos study recently highlighted other derived customer outputs such as self-affective reactions, stressing that logos can generate positive sentiments and communicate the brand’s significance (foroudi, 2019). the logo, a core element of brand recognition, offers the immediate brand visibility, according to kilic et al. (2009) critically, logos help to overcome international borders and language barriers as they interact visually. in marketing practices, the importance of a good logo is understood; construction a london olympic logo in 2012 cost $625,000, 2008’s modification on the pepsi logo cost $1 million, and 2008’s renovation of the bp logo cost $211 million (van grinsven and das, 2016). a corporation such as taco bell uses 20 times more on names and logo symbols. companies spend considerable amounts of time and money promoting, modernizing and modifying their logos (kilic et al., 2009), and marketing managers would advantage significantly from a sympathetic of the concepts of logos design, selection, and redesign. nevertheless, considering the high managerial significance and comprehensive recent research on the brand and product design or marketing aesthetics (e.g., labrecque and milne, 2012), little systematic research has been conducted to explore the influence of logo design on the affective reaction of the brand. hence, the logo shape redesign is adopted as the independent variable. this analysis focuses on tackling this research gap by exploring how logo shapes, directly and indirectly, affect brand loyalty and repurchases intention. therefore, we examine whether the subdimensions of the independent variable are sources of variations in such reactions. this research started with a study of relevant literature on brand loyalty; repurchase intention, brand attitude, and logo shape redesign sub-dimensions. then, the theoretical model and theory are established in the context of the respective examined literature. the analysis also contains research methods, findings, discussion, managerial implications, limitations, and recommendations for the upcoming study, respectively. therefore, the purpose of this research was to investigate the determinants of unilever’s redesign of logo shapes based on brand loyalty and repurchase intention through brand attitude mediating impact. 2. literature review 2.1. logo shape redesign the logo, a vital element of brand identity, offers immediate brand recognition; significantly, logos help overcome worldwide borders and language barriers as they interact visually (kilic et al., 2009). a logo may take on a variety of graphic or typographic elements as a brand identity symbol, varying from word-driven, such as wordmarks or stylized letter marks, to image-driven, i.e. along with graphic trademarks; (foroudi, 2019). recent studies indicate that users create a firm decision about the company’s image or logo design (séraphin et al., 2016). chan, (2019) reveals that the effect on the logo determines the attitude towards the logo and, consequently, the attitude towards the business and the intention to repurchase; the research aspires to examine more closely the design features of the logo influencing the driving. according to foroudi (2019), most significantly, the logo, a core aspect of brand identification, offers immediate brand visibility; logos help overcome foreign borders and cultural differences as they interact visually. the seminal work of walsh et al. (2010) established the psychological processes which relate the aesthetic dimensions of stimuli to the responses of the perceiver. 2.2. brand attitude the company’s attitude will tell you what people think about a good or service, whether the product meets a customer’s needs and whether the consumer wants the product. as already mentioned by salehzadeh and pool (2017), the brand attitude seems to be a significant aspect of a brand assessment. brand attitude is essential in creating high brand equity outputs, including expected performance and recognition (salehzadeh and pool, 2017). saad et al. (2012) determined that a consumer attitude that leads to a focused brand depends not only on its brand recognition as well as on its market preferences. customers attach themselves to and form relationships with different brands (walsh et al., 2010), which leads to brand value (e.g. (ebrahim et al., 2016). affective attitudes are consisting of feelings, moods, and emotions which have a profound impact on loyalty (rajumesh and uiversity, 2014). 2.3. brand loyalty brand loyalty is a buyer behavior phenomenon that tends to commit consumers in a specific brand company and make repeated purchases throughout time. this purchasing decision will be either aware or unaware; however, it depends on the confidence which the brand can satisfy consumers. brand loyalty is founded on an emotional engagement in the brand as well as the user. brand loyalty stands, an emotionally charged choice for a customer to purchase one rafiq, et al.: the impact of logo shapes redesign on brand loyalty and repurchase intentions through brand attitude international review of management and marketing | vol 10 • issue 5 • 2020 119 item again and again. the object of repurchasing is the method of individual purchase of products or services from the same company (chinomona and maziriri, 2017) and the justification for repurchase is primarily focused on previous purchasing experience. if customers find importance (both utilitarian and hedonic) and are pleased with their past purchases from the same retailer, they develop a strong intention to repurchase (liang et al., 2018). furthermore, anwar et al. (2011) suggests a brand would be loyal if six requirements have to meet those are: (1) customer’s biased reaction to purchase (2) behavioral reaction implies behavioral indicates that taking into account the other items makes purchase (3) increasingly articulated indicates that this buying activity can demonstrate more than once (4) without taking into account the decision-making procedure (5) the choice of the similar items in the case of replacement goods (6) the role of a mental cycle. besides, brand loyalty is the engagement and optimistic attitude in their potential buying situation to buy the same item durably (anwar et al., 2012). 2.4. repurchase intentions repurchase intention is the person’s choice to continue the purchase in a similar organization (ariffin et al., 2016). the explanation of why consumers prefer to elect a related supplier and a similar brand is premised on owns past experiences. the decision to buy back requires a person’s view of the same business that meets their requirements and the existing service situation evaluation (cheng et al., 2016). the intention to buy the similar good or service, again and again, is regarded as the desire of the customer to purchase the related product or service (alsaid et al., 2016) after a customer has bought something, might be repeating the transactions (alsaid and ali, 2019). the repurchase is the real action, and the intention to purchase back is defined as the customer’s decision to engage with the retailer or vendor in future activities (alsaid and ali, 2019), repurchase intention denotes to the desire of the buyer to buy from the same business for a long time (bıçakcıoğlu et al., 2018). in some recent research, the repurchase intentions were used as the basis for predicting the potential purchasing behaviors of consumers (arani and shafiizadeh, 2019). through evaluating a research model, the research tries to explain the relationship into brand loyalty and repurchase intention. 3. research hypotheses 3.1. research hypotheses the study presents a research framework according to the aims and reviews of the above literature. logo shapes redesign is the independent variable; the dependent variables are brand loyalty and repurchase intention and the brand attitude as the mediating variable. the relationships between the logo shape redesign, brand loyalty, and repurchase intentions with brand attitude mediation are shown in the research structure. it describes all main variables, and their relationships are discussed as follows (figure 1). 3.1.1. logo shape redesigns and brand attitude a logo has been seen as an essential element of identification, impacting the organization’s brand value and its vital function. regarding the relation between the logo assessment and the attitude of the brand, müller et al. (2013) claimed logos are a leading graphical feature of brand assessment, thereby generating brand connections. therefore, consumer logo assessments (i.e. positively or negatively) influence consumers’ overall behavior towards the brand (i.e. favorable or harmful). for this reason, walsh et al. (2010) concluded; both the logo assessment and the brand attitude influence a modified logo. however, salehzadeh and pool, (2017) found the attitude towards the logo to be a predictor of attitude towards the brand in terms of understanding processing fluency and customer judgment. therefore, it can be hypothesized that: h1: logo shapes redesign has a significant positive effect on brand attitude. 3.1.2. logo shape redesign and brand loyalty brand loyalty is an essential benefit, as loyal customers were less responsive towards higher costs, more mediocre quality, and more inferior ads (gwang-in et al., 2013). so, one could claim this logo is also leading to a brand’s success. a logo will make a difference between a brand that is now considered an “up-to-date” brand and a “had been.” therefore, firms can charge existing customers a price premium and profit from higher advertisement performance (müller et al., 2013), resulting in higher value for shareholders and higher productivity (müller et al., 2013). therefore, it can be hypothesized that: h2: logo shapes redesign has a significant positive effect on brand loyalty. 3.1.3. logo shape redesign and repurchase intentions a logo that has visual markers, such as color combination, graphic icon and the font size has been proven to help consumers to remember brands better than logos that do not have images. however, some companies that change their logos have received different responses from their customers. if consumers are pleased figure 1: research structure rafiq, et al.: the impact of logo shapes redesign on brand loyalty and repurchase intentions through brand attitude international review of management and marketing | vol 10 • issue 5 • 2020120 with a defined brand, they will tend to repeat the purchase of that brand. chan (2019) show that the impact on the logo affects the attitude towards the logo and ultimately the attitude towards the corporation and the repurchase intention if corporations want to defeat their competitors; they need to make customers want to purchase their brands and their goods. the decision to repurchase intention represents the desire of the buyer to replicate the brand’s purchasing behavioral activity (ebrahim et al., 2016). recent surveys have also verified that the buyback intentions are a good indicator of actual buying activity (van grinsven, 2016) and suitable for evaluating customer performance (liang et al., 2018). it can also be hypothesized as: h3: logo shapes redesign has a significant positive effect on repurchase intentions. 3.1.4. brand attitude and brand loyalty consumers are attached to and from different brand associations (bıçakcıoğlu et al., 2018), which eventually leads to a brand value (e.g. danish et al., 2018). the strength of the buyer’s attitude towards the brand differs, as consumers with a more optimistic brand attitude have a higher tolerance to knowledge attempting to distract their loyalty from a specific brand (e.g., van grinsven, 2016). the theoretical concept linked to cognitive loyalty claims the idea that the attitude towards the object is influenced by an object (back, 2005). researchers accepted attitudes that were developed based on beliefs-based models. within the customer mind, perceived advantages associated with cognitive belief play a crucial role in the production of attitude. relevant literature advises that the main elements of brand loyalty-building are customer satisfaction, attitude, and dedication to repurchasing actions (rajumesh and uiversity, 2014). affective attitudes are consisting of thoughts, moods, and impulses, which have a profound impact on loyalty (rajumesh and uiversity, 2014). and it could be hypothesized: h4: brand attitude has a significant positive effect on brand loyalty. 3.1.5. brand attitude and repurchase intentions the aim to repurchase is one’s belief in repurchasing based on an appraisal of a product’s past buying experience and relates to the possibility of a consumer buying the brand in the future (arani and shafiizadeh, 2019). repurchase applies to regular repurchasing, not endorsing others or shaking with the reward techniques of rivals, and to determine whether the attitude of a consumer leads to practice, comparisons should be made of customer attitudes research in terms of actual behavior (liang et al., 2018). moreover, the desire to repurchase is linked to the actual repurchase conduct, and the consumer will probably repeat the product’s use in the future with his confidence in repurchasing based on the purchasing experience appraisal (foroudi, 2019). existing customers with high loyalty, purchase more frequently and they are less sensitive to competitors’ price incentive strategies so that they can continue to repurchase even at higher prices and create new customers with positive word of mouth. this repurchase behavior also plays a significant role in profit growth (chi et al., 2009). in this way, attitudes are influenced by the satisfaction of the evaluation after purchasing the product, and attitude influences repurchase intention (kim and lim, 2019). and this can be hypothesized: h5: brand attitude has a significant positive effect on repurchase intention. 3.1.6. brand loyalty and repurchase intentions the relation to brand loyalties and repurchase intention is significant. chinomona and maziriri (2017) analyzed the correlation among brand loyalties and repurchase intention and discovered that there is a clear, optimistic connection to brand loyalties and repurchase intention. salehzadeh and pool, (2017) showed research focusing on brand loyalty and cell phone repurchase intention; said’s research finds a strong relation of value into brand loyalties and repurchases intention. brand loyalty may also be believed to have a beneficial impact on repurchase intention. chinomona and maziriri (2017) looked at the essential aspects of brand loyalty and repurchase intention. they find that brand loyalty is strongly associated with repurchase intention. brand loyalty is either the aware or unaware of repurchase or repurchasing a specific product (danish et al., 2018). so, this can be hypothesized: h6: brand loyalty has a significant positive effect on repurchase intention. 3.1.7. the mediation of brand attitude the marketing professionals and researchers have recognized in current years the importance of brand experience in marketing related ideas such as sales promotion, brand differentiation, customer engagement, and loyalty (rajumesh and uiversity, 2014). the link between attitude and loyalty was discussed in brand-related literature more than three decades ago (back, 2005). this strongly indicates that repeated loyalty is dictated by the representing attitude of the mark in cognitive-affective and conative situations. in assessing brand loyalty, most recent brand loyalty surveys didn’t keep in mind the value of brand experience and brand attitude. besides, jiang et al. (2016) considered the logo as an indication of the brand’s attitude towards the concept of flexibility in production and customer decision-making. the brand attitudes have an essential effect on re-intention in gwang-in et al. (2013) research and séraphin et al. (2016) favorable attitude towards the brand, take a definite turn on product quality and value. according to gwang-in et al. (2013) research, consumers supported the lesser the attitude towards the brand; the more likely the buyer was to purchase the brand it turned out to be high. moreover, ariffin et al. (2016) said that repurchase intention was closely linked to customer love. according to gwang-in et al. (2013), the brand that has the most significant effect on the degree of inquiry returned from brand research. it was suggested that this was an attitude, and if it is done, it will shape a favorable brand attitude, it can increase the intention to repurchase. it can also be hypothesized as: h7a: brand attitude will mediate logo shapes redesigns and brand loyalty relationship. h7b: brand attitude will mediate logo shapes redesign and repurchase intention relationship. 4. research methodology 4.1. survey and sampling procedures 4.1.1. instruments and measures the fundamental nature of this paper is empirical research which includes primary data gathered by a well-administered questionnaire. the present study has chosen the fmcg sector, and notably “unilever” company was selected for data collection. the questions rafiq, et al.: the impact of logo shapes redesign on brand loyalty and repurchase intentions through brand attitude international review of management and marketing | vol 10 • issue 5 • 2020 121 were asked after the literature review, and according to the context of the item. we generated a questionnaire using the constructs of multiple items from existing literature, as seen in table 1. due to real marketing exchanges, the survey approach allows data to be collected from a wide range of respondents with high external reliability and generalizability. the questionnaire is composed of two parts; part one is pre-coded questions about respondents’ demographics, and part two includes 7 point liker scale going from (1) strongly disagree to (7) strongly agree questions about logo redesign, brand attitude, brand loyalty, and repurchase intentions. following cretu and brodie (2007), the questionnaire started with demographic questions. we have qualified three distributors of the questionnaires to maintain sufficient and adequate response levels. data were collected from january 2020 to february 2020 over the three weeks. distributed questionnaires were 600, of which we got 518 with 86.33% response rate. we finally reached 452 valid questionnaires after discarding incomplete portions of questionnaires which lacked significance. a hybrid of the questionnaire was used to gather data for selfadministered and former researchers. three items for repurchase intention were measured according to chiu and chang (2009). attitudinal and behavioral parameters should be used to test loyalty; the analysis of brand loyalty was based on three elements revised by oh (1999) and del río et al. (2001). five items for brand attitude were measured based on chiu and chang (2009). logo shape redesigns thirteen items adapted from cretu and brodie (2007). besides, a marketing expert analyzed the reliability of the survey questionnaire face and text and integrated recommendations with additional reviews. 4.1.2. sampling and data collection this research used a non-probable convenience sampling approach and targeted the university of okara, pakistan’s students, and teachers. we also verified that the rationality of the skewness and kurtosis data and standards were within the threshold range (±1, ±3) recommended by siddiqi et al. (2019). while the caveat used convenient sampling to generalize findings, it was used because of the respondents’ simple approach and the significance of the elements towards them (siddiqi et al., 2019). therefore, convenient sampling for the present research is not a big concern. 5. data analysis and results 5.1. analytical technique due to its importance in different disciplines, the research analyzed the conceptual framework using partial least square structural equation modeling (pls-sem) (siddiqi et al., 2019). the current studies (siddiqi et al., 2019) suggested that pls-sem investigate complex models, with mediation analysis, hypothesis testing, and predictive orientation compared to conventional covariancebased structural equation modeling (cb-sem), because of its high statistical strength. the present study incorporates all of these theories for model complexity, hypothesis testing, and statistical strength to forecast expected statistical structure, making it essential to use smartpls3.0 to implement the plssem technique. 5.2. profile of respondents table 2 shows details for the participants. according to age, 64.01% were between 18 and 25 years, 20.79% were between 26 and 32 years, 8.84% were between 32 and 40 years, 5.75% were between 40 and 50 years, 46.90% were female, and 15.26% were married. more than half (52.65%) possess a graduate and 28.76% hold a degree in undergraduate education. in comparison, 18.58% hold a post-graduate degree. table 1: loading, cr, ave, and α of constructs constructs items statements loading cr ave α brand attitude ba1 i think it’s a brand that suits me 0.524 0.852 0.542 0.782 ba2 i think it’s a brand which offers good performance products 0.649 ba3 it is a brand that i can rely on 0.863 ba4 i consider this is a brand with a strong value for money 0.753 ba5 i think it’s a brand with a good image 0.840 brand loyalty bl1 over the next few years, i will continue with my current brand 0.841 0.821 0.606 0.675 bl2 i recommend my friends and relatives on this brand 0.803 bl3 i tell others positive things about the brand 0.682 color combination (lsr) cc1 logo design can build a powerful urge to purchase instantly 0.812 0.827 0.492 0.745 cc2 a brand logo is unique compared to another brand 0.637 cc3 colorful logo catches my attention first 0.591 cc4 color draws my attention and makes a good mood. 0.671 cc5 if the logo color is bright, i can purchase 0.771 font size (lsr) fs1 the font on the logo draws my attention 0.636 0.836 0.563 0.742 fs2 the font is readable 1 meter away 0.790 fs3 the font size on the logo can improve mood for purchasing 0.829 fs4 font size catches my attention and makes it easy to read 0.734 graphic icon (lsr) gi1 the icon on the logo is easy to remember 0.925 0.87 0.639 0.785 gi2 graphic icon grabs your attention 0.465 gi3 the icon helps to choose a product 0.929 gi4 graphic icon influences the impulsive design 0.786 repurchase intention ri1 i will continue to purchase this brand’s products in the future 0.959 0.844 0.668 0.701 ri2 in the future, i hope to continue buying goods from that brand 0.961 ri3 i’d like to continue to use this brand to purchase products 0.399 *lrs=logo shapes redesign rafiq, et al.: the impact of logo shapes redesign on brand loyalty and repurchase intentions through brand attitude international review of management and marketing | vol 10 • issue 5 • 2020122 table 2: demographic information (n=452) demographics frequency percentage gender male 240 53.09 female 212 46.90 place sahiwala 34 7.52 okara 189 41.81 renala khurd 110 24.33 pattoki 74 16.37 others 45 9.95 marital status single 383 84.73 married 69 15.26 age 18–25 290 64.01 26–32 94 20.79 32–40 40 8.84 40–50 26 5.75 education undergraduate 130 28.76 graduate 238 52.65 post-graduate 84 18.58 job students 320 70.79 professionals 122 26.99 others 10 2.21 income (pak rupee/month) <10,000 256 56.63 10,000–19,999 48 10.61 20,000-29,999 46 10.17 30,000-39,999 49 10.84 40,000 and above 53 11.72 table 3: discriminant validity constructs ba bl cc fs gi ri brand attitude 0.737 brand loyalty 0.439 0.778 color combination 0.182 0.337 0.701 font size 0.271 0.464 0.297 0.750 graphic icon 0.214 0.327 0.510 0.472 0.799 repurchase intention 0.563 0.497 0.204 0.161 0.176 0.817 the income relevance showed that approximately 56.63% <10,000 rs. 10.61% were between 10,000 and 19,999 rs. 10.17% were between 20,000 and 29,999 rs. 10.84% were from 30,000 to 39,999. whereas, 11.72 % were 40,000 rs. and above. moreover, 70.79% of the respondents were students, whereas 26.99% were professionals. the respondents’ geographic representation reduced by the following percentages: sahiwal (7.52 %), okara (41.81%), renala khurd (24.33%), pattoki (16.37%), and others (9.95%). 5.3. assessment of measurement model following on from siddiqi et al. (2019), the reliability and validity of the external model are determined by the researchers. it was measured the internal consistency and convergent reliability of standardized factor loadings (sfl), composite reliability (cr), and average extracted variance (ave). the tests showed values above 0.701, 0.70, and 0.50 respectively for sfl, cr, and ave (siddiqi et al., 2019); which presented sufficient reliability and convergent validity (table 1). furthermore, discriminating validity (table 3) was recognized following imran and zillur (2016) method, whereby ave’s square root was more significant than any pair of latent constructs correlations. some variables have cronbach’s alpha <0.70 and pvc <0.50 but they have better composite reliability (pc) than 0.742, so they will be supported and analyze next steps. 5.4. analysis of structural model the internal or structural model helps to show the relationship between the model’s frameworks (siddiqi et al., 2019). the predictive power of the model was evaluated using the most common coefficient of determination (r2 value) form, ranging from 0 to 1, r2: 0.75, 0.50, and 0.25 respectively are considered significant, moderate, and low (siddiqi et al., 2019). the r2 values for endogenous constructions are as follows for the current model: brand attitude (r2ba) =0.069, brand loyalty (r2bl) = 0.307, logo shapes redesign (r2lsr) =1, and repurchase intentions (r2ri) = 0.618. the experimental findings of the 5000 bootstrap samples and 97.50% bias correlated confidence interval (ci) hypotheses presented that logo shape redesign have positive impacts on the brand attitude (h1– βlrs→ ba = 0.263, t = 4.476, [0.146.0.378], p < 0.001), the core effect for h2 showed a strong correlation between logo shapes redesign (h2– β lrs → bl = 0.442, t = 9.133, [0.253, 0.445], p < 0.001) with brand loyalty, thereby supporting h2. further, logo shape redesign have positive significant effects (h3–βlrs→ ri = 0.219, t =4.419, [−0.118, −0.001], p < 0.001) on brand attitude. further, the results presented that the brand attitude had a strong optimistic impact on brand loyalty (h4– βba → bl= 0.346, t =7.620, [0.256, 0.437], p < 0.001). moreover, brand attitude have positive significant effects (h5–βba→ ri = 0.681, t =12.127, [0.563, 0.782], p < 0.001) on repurchase intention. the findings indicated that the brand loyalty had a strong constructive impact on repurchase intention (h6– βbl → ri = 0.225, t =3.018, [0.072, 0.362], p < 0.003). the effective outcomes are summarized in table 4 and figure 2. 5.5. mediation analysis besides, h7a indicates that brand attitude significantly mediates the relationship among logo shape redesign and brand loyalty; h7b points out that brand attitude positively mediates the relationship between logo shape redesign and repurchase intention. to check the mediating impact of variables, follow the procedure mentioned in the current study (siddiqi et al., 2019). first, logo shape redesign can affect brand loyalty; this condition being endorsed by h2. second, logo shapes redesign can influence repurchase intention; this condition supported by h3. furthermore, brand attitude mediates between logo shapes redesign and brand loyalty (h7a– βlrs→ba → bl = 0.116, t = 3.832, [0.050, 0.142], p < 0.001). finally, the findings showed the significant positive impact of the brand attitude, as opposed to our hypothesis mediate between logo shapes redesign and repurchase intention (h7b– βlrs→ba → ri = 0.201, t = 4.995, [0.103, 0.259], p < 0.001). following the fulfillment of all criteria, the final move is to decide the mediation whether to mediate in full or in part by measuring the variance accounted for. the vaf (indirect effect/total effect*100) shown in table 5 and the final findings showed that the brand attitude partially mediates the relationship between logo shapes redesign, brand loyalty, and repurchase intention since the vaf value is 20.79% and 47.86%. there is zero mediation when the value of vaf is <20%, but when the value of vaf is 20-80% it would be a partial mediation, and rafiq, et al.: the impact of logo shapes redesign on brand loyalty and repurchase intentions through brand attitude international review of management and marketing | vol 10 • issue 5 • 2020 123 table 4: path coefficient paths path coefficient bias correlated ci (97.50%) t-value p‑value findings h1. lsr -> ba 0.263*** [0.146, 0.378] 4.476 0.000 supported h2. lsr -> bl 0.442*** [0.253, 0.445] 9.133 0.000 supported h3. lsr -> ri 0.219*** [−0.118, −0.001] 4.419 0.000 supported h4. ba -> bl 0.346*** [0.256, 0.437] 7.62 0.001 supported h5. ba -> ri 0.681*** [0.563, 0.782] 12.127 0.000 supported h6. bl -> ri 0.225*** [0.072, 0.362] 3.018 0.003 supported *lrs=logo shapes redesign *ba=brand attitude *bl=brand loyalty *ri=repurchase intentions significance level 0.05 table 5: mediation analysis paths direct effect indirect effect total effect vaf mediation ß ß lsr -> bl 0.442 lsr -> ba -> bl 0.116 0.558 20.79 partial mediation lsr -> ri 0.219 lsr -> ba -> ri 0.201 0.420 47.86 partial mediation *lrs=logo shapes redesign *ba=brand attitude *bl=brand loyalty *ri=repurchase intentions figure 2: structural model results when the value of vaf is greater than 80% it is defined as a full mediation (hussain et al., 2020). the findings suggest that brand attitude partially mediates the relationship between logo shapes redesign, brand loyalty, and repurchase intention since the vaf values are 20.79% and 47.86% respectively. so, the findings that endorse h7a and h7b. 6. discussion the paper explains the influence of multiple variables on the consumer’s repurchase intention. after analysis, we accomplish that eight of its hypotheses are acknowledged, indicating that the first hypothesis “there is a positive relationship between logo shapes redesign and brand attitude,” was accepted after the study has indicated that logo shapes redesign impact on brand attitude, walsh et al. (2010) stated, a modified logo affects both the logo himself assessment and the attitude towards to the brand. according to müller et al. (2013), a logo can create the modification into a brand that is viewed as an “up-to-date” brand and a “had been” one. so, corporations could charge loyal customers a price premium and benefit from increased advertisement performance. furthermore, the second hypothesis that was “logo shapes redesign has a significant direct effect on brand loyalty” is also approved. chan (2019) show that the effect on the logo affects the logo’s attitude and, ultimately, the company’s attitude and repurchase intention if company want to defeat their competitors; they need to make customers want to purchase their brand and goods. it shows the positive effect and is also important, thus showing the positive relationship of the purpose with the repurchase intention. some factors have cronbach’s alpha < 0.70 and pvc <0.50 but they have composite reliability (pc) better than 0.742, so they will be supported and analyze next steps. the fourth hypothesis is also accepted “brand attitude has a positive impact on brand loyalty.” because, affective attitudes consisting of feelings, moods and emotions which have a profound impact on loyalty (rajumesh and uiversity, 2014). the satisfaction of the evaluation influences attitudes after purchasing the product, and attitude influences repurchase intention (hussain et al., 2020). moreover, the fifth hypothesis “brand attitude has a direct effect on the repurchase intention” is also accepted, it demonstrates the favorable outcome, and it also indicates the sign in its data. chinomona rafiq, et al.: the impact of logo shapes redesign on brand loyalty and repurchase intentions through brand attitude international review of management and marketing | vol 10 • issue 5 • 2020124 and maziriri (2017) analyzed the correlation between brand loyalties and repurchase intention and found that there is a significant optimistic relationship between brand loyalties and repurchase intention. therefore, the sixth hypothesis “there is a direct and positive relationship between brand loyalty and the repurchase intention” is also accepted and presented the effective outcome of the study. the link between attitude and loyalty was discussed in brand-related literature more than three decades ago (mathew and thomas, 2018). the brand’s attitudes have an important influence on re-intention in gwang-in et al. (2013) research. besides, the seventh and last hypothesis made by the researcher is “brand attitude mediating between logo shapes redesign, brand loyalty and repurchase intention” after the analysis was completed on it was also accepted. it displays the relevant outcomes and means after the application of statistical tools, we put data on smartpls3.0 after testing its reliability through cronbach’s alpha and get a favorable result. 6.1. theoretical implications by identifying some critical factors in the current model of the research, this analysis can make a significant theoretical contribution to the area of interest to researchers. this is in line with a suggestion to expand the applicability of their model to new systems and applications. in the current study, brand loyalty, repurchase intentions have been examined in contributing brand attitude to understand the main content factors that could impact on customers’ attitudes regarding their perception and expectations toward logo shapes redesign. this study also contributes that loyal customers react more positively than redesigned logos and repurchase products as well. such associations have been empirically proven, as presented in the results section. looking at the research model; one can see that the effect sizes are important and applicable to management. besides, the effect is mediated not only by the attitude of the brand but also by a more comprehensive collection of associations modified in response to the redesign of a logo. 6.2. practical implications from practical perceptive, results of present research have shown pieces of evidence about main features that would exist the focus of attention for marketers who are engaged in logo redesigning. logo shapes also keep a company updated about market trends and new techniques. for managers, the present study has several significant implications. nowadays, when changing their logos, most companies use a mass strategy (ebrahim et al., 2016). furthermore, most organizations believe that their most loyal consumers, those with a deep commitment to the company, are more open to change (ebrahim et al., 2016). additionally, weakly loyal customers respond favorably to the logo redesign. of course, a more complicated strategy is wanted to make sure the logo redesigns appeal to both classes. one approach can control loyal customers’ reactions and perceptions by always asking their feedback, and can announce flying until the adjustments are revealed to the general public. providing such a feeling of being an “insider” to the deeply committed will reinforce their self-brand relation and reduces the potentially harmful effect of redesigning a logo. for example, if unilever’s company has not directly revealed a change of logo; redesign of products, packaging, and ads appeared. the adverse reactions may have been because unilever’s new logo shocked and disappointed its intensely loyal buyers, who should have predicted such a change. empirical research explores this ameliorative method will improve managerial practice. another essential feature of the present study is brand attitude. affective attitudes are consisting of feelings, moods, and emotions which have a profound impact on loyalty. brand attitude is crucial to building positive outcomes for brand equity, including perceived quality and awareness. accordingly, marketers have to put more effort into perceived quality, feelings, moods, emotions and focus on the value proposition of any product. from a practical perceptive, brand loyalty is founded on the consumer’s emotional attachment to the brand. brand loyalty is a customer’s emotionally charged decision to purchase one brand again and again. therefore, marketers have to put more effort into building a strong relationship between products and consumers and develop a strong intention to repurchase. another essential feature of the present study is repurchasing intentions. this means consumers consume similar services or goods repeatedly from related vendors. while repurchasing is the actual practice, the intention to repurchase indicates the customer’s willingness to participate in future activities with the retailer or supplier. therefore, marketers have to put more effort into love about brands. 7. limitations and future research directions in this analysis, only one fmcg company was taken, researchers can use other companies. our sample size is small, with a large sample size that would produce exciting findings. currently, the theoretical model shows sub-dimensions of logo shapes redesign like the color combination, graphic icon, and font size. thus, marketers must concentrate on raising customer loyalty by focusing on sub-dimensions such as brand packaging design, brand trust, and brand image. the current study has used a convenience sampling technique, whereas future research can use other sampling techniques like simple random sampling and systematic sampling. the study also indicates that marketers should concentrate on brand quality; customers would in future create brand loyalty and increasing their repurchase intention. 8. conclusion in conclusion, all of the aims of such research have been accomplished: firstly to find out what aspects of logo shapes redesign impact on brand loyalty and consumer repurchase intention; secondly to analyze the direct and indirect effect of independent variable sub-dimensions (color combination, font size, and graphic icons) on dependent variables by brand attitude; and thirdly to provide recommendations for improving logo shapes redesign. this research utilized convenient nonprobability sampling and gathered statistics from 452 students and teachers of the university of okara, pakistan. the data obtained for this study were evaluated using smart pls3.0, rafiq, et al.: the impact of logo shapes redesign on brand loyalty and repurchase intentions through brand attitude international review of management and marketing | vol 10 • issue 5 • 2020 125 and reliability analysis/cronbach’s alpha was performed to assess the reliability and validity of the questions. furthermore, the direct and indirect effects of logo shapes redesign were discussed and explained to achieve clear answers and evidence for all research hypotheses. details and suggestions given were based on the analysis of the literature and the experiential results of the study. thus, the implications of the current study provide both theoretical and practical contributions to the marketing field. moreover, the research offers prolific implications for loyal customers in the study context. this study, also suggests that marketers must concentrate on raising customer loyalty by focusing on sub-dimensions like brand packaging design, brand trust, and brand image. lastly, this study verifies the brand attitude act as a mediator between the logo shapes redesign, brand loyalty, and repurchase intentions significantly. references alsaid, e., ali, a., cheng, q., fang, l., chen, h. 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(2010), do logo redesigns help or hurt your brand? the role of brand commitment. journal of product and brand management, 19(2), 76-84. tx_1~at/tx_2~at international review of management and marketing issn: 2146-4405 available at http: www.econjournals.com international review of management and marketing, 2021, 11(4), 38-48. international review of management and marketing | vol 11 • issue 4 • 202138 employee green behavior on generation x and y millennial resti eva mayangsari, lenny c. nawangsari, ahmad h. sutawijaya* universitas mercu buana, jakarta, indonesia. *email: a.h.sutawijaya@mercubuana.ac.id received: 20 april 2021 accepted: 23 june 2021 doi: https://doi.org/10.32479/irmm.11633 abstract employee green behavior (egb), which is an important component of organizational sustainability. this study aims to analyze the effect of green recruitment, green training and employee green behavior on environment performance in two groups of generation x and generation y employees. the paradigm in this study is positivism with the type quantitative research and using survey methods. the study population was employees at pt pt wira cipta perkasa with a total sample of 100 people. the data analysis used was the structural equation model with smart pls software. the results of the study prove that green recruitment and green training have an effect on environment performance through employee green behavior in generation x. whereas in generation y millennia it is proven that green recruitment has an effect on environment performance through employee green behavior but green training has no effect. keywords: green recruitment, green training, employee green behavior, environment performance jel classifications: l2, j2 1. introduction environmental performance is the company’s performance to create a green environment (suratno et al., 2006). environmental performance is one of the important steps a company takes in achieving business success. the more the company contributes to the environment, the better the company’s image in the eyes of the community. based on field data, it was proven that there was an increase in the amount of organic and non-organic waste from 2016 to 2018 at pt wira cipta perkasa/wcp, namely from 57,528 in 2016, 60,295 in 2017 and 62,946 in 2018. interviews were conducted with related company managers. with factors that affect the company’s environmental performance and obtained 3 variables, namely green recruitment, green training, employee green behavior. employee green behavior is an important component of organizational sustainability. in improving environmental performance the company instills an environmentally friendly attitude towards employees. based on company data, there was a decline in green behavior, as in the following table 1. researchers also conducted a pre-survey on 20 people related to green recruitment, green training and the survey results can be seen in the table 2. green recruitment is a paper-free recruitment process that minimizes environmental impact. for the recruitment process, applications can be used through online media such as email, online application forms, websites, or telephone or video-based interviews. the pre-survey results show that the results of green recruitment are still not optimal regarding the recruitment process. green training is one part of green human resources management that is important in companies to build employee awareness of the environment by implementing behaviors such as reducing waste, saving energy, reducing paper use and other things that aim to familiarize employees with environmental awareness. implementation of environmentally friendly training (training), carried out through training programs conducted through online media by means of e-learning training where employees can gain knowledge and materials with easy access through online methods. it also aims to apply environmentally friendly behavior this journal is licensed under a creative commons attribution 4.0 international license mayangsari, et al.: employee green behavior on generation x and y millennial international review of management and marketing | vol 11 • issue 4 • 2021 39 to employees through training programs specifically designed by the company for the needs of improving the quality of employee performance. the results of the pre-survey showed that there were still problems related to the training method which made the training still not optimal. one of the challenges for companies in this globalization era is that companies must manage workers across generations (generation x and generation y). each generation has its own characteristics in behaving environmentally conscious in its work environment. based on the above phenomena, a research was carried out to analyze the effect of green recruitment, green training and employee green behavior on environment performance in the group x and generation y employees. 2. literature review 2.1. green recruitment green recruitment is a process of recruiting new talents who are aware of the ongoing process, environmental systems and roots of environmental conservation. green recruitment ensures that new talents are familiar with green practices and environmental systems that will support effective environmental management within the organization (stringer, 2009). meanwhile, according to prachi (2011), green recruitment is a paper-free recruitment process that minimizes environmental impact. recruitment is usually done through online media such as websites, e-mails, online application forms and other applications. the dimensions of green recruitment (astuti and wahyuni, 2018) are job design and recruitment process. 2.2. green training the definition of green training according to roy and therin (2008) is training that is carried out with the aim of instilling environmentally friendly behavior in employees in the work environment. the aim of green training is to train employees to collect waste data and increase knowledge of green environmental management. the dimensions of green training (jabbour, 2015) are implementation and evaluation. 2.3. employee green behavior ones and dilchert (2012) states that employee green behavior is a measurable individual behavior that contributes to or reduces environmental impact in the context of work. thomas (2016) emphasizes that employee green behavior includes activities to save energy, use resources efficiently, reduce waste, recycle and care for the environment. the dimensions of employee green behavior (thomas et al., 2015) are environmental concern, task control and efficiency. 2.4. environment performance environmental performance is a measurable result of the environmental management system, in an organization that is related to the control of its environmental aspects. khsan (2008) explains that environmental performance assessment is based on environmental policies, environmental targets and environmental targets. according to sukirman (2012), the dimensions of environmental performance consist of: anticipation, measurement of environmental performance and concern for the environment. several previous studies related to employee green behavior and environmental performance are research conducted by janaka et al. (2017) which states that practices that human resources management can integrate with environmental management activities to improve environmental performance. norton et al. (2015) also examined the factors influenced by employee green behavior for organizational sustainability. the importance of green recruitment and green training in companies that will affect the performance environment in the company was studied by deepak and prakash (2015). several studies (sakher et al., 2017; lenny and ahmad, 2018) prove the connection of green recruitment, green training on sustainable corporate performance. other research also discusses the effect of employee green behavior on environmental sustainability (qaisar et al., 2018) and green recruitment and green training on employee green behavior (shweta and shruyi, 2018; brenton et al., 2016). the hypotheses in this study are: h1a: green recruitment affects the employee green behavior of generation x employees h1b: green recruitment affects the employee green behavior of generation y employees h2a: green training affects employee green behavior for x generation employees h2b: green training affects employee green behavior in y generation employees h3a: green recruitment affects environment performance for x generation employees h3b: green recruitment has an effect on environment performance in generation y employees h4a: green training affects the environment performance of generation x employees table 2: results of the pre-survey green recruitment and green training no. question yes (%) no (%) green recruitment 1. has the recruitment process at this company used an online system? 35 65 2. in your opinion, has the recruitment method applied by the company been running effectively? 40 60 3. does background knowledge about the environment qualify in the recruitment process? 45 55 green training 1. has the training method used so far used the e-learning method? 40 60 2. have you received training on environmental environmental awareness? 45 55 3. have you received any training on b3 training? 40 60 table 1: recapitulation of the 2016-2018 employee assessment category 2016 2017 2018 work performance (60%) 51.3 51.06 54.27 attitude (20%) 19.902 19.38 19.9 green behavior (10%) 6.553 6.235 6.098 safety (10%) 9.95 9.909 9.861 mayangsari, et al.: employee green behavior on generation x and y millennial international review of management and marketing | vol 11 • issue 4 • 202140 h4b: green training affects the environment performance of generation y employees h5a: employee green behavior affects environment performance in x generation employees h5b: employee green behavior affects the environment performance of generation y employees h6a: green recruitment affects environment performance through employee green behavior for x generation employees h6b: green recruitment affects environment performance through employee green behavior for generation y employees h7a: green training affects environment performance through employee green behavior for x generation employees h7b: green training affects environment performance through employee green behavior for generation y employees 3. research methods this study uses a quantitative approach with survey methods conducted on employees of pt wira cipta perkasa with a sample size of 100 people. the statistical analysis in this study used sem-smart pls. all variables in the study were measured using a likert scale of 1-5. 4. results and discussion 4.1. evaluation of measurement model (outer model) the evaluation of the measurement model (outer model) is carried out to determine the validity and reliability of the indicator and its latent variables. the measurement model has been analyzed based on pls-sem with the help of smart pls 3.0. for assessment of measurement models, factor loading, composite reliability, cronbach’s alpha, average extracted variance (ave), and discriminant validity. figures 1 and 2 and table 1 show the results of the measurement model. the loading factor value used in this study is >0.6, so if there is a loading factor value <0.6 in the calculation result of the measurement model (outer model), it will be excluded from the model. the results of the calculation of the measurement model using. sem pls version 3.0, then look at the loading factor value, there are several indicators with the loading factor in each research variable that has met the value >0.6 as can be seen in figures 1 and 2 and table 3. tables 4 and 5, show the loading factor value, cronbach’s alpha value, composite value and ave. mentioned that cronbach alpha more than 0.7 (α > 0.9) is very good. in the current study, more than 0.9 were excellent. in addition, ave must be equal to or more than 0.5 and the composite reliability value must be 0.7 or higher (fornell and larcker, 1981; hair et al., 2014). in this study, both ave and composite were more than acceptable ranges for both x and y generation. so, the measurement of the structural model was continued. 4.2. evaluation of the structural model (inner model) or hypothesis testing assessment of the structural model after the assessment of the measurement model, the structural model is analyzed with the help of smart pls 3. evaluation of the structural model (inner model) or testing the hypothesis in this study through the steps of evaluating the path coefficient value, evaluating the r2 value, measuring the effect size f2, validates the overall structural model with the goodness of fit index (gof), and performs predictive relevance (q2) testing. testing the structural model of this research, obtained the path coefficient results through the calculate smartpls version 3.0 bootstrapping shown in figures 3 and 4 and table 6. evaluating the value of the path coefficient, based on the results of calculations using calculate smartpls version 3.0, the bootstrapping results are obtained by the path coefficient that describes the strength of the relationship or influence between constructs/variables as shown in table 5. test results of the x generation path coefficient and generation y. assessment of effect size levels using cohen’s f2. according to the defined criteria, the f2 values were equal to 0.0, 0.15, and 0.35 representing weak, moderate, and strong effect sizes. table 6 provides a summary of the effect sizes. the results given in table 7 show that in generation x, the employee green behavior (0.928) construct has a strong effect size, the green recruitment construct (0.159) has a moderate effect size, while green training has a weak effect (0.032). in contrast, in generation y, the employee table 3: loading factor research variables variable indicators loadings gen x gen y green recruitment (x1) x1.1 0,908 0,921 x1.2 0,898 0,906 x1.3 0,863 0,912 x1.4 0,866 0,771 green training (x2) x2.1 0,865 0,908 x2.2 0,921 0,881 x2.3 0,860 0,878 x2.4 0,876 0,885 employee green behavior (y1) y1.1 0,902 0,869 y1.2 0,887 0,890 y1.3 0,918 0,884 y1.4 0,832 0,857 y1.5 0,861 0,790 y1.6 0,908 0,869 y1.7 0,894 0,876 y1.8 0,897 0,891 y1.9 0,915 0,899 y1.10 0,919 0,847 y1.11 0,899 0,883 y1.12 0,925 0,844 environment performance (y2) y2.1 0,925 0,877 y2.2 0,921 0,848 y2.3 0,852 0,830 y2.4 0,897 0,876 source: primary data processed (2020) mayangsari, et al.: employee green behavior on generation x and y millennial international review of management and marketing | vol 11 • issue 4 • 2021 41 figure 1: loading factor of measurement and structural modeling in gen x figure 2: loading factor measurement and structural modeling in gen y (millennial) green behavior (2.15) construct has a strong effect size, the green recruitment construct (0.011) has a weak effect size, while green training has a moderate effect (0.214). therefore, this study concluded that the effect size of f2 ranges from weak to strong according to cohen’s criteria. the r2 value in generation x is 95.7%, this indicates that all constructs together have a tendency to influence 95.7% of changes in the dependent variable (environment performance). while the r2 value in generation y is 92.6%, this indicates that all constructs together have a tendency to influence 92.6% of changes in the dependent variable (environment performance). validation of the overall structural model with the goodness of fit index (gof) and q2 to validate the combined performance of the measurement model (outer model) and the structural model (inner model) obtained through the following calculations: gof for generation x 2ave gof = r× mayangsari, et al.: employee green behavior on generation x and y millennial international review of management and marketing | vol 11 • issue 4 • 202142 0.792gof = 0.957× 0g f 8o .75= gof = 0.871 gof for generation y 2ave gof = r× 0.762gof = 0.926× table 5: outer loading, cronbach alpa, composite and ave generation y variable loadings cronbach alpa composite ave indicator gen x green recruitment (x1) x1.1 0,921 0,901 0,932 0,774 x1.2 0,906 x1.3 0,912 x1.4 0,771 green training (x2) x2.1 0,908 0,913 0,937 0,778 x2.2 0,881 x2.3 0,878 x2.4 0,885 employee green behavior (y1) y1.1 0,869 0,970 0,973 0,752 y1.2 0,890 y1.3 0,884 y1.4 0,857 y1.5 0,790 y1.6 0,869 y1.7 0,876 y1.8 0,891 y1.9 0,899 y1.10 0,847 y1.11 0,883 y1.12 0,844 environment performance (y2) y2.1 0,877 0,880 0,918 0,736 y2.2 0,848 y2.3 0,830 y2.4 0,876 source : primary data processed (2020) table 4: outer loading, cronbach alpa, composite and ave generation x variable loadings cronbach alpa composite ave indicator gen x green recruitment (x1) x1.1 0,908 0,906 0,934 0,781 x1.2 0,898 x1.3 0,863 x1.4 0,866 green training (x2) x2.1 0,865 0,903 0,932 0,775 x2.2 0,921 x2.3 0,860 x2.4 0,876 employee green behavior (y1) y1.1 0,902 0,978 0,980 0,804 y1.2 0,887 y1.3 0,918 y1.4 0,832 y1.5 0,861 y1.6 0,908 y1.7 0,894 y1.8 0,897 y1.9 0,915 y1.10 0,919 y1.11 0,899 y1.12 0,925 environment performance (y2) y2.1 0,925 0,921 0,944 0,809 y2.2 0,921 y2.3 0,852 y2.4 0,897 source: primary data processed (2020) mayangsari, et al.: employee green behavior on generation x and y millennial international review of management and marketing | vol 11 • issue 4 • 2021 43 0g f 6o .70= gof = 0.84 information: ave gen x = (0.804+0.809+0.781+0.775)/4 = 0.792 ave gen y = (0.752+0.736+0.774+0.788)/4 = 0.762 the results of the calculation of the goodness of fit index (gof) show a value of 0.871 for generation x while for generation y it is 0.84. small gof = 0.1, medium gof = 0.25 and large gof = 0.36. based on these results, it can be concluded that the combined performance of the measurement model (outer model) and the structural model (inner model) as a whole is good because the goodness of fit index (gof) value is more than 0.36 (large scale gof). q2 for generation x q2 = 1–(1–r12) (1–r22) q2 = 1–(1–0.697)(1–0.858) figure 3: bootstrapping results on gen x figure 4: bootsrapping results on gen y (millennial) mayangsari, et al.: employee green behavior on generation x and y millennial international review of management and marketing | vol 11 • issue 4 • 202144 q2 = 0.957 q2 for generation y q2 = 1–(1–r12) (1–r22) q2 = 1–(1–0.519)(1–0.846) q2 = 0.926 based on the calculation of predictive relevance (q2), it was obtained 0.957 for generation x, while for generation y it was 0.926. in this research model, endogenous latent variables have a predictive relevance (q2) value greater than 0 (zero) so that the exogenous latent variables as explanatory variables are able to predict the endogenous variables, namely environment performance, or in other words prove that this model is considered to have predictive relevance. well, for generation x and generation y. 4.3. hypothesis test the results of statistical calculations of the effect of the independent variable on the dependent variable are presented in table 5, presenting the results of the significance test of the structural model. the simultaneous effect of the green recruitment (x1), green training (x2), employee green behavior (y1), and environment performance (y2) variables can be done by calculating the f/f statistic using the formula below. using the formula as below. simultaneous test for generation x r2 = 0,957 (gen x) 2 2 r (k 1) (1 f count r ) = k) /(n − − − table 7: the result of testing the indirect effect of generation x and generatin y (millenial) hypotesis relationship coefficient information conclusion generation x h6 green recruitment  employee green behavior  environment performance 0,376 green recruitment  employee green behavior (sig), employee green behavior  environment performance (sig) significant h7 green training  employee green behvior  environment performance 0,227 green training  employee green behavior (sig), employee green behavior  environment performance (sig) significant generation y h6 green recruitment  employee green behavior  environment performance 0,579 green recruitment  employee green behavior (sig), employee green behavior  environment performance (sig) significant h7 green training  employee green behvior  environment performance 0,138 green training  employee green behavior (sig), employee green behavior  environment performance (sig) not significant source : primary data processed (2020) table 6: the result of path coefficient testing (direct effect) generation x and generation y (millenial) generation x original sample (o) standard deviation (stdev) t statistic (o/stdev) p-values employee green behavior (y1)  environment performance (y2) 0,661 0,103 6,425 0,000 green recruitment (x1)  employee green behavior (y1) 0,596 0,128 4,641 0,000 green recruitment (x1)  environment performance (y2) 0,242 0,083 2,907 0,004 green training (x2)  employee green behavior (y1) 0,344 0,138 2,496 0,013 green training (x2)  environment performance (y2) 0,090 0,074 1,226 0,221 generation y employee green behavior (y1)  environment performance (y2) 0,829 0,072 11,506 0,000 green recruitment (x1)  employee green behavior (y1) 0,699 0,084 8,292 0,000 green recruitment (x1)  environment performance (y2) 0,057 0,070 0,813 0,417 green training (x2)  employee green behavior (y1) 0,166 0,107 1,547 0,122 green training (x2)  environment performance (y2) 0,187 0,070 2,655 0,008 source: primary data processed (2020) table 8: value of r2 and (f)2 generation x and generation y (millenial) generation x r2 (f)2 environment performance (y2) 0,957 employee green behavior (y1) 0,928 green recruitment (x1) 0,159 green training (x2) 0,032 generation y environment performance (y2) 0,926 employee green behavior (y1) 2,15 green recruitment (x1) 0,011 green training (x2) 0,214 source : primary data processed (2020) mayangsari, et al.: employee green behavior on generation x and y millennial international review of management and marketing | vol 11 • issue 4 • 2021 45 0.957 (4 1) (1 0.957) / (50 4) f count − − − = f count = 0.319/0.0009 f count = 341.26 simultaneous test for generation y r2 = 0,926 (gen y) 2 2 r (k 1) (1 f count r ) = k) /(n − − − 0.926 (4 1) (1 0.926) / (50 4) f count − − f count = 0.309/0.00161 f count= 191.87 the simultaneous significant test results show that the calculated f value in this study is 341.26 for generation x while generation y is 191.87, the f table value at alpha 0.05 is 2.61. this means f count> f table (2.61), so together the green recruitment (x1), green training (x2), employee green behavior (y1) variables affect environment performance (y2) both in generation x and generation y. 5. discussion 5.1. explanation of each hypothesis in group 1 (generation x) hypothesis 1a: green recruitment has a positive and significant effect on employee green behavior hypothesis testing with the pls approach produces a path coefficient of 0.596 with a t statistics of 4.461 which is greater than the value of t table = 1.96, and the value of p = 4.4e-06 which is smaller than α = 0.05. the coefficient value is positive, meaning that the green recruitment variable (x1) has a positive effect on the employee green behavior (y1) variable by 59.6%. thus the hypothesis h1 in this study which states that “green recritment has a positive and significant effect on employee green behavior” is accepted. according to employees, the most dominant thing in green recruitment is that environmental criteria have been included so that this way the company can get employee candidates who are aware of green in their work environment. hypothesis 2a: green training has a positive and significant effect on employee green behavior hypothesis testing with the pls approach produces a path coefficient of 0.344 with t statistics of 2.496, which is greater than the value of t table = 1.96, and the value of p = 0.013 which is smaller than α = 0.05. the coefficient value is positive, which means that the green training variable has a positive and significant effect on employee green behavior by 34.4%. thus the h2 hypothesis in this study which states that “green training has a positive and significant effect on employee green behavior” is accepted. the results showed that in the implementation of green training, generation x employees felt that every employee had the same opportunity to get training about the environment. this is what ultimately encourages employees to behave green. hypothesis 3a: green recruitment has a positive and significant effect on environment performance. hypothesis testing with the pls approach produces a path coefficient of 0.242 with a t statistics of 2.907 which is greater than the value of t table = 1.96, and the value of p = 0.004 which is smaller than α = 0.05. the coefficient value is positive, which means that the green recruitment (x1) variable has a positive effect on the environment performance (y2) variable by 24.2%. thus the hypothesis h3 in this study which states that “green recritment has a positive and significant effect on environment performance” is accepted. it has been proven that what needs to be improved in green recruitment is the dimension of the recruitment process, namely that the management should include the criteria for environmental knowledge in job vacancies. hypothesis 4a: green training has a positive and significant effect on environment performance hypothesis testing with the pls approach produces a path coefficient of 0.09 with t statistics of 1.226 smaller than the value of t table = 1.96, and the value of p = 0.221 which is greater than α = 0.05. the coefficient value is positive and insignificant for environment performance. thus the hypothesis h4 in this study which states that “green training has a positive and significant effect on environment performance” is rejected. according to generation x employees, it turns out that green training does not affect environment performance. the thing that needs to be improved related to green training is the evaluation process, namely the use of environmental training results by employees so that it will lead to an increase in environment performance. hypothesis 5a: employee green behavior has a positive and significant effect on environment performance hypothesis testing with the pls approach produces a path coefficient of 0.661 with t statistics of 6.425 greater than the value of t table = 1.96, and the value of p = 3.1e-10 which is smaller than α = 0.05. the coefficient value is positive, meaning that the employee green behavior (y1) variable has a positive effect on the environment performance (y2) variable by 66.1%. thus, the hypothesis h1 in this study which states that “employee green behavior has a positive and significant effect on environment performance” is accepted. based on the research results, it was found that the most influential dimension on environment performance is anticipation in which employees understand the environmental impact caused by the company mayangsari, et al.: employee green behavior on generation x and y millennial international review of management and marketing | vol 11 • issue 4 • 202146 so that various programs can be carried out for environmental conservation. hypothesis 6a: green recruitment has a positive and significant effect on environment performance through employee green behavior hypothesis testing using the pls approach produces a path coefficient of the effect of green recruitment on environment performance through employee green behavior with a significant effect with a path coefficient of 0.376. since the two direct effects that form are significant, there is sufficient empirical evidence to accept. h1: which states that green recruitment has a positive and significant effect on environment performance through employee green behavior. the positive coefficient indicates that the higher the green recruitment, the higher the environment performance by increasing the employee green behavior path. the employee green behavior variable is a partially mediating variable in the relationship between green recruitment and environment performance, because the coefficient of indirect effect of green recruitment on environment performance through employee green behavior is greater than the coefficient of direct influence between green recruitment on environment performance and both have significant effects. partially mediation means that the employee green behavior variable plays a role in strengthening the relationship between the green recruitment variable and the environment performance. thus the hypothesis h1 in this study which states that “green recruitment has a positive and significant effect on environment performance through employee green behavior” is accepted. generation x employees stated that the most influential dimension of employee green behavior is motivation in which employees understand the actions of safety needs, security at work. hypothesis 7a: green training has a positive and significant effect on environment performance through employee green behavior. hypothesis testing with the pls approach produces a path coefficient of the effect of green training on environment performance through employee green behavior with a significant effect with a path coefficient of 0.227. since the two direct effects that form are significant, there is sufficient empirical evidence to accept h7: which states that green training has a positive and significant effect on environment performance through employee green behavior. the positive coefficient indicates that the higher the green training, the higher the environment performance by increasing the employee green behavior path. the employee green behavior variable is a perfect mediation variable in the relationship between green training and environment performance, because the coefficient of direct influence between green training on environment performance is insignificant.perfect mediation means that the green training variable does not explain the diversity of environment performance variables, but the employee green behavior variable which explains the diversity of environment performance. variables in the relationship between green training and environment performance. thus the hypothesis h7 in this study which states that “green training has a positive and significant effect on environment performance through employee green behavior” is accepted. the results of the study state that the dimensions that must be improved regarding employee green behavior are control related to tasks, namely minimizing the impact of environmental damage. 5.2. explanation of each hypothesis in group 2 (generation y (millennial)) hypothesis 1b: green recruitment has a positive and significant effect on employee green behavior hypothesis testing with the pls approach produces a path coefficient of 0.699 with t statistics of 8,292, which is greater than the value of t table = 1.96, and the value of p = <0.000 which is smaller than α = 0.05. the coefficient value is positive, meaning that the green recruitment variable (x1) has a positive effect on the employee green behavior (y1) variable by 59.6%. thus, the h1 hypothesis in this study which states that “green recruitment has a positive and significant effect on employee green behavior” is accepted. according to y generation employees regarding green recruitment, the dimensions of the work design have been carried out well. that the company has entered environmental criteria and the company’s commitment to the environment during the employee recruitment process. hypothesis 2b: green training has a positive and significant effect on employee green behavior. hypothesis testing with the pls approach produces a path coefficient of 0.166 with t statistics of 1.547 smaller than the value of t table = 1.96, and the value of p = 0.122 which is greater than α = 0.05. thus the h2 hypothesis in this study which states that “green training has a positive and significant effect on employee green behavior” is rejected. it is proven in this study that the dimension that needs to be improved in relation to green training is evaluation. training evaluation is very important to see the effectiveness of the training implementation. hypothesis 3b: green recruitment has a positive and significant effect on environment performance. hypothesis testing with the pls approach produces a path coefficient of 0.057 with t statistics of 0.813 smaller than the value of t table = 1.96, and the value of p = 0.417 which is greater than α = 0.05. thus the h1 hypothesis in this study which states that “green recruitment has a positive and significant effect on environment performance” is rejected. employees stated that the recruitment process must be improved, namely in finding candidates who have competence in the field of environmental management. mayangsari, et al.: employee green behavior on generation x and y millennial international review of management and marketing | vol 11 • issue 4 • 2021 47 hypothesis 4b: green training has a positive and significant effect on environment performance. hypothesis testing with the pls approach produces a path coefficient of 0.187 with t statistics of 2.655, which is greater than the value of t table = 1.96, and the value of p = 0.008 which is smaller than α = 0.05. the coefficient value is positive, meaning that the green training (x2) variable has a positive effect on the environment performance (y2) variable by 18.7%. thus the h1 hypothesis in this study which states that “green training has a positive and significant effect on environment performance” is accepted. the results of the study stated that the implementation of the green training had gone quite well. all employees are given equal opportunities in environmental training. hypothesis 5b: employee green behavior has a positive and significant effect on environment performance. hypothesis testing with the pls approach produces a path coefficient of 0.829 with t statistics of 11.506 greater than the value of t table = 1.96, and the value of p ≤ 0.000 which is smaller than α = 0.05. the coefficient value is positive, meaning that the employee green behavior (y1) variable has a positive effect on the environment performance (y2) variable by 82.9%. thus, the hypothesis h1 in this study which states that “employee green behavior has a positive and significant effect on environment performance” is accepted. related to environment performance that needs to be improved is concern for the environment. employees increase employee awareness of the applied employee management system. hypothesis 6b: green recruitment has a positive and significant effect on environment performance through employee green behavior. hypothesis testing with the pls approach produces a path coefficient of the effect of green recruitment on environment performance through employee green behavior with a significant effect with a path coefficient of 0.579. since the two direct effects that form are significant, there is sufficient empirical evidence to accept h1: which states that green recruitment has a positive and significant effect on environment performance through employee green behavior. the positive coefficient indicates that the higher the green recruitment, the higher the environment performance by increasing the employee green behavior path. the employee green behavior variable is a perfect mediation variable in the relationship between green recruitment and environment performance, because the coefficient of direct influence between green recruitment on environment performance is insignificant. perfect mediation means that the green recruitment variable does not explain the diversity of environment performance variables, but the employee green behavior variable which explains the diversity of environment performance variables in the relationship between green recruitment and environment performance. thus the hypothesis h1 in this study which states that “green recruitment has a positive and significant effect on environment performance through employee green behavior” is accepted. the dominant dimension of employee green behavior, according to the opinion of generation y employees, is that there is a good intention of positive behavior for employees to behave in an environmentally conscious manner so that this encourages behavior control to behave in green. hypothesis 7b: green training has a positive and significant effect on environment performance through employee green behavior. hypothesis testing with the pls approach produces a path coefficient of the effect of green training on environment performance through employee green behavior which has no significant effect with a path coefficient of 0.138. since the two direct effects that form an indirect effect are one of which is insignificant, namely the effect of green training on employee green behavior, there is sufficient empirical evidence to accept h0: which states that green training has an effect on environment performance without going through employee green behavior. so that the employee green behavior variable is not a mediating variable in the relationship between green training and environment performance. thus the h1 hypothesis in this study which states that “green training has a positive and significant effect on environment performance through employee green behavior” is rejected. based on the research results, it is found that the waste management is not optimal so that it needs attention from the company. 6. conclusion 6.1. conclusion on generation x employees • green recruitment and green training have an effect on employee green behavior • green recruitment and employee green behavior affect the environment. performance while green training has no effect on environment performance • green recruitment and green training affect environment performance through employee green behavior. • on generation y employees • green recruitment has an effect on employee green behavior, while green training has no effect • green training and employee green behavior have an effect on environment performance while green recruitment has no effect on environment performance • green recruitment affects environment performance through employee green behavior, while green training has no effect. mayangsari, et al.: employee green behavior on generation x and y millennial international review of management and marketing | vol 11 • issue 4 • 202148 6.2. suggestion for companies • improve the green recruitment system by including criteria for candidate employees who are aware of environmental management and behave in green. • improve the training system related to training evaluation so that training effectiveness can be achieved • improve the employee green behavior system related to task control to increase employees’ sense of concern so that it will have an impact on employee behavior in environmental management • improve the company’s existing environmental performance appraisal system so that it will increase employee awareness of the employee management system. for future researchers, it is hoped that the existing research framework will be developed and add other variables that are thought to affect employee green behavior and 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